REAL ESTATE SOLD AND HELD FOR SALE DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Real Estate Sold and Held For Sale and Discontinued Operations

REAL ESTATE SOLD AND HELD FOR SALE

The Company considers a real estate property to be held for sale when it meets the criteria established under ASC 360, Property, Plant and Equipment, including when it is probable that the property will be sold within a year. Real estate properties held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The Company did not classify any properties as held for sale as of September 30, 2023 and December 31, 2022.

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

The Company sold one operating property during the nine months ended September 30, 2023 and three operating properties during the year ended December 31, 2022, as shown in the table below. The results of operations and gains and losses on sales for the properties sold are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales are included in Gain on sales of real estate investments. The Company did not consider its sales in 2022 or 2023 to be disposals of a component of an entity or a group of components of an entity representing a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.

A summary of Gain on sales of real estate investments for the nine months ended September 30, 2023 and the year ended December 31, 2022 follows:

REAL ESTATE PROPERTIES SOLD	Location	Size	Date Sold	Net Sales Price		Basis	Recognized Gain
		(In square feet)		(In thousands)
2023
World Houston 23	Houston, TX	125,000	03/31/2023	$	9,327	4,518	4,809
2022
Metro Business Park	Phoenix, AZ	189,000	01/06/2022	$	32,851	5,880	26,971
Cypress Creek Business Park (1)	Fort Lauderdale, FL	56,000	03/31/2022	5,282		1,901	3,381
World Houston 15 East	Houston, TX	42,000	05/11/2022	12,873		2,226	10,647
Total for 2022		287,000		$	51,006	10,007	40,999

(1)    Cypress Creek Business Park is located on a ground lease. In conjunction with the sale of the property, the Company fully amortized the associated right-of-use asset and liability of $1,745,000.

The table above includes sales of operating properties. During the nine months ended September 30, 2023, the Company also sold 11.9 acres of land in Houston and Fort Worth, for $4,750,000 and recognized gains on the sales of $446,000. The Company did not sell any land during the year ended December 31, 2022. The gains on sales of non-operating real estate are included in Other on the Consolidated Statements of Income and Comprehensive Income.