10-Q 1 egp-20240930.htm 10-Q egp-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________

FORM 10-Q

(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024
or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____
                    
Commission File Number: 1-07094


EG Logo_rgb.jpg


EASTGROUP PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland13-2711135
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
400 W Parkway Place 
Suite 100 
Ridgeland,Mississippi39157
(Address of principal executive offices)(Zip code)

Registrant’s telephone number, including area code: (601) 354-3555

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par value per shareEGPNew York Stock Exchange

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

-1-

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.   
Large Accelerated Filer ☒Accelerated Filer
 ☐
Non-accelerated Filer
 ☐
Smaller Reporting Company☐Emerging Growth Company☐
                   
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of common stock, $0.0001 par value, outstanding as of October 23, 2024 was 49,505,601.
-2-

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS
FOR THE QUARTER ENDED SEPTEMBER 30, 2024 
  Page
 
   
 
   
 
   
 
   
 
   
 
  
 
   
   
   
   
 
   
   
  
   
 

-3-

PART I.      FINANCIAL INFORMATION.

ITEM 1.      FINANCIAL STATEMENTS.

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
 September 30,
2024		December 31,
2023
ASSETS  
Real estate properties$5,184,057 4,853,548 
Development and value-add properties654,092 639,647 
 5,838,149 5,493,195 
Less accumulated depreciation(1,376,198)(1,273,723)
 4,461,951 4,219,472 
Unconsolidated investment7,169 7,539 
Cash and cash equivalents16,957 40,263 
Other assets267,988 251,939 
TOTAL ASSETS$4,754,065 4,519,213 
LIABILITIES AND EQUITY  
LIABILITIES  
Unsecured bank credit facilities, net of debt issuance costs$(3,848)(1,520)
Unsecured debt, net of debt issuance costs1,627,018 1,676,347 
Accounts payable and accrued expenses205,320 146,337 
Other liabilities92,884 89,415 
Total Liabilities1,921,374 1,910,579 
EQUITY  
Stockholders’ Equity:  
Common shares; $0.0001 par value; 70,000,000 shares authorized; 49,206,050 shares issued
      and outstanding at September 30, 2024 and 47,700,432 at December 31, 2023
5 5 
Excess shares; $0.0001 par value; 30,000,000 shares authorized; no shares issued
— — 
Additional paid-in capital3,207,773 2,949,907 
Distributions in excess of earnings(389,274)(366,473)
Accumulated other comprehensive income13,940 24,888 
Total Stockholders’ Equity2,832,444 2,608,327 
Noncontrolling interest in joint ventures247 307 
Total Equity2,832,691 2,608,634 
TOTAL LIABILITIES AND EQUITY$4,754,065 4,519,213 
 
See accompanying Notes to Consolidated Financial Statements (unaudited).


-4-

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months EndedNine Months Ended
 September 30,September 30,
 2024202320242023
REVENUES  
Income from real estate operations$162,861 144,378 474,268 417,153 
Other revenue15 2,152 1,922 4,289 
 162,876 146,530 476,190 421,442 
EXPENSES  
Expenses from real estate operations44,163 40,709 131,017 114,662 
Depreciation and amortization48,917 42,521 139,749 125,830 
General and administrative5,154 3,429 16,576 13,017 
Indirect leasing costs159 147 556 436 
 98,393 86,806 287,898 253,945 
OTHER INCOME (EXPENSE)  
Interest expense(9,871)(11,288)(29,764)(36,888)
Gain on sales of real estate investments— — 8,751 4,809 
Other582 474 1,874 1,661 
NET INCOME55,194 48,910 169,153 137,079 
Net income attributable to noncontrolling interest in joint ventures(14)(14)(42)(43)
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS55,180 48,896 169,111 137,036 
Other comprehensive income (loss) — interest rate swaps(15,747)5,777 (10,948)5,717 
TOTAL COMPREHENSIVE INCOME$39,433 54,673 158,163 142,753 
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS  
Net income attributable to common stockholders$1.13 1.07 3.50 3.07 
Weighted average shares outstanding — Basic48,864 45,658 48,324 44,688 
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS  
Net income attributable to common stockholders$1.13 1.07 3.49 3.06 
Weighted average shares outstanding — Diluted48,999 45,788 48,435 44,782 

See accompanying Notes to Consolidated Financial Statements (unaudited).
-5-

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
For the nine months ended September 30, 2024:
Common SharesAdditional
Paid-In Capital		Distributions in Excess of EarningsAccumulated Other Comprehensive IncomeNoncontrolling Interest in Joint VenturesTotal
BALANCE, DECEMBER 31, 2023$5 2,949,907 (366,473)24,888 307 2,608,634 
Net income— — 58,644 — 14 58,658 
Net unrealized change in fair value of interest rate swaps— — — 5,894 — 5,894 
Common dividends declared — $1.27 per
   share
— — (61,125)— — (61,125)
Stock-based compensation, net of
   forfeitures
— 4,147 — — — 4,147 
Issuance of 272,342 shares of common
   stock, common stock offering, net of
   expenses
— 49,294 — — — 49,294 
Withheld 33,381 shares of common stock to
   satisfy tax withholding obligations in
   connection with the vesting of restricted
   stock
— (6,125)— — — (6,125)
Withheld 68 shares of common stock to
   satisfy tax withholding obligations in
   connection with the issuance of common
   stock
— (13)— — — (13)
Net distributions to noncontrolling interest— — — — (67)(67)
Contributions from noncontrolling interest— — — — 62 62 
BALANCE, MARCH 31, 20245 2,997,210 (368,954)30,782 316 2,659,359 
Net income— — 55,287 — 14 55,301 
Net unrealized change in fair value of interest rate swaps— — — (1,095)— (1,095)
Common dividends declared — $1.27 per
   share
— — (61,889)— — (61,889)
Stock-based compensation, net of
   forfeitures
— 2,644 — — — 2,644 
Issuance of 639,299 shares of common
   stock, common stock offering, net of expenses
— 112,710 — — — 112,710 
Withheld 57 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock
— (10)— — — (10)
Net distributions to noncontrolling interest— — — — (73)(73)
BALANCE, JUNE 30, 20245 3,112,554 (375,556)29,687 257 2,766,947 
Net income— — 55,180 — 14 55,194 
Net unrealized change in fair value of interest rate swaps— — — (15,747)— (15,747)
Common dividends declared — $1.40 per
   share
— — (68,898)— — (68,898)
Stock-based compensation, net of
   forfeitures
— 3,012 — — — 3,012 
Issuance of 540,252 shares of common
   stock, common stock offering, net of
   expenses
— 92,210 — — — 92,210 
Withheld 22 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock
— (3)— — — (3)
Net distributions to noncontrolling interest— — — — (24)(24)
BALANCE, SEPTEMBER 30, 2024$5 3,207,773 (389,274)13,940 247 2,832,691 
See accompanying Notes to Consolidated Financial Statements (unaudited).
-6-


EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
For the nine months ended September 30, 2023:
Common SharesAdditional
Paid-In Capital		Distributions in Excess of EarningsAccumulated Other Comprehensive IncomeNoncontrolling Interest in Joint VenturesTotal
BALANCE, DECEMBER 31, 2022$4 2,251,521 (334,898)36,371 441 1,953,439 
Net income— — 44,690 — 14 44,704 
Net unrealized change in fair value of interest rate swaps— — — (10,262)— (10,262)
Common dividends declared — $1.25 per
   share
— — (55,414)— — (55,414)
Stock-based compensation, net of
   forfeitures
— 3,477 — — — 3,477 
Issuance of 652,909 shares of common
   stock, common stock offering, net of
   expenses
— 105,321 — — — 105,321 
Withheld 31,254 shares of common stock to
   satisfy tax withholding obligations in
   connection with the vesting of restricted
   stock
— (4,836)— — — (4,836)
Withheld 46 shares of common stock to
   satisfy tax withholding obligations in
   connection with the issuance of common
   stock
— (7)— — — (7)
Net distributions to noncontrolling interest— — — — (40)(40)
BALANCE, MARCH 31, 20234 2,355,476 (345,622)26,109 415 2,036,382 
Net income— — 43,450 — 15 43,465 
Net unrealized change in fair value of interest rate swaps— — — 10,202 — 10,202 
Common dividends declared — $1.25 per
   share
— — (56,762)— — (56,762)
Stock-based compensation, net of
   forfeitures
— 2,771 — — — 2,771 
Issuance of 1,065,678 shares of common stock, common stock offering, net of expenses
— 177,749 — — — 177,749 
Net distributions to noncontrolling interest— — — — (86)(86)
BALANCE, JUNE 30, 20234 2,535,996 (358,934)36,311 344 2,213,721 
Net income— — 48,896 — 14 48,910 
Net unrealized change in fair value of interest rate swaps— — — 5,777 — 5,777 
Common dividends declared — $1.27 per
   share
— — (59,154)— — (59,154)
Stock-based compensation, net of
   forfeitures
— 2,766 — — — 2,766 
Issuance of 953,070 shares of common
   stock, common stock offering, net of
   expenses
— 167,315 — — — 167,315 
Withheld 74 shares of common stock to satisfy tax withholding obligations in connection with the issuance of common stock
— (13)— — — (13)
Net distributions to noncontrolling interest— — — — (57)(57)
BALANCE, SEPTEMBER 30, 2023$4 2,706,064 (369,192)42,088 301 2,379,265 
See accompanying Notes to Consolidated Financial Statements (unaudited).
-7-

EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
 Nine Months Ended September 30,
 20242023
OPERATING ACTIVITIES  
Net income                                                                                                       $169,153 137,079 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization139,749 125,830 
Stock-based compensation expense8,277 6,835 
Gain on sales of real estate investments(8,751)(4,809)
Gain on sales of non-operating real estate(222)(446)
Gain on involuntary conversion and business interruption claims(1,708)(4,187)
Changes in operating assets and liabilities:  
Accrued income and other assets(10,630)(11,986)
Accounts payable, accrued expenses and prepaid rent65,021 50,434 
Other                                                                                                       1,804 1,349 
NET CASH PROVIDED BY OPERATING ACTIVITIES362,693 300,099 
INVESTING ACTIVITIES  
Development and value-add properties(181,353)(286,256)
Purchases of real estate(143,585)(87,338)
Real estate improvements(49,287)(42,097)
Net proceeds from sales of real estate investments and non-operating real estate17,397 13,821 
Leasing commissions(24,748)(22,712)
Proceeds from involuntary conversion on real estate assets2,450 1,339 
Changes in accrued development costs(12,950)26,724 
Changes in other assets and other liabilities(4,720)7,060 
NET CASH USED IN INVESTING ACTIVITIES(396,796)(389,459)
FINANCING ACTIVITIES  
Proceeds from unsecured bank credit facilities 55,262 334,230 
Repayments on unsecured bank credit facilities(55,262)(504,230)
Proceeds from unsecured debt— 100,000 
Repayments on unsecured debt(50,000)(115,000)
Repayments on secured debt— (1,970)
Debt issuance costs(3,099)(1,796)
Distributions paid to stockholders (not including dividends accrued)(184,030)(166,960)
Proceeds from common stock offerings254,356 450,869 
Common stock offering related costs(142)(484)
Other(6,288)(4,981)
NET CASH PROVIDED BY FINANCING ACTIVITIES10,797 89,678 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(23,306)318 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD40,263 56 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$16,957 374 
SUPPLEMENTAL CASH FLOW INFORMATION  
      Cash paid for interest, net of amounts capitalized of $14,797 and $11,864 for 2024 and 2023,
    respectively
$22,631 30,888 
Cash paid for operating lease liabilities1,783 1,620 

See accompanying Notes to Consolidated Financial Statements (unaudited).
-8-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


(1)BASIS OF PRESENTATION
The accompanying unaudited financial statements of EastGroup Properties, Inc. (“EastGroup” or “the Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In management’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  The financial statements should be read in conjunction with the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2023 and the notes thereto.

(2)PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and the investee of any joint ventures in which the Company has a controlling interest.

As of September 30, 2024 and December 31, 2023, EastGroup had a 95% controlling interest in a joint venture arrangement owning 6.5 acres of land in San Diego, known by the Company as Miramar Land. During the year ended December 31, 2023, a joint venture, in which EastGroup owns a 99.5% interest, acquired 29.3 acres of land in Denver, known by the Company as Arista 36 Business Park 1-3. As of September 30, 2024 and December 31, 2023, EastGroup continued to hold a controlling interest in these two joint venture arrangements.

The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. 

The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution Center 2.  All significant intercompany transactions and accounts have been eliminated in consolidation.

(3)USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and to disclose material contingent assets and liabilities at the date of the financial statements.  Actual results could differ from those estimates.

(4)LEASE REVENUE
The Company’s primary source of revenue is rental income from business distribution space. The table below presents the components of Income from real estate operations for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended
September 30,		Nine Months Ended September 30,
2024202320242023
(In thousands)
Lease income — operating leases$121,797 106,683 353,135 311,529 
Variable lease income (1)
41,064 37,695 121,133 105,624 
Income from real estate operations$162,861 144,378 474,268 417,153 

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

(5)REAL ESTATE PROPERTIES
EastGroup has one reportable segment – industrial properties, consistent with the Company’s manner of internal reporting, measurement of operating results and allocation of the Company’s resources.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.  During the nine month periods ended September 30, 2024 and 2023, the Company did not identify any impairment charges which should be recorded.
-9-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of generally 40 years for buildings and 3 to 15 years for improvements.  Building improvements are capitalized, while maintenance and repair expenses are charged to expense as incurred.  Significant renovations and improvements that improve or extend the useful life of the assets are capitalized.  Depreciation expense was $40,046,000 and $114,897,000 for the three and nine months ended September 30, 2024, respectively, and $35,031,000 and $103,567,000 for the same periods in 2023.

The Company’s Real estate properties and Development and value-add properties at September 30, 2024 and December 31, 2023 were as follows:
 September 30,
2024		December 31,
2023
 (In thousands)
Real estate properties:  
   Land$876,198 814,364 
   Buildings and building improvements3,562,908 3,336,615 
   Tenant and other improvements727,945 684,573 
   Right of use assets — Ground leases (operating) (1)
17,006 17,996 
Development and value-add properties (2)
654,092 639,647 
 5,838,149 5,493,195 
   Less accumulated depreciation(1,376,198)(1,273,723)
 $4,461,951 4,219,472 

(1)EastGroup applies the principles of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases, and its related Accounting Standards Updates (“ASUs”) to account for its ground leases, which are classified as operating leases. The related operating lease liabilities for ground leases are included in Other liabilities on the Consolidated Balance Sheets.
(2)Value-add properties are defined in Note 6.

(6)DEVELOPMENT AND VALUE-ADD PROPERTIES
Development and value-add properties consists of properties in lease-up, under construction, and prospective development (primarily land). Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% leased as of the acquisition date (or will be less than 75% occupied within one year of the acquisition date based on near term lease roll), or (2) 20% or greater of the gross carrying amount of the property will be spent to redevelop the property.

Costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property.  Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development projects based on development activity. As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant. The Company transfers properties from Development and value-add properties to Real estate properties as follows: (1) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (2) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or one year after completion of the shell construction/value-add acquisition date, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).

(7)REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES
Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations. The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses. Under the guidance, companies are required to utilize an initial screening test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. Criteria considered in grouping similar assets include geographic location, market and operational risks and the physical characteristics of the assets. EastGroup determined that its real estate property acquisitions in 2023 and the first nine months of 2024 are considered to be acquisitions of groups of similar identifiable assets;
-10-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company capitalized acquisition costs related to its 2023 and 2024 acquisitions.

The FASB Codification also provides guidance on how to properly determine the allocation of the purchase price among the individual components of both the tangible and intangible assets based on their respective fair values.  The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. Land is valued using comparable land sales specific to the applicable market, provided by a third party. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties.  The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates.  

The purchase price is also allocated among the following categories of intangible assets: the above or below market component of in-place leases and the value of leases in-place at the time of acquisition.  The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease. The amounts allocated to above and below market lease intangibles are included in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases. In-place lease intangibles are valued based upon management’s assessment of factors such as an estimate of foregone rents and avoided leasing costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.  These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining terms of the existing leases.

Amortization of above and below market lease intangibles, which is included in Income from real estate operations, increased rental income by $612,000 and $1,765,000 for the three and nine months ended September 30, 2024, respectively, and $560,000 and $1,855,000 for the same periods in 2023. Amortization expense for in-place lease intangibles, which is included in Depreciation and amortization, was $2,009,000 and $5,828,000 for the three and nine months ended September 30, 2024, respectively, and $1,895,000 and $6,031,000 for the same periods in 2023.

During the nine months ended September 30, 2024, EastGroup acquired the following properties:
REAL ESTATE PROPERTIES ACQUIRED IN 2024
LocationSizeDate
Acquired
Cost (1)
  (Square feet) (In thousands)
Operating properties acquired (2)(3)
Spanish Ridge Industrial Park
Las Vegas, NV231,000 01/23/2024$54,859 
147 ExchangeRaleigh, NC274,000 05/03/202452,945 
Hays Commerce Center 3 & 4Austin, TX179,000 08/19/202435,781 
Total operating property acquisitions684,000 $143,585 
(1)Cost is calculated in accordance with FASB ASC 805, Business Combinations, and represents the sum of the purchase price, closing costs and capitalized acquisition costs.
(2)Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets.
(3)Excludes acquired development land as discussed below.

There were no value-add acquisitions during the nine months ended September 30, 2024.
-11-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the allocation of the total consideration for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the nine months ended September 30, 2024.
ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2024
Cost
 (In thousands)
Land $34,778 
Buildings and building improvements96,218 
Tenant and other improvements6,371 
Total real estate properties acquired137,367 
In-place lease intangibles (1)
8,659 
Above market lease intangibles (1)
121 
Below market lease intangibles (2)
(2,562)
Total assets acquired, net of liabilities assumed$143,585 
(1)In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining terms of the associated leases in place at the time of acquisition. 
(2)Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining terms of the associated leases in place at the time of acquisition.

The leases in the properties acquired during the nine months ended September 30, 2024 had a weighted average remaining lease term at acquisition of approximately 5.7 years.

Also during the nine months ended September 30, 2024, EastGroup purchased 34.3 acres of development land in Atlanta for $3,302,000.

During 2023, EastGroup acquired the following properties:
REAL ESTATE PROPERTIES ACQUIRED IN 2023
LocationSizeDate
Acquired
Cost (1)
  (Square feet) (In thousands)
Operating properties acquired (2)(3)
Craig Corporate CenterLas Vegas, NV156,000 04/18/2023$34,365 
Blue Diamond Business ParkLas Vegas, NV254,000 09/05/202352,973 
McKinney Logistics CenterDallas, TX193,000 10/02/202325,739 
Park at MyattNashville, TN171,000 11/03/202330,793 
Pelzer Point Commerce Center 1Greenville, SC213,000 12/21/202321,246 
Total operating property acquisitions987,000 $165,116 
(1)Cost is calculated in accordance with FASB ASC 805, Business Combinations, and represents the sum of the purchase price, closing costs and capitalized acquisition costs.
(2)Operating properties are defined as stabilized real estate properties (land including buildings and improvements) in the Company’s operating portfolio; included in Real estate properties on the Consolidated Balance Sheets.
(3)Excludes acquired development land as discussed below.

There were no value-add acquisitions during the year ended December 31, 2023.
-12-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the allocation of the total consideration for the acquired assets and assumed liabilities in connection with the acquisitions identified in the table above which were acquired during the year ended December 31, 2023.
ACQUIRED ASSETS AND ASSUMED LIABILITIES IN 2023
Cost
 (In thousands)
Land $44,676 
Buildings and building improvements111,082 
Tenant and other improvements4,346 
Total real estate properties acquired160,104 
In-place lease intangibles (1)
7,242 
Below market lease intangibles (2)
(2,230)
Total assets acquired, net of liabilities assumed$165,116 
(1)In-place lease intangibles and above market lease intangibles are each included in Other assets on the Consolidated Balance Sheets. These costs are amortized over the remaining terms of the associated leases in place at the time of acquisition.
(2)Below market lease intangibles are included in Other liabilities on the Consolidated Balance Sheets. These costs are amortized over the remaining terms of the associated leases in place at the time of acquisition.  

The leases in the properties acquired during the year ended December 31, 2023 had a weighted average remaining lease term at acquisition of approximately 8.0 years.

Also during 2023, EastGroup purchased 328.3 acres of development land in seven markets for $70,664,000.

The Company periodically reviews the recoverability of goodwill (at least annually) and the recoverability of other intangibles (on a quarterly basis) for possible impairment.  No impairment of goodwill or other intangibles existed during the three and nine month periods ended September 30, 2024 and 2023.

(8)REAL ESTATE SOLD AND HELD FOR SALE
The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of September 30, 2024 and December 31, 2023.

In accordance with ASC 360 and ASC 205, Presentation of Financial Statements, the Company would report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, the Company would provide additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. EastGroup performs an analysis of properties sold to determine whether the sales qualify for discontinued operations presentation.

Results of operations and gains and losses on sales for properties sold are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales of operating properties are included in Gain on sales of real estate investments.

-13-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A summary of Gain on sales of real estate investments for the nine months ended September 30, 2024 and the year ended December 31, 2023 follows:

REAL ESTATE PROPERTIES SOLDLocationSizeDate SoldNet Sales PriceBasisRecognized Gain
  (Square feet) (In thousands)
2024
Interchange Business Park and
    Metro Airport Commerce Center
Jackson, MS159,00003/05/2024$13,614 4,863 8,751 
2023
World Houston 23Houston, TX125,00003/31/2023$9,327 4,518 4,809 
Ettie Business CenterSan Francisco, CA29,00011/20/202311,638 8,845 2,793 
Los Angeles Corporate CenterLos Angeles, CA77,00012/29/202316,006 5,643 10,363 
Total for 2023231,000 $36,971 19,006 17,965 

The table above includes sales of operating properties. During the nine months ended September 30, 2024, the Company also sold 3.9 acres of land in San Francisco for $4,000,000 and recognized a gain on the sale of $222,000. During the year ended December 31, 2023, the Company sold 11.9 acres of land in Houston and Fort Worth for $4,750,000 and recognized gains on the sales of $446,000. The gains on sales of non-operating real estate are included in Other on the Consolidated Statements of Income and Comprehensive Income.

The Company did not consider its sales in 2024 or 2023 to be disposals of a component of an entity or a group of components of an entity representing a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.

(9)OTHER ASSETS
A summary of the Company’s Other assets follows:
 September 30,
2024		December 31,
2023
 (In thousands)
Leasing costs (principally commissions)$168,476 158,741 
Accumulated amortization of leasing costs                                                       (60,762)(57,646)
Leasing costs (principally commissions), net of accumulated amortization107,714 101,095 
Acquired in-place lease intangibles                                                                                  43,286 39,600 
Accumulated amortization of acquired in-place lease intangibles(20,251)(19,395)
Acquired in-place lease intangibles, net of accumulated amortization23,035 20,205 
Acquired above market lease intangibles                                                                                  582 482 
Accumulated amortization of acquired above market lease intangibles(370)(318)
Acquired above market lease intangibles, net of accumulated amortization212 164 
Straight-line rents receivable80,607 72,360 
Accounts receivable6,640 9,984 
Interest rate swap assets17,339 27,366 
Right of use assets — Office leases (operating)2,374 2,828 
Goodwill990 990 
Escrow deposits and prepaid costs for pending transactions7,886 745 
Prepaid insurance10,117 7,208 
Receivable for insurance proceeds3,334 1,425 
Prepaid expenses and other assets                                                                                  7,740 7,569 
Total Other assets
$267,988 251,939 

-14-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(10) DEBT

The Company’s debt is detailed below:
 September 30,
2024		December 31,
2023
 (In thousands)
Unsecured bank credit facilities — variable rate, carrying amount$— — 
Unamortized debt issuance costs(3,848)(1,520)
Unsecured bank credit facilities, net of debt issuance costs(3,848)(1,520)
Unsecured debt — fixed rate, carrying amount (1)
1,630,000 1,680,000 
Unamortized debt issuance costs(2,982)(3,653)
Unsecured debt, net of debt issuance costs1,627,018 1,676,347 
Total unsecured debt, net of debt issuance costs$1,623,170 1,674,827 

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

On June 13, 2024, EastGroup entered into amended and restated credit agreements related to its $625,000,000 and $50,000,000 unsecured bank credit facilities, to extend the maturity dates from July 30, 2025 to July 31, 2028. There were no other material changes to the credit facilities, which are outlined below.

The Company has a $625,000,000 unsecured bank credit facility with a group of 10 banks, which has a maturity date of July 31, 2028. The credit facility contains options for two six-month extensions (at the Company's election) and an additional $625,000,000 accordion (with agreement by all parties). The interest rate on each tranche is reset on a monthly basis and as of September 30, 2024, was Secured Overnight Financing Rate (“SOFR”) plus 76.5 basis points with an annual facility fee of 15 basis points. As of September 30, 2024, the Company had no variable rate borrowings on this unsecured bank credit facility and an interest rate of 5.711%. The Company has two standby letters of credit totaling $2,655,000 pledged on this facility, which reduces borrowing capacity under the credit facility.

The Company also 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. The interest rate is reset on a daily basis and as of September 30, 2024, was SOFR plus 77.5 basis points with an annual facility fee of 15 basis points. As of September 30, 2024, the interest rate was 5.835% with no outstanding balance.

For both facilities, the margin and facility fee are subject to changes in the Company's credit ratings. Although the Company’s current credit rating is Baa2, given the strength of the Company’s key credit metrics, initial pricing for the credit facilities is based on the BBB+/Baa1 credit ratings level. This favorable pricing level will be retained provided that the Company’s consolidated leverage ratio, as defined in the applicable agreements, remains less than 32.5%.

The $625,000,000 facility is also subject to a sustainability-linked pricing component, pursuant to which the applicable interest margin is adjusted if the Company meets a certain sustainability performance target. This sustainability metric is evaluated annually and was achieved for the years ended December 31, 2023 and 2022, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric. The margin was effectively reduced on this unsecured bank credit facility by one basis point, from 77.5 to 76.5 basis points.

In August 2024, EastGroup repaid a $50,000,000 senior unsecured term loan at maturity with an effectively fixed interest rate of 4.08%.

-15-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Scheduled principal payments on long-term debt, including Unsecured debt, net of debt issuance costs (not including Unsecured bank credit facilities, net of debt issuance costs), as of September 30, 2024, are as follows: 
MATURITY DATESPrincipal Payments Maturing
(In thousands)
2024 — Remainder of year$120,000 
2025145,000 
2026140,000 
2027175,000 
2028160,000 
2029 and beyond890,000 
       Total$1,630,000 

(11) ACCOUNTS PAYABLE AND ACCRUED EXPENSES
A summary of the Company’s Accounts payable and accrued expenses follows:
 September 30,
2024		December 31,
2023
 (In thousands)
Property taxes payable                                                                                  $71,656 9,508 
Development costs payable                                                                                  20,659 29,487 
Retainage payable10,870 14,992 
Real estate improvements and capitalized leasing costs payable5,596 5,275 
Interest payable                                                                                  14,185 8,493 
Dividends payable                                                        70,275 62,393 
Other payables and accrued expenses                                                                                  12,079 16,189 
 Total Accounts payable and accrued expenses
$205,320 146,337 


(12) OTHER LIABILITIES
A summary of the Company’s Other liabilities follows:
 September 30,
2024		December 31,
2023
 (In thousands)
Security deposits                                                                                  $40,765 37,102 
Prepaid rent and other deferred income                                                     19,748 20,070 
Operating lease liabilities — Ground leases 17,917 18,758 
Operating lease liabilities — Office leases2,420 2,882 
Acquired below market lease intangibles12,953 11,451 
     Accumulated amortization of below market lease intangibles(5,786)(5,006)
Acquired below market lease intangibles, net of accumulated amortization7,167 6,445 
Interest rate swap liabilities3,399 2,478 
Other liabilities                                                                                  1,468 1,680 
 Total Other liabilities
$92,884 89,415 


-16-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(13) COMPREHENSIVE INCOME
Total Comprehensive Income is comprised of net income plus all other changes in equity from non-owner sources and is presented on the Consolidated Statements of Income and Comprehensive Income. The components of Accumulated other comprehensive income are presented in the Company’s Consolidated Statements of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps.
Three Months Ended
September 30,		Nine Months Ended September 30,
2024202320242023
(In thousands)
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period$29,687 36,311 24,888 36,371 
    Other comprehensive income (loss) — interest rate swaps(15,747)5,777 (10,948)5,717 
Balance at end of period$13,940 42,088 13,940 42,088 

(14) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments.

Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings.

The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the term of the agreements without exchange of the underlying notional amount. 

As of September 30, 2024, the Company had six interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ SOFR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective.

The changes in the fair value of derivatives designated and qualifying as cash flow hedges are recorded in Other comprehensive income (loss) and are subsequently reclassified into earnings through Interest expense as interest payments are made or received on the Company’s variable-rate debt in the period that the hedged forecasted transaction affects earnings. The Company estimates that an additional $8,810,000 will be reclassified from Other comprehensive income (loss) as a decrease to Interest expense over the next twelve months.

The Company’s valuation methodology for over-the-counter (“OTC”) derivatives is to discount cash flows based on SOFR market data. Uncollateralized or partially-collateralized trades include appropriate economic adjustments for funding costs and credit risk. The Company calculates its derivative valuations using mid-market prices.

-17-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
As of September 30, 2024 and December 31, 2023, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
NOTIONAL VALUE OF INTEREST RATE DERIVATIVESSeptember 30,
2024		December 31,
2023
(In thousands)
Interest Rate Swap$100,000 100,000 
Interest Rate Swap100,000 100,000 
Interest Rate Swap50,000 50,000 
Interest Rate Swap100,000 100,000 
Interest Rate Swap75,000 75,000 
Interest Rate Swap— 50,000 
Interest Rate Swap100,000 100,000 

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023. See Note 18 for additional information on the fair value of the Company’s interest rate swaps.
Derivatives
As of September 30, 2024
Derivatives
As of December 31, 2023
DERIVATIVES DESIGNATED AS CASH FLOW HEDGESBalance Sheet LocationFair ValueBalance Sheet LocationFair Value
(In thousands)
    Interest rate swap assetsOther assets$17,339 Other assets$27,366 
    Interest rate swap liabilitiesOther liabilities3,399 Other liabilities2,478 

The table below presents the effect of the Company’s derivative financial instruments (interest rate swaps) on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended
September 30,		Nine Months Ended September 30,
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS2024202320242023
 (In thousands)
Amount of income (loss) recognized in Other comprehensive income (loss)
        on derivatives
$(11,094)10,463 3,180 18,719 
Amount of (income) reclassified from Accumulated other comprehensive
        income into Interest expense
(4,653)(4,686)(14,128)(13,002)

See Note 13 for additional information on the Company’s Accumulated other comprehensive income resulting from its interest rate swaps.

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

The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender. As of September 30, 2024, we had not posted any collateral related to these agreements and were not in breach of any of the provisions of these agreements. If the Company had breached any of these provisions, it would be required to settle its obligations under the agreements at their termination value.

(15) EARNINGS PER SHARE
The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted earnings per share (“EPS”).  Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period.  The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. Outstanding forward equity sale agreements are potentially dilutive securities excluded from the basic EPS
-18-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
calculation until the agreements are settled, shares issued and proceeds received. Although unvested restricted shares are classified as issued and outstanding, they are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested.

Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period.  The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding plus the effect of any dilutive securities including shares issuable under forward equity sale agreements and unvested restricted stock using the treasury stock method. Any anti-dilutive securities are excluded from the diluted EPS calculation.

Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
 Three Months Ended
September 30,		Nine Months Ended September 30,
 2024202320242023
 (In thousands)
BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS  
  Numerator — net income attributable to common stockholders$55,180 48,896 169,111 137,036 
  Denominator — weighted average shares outstanding — Basic48,864 45,658 48,324 44,688 
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS
  Numerator — net income attributable to common stockholders$55,180 48,896 169,111 137,036 
  Denominator:
    Weighted average shares outstanding — Basic48,864 45,658 48,324 44,688 
    Effect of dilutive securities135 130 111 94 
Weighted average shares outstanding — Diluted48,999 45,788 48,435 44,782 

(16) EQUITY OFFERINGS
Underwriting commissions and offering costs incurred in connection with common stock offerings and at-the-market equity offering programs have been reflected as a reduction of Additional paid-in capital.

Under relevant accounting guidance, sales of common stock under forward equity sale agreements are not deemed to be liabilities, and furthermore, meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

On October 25, 2023, we established an at-the-market common stock offering program pursuant to which we are able to sell, from time to time, shares of our common stock having an aggregate gross sales price of up to $750,000,000 (the “Current 2023 ATM Program”). The Current 2023 ATM Program replaced our previous $750,000,000 ATM program, which was established on December 16, 2022, under which we had sold shares of our common stock having an aggregate gross sales price of $464,305,000 through October 25, 2023.

In connection with the Current 2023 ATM Program, we may sell shares of our common stock directly through sales agents or through certain financial institutions acting as forward counterparties whereby, at our discretion, the forward counterparties, or their agents or affiliates, may borrow from third parties and subsequently sell shares of our common stock. The use of a forward equity sale agreement allows us to lock in a share price on the sale of shares of our common stock but defer settling and receiving the proceeds from the sale of shares until a later date. Additionally, the forward price that we expect to receive upon settlement of an agreement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends during the term of the agreement.

-19-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Direct Common Stock Issuance Activity
The following table presents the Company’s common stock issuance activity sold directly through sales agents pursuant to the Company's ATM programs during the nine months ended September 30, 2024 and the year ended December 31, 2023:
Common
Stock (1)
Weighted Average PriceGross ProceedsNet Proceeds
(In shares)(Per share)(In thousands)(In thousands)
Three months ended March 31, 2024
— $— $— $— 
Three months ended June 30, 2024
218,929 168.62 36,916 36,547 
Three months ended September 30, 2024
239,750 179.74 43,093 42,663 
Nine months ended September 30, 2024
458,679 $174.43 $80,009 $79,210 
Twelve months ended December 31, 2023
4,094,896 $170.77 $699,304 $692,312 
(1) Excludes shares of common stock sold on a forward basis as described below.

Forward Equity Offering Activity
The following table presents the Company’s forward equity offering activity during the three and nine months ended September 30, 2024:
Common Stock Weighted Average PriceGross Proceeds
(In shares)(Per share)(In thousands)
Forward Sale Agreements Outstanding at December 31, 2023
406,041 $183.92 $74,679 
Forward sale agreements settled — shares issued and proceeds
received (1)
(272,342)183.59 (50,000)
New forward sale agreements (2)
286,671 181.95 52,160 
Forward Sale Agreements Outstanding at March 31, 2024
420,370 $182.79 $76,839 
Forward sale agreements settled — shares issued and proceeds
received (3)
(420,370)182.79 (76,839)
New forward sale agreements (2)
600,053 166.65 100,000 
Forward Sale Agreements Outstanding at June 30, 2024
600,053 $166.65 $100,000 
Forward sale agreements settled — shares issued and proceeds
      received (4)
(300,502)166.39 (50,000)
New forward sale agreements (2)
1,099,612 185.80 204,306 
Forward Sale Agreements Outstanding at September 30, 2024
1,399,163 $181.76 $254,306 
(1) EastGroup settled outstanding forward equity sale agreements by issuing 272,342 shares of common stock in exchange for net proceeds of approximately $49,364,000.
(2) The Company did not receive any proceeds from the sale of common shares by the forward counterparties at the time it entered into forward sale agreements.
(3) EastGroup settled outstanding forward equity sale agreements by issuing 420,370 shares of common stock in exchange for net proceeds of approximately $76,200,000.
(4) EastGroup settled outstanding forward equity sale agreements by issuing 300,502 shares of common stock in exchange for net proceeds of approximately $49,582,000.

(17) STOCK-BASED COMPENSATION
EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. The cost for market-based awards and awards that only require service are expensed on a straight-line basis over the requisite service periods. The cost for performance-based awards is determined using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. This method accelerates the expensing of the award compared to the straight-line method. For awards with a performance condition, compensation expense is recognized when the performance condition is considered probable of achievement.

-20-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The total compensation expense for service and performance based awards is based upon the fair market value of the shares on the grant date. The grant date fair value for awards that have been granted and are subject to a future market condition (total shareholder return) are determined using a Monte Carlo simulation pricing model developed to specifically accommodate the unique features of the awards.

During the restricted period for awards no longer subject to contingencies, the Company accrues dividends and holds the certificates for the shares; however, the employee can vote the shares. Share certificates and dividends are delivered to the employee as they vest. Forfeitures of awards are recognized as they occur.

The Compensation Committee of the Company’s Board of Directors (the “Committee”) approves long-term and annual equity compensation awards for the Company’s executive officers. The vesting periods of the Company’s restricted stock plans vary, as determined by the Committee. Restricted stock is granted to executive officers subject to both continued service and the satisfaction of certain annual performance goals and multi-year market conditions as determined by the Committee.

The long-term compensation awards include components based on the Company’s total shareholder return over the upcoming three years and the employee’s continued service as of the vesting dates. The total shareholder return component is subject to bright-line tests that compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The Company begins recognizing expense for these awards based on the grant date fair value of the awards which is determined using a simulation pricing model developed to specifically accommodate the unique features of the award. These market-based awards are expensed on a straight-line basis over the requisite service period (75% vests at the end of the three-year performance period and 25% vests the following year). The long-term awards subject only to continuing employment are expensed on a straight-line basis over the requisite service period (25% vests in each of the following four years).

The annual equity compensation awards include components based on certain annual Company performance measures and individual annual performance goals over the upcoming year. The certain Company performance measures for 2024 are: (i) funds from operations (“FFO”) per share, (ii) cash same property net operating income change, (iii) debt-to-EBITDAre ratio, and (iv) fixed charge coverage. The Company begins recognizing expense for its estimate of the shares that could be earned pursuant to these awards on the grant date; the expense is adjusted to estimated performance levels during the performance period and to actual upon the determination of the awards. The shares are expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period (34% vests at the end of the one year performance period and 33% vests in each of the following two years). Any shares issued pursuant to the individual annual performance goals are determined by the Committee in its discretion following the performance period. The Company begins recognizing the expense for the shares on the grant date and will expense on a straight-line basis over the remaining service period (34% vests at the end of the one year performance period and 33% vests in each of the following two years).

Equity compensation is also awarded to the Company’s non-executive officers and directors, which are subject to service only conditions and expensed on a straight-line basis over the required service period. The total compensation expense is based upon the fair market value of the shares on the grant date.

The Committee has adopted an Equity Award Retirement Policy (the “retirement policy”) which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees.

Stock-based compensation cost for employees was $2,801,000 and $9,249,000 for the three and nine months ended September 30, 2024, respectively, of which $486,000 and $1,526,000 was capitalized as part of the Company’s development costs. For the three and nine months ended September 30, 2023, stock-based compensation cost for employees was $2,593,000 and $8,424,000, respectively, of which $886,000 and $2,180,000 was capitalized as part of the Company’s development costs.

Stock-based compensation expense for directors was $211,000 and $554,000 for the three and nine months ended September 30, 2024, respectively, and $174,000 and $591,000 for the same periods in 2023.

Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices.  Of the shares that vested in the nine months ended September 30, 2024, the Company withheld 33,381 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan.  As of the grant dates, the fair value of shares that were granted during the nine months ended
-21-
EASTGROUP PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2024 was $12,081,000. As of the vesting dates, the aggregate fair value of shares that vested during the nine months ended September 30, 2024 was $15,004,000.
Award Activity:Three Months Ended
September 30, 2024		Nine Months Ended September 30, 2024
 
 
 
Shares
Weighted Average Grant Date Fair Value 
 
Shares		Weighted Average Grant Date Fair Value
Unvested at beginning of period76,005 $157.40 84,564 $153.78 
Granted (1) (2)
13,220 179.97 89,348 135.21 
Forfeited — — (2,545)156.45 
Vested (52)120.39 (82,194)125.94 
Unvested at end of period 89,173 $160.76 89,173 $160.76 

(1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined.
(2) Does not include the restricted shares that may be earned if the performance goals established in 2022 and 2023 for long-term performance and in 2024 for annual and long-term performance are achieved. Depending on the actual level of achievement of the goals at the end of the open performance periods, the number of shares earned could range from zero to 135,501.

(18) FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  ASC 820 also provides guidance for using fair value to measure financial assets and liabilities.  The FASB Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2) and significant valuation assumptions that are not readily observable in the market (Level 3).

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at September 30, 2024 and December 31, 2023.
 September 30, 2024December 31, 2023
 
Carrying Amount (1)
Fair Value
Carrying Amount