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What changed in EASTGROUP PROPERTIES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EASTGROUP PROPERTIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+245 added−241 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in EASTGROUP PROPERTIES INC's 2024 10-K

245 paragraphs added · 241 removed · 207 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Company posts its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission (the “SEC”).
Biggest changeThe Company posts to its website all of the reports it files or furnishes with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act, including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and the exhibits and amendments to those reports, as soon as reasonably practicable after it electronically files or furnishes such materials to the SEC.
EastGroup is focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Florida, Texas, Arizona, California and North Carolina. EastGroup’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets.
EastGroup is focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Texas, Florida, California, Arizona and North Carolina. EastGroup’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets.
You may also access any materials we file with the SEC through the EDGAR database on the SEC’s website at www.sec.gov. Administration EastGroup maintains its principal executive office and headquarters in Ridgeland, Mississippi. The Company also has regional offices in Atlanta, Dallas and Los Angeles and asset management offices in Orlando, Tampa, Houston and Phoenix.
You may also access any materials we file with the SEC through the EDGAR database on the SEC’s website at www.sec.gov. Administration EastGroup maintains its principal executive office and headquarters in Ridgeland, Mississippi. The Company also has regional offices in Dallas, Los Angeles and Atlanta and asset management offices in Houston, Orlando, Tampa and Phoenix.
The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Florida, Texas, Arizona, California and North Carolina. As of December 31, 2023, EastGroup owned 510 industrial properties in 12 states.
The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Texas, Florida, California, Arizona and North Carolina. As of December 31, 2024, EastGroup owned 536 industrial properties in 12 states.
As of December 31, 2023, EastGroup’s operating portfolio was 98.7% leased to tenants in approximately 1,600 leases, with no single tenant accounting for more than approximately 1.8% of the Company’s annualized based rent (as defined in
As of December 31, 2024, EastGroup’s operating portfolio was 97.1% leased to tenants in approximately 1,600 leases, with no single tenant accounting for more than approximately 1.6% of the Company’s annualized based rent (as defined in
EastGroup has property management offices in Jacksonville, Miami, Charlotte, Greenville, San Antonio, Austin and San Francisco. Offices at these locations allow the Company to provide property management services to 83% of the Company’s operating portfolio on a square foot basis. In addition, the Company currently provides property administration (accounting of operations) for its entire portfolio.
EastGroup's property management teams are located in San Antonio, Austin, Miami, Jacksonville, San Francisco, Charlotte, Las Vegas and Greenville. These locations allow the Company to provide property management services to 87% of the Company’s operating portfolio on a square foot basis. In addition, the Company currently provides property administration (accounting of operations) for its entire portfolio.
As of that same date, the Company’s portfolio, including development projects and value-add properties in lease-up and under construction, included approximately 59.2 million square feet consisting of 470 business distribution properties containing 53.9 million square feet, 17 bulk distribution properties containing 4.4 million square feet, and 23 business service properties containing 900,000 square feet.
As of that same date, the Company’s portfolio, including development projects and value-add properties in lease-up and under construction, included approximately 63.1 million square feet consisting of 497 business distribution properties containing 57.8 million square feet, 17 bulk distribution properties containing 4.4 million square feet, and 22 business service properties containing 900,000 square feet.
The regional offices in Georgia, Texas and California provide oversight of the Company’s development and value-add program. Properties that are either acquired but not stabilized or can be converted to a higher and better use are considered value-add properties. As of December 31, 2023, EastGroup had 96 full-time employees.
The regional offices in Texas, California and Georgia provide oversight of the Company’s development and value-add program (as described in Note 1(e) in the Notes to Consolidated Financial Statements). As of December 31, 2024, EastGroup had 101 full-time employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe potential impacts of future climate change on our properties could adversely affect our ability to lease, develop or sell our properties or to borrow using our properties as collateral. In addition, any proposed legislation enacted to address climate change could increase the costs of energy, utilities and overall development.
Biggest changeClimate change could cause an increase in property and casualty insurance premiums or negatively impact our ability to obtain insurance. The potential impacts of future climate change on our properties could adversely affect our ability to lease, develop or sell our properties or to borrow using our properties as collateral.
Other factors that may affect general economic conditions or local real estate conditions include: • population and demographic trends; • employment and personal income trends; • income and other tax laws; • changes in interest rates and availability and costs of financing; • increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents; • changes in the price of oil; • construction costs; and • weather-related events.
Other factors that may affect general economic conditions or local real estate conditions include: • population and demographic trends; • employment and personal income trends; • income and other tax laws; • changes in interest rates and availability and costs of financing; • increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents; • changes in the price of oil; • construction costs; and • weather-related and climate-related events.
If we were to fail to qualify as a REIT, subject to certain limitations in the Internal Revenue Code, corporate stockholders may be eligible for the dividends received deduction, and individual, trust and estate stockholders may be eligible to treat the dividends received from us as qualified dividend income taxable as net capital gains under the provisions of Section 1(h)(11) of the Internal Revenue Code.
If we were to fail to qualify as a REIT, subject to certain limitations in the Internal Revenue 14 Code, corporate stockholders may be eligible for the dividends received deduction, and individual, trust and estate stockholders may be eligible to treat the dividends received from us as qualified dividend income taxable as net capital gains under the provisions of Section 1(h)(11) of the Internal Revenue Code.
A downturn in general economic conditions and local real estate conditions in these geographic regions, as a result of oversupply of or reduced demand for industrial properties, local business climate, business layoffs and changing demographics, would have a particularly strong adverse effect on us. In addition, our investments in real estate assets are concentrated in the industrial distribution 11 sector.
A downturn in general economic conditions and local real estate conditions in these geographic regions, as a result of oversupply of or reduced demand for industrial properties, local business climate, business layoffs and changing demographics, would have a particularly strong adverse effect on us. In addition, our investments in real estate assets are concentrated in the industrial distribution sector.
If we are unable to lease all or a substantial portion of our properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.
If we are unable to lease all or a substantial portion of our 10 properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.
If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in any bankruptcy proceeding relating 10 to the tenant. We also cannot be sure that we would receive rent in the proceeding sufficient to cover our expenses with respect to the premises.
If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in any bankruptcy proceeding relating to the tenant. We also cannot be sure that we would receive rent in the proceeding sufficient to cover our expenses with respect to the premises.
Risks associated with our current and future development and construction activities include: • the availability of favorable financing alternatives; • the risk that we may not be able to obtain land on which to develop or that due to the increased cost of land, our activities may not be as profitable; • construction costs exceeding original estimates due to rising interest rates and increases in the costs of materials and labor; • disruption in supply and delivery chains; • construction and lease-up delays resulting in increased debt service, fixed expenses and construction costs; • expenditure of funds and devotion of management’s time to projects that we do not complete; • fluctuations of occupancy and rental rates at newly completed properties, which depend on a number of factors, including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower return on our investment; and • complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits.
Risks associated with our current and future development and construction activities include: • the availability of favorable financing alternatives; • the risk that we may not be able to obtain land on which to develop or that due to the increased cost of land, our activities may not be as profitable; • construction costs exceeding original estimates due to tariffs or elevated interest rates and increases in the costs of materials and labor; • disruption in supply and delivery chains; • construction and lease-up delays resulting in increased debt service, fixed expenses and construction costs; • expenditure of funds and devotion of management’s time to projects that we do not complete; • fluctuations of occupancy and rental rates at newly completed properties, which depend on a number of factors, including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower return on our investment; and • complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits.
There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt. We face risks associated with our dependence on external sources of capital.
There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt. 12 We face risks associated with our dependence on external sources of capital.
If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties.
If an uninsured 11 loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties.
These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the 12 instruments governing the applicable indebtedness even if we had satisfied our payment obligations.
These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations.
Although we believe we have operated and intend to operate in a manner that will 14 continue to qualify us as a REIT, we cannot be certain that we have been or will be successful in continuing to be taxed as a REIT.
Although we believe we have operated and intend to operate in a manner that will continue to qualify us as a REIT, we cannot be certain that we have been or will be successful in continuing to be taxed as a REIT.
Also, a downgrade in our credit ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities and debt instruments. Increases in interest rates would increase our interest expense. At December 31, 2023, we had no variable rate debt outstanding not protected by interest rate hedge contracts.
Also, a downgrade in our credit ratings would trigger additional costs or other potentially negative consequences under our current and future credit facilities and debt instruments. Increases in interest rates would increase our interest expense. At December 31, 2024, we had no variable rate debt outstanding not protected by interest rate hedge contracts.
If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate the officer’s employment other than for cause, or if the officer elects to terminate his or her employment with us for reasons specified in the agreement, we will make a severance payment equal to the officer’s average annual compensation times an amount specified in the officer’s agreement, together with the officer’s base salary and vacation pay that have accrued but are 15 unpaid through the date of termination.
If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate any such officer’s employment other than for cause, or if any such officer elects to terminate his or her employment with us for reasons specified in the agreement, we will make a severance payment equal to the officer’s average annual compensation times an amount specified in the officer’s agreement, together with the officer’s base salary and vacation pay that have accrued but are unpaid through the date of termination.
These agreements may deter a change in control because of the increased cost for a third party to acquire control of us. We rely on information technology in our operations, and any material failure, inadequacy, interruption or cyber-attack of that technology could harm our business.
These agreements may deter a change in control because of the increased cost for a third party to acquire control of the Company. We rely on information technology in our operations, and any material failure, inadequacy, interruption or cyber-attack of that technology could harm our business.
Substantially all of our properties are located in the Sunbelt region of the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. As of December 31, 2023, our largest markets were Houston and Dallas.
Substantially all of our properties are located in the Sunbelt region of the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina. As of December 31, 2024, our largest markets were Houston and Dallas.
In addition, rising interest rates would result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness and pay dividends. The state of the economy or other adverse changes in general or local economic conditions may adversely affect our operating results and financial condition.
In addition, rising interest rates would result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness and pay dividends. The state of the economy, geopolitical conflict or adverse changes in general or local economic conditions may adversely affect our operating results and financial condition.
In addition, there may be certain losses that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so, including losses due to floods, wind, earthquakes, acts of war, acts of terrorism or riots.
In addition, there may be certain losses that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so, or insurance coverage may not be available, including losses due to fire, floods, wind, earthquakes, acts of war, acts of terrorism or riots.
We owned operating properties totaling 6.8 million square feet in Houston and 5.4 million square feet in Dallas, which represent 10.7% and 9.6%, respectively, of the Company’s total Real estate properties based on percentage of total annualized base rent (as defined in Item 2. Properties).
We owned operating properties totaling 7,108,000 square feet in Houston and 6,108,000 square feet in Dallas, which represent 10.0% and 10.8%, respectively, of the Company’s total Real estate properties based on percentage of total annualized base rent (as defined in Item 2. Properties).
We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest.
Financing Risks We face risks associated with the use of debt to fund acquisitions and developments, including refinancing risk. We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest.
Even in the absence of direct physical damage to our properties, the occurrence of any natural disasters or a changing climate in the area of any of our properties could have a material adverse effect on business, supply chains and the economy generally. Climate change could cause an increase in property and casualty insurance premiums.
Even in the absence of direct physical damage to our properties, the occurrence of any natural disasters or a changing climate in the area of any of our properties could have a material adverse effect on business, supply chains and the economy generally.
As a result, if a claim were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow. Coverage under our existing insurance policies may be inadequate to cover losses .
As a result, if a claim were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.
The market value of our common stock could decrease based on our performance and market perception and conditions. The market value of our common stock may be affected by the market’s perception of our operating results, growth potential, and current and future cash dividends and may also be affected by the real estate market value of our underlying assets.
The market value of our common stock may be affected by the market’s perception of our operating results, growth potential, and current and future cash dividends and may also be affected by the real estate market value of our underlying assets and by equity markets in general.
In addition, attracting new or replacement personnel may be difficult in a competitive market. We have severance and change in control agreements with certain of our officers that may deter changes in control of the Company.
Unanticipated turnover or inadequate succession planning could have a material adverse impact on the Company's business plans and opportunities. In addition, attracting new or replacement personnel may be difficult in a competitive market. 15 We have severance and change in control agreements with certain of our officers that may deter changes in control of the Company.
We have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity securities on an as-needed basis, including shares under our Current 2023 ATM Program (as defined below).
We have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity securities on an as-needed basis, including shares under our Current ATM Program (as defined in Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K).
Higher construction costs could adversely impact our investments in real estate assets and our expected yields on development and value-add projects. Although the Company has an obligation to complete development projects currently under construction, the Company does not have any obligation to start new development projects in the future.
Although the Company has an obligation to complete development projects currently under construction, the Company does not have any obligation to start new development projects in the future.
There is no guarantee that we will be able to mitigate the effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation, and any related adverse effects on our results of operations and financial condition, remain unknown at this time. 13 Additionally, inflationary pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not limited to, costs of construction materials, labor and services from third-party contractors and suppliers.
There is no guarantee that we will be able to mitigate the effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation, and any related adverse effects on our results of operations and financial condition, remain unknown at this time.
See “Item 1C. Cybersecurity” for further discussion. We may be impacted by changes in U.S. social, political, regulatory and economic conditions or laws and policies. Any changes to U.S. tax laws, foreign trade, manufacturing, and development and investment in the territories and countries where our customers operate could adversely affect our operating results and our business. ITEM 1B.
Any changes to U.S. tax laws, duties, tariffs, changes to bilateral or regional trade agreements, manufacturing, and development and investment in the territories and countries where we and our customers operate could adversely affect our operating results and our business. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Accordingly, we may incur additional debt and would do so, for example, if it were necessary to maintain our status as a REIT. We might become more highly leveraged as a result, and our financial condition and cash available for distribution to stockholders might be negatively affected and the risk of default on our indebtedness could increase.
Accordingly, we may incur additional debt and would do so, for example, if it were necessary to maintain our status as a REIT.
General Risk Factors Inflation and related volatility in the economy could negatively impact our tenants, our results of operations and the value of our publicly-traded equity securities.
We might become more highly leveraged as a result, and our financial condition and cash available for distribution to stockholders might be negatively affected and the risk of default on our indebtedness could increase. 13 General Risk Factors Inflation and related volatility in the economy could negatively impact our tenants, our results of operations and the value of our publicly-traded equity securities.
The resulting costs of any proposed legislation may adversely affect our financial position, results of operations and cash flows. Financing Risks We face risks associated with the use of debt to fund acquisitions and developments, including refinancing risk.
In addition, any proposed legislation enacted to address climate change could increase the costs of energy, utilities and overall development. The resulting costs of any proposed legislation may adversely affect our or our tenants' financial position, results of operations and cash flows.
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Inflation may also cause increased volatility in financial markets, which could affect our ability to access the capital markets or impact the cost or timing at which we are able to do so.
Added
Coverage under our existing insurance policies may be inadequate to cover losses, or we may not be able to obtain adequate insurance at certain properties in the future .
Removed
To the extent our exposure to increases in interest rates on any of our debt is not eliminated through interest rate swaps and interest rate protection agreements, such increases will result in higher debt service costs, which will adversely affect our cash flows. Our exposure to increases in interest rates in the short term includes our variable-rate borrowings.
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Additionally, inflationary pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not limited to, costs of construction materials, labor and services from third-party contractors and suppliers. Higher construction costs could adversely impact our investments in real estate assets and our expected yields on development and value-add projects.
Removed
With the exception of the unsecured bank credit facilities, all of the Company’s debt has an effectively fixed interest rate.
Added
The market value of our common stock could decrease based on our performance and market perception and conditions.
Removed
See “ Financing Risks – Increases in interest rates would increase our interest expense .” Increases in interest rates could also increase our debt financing costs over time, either through near-term borrowings on our existing unsecured bank credit facilities or refinancing of our existing borrowings that may incur incrementally higher interest rates.
Added
Deficiencies in internal control over financial reporting could adversely affect our business. The design and effectiveness of our procedures for internal control over financial reporting may not prevent all misstatements, errors or misrepresentations.
Removed
One of the factors that may influence the trading price of our publicly-traded common stock is the interest rate on our debt and the dividend yield on our common stock relative to market interest rates.
Added
While our management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no assurance that our internal control over financial reporting will be effective in achieving all control objectives without fail. Deficiencies could result in restatements of our financial statements or otherwise materially adversely affect our business.
Removed
As market interest rates rise, unless we eliminate our exposure to such increases, our borrowing costs may rise and result in less funds being available for distribution. Therefore, we may not be able to, or we may choose not to, provide a higher distribution rate on our common stock.
Added
Techniques used to obtain unauthorized access to, disable or sabotage information technology systems are increasingly diverse and sophisticated, including as a result of emerging technologies, such as artificial intelligence and machine learning.
Removed
In addition, fluctuations in interest rates could adversely affect the market value of our properties. These factors could result in a decline in the market prices of our common stock. There is no guarantee we will be able to mitigate the impact of inflation.
Added
See “Item 1C. Cybersecurity” for further discussion. We may be impacted by changes in U.S. social, political, regulatory and economic conditions or laws and policies.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, EastGroup has information technology general controls in place in support of internal control over financial reporting. These controls are tested by the Company’s internal audit function and control deficiencies, if any, would be reported to senior management and the Audit Committee of the Board of Directors.
Biggest changeThese controls are tested by the Company’s internal audit function and control deficiencies, if any, would be reported to senior management and the Audit Committee of the Board of Directors. 16 As of the date of this report, the Company has not identified breaches from any cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to affect operations, business strategy or financial condition.
These properties are located primarily in the Sunbelt states of Florida, Texas, Arizona, California and North Carolina, and the majority are clustered around major transportation features in supply constrained submarkets.
These properties are located primarily in the Sunbelt states of Texas, Florida, California, Arizona and North Carolina, and the majority are clustered around major transportation features in supply constrained submarkets.
(2) Annualized base rent represents the monthly cash rental rate, excluding tenant expense reimbursements, as of December 31, 2023, multiplied by 12 months. (3) Includes month-to-month leases.
(2) Annualized base rent represents the monthly cash rental rate, excluding tenant expense reimbursements, as of December 31, 2024, multiplied by 12 months. (3) Includes month-to-month leases.
We also maintain processes regarding third-party vendor risk management, including, as appropriate, conducting a review of security ratings of and System and Organization Controls (“SOC”) reports provided by potential vendors. Additionally, EastGroup works with cybersecurity consulting firms to help manage the Company’s cybersecurity risks.
The Company also maintains processes regarding third-party vendor risk management, including, as appropriate, conducting a review of security ratings of and System and Organization Controls (“SOC”) reports provided by potential vendors. Additionally, EastGroup works with cybersecurity consulting firms to help manage the Company’s cybersecurity risks.
Additionally, management conducts comprehensive risk surveys annually and presents the results of these surveys to the Board of Directors for discussion. ITEM 2. PROPERTIES. EastGroup owned 510 industrial properties as of December 31, 2023.
Additionally, management conducts comprehensive risk surveys annually and presents the results of these surveys to the Board of Directors for discussion. ITEM 2. PROPERTIES. EastGroup owned 536 industrial properties as of December 31, 2024.
The Company has developed approximately 50% of its total portfolio (on a square foot basis), which includes real estate properties and development and value-add properties in lease-up and under construction. The Company’s focus is the ownership of business distribution space (91% of the total portfolio) with the remainder in bulk distribution space (8%) and business service space (1%).
The Company has developed approximately 49% of its total portfolio (on a square foot basis), which includes real estate properties and development and value-add properties in lease-up and under construction. The Company’s focus is the ownership of business distribution space (92% of the total portfolio) with the remainder in bulk distribution space (7%) and business service space (1%).
The cyber consulting firms currently conduct testing of EastGroup’s controls and environment, including penetration testing, to identify and remediate cybersecurity risks. They also currently provide EastGroup with advice on technology, infrastructure, management, and productivity in relation to its information technology capabilities, including conducting phishing exercises with the Company’s employees.
The cyber consulting firms currently conduct testing of EastGroup’s controls and environment, including network penetration testing, to identify and remediate cybersecurity risks. They also currently provide EastGroup with advice on technology, infrastructure, management, and productivity in relation to its information technology capabilities, including training for all employees.
As of February 13, 2024, EastGroup’s operating portfolio was 97.8% leased and 97.6% occupied by tenants in approximately 1,600 leases, with no single tenant accounting for more than approximately 1.8% of the Company’s annualized based rent, as defined in the table below.
As of February 11, 2025, EastGroup’s operating portfolio was 96.5% leased and 95.7% occupied by tenants in approximately 1,600 leases, with no single tenant accounting for more than approximately 1.6% of the Company’s annualized based rent, as defined in the table below.
Governance Related to Cybersecurity Risks EastGroup’s cybersecurity risk management process is assessed and managed by a cyber risk committee (“Cyber Risk Committee”), which includes the Company’s Chief Financial Officer (“CFO”), Chief Information Officer (“CIO”) and members of management within the information technology, finance and accounting, legal and internal audit functions.
Risk Factors - We rely on information technology in our operations, and any material failure, inadequacy, interruption or cyber-attack of that technology could harm our business.” Governance Related to Cybersecurity Risks EastGroup’s cybersecurity risk management process is assessed and managed by a cyber risk committee (“Cyber Risk Committee”), which includes the Company’s Chief Financial Officer (“CFO”), Chief Information Officer (“CIO”) and members of management within the information technology, finance and accounting, legal and internal audit functions.
The CIO is a Certified Public Accountant (“CPA”), a Certified Information Technology Professional with the American Institute of CPAs and has 20 years of experience in the areas of cybersecurity and information technology.
The CIO is a Certified Public Accountant (“CPA”), a Certified Information Technology Professional with the American Institute of CPAs and has over 20 years of experience in the areas of cybersecurity and information technology. Collectively, other members of the Cyber Risk Committee have technical expertise and experience in accounting, financial reporting and auditing, and law and compliance.
At December 31, 2023, EastGroup did not own any single property with a book value that was 10% or more of total book value or with gross revenues that were 10% or more of total gross revenues. 17 The Company’s lease expirations are detailed below: Years Ending December 31, Number of Leases Expiring (1) Total Area of Leases Expiring (in Square Feet) (1) Annualized Base Rent of Leases Expiring (1) (2) % of Total Base Rent of Leases Expiring (1) 2024 (3) 251 5,977,000 $ 45,654,000 10.5% 2025 312 8,189,000 $ 66,880,000 15.4% 2026 324 10,014,000 $ 81,637,000 18.8% 2027 280 9,127,000 $ 75,052,000 17.3% 2028 227 6,976,000 $ 57,923,000 13.3% 2029 114 5,214,000 $ 34,830,000 8.0% 2030 49 2,519,000 $ 20,501,000 4.7% 2031 32 1,315,000 $ 11,447,000 2.6% 2032 23 1,738,000 $ 13,261,000 3.0% 2033 and beyond 28 3,374,000 $ 27,737,000 6.4% (1) Does not include lease renewal options.
At December 31, 2024, EastGroup did not own any single property with a book value that was 10% or more of total book value or with gross revenues that were 10% or more of total gross revenues. 17 The Company’s lease expirations are detailed below: Years Ending December 31, Number of Leases Expiring (1) Total Area of Leases Expiring (in Square Feet) (1) Annualized Base Rent of Leases Expiring (1) (2) % of Total Base Rent of Leases Expiring (1) 2025 (3) 253 5,526,000 $ 50,843,000 10.1% 2026 326 10,178,000 $ 85,709,000 17.0% 2027 328 10,392,000 $ 91,190,000 18.0% 2028 260 8,031,000 $ 72,141,000 14.3% 2029 224 7,915,000 $ 71,009,000 14.1% 2030 114 5,735,000 $ 47,574,000 9.4% 2031 62 2,670,000 $ 25,944,000 5.1% 2032 33 2,227,000 $ 17,342,000 3.4% 2033 18 2,290,000 $ 21,216,000 4.2% 2034 and beyond 27 2,325,000 $ 22,447,000 4.4% (1) Does not include lease renewal options.
ITEM 1C. CYBERSECURITY. Cyber Risk Management and Strategy EastGroup incorporates cybersecurity processes, which include periodic tests of its information security processes and systems by external firms, into the Company’s overall risk management program. EastGroup has processes and policies regarding incident response, identity and access management, employee training on cybersecurity matters, device management, and patch and vulnerability management, among others.
ITEM 1C. CYBERSECURITY. Cyber Risk Management and Strategy Cybersecurity risk management policies and processes are integrated into EastGroup’s enterprise risk management program. These policies and processes include incident response, identity and access management, employee training on cybersecurity matters, device management, patch management and vulnerability assessment.
Collectively, other members of the Cyber Risk Committee have technical expertise and experience in accounting, financial reporting and auditing, and law and compliance. 16 The Company’s Board of Directors oversees EastGroup’s risk management process.
The Company’s Board of Directors oversees EastGroup’s risk management process.
Added
This training supports information security awareness and adherence to Company policies and guidance through regular, mandatory training and random simulated phishing tests. Additionally, EastGroup has information technology general controls in place in support of internal control over financial reporting.
Added
For additional information regarding our cybersecurity risks, see “Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur employees are provided with training, education and peer mentoring programs to further develop their professional skill set, enhancing the level of service provided to our customers and the quality of information disclosed to our stakeholders. • Policies: We have various policies and practices in place, including a Code of Ethics and Business Conduct, Whistleblower Program, Equal Opportunity and Commitment to Diversity, Human Rights Statement, Vendor Code of Conduct, ADA & Reasonable Accommodation, Commitment to Safety, Community Service, Family Medical Leave, Maternity and Paternity Leave, Standards of Conduct, Corporate Green Office Guide, Environmental Management System, Workplace Violence Prevention, Healthy, Wealthy, Wise Benefits Summary, and Cybersecurity. • Company and Board Engagement: We value our employees, and our focus on human capital management and other socially-responsible initiatives is at the forefront of discussions and decisions with both management and the Board of Directors.
Biggest changeWe also offer a Director Education Program, providing educational resources to our Board of Directors. • Policies: We have various policies and practices in place, including a Code of Ethics and Business Conduct, Ethics Line, Standards of Conduct, Equal Opportunity & Commitment to Diversity, ADA & Reasonable Accommodation, Family Medical Leave, Parental Leave, Community Service, Workplace Violence Prevention, Cybersecurity, Corporate Responsibility Policy, Human Rights Statement, Vendor Code of Conduct, Commitment to Safety & Health and Safety Policy, Healthy, Wealthy, Wise Benefits Summary and an Environmental Management System. • Company and Board Engagement: We value our employees, and our focus on human capital management and other corporate responsibility initiatives is at the forefront of discussions and decisions with both management and the Board of Directors.
Shareholders.” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S. federal withholding rate that we determine could apply. New Treasury Regulations also provide new guidance regarding qualified foreign pension funds.
Shareholders.” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S. federal withholding rate that we determine could apply. Treasury Regulations also provide new guidance regarding qualified foreign pension funds.
The new Treasury Regulations provide that: (i) The withholding rules applicable to ordinary REIT dividends paid to a non-U.S. stockholder (generally, a 30% rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-U.S. stockholder’s trade or business within the U.S. and proper certifications are provided) will apply to (a) that portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S. stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain 8 attributable to the sale or exchange of a U.S. real property interest by reason of the recipient not owning more than 10% of a class of our stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.
The new Treasury Regulations provide that: (i) The withholding rules applicable to ordinary REIT dividends paid to a non-U.S. stockholder (generally, a 30% rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-U.S. stockholder’s trade or business within the U.S. and proper certifications are provided) will apply to (a) that portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S. stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain attributable to the sale or exchange of a U.S. real property interest by reason of the recipient not owning more than 10% of a class of our stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.
Our management is not aware of any environmental liability that would have a material adverse effect on EastGroup’s business, assets, financial position or results of operations. 6 See “ Item 1A. Risk Factors ” in this Annual Report for a discussion of material risks to EastGroup, including related to governmental regulations and environmental matters.
Our management is not aware of any environmental liability that would have a material adverse effect on EastGroup’s business, assets, financial position or results of operations. See “ Item 1A. Risk Factors ” in this Annual Report for a discussion of material risks to EastGroup, including related to governmental regulations and environmental matters.
As market conditions permit, EastGroup issues equity or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings. Moody’s Investors Service has assigned the Company’s issuer rating of Baa2 with a stable outlook.
As market conditions permit, EastGroup issues equity or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace short-term bank borrowings. Moody’s Investors Service has assigned EastGroup an issuer rating of Baa2 with a stable outlook.
Federal Income Tax Considerations The following discussion supplements and updates the disclosures under “Certain United States Federal Income Tax Considerations” in the prospectus dated December 16, 2022, contained in our Registration Statement on Form S-3 filed with the SEC on December 16, 2022.
Federal Income Tax Considerations The following discussion supplements and updates the disclosures under “Certain United States Federal Income Tax Considerations” in the prospectus dated December 16, 2022, contained in our Registration Statement on Form S-3 filed with the 8 SEC on December 16, 2022.
EastGroup’s properties have generally been subject to Phase I Environmental Site Assessments (“ESAs”) by independent environmental consultants and, as necessary, have been subjected to Phase II ESAs. These reports have not revealed any potential significant environmental liability.
EastGroup’s properties have generally been subject to Phase I Environmental Site Assessments (“ESAs”) by independent environmental consultants and, as necessary, have 6 been subjected to Phase II ESAs. These reports have not revealed any potential significant environmental liability.
EastGroup holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria. The Company may provide financing to a prospective purchaser in connection with such sales of property if market conditions require.
EastGroup plans to hold its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria. The Company may provide financing to a prospective purchaser in connection with such sales of property if market conditions require.
With 96 employees and 7 directors, each team member plays a vital role in the success of the Company. • Employee Tenure: We believe our culture supports our employees and creates a positive, professional environment that encourages longevity for our team members. We seek to develop leaders and promote from within the organization when opportunities arise.
With 101 employees and seven directors, each team member plays a vital role in the success of the Company. • Employee Tenure: We believe our culture supports our employees and creates a positive, professional environment that encourages longevity for our team members. We seek to develop leaders and promote from within the organization when opportunities arise.
Environmental, Social and Governance (“ESG”) Matters EastGroup’s commitment to ESG initiatives is evidenced by its building standards, corporate policies and procedures and company culture. At EastGroup, protecting the environment is important to the Company’s employees, customers and communities. The Company strives to support sustainability through its commitment to build high performance and environmentally responsible properties.
Corporate Responsibility Matters EastGroup’s commitment to corporate responsibility initiatives is evidenced by its building standards, corporate policies and procedures and company culture. At EastGroup, protecting the environment is important to the Company’s employees, customers and communities. The Company strives to support sustainability through its commitment to build high performance and environmentally responsible properties.
Readers are encouraged to visit the “Priorities” page of the Company’s website and review its latest Environmental, Social & Governance Reports for more detail regarding EastGroup’s ESG programs and initiatives. Nothing on the Company’s website or in the referenced reports shall be deemed to be incorporated by reference into this Annual Report on Form 10-K.
Readers are encouraged to visit the “Priorities” page of the Company’s website and review its latest corporate responsibility reports and policies for more detail regarding EastGroup’s corporate responsibility programs and initiatives. Nothing on the Company’s website or in the referenced reports or policies shall be deemed to be incorporated by reference into this Annual Report on Form 10-K.
All of our employees are eligible for performance-based annual bonuses based on a percentage of salary. • Training and Development: We have a formal, certificate-based learning program for all employees; learning objectives include topics such as diversity and inclusion, unconscious bias, anti-harassment, workplace violence & bullying and data security.
All of our employees are eligible for performance based annual bonuses based on a percentage of salary. • Training and Development: We have a formal, certificate-based learning program for all employees; learning objectives include topics such as ethics and anti-corruption, cybersecurity, anti-discrimination, diversity, equity and inclusion, unconscious bias, anti-harassment, and workplace violence and bullying.
Item 2. Properties ) for the year ended December 31, 2023. The properties in the development and value-add program were 18% leased as of December 31, 2023. During 2023, EastGroup increased its holdings in real estate properties through its acquisition and development programs.
Item 2. 5 Properties ) for the year ended December 31, 2024. The properties in the Company's development and value-add program were 21.8% leased as of December 31, 2024. During 2024, EastGroup increased its holdings in real estate properties through its acquisition and development programs.
On a regular basis, Company management holds ESG-related discussions with the Board of Directors; in 2023, our management and the Board of Directors formally met to discuss these topics four times.
On a regular basis, Company management holds corporate responsibility discussions with the Board of Directors; in 2024, our management and the Board of Directors formally met to discuss these topics four times.
Our voluntary turnover rate was 8%, and there was no involuntary turnover during the year ended December 31, 2023. • Compensation, Benefits, Health and Safety: We offer a comprehensive employee benefits program and what we believe are socially-responsible policies and practices in order to support the overall well-being of our employees and create a safe, professional and inclusive work environment.
Our voluntary turnover rate was 4%, and our involuntary turnover rate was 1% during the year ended December 31, 2024. • Compensation, Benefits, Health and Safety: We offer a competitive pay structure along with a comprehensive employee benefits program and what we believe are socially-responsible policies and practices in order to support the overall well-being of our employees and create a safe, professional and inclusive work environment.
Subject to the requirements necessary to maintain EastGroup’s qualifications as a REIT, the Company may acquire securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over those entities. EastGroup has no present intention of acting as an underwriter of offerings of securities of other issuers.
Subject to the requirements necessary to maintain EastGroup’s qualifications as a REIT, the Company may acquire securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over those entities.
The officer group is comprised of 49% women and 51% men. As of December 31, 2023, 15% of our employees self-identified as members of a racial or ethnic minority group. Our Board of Directors is 29% comprised of women, and one of seven Board members is a member of a racial or ethnic minority group.
As of December 31, 2024, 14% of our employees self-identified as members of a racial or ethnic minority group. Our Board of Directors is 29% comprised of women, and one of the seven Board members is a member of a racial or ethnic minority group.
Using the data obtained from these efforts, EastGroup completed its first GRESB Real Estate Assessment during 2023, which provided the Company with additional insight into its ESG management and performance as compared to industry peers.
Using the data obtained from these efforts, EastGroup completed its second annual GRESB ® Real Estate Assessment, which provided the Company with additional insight into its environmental, social and governance management and performance as compared to its industry peers.
Some of the benefits we offer include a robust 401(k) matching program, company-wide equity award program, generous personal leave policy, paid parental leave, flexible work schedules, paid time off for volunteering, annual health and wellness checkups, employer-paid health insurance for all full-time employees, tobacco cessation program, athletic club and tuition reimbursement programs, and a competitive pay structure.
Some of the benefits we offer include a robust 401(k) matching program with additional discretionary profit-sharing contributions, a company-wide equity compensation award program, generous personal leave, paid parental leave, flexible work schedules, paid time off for volunteering and annual health and wellness checkups, employer-paid health insurance for all full-time employees, access to mental healthcare, tobacco cessation program and athletic club and tuition reimbursement programs.
As of December 31, 2023, the average tenure of our workforce was 9 years, and 13 years for our officers; 71% of our employees at the manager level and above were promoted from within the Company.
As of December 31, 2024, the average tenure of our workforce was 10 years, and 12 years for our officers; 76% of our employees at the manager level and above were promoted from within the Company.
The Nominating and Corporate Governance Committee of the Board of Directors has direct oversight over ESG and in 2023, met for two formal discussions on ESG and also received periodic updates from Company management. Supplemental U.S.
The Nominating and Corporate Governance Committee of the Board of Directors has direct oversight of our corporate responsibility program and initiatives, and in 2024, met for two formal discussions on these topics and also received periodic updates from Company management. Supplemental U.S.
Treasury Regulations further require that a qualified foreign pension fund or qualified controlled entity will not be exempt from FIRPTA with respect to dispositions of U.S. real property interests or REIT distributions attributable to the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests at the time of the disposition of the U.S. real property interest or the REIT distribution.
A qualified controlled entity generally includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities. 9 Treasury Regulations further require that a qualified foreign pension fund or qualified controlled entity will not be exempt from FIRPTA with respect to dispositions of U.S. real property interests or REIT distributions attributable to the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests at the time of the disposition of the U.S. real property interest or the REIT distribution.
The Company typically initially funds its development and acquisition programs through its unsecured bank credit facilities; the total capacity of which was increased in January 2023 by $200,000,000, from $475,000,000 to $675,000,000 (as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K).
In the near term, the Company funds its development and acquisition programs through its $675,000,000 unsecured bank credit facilities, as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K.
Human Capital Matters We believe our employees are a critical component of the success and sustainability of our Company, and we are committed to providing a diverse and inclusive work environment that encourages collaboration and teamwork. • Workforce Diversity: As of December 31, 2023, we employed 96 team members, 99% considered full-time and 1% part-time, located in 15 offices in Arizona, California, Florida, Georgia, Mississippi, North Carolina, South Carolina and Texas, and as of such date, none of these employees were members of a union or subject to a collective bargaining agreement.
Human Capital Matters We believe our employees are a critical component of the success and sustainability of our Company, and we are committed to providing a diverse and inclusive work environment that encourages collaboration and teamwork. • Workforce Diversity: As of December 31, 2024, we employed 101 team members, across 15 locations in Texas, Florida, California, Arizona, North Carolina, Nevada, Georgia, Mississippi and South Carolina.
Also during 2023, the Company began construction of 11 development projects containing 2.4 million square feet and transferred 13 5 projects, which contain 2.3 million square feet and had costs of $271,568,000 at the date of transfer, from its development and value-add program to real estate properties.
Also during 2024, the Company began construction of 10 development projects containing 1,585,000 square feet and transferred seven projects, which contain 1,519,000 square feet and had costs of $199,971,000 at the date of transfer, from its development and value-add program to real estate properties.
Alternatively, if a qualified foreign pension fund or qualified controlled entity held U.S. real property interests as of the earliest date during the period described in the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements. 9 Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships, may certify its status as such and will not be treated as a foreign person for purposes of withholding under Section 1445 of the Code (and Section 1446 of the Code, as applicable).
Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships, may certify its status as such and will not be treated as a foreign person for purposes of withholding under Section 1445 of the Code (and Section 1446 of the Code, as applicable).
The Company acquired 987,000 square feet of operating properties and 328.3 acres of land for a total of $235,780,000.
The Company acquired 2,474,000 square feet of operating properties and 61.1 acres of land for a total of $403,773,000.
This metric is based on a target number of newly-constructed buildings with qualifying electric vehicle charging stations as a percentage of total qualifying buildings for each fiscal year. If the metric is achieved, the applicable interest rate margin on the Company’s $625,000,000 unsecured credit facility is reduced by one basis point for the following year.
This metric is based on the number of newly-constructed buildings with qualifying electric vehicle charging stations as a percentage of total qualifying buildings for each fiscal year. The impact to interest rates on the credit facility is further described in Note 5 in the Notes to Consolidated Financial Statements.
All of our employees participate in annual performance reviews and feedback sessions.
Additional trainings covering numerous environmental sustainability topics and trends are available to employees through our third-party sustainability consultant. All of our employees participate in annual performance reviews and feedback sessions.
Through EastGroup’s continued efforts, numerous properties have been Leadership in Energy and Environmental Design (“LEED”), Building Owners and Managers Association 360 and ENERGY STAR® certified, and while formal certification is not always pursued, the Company builds its development properties with the intention of meeting LEED certifiable standards.
Through EastGroup’s continued efforts, numerous properties have been certified through the U.S. Green Building Council's Leadership in Energy and Environmental Design (“LEED ® ”) green building program, ENERGY STAR ® and the BOMA 360 Performance Program ® of the Building Owners and Managers Association (“BOMA”) International ® .
For the years ended December 31, 2022 and 2023, the metric was exceeded, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric. The Company believes that its continued commitment to pursue environmentally conscious performance creates positive impacts on the environment and long-term value for the Company and its stakeholders.
The Company believes that its continued commitment to these practices creates positive impacts on the environment and long-term value for the Company and its stakeholders.
Our team is comprised of the following types of personnel: • asset, construction and property managers; • accounting, administrative, human resources and information technology professionals; and 7 • our corporate leadership team. Our employee base is gender diverse, with 74% identifying as women as of December 31, 2023 and 64% of new hires in 2023 identifying as women.
As of such date, 7 100% of these employees were full-time and none were members of a union or subject to a collective bargaining agreement. Our team is comprised of the following types of personnel: • asset, construction and property managers; • accounting, administrative, human resources, investor relations and information technology professionals; and • our corporate leadership team.
The Company consistently invests in energy-efficient improvements throughout its portfolio, such as LED lighting, skylights, white reflective roofing, electric vehicle charging stations and smart sensor irrigation systems. In June 2021, the Company amended and restated its unsecured revolving credit facility, providing for an incremental reduction in borrowing costs if a certain sustainability-linked metric is achieved.
While formal certification is not always pursued, the Company prioritizes the use of energy and water efficient fixtures during development and consistently invests in efficiency improvements for existing properties, such as LED lighting, white reflective roofing, electric vehicle charging stations and smart sensor irrigation systems.
The Company released a Corporate Green Office Guide during 2022, which contains best environmental practices for its corporate offices, and it continues to seek additional ways to engage with tenants on environmental matters, including recycling initiatives, Earth Day celebrations, and other tenant appreciation events at many of its properties.
EastGroup assesses climate-related risks using information obtained through third-party risk and resilience assessments and seeks to engage with tenants on climate risk and other environmental matters, including through newsletters, recycling initiatives, Earth Day celebrations, and other tenant appreciation events at many of its properties.
During 2023, EastGroup sold three operating properties containing 231,000 square feet and 11.9 acres of land, which generated gross proceeds of $43,150,000.
During 2024, EastGroup sold a group of operating properties in the Jackson, Mississippi market, containing 159,000 square feet and disposed of 5.4 acres of land in two markets, generating gross sales proceeds of $18,311,000.
Removed
During 2022, the Company furthered its commitment to ESG initiatives by partnering with a sustainability consulting firm and beginning to utilize an environmental data management platform, with the goal of more reliably tracking and benchmarking operational performance.
Added
The Company has an unsecured revolving credit facility subject to a sustainability-linked pricing component, pursuant to which the applicable interest margin and facility fee may be adjusted annually based on a sustainability performance metric as calculated for the preceding year.
Removed
The Company also worked to formalize its approach toward ESG management and risk assessment during 2023 by creating an environmental management system and implementing an ESG due diligence scorecard for potential building acquisitions, which includes an assessment of each building’s environmental and resilience characteristics, as well as a physical climate risk assessment.
Added
During 2024, EastGroup continued to work with a sustainability consulting firm to track and benchmark the Company's environmental data and further expand its corporate responsibility policies, practices and voluntary disclosures.
Removed
A qualified controlled entity generally includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities.
Added
The Company also adopted its Corporate Responsibility Policy during 2024, formalizing EastGroup's commitments, goals and targets related to topics such as environmental sustainability, climate resilience, social responsibility, stakeholder engagement and corporate governance.
Added
As of December 31, 2024, our employee base is gender diverse, comprised of 72% women and 28% men. Also, of the employees hired during the year ended December 31, 2024, 67% are women. The officer group is comprised of 49% women and 51% men.
Added
Our employees are provided with training and peer mentoring programs to further develop their professional skill set, along with reimbursements for professional designations and continuing education, enhancing the level of service provided to our customers and the quality of information disclosed to our stakeholders.
Added
Alternatively, if a qualified foreign pension fund or qualified controlled entity held U.S. real property interests as of the earliest date during the period described in the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOf these matters, substantially all of which are to be covered by the Company’s liability insurance and which, in the aggregate, are not expected to have a material adverse effect on the Company’s financial condition or results of operations.
Biggest changeSubstantially all of these matters are anticipated to be covered by the Company’s liability insurance; they are also not expected to have a material adverse effect on the Company’s financial condition or results of operations, individually or in the aggregate.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFiscal years ended December 31, 2018 2019 2020 2021 2022 2023 EastGroup $ 100.00 148.20 158.13 266.35 178.27 227.53 FTSE Nareit Equity REITs 100.00 126.00 115.92 166.04 125.58 142.82 S&P 500 Total Return 100.00 131.49 155.68 200.38 164.09 207.23 The information above assumes that the value of the investment in shares of EastGroup’s common stock and each index was $100 on December 31, 2018, and that all dividends were reinvested.
Biggest changeFiscal years ended December 31, 2019 2020 2021 2022 2023 2024 EastGroup $ 100.00 106.70 179.73 120.29 153.53 138.42 FTSE Nareit Equity REITs 100.00 92.00 131.78 99.67 113.35 123.25 S&P 500 Total Return 100.00 118.40 152.39 124.79 157.60 197.03 The information above assumes that the value of the investment in shares of EastGroup’s common stock and each index was $100 on December 31, 2019, and that all dividends were reinvested.
The Company distributed all of its 2023 and 2022 taxable income to its stockholders. We generally pay quarterly cash dividends to holders of our common stock at the discretion of our Board of Directors.
The Company distributed all of its 2024 and 2023 taxable income to its stockholders. We generally pay quarterly cash dividends to holders of our common stock at the discretion of our Board of Directors.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Period Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2023 through October 31, 2023 — $ — — — November 1, 2023 through November 30, 2023 — — — — December 1, 2023 through December 31, 2023 (1) 64 178.38 — — Total 64 $ 178.38 — (1) As permitted under the Company’s equity compensation plan, these shares were withheld by the Company to satisfy the tax withholding obligations in connection with the issuance of shares of common stock. 19 Performance Graph The following graph compares, over the five years ended December 31, 2023, the cumulative total shareholder return on EastGroup’s common stock with the cumulative total return of the Standard & Poor’s 500 Total Return Index (S&P 500 Total Return) and the FTSE Equity REIT index prepared by the National Association of Real Estate Investment Trusts (FTSE Nareit Equity REITs).
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Period Total Number of Shares Purchased Weighted Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 through October 31, 2024 — $ — — — November 1, 2024 through November 30, 2024 (1) 14 172.72 — — December 1, 2024 through December 31, 2024 (1) 31 172.48 — — Total 45 $ 172.55 — (1) As permitted under the Company’s equity compensation plan, these shares were withheld by the Company to satisfy the tax withholding obligations in connection with the issuance of shares of common stock. 19 Performance Graph The following graph compares, over the five years ended December 31, 2024, the cumulative total shareholder return on EastGroup’s common stock with the cumulative total return of the Standard & Poor’s 500 Total Return Index (S&P 500 Total Return) and the FTSE Equity REIT index prepared by the National Association of Real Estate Investment Trusts (FTSE Nareit Equity REITs).
The following table summarizes the federal income tax treatment for all distributions by the Company for the years 2023 and 2022.
The following table summarizes the federal income tax treatment for all distributions by the Company for the years 2024 and 2023.
Federal Income Tax Treatment of Share Distributions Years Ended December 31, 2023 2022 Common Share Distributions: (Per share) Ordinary dividends $ 5.02083 4.53746 Nondividend distributions — — Unrecaptured Section 1250 capital gain — — Other capital gain — — Total Common Distributions (1) $ 5.02083 4.53746 (1) Pursuant to Internal Revenue Code of 1986, as amended, Section 857(b)(9), cash distributions made on January 12, 2024 with a record date of December 29, 2023 were treated as received by shareholders on December 31, 2023 to the extent of 2023 undistributed earnings and profits.
Federal Income Tax Treatment of Share Distributions Years Ended December 31, 2024 2023 Common Share Distributions: (Per share) Ordinary dividends $ 5.21028 5.02083 Nondividend distributions — — Unrecaptured Section 1250 capital gain — — Other capital gain — — Total Common Distributions (1) $ 5.21028 5.02083 (1) Pursuant to Internal Revenue Code of 1986, as amended, Section 857(b)(9), cash distributions made on January 15, 2025 with a record date of December 31, 2024 were treated as received by shareholders on December 31, 2024 to the extent of 2024 undistributed earnings and profits.
Cash distributions made on January 13, 2023 with a record date of December 30, 2022 were treated as received by shareholders on December 31, 2022 to the extent of 2022 undistributed earnings and profits.
Cash distributions made on January 12, 2024 with a record date of December 29, 2023 were treated as received by shareholders on December 31, 2023 to the extent of 2023 undistributed earnings and profits.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s shares of common stock are listed for trading on the NYSE under the symbol “EGP.” As of February 13, 2024, there were 397 holders of record of the Company’s 47,956,587 outstanding shares of common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The Company’s shares of common stock are listed for trading on the NYSE under the symbol “EGP.” As of February 11, 2025, there were 378 holders of record of the Company’s 52,024,019 outstanding shares of common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe details of the unsecured debt obtained in 2022 and 2023 are shown in the following table: NEW UNSECURED DEBT IN 2022 AND 2023 Margin Effectively Fixed Interest Rate Date Obtained Maturity Date Amount (In thousands) $100 Million Senior Unsecured Term Loan (1)(2) 0.95% 2.61% 03/31/2022 09/29/2028 $ 100,000 $150 Million Senior Unsecured Notes Not applicable 3.03% 04/20/2022 04/20/2032 150,000 $50 Million Senior Unsecured Term Loan (1) 0.95% 4.09% 08/31/2022 08/30/2024 50,000 $75 Million Senior Unsecured Term Loan (1) 0.95% 4.00% 08/31/2022 08/31/2027 75,000 $75 Million Senior Unsecured Notes Not applicable 4.90% 10/12/2022 10/12/2033 75,000 $75 Million Senior Unsecured Notes Not applicable 4.95% 10/12/2022 10/12/2034 75,000 $100 Million Senior Unsecured Term Loan (1) 1.35% 5.27% 01/13/2023 01/13/2030 100,000 Weighted Average Effectively Fixed Interest Rate and Total Amount for 2022 and 2023 3.98% $ 625,000 (1) The interest rates on these unsecured term loans are comprised of Term Secured Overnight Financing Rate ( “ SOFR ” ) plus a margin which is subject to a pricing grid for changes in the Company’s coverage ratings.
Biggest changeThe decrease in interest expense from unsecured debt was partially offset by new unsecured debt obtained during the year ended December 31, 2023: NEW UNSECURED DEBT IN 2023 Margin Effectively Fixed Interest Rate Date Obtained Maturity Date Amount (In thousands) $100 Million Senior Unsecured Term Loan (1) 1.35% 5.27% 01/13/2023 01/13/2030 $ 100,000 (1) The interest rate on this unsecured term loan is comprised of Term Secured Overnight Financing Rate ( “ SOFR ” ) plus a margin which is subject to a pricing grid for changes in the Company’s coverage ratings.
The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Florida, Texas, Arizona, California and North Carolina.
The Company develops, acquires and operates distribution facilities, the majority of which are clustered around major transportation features in supply-constrained submarkets in major Sunbelt regions. The Company’s core markets are in the states of Texas, Florida, California, Arizona and North Carolina.
The Company believes that the exclusion of depreciation and amortization in the calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be 22 comparable to similarly titled but differently calculated measures for other REITs.
The Company believes that the exclusion of depreciation and amortization in the calculations of PNOI and FFO provides supplemental indicators of the properties’ performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs.
PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market-based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments. EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI”; the Company also presents Same PNOI Excluding Income from Lease Terminations.
PNOI is defined as Income from real estate operations less Expenses from real estate operations (including market based internal management fee expense) plus the Company’s share of income and property operating expenses from its less-than-wholly-owned real estate investments. 22 EastGroup sometimes refers to PNOI from Same Properties as “Same PNOI”; the Company also presents Same PNOI Excluding Income from Lease Terminations.
Additionally, the forward price that we expect to receive upon settlement of an agreement will be 33 subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
Additionally, the forward price that we expect to receive upon settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.
In connection with the Current 2023 ATM program, we may sell shares of our common stock through sales agents or through certain financial institutions acting as forward purchasers whereby, at our discretion, the forward counterparties may borrow from third parties and subsequently sell shares of our common stock.
In connection with the Current ATM program, we may sell shares of our common stock through sales agents or through certain financial institutions acting as forward purchasers whereby, at our discretion, the forward counterparties may borrow from third parties and subsequently sell shares of our common stock.
The Company believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the operations of the Company, and the Company also believes it can issue common and/or preferred equity and obtain debt financing on currently acceptable terms.
EastGroup believes its current operating cash flow and unsecured bank credit facilities provide the capacity to fund the operations of the Company, and the Company also believes it can issue common and/or preferred equity and obtain debt financing on currently acceptable terms.
The Company anticipates that its current cash balance, operating cash flows, borrowings under its unsecured bank credit facilities, proceeds from new debt and/or proceeds from the issuance of equity instruments will be adequate for (i) operating and administrative expenses, (ii) normal repair and maintenance expenses at its properties, (iii) debt service obligations, (iv) maintaining compliance with its debt covenants, (v) distributions to stockholders, (vi) capital improvements, (vii) purchases of properties, (viii) development, and (ix) any other normal business activities of the Company, both in the short-term and long-term.
LIQUIDITY AND CAPITAL RESOURCES The Company anticipates that its current cash balance, operating cash flows, borrowings under its unsecured bank credit facilities, proceeds from new debt and/or proceeds from the issuance of equity instruments will be adequate for (i) operating and administrative expenses, (ii) normal repair and maintenance expenses at its properties, (iii) debt service obligations, (iv) maintaining compliance with its debt covenants, (v) distributions to stockholders, (vi) capital improvements, (vii) purchases of properties, (viii) development, and (ix) any other normal business activities of the Company, both in the short-term and long-term.
Increases in property operating expenses are fully recoverable under net leases and recoverable to a 23 high degree under modified gross leases. Modified gross leases often include base year amounts, and expense increases over these amounts are recoverable.
Increases in property operating expenses are fully recoverable under net leases and recoverable to a high degree under modified gross leases. Modified gross leases often include base year amounts, and expense increases over these amounts are recoverable.
The Company’s exposure to property operating expenses is primarily due to vacancies and leases for occupied space that limit the amount of expenses that can be recovered. The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO Attributable to Common Stockholders for the three fiscal years ended December 31, 2023, 2022 and 2021.
The Company’s exposure to property operating expenses is primarily due to vacancies and leases for occupied space that limit the amount of expenses that can be recovered. The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO Attributable to Common Stockholders for the three fiscal years ended December 31, 2024, 2023 and 2022.
The decrease resulted from the change in fair value of the Company’s interest rate swaps (cash flow hedges) which are further discussed in Notes 11 and 12 in the Notes to Consolidated Financial Statements. 27 RESULTS OF OPERATIONS 2023 Compared to 2022 Net Income Attributable to EastGroup Properties, Inc.
The decrease resulted from the change in fair value of the Company’s interest rate swaps (cash flow hedges) which are further discussed in Notes 11 and 12 in the Notes to Consolidated Financial Statements. 27 RESULTS OF OPERATIONS 2024 Compared to 2023 Net Income Attributable to EastGroup Properties, Inc.
The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining minimum debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at December 31, 2023.
The Company’s unsecured bank credit facilities have certain restrictive covenants, such as maintaining minimum debt service coverage and leverage ratios and maintaining insurance coverage, and the Company was in compliance with all of its financial debt covenants at December 31, 2024.
The interest rate is reset on a daily basis and as of December 31, 2023, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.
The interest rate is reset on a daily basis and as of December 31, 2024, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points.
The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI Excluding Income from Lease Terminations for the three fiscal years ended December 31, 2023, 2022 and 2021.
The following table presents reconciliations of Net Income to PNOI, Same PNOI and Same PNOI Excluding Income from Lease Terminations for the three fiscal years ended December 31, 2024, 2023 and 2022.
For the year ended December 31, 2023, Same Properties includes properties which were included in the operating portfolio for the entire period from January 1, 2022 through December 31, 2023.
For the year ended December 31, 2024, Same Properties includes properties which were included in the operating portfolio for the entire period from January 1, 2023 through December 31, 2024.
Same PNOI, excluding income from lease terminations, increased 6.6% for the year ended December 31, 2023, compared to 2022. • Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023).
Same PNOI, excluding income from lease terminations, increased 4.8% for the year ended December 31, 2024, compared to 2023. • Same property average occupancy represents the average month-end percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2023 through December 31, 2024).
Years Ended December 31, 2023 2022 2021 (In thousands, except per share data) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC.
Years Ended December 31, 2024 2023 2022 (In thousands, except per share data) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC.
The capitalized costs incurred on development and value-add projects subsequent to transfer to Real estate properties include capital improvements at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel costs). EastGroup capitalized internal development costs of $10,472,000 during the year ended December 31, 2023, compared to $9,985,000 during 2022.
The capitalized costs incurred on development and value-add projects subsequent to transfer to Real estate properties include capital improvements at the properties and do not include other capitalized costs associated with development (i.e., interest expense, property taxes and internal personnel costs). EastGroup capitalized internal development costs of $8,181,000 during the year ended December 31, 2024, compared to $10,472,000 during 2023.
For future debt issuances, the Company intends to issue primarily unsecured fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public debt market in the future as a means to raise capital.
For future debt issuances, the Company intends to issue primarily unsecured fixed-rate debt, including variable-rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps. The Company may also access the public debt or convertible bond markets in the future as a means to raise capital.
Same property average occupancy for the year ended December 31, 2023 was 98.4% compared to 98.3% for 2022. • The same property average rental rate calculated in accordance with GAAP represents the average annual rental rates of leases in place for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023).
Same property average occupancy for the year ended December 31, 2024 was 96.7% compared to 98.2% for 2023. • The same property average rental rate calculated in accordance with GAAP represents the average annual rental rates of leases in place for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2023 through December 31, 2024).
The Company typically initially funds its development and acquisition programs through its $675,000,000 unsecured bank credit facilities (as discussed below in Liquidity and Capital Resources ).
In the near term, the Company funds its development and acquisition programs through its $675,000,000 unsecured bank credit facilities (as discussed below in Liquidity and Capital Resources ).
The Company's $50,000,000 unsecured bank credit facility has a maturity date of July 30, 2025, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $625,000,000 facility are exercised.
The Company has a $50,000,000 unsecured bank credit facility with a maturity date of July 31, 2028, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $625,000,000 facility are exercised.
On October 25, 2023, we established an at-the-market common stock offering program pursuant to which we are able to sell from time to time shares of our common stock having an aggregate gross sales price of up to $750,000,000, (the “Current 2023 ATM Program”).
On October 25, 2024, we established an ATM common stock offering program pursuant to which we are able to sell from time to time shares of our common stock having an aggregate gross sales price of up to $1,000,000,000 (the “Current ATM Program”).
This percentage was reduced to 9.1% as of February 13, 2024. The Company generates new sources of leasing revenue through its acquisitions and also its development and value-add program. The Company mitigates risks associated with development through a Board-approved maximum level of land held for development and by adjusting development start dates according to leasing activity.
This percentage was reduced to 8.2% as of February 11, 2025. The Company generates new sources of leasing revenue through its acquisitions and also its development and value-add program. The Company mitigates risks associated with development through a Board-approved maximum level of land held for development and by adjusting development start dates according to leasing activity.
Property Net Operating Income (“PNOI”) Excluding Income from Lease Terminations from same properties (defined as operating properties owned during the entire current and prior year reporting periods – January 1, 2022 through December 31, 2023), increased 6.6% for 2023 compared to 2022. EastGroup’s operating portfolio was 98.7% leased at both December 31, 2023 and 2022.
Property Net Operating Income (“PNOI”) Excluding Income from Lease Terminations from same properties (defined as operating properties owned during the entire current and prior year reporting periods – January 1, 2023 through December 31, 2024), increased 4.8% for 2024 compared to 2023. 21 EastGroup’s operating portfolio was 97.1% leased at December 31, 2024 compared to 98.7% at December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” 31 under the heading “2022 Compared to 2021” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 15, 2023, and is incorporated herein by reference.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “2023 Compared to 2022” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 14, 2024, and is incorporated herein by reference.
As of December 31, 2023, the interest rate was 6.255% with no outstanding balance. 32 For both facilities, the margin and facility fee are subject to changes in the Company’s credit ratings.
As of December 31, 2024, the interest rate was 5.335% with no outstanding balance. 32 For both facilities, the margin and facility fee are subject to changes in the Company’s credit ratings.
Occupancy at December 31, 2023 was 98.2%. Quarter-end occupancy ranged from 97.7% to 98.3% over the previous four quarters ended December 31, 2022 to September 30, 2023. • Rental rate change represents the rental rate increase or decrease on new and renewal leases compared to the prior leases on the same space.
Occupancy at December 31, 2024 was 96.1%. Quarter-end occupancy ranged from 96.5% to 98.2% over the previous four quarters ended December 31, 2023 to September 30, 2024. • Rental rate change represents the rental rate increase or decrease on new and renewal leases compared to the prior leases on the same space.
The same property average rental rate was $7.58 per square foot for the year ended December 31, 2023, compared to $7.08 per square foot for the year ended December 31, 2022. 24 • Occupancy is the percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage as of the close of the reporting period.
The same property average rental rate was $8.22 per square foot for the year ended December 31, 2024, compared to $7.76 per square foot for the year ended December 31, 2023. • Occupancy is the percentage of leased square footage for which the lease term has commenced as compared to the total leasable square footage as of the close of the reporting period.
An amount for dividends payable of $62,393,000 was included in Accounts payable and accrued expenses at December 31, 2023, which includes dividends payable on unvested restricted stock of $1,921,000, which are subject to continued service and will be paid upon vesting in future periods.
An amount for dividends payable of $74,049,000 was included in Accounts payable and accrued expenses at December 31, 2024, which includes dividends payable on unvested restricted stock of $1,617,000, which are subject to continued service and will be paid upon vesting in future periods.
The Current 2023 ATM Program replaced our previous $750,000,000 ATM program (the “Prior ATM Program”), which was established on December 16, 2022, under which we had sold shares of our common stock having an aggregate gross sales price of $464,305,000 through October 25, 2023.
The Current ATM Program replaced our previous $750,000,000 ATM program (the “Prior ATM Program”), which was established on October 25, 2023, under which we had sold shares of our common stock having an aggregate gross sales price of $746,153,000 through October 25, 2024.
FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims was $7.70 per diluted share for the year ended December 31, 2023 compared to $7.00 per diluted share for 2022, an increase of 10.0%.
FFO Excluding Gain on Involuntary Conversion and Business Interruption Claims was $8.31 per diluted share for the year ended December 31, 2024 compared to $7.70 per diluted share for 2023, an increase of 7.9%.
See Results of Operations for further analysis. • The change in FFO per diluted share represents the increase or decrease in FFO per diluted share from the current year compared to the prior year. For 2023, FFO was $7.79 per diluted share compared with $7.00 per diluted share for 2022, an increase of 11.3%.
See Results of Operations for further analysis. • The change in FFO per diluted share represents the increase or decrease in FFO per diluted share from the current year compared to the prior year. For 2024, FFO was $8.35 per diluted share compared with $7.79 per diluted share for 2023, an increase of 7.2%.
The following paragraphs explain these changes in greater detail. Assets Real Estate Properties Real estate properties increased $457,576,000 during the year ended December 31, 2023.
The following paragraphs explain these changes in greater detail. Assets Real Estate Properties Real estate properties increased $649,896,000 during the year ended December 31, 2024.
EastGroup’s variable rate interest expense decreased by $792,000 for 2023 as compared to 2022 primarily due to a decrease in average borrowings, partially offset by an increase in the Company’s weighted average variable interest rates on its unsecured bank credit facilities as shown in the following table: Years Ended December 31, 2023 2022 Increase (Decrease) (In thousands, except rates of interest) Average borrowings on unsecured bank credit facilities - variable rate $ 49,384 182,478 (133,094) Weighted average variable interest rates (excluding amortization of facility fees and debt issuance costs) 5.68% 2.32% 29 The Company’s fixed rate interest expense increased by $14,131,000 for 2023 as compared to 2022 primarily as a result of the unsecured debt activity described below.
EastGroup’s variable rate interest expense decreased by $2,653,000 for 2024 as compared to 2023 primarily due to a decrease in average borrowings, partially offset by an increase in the Company’s weighted average variable interest rates on its unsecured bank credit facilities as shown in the following table: Years Ended December 31, 2024 2023 Increase (Decrease) (In thousands, except rates of interest) Average borrowings on unsecured bank credit facilities — variable rate $ 1,776 49,384 (47,608) Weighted average variable interest rates (excluding amortization of facility fees and debt issuance costs) 6.25% 5.68% The Company’s fixed rate interest expense decreased by $2,799,000 for 2024 as compared to 2023 primarily as a result of the unsecured debt activity described below.
Occupancy at the end of 2023 for the operating portfolio was 98.2% compared to 98.3% at December 31, 2022. As of February 13, 2024, the operating portfolio was 97.8% leased and 97.6% occupied. As of December 31, 2023, leases approximating 10.5% of the operating portfolio, based on a percentage of annualized based rent, were scheduled to expire in 2024.
Occupancy at the end of 2024 for the operating portfolio was 96.1% compared to 98.2% at December 31, 2023. As of February 11, 2025, the operating portfolio was 96.5% leased and 95.7% occupied. As of December 31, 2024, leases approximating 10.1% of the operating portfolio, based on a percentage of annualized based rent, were scheduled to expire in 2025.
The $625,000,000 facility also includes a sustainability-linked pricing component pursuant to which the applicable interest rate margin is reduced by one basis point if the Company meets a certain sustainability performance target.
The $625,000,000 facility is also subject to a sustainability-linked pricing component, pursuant to which the applicable interest rate margin is adjusted if the Company meets a certain sustainability performance target.
The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 34 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company’s management considers the following accounting policies and estimates to be critical to the reported operations of the Company.
The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
(2) Represents commitments on real estate properties, except for tenant improvement allowance obligations. (3) Represents commitments on properties in the Company’s development and value-add program, except for tenant improvement allowance obligations. (4) Represents tenant improvement allowance obligations.
(2) Represents commitments on real estate properties, except for tenant improvement allowance obligations. (3) Represents commitments on properties in the Company’s development and value-add program, except for tenant improvement allowance obligations. (4) Represents tenant improvement allowance obligations. (5) Represents ground lease payments due within one year.
The increase was primarily due to: (i) the transfer of 13 properties from Development and value-add properties to Real estate properties (as detailed under Development and Value-Add Properties below); (ii) the acquisition of five operating properties; (iii) capital improvements at the Company’s properties; and (iv) costs incurred on development and value-add projects subsequent to transfer to Real estate properties discussed below.
The increase was primarily due to: (i) the acquisition of operating properties; (ii) the transfer of properties from Development and value-add properties to Real estate properties ; (iii) capital improvements at the Company’s properties; (iv) right of use assets for the Company’s ground leases; and (v) costs incurred on development and value-add projects subsequent to transfer to Real estate properties discussed below.
Capitalized leasing costs for the years ended December 31, 2023 and 2022 were as follows: Estimated Useful Life Years Ended December 31, 2023 2022 (In thousands) Development and value-add Lease Life $ 9,597 14,366 New tenants Lease Life 9,379 10,392 Renewal tenants Lease Life 12,696 12,095 Total capitalized leasing costs (1) $ 31,672 36,853 Amortization of leasing costs $ 22,133 18,950 (1) Reconciliation of Total capitalized leasing costs to Leasing commissions on the Consolidated Statements of Cash Flows: Years Ended December 31, 2023 2022 (In thousands) Total capitalized leasing costs $ 31,672 36,853 Change in leasing commissions payables 332 419 Leasing commissions on the Consolidated Statements of Cash Flows $ 32,004 37,272 2022 Compared to 2021 A discussion of changes in the Company’s results of operations between 2022 and 2021 has been omitted from this Form 10-K and can be found in “Part II.
Capitalized leasing costs for the years ended December 31, 2024 and 2023 were as follows: Estimated Useful Life Years Ended December 31, 2024 2023 (In thousands) Development and value-add Lease Term $ 7,117 9,597 New tenants Lease Term 16,478 9,379 Renewal tenants Lease Term 11,318 12,696 Total capitalized leasing costs (1) $ 34,913 31,672 Amortization of leasing costs $ 25,522 22,133 (1) Reconciliation of Total capitalized leasing costs to Leasing commissions on the Consolidated Statements of Cash Flows: Years Ended December 31, 2024 2023 (In thousands) Total capitalized leasing costs $ 34,913 31,672 Change in leasing commissions payables (2,759) 332 Leasing commissions on the Consolidated Statements of Cash Flows $ 32,154 32,004 2023 Compared to 2022 A discussion of changes in the Company’s results of operations between 2023 and 2022 has been omitted from this Form 10-K and can be found in “Part II.
See the table below for details. • During 2023, EastGroup recognized gains on involuntary conversion and business interruption claims of $4,187,000 ($0.09 per diluted share). There were no gains on involuntary conversion and business interruption claims during 2022.
See the table below for details. • EastGroup recognized gains on involuntary conversion and business interruption claims of $1,708,000 ($0.03 per diluted share) during 2024, compared to $4,187,000 ($0.09 per diluted share) during 2023.
COMMON STOCKHOLDERS $ 200,491 186,182 157,557 Depreciation and amortization 171,078 153,638 127,099 Company’s share of depreciation from unconsolidated investment 124 124 136 Depreciation and amortization from noncontrolling interest (5) (17) — Gain on sales of real estate investments (17,965) (40,999) (38,859) Gain on sales of non-operating real estate (446) — — FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS 353,277 298,928 245,933 Gain on involuntary conversion and business interruption claims (4,187) — — FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS — EXCLUDING GAIN ON INVOLUNTARY CONVERSION AND BUSINESS INTERRUPTION CLAIMS $ 349,090 298,928 245,933 Net income attributable to common stockholders per diluted share $ 4.42 4.36 3.90 FFO attributable to common stockholders per diluted share $ 7.79 7.00 6.09 FFO attributable to common stockholders - excluding gain on involuntary conversion and business interruption claims per diluted share $ 7.70 7.00 6.09 Diluted shares for earnings per share and funds from operations 45,331 42,712 40,377 The Company analyzes the following performance trends in evaluating the revenues and expenses of the Company: • Net Income Attributable to EastGroup Properties, Inc.
COMMON STOCKHOLDERS $ 227,751 200,491 186,182 Depreciation and amortization 189,411 171,078 153,638 Company’s share of depreciation from unconsolidated investment 125 124 124 Depreciation and amortization attributable to noncontrolling interest (5) (5) (17) Gain on sales of real estate investments (8,751) (17,965) (40,999) Gain on sales of non-operating real estate (362) (446) — FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS 408,169 353,277 298,928 Gain on involuntary conversion and business interruption claims (1,708) (4,187) — FFO ATTRIBUTABLE TO COMMON STOCKHOLDERS — EXCLUDING GAIN ON INVOLUNTARY CONVERSION AND BUSINESS INTERRUPTION CLAIMS $ 406,461 349,090 298,928 Net income attributable to common stockholders per diluted share $ 4.66 4.42 4.36 FFO attributable to common stockholders per diluted share $ 8.35 7.79 7.00 FFO attributable to common stockholders per diluted share — excluding gain on involuntary conversion and business interruption claims $ 8.31 7.70 7.00 Diluted shares for earnings per share and funds from operations 48,911 45,331 42,712 The Company analyzes the following performance trends in evaluating the revenues and expenses of the Company: • Net Income Attributable to EastGroup Properties, Inc.
EastGroup entered into 91 leases with certain rent concessions on 3,282,000 square feet during 2023 with total rent concessions of $7,543,000 over the terms of the leases, compared to 114 leases with rent concessions on 4,798,000 square feet with total rent concessions of $7,378,000 over the terms of the leases in 2022.
EastGroup entered into 136 leases with certain rent concessions on 5,201,000 square feet during 2024 with total rent concessions of $13,135,000 over the terms of the leases, compared to 91 leases with rent concessions on 3,282,000 square feet with total rent concessions of $7,543,000 over the terms of the leases in 2023.
Liabilities Unsecured bank credit facilities, net of debt issuance costs decreased $169,974,000 during the year ended December 31, 2023, mainly due to repayments of $641,624,000 and new debt issuance costs incurred during the year, partially offset by borrowings of $471,624,000 and the amortization of debt issuance costs during the year.
Liabilities Unsecured bank credit facilities, net of debt issuance costs decreased $2,075,000 during the year ended December 31, 2024, mainly due to repayments of $64,968,000 and new debt issuance costs incurred during the year, offset by borrowings of $64,968,000 and the amortization of debt issuance costs during the year.
Common Stockholders for the year ended December 31, 2023 was $200,491,000 ($4.43 per basic and $4.42 per diluted share) compared to $186,182,000 ($4.37 per basic and $4.36 per diluted share) for 2022.
Common Stockholders for the year ended December 31, 2024 was $227,751,000 ($4.67 per basic and $4.66 per diluted share) compared to $200,491,000 ($4.43 per basic and $4.42 per diluted share) for 2023.
Common Stockholders for the year ended December 31, 2023 was $200,491,000 ($4.43 per basic and $4.42 per diluted share) compared to $186,182,000 ($4.37 per basic and $4.36 per diluted share) for the year ended December 31, 2022.
Common Stockholders for the year ended December 31, 2024 was $227,751,000 ($4.67 per basic and $4.66 per diluted share) compared to $200,491,000 ($4.43 per basic and $4.42 per diluted share) for the year ended December 31, 2023.
The Company continues to monitor these supply chain, inflation and interest rate factors, as well as the uncertainty resulting from the overall economic environment.
The Company continues to monitor inflation and interest rates, as well as the uncertainty resulting from the overall regulatory and economic environment.
Years Ended December 31, 2023 2022 2021 (In thousands) Income from real estate operations $ 566,179 486,817 409,412 Expenses from real estate operations (154,030) (133,915) (115,078) Noncontrolling interest in PNOI of consolidated joint ventures (62) (105) (61) PNOI from 50% owned unconsolidated investment 1,234 1,234 960 PROPERTY NET OPERATING INCOME (“PNOI”) $ 413,321 354,031 295,233 Income from real estate operations is comprised of rental income, net of reserves for uncollectible rent, expense reimbursement pass-through income and other real estate income including lease termination fees.
Years Ended December 31, 2024 2023 2022 (In thousands) Income from real estate operations $ 638,035 566,179 486,817 Expenses from real estate operations (174,212) (154,030) (133,915) Noncontrolling interest in PNOI of consolidated joint ventures (62) (62) (105) PNOI from 50% owned unconsolidated investment 1,234 1,234 1,234 PROPERTY NET OPERATING INCOME (“PNOI”) $ 464,995 413,321 354,031 Income from real estate operations is comprised of rental income, expense reimbursement pass-through income and other real estate income.
Equity Additional paid-in capital increased $698,386,000 during the year ended December 31, 2023 primarily due to: (i) the issuance of common stock under the Company’s continuous common equity offering program (as discussed below under Liquidity and Capital Resources ) and (ii) activity related to stock-based compensation (as discussed in Note 10 in the Notes to Consolidated Financial Statements).
Equity Additional paid-in capital increased $723,486,000 during the year ended December 31, 2024 primarily due to the issuance of common stock under the Company’s ATM programs (as discussed in Note 9 in the Notes to Consolidated Financial Statements) and activity related to stock-based compensation (as discussed in Note 10 in the Notes to Consolidated Financial Statements).
LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $338,202,000 for the year ended December 31, 2023. The primary other sources of cash were from proceeds from common stock offerings; borrowings on unsecured bank credit facilities; proceeds from unsecured debt; and net proceeds from sales of real estate investments.
Net cash provided by operating activities was $416,587,000 for the year ended December 31, 2024. The primary other sources of cash were from proceeds from common stock offerings; borrowings on unsecured bank credit facilities; and net proceeds from sales of real estate investments. The Company distributed $252,794,000 in common stock dividends during 2024.
PNOI increased $29,821,000 from newly developed and value-add properties, $19,557,000 from same property operations and $9,694,000 from 2022 and 2023 acquisitions. • The change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023).
PNOI increased $20,089,000 from same property operations, $18,354,000 from newly developed and value-add properties and $15,915,000 from 2023 and 2024 acquisitions; PNOI decreased $2,642,000 from operating properties sold in 2023 and 2024. • The change in Same PNOI represents the PNOI increase or decrease for the same operating properties owned during the entire current and prior year reporting periods (January 1, 2023 through December 31, 2024).
During the year ended December 31, 2023, Distributions in excess of earnings increased $31,575,000 as a result of dividends on common stock of $232,066,000 exceeding Net Income Attributable to EastGroup Properties, Inc. Common Stockholders of $200,491,000. Accumulated other comprehensive income decreased $11,483,000 during 2023.
During the year ended December 31, 2024, Distributions in excess of earnings increased $36,699,000 as a result of dividends on common stock of $264,450,000 exceeding Net Income Attributable to EastGroup Properties, Inc. Common Stockholders of $227,751,000. Accumulated other comprehensive income decreased $2,935,000 during 2024.
The Company recognized $17,965,000 in Gain on sales of real estate investments and $446,000 in gains on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive Income) during 2023.
The Company recognized $8,751,000 in Gain on sales of real estate investments and $362,000 in gains on sales of non-operating real estate (included in Other on the Consolidated Statements of Income and Comprehensive Income) during the year ended December 31, 2024.
As of February 14, 2024, approximately $440,322,000 of common stock remains available to be sold under the Current 2023 ATM Program.
As of February 12, 2025, approximately $719,665,000 of common stock remains available to be sold under the Current ATM Program.
Straight-lining of rent increased PNOI by $11,898,000 and $9,991,000 in 2023 and 2022, respectively. • EastGroup recognized Gains on sales of real estate investments of $17,965,000 ($0.40 per diluted share) during 2023 compared to $40,999,000 ($0.96 per diluted share) during 2022.
Straight-lining of rent increased Income from real estate operations by $11,450,000 and $11,289,000 in 2024 and 2023, respectively. • EastGroup recognized Gains on sales of real estate investments of $8,751,000 ($0.18 per diluted share) during 2024, compared to $17,965,000 ($0.40 per diluted share) during 2023.
Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development projects based on development activity. RECENT ACCOUNTING PRONOUNCEMENTS See Note 1(p) in the Notes to Consolidated Financial Statements.
The internal costs are allocated to specific development projects based on development activity. RECENT ACCOUNTING PRONOUNCEMENTS See Note 1(p) in the Notes to Consolidated Financial Statements.
Also in 2023, the Company transferred 13 development and value-add projects (2,341,000 square feet) in 10 markets from its 21 development and value-add program to real estate properties, with costs of $271,568,000 at the date of transfer. As of December 31, 2023, EastGroup’s development and value-add program consisted of 18 projects (4,077,000 square feet) located in 12 markets.
Also in 2024, the Company transferred seven development and value-add projects (1,519,000 square feet) in six markets from its development and value-add program to real estate properties, with costs of $199,971,000 at the date of transfer. As of December 31, 2024, EastGroup’s development and value-add program consisted of 21 projects (4,143,000 square feet) located in 14 markets.
Capitalized interest increased by $3,842,000 for 2023 as compared to 2022, due to increased borrowing rates and changes in development spending. 30 Real Estate Improvements Real estate improvements for EastGroup’s operating properties for the years ended December 31, 2023 and 2022 were as follows: Estimated Useful Life Years Ended December 31, 2023 2022 (In thousands) Upgrade on acquisitions 40 yrs $ 1,892 618 Tenant improvements: New tenants Lease Life 16,352 13,224 Renewal tenants Lease Life 3,503 3,687 Other: Building improvements 5-40 yrs 8,085 9,853 Roofs 5-15 yrs 17,386 6,611 Parking lots 3-5 yrs 4,824 3,482 Other 5 yrs 1,508 1,969 Total real estate improvements (1) $ 53,550 39,444 (1) Reconciliation of Total real estate improvements to Real estate improvements on the Consolidated Statements of Cash Flows: Years Ended December 31, 2023 2022 (In thousands) Total real estate improvements $ 53,550 39,444 Change in real estate property payables (527) 197 Change in construction in progress (1,907) 1,210 Real estate improvements on the Consolidated Statements of Cash Flows $ 51,116 40,851 Capitalized Leasing Costs The Company’s leasing costs (principally commissions) are capitalized and included in Other assets .
Real Estate Improvements Real estate improvements for EastGroup’s operating properties for the years ended December 31, 2024 and 2023 were as follows: Estimated Useful Life Years Ended December 31, 2024 2023 (In thousands) Upgrade on acquisitions 40 years $ 1,435 1,892 Tenant improvements: New tenants Lease Term 18,540 16,352 Renewal tenants Lease Term 2,964 3,503 Other: Building improvements 5 - 40 years 13,006 8,085 Roofs 5 - 15 years 12,940 17,386 Parking lots 3 - 5 years 4,763 4,824 Other 5 years 4,480 1,508 Total real estate improvements (1) $ 58,128 53,550 (1) Reconciliation of Total real estate improvements to Real estate improvements on the Consolidated Statements of Cash Flows: Years Ended December 31, 2024 2023 (In thousands) Total real estate improvements $ 58,128 53,550 Change in real estate property payables (719) (527) Change in construction in progress 1,879 (1,907) Real estate improvements on the Consolidated Statements of Cash Flows $ 59,288 51,116 30 Capitalized Leasing Costs The Company’s leasing costs (principally commissions) are capitalized and included in Other assets .
As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings.
The Company expects liquidity sources and needs in future years to be consistent in nature with those for the year ended December 31, 2024. As market conditions permit, EastGroup issues equity and/or employs fixed-rate debt, including variable-rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings.
Years Ended December 31, 2023 2022 2021 (In thousands) NET INCOME $ 200,548 186,274 157,638 Gain on sales of real estate investments (17,965) (40,999) (38,859) Gain on sales of non-operating real estate (446) — — Interest income (879) (100) (6) Other revenue (4,412) (208) (63) Indirect leasing costs 582 546 700 Depreciation and amortization 171,078 153,638 127,099 Company’s share of depreciation from unconsolidated investment 124 124 136 Interest expense 47,996 38,499 32,945 General and administrative expense 16,757 16,362 15,704 Noncontrolling interest in PNOI of consolidated joint ventures (62) (105) (61) PROPERTY NET OPERATING INCOME (“PNOI”) 413,321 354,031 295,233 PNOI from 2022 and 2023 acquisitions (19,165) (9,471) * PNOI from 2022 and 2023 development and value-add properties (47,739) (17,918) * PNOI from 2022 and 2023 operating property dispositions (1,813) (1,753) * Other PNOI 166 324 * SAME PNOI 344,770 325,213 * Net lease termination fee income from same properties (907) (2,708) * SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS $ 343,863 322,505 * * Same property metrics are not applicable to the year ended December 31, 2021, as the same property metrics for 2023 and 2022 are based on operating properties owned during the entire current and prior year reporting periods (January 1, 2022 through December 31, 2023).
Years Ended December 31, 2024 2023 2022 (In thousands) NET INCOME $ 227,807 200,548 186,274 Gain on sales of real estate investments (8,751) (17,965) (40,999) Gain on sales of non-operating real estate (362) (446) — Interest income (1,334) (879) (100) Other revenue (2,199) (4,412) (208) Indirect leasing costs 785 582 546 Depreciation and amortization 189,411 171,078 153,638 Company’s share of depreciation from unconsolidated investment 125 124 124 Interest expense 38,956 47,996 38,499 General and administrative expense 20,619 16,757 16,362 Noncontrolling interest in PNOI of consolidated joint ventures (62) (62) (105) PROPERTY NET OPERATING INCOME (“PNOI”) 464,995 413,321 354,031 PNOI from 2023 and 2024 acquisitions (19,249) (3,334) * PNOI from 2023 and 2024 development and value-add properties (31,544) (13,190) * PNOI from 2023 and 2024 operating property dispositions (177) (2,819) * Other PNOI 208 166 * SAME PNOI 414,233 394,144 * Lease termination fee income from same properties (2,192) (1,020) * SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS $ 412,041 393,124 * * Same property metrics are not applicable to the year ended December 31, 2022, as the same property metrics for 2024 and 2023 are based on operating properties owned during the entire current and prior year reporting periods (January 1, 2023 through December 31, 2024). 23 PNOI was calculated as follows for the three fiscal years ended December 31, 2024, 2023 and 2022.
Other liabilities increased $5,749,000 during 2023. See Note 8 in the Notes to Consolidated Financial Statements for further details.
See Note 8 in the Notes to Consolidated Financial Statements for further details.
Total capital invested for development and value-add properties during 2023 was $388,213,000, which primarily consisted of improvement costs of $301,596,000 on development and value-add properties, $70,664,000 for new land investments, and costs of $15,953,000 on properties subsequent to transfer to Real estate propertie s.
Total capital invested for development and value-add properties during 2024 was $245,033,000, which primarily consisted of improvement costs of $227,487,000 on development and value-add properties, $13,762,000 for new land investments, and costs of $3,784,000 on properties subsequent to transfer to Real estate propertie s.
The following table presents the components of Interest Expense for 2023 and 2022: Years Ended December 31, 2023 2022 Increase (Decrease) (In thousands) VARIABLE RATE INTEREST EXPENSE Unsecured bank credit facilities interest — variable rate (excluding amortization of facility fees and debt issuance costs) $ 2,804 4,241 (1,437) Amortization of facility fees — unsecured bank credit facilities 1,005 713 292 Amortization of debt issuance costs — unsecured bank credit facilities 1,003 650 353 Total variable rate interest expense 4,812 5,604 (792) FIXED RATE INTEREST EXPENSE Unsecured debt interest (1) (excluding amortization of debt issuance costs) 58,428 44,492 13,936 Secured debt interest (excluding amortization of debt issuance costs) 51 89 (38) Amortization of debt issuance costs — unsecured debt 909 704 205 Amortization of debt issuance costs — secured debt 31 3 28 Total fixed rate interest expense 59,419 45,288 14,131 Total interest 64,231 50,892 13,339 Less capitalized interest (16,235) (12,393) (3,842) TOTAL INTEREST EXPENSE $ 47,996 38,499 9,497 (1) Includes interest on the Company’s unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 12 in the Notes to Consolidated Financial Statements.
The following table presents the components of Interest Expense for 2024 and 2023: Years Ended December 31, VARIABLE RATE INTEREST EXPENSE 2024 2023 Increase (Decrease) (In thousands) Unsecured bank credit facilities interest — variable rate (excluding amortization of facility fees and debt issuance costs) $ 111 2,804 (2,693) Amortization of facility fees — unsecured bank credit facilities 1,012 1,005 7 Amortization of debt issuance costs — unsecured bank credit facilities 1,036 1,003 33 Total variable rate interest expense 2,159 4,812 (2,653) FIXED RATE INTEREST EXPENSE Unsecured debt interest (excluding amortization of debt issuance costs) (1) 55,742 58,428 (2,686) Secured debt interest (excluding amortization of debt issuance costs) — 51 (51) Amortization of debt issuance costs — unsecured debt 878 909 (31) Amortization of debt issuance costs — secured debt — 31 (31) Total fixed rate interest expense 56,620 59,419 (2,799) Total interest 58,779 64,231 (5,452) Less capitalized interest (19,823) (16,235) (3,588) TOTAL INTEREST EXPENSE $ 38,956 47,996 (9,040) (1) Includes interest on the Company’s unsecured debt with fixed interest rates per the debt agreements or effectively fixed interest rates due to interest rate swaps, as discussed in Note 12 in the Notes to Consolidated Financial Statements.
This sustainability metric is evaluated annually and was achieved for the years ended December 31, 2023 and 2022, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric. The margin was effectively reduced on this unsecured bank credit facility by one basis point, from 77.5 to 76.5 basis points.
This sustainability metric is evaluated annually and was achieved for the years ended December 31, 2024, 2023 and 2022, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric.
During the year ended December 31, 2023, EastGroup purchased 328.3 acres of land in seven markets for a total of $70,664,000. The Company began construction of 11 development projects containing 2,435,000 square feet in eight markets.
During the year ended December 31, 2024, EastGroup purchased 61.1 acres of land in two markets for a total of $13,762,000. The Company began construction of 10 development projects containing 1,585,000 square feet in seven markets.
FFO increased during the year ended December 31, 2023, as compared to 2022, primarily due to the increase in PNOI and other revenue, partially offset by the increase in interest expense. • For the year ended December 31, 2023, PNOI increased by $59,290,000, or 16.7%, compared to 2022.
FFO increased during the year ended December 31, 2024, as compared to 2023, primarily due to the 24 increase in PNOI and the decrease in interest expense, partially offset by an increase in general and administrative expense. • For the year ended December 31, 2024, PNOI increased by $51,674,000, or 12.5%, compared to 2023.
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.
For properties included in Development and value-add properties , 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 34 costs) deemed related to such development activities.
The Company distributed $225,625,000 in common stock dividends during 2023. Other primary uses of cash were for repayments on unsecured bank credit facilities and unsecured debt; the construction and development of properties; purchases of real estate; capital improvements at various properties; and leasing commissions.
The Company also paid $390,011,000 related to the purchase of real estate property. Other primary uses of cash were for the 31 construction and development of properties; repayments on unsecured bank credit facilities and unsecured debt; capital improvements at various properties; and leasing commissions.
During the year ended December 31, 2023, we entered into forward equity sale agreements with certain financial institutions acting as forward purchasers under our Current 2023 ATM program with respect to 406,041 shares of common stock at a weighted average initial forward price of $183.92 per share.
During the year ended December 31, 2024, EastGroup entered into forward equity sale agreements with certain financial institutions acting as forward counterparties under its ATM programs with respect to 2,677,289 shares of common stock with an initial weighted average forward price of $178.32 per share.
The Company’s percentage of leased square footage for the operating portfolio was 98.7% at both December 31, 2023 and 2022. Occupancy at the end of 2023 for the operating portfolio was 98.2% compared to 98.3% at December 31, 2022. 28 Interest Expense increased $9,497,000 for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Occupancy at the end of 2024 for the operating portfolio was 96.1% compared to 98.2% at December 31, 2023. 28 Interest Expense decreased $9,040,000 for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The Company has two standby letters of credit totaling $2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.
As of December 31, 2024, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 5.222%. The Company has two standby letters of credit totaling $2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.
We did not receive any proceeds from the sale of common shares by the forward purchasers at the time we entered into forward equity sale agreements. As of December 31, 2023, we had not settled any of the outstanding forward equity sale agreements by issuing shares of our common stock.
The Company did not receive any proceeds from the sale of common shares by the forward counterparties at the time it entered into forward equity sale agreements.
Also, the Company incurred costs of $15,953,000 on development and value-add projects subsequent to transfer to Real estate properties ; the Company records these expenditures as development and value-add costs on the Consolidated Statements of Cash Flows. Also, during the year ended December 31, 2023, EastGroup sold 231,000 square feet of operating properties, generating gross sales proceeds of $38,400,000.
Also, the Company incurred costs of $3,784,000 on development and value-add projects subsequent to transfer to Real estate properties ; the Company records these expenditures as development and value-add costs on the Consolidated Statements of Cash Flows.
Unsecured debt, net of debt issuance costs decreased $14,912,000 during the year ended December 31, 2023, primarily due to the repayment of a $65,000,000 term loan in March, the $50,000,000 principal repayment on its senior unsecured notes in August and new debt issuance costs incurred during the period.
The Company’s credit facilities are described in greater detail in Liquidity and Capital Resources . Unsecured debt, net of debt issuance costs decreased $169,190,000 during the year ended December 31, 2024, primarily due to the repayment of a $50,000,000 term loan in August and $120,000,000 in principal repayments on the Company's senior unsecured notes in December.
FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”). Nareit’s guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a real estate investment trust's (“REIT’s”) business are excluded from the calculation of FFO.
Nareit’s guidance allows preparers an option as it pertains to whether gains or losses on sale, or impairment charges, on real estate assets incidental to a REIT’s business are excluded from the calculation of FFO. EastGroup has made the election to exclude activity related to such assets that are incidental to our business.
These decreases were partially offset by the closing of a $100,000,000 senior unsecured term loan in January and the amortization of debt issuance costs. These changes are described in greater detail below under Liquidity and Capital Resources . Accounts payable and accrued expenses increased $9,349,000 during 2023. See Note 7 in the Notes to Consolidated Financial Statements for further details.
The borrowings and repayments on Unsecured debt, net of debt issuance costs are described in greater detail under Liquidity and Capital Resources . Accounts payable and accrued expenses increased $1,005,000 during 2024. See Note 7 in the Notes to Consolidated Financial Statements for further details. Other liabilities increased $44,613,000 during 2024.
These increases were offset by the transfer of 13 development and value-add projects to Real estate properties with a total investment of $271,568,000 as of the date of transfer. The Company also transferred one operating property to Development and value-add properties with a total investment of $4,553,000 as of the date of transfer.
Costs associated with these acquisitions are included below in the Development and Value-Add Properties table. These increases were offset by the transfer of seven development and value-add projects to Real estate properties with a total investment of $199,971,000 as of the date of transfer.
The Company expects liquidity sources and needs in future years to be consistent in nature with those for the year ended December 31, 2023. As of December 31, 2023, the Company was contractually obligated to pay the dividend declared in December 2023, which was paid in January 2024.
As of December 31, 2024, the Company was contractually obligated to pay the dividend declared in December 2024, which was paid in January 2025.
The increase is primarily due to the operating properties acquired by the Company in 2022 and 2023 and the properties transferred from Development and value-add properties in 2022 and 2023, partially offset by operating properties sold in 2022 and 2023. • Interest expense increased by $9,497,000 ($0.21 per diluted share) during 2023 compared to 2022.
The increase is primarily due to the operating properties acquired by the Company in 2023 and 2024 and the properties transferred from Development and value-add properties in 2023 and 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company’s interest rate swaps are discussed in Note 12 in the Notes to Consolidated Financial Statements. 35 The table below presents the principal payments due and weighted average interest rates, which include the impact of interest rate swaps, for both the fixed rate and variable rate debt as of December 31, 2023. 2024 2025 2026 2027 2028 Thereafter Total Fair Value Unsecured bank credit facilities — variable rate (in thousands) $ — — (1) — — — — — — (2) Weighted average interest rate — 6.19% (3) — — — — 6.19% Unsecured debt — fixed rate (in thousands) $ 170,000 145,000 140,000 175,000 160,000 890,000 1,680,000 1,548,655 (4) Weighted average interest rate 3.65% 3.13% 2.57% 2.74% 3.10% 3.66% 3.37% (1) The variable rate unsecured bank credit facilities mature in July 2025, and as of December 31, 2023, the Company had no borrowings on both the $625,000,000 unsecured bank credit facility and the $50,000,000 unsecured bank credit facility.
Biggest changeThe table below presents the principal payments due and weighted average interest rates, which include the impact of interest rate swaps, for both the fixed rate and variable rate debt as of December 31, 2024. 2025 2026 2027 2028 2029 Thereafter Total Fair Value Unsecured bank credit facilities — variable rate (in thousands) $ — — — — (1) — — — — (2) Weighted average interest rate — — — 5.28% (3) — — 5.28% Unsecured debt — fixed rate (in thousands) $ 145,000 140,000 175,000 160,000 155,000 735,000 1,510,000 1,403,754 (4) Weighted average interest rate 3.13% 2.56% 2.74% 3.10% 3.88% 3.61% 3.34% (1) The variable rate unsecured bank credit facilities mature in July 2028, and as of December 31, 2024, the Company had no borrowings on both the $625,000,000 unsecured bank credit facility and the $50,000,000 unsecured bank credit facility.
It may also impact the Company’s ability to (i) renew leases or re-lease space as leases expire, or (ii) lease development space. In addition, an economic downturn or recession, could also lead to an increase in overall vacancy rates or a decline in rents the Company can charge to re-lease properties upon expiration of current leases.
It may also impact the Company’s ability to (i) renew leases or re-lease space as 35 leases expire, or (ii) lease development space. In addition, an economic downturn or recession, could also lead to an increase in overall vacancy rates or a decline in rents the Company can charge to re-lease properties upon expiration of current leases.
Assuming there was a $100,000,000 balance on the unsecured bank credit facilities, and if interest rates changed by 10%, or approximately 62 basis points, interest expense and cash flows would increase or decrease by approximately $620,000 annually.This does not include variable rate debt that has been effectively fixed through the use of interest rate swaps.
Assuming there was a $100,000,000 balance on the unsecured bank credit facilities, and if interest rates changed by 10%, or approximately 53 basis points, interest expense and cash flows would increase or decrease by approximately $528,000 annually. This does not include variable rate debt that has been effectively fixed through the use of interest rate swaps.
As the table above incorporates only those exposures that existed as of December 31, 2023, it does not consider those exposures or positions that could arise after that date.
As the table above incorporates only those exposures that existed as of December 31, 2024, it does not consider those exposures or positions that could arise after that date.
(3) Represents the weighted average interest rate for the Company’s variable rate unsecured bank credit facilities as of December 31, 2023.
(3) Represents the weighted average interest rate for the Company’s variable rate unsecured bank credit facilities as of December 31, 2024.
As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings.
As market conditions permit, EastGroup issues equity and/or employs fixed rate debt, including variable rate debt that has been swapped to an effectively fixed rate through the use of interest rate swaps, to replace the short-term bank borrowings. The Company’s interest rate swaps are discussed in Note 12 in the Notes to Consolidated Financial Statements.
The state of the economy, or other adverse changes in general or local economic conditions could result in the inability of some of the Company’s existing tenants to make lease payments and may therefore increase the reserves for uncollectible rent.
The state of the economy, or other adverse changes in general or local economic conditions could result in the inability of some of the Company’s existing tenants to make lease payments and may therefore result in uncollectible rent, reducing Income from real estate operations .

Other EGP 10-K year-over-year comparisons