REAL ESTATE PROPERTIES

3 Months Ended

Mar. 31, 2024

Real Estate Investment Property, Net [Abstract]

REAL ESTATE PROPERTIES

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

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows (including estimated future expenditures necessary to substantially complete the asset) expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the three month periods ended March 31, 2024 and 2023, 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 $37,205,000 and $33,846,000 for the three months ended March 31, 2024 and 2023, respectively.

The Company’s Real estate properties and Development and value-add properties at March 31, 2024 and December 31, 2023 were as follows:


	March 31, 2024		December 31, 2023
	(In thousands)
Real estate properties:
Land	$	835,795	814,364
Buildings and building improvements	3,382,163		3,336,615
Tenant and other improvements	692,300		684,573
Right of use assets — Ground leases (operating) (1)	17,663		17,996
Development and value-add properties (2)	670,250		639,647
	5,598,171		5,493,195
Less accumulated depreciation	(1,299,905)		(1,273,723)
	$	4,298,266	4,219,472

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

(2)Value-add properties are defined in Note 6.