(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated Filer | ☐ | Non-accelerated Filer | ☐ | |||||||||||||||||||
Smaller Reporting Company | Emerging Growth Company |
Page | ||||||||
Consolidated Balance Sheets, September 30, 2020 and December 31, 2019 (unaudited) | ||||||||
Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2020 and 2019 (unaudited) | ||||||||
Consolidated Statements of Changes in Equity for the nine months ended September 30, 2020 and 2019 (unaudited) | ||||||||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited) | ||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Real estate properties | $ | ||||||||||
Development and value-add properties | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Unconsolidated investment | |||||||||||
Cash | |||||||||||
Other assets | |||||||||||
TOTAL ASSETS | $ | ||||||||||
LIABILITIES AND EQUITY | |||||||||||
LIABILITIES | |||||||||||
Unsecured bank credit facilities | $ | ||||||||||
Unsecured debt | |||||||||||
Secured debt | |||||||||||
Accounts payable and accrued expenses | |||||||||||
Other liabilities | |||||||||||
Total Liabilities | |||||||||||
EQUITY | |||||||||||
Stockholders’ Equity: | |||||||||||
Common shares; $0.0001 par value; 70,000,000 shares authorized; 39,556,930 shares issued and outstanding at September 30, 2020 and 38,925,953 at December 31, 2019 | |||||||||||
Excess shares; $0.0001 par value; 30,000,000 shares authorized; no shares issued | |||||||||||
Additional paid-in capital | |||||||||||
Distributions in excess of earnings | ( | ( | |||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Total Stockholders’ Equity | |||||||||||
Noncontrolling interest in joint ventures | |||||||||||
Total Equity | |||||||||||
TOTAL LIABILITIES AND EQUITY | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Income from real estate operations | $ | ||||||||||||||||||||||
Other revenue | |||||||||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Expenses from real estate operations | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Indirect leasing costs | |||||||||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Gain on sales of real estate investments | |||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||
NET INCOME | |||||||||||||||||||||||
Net income attributable to noncontrolling interest in joint ventures | ( | ( | ( | ( | |||||||||||||||||||
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||||||||||||||
Other comprehensive income (loss) - cash flow hedges | ( | ( | ( | ||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | ||||||||||||||||||||||
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||||||||||||||
Net income attributable to common stockholders | $ | ||||||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||||||||||||||
Net income attributable to common stockholders | $ | ||||||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest in Joint Ventures | Total | ||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2019 | $ | ( | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Common dividends declared – $0.75 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 105,837 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Withheld 33,963 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock | ( | ( | |||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2020 | ( | ( | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Common dividends declared – $0.75 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 243,621 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2020 | ( | ( | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | |||||||||||||||||||||||||||||||||||
Common dividends declared – $0.79 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 238,086 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2020 | $ | ( | ( | ||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest in Joint Ventures | Total | ||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2018 | $ | ( | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Common dividends declared – $0.72 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 232,205 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Issuance of 571 shares of common stock, dividend reinvestment plan | |||||||||||||||||||||||||||||||||||
Withheld 28,955 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock | ( | ( | |||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, MARCH 31, 2019 | ( | ||||||||||||||||||||||||||||||||||
Net income | ( | ||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Common dividends declared – $0.72 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 790,052 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Issuance of 479 shares of common stock, dividend reinvestment plan | |||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, JUNE 30, 2019 | ( | ||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net unrealized change in fair value of cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Common dividends declared – $0.75 per share | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | |||||||||||||||||||||||||||||||||||
Issuance of 849,751 shares of common stock, common stock offering, net of expenses | |||||||||||||||||||||||||||||||||||
Issuance of 441 shares of common stock, dividend reinvestment plan | |||||||||||||||||||||||||||||||||||
Purchase of noncontrolling interest in joint venture | |||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interest | ( | ( | |||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2019 | $ | ( | |||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Net gain on sales of real estate investments and non-operating real estate | ( | ||||||||||
Gain on casualties and involuntary conversion on real estate assets | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accrued income and other assets | |||||||||||
Accounts payable, accrued expenses and prepaid rent | |||||||||||
Other | |||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
INVESTING ACTIVITIES | |||||||||||
Development and value-add properties | ( | ( | |||||||||
Purchases of real estate | ( | ( | |||||||||
Real estate improvements | ( | ( | |||||||||
Net proceeds from sales of real estate investments and non-operating real estate | |||||||||||
Proceeds from casualties and involuntary conversion on real estate assets | |||||||||||
Repayments on mortgage loans receivable | |||||||||||
Changes in accrued development costs | ( | ||||||||||
Changes in other assets and other liabilities | ( | ( | |||||||||
NET CASH USED IN INVESTING ACTIVITIES | ( | ( | |||||||||
FINANCING ACTIVITIES | |||||||||||
Proceeds from unsecured bank credit facilities | |||||||||||
Repayments on unsecured bank credit facilities | ( | ( | |||||||||
Proceeds from unsecured debt | |||||||||||
Repayments on unsecured debt | ( | ( | |||||||||
Repayments on secured debt | ( | ( | |||||||||
Debt issuance costs | ( | ( | |||||||||
Distributions paid to stockholders (not including dividends accrued) | ( | ( | |||||||||
Proceeds from common stock offerings | |||||||||||
Proceeds from dividend reinvestment plan | |||||||||||
Other | ( | ( | |||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | |||||||||||
DECREASE IN CASH AND CASH EQUIVALENTS | ( | ( | |||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | ||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||
Cash paid for interest, net of amounts capitalized of $7,562 and $6,067 for 2020 and 2019, respectively | $ | ||||||||||
Cash paid for operating lease liabilities | |||||||||||
NON-CASH OPERATING ACTIVITY | |||||||||||
Operating lease liabilities arising from obtaining right of use assets | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Lease income — operating leases | $ | ||||||||||||||||||||||
Variable lease income (1) | |||||||||||||||||||||||
Income from real estate operations | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Real estate properties: | |||||||||||
Land | $ | ||||||||||
Buildings and building improvements | |||||||||||
Tenant and other improvements | |||||||||||
Right of use assets — Ground leases (operating) (1) | |||||||||||
Development and value-add properties (2) | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
$ |
Years Ending December 31, | (In thousands) | |||||||
2020 - Remainder of year | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
Total minimum payments | ||||||||
Imputed interest (1) | ( | |||||||
Total ground leases | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Leasing costs (principally commissions) | $ | ||||||||||
Accumulated amortization of leasing costs | ( | ( | |||||||||
Leasing costs (principally commissions), net of accumulated amortization | |||||||||||
Acquired in-place lease intangibles | |||||||||||
Accumulated amortization of acquired in-place lease intangibles | ( | ( | |||||||||
Acquired in-place lease intangibles, net of accumulated amortization | |||||||||||
Acquired above market lease intangibles | |||||||||||
Accumulated amortization of acquired above market lease intangibles | ( | ( | |||||||||
Acquired above market lease intangibles, net of accumulated amortization | |||||||||||
Straight-line rents receivable | |||||||||||
Accounts receivable | |||||||||||
Mortgage loans receivable | |||||||||||
Interest rate swap assets | |||||||||||
Right of use assets — Office leases (operating) | |||||||||||
Goodwill | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total Other assets | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Unsecured bank credit facilities - variable rate, carrying amount | $ | ||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unsecured bank credit facilities | |||||||||||
Unsecured debt - fixed rate, carrying amount (1) | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unsecured debt | |||||||||||
Secured debt - fixed rate, carrying amount (1) | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Secured debt | |||||||||||
Total debt | $ |
Years Ending December 31, | (In thousands) | |||||||
2020 - Remainder of year | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 and beyond | ||||||||
Total | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Property taxes payable | $ | ||||||||||
Development costs payable | |||||||||||
Real estate improvements and capitalized leasing costs payable | |||||||||||
Interest payable | |||||||||||
Dividends payable | |||||||||||
Book overdraft (1) | |||||||||||
Other payables and accrued expenses | |||||||||||
Total Accounts payable and accrued expenses | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Security deposits | $ | ||||||||||
Prepaid rent and other deferred income | |||||||||||
Operating lease liabilities — Ground leases | |||||||||||
Operating lease liabilities — Office leases | |||||||||||
Acquired below-market lease intangibles | |||||||||||
Accumulated amortization of below-market lease intangibles | ( | ( | |||||||||
Acquired below-market lease intangibles, net of accumulated amortization | |||||||||||
Interest rate swap liabilities | |||||||||||
Prepaid tenant improvement reimbursements | |||||||||||
Other liabilities | |||||||||||
Total Other liabilities | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||||||||||||||
Balance at beginning of period | $ | ( | |||||||||||||||||||||
Change in fair value of interest rate swaps - cash flow hedges | ( | ( | ( | ||||||||||||||||||||
Balance at end of period | $ | ( | ( |
Interest Rate Derivative | Notional Amount as of September 30, 2020 | Notional Amount as of December 31, 2019 | ||||||||||||
(In thousands) | ||||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ | ||||||||||||
Interest Rate Swap | $ | $ |
Derivatives As of September 30, 2020 | Derivatives As of December 31, 2019 | ||||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||
Interest rate swap assets | Other assets | $ | Other assets | $ | |||||||||||||||||||
Interest rate swap liabilities | Other liabilities | Other liabilities |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
DERIVATIVES IN CASH FLOW HEDGING RELATIONSHIPS | |||||||||||||||||||||||
Interest Rate Swaps: | |||||||||||||||||||||||
Amount of income (loss) recognized in Other comprehensive income (loss) on derivatives | $ | ( | ( | ( | |||||||||||||||||||
Amount of (income) loss reclassified from Accumulated other comprehensive income (loss) into Interest expense | ( | ( | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
BASIC EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||||||||||||||
Numerator – net income attributable to common stockholders | $ | ||||||||||||||||||||||
Denominator – weighted average shares outstanding | |||||||||||||||||||||||
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | |||||||||||||||||||||||
Numerator – net income attributable to common stockholders | $ | ||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Unvested restricted stock | |||||||||||||||||||||||
Total Shares |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Award Activity: | September 30, 2020 | September 30, 2020 | |||||||||||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||||
Unvested at beginning of period | $ | $ | |||||||||||||||||||||
Granted (1) (2) | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Unvested at end of period | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Amount (1) | Fair Value | Carrying Amount (1) | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | ||||||||||||||||||||||
Mortgage loans receivable | |||||||||||||||||||||||
Interest rate swap assets | |||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Unsecured bank credit facilities - variable rate (2) | |||||||||||||||||||||||
Unsecured debt (2) | |||||||||||||||||||||||
Secured debt (2) | |||||||||||||||||||||||
Interest rate swap liabilities |
Month in Year 2020 | % of Rent Collected (1) | % of Uncollected Rent Deferred to Future Period | % of Uncollected Rent With No Deferral Agreement | |||||||||||||||||
March | 99.8% | —% | 0.2% | |||||||||||||||||
April | 99.7% | 0.1% | 0.2% | |||||||||||||||||
May | 98.9% | 0.7% | 0.4% | |||||||||||||||||
June | 98.7% | 0.8% | 0.5% | |||||||||||||||||
July | 98.9% | 0.7% | 0.4% | |||||||||||||||||
August | 99.0% | 0.5% | 0.5% | |||||||||||||||||
September | 99.2% | 0.2% | 0.6% | |||||||||||||||||
October (2) | 97.9% | 0.1% | 2.0% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Income from real estate operations | $ | 92,000 | 83,913 | 270,077 | 244,333 | ||||||||||||||||||
Expenses from real estate operations | (26,325) | (23,756) | (77,505) | (68,980) | |||||||||||||||||||
Noncontrolling interest in PNOI of consolidated joint ventures | (46) | (43) | (130) | (137) | |||||||||||||||||||
PNOI from 50% owned unconsolidated investment | 242 | 244 | 728 | 732 | |||||||||||||||||||
PROPERTY NET OPERATING INCOME (“PNOI”) | $ | 65,871 | 60,358 | 193,170 | 175,948 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
NET INCOME | $ | 24,411 | 22,575 | 71,196 | 72,058 | ||||||||||||||||||
Gain on sales of real estate investments | — | — | — | (11,406) | |||||||||||||||||||
Net loss on other | — | 76 | — | 884 | |||||||||||||||||||
Interest income | (36) | (34) | (86) | (101) | |||||||||||||||||||
Other revenue | (12) | (25) | (278) | (504) | |||||||||||||||||||
Indirect leasing costs | 248 | 110 | 522 | 306 | |||||||||||||||||||
Depreciation and amortization | 29,211 | 25,990 | 85,673 | 77,027 | |||||||||||||||||||
Company’s share of depreciation from unconsolidated investment | 34 | 36 | 103 | 106 | |||||||||||||||||||
Interest expense | 8,347 | 8,522 | 25,150 | 26,214 | |||||||||||||||||||
General and administrative expense | 3,714 | 3,151 | 11,020 | 11,501 | |||||||||||||||||||
Noncontrolling interest in PNOI of consolidated joint ventures | (46) | (43) | (130) | (137) | |||||||||||||||||||
PROPERTY NET OPERATING INCOME (“PNOI”) | 65,871 | 60,358 | 193,170 | 175,948 | |||||||||||||||||||
PNOI from 2019 and 2020 Acquisitions | (2,155) | (1,084) | (6,370) | (1,494) | |||||||||||||||||||
PNOI from 2019 and 2020 Development and Value-Add Properties | (6,329) | (2,395) | (16,556) | (4,430) | |||||||||||||||||||
PNOI from 2019 Operating Property Dispositions | — | (930) | — | (3,122) | |||||||||||||||||||
Other PNOI | 64 | 54 | 170 | 180 | |||||||||||||||||||
SAME PNOI | 57,451 | 56,003 | 170,414 | 167,082 | |||||||||||||||||||
Net lease termination fee income from same properties | (192) | (34) | (661) | (941) | |||||||||||||||||||
SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS | $ | 57,259 | 55,969 | 169,753 | 166,141 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | $ | 24,401 | 22,571 | 71,182 | 72,053 | ||||||||||||||||||
Depreciation and amortization | 29,211 | 25,990 | 85,673 | 77,027 | |||||||||||||||||||
Company’s share of depreciation from unconsolidated investment | 34 | 36 | 103 | 106 | |||||||||||||||||||
Depreciation and amortization from noncontrolling interest | (35) | (48) | (114) | (141) | |||||||||||||||||||
Gain on sales of real estate investments | — | — | — | (11,406) | |||||||||||||||||||
FUNDS FROM OPERATIONS (“FFO”) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 53,611 | 48,549 | 156,844 | 137,639 | ||||||||||||||||||
Net income attributable to common stockholders per diluted share | $ | 0.62 | 0.60 | 1.82 | 1.94 | ||||||||||||||||||
Funds from operations (“FFO”) attributable to common stockholders per diluted share | $ | 1.36 | 1.28 | 4.00 | 3.71 | ||||||||||||||||||
Diluted shares for earnings per share and funds from operations | 39,450 | 37,869 | 39,168 | 37,136 |
Costs Incurred | Anticipated Building Conversion Date | ||||||||||||||||||||||||||||||||||
DEVELOPMENT AND VALUE-ADD PROPERTIES ACTIVITY | Costs Transferred in 2020 (1) | For the Nine Months Ended 9/30/2020 | Cumulative as of 9/30/2020 | Projected Total Costs | |||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
LEASE-UP | Building Size (Square feet) | ||||||||||||||||||||||||||||||||||
Southwest Commerce Center, Las Vegas, NV (2) | 196,000 | $ | — | 1,721 | 28,334 | 30,100 | 10/20 | ||||||||||||||||||||||||||||
Gilbert Crossroads A & B, Phoenix, AZ | 140,000 | — | 2,613 | 16,563 | 17,500 | 01/21 | |||||||||||||||||||||||||||||
World Houston 44, Houston, TX | 134,000 | — | 3,107 | 7,897 | 9,100 | 05/21 | |||||||||||||||||||||||||||||
Gateway 4, Miami, FL | 197,000 | 14,895 | 6,790 | 21,685 | 23,800 | 06/21 | |||||||||||||||||||||||||||||
Hurricane Shoals 3, Atlanta, GA | 101,000 | — | 1,950 | 8,579 | 8,800 | 06/21 | |||||||||||||||||||||||||||||
Interstate Commons 2, Phoenix, AZ (2) | 142,000 | — | 2,249 | 12,131 | 12,400 | 06/21 | |||||||||||||||||||||||||||||
Tri-County Crossing 3 & 4, San Antonio, TX | 203,000 | — | 4,161 | 12,859 | 14,700 | 06/21 | |||||||||||||||||||||||||||||
CreekView 121 7 & 8, Dallas, TX | 137,000 | — | 7,840 | 14,639 | 16,300 | 08/21 | |||||||||||||||||||||||||||||
Northwest Crossing 1-3, Houston, TX | 278,000 | — | 9,793 | 21,328 | 25,700 | 09/21 | |||||||||||||||||||||||||||||
Total Lease-Up | 1,528,000 | 14,895 | 40,224 | 144,015 | 158,400 | ||||||||||||||||||||||||||||||
UNDER CONSTRUCTION | |||||||||||||||||||||||||||||||||||
LakePort 1-3, Dallas, TX | 194,000 | — | 9,924 | 17,986 | 22,500 | 10/21 | |||||||||||||||||||||||||||||
Ridgeview 1 & 2, San Antonio, TX | 226,000 | — | 9,839 | 16,370 | 19,000 | 10/21 | |||||||||||||||||||||||||||||
Settlers Crossing 3 & 4, Austin, TX | 173,000 | — | 8,405 | 16,494 | 18,400 | 10/21 | |||||||||||||||||||||||||||||
SunCoast 7, Ft. Myers, FL | 77,000 | 3,232 | 3,728 | 6,960 | 8,400 | 11/21 | |||||||||||||||||||||||||||||
Total Under Construction | 670,000 | 3,232 | 31,896 | 57,810 | 68,300 | ||||||||||||||||||||||||||||||
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND) | Estimated Building Size (Square feet) | ||||||||||||||||||||||||||||||||||
Phoenix, AZ | 178,000 | — | 600 | 4,973 | |||||||||||||||||||||||||||||||
Ft. Myers, FL | 622,000 | (3,232) | 3,443 | 7,714 | |||||||||||||||||||||||||||||||
Miami, FL | 266,000 | (14,895) | 618 | 19,908 | |||||||||||||||||||||||||||||||
Orlando, FL | 1,488,000 | — | 24,724 | 25,799 | |||||||||||||||||||||||||||||||
Tampa, FL | 349,000 | — | 549 | 6,350 | |||||||||||||||||||||||||||||||
Jackson, MS | 28,000 | — | — | 706 | |||||||||||||||||||||||||||||||
Charlotte, NC | 475,000 | — | 247 | 7,574 | |||||||||||||||||||||||||||||||
Dallas, TX | 1,074,000 | — | 5,342 | 24,930 | |||||||||||||||||||||||||||||||
Houston, TX | 1,223,000 | — | 974 | 20,422 | |||||||||||||||||||||||||||||||
San Antonio, TX | 373,000 | — | 441 | 4,640 | |||||||||||||||||||||||||||||||
Total Prospective Development | 6,076,000 | (18,127) | 36,938 | 123,016 | |||||||||||||||||||||||||||||||
8,274,000 | $ | — | 109,058 | 324,841 | |||||||||||||||||||||||||||||||
DEVELOPMENT AND VALUE-ADD PROPERTIES TRANSFERRED TO REAL ESTATE PROPERTIES DURING 2020 | Building Size (Square feet) | Building Conversion Date | |||||||||||||||||||||||||||||||||
Logistics Center 6 & 7, Dallas, TX (2) | 142,000 | $ | — | 19 | 15,754 | 01/20 | |||||||||||||||||||||||||||||
Settlers Crossing 1, Austin, TX | 77,000 | — | — | 9,259 | 01/20 | ||||||||||||||||||||||||||||||
Settlers Crossing 2, Austin, TX | 83,000 | — | — | 8,475 | 01/20 | ||||||||||||||||||||||||||||||
Parc North 5, Dallas, TX | 100,000 | — | 20 | 8,709 | 02/20 | ||||||||||||||||||||||||||||||
Airport Commerce Center 3, Charlotte, NC | 96,000 | — | 335 | 8,891 | 03/20 | ||||||||||||||||||||||||||||||
Horizon VIII & IX, Orlando, FL | 216,000 | — | 887 | 17,488 | 04/20 | ||||||||||||||||||||||||||||||
Ten West Crossing 8, Houston, TX | 132,000 | — | 67 | 9,831 | 04/20 | ||||||||||||||||||||||||||||||
Tri-County Crossing 1 & 2, San Antonio, TX | 203,000 | — | 189 | 15,575 | 04/20 | ||||||||||||||||||||||||||||||
SunCoast 8, Ft. Myers, FL | 77,000 | — | 3,665 | 8,149 | 05/20 | ||||||||||||||||||||||||||||||
CreekView 121 5 & 6, Dallas, TX | 139,000 | — | 2,112 | 15,263 | 06/20 | ||||||||||||||||||||||||||||||
Parc North 6, Dallas, TX | 96,000 | — | 2,451 | 10,741 | 07/20 | ||||||||||||||||||||||||||||||
SunCoast 6, Ft. Myers, FL | 81,000 | — | 445 | 8,379 | 07/20 | ||||||||||||||||||||||||||||||
Arlington Tech Centre 1 & 2, Dallas, TX (2) | 151,000 | — | 578 | 13,855 | 08/20 | ||||||||||||||||||||||||||||||
Gateway 5, Miami, FL | 187,000 | — | 1,664 | 24,769 | 08/20 | ||||||||||||||||||||||||||||||
Steele Creek IX, Charlotte, NC | 125,000 | — | 1,986 | 11,106 | 08/20 | ||||||||||||||||||||||||||||||
Grand Oaks 75 2, Tampa, FL (2) | 150,000 | — | 1,777 | 14,892 | 09/20 | ||||||||||||||||||||||||||||||
Rocky Point 2, San Diego, CA (2) | 109,000 | — | 583 | 19,858 | 09/20 | ||||||||||||||||||||||||||||||
Total Transferred to Real Estate Properties | 2,164,000 | $ | — | 16,778 | 220,994 | (3) |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Leasing costs (principally commissions) | $ | 96,473 | 89,191 | ||||||||
Accumulated amortization of leasing costs | (38,166) | (34,963) | |||||||||
Leasing costs (principally commissions), net of accumulated amortization | 58,307 | 54,228 | |||||||||
Acquired in-place lease intangibles | 26,175 | 28,834 | |||||||||
Accumulated amortization of acquired in-place lease intangibles | (12,870) | (11,918) | |||||||||
Acquired in-place lease intangibles, net of accumulated amortization | 13,305 | 16,916 | |||||||||
Acquired above market lease intangibles | 1,723 | 1,721 | |||||||||
Accumulated amortization of acquired above market lease intangibles | (1,174) | (1,007) | |||||||||
Acquired above market lease intangibles, net of accumulated amortization | 549 | 714 | |||||||||
Straight-line rents receivable | 43,033 | 40,369 | |||||||||
Accounts receivable | 5,841 | 5,581 | |||||||||
Mortgage loans receivable | 1,658 | 1,679 | |||||||||
Interest rate swap assets | — | 3,485 | |||||||||
Right of use assets — Office leases (operating) | 2,253 | 2,115 | |||||||||
Goodwill | 990 | 990 | |||||||||
Prepaid expenses and other assets | 19,765 | 18,545 | |||||||||
Total Other assets | $ | 145,701 | 144,622 |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Property taxes payable | $ | 42,824 | 2,696 | ||||||||
Development costs payable | 9,864 | 11,766 | |||||||||
Real estate improvements and capitalized leasing costs payable | 6,001 | 4,636 | |||||||||
Interest payable | 6,270 | 6,370 | |||||||||
Dividends payable | 32,395 | 30,714 | |||||||||
Book overdraft (1) | 5,951 | 25,771 | |||||||||
Other payables and accrued expenses | 7,152 | 10,071 | |||||||||
Total Accounts payable and accrued expenses | $ | 110,457 | 92,024 |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Security deposits | $ | 21,697 | 20,351 | ||||||||
Prepaid rent and other deferred income | 12,130 | 13,855 | |||||||||
Operating lease liabilities — Ground leases | 11,410 | 12,048 | |||||||||
Operating lease liabilities — Office leases | 2,287 | 2,141 | |||||||||
Acquired below-market lease intangibles | 8,637 | 8,616 | |||||||||
Accumulated amortization of below-market lease intangibles | (5,738) | (4,494) | |||||||||
Acquired below-market lease intangibles, net of accumulated amortization | 2,899 | 4,122 | |||||||||
Interest rate swap liabilities | 13,445 | 678 | |||||||||
Prepaid tenant improvement reimbursements | 26 | 56 | |||||||||
Other liabilities | 5,650 | 15,872 | |||||||||
Total Other liabilities | $ | 69,544 | 69,123 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Increase (Decrease) | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
VARIABLE RATE INTEREST EXPENSE | |||||||||||||||||||||||||||||||||||
Unsecured bank credit facilities interest - variable rate (excluding amortization of facility fees and debt issuance costs) | $ | 212 | 1,604 | (1,392) | 1,528 | 5,182 | (3,654) | ||||||||||||||||||||||||||||
Amortization of facility fees - unsecured bank credit facilities | 198 | 199 | (1) | 591 | 591 | — | |||||||||||||||||||||||||||||
Amortization of debt issuance costs - unsecured bank credit facilities | 141 | 139 | 2 | 421 | 416 | 5 | |||||||||||||||||||||||||||||
Total variable rate interest expense | 551 | 1,942 | (1,391) | 2,540 | 6,189 | (3,649) | |||||||||||||||||||||||||||||
FIXED RATE INTEREST EXPENSE | |||||||||||||||||||||||||||||||||||
Unsecured debt interest (1) (excluding amortization of debt issuance costs) | 8,553 | 7,041 | 1,512 | 25,249 | 20,005 | 5,244 | |||||||||||||||||||||||||||||
Secured debt interest (excluding amortization of debt issuance costs) | 1,408 | 1,508 | (100) | 4,299 | 5,503 | (1,204) | |||||||||||||||||||||||||||||
Amortization of debt issuance costs - unsecured debt | 158 | 117 | 41 | 454 | 394 | 60 | |||||||||||||||||||||||||||||
Amortization of debt issuance costs - secured debt | 55 | 60 | (5) | 170 | 190 | (20) | |||||||||||||||||||||||||||||
Total fixed rate interest expense | 10,174 | 8,726 | 1,448 | 30,172 | 26,092 | 4,080 | |||||||||||||||||||||||||||||
Total interest | 10,725 | 10,668 | 57 | 32,712 | 32,281 | 431 | |||||||||||||||||||||||||||||
Less capitalized interest | (2,378) | (2,146) | (232) | (7,562) | (6,067) | (1,495) | |||||||||||||||||||||||||||||
TOTAL INTEREST EXPENSE | $ | 8,347 | 8,522 | (175) | 25,150 | 26,214 | (1,064) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Increase (Decrease) | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||||||||||||||
(In thousands, except rates of interest) | |||||||||||||||||||||||||||||||||||
Average borrowings on unsecured bank credit facilities - variable rate | $ | 72,083 | 195,701 | (123,618) | 105,811 | 203,347 | (97,536) | ||||||||||||||||||||||||||||
Weighted average variable interest rates (excluding amortization of facility fees and debt issuance costs) | 1.17 | % | 3.24 | % | 1.93 | % | 3.40 | % |
NEW UNSECURED DEBT IN 2019 AND 2020 | Effective Interest Rate | Date Obtained | Maturity Date | Amount | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
$80 Million Senior Unsecured Notes | 4.27% | 03/28/2019 | 03/28/2029 | $ | 80,000 | |||||||||||||||||||||
$35 Million Senior Unsecured Notes | 3.54% | 08/15/2019 | 08/15/2031 | 35,000 | ||||||||||||||||||||||
$75 Million Senior Unsecured Notes | 3.47% | 08/19/2019 | 08/19/2029 | 75,000 | ||||||||||||||||||||||
$100 Million Senior Unsecured Term Loan (1) | 2.75% | 10/10/2019 | 10/10/2026 | 100,000 | ||||||||||||||||||||||
$100 Million Senior Unsecured Term Loan (2) | 2.39% | 03/25/2020 | 03/25/2027 | 100,000 | ||||||||||||||||||||||
Weighted Average/Total Amount for 2019 and 2020 | 3.18% | $ | 390,000 |
UNSECURED DEBT REPAID IN 2019 and 2020 | Interest Rate | Date Repaid | Payoff Amount | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
$75 Million Senior Unsecured Term Loan | 2.85% | 07/31/2019 | $ | 75,000 | ||||||||||||||||
$30 Million Senior Unsecured Notes | 3.80% | 08/28/2020 | 30,000 | |||||||||||||||||
Weighted Average/Total Amount for 2019 and 2020 | 3.12% | $ | 105,000 | |||||||||||||||||
SECURED DEBT REPAID IN 2019 | Interest Rate | Date Repaid | Payoff Amount | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Dominguez, Industry I & III, Kingsview, Shaw, Walnut and Washington | 7.50% | 04/05/2019 | $ | 45,725 | ||||||||||||||||
Blue Heron II | 5.39% | 12/16/2019 | 47 | |||||||||||||||||
Weighted Average/Total Amount for 2019 | 7.50% | $ | 45,772 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
Estimated Useful Life | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Upgrade on Acquisitions | 40 yrs | $ | 117 | 750 | 282 | 1,105 | |||||||||||||||||||||||
Tenant Improvements: | |||||||||||||||||||||||||||||
New Tenants | Lease Life | 3,114 | 4,706 | 8,870 | 11,508 | ||||||||||||||||||||||||
Renewal Tenants | Lease Life | 398 | 506 | 2,403 | 2,033 | ||||||||||||||||||||||||
Other: | |||||||||||||||||||||||||||||
Building Improvements | 5-40 yrs | 1,195 | 1,576 | 3,185 | 4,364 | ||||||||||||||||||||||||
Roofs | 5-15 yrs | 1,443 | 2,701 | 5,025 | 8,239 | ||||||||||||||||||||||||
Parking Lots | 3-5 yrs | 90 | 783 | 439 | 1,268 | ||||||||||||||||||||||||
Other | 5 yrs | 207 | 436 | 560 | 816 | ||||||||||||||||||||||||
Total Real Estate Improvements (1) | $ | 6,564 | 11,458 | 20,764 | 29,333 |
Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||
Total Real Estate Improvements | $ | 20,764 | 29,333 | |||||||||||
Change in Real Estate Property Payables | 585 | (2,852) | ||||||||||||
Change in Construction in Progress | 4,187 | 1,315 | ||||||||||||
Real Estate Improvements on the Consolidated Statements of Cash Flows | $ | 25,536 | 27,796 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
Estimated Useful Life | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Development and Value-Add | Lease Life | $ | 1,356 | 2,152 | 3,873 | 6,085 | |||||||||||||||||||||||
New Tenants | Lease Life | 2,164 | 1,415 | 4,385 | 4,478 | ||||||||||||||||||||||||
Renewal Tenants | Lease Life | 2,690 | 1,149 | 6,432 | 3,679 | ||||||||||||||||||||||||
Total Capitalized Leasing Costs | $ | 6,210 | 4,716 | 14,690 | 14,242 | ||||||||||||||||||||||||
Amortization of Leasing Costs | $ | 3,782 | 3,285 | 10,636 | 9,724 |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Unsecured bank credit facilities - variable rate, carrying amount | $ | 77,474 | 112,710 | ||||||||
Unamortized debt issuance costs | (934) | (1,316) | |||||||||
Unsecured bank credit facilities | 76,540 | 111,394 | |||||||||
Unsecured debt - fixed rate, carrying amount (1) | 1,010,000 | 940,000 | |||||||||
Unamortized debt issuance costs | (1,988) | (1,885) | |||||||||
Unsecured debt | 1,008,012 | 938,115 | |||||||||
Secured debt - fixed rate, carrying amount (1) | 126,674 | 133,422 | |||||||||
Unamortized debt issuance costs | (159) | (329) | |||||||||
Secured debt | 126,515 | 133,093 | |||||||||
Total debt | $ | 1,211,067 | 1,182,602 |
October – December 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
Unsecured bank credit facilities - variable rate (in thousands) | $ | — | — | 77,474 | (1) | — | — | — | 77,474 | 76,981 | (2) | |||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | — | — | 1.15 | % | (3) | — | — | — | 1.15 | % | ||||||||||||||||||||||||||||||||||||||||
Unsecured debt - fixed rate (in thousands) | $ | 75,000 | 40,000 | 75,000 | 115,000 | 120,000 | 585,000 | 1,010,000 | 1,033,333 | (4) | ||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | 3.45 | % | 2.34 | % | 3.03 | % | 2.96 | % | 3.47 | % | 3.42 | % | 3.30 | % | ||||||||||||||||||||||||||||||||||||
Secured debt - fixed rate (in thousands) | $ | 2,299 | 89,562 | 32,770 | 119 | 122 | 1,802 | 126,674 | 128,613 | (4) | ||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate | 4.42 | % | 4.55 | % | 4.09 | % | 3.85 | % | 3.85 | % | 3.85 | % | 4.42 | % |
Exhibits | ||||||||
The following exhibits are included in or incorporated by reference into, this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020: |
Exhibit Number | Description | ||||
Form of Indemnification Agreement entered into by and between the Company and each of its directors and executive officers (filed herewith). | |||||
Form of First Amendment to the Severance and Change in Control Agreement, entered into by and between the Company and each of R. Reid Dunbar and Ryan M. Collins (filed herewith). | |||||
Form of Severance and Change in Control Agreement, entered into by and between the Company and Staci H. Tyler (filed herewith). | |||||
Note Purchase Agreement, dated as of August 17, 2020, among EastGroup Properties, L.P., the Company and the purchasers of the notes party thereto (including the form of the 2.61% Series A Senior Notes due October 14, 2030 and the 2.71% Series B Senior Notes due October 14, 2032) (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-07094) filed August 21, 2020). | |||||
Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) of Marshall A. Loeb, Chief Executive Officer (filed herewith). | |||||
Rule 13a-14(a)/15d-14(a) Certifications (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) of Brent W. Wood, Chief Financial Officer (filed herewith). | |||||
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Marshall A. Loeb, Chief Executive Officer (furnished herewith). | |||||
Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Brent W. Wood, Chief Financial Officer (furnished herewith). | |||||
101.1.SCH | Inline XBRL Taxonomy Extension Schema Document (filed herewith). | ||||
101.2.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). | ||||
101.3.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). | ||||
101.4.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith). | ||||
101.5.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) (filed herewith). |
EASTGROUP PROPERTIES, INC. | |||||
/s/ STACI H. TYLER | |||||
Staci H. Tyler | |||||
Senior Vice President, Chief Accounting Officer and Secretary | |||||
/s/ BRENT W. WOOD | |||||
Brent W. Wood | |||||
Executive Vice President, Chief Financial Officer and Treasurer |
/s/ MARSHALL A. LOEB | |||||
MARSHALL A. LOEB | |||||
Chief Executive Officer | |||||
October 28, 2020 |
/s/ BRENT W. WOOD | |||||
BRENT W. WOOD | |||||
Chief Financial Officer | |||||
October 28, 2020 |
/s/ MARSHALL A. LOEB | |||||
MARSHALL A. LOEB | |||||
Chief Executive Officer | |||||
October 28, 2020 |
/s/ BRENT W. WOOD | |||||
BRENT W. WOOD | |||||
Chief Financial Officer | |||||
October 28, 2020 |
7
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CONSOLIDATED BALANCE SHEETS - Unaudited - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
ASSETS | ||||
Real estate properties | $ 3,097,818,000 | $ 2,844,567,000 | ||
Development and value-add properties | [1] | 324,841,000 | 419,999,000 | |
Real estate, development and value-add properties | 3,422,659,000 | 3,264,566,000 | ||
Less accumulated depreciation | (940,223,000) | (871,139,000) | ||
Real estate, net | 2,482,436,000 | 2,393,427,000 | ||
Unconsolidated investment | 7,530,000 | 7,805,000 | ||
Cash | 19,000 | 224,000 | ||
Other Assets | 145,701,000 | 144,622,000 | ||
TOTAL ASSETS | 2,635,686,000 | 2,546,078,000 | ||
LIABILITIES | ||||
Unsecured bank credit facilities | 76,540,000 | 111,394,000 | ||
Unsecured debt | 1,008,012,000 | 938,115,000 | ||
Secured debt | 126,515,000 | 133,093,000 | ||
Accounts payable and accrued expenses | 110,457,000 | 92,024,000 | ||
Other liabilities | 69,544,000 | 69,123,000 | ||
Total Liabilities | 1,391,068,000 | 1,343,749,000 | ||
Stockholders' Equity: | ||||
Common shares; $.0001 par value; 70,000,000 shares authorized; 39,556,930 shares issued and outstanding at September 30, 2020 and 38,925,953 at December 31, 2019 | 4,000 | 4,000 | ||
Excess shares; $.0001 par value; 30,000,000 shares authorized; no shares issued | 0 | 0 | ||
Additional paid-in capital | 1,591,720,000 | 1,514,055,000 | ||
Distributions in excess of earnings | (335,359,000) | (316,302,000) | ||
Accumulated Other Comprehensive Income (loss) | (13,445,000) | 2,807,000 | ||
Total Stockholders' Equity | 1,242,920,000 | 1,200,564,000 | ||
Noncontrolling interest in joint ventures | 1,698,000 | 1,765,000 | ||
Total Equity | 1,244,618,000 | 1,202,329,000 | ||
TOTAL LIABILITIES AND EQUITY | $ 2,635,686,000 | $ 2,546,078,000 | ||
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CONSOLIDATED BALANCE SHEETS - Unaudited (Parenthetical) - $ / shares |
Sep. 30, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, authorized | 70,000,000 | 70,000,000 |
Common shares, issued | 39,556,930 | 38,925,953 |
Common shares, outstanding | 39,556,930 | 38,925,953 |
Excess shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Excess shares, authorized | 30,000,000 | 30,000,000 |
Excess shares, issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - Unaudited - USD ($) shares in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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REVENUES | ||||
Income from real estate operations | $ 92,000,000 | $ 83,913,000 | $ 270,077,000 | $ 244,333,000 |
Other revenue | 12,000 | 25,000 | 278,000 | 504,000 |
Revenues | 92,012,000 | 83,938,000 | 270,355,000 | 244,837,000 |
EXPENSES | ||||
Expenses from real estate operations | 26,325,000 | 23,756,000 | 77,505,000 | 68,980,000 |
Depreciation and amortization | 29,211,000 | 25,990,000 | 85,673,000 | 77,027,000 |
General and administrative | 3,714,000 | 3,151,000 | 11,020,000 | 11,501,000 |
Indirect leasing costs | 248,000 | 110,000 | 522,000 | 306,000 |
Expenses | 59,498,000 | 53,007,000 | 174,720,000 | 157,814,000 |
OTHER INCOME (EXPENSE) | ||||
Interest expense | (8,347,000) | (8,522,000) | (25,150,000) | (26,214,000) |
Gains on Sales of Real Estate Investments | 0 | 0 | 0 | 11,406,000 |
Other | 244,000 | 166,000 | 711,000 | (157,000) |
Net Income | 24,411,000 | 22,575,000 | 71,196,000 | 72,058,000 |
Net income attributable to noncontrolling interest in joint ventures | (10,000) | (4,000) | (14,000) | (5,000) |
NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | 24,401,000 | 22,571,000 | 71,182,000 | 72,053,000 |
Other comprehensive loss - cash flow hedges | 1,362,000 | (256,000) | (16,252,000) | (6,323,000) |
TOTAL COMPREHENSIVE INCOME | $ 25,763,000 | $ 22,315,000 | $ 54,930,000 | $ 65,730,000 |
BASIC PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||||
Net income attributable to common stockholders | $ 0.62 | $ 0.60 | $ 1.82 | $ 1.94 |
Weighted average shares outstanding | 39,338 | 37,771 | 39,077 | 37,064 |
DILUTED PER COMMON SHARE DATA FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||||
Net income attributable to common stockholders | $ 0.62 | $ 0.60 | $ 1.82 | $ 1.94 |
Weighted average shares outstanding | 39,450 | 37,869 | 39,168 | 37,136 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - Unaudited (Parenthetical) - $ / shares |
3 Months Ended | |||||
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Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
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Stockholders' Equity Attributable to Parent | ||||||
Common dividends declared - per share (in dollars per share) | $ 0.79 | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.72 | $ 0.72 |
Issuance of shares of common stock, common stock offering, net of expenses | 238,086 | 243,621 | 105,837 | 849,751 | 790,052 | 232,205 |
Issuance of shares of common stock, dividend reinvestment plan | 0 | 0 | 0 | 441 | 479 | 571 |
Withheld shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock | 0 | 0 | 33,963 | 0 | 0 | 28,955 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited (Parenthetical) - USD ($) |
9 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest, net of amount capitalized | $ 7,562 | $ 6,067 |
BASIS OF PRESENTATION |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited financial statements of EastGroup Properties, Inc. (“EastGroup” or “the Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The financial statements should be read in conjunction with the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2019 and the notes thereto. |
PRINCIPLES OF CONSOLIDATION |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of September 30, 2020 and December 31, 2019, EastGroup held a controlling interest in the following joint venture arrangements: (i) an 80% controlling interest in University Business Center 120; (ii) a 95% controlling interest in the Miramar land; and (iii) a 99% controlling interest in the Otay Mesa land. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution Center II. All significant intercompany transactions and accounts have been eliminated in consolidation.
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USE OF ESTIMATES |
9 Months Ended |
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Sep. 30, 2020 | |
Use of estimates [Abstract] | |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and to disclose material contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
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Lease Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease, Lease Income [Text Block] | LEASE REVENUE The Company’s primary revenue is rental income from business distribution space. The table below presents the components of Income from real estate operations for the three and nine months ended September 30, 2020 and 2019:
(1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance. In April 2020, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Question-and-Answer (“Q&A”)-Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic to clarify whether lease concessions related to the effects of the COVID-19 pandemic require the application of lease modification guidance under FASB Accounting Standards Codification (“ASC”) 842, Leases. Under ASC 842, an entity must determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if the lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Q&A provides a practical expedient for entities to make an election to account for certain lease concessions consistent with how those concessions would be accounted for outside of the lease modification framework. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The FASB staff provided two possible methods to account for deferral of payments with no substantive changes to the consideration in the original contract: (a) account for the concessions as if no changes to the lease contract were made and, (b) account for the deferred payments as variable lease payments. The Company has elected the practical expedient provided by the FASB staff and is accounting for lease concessions meeting the criterion as if no changes to the lease contract were made. For the three and nine months ended September 30, 2020, the Company recognized approximately $549,000 and $1,340,000, respectively, in Income from real estate operations from lease concessions under this election.
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REAL ESTATE PROPERTIES |
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Real Estate Investment Property, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties | REAL ESTATE PROPERTIES EastGroup has one reportable segment – industrial properties. These properties are primarily located in major Sunbelt regions of the United States. The Company’s properties have similar economic characteristics and as a result, have been aggregated into one reportable segment. 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 periods ended September 30, 2020 and 2019, the Company did not identify any impairment charges which should be recorded. Depreciation of buildings and other improvements is computed using the straight-line method over estimated useful lives of generally 40 years for buildings and 3 to 15 years for improvements. Building improvements are capitalized, while maintenance and repair expenses are charged to expense as incurred. Significant renovations and improvements that improve or extend the useful life of the assets are capitalized. Depreciation expense was $24,087,000 and $70,989,000 for the three and nine months ended September 30, 2020, respectively, and $21,384,000 and $63,650,000 for the same periods in 2019. The Company’s Real estate properties and Development and value-add properties at September 30, 2020 and December 31, 2019 were as follows:
(1)See below for information regarding the Company’s right of use assets for ground leases. (2)Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property. Ground Leases On January 1, 2019, EastGroup adopted the principles of FASB ASC 842, Leases, and its related Accounting Standards Updates (“ASUs”). In connection with the adoption, the Company recorded right of use assets for its ground leases, which are classified as operating leases, using the effective date transition option; under this option, prior years are not restated. As of January 1, 2019, the Company recorded right of use assets for its ground leases of $10,226,000. In April 2019, the Company acquired Logistics Center 6 & 7 in Dallas, which is located on land under a ground lease. The Company recorded a right of use asset of $2,679,000 in connection with this acquisition. As of September 30, 2020 and December 31, 2019, the unamortized balance of the Company’s right of use assets for its ground leases was $11,303,000 and $11,997,000, respectively. The right of use assets for ground leases are included in Real estate properties on the Consolidated Balance Sheets. As of September 30, 2020, the Company operated two properties in Florida, three properties in Texas and one property in Arizona that are subject to ground leases. These leases have terms of 40 to 50 years, expiration dates of August 2031 to October 2058, and renewal options of 15 to 35 years, except for the one lease in Arizona which is automatically and perpetually renewed annually. The Company has included renewal options in the lease terms for calculating the ground lease assets and liabilities as the Company is reasonably certain it will exercise these options. Total ground lease expenditures were $266,000 and $789,000 for the three and nine months ended September 30, 2020, respectively, and $261,000 and $705,000 for the same periods in 2019. Payments are subject to increases at 3 to 10 year intervals based upon the agreed or appraised fair market value of the leased premises on the adjustment date or the Consumer Price Index percentage increase since the base rent date. These future changes in payments will be considered variable payments and will not impact the assessment of the asset or liability unless there is a significant event that triggers reassessment, such as amendment with a change in the terms of the lease. The weighted-average remaining lease term as of September 30, 2020 for the ground leases is 43 years. The following schedule indicates approximate future minimum ground lease payments for these properties by year as of September 30, 2020: Future Minimum Ground Lease Payments
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DEVELOPMENT AND VALUE-ADD PROPERTIES |
9 Months Ended |
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Sep. 30, 2020 | |
DEVELOPMENT [Abstract] | |
Development | DEVELOPMENT AND VALUE-ADD PROPERTIES For properties under development and value-add properties acquired in the development stage, costs associated with development (i.e., land, construction costs, interest expense, property taxes and other costs associated with development) are aggregated into the total capitalized costs of the property. Included in these costs are management’s estimates for the portions of internal costs (primarily personnel costs) deemed related to such development activities. The internal costs are allocated to specific development projects based on development activity. As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant. The Company transfers properties from the development and value-add program to Real estate properties as follows: (i) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (ii) for value-add properties, at the earlier of 90% occupancy or one year after acquisition. Upon the earlier of 90% occupancy or one year after completion of the shell construction, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).
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REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES |
9 Months Ended |
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Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Real Estate Property Acquisitions and Acquired Intangibles | REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations. The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions (or disposals) 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 (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup determined that its real estate property acquisitions in 2019 and the first nine months of 2020 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company capitalized acquisition costs related to its 2019 and 2020 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. Goodwill for business combinations is recorded when the purchase price exceeds the fair value of the assets and liabilities acquired. Factors considered by management in allocating the cost of the properties acquired include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties. The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates. The purchase price is also allocated among the following categories of intangible assets: the above or below market component of in-place leases, the value of in-place leases, and the value of customer relationships. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease. The amounts allocated to above and below market leases are included in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable. Amortization expense for in-place lease intangibles was $1,342,000 and $4,048,000 for the three and nine months ended September 30, 2020, respectively, and $1,321,000 and $3,653,000 for the same periods in 2019. Amortization of above and below market leases increased rental income by $332,000 and $1,078,000 for the three and nine months ended September 30, 2020, respectively, and $366,000 and $842,000 for the same periods in 2019. During the nine months ended September 30, 2020, the Company acquired one operating property, Wells Point One in Austin. The total cost for the property acquired by the Company was $6,231,000, of which $5,811,000 was allocated to Real estate properties. EastGroup allocated $907,000 of the total purchase price to land using third party land valuations for the Austin market. The market values are considered to be Level 3 inputs as defined by ASC 820, Fair Value Measurement (see Note 17 for additional information on ASC 820). Intangibles associated with the purchase of real estate were allocated as follows: $438,000 to in-place lease intangibles and $2,000 to above market leases (both included in Other assets on the Consolidated Balance Sheets) and $20,000 to below market leases (included in Other liabilities on the Consolidated Balance Sheets). These costs are amortized over the remaining lives of the associated leases in place at the time of acquisition. During the year ended December 31, 2019, the Company acquired the following operating properties: Airways Business Center in Denver; 385 Business Park in Greenville; Grand Oaks 75 Business Center 1 in Tampa; and Siempre Viva Distribution Center 2 and Rocky Point Distribution Center 1 in San Diego. The Company also acquired the following value-add properties: Logistics Center 6 & 7 and Arlington Tech Centre 1 & 2 in Dallas; Grand Oaks 75 Business Center 2 in Tampa; Interstate Commons Distribution Center 2 in Phoenix; Southwest Commerce Center in Las Vegas; and Rocky Point Distribution Center 2 in San Diego. At the time of acquisition, these value-add properties were classified in the lease-up or under construction phase. The total cost for the properties acquired by the Company was $205,841,000, of which $105,301,000 was allocated to Real estate properties and $92,268,000 was allocated to Development and value-add properties. EastGroup allocated $46,778,000 of the total purchase price to land using third party land valuations for the Denver, Greenville, Tampa, Dallas, Phoenix, Las Vegas and San Diego markets. Logistics Center 6 & 7 is located on land under a ground lease; therefore, no value was allocated to land for this transaction. Intangibles associated with the purchase of real estate were allocated as follows: $10,020,000 to in-place lease intangibles, $344,000 to above market leases and $2,092,000 to below market leases. Also during 2019, EastGroup acquired 6.5 acres of operating land in San Diego for $13,386,000. In connection with the acquisition, the Company allocated value to land and below market leases. EastGroup recorded land of $13,979,000 based on third party land valuations for the San Diego market. This land, which is included in Real estate properties on the Consolidated Balance Sheets, is currently leased to a tenant that operates a parking lot on the site. The Company recorded $593,000 to below market leases in connection with this land acquisition. During 2019, EastGroup also acquired 41.6 acres of operating land in San Diego for $15,282,000. This land, which is included in Real estate properties on the Consolidated Balance Sheets, is currently leased (on a month-to-month basis) to various tenants operating outdoor storage on the site. Also during 2019, EastGroup acquired a small parcel of land (0.5 acres) adjacent to its Yosemite Distribution Center in Milpitas (San Francisco), California, for $472,000. This land is included in Real estate properties on the Consolidated Balance Sheets. 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, 2020 and 2019.
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REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS |
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Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Real Estate Sold and Held For Sale and Discontinued Operations | REAL ESTATE SOLD AND HELD FOR SALE/DISCONTINUED OPERATIONS The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of September 30, 2020 and December 31, 2019. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, the Company would report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, the Company would provide additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. EastGroup performs an analysis of properties sold to determine whether the sales qualify for discontinued operations presentation. The Company does not consider its sales in 2019 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. The Company had no sales during the nine months ended September 30, 2020. During the year 2019, EastGroup sold the following operating properties: World Houston 5 in Houston; Altamonte Commerce Center in Orlando; Southpointe Distribution Center in Tuscon; and three of its four University Business Center buildings in Santa Barbara. The properties contain a combined 617,000 square feet and were sold for $68.5 million. EastGroup recognized gains on the sales of $41.1 million. The Company also sold (through eminent domain procedures) a small parcel of land (0.2 acres) in San Diego for $185,000 and recognized a gain of $83,000. Of the above-mentioned 2019 transactions, World Houston 5 and Altamonte Commerce Center were sold during the nine months ended September 30, 2019. The properties, which together contain 237,000 square feet and are located in Houston and Orlando, respectively, were sold for an aggregate of $18.7 million, and the Company recognized gains on the sales of $11.4 million during the nine months ended September 30, 2019. There were no sales during the three months ended September 30, 2019. The results of operations and gains on sales for the properties sold during the periods presented are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income. The gains on sales of operating properties are included in Gain on sales of real estate investments, and the gains on sales of land are included in Other.
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | OTHER ASSETS A summary of the Company’s Other assets follows:
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DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure | DEBT The Company’s debt is detailed below. EastGroup presents debt issuance costs as reductions of Unsecured bank credit facilities, Unsecured debt and Secured debt on the Consolidated Balance Sheets.
(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps. The Company has a $350 million unsecured bank credit facility with a group of nine banks; the facility has a maturity date of July 30, 2022. The credit facility contains options for two six-month extensions (at the Company’s election) and a $150 million accordion (with agreement by all parties). The interest rate on each tranche is usually reset on a monthly basis and as of September 30, 2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company’s credit ratings. As of September 30, 2020, the Company had $65,000,000 of variable rate borrowings on this unsecured bank credit facility with a weighted average interest rate of 1.146%. The Company has a standby letter of credit of $674,000 pledged on this facility. The Company also has a $45 million unsecured bank credit facility with a maturity date of July 30, 2022, or such later date as designated by the bank; the Company also has two six-month extensions available if the extension options in the $350 million facility are exercised. The interest rate is reset on a daily basis and as of September 30, 2020, was LIBOR plus 100 basis points with an annual facility fee of 20 basis points. The margin and facility fee are subject to changes in the Company’s credit ratings. As of September 30, 2020, the interest rate was 1.148% on a balance of $12,474,000. In March 2020, the Company closed a $100 million senior unsecured term loan with a -year term and interest only payments. It bears interest at the annual rate of LIBOR plus an applicable margin (1.45% as of September 30, 2020) based on the Company’s senior unsecured long-term debt rating. The Company also entered into an interest rate swap agreement to convert the loan’s LIBOR rate component to a fixed interest rate for the entire term of the loan providing a total effective fixed interest rate of 2.39%. In July 2020, the Company and a group of lenders agreed to terms on the private placement of $175 million of senior unsecured notes with a weighted average fixed interest rate of 2.65%. The $100 million note has a 10-year term and a fixed interest rate of 2.61%, and the $75 million note has a 12-year term and a fixed interest rate of 2.71%. These maturity dates complement the Company's existing debt maturity schedule. The notes dated August 17, 2020, were issued and sold on October 14, 2020 and require interest-only payments. The notes will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. In August 2020, the Company made a $30 million principal repayment on $100 million of senior unsecured notes with a fixed interest rate of 3.80%. Scheduled principal payments on long-term debt, including Unsecured debt and Secured debt (not including Unsecured bank credit facilities), as of September 30, 2020, are as follows:
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | ACCOUNTS PAYABLE AND ACCRUED EXPENSES A summary of the Company’s Accounts payable and accrued expenses follows:
(1)Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit.
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OTHER LIABILITIES |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | OTHER LIABILITIES A summary of the Company’s Other liabilities follows:
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COMPREHENSIVE INCOME |
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COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | COMPREHENSIVE INCOME Total Comprehensive Income is comprised of net income plus all other changes in equity from non-owner sources and is presented on the Consolidated Statements of Income and Comprehensive Income. The components of Accumulated other comprehensive income (loss) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments. Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative instruments, described below, are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings. The Company’s objective in using interest rate derivatives is to change variable interest rates to fixed interest rates by using interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2020, the Company had seven interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ LIBOR rate components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships is highly effective. The changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in Other comprehensive income (loss) and is subsequently reclassified into earnings through interest expense as interest payments are made in the period that the hedged forecasted transaction affects earnings. Amounts reported in Other comprehensive income (loss) related to derivatives will be reclassified to Interest expense as interest payments are made or received on the Company’s variable-rate debt. The Company estimates that an additional $4,442,000 will be reclassified from Other comprehensive income (loss) as an increase to Interest expense over the next twelve months. The Company’s valuation methodology for over-the-counter (“OTC”) derivatives is to discount cash flows based on Overnight Index Swap (“OIS”) rates. Uncollateralized or partially-collateralized trades are discounted at OIS rates, but include appropriate economic adjustments for funding costs (i.e., a LIBOR-OIS basis adjustment to approximate uncollateralized cost of funds) and credit risk. The Company calculates its derivative valuations using mid-market prices. In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. The Company has material contracts that are indexed to USD-LIBOR and is monitoring this activity and evaluating the related risks. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. As of September 30, 2020 and December 31, 2019, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019. See Note 17 for additional information on the fair value of the Company’s interest rate swaps.
The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2020 and 2019:
See Note 13 for additional information on the Company’s Accumulated other comprehensive income (loss) resulting from its interest rate swaps. Derivative financial agreements expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. The Company believes it minimizes the credit risk by transacting with financial institutions the Company regards as credit-worthy. The Company has an agreement with its derivative counterparties containing a provision stating that the Company could be declared in default on its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender. As of September 30, 2020, the fair value of derivatives in a net liability position related to these agreements was $13,445,000.
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EARNINGS PER SHARE |
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Earnings per Share | EARNINGS PER SHARE The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted earnings per share (“EPS”). Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period. The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding plus the dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method. Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. Stock-based compensation cost for employees was $1,945,000 and $5,617,000 for the three and nine months ended September 30, 2020, of which $424,000 and $1,478,000 were capitalized as part of the Company’s development costs. For the three and nine months ended September 30, 2019, stock-based compensation cost for employees was $1,739,000 and $4,752,000, respectively, of which $523,000 and $1,300,000 were capitalized as part of the Company’s development costs. Stock-based compensation expense for directors was $91,000 and $894,000 for the three and nine months ended September 30, 2020, respectively, and $1,000 and $725,000 for the same periods of 2019. In the second quarter of 2017, the Compensation Committee of the Company’s Board of Directors (the “Committee”) approved a long-term equity compensation plan for certain of its executive officers that included three components based on total shareholder return and one component based only on continued service as of the vesting dates. The three long-term equity compensation plan components based on total shareholder return were subject to bright-line tests that compared the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The first plan measured the bright-line tests over the one-year period ended December 31, 2017; these shares were awarded during the first quarter of 2018. The second plan measured the bright-line tests over the two-year period ended December 31, 2018; these shares were awarded during the first quarter of 2019. The third plan measured the bright-line tests over the three-year period ended December 31, 2019. During the first quarter of 2020, the Committee measured the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of May 10, 2017. The number of shares determined on the measurement date was 18,917. These shares vested 75% on February 13, 2020, the date the earned shares were determined, and will vest 25% on January 1, 2021. On the grant date of May 10, 2017, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award. The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on May 10, 2017. On that date, 5,406 shares were granted to certain executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $78.18 per share, vested 25% in the first quarter of each of 2018, 2019 and 2020 and will vest 25% on January 1, 2021. The shares are being expensed on a straight-line basis over the remaining service period. In the second quarter of 2018, the Committee approved a long-term equity compensation plan for the Company’s executive officers that included one component based on total shareholder return and one component based only on continued service as of the vesting dates. The component of the long-term equity compensation plan based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The plan will measure the bright-line tests over the three-year period ending December 31, 2020. During the first quarter of 2021, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of June 1, 2018. The number of shares to be earned on the measurement date could range from zero to 27,087. These shares would vest 75% on the date the earned shares are determined in the first quarter of 2021 and 25% on January 1, 2022. On the grant date of June 1, 2018, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award. The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on June 1, 2018. On that date, 7,884 shares were granted to the Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $95.19, vested 25% in the first quarter of 2019 and 25% on January 1, 2020, and will vest 25% on January 1 in years 2021 and 2022. The shares are being expensed on a straight-line basis over the remaining service period. In the first quarter of 2019, the Committee approved an equity compensation plan (the “2019 Annual Grant”) for the Company’s executive officers based upon certain annual performance measures for 2019; the 2019 Annual Grant was comprised of three components. The first component of the 2019 Annual Grant was based upon the following Company performance measures for 2019: (i) same property net operating income change, (ii) debt-to EBITDAre ratio, and (iii) fixed charge coverage. On February 13, 2020, the Committee measured the Company’s performance for 2019 against bright-line tests established by the Committee on the grant date of March 7, 2019 and determined that 9,162 shares were earned. These shares, which have a grant date fair value of $105.97, vested 20% on the date shares were determined and will vest 20% per year on each January 1 in years 2021, 2022, 2023 and 2024. On the grant date of March 7, 2019, the Company began recognizing expense for its estimate of the shares that could be earned pursuant to these awards; the expense was adjusted to actual upon the determination of the awards. The shares are being expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. The second component of the 2019 Annual Grant was based upon the Company’s funds from operations (“FFO”) per share for 2019. On February 13, 2020, the Committee measured the Company’s performance for 2019 against bright-line tests established by the Committee on the grant date of August 28, 2019 and determined that 15,990 shares were earned. These shares, which have a grant date fair value of $122.61, vested 20% on the date shares were determined and will vest 20% per year on each January 1 in years 2021, 2022, 2023 and 2024. On the grant date of August 28, 2019, the Company began recognizing expense for its estimate of the shares that could be earned pursuant to these awards; the expense was adjusted to actual upon the determination of the awards. The shares are being expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. The third component of the 2019 Annual Grant was based upon the achievement of individual goals for each of the officers included in the plan. On February 13, 2020, the Committee evaluated the performance of the officers and, in its discretion, awarded 5,860 shares with a grant date fair value of $141.63. These shares vested 20% on the date shares were determined and will vest 20% per year on each January 1 in years 2021, 2022, 2023 and 2024. The Company began recognizing the expense for the shares awarded on the grant date of February 13, 2020, and the shares will be expensed on a straight-line basis over the remaining service period. Also in the first quarter of 2019, the Committee approved a long-term equity compensation plan for the Company’s executive officers that includes one component based on total shareholder return and one component based only on continued service as of the vesting dates. The component of the long-term equity compensation plan based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The plan will measure the bright-line tests over the three-year period ending December 31, 2021. During the first quarter of 2022, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of March 7, 2019. The aggregate number of shares to be earned on the measurement date could range from zero to 33,442. These shares would vest 75% on the date the earned shares are determined in the first quarter of 2022 and 25% on January 1, 2023. On the grant date of March 7, 2019, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award. The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on March 7, 2019. On that date, an aggregate of 9,947 shares were granted to the Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $105.97, vested 25% in the first quarter of 2020 and will vest 25% on each January 1 in years 2021, 2022 and 2023. The shares are being expensed on a straight-line basis over the remaining service period. In the first quarter of 2020, the Committee approved an equity compensation plan (the “2020 Annual Grant”) for the Company’s executive officers based upon certain annual performance measures for 2020; the plan is comprised of two components. The first component of the 2020 Annual Grant is based upon the following Company performance measures for 2020: (i) FFO per share, (ii) same property net operating income change, (iii) debt-to EBITDAre ratio, and (iv) fixed charge coverage. During the first quarter of 2021, the Committee will measure the Company’s performance for 2020 against bright-line tests established by the Committee on the grant date of March 6, 2020. The number of shares that may be earned for the achievement of the annual performance measures could range from zero to 19,282. These shares, which have a grant date fair value of $131.36, would vest 34% on the date shares are determined and 33% per year on each January 1 in years 2022 and 2023. On the grant date of March 6, 2020, the Company began recognizing expense for its estimate of the shares that may be earned pursuant to these awards; the shares are being expensed using the graded vesting attribution method which recognizes each separate vesting portion of the award as a separate award on a straight-line basis over the requisite service period. The second component of the 2020 Annual Grant is based upon the achievement of individual goals for each of the officers included in the plan. Any shares issued pursuant to the individual goals in this compensation plan will be determined by the Committee in its discretion and issued in the first quarter of 2021. The number of shares to be issued on the grant date for the achievement of individual goals could range from zero to 4,812. These shares would vest 34% on the date shares are determined and awarded and 33% per year on each January 1 in years 2022 and 2023. The Company will begin recognizing the expense for any shares awarded on the grant date in the first quarter of 2021, and the shares will be expensed on a straight-line basis over the remaining service period. Also in the first quarter of 2020, the Committee approved a long-term equity compensation plan for the Company’s executive officers that includes one component based on total shareholder return and one component based only on continued service as of the vesting dates. The component of the long-term equity compensation plan based on total shareholder return is subject to bright-line tests that will compare the Company’s total shareholder return to the Nareit Equity Index and to the member companies of the Nareit industrial index. The plan will measure the bright-line tests over the three-year period ending December 31, 2022. During the first quarter of 2023, the Committee will measure the Company’s performance for the three-year period against bright-line tests established by the Committee on the grant date of March 6, 2020. The aggregate number of shares to be earned on the measurement date could range from zero to 25,261. These shares would vest 75% on the date the earned shares are determined in the first quarter of 2023 and 25% on January 1, 2024. On the grant date of March 6, 2020, the Company began recognizing expense for this plan based on the grant date fair value of the awards which was determined using a simulation pricing model developed to specifically accommodate the unique features of the award. The component of the long-term equity compensation plan based only on continued service as of the vesting dates was awarded on March 6, 2020. On that date, an aggregate of 7,217 shares were granted to the Company’s executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $131.36, will vest 25% in the first quarter of 2021 and 25% on January 1 in years 2022, 2023 and 2024. The shares are being expensed on a straight-line basis over the remaining service period. During the second quarter of 2020, 12,300 shares were granted to certain non-executive officers subject only to continued service as of the vesting dates. These shares, which have a grant date fair value of $105.30, will vest 20% on January 1 in years 2021, 2022, 2023, 2024 and 2025. The shares are being expensed on a straight-line basis over the remaining service period. During the fourth quarter of 2019, the Committee adopted the Equity Award Retirement Policy (the "retirement policy") which allows for accelerated vesting of unvested shares for retirement-eligible employees (defined as employees who meet certain age and years of service requirements). In order to qualify for accelerated vesting upon retirement, the eligible employees must provide required notification under the retirement policy and must retire from the Company. The Company has adjusted its stock-based compensation expense to accelerate the recognition of expense for retirement-eligible employees. 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, 2020, the Company withheld 33,963 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the vesting dates, the aggregate fair value of shares that vested during the nine months ended September 30, 2020, was $10,873,000.
(1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined. (2) Does not include the restricted shares that may be earned if the performance goals established in 2018 and 2019 for long-term performance and in 2020 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 109,884.
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at September 30, 2020 and December 31, 2019.
(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information). The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents: The carrying amounts approximate fair value due to the short maturity of those instruments. Mortgage loans receivable (included in Other assets on the Consolidated Balance Sheets): The fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities (Level 2 input). Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs. Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Secured debt: The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps.
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RISKS AND UNCERTAINTIES |
9 Months Ended |
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Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | RISKS AND UNCERTAINTIES The state of the overall economy can significantly impact the Company’s operational performance and thus impact its financial position. Should EastGroup experience a significant decline in operational performance due to the current coronavirus (“COVID-19”) pandemic, as discussed below, or other general economic conditions, it may affect the Company’s ability to make distributions to its shareholders, service debt, or meet other financial obligations. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. The United States, which is where EastGroup’s properties are located, has experienced widespread infection, and there is uncertainty regarding how long the pandemic will impact the United States and the rest of the world. Unprecedented, extraordinary actions have been taken by federal, state and local governmental authorities to combat the spread of COVID-19, including issuance of “stay-at-home” directives and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. These measures, while intended to protect human life, have led to, and may continue to lead to, reduced economic activity in certain sectors and an increase in unemployment throughout the United States, including some markets where the Company’s properties are located. As a result, there has been, and may continue to be, a period of economic slowdown, the severity of which is uncertain. Such economic slowdown, among other disruptions caused by the COVID-19 pandemic may adversely impact EastGroup’s financial condition and results of operations and the financial condition and results of operations of the Company’s tenants. EastGroup’s ability to lease its properties and collect rental revenues and expense reimbursements is dependent upon national, regional and local economic conditions. The potential inability to renew leases, lease vacant space or re-lease space as leases expire on favorable terms, or at all, could cause a decline in the Company’s receipt of rental payments. The Company has been in communication with a portion of its customer base regarding rent relief requests and has executed rent deferral agreements totaling $1.7 million, including approximately $1,500,000 that was applicable to periods through September 30, 2020 and approximately $150,000 for future periods. The majority of these deferral agreements ($1.4 million of the $1.7 million) qualify under modified COVID-19-related guidance provided by the FASB for rental income to be recognized in the periods in which they were charged under the original terms of the leases. These requests are being handled on a case-by-case basis, and the Company’s responses are largely dependent on its understanding of the financial strength of the customer, the operational and earnings impacts being experienced by the customer, and the customer’s ability or inability to obtain capital through debt or equity issuances, government assistance programs or by other means. The frequency of these requests slowed dramatically in the three months ended September 30, 2020. Some of the Company’s customers are experiencing a deterioration in their financial position, results of operations and cash flows; as a result, they may not be able to pay their rent and expense reimbursements, which could adversely affect EastGroup’s financial condition, results of operations and cash flows. Federal, state and local government restrictions associated with the mitigation efforts to prevent the spread of COVID-19 could prevent EastGroup’s customers from accessing their leased space and operating their businesses; such restrictions could also impact the Company’s ability to operate its business, which may cause the business and operating results to decline or impact the Company’s ability to comply with regulatory obligations leading to reputational harm and regulatory issues or fines. Such restrictions could also inhibit the Company’s ability to lease vacant space in its operating portfolio and its development and value-add program. In addition, government restrictions could prevent construction of tenant improvements and development projects, which could delay construction completion and lease commencement dates. In each case, EastGroup may experience an adverse impact on its financial condition and results of operations. The economic uncertainty surrounding the COVID-19 pandemic has caused and may continue to cause disruption and instability in the financial markets and may impact EastGroup’s ability to raise capital from debt and equity markets on favorable terms or at all. The health and well-being of EastGroup’s customers, employees, directors and other stakeholders is of great importance to the Company. The Company is striving to accommodate flexible working arrangements for its employees to ensure the health and safety of its team, while employees are continuing to perform job duties and provide services to the Company’s customers and other stakeholders. There are risks associated with remote working arrangements, including, but not limited to, risks related to cyber-security. EastGroup is continuing to monitor and adhere to federal, state and local government guidelines regarding its work arrangements with the goal of preventing the spread of COVID-19 to the Company’s workforce, customers and communities. There are risks and uncertainties related to the health of the Company’s employees and directors; any potential deterioration of the health of key personnel could impact EastGroup’s business operations. The ongoing COVID-19 pandemic and the current economic, financial and capital markets environment present material risks and uncertainties for the Company. However, the rapid development and fluidity of the situation precludes any prediction as to the ultimate impact COVID-19 will have on EastGroup’s business, financial condition, results of operations and cash flows, which will depend largely on future developments directly or indirectly relating to the duration and scope of the COVID-19 pandemic in the United States.
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LEGAL MATTERS (Notes) |
9 Months Ended |
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Sep. 30, 2020 | |
LEGAL MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL MATTERS The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties, other than routine litigation arising in the ordinary course of business. As previously reported in the Company’s annual reports on Form 10-K for the years ended December 31, 2019 and 2018, and the Company’s quarterly reports on Form 10-Q for the quarters ended March 31 and June 30, 2020 and 2019 and September 30, 2019, the Company had been involved in pending litigation related to an action against the Company and certain of its officers in connection with the Company’s November 2016 purchase of a land parcel, alleging breach of contract and other claims in law and in equity. The Company asserted numerous affirmative defenses. In an effort to resolve the litigation, EastGroup made an initial settlement offer for $497,000, which was reserved in the Company’s financial statements as of December 31, 2018 and March 31, 2019. During the three months ended June 30, 2019, the parties came to a mediated resolution of the matter; losses related to the matter are included in Other on the Consolidated Statements of Income and Comprehensive Income. As of June 30, 2019, the matter was resolved. Even though the matter was settled, the case was dismissed, and releases exchanged among all parties, the Plaintiff filed an appeal of the order in the Florida Court of Appeal compelling him to comply with the settlement. The Court has since dismissed the appeal. All monies due under the settlement have been paid to the Plaintiff’s lawyers and were accounted for as stated above.
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RECENT ACCOUNTING PRONOUNCEMENTS |
9 Months Ended |
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Sep. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Changes [Text Block] | RECENT ACCOUNTING PRONOUNCEMENTS EastGroup has evaluated all ASUs recently released by the FASB through the date the financial statements were issued and determined that the following ASUs apply to the Company. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequently issued ASUs 2018-19, 2019-04, 2019-05, 2019-10, 2019-11, 2020-02 and 2020-03. The ASUs amend guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. For available for sale debt securities (EastGroup does not currently hold any and does not intend to hold any in the future), credit losses should be measured in a similar manner to current GAAP; however, Topic 326 requires that credit losses be presented as an allowance rather than a write-down. The ASUs affect entities holding financial assets and are effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2016-13 and ASU 2018-19 on January 1, 2020, and the adoption did not have a material impact on its financial condition, results of operations or disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU is intended to improve the effectiveness of fair value measurement disclosures. ASU 2018-13 is effective for all entities for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2018-13 on January 1, 2020, and the adoption did not have a material impact on its financial condition, results of operations or disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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SUBSEQUENT EVENTS (Notes) |
9 Months Ended |
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Sep. 30, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS On October 14, 2020, $175 million of senior unsecured private placement notes dated August 17, 2020 were issued and sold. The $100 million note has a 10-year term and a fixed interest rate of 2.61%, and the $75 million note has a 12-year term and a fixed interest rate of 2.71%. The notes, which require interest-only payments, will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. In October 2020, EastGroup repaid (with no penalty) a mortgage loan with a balance of $45.9 million, an interest rate of 4.39% and an original maturity date of January 5, 2021. Also in October 2020, EastGroup acquired Rancho Distribution Center, a 162,000 square foot distribution building in the Inland Empire West submarket of Los Angeles. The multi-tenant distribution building was acquired for $27.8 million.
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The consolidated financial statements include the accounts of EastGroup, its wholly owned subsidiaries and its investment in any joint ventures in which the Company has a controlling interest. As of September 30, 2020 and December 31, 2019, EastGroup held a controlling interest in the following joint venture arrangements: (i) an 80% controlling interest in University Business Center 120; (ii) a 95% controlling interest in the Miramar land; and (iii) a 99% controlling interest in the Otay Mesa land. The Company records 100% of the assets, liabilities, revenues and expenses of the buildings and land held in joint ventures with the noncontrolling interests provided for in accordance with the joint venture agreements. The equity method of accounting is used for the Company’s 50% undivided tenant-in-common interest in Industry Distribution Center II. All significant intercompany transactions and accounts have been eliminated in consolidation.
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Discontinued Operations | The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of September 30, 2020 and December 31, 2019. In accordance with FASB ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, the Company would report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component or group of components meets the criteria to be classified as held for sale or when the component or group of components is disposed of by sale or other than by sale. In addition, the Company would provide additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. EastGroup performs an analysis of properties sold to determine whether the sales qualify for discontinued operations presentation. The Company does not consider its sales in 2019 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.
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Real Estate Property Acquisitions and Acquired Intangibles [Policy Text Block] | Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations. The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions (or disposals) 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 (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set is not a business. EastGroup determined that its real estate property acquisitions in 2019 and the first nine months of 2020 are considered to be acquisitions of groups of similar identifiable assets; therefore, the acquisitions are not considered to be acquisitions of a business. As a result, the Company capitalized acquisition costs related to its 2019 and 2020 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. Goodwill for business combinations is recorded when the purchase price exceeds the fair value of the assets and liabilities acquired. Factors considered by management in allocating the cost of the properties acquired include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The allocation to tangible assets (land, building and improvements) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar properties. The cost of the properties acquired may be adjusted based on indebtedness assumed from the seller that is determined to be above or below market rates. The purchase price is also allocated among the following categories of intangible assets: the above or below market component of in-place leases, the value of in-place leases, and the value of customer relationships. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate reflecting the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current market rents over the remaining term of the lease. The amounts allocated to above and below market leases are included in Other assets and Other liabilities, respectively, on the Consolidated Balance Sheets and are amortized to rental income over the remaining terms of the respective leases. The total amount of intangible assets is further allocated to in-place lease values and customer relationship values based upon management’s assessment of their respective values. These intangible assets are included in Other assets on the Consolidated Balance Sheets and are amortized over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable.
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Earnings Per Share, Policy [Policy Text Block] | The Company applies ASC 260, Earnings Per Share, which requires companies to present basic and diluted earnings per share (“EPS”). Basic EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period. The Company’s basic EPS is calculated by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted EPS represents the amount of earnings for the period attributable to each share of common stock outstanding during the reporting period and to each share that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during the reporting period. The Company calculates diluted EPS by dividing Net Income Attributable to EastGroup Properties, Inc. Common Stockholders by the weighted average number of common shares outstanding plus the dilutive effect of unvested restricted stock. The dilutive effect of unvested restricted stock is determined using the treasury stock method.
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Share-based Payment Arrangement [Policy Text Block] | EastGroup applies the provisions of ASC 718, Compensation - Stock Compensation, to account for its stock-based compensation plans. ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements and that the cost be measured on the fair value of the equity or liability instruments issued. |
Fair Value Measurement, Policy [Policy Text Block] | ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). |
USE OF ESTIMATES (Policies) |
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Use of estimates [Abstract] | |
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. |
Real Estate (Policies) |
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Real Estate [Abstract] | |
Right of use assets, ground leases | On January 1, 2019, EastGroup adopted the principles of FASB ASC 842, Leases, and its related Accounting Standards Updates (“ASUs”). In connection with the adoption, the Company recorded right of use assets for its ground leases, which are classified as operating leases, using the effective date transition option; under this option, prior years are not restated. |
LEASE REVENUE (Tables) |
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Operating Lease, Lease Income [Table Text Block] | The table below presents the components of Income from real estate operations for the three and nine months ended September 30, 2020 and 2019:
(1)Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.
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REAL ESTATE PROPERTIES (Tables) |
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Ground lease payments [Table Text Block] | The following schedule indicates approximate future minimum ground lease payments for these properties by year as of September 30, 2020: Future Minimum Ground Lease Payments
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Schedule of Real Estate Properties | The Company’s Real estate properties and Development and value-add properties at September 30, 2020 and December 31, 2019 were as follows:
(1)See below for information regarding the Company’s right of use assets for ground leases. (2)Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.
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OTHER ASSETS (Tables) |
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Other Assets | A summary of the Company’s Other assets follows:
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled principal payments on long-term debt, including Unsecured debt and Secured debt (not including Unsecured bank credit facilities), as of September 30, 2020, are as follows:
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Long term debt, by type [Table Text Block] | The Company’s debt is detailed below. EastGroup presents debt issuance costs as reductions of Unsecured bank credit facilities, Unsecured debt and Secured debt on the Consolidated Balance Sheets.
(1)These loans have a fixed interest rate or an effectively fixed interest rate due to interest rate swaps.
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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) |
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Summary of Accounts Payable and Accrued Expenses | A summary of the Company’s Accounts payable and accrued expenses follows:
(1)Represents checks written before the end of the period which have not cleared the bank; therefore, the bank has not yet advanced cash to the Company. When the checks clear the bank, they will be funded through the Company’s working cash line of credit.
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OTHER LIABILITIES (Tables) |
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Summary of other liabilities | A summary of the Company’s Other liabilities follows:
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COMPREHENSIVE INCOME (Tables) |
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of Accumulated other comprehensive income (loss) are presented in the Company’s Consolidated Statement of Changes in Equity and are summarized below. See Note 14 for information regarding the Company’s interest rate swaps.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
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Schedule of Derivative Instruments [Table Text Block] | As of September 30, 2020 and December 31, 2019, the Company had the following outstanding interest rate derivatives that are designated as cash flow hedges of interest rate risk:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019. See Note 17 for additional information on the fair value of the Company’s interest rate swaps.
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2020 and 2019:
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share | Reconciliation of the numerators and denominators in the basic and diluted EPS computations is as follows:
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STOCK-BASED COMPENSATION (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of total shares granted, forfeited and delivered | Following is a summary of the total restricted shares granted, forfeited and delivered (vested) to participants with the related weighted average grant date fair value share prices. Of the shares that vested in the nine months ended September 30, 2020, the Company withheld 33,963 shares to satisfy the tax obligations for those participants who elected this option as permitted under the applicable equity plan. As of the vesting dates, the aggregate fair value of shares that vested during the nine months ended September 30, 2020, was $10,873,000.
(1) Includes shares granted in prior years for which performance conditions have been satisfied and the number of shares have been determined. (2) Does not include the restricted shares that may be earned if the performance goals established in 2018 and 2019 for long-term performance and in 2020 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 109,884.
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amounts and fair value of financial instruments | The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments in accordance with ASC 820 at September 30, 2020 and December 31, 2019.
(1) Carrying amounts shown in the table are included on the Consolidated Balance Sheets under the indicated captions, except as explained in the notes below. (2) Carrying amounts and fair values shown in the table exclude debt issuance costs (see Note 10 for additional information). The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents: The carrying amounts approximate fair value due to the short maturity of those instruments. Mortgage loans receivable (included in Other assets on the Consolidated Balance Sheets): The fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities (Level 2 input). Interest rate swap assets (included in Other assets on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps. Unsecured bank credit facilities: The fair value of the Company’s unsecured bank credit facilities is estimated by discounting expected cash flows at current market rates (Level 2 input), excluding the effects of debt issuance costs. Unsecured debt: The fair value of the Company’s unsecured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Secured debt: The fair value of the Company’s secured debt is estimated by discounting expected cash flows at the rates currently offered to the Company for debt of the same remaining maturities, as advised by the Company’s bankers (Level 2 input), excluding the effects of debt issuance costs. Interest rate swap liabilities (included in Other liabilities on the Consolidated Balance Sheets): The instruments are recorded at fair value based on models using inputs, such as interest rate yield curves, LIBOR swap curves and OIS curves, observable for substantially the full term of the contract (Level 2 input). See Note 14 for additional information on the Company’s interest rate swaps.
|
LEASE REVENUE LEASE REVENUE (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Lease Revenue [Line Items] | ||||||
Lease income - operating leases | $ 68,528,000 | $ 62,901,000 | $ 201,284,000 | $ 183,271,000 | ||
Variable lease income | [1] | 23,472,000 | 21,012,000 | 68,793,000 | 61,062,000 | |
Income from real estate operations | 92,000,000 | $ 83,913,000 | 270,077,000 | $ 244,333,000 | ||
Operating lease with rent concessions related to the effects of the COVID-19 pandemic [Member] | ||||||
Lease Revenue [Line Items] | ||||||
Income from real estate operations | $ 549,000 | $ 1,340,000 | ||||
|
REAL ESTATE PROPERTIES (Details) |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
Integer
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jan. 01, 2019
USD ($)
|
|||||||
Real Estate Properties [Line Items] | |||||||||||||
Number of Reporting Units | Integer | 1 | ||||||||||||
Depreciation Expense During the Period | $ 24,087,000 | $ 21,384,000 | $ 70,989,000 | $ 63,650,000 | |||||||||
Percentage of occupancy to qualify as value-add property | 75.00% | ||||||||||||
Percentage of acquisition price to be spent on capital items to qualify as value-add property | 20.00% | ||||||||||||
Real Estate Properties | |||||||||||||
Land | 488,698,000 | $ 488,698,000 | $ 452,698,000 | ||||||||||
Building and building improvements | 2,080,785,000 | 2,080,785,000 | 1,907,963,000 | ||||||||||
Tenant and other improvements | 517,032,000 | 517,032,000 | 471,909,000 | ||||||||||
Right of use assets - Ground leases (operating) | [1] | 11,303,000 | 11,303,000 | 11,997,000 | |||||||||
Development and value-add properties | [2] | 324,841,000 | 324,841,000 | 419,999,000 | |||||||||
Real estate, development and value-add properties | 3,422,659,000 | 3,422,659,000 | 3,264,566,000 | ||||||||||
Less accumulated depreciation | (940,223,000) | (940,223,000) | (871,139,000) | ||||||||||
Real estate, net | 2,482,436,000 | $ 2,482,436,000 | $ 2,393,427,000 | ||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Incremental borrowing rate used in determining the present value of lease payments | 7.30% | ||||||||||||
Building [Member] | |||||||||||||
Real Estate Properties [Line Items] | |||||||||||||
Property, Plant and Equipment, Useful Life | 40 years | ||||||||||||
Minimum [Member] | Improvements [Member] | |||||||||||||
Real Estate Properties [Line Items] | |||||||||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||||||||
Maximum [Member] | Improvements [Member] | |||||||||||||
Real Estate Properties [Line Items] | |||||||||||||
Property, Plant and Equipment, Useful Life | 15 years | ||||||||||||
Accounting Standards Update 2016-02 [Member] | |||||||||||||
Real Estate Properties | |||||||||||||
Right of use assets - Ground leases (operating) | $ 10,226,000 | ||||||||||||
Ground leases [Member] | |||||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Leases terms minimum | 40 years | ||||||||||||
Leases terms maximum | 50 years | ||||||||||||
Renewal period option minimum | 15 years | ||||||||||||
Renewal period option maximum | 35 years | ||||||||||||
Total ground lease expenditures for continuing and discontinued operations | 266,000 | $ 261,000 | $ 789,000 | $ 705,000 | |||||||||
Payment increase interval minimum | 3 years | ||||||||||||
Payment increase interval maximum | 10 years | ||||||||||||
Weighted Average term for ground leases | 43 years | ||||||||||||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 242,000 | $ 242,000 | |||||||||||
Operating Leases, Future Minimum Payments, Due in Two Years | 970,000 | 970,000 | |||||||||||
Operating Leases, Future Minimum Payments, Due in Three Years | 970,000 | 970,000 | |||||||||||
Operating Leases, Future Minimum Payments, Due in Four Years | 975,000 | 975,000 | |||||||||||
Operating Leases, Future Minimum Payments, Due in Five Years | 999,000 | 999,000 | |||||||||||
Operating Leases, Future Minimum Payments, Due Thereafter | 38,916,000 | 38,916,000 | |||||||||||
Operating leases, future minimum payments due, total | 43,072,000 | 43,072,000 | |||||||||||
Imputed interest related to right of use assets for ground leases | [3] | (31,662,000) | (31,662,000) | ||||||||||
Ground Leases, Net | $ 11,410,000 | $ 11,410,000 | |||||||||||
Ground leases [Member] | FLORIDA | |||||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Properties subject to ground leases | 2 | 2 | |||||||||||
Ground leases [Member] | TEXAS | |||||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Properties subject to ground leases | 3 | 3 | |||||||||||
Ground leases [Member] | ARIZONA | |||||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Properties subject to ground leases | 1 | 1 | |||||||||||
Logistics Center 6 & 7 [Member] | |||||||||||||
Real Estate Properties | |||||||||||||
Right of use assets - Ground leases (operating) | $ 2,679,000 | ||||||||||||
Ground Leases Disclosures [Abstract] | |||||||||||||
Incremental borrowing rate used in determining the present value of lease payments | 8.00% | ||||||||||||
|
REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2019
USD ($)
ft²
|
Dec. 31, 2019
USD ($)
ft²
a
|
|
2019 Operating Property Sales [Member] [Domain] | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Square Footage of Real Estate Property | ft² | 617,000 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 68,500,000 | |
Gain (Loss) on Sale of Properties | 41,100,000 | |
2Q19 Operating Property Sales - World Houston 5 and Altamonte Commerce Center [Member] | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Square Footage of Real Estate Property | ft² | 237,000 | |
Proceeds from Sale of Property, Plant, and Equipment | $ 18,700,000 | |
Gain (Loss) on Sale of Properties | $ 11,400,000 | |
Land [Member] | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 185,000 | |
Size (in acres) of land sold | a | 0.2 | |
Gain on sales of land | $ 83,000 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Accounts Payable and Accrued Expenses [Abstract] | ||||
Property taxes payable | $ 42,824 | $ 2,696 | ||
Development costs payable | 9,864 | 11,766 | ||
Real estate improvements and capitalized leasing costs payable | 6,001 | 4,636 | ||
Interest payable | 6,270 | 6,370 | ||
Dividends payable | 32,395 | 30,714 | ||
Book Overdraft | [1] | 5,951 | 25,771 | |
Other payables and accrued expenses | 7,152 | 10,071 | ||
Accounts payable and accrued expenses | $ 110,457 | $ 92,024 | ||
|
OTHER LIABILITIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Liabilities, Unclassified [Abstract] | ||
Security deposits | $ 21,697 | $ 20,351 |
Prepaid rent and other deferred income | 12,130 | 13,855 |
Operating lease liabilities - ground leases | 11,410 | 12,048 |
Operating lease liabilities - office leases | 2,287 | 2,141 |
Acquired Below Market Lease Intangibles | 8,637 | 8,616 |
Accumulated Amortization of Acquired Below Market Lease Intangibles | (5,738) | (4,494) |
Acquired Below Market Lease Intangibles, Net of Accumulated Amortization | 2,899 | 4,122 |
Interest rate swap liabilities | 13,445 | 678 |
Prepaid tenant improvement reimbursements | 26 | 56 |
Other liabilities | 5,650 | 15,872 |
Total Other Liabilities | $ 69,544 | $ 69,123 |
COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
COMPREHENSIVE INCOME [Abstract] | ||||||||
Balance at Beginning of Period | $ (14,807) | $ 2,807 | $ 634 | $ 6,701 | $ 2,807 | $ 6,701 | ||
Change in fair value of interest rate swaps - cash flow hedges | 1,362 | $ (1,824) | $ (15,790) | (256) | $ (3,754) | $ (2,313) | (16,252) | (6,323) |
Balance at End of Period | $ (13,445) | $ (14,807) | $ 378 | $ 634 | $ (13,445) | $ 378 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
Integer
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
Integer
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Derivative [Line Items] | |||||
Number of interest rate swaps | Integer | 7 | 7 | |||
Interest Rate Cash Flow Hedge Assets at Fair Value | $ 0 | $ 0 | $ 3,485,000 | ||
Interest rate cash flow hedge liabilities at fair value | 13,445,000 | 13,445,000 | 678,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | |||||
Derivative [Line Items] | |||||
Amount of Income (Loss) Recognized in Other Comprehensive Income on Derivatives | (75,000) | $ 153,000 | (18,647,000) | $ (4,595,000) | |
Amount of (income) loss reclassified from accumulated other comprehensive income into interest expense | 1,437,000 | $ (409,000) | 2,395,000 | $ (1,728,000) | |
Cash flow hedge amount to be reclassified to Interest Expense in next 12 months [Line Items] | 4,442,000 | 4,442,000 | |||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |||||
Derivative [Line Items] | |||||
Interest Rate Cash Flow Hedge Assets at Fair Value | 0 | 0 | 3,485,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Liabilities [Member] | |||||
Derivative [Line Items] | |||||
Interest rate cash flow hedge liabilities at fair value | 13,445,000 | 13,445,000 | 678,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $75 million interest rate swap executed in 2015 [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 75,000,000 | 75,000,000 | 75,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $65 million interest rate swap executed in 2016 [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 65,000,000 | 65,000,000 | 65,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $60 million interest rate swap [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 60,000,000 | 60,000,000 | 60,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $40 million interest rate swap (2016) [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 40,000,000 | 40,000,000 | 40,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $15 million interest rate swap [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 15,000,000 | 15,000,000 | 15,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2019) [Domain] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | 100,000,000 | 100,000,000 | 100,000,000 | ||
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | $100 million interest rate swap (2020) [Member] | |||||
Derivative [Line Items] | |||||
Notional Amount of Interest Rate Derivatives | $ 100,000,000 | $ 100,000,000 | $ 0 |
EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
BASIC EPS COMPUTATION FOR NET INCOME AVAILABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS [Abstract] | ||||
Numerator - net income attributable to common stockholders | $ 24,401 | $ 22,571 | $ 71,182 | $ 72,053 |
Denominator - Weighted average shares outstanding | 39,338 | 37,771 | 39,077 | 37,064 |
DILUTED EPS COMPUTATION FOR NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS | ||||
Numerator - net income attributable to common stockholders | $ 24,401 | $ 22,571 | $ 71,182 | $ 72,053 |
Denominator - Weighted average shares outstanding | 39,338 | 37,771 | 39,077 | 37,064 |
Unvested restricted stock | 112 | 98 | 91 | 72 |
Total Shares | 39,450 | 37,869 | 39,168 | 37,136 |
STOCK-BASED COMPENSATION (Details) |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
$ / shares
shares
|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Mar. 31, 2020
USD ($)
$ / shares
shares
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
Integer
$ / shares
shares
|
Sep. 30, 2019
USD ($)
|
|||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based Payment Arrangement, Expense | $ | $ (2,036,000) | $ (2,694,000) | $ (1,781,000) | $ (1,739,000) | $ (2,291,000) | $ (1,447,000) | ||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Executive Officer [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 109,884 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Company Performance Awards [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 131.36 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 131.36 | |||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 34.00% | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 19,282 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 33.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2018 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2017 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 3 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Individual performance awards [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent that vested when number of shares determined | 20.00% | |||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 141.63 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 5,860 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 141.63 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 20.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Individual performance awards [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 34.00% | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 4,812 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 33.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Service Condition Only Awards [Member] | Executive Officer [Member] | 2018 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 95.19 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 7,884 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 95.19 | |||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 25.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Service Condition Only Awards [Member] | Executive Officer [Member] | 2017 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 78.18 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 5,406 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 78.18 | |||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 25.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Service Condition Only Awards [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent that vested when number of shares determined | 25.00% | |||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 105.97 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 9,947 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 105.97 | |||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 25.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Service Condition Only Awards [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 131.36 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 7,217 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 131.36 | |||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 25.00% | |||||||||||
Equity Instruments other than options, number of plans | Integer | 1 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 25.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Annual equity plan [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 3 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Annual equity plan [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Equity Instruments other than options, number of plans | Integer | 2 | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Company Performance Awards - Part A [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent that vested when number of shares determined | 20.00% | |||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 105.97 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 9,162 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 105.97 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 20.00% | |||||||||||
Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Company Performance Awards - Part B [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent that vested when number of shares determined | 20.00% | |||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 122.61 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 15,990 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 122.61 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 20.00% | |||||||||||
Award Recipient Type Employee [Member] | Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation costs capitalized as development costs | $ | 424,000 | 523,000 | $ 1,478,000 | $ 1,300,000 | ||||||||
Share-based Payment Arrangement, Expense | $ | $ 1,945,000 | 1,739,000 | $ 5,617,000 | 4,752,000 | ||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | [1],[2] | $ 101.25 | ||||||||||
Shares withheld for tax obligations | 33,963 | |||||||||||
Fair value of shares vested as of the vesting date | $ | $ 10,873,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Unvested at beginning of period (in shares) | 131,024 | 131,024 | ||||||||||
Granted (in shares) | [1],[2] | 69,654 | ||||||||||
Forfeited (in shares) | (440) | |||||||||||
Vested (in shares) | (80,529) | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Unvested at beginning of period (per share) | $ / shares | $ 82.79 | $ 82.79 | ||||||||||
Granted (per share) | $ / shares | [1],[2] | 101.25 | ||||||||||
Forfeited (per share) | $ / shares | 112.14 | |||||||||||
Vested (per share) | $ / shares | 72.24 | |||||||||||
Unvested at end of period (per share) | $ / shares | $ 100.52 | 100.52 | ||||||||||
Award Recipient Type Employee [Member] | Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Non Executive Officers [Member] | 2020 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | $ 105.30 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 12,300 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Granted (per share) | $ / shares | $ 105.30 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | |||||||||||
Award Recipient Type Employees and Directors [Member] | Restricted Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Grant date fair value of shares issued (in dollars per share) | $ / shares | [1],[2] | $ 120.39 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Unvested at beginning of period (in shares) | 119,571 | |||||||||||
Granted (in shares) | [1],[2] | 208 | ||||||||||
Forfeited (in shares) | 0 | |||||||||||
Vested (in shares) | (70) | |||||||||||
Unvested at end of period (in shares) | 119,709 | 119,571 | 119,709 | |||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Unvested at beginning of period (per share) | $ / shares | $ 100.48 | |||||||||||
Granted (per share) | $ / shares | [1],[2] | 120.39 | ||||||||||
Forfeited (per share) | $ / shares | 0 | |||||||||||
Vested (per share) | $ / shares | 88.86 | |||||||||||
Unvested at end of period (per share) | $ / shares | $ 100.52 | $ 100.48 | $ 100.52 | |||||||||
Award Recipient Type Director [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based Payment Arrangement, Expense | $ | $ 91,000 | $ 1,000 | $ 894,000 | $ 725,000 | ||||||||
Three year period [Member] | Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2018 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 75.00% | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Possible Shares To Be Awarded Vesting Rights | 25.00% | |||||||||||
Number of years in total shareholder return performance period | Integer | 3 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 27,087 | |||||||||||
Three year period [Member] | Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2017 Awards [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent that vested when number of shares determined | 75.00% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||||||||
Granted (in shares) | 18,917 | |||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Number of years in total shareholder return performance period | Integer | 3 | |||||||||||
Share Based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Rights (% vesting per year in future years) | 25.00% | |||||||||||
Three year period [Member] | Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2019 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 75.00% | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Possible Shares To Be Awarded Vesting Rights | 25.00% | |||||||||||
Number of years in total shareholder return performance period | Integer | 3 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 33,442 | |||||||||||
Three year period [Member] | Equity Incentive Plan 2013 [Member] | Restricted Stock [Member] | Shareholder Return Awards [Member] | Executive Officer [Member] | 2020 Awards [Member] | ||||||||||||
Weighted Average Grant Date Fair Value [Abstract] | ||||||||||||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other Than Options, Percent of future vesting that will occur on performance determination date or future grant date | 75.00% | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Possible Shares To Be Awarded Vesting Rights | 25.00% | |||||||||||
Number of years in total shareholder return performance period | Integer | 3 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (minimum) | 0 | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other Than Options, Potential Grants in Future Period (maximum) | 25,261 | |||||||||||
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
||
---|---|---|---|---|---|---|
Financial Assets [Abstract] | ||||||
Cash and Cash Equivalents, at Carrying Value | $ 19 | $ 224 | $ 130 | $ 374 | ||
Fair Value [Member] | ||||||
Financial Assets [Abstract] | ||||||
Cash and Cash Equivalents, Fair Value Disclosure | 19 | 224 | ||||
Mortgage loans receivable | 1,693 | 1,703 | ||||
Interest rate swap assets | 0 | 3,485 | ||||
Financial Liabilities [Abstract] | ||||||
Unsecured bank credit facilities - variable rate | 76,981 | 113,174 | ||||
Unsecured debt Fair Value Disclosure | 1,033,333 | 959,177 | ||||
Secured debt | 128,613 | 136,107 | ||||
Interest rate swap liabilities | 13,445 | 678 | ||||
Carrying Amount [Member] | ||||||
Financial Assets [Abstract] | ||||||
Cash and Cash Equivalents, at Carrying Value | [1] | 19 | 224 | |||
Mortgage loans receivable | [1] | 1,658 | 1,679 | |||
Interest rate swap assets | [1] | 0 | 3,485 | |||
Financial Liabilities [Abstract] | ||||||
Unsecured bank credit facilities - variable rate | [1] | 77,474 | 112,710 | |||
Unsecured debt Fair Value Disclosure | [1] | 1,010,000 | 940,000 | |||
Secured debt | [1] | 126,674 | 133,422 | |||
Interest rate swap liabilities | [1] | $ 13,445 | $ 678 | |||
|
RISKS AND UNCERTAINTIES Notes (Details) |
Sep. 30, 2020
USD ($)
|
---|---|
Risks and Uncertainties [Abstract] | |
Deferred Rent Receivables, Gross | $ 1,700,000 |
Deferred rent receivable, applicable to past periods | 1,500,000 |
Deferred rent receivable, applicable to future periods | 150,000 |
Deferred rent receivable, qualify to be recognized as rental income in charge periods under the original lease terms | $ 1,400,000 |
LEGAL MATTERS (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
LEGAL MATTERS [Abstract] | ||
Loss Contingency Accrual | $ 497,000 | $ 497,000 |
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] $ in Thousands |
1 Months Ended |
---|---|
Oct. 27, 2020
USD ($)
ft²
| |
$74 million mortgage (closed 2010, repaid in 2020) [Member] | |
Subsequent Event [Line Items] | |
Secured debt, Interest Rate | 4.39% |
Secured debt, carrying amount | $ 45,900 |
Secured debt, Maturity Date | Jan. 05, 2021 |
Rancho Distribution Center [Member] | |
Subsequent Event [Line Items] | |
Square Footage of Real Estate Property | ft² | 162,000 |
Total cost of properties purchased | $ 27,800 |
$100 million senior unsecured private placement notes (2Q 2020) [Member] | |
Subsequent Event [Line Items] | |
Unsecured debt, carrying amount | $ 100,000 |
Debt Instrument, Term | 10 years |
Fixed interest rate | 2.61% |
$75 million senior unsecured private placement notes (2020) [Member] | |
Subsequent Event [Line Items] | |
Unsecured debt, carrying amount | $ 75,000 |
Debt Instrument, Term | 12 years |
Fixed interest rate | 2.71% |
$175 million senior unsecured private placement notes (Both notes - 2Q 2020) [Member] | |
Subsequent Event [Line Items] | |
Total amount of unsecured debt | $ 175,000 |
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