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OFFON

EASTGROUP PROPERTIES, INC.

(EGP)
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EASTGROUP PROPERTIES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

07/28/2021 | 04:42pm EDT
The following discussion and analysis of results of operations and financial
condition should be read in conjunction with the consolidated financial
statements and notes thereto appearing elsewhere in this Quarterly Report on
Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" (within
the meaning of the federal securities laws, Section 27A of the Securities Act of
1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act of
1934, as amended (the "Exchange Act")) that reflect EastGroup's expectations and
projections about the Company's future results, performance, prospects and
opportunities. The Company has attempted to identify these forward-looking
statements by the use of words such as "may," "will," "seek," "expects,"
"anticipates," "believes," "targets," "intends," "should," "estimates," "could,"
"continue," "assume," "projects," "plans" or similar expressions. These
forward-looking statements are based on information currently available to the
Company and are subject to a number of known and unknown risks, uncertainties
and other factors that may cause the Company's actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. These
factors include, among other things, those discussed below. The Company intends
for all such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A of the
Securities Act and Section 21E of the Exchange Act, as applicable by law. The
Company does not undertake publicly to update or revise any forward-looking
statements, whether as a result of changes in underlying assumptions or new
information, future events or otherwise, except as may be required to satisfy
the Company's obligations under federal securities law.

The following are some, but not all, of the risks, uncertainties and other
factors that could cause the Company's actual results to differ materially from
those presented in the Company's forward-looking statements (the Company refers
to itself as "we," "us" or "our" in the following):

•international, national, regional and local economic conditions;
•the duration and extent of the impact of the coronavirus ("COVID-19") pandemic,
including as a result of any COVID-19 variants or as affected by the rate and
efficacy of COVID-19 vaccines, and any related orders or other formal
recommendations for social distancing on our business operations or the business
operations of our tenants (including their ability to timely make rent payments)
and the economy generally;
•disruption in supply and delivery chains;
•the general level of interest rates and ability to raise equity capital on
attractive terms;
•financing risks, including the risks that our cash flows from operations may be
insufficient to meet required payments of principal and interest, and we may be
unable to refinance our existing debt upon maturity or obtain new financing on
attractive terms or at all;
•the competitive environment in which the Company operates;
•fluctuations of occupancy or rental rates;
•potential defaults (including bankruptcies or insolvency) on or non-renewal of
leases by tenants, or our ability to lease space at current or anticipated
rents, particularly in light of the significant uncertainty as to the conditions
under which current or potential tenants will be able to operate physical
locations in the future;
•potential changes in the law or governmental regulations and interpretations of
those laws and regulations, including changes in real estate laws or real estate
investment trust ("REIT") or corporate income tax laws, and potential increases
in real property tax rates;
•our ability to maintain our qualification as a REIT;
•acquisition and development risks, including failure of such acquisitions and
development projects to perform in accordance with projections;
•natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes;
•pandemics, epidemics or other public health emergencies, such as the outbreak
of COVID-19;
•the terms of governmental regulations that affect us and interpretations of
those regulations, including the costs of compliance with those regulations,
changes in real estate and zoning laws and increases in real property tax rates;
•credit risk in the event of non-performance by the counterparties to our
interest rate swaps;
•lack of or insufficient amounts of insurance;
•litigation, including costs associated with prosecuting or defending claims and
any adverse outcomes;
•our ability to attract and retain key personnel;
•the consequences of future terrorist attacks or civil unrest; and
                                      -23-
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•environmental liabilities, including costs, fines or penalties that may be
incurred due to necessary remediation of contamination of properties presently
owned or previously owned by us.

All forward-looking statements should be read in light of the risks identified
in Part I, Item 1A. Risk Factors within the Company's Annual Report on Form 10-K
for the year ended December 31, 2020. In addition, the Company's current and
continuing qualification as a real estate investment trust, or REIT, involves
the application of highly technical and complex provisions of the Internal
Revenue Code of 1986, as amended, or the Code, and depends on the Company's
ability to meet the various requirements imposed by the Code through actual
operating results, distribution levels and diversity of stock ownership.

OVERVIEW

EastGroup's goal is to maximize shareholder value by being a leading provider in
its markets of functional, flexible and quality business distribution space for
location-sensitive customers (primarily in the 15,000 to 70,000 square foot
range). The Company develops, acquires and operates distribution facilities, the
majority of which are clustered around major transportation features in supply
constrained submarkets in major Sunbelt regions. The Company's core markets are
in the states of Florida, Texas, Arizona, California and North Carolina.

Impact of the COVID-19 Pandemic
Global, national and local economies continue to be impacted by the COVID-19
pandemic and the mitigation efforts to combat the spread of COVID-19. During the
course of the pandemic, the United States has experienced, and may continue to
experience, significant health, social and economic impacts from COVID-19.
EastGroup's operations, occupancy and rent collections have remained
substantially stable during this period. The Company has executed rent deferral
agreements totaling $1.7 million, which represents approximately 0.4% of the
Company's 2020 revenue, and of which $1.5 million has been collected by the
Company through July 27, 2021. The deferrals all relate to 2020 rental income
with no future period deferred rents. The terms differ for each deferral
agreement, and all deferred rent payments that were due through June 30, 2021
have been collected with the exception of $33,000. Under modified
COVID-19-related guidance provided by the Financial Accounting Standards Board
("FASB"), rental income for the majority of these deferral agreements ($1.4
million of the $1.7 million) qualified to be recognized as rental income in the
periods in which it was charged under the original terms of the leases. Rent
payment deferrals have not been significant; however, the Company is continuing
to actively monitor the evolving COVID-19 situation and its impact on the
Company's cash flows and operations.

As of July 27, 2021, the Company had collected 99.4% of its rental income charges for January through July 2021. Also as of July 27, 2021, the Company had collected 97.7% of amounts due through June 30, 2021 pursuant to deferral agreements with tenants.

The future impacts of COVID-19 on the Company are largely dependent on the severity and duration of the economic uncertainty and its effect on EastGroup's customers and cannot be predicted with certainty at this time.

General

EastGroup believes its current operating cash flow and unsecured bank credit
facilities provide the capacity to fund the operations of the Company, and the
Company also believes it can issue common and/or preferred equity and obtain
debt financing on currently acceptable terms. During the three months ended
June 30, 2021, EastGroup issued 370,177 shares of common stock through its
continuous common equity offering program, providing net proceeds to the Company
of $59.3 million. During the six months ended June 30, 2021, EastGroup issued
687,715 shares of common stock through its continuous common equity offering
program, providing net proceeds to the Company of $103.8 million. Also during
the six months ended June 30, 2021, the Company closed a $50 million senior
unsecured term loan with an effective fixed interest rate of 1.55% and the
private placement of $125 million of senior unsecured notes with a fixed
interest rate of 2.74%. The Company amended and restated its two unsecured bank
credit facilities on June 29, 2021, expanding the capacity from $350 million and
$45 million with maturity dates of July 30, 2022 to $425 million and $50
million, respectively, with maturity dates of July 30, 2025. EastGroup's
financing and equity issuances are further described in Liquidity and Capital
Resources below.

The Company's primary revenue is rental income. During the six months ended June 30, 2021, EastGroup executed new and renewal leases on 5,010,000 square feet (11.0% of EastGroup's total square footage of 45,477,000). For new and renewal leases signed during first six months of 2021, average rental rates increased by 28.3% as compared to the former leases on the same spaces.


Property Net Operating Income ("PNOI") Excluding Income from Lease Terminations
from same properties (defined as operating properties owned during the entire
current and prior year reporting periods - January 1, 2020 through June 30,
2021), increased 6.1% for the six months ended June 30, 2021 as compared to the
same period in 2020.

                                      -24-
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EastGroup's portfolio was 98.3% leased and 96.8% occupied as of June 30, 2021,
compared to 97.5% and 97.0%, respectively, at June 30, 2020. As of July 27,
2021, the portfolio was 98.5% leased and 96.7% occupied. Leases scheduled to
expire for the remainder of 2021 were 5.1% of the portfolio on a square foot
basis at June 30, 2021, and this percentage was reduced to 4.2% as of July 27,
2021.

The Company generates new sources of leasing revenue through its development and
acquisition programs. The Company mitigates risks associated with development
through a Board-approved maximum level of land held for development and by
adjusting development start dates according to leasing activity.

During the six months ended June 30, 2021, EastGroup acquired four value-add
properties containing 499,000 square feet in Greenville and Atlanta for $36.6
million and 15.1 acres of development land in Atlanta for $289,000. During the
same period, the Company began construction of seven development projects
containing 1,318,000 square feet in Orlando, Tampa, Fort Myers, Dallas, San
Antonio and San Diego. EastGroup also transferred 11 development projects and
value-add acquisitions (1,545,000 square feet) in Miami, Fort Myers, Dallas,
Austin, Houston, San Antonio, Phoenix, Los Angeles and Atlanta from its
development and value-add program to real estate properties, with costs of
$164.1 million at the date of transfer. As of June 30, 2021, EastGroup's
development and value-add program consisted of 16 projects (3,013,000 square
feet) located in 12 cities. The projected total investment for the development
and value-add projects, which were collectively 53% leased as of July 27, 2021,
is $329 million, of which $134 million remained to be invested as of June 30,
2021.

During the six months ended June 30, 2021, EastGroup acquired a 79,000 square foot operating property in Phoenix for $9.2 million.

There were no property sales during the six months ended June 30, 2021.


The Company typically initially funds its development and acquisition programs
through its unsecured bank credit facilities, the total capacity of which was
increased in June 2021 to $475 million (as discussed in Liquidity and Capital
Resources). As market conditions permit, EastGroup issues equity and/or employs
fixed-rate debt, including variable-rate debt that has been swapped to an
effectively fixed rate through the use of interest rate swaps, to replace
short-term bank borrowings. In June 2019, Moody's Investors Service affirmed
EastGroup's issuer rating of Baa2 with a stable outlook. A security rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time by the assigning rating agency. Each rating
should be evaluated independently of any other rating. For future debt
issuances, the Company intends to issue primarily unsecured fixed-rate debt,
including variable-rate debt that has been swapped to an effectively fixed rate
through the use of interest rate swaps. The Company may also access the public
debt market in the future as a means to raise capital.

EastGroup has one reportable segment - industrial properties. These properties,
primarily located in major Sunbelt regions of the United States, have similar
economic characteristics and, as a result, have been aggregated into one
reportable segment.

The Company's chief decision makers use two primary measures of operating results in making decisions: (1) funds from operations attributable to common stockholders ("FFO"), and (2) property net operating income ("PNOI").


FFO is computed in accordance with standards established by the National
Association of Real Estate Investment Trusts, Inc. ("Nareit"). Nareit's guidance
allows preparers an option as it pertains to whether gains or losses on sale, or
impairment charges, on real estate assets incidental to a REIT's business are
excluded from the calculation of FFO. EastGroup made the election to exclude
activity related to such assets that are incidental to our business.

FFO is calculated as net income (loss) attributable to common stockholders
computed in accordance with U.S. generally accepted accounting principles
("GAAP"), excluding gains and losses from sales of real estate property
(including other assets incidental to the Company's business) and impairment
losses, adjusted for real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. FFO is not
considered as an alternative to net income (determined in accordance with GAAP)
as an indication of the Company's financial performance, nor is it a measure of
the Company's liquidity or indicative of funds available to provide for the
Company's cash needs, including its ability to make distributions. The Company's
key drivers affecting FFO are changes in PNOI (as discussed below), interest
rates, the amount of leverage the Company employs and general and administrative
expenses.

PNOI is defined as Income from real estate operations less Expenses from real
estate operations (including market-based internal management fee expense) plus
the Company's share of income and property operating expenses from its
less-than-wholly-owned real estate investments.

                                      -25-
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EastGroup sometimes refers to PNOI from Same Properties as "Same PNOI"; the
Company also presents Same PNOI Excluding Income from Lease Terminations. Same
Properties is defined as operating properties owned during the entire current
period and prior year reporting period. Properties developed or acquired are
excluded until held in the operating portfolio for both the current and prior
year reporting periods. Properties sold during the current or prior year
reporting periods are also excluded. For the three and six months ended June 30,
2021, Same Properties includes properties which were included in the operating
portfolio for the entire period from January 1, 2020 through June 30, 2021. The
Company presents Same PNOI and Same PNOI Excluding Income from Lease
Terminations as a property-level supplemental measure of performance used to
evaluate the performance of the Company's investments in real estate assets and
its operating results on a same property basis. It is calculated on a
lease-by-lease basis by averaging the customers' rent payments over the life of
each individual lease.

FFO and PNOI are supplemental industry reporting measurements used to evaluate
the performance of the Company's investments in real estate assets and its
operating results. The Company believes that the exclusion of depreciation and
amortization in the industry's calculations of PNOI and FFO provides
supplemental indicators of the properties' performance since real estate values
have historically risen or fallen with market conditions. PNOI and FFO as
calculated by the Company may not be comparable to similarly titled but
differently calculated measures for other real estate investment trusts
("REITs"). Investors should be aware that items excluded from or added back to
FFO are significant components in understanding and assessing the Company's
financial performance.

PNOI was calculated as follows for the three and six months ended June 30, 2021
and 2020.
                                                              Three Months Ended                           Six Months Ended
                                                                   June 30,                                    June 30,
                                                          2021                 2020                  2021                      2020
                                                                                        (In thousands)
Income from real estate operations                    $   99,562               89,500                197,479                  178,077
Expenses from real estate operations                     (28,057)             (25,351)               (55,877)                 (51,180)

Noncontrolling interest in PNOI of consolidated joint ventures

                                                     (16)                 (41)                   (31)                     (84)
PNOI from 50% owned unconsolidated investment                241                  243                    475                      486
PROPERTY NET OPERATING INCOME ("PNOI")                $   71,730               64,351                142,046                  127,299



Income from real estate operations is comprised of rental income, net of
reserves for uncollectible rent, expense reimbursement pass-through income and
other real estate income including lease termination fees. Expenses from real
estate operations is comprised of property taxes, insurance, utilities, repair
and maintenance expenses, management fees and other operating costs. Generally,
the Company's most significant operating expenses are property taxes and
insurance. Tenant leases may be net leases in which the total operating expenses
are recoverable, modified gross leases in which some of the operating expenses
are recoverable, or gross leases in which no expenses are recoverable (gross
leases represent only a small portion of the Company's total leases). Increases
in property operating expenses are fully recoverable under net leases and
recoverable to a high degree under modified gross leases. Modified gross leases
often include base year amounts, and expense increases over these amounts are
recoverable. The Company's exposure to property operating expenses is primarily
due to vacancies and leases for occupied space that limit the amount of expenses
that can be recovered.

                                      -26-
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The following table presents reconciliations of Net Income to PNOI, Same PNOI
and Same PNOI Excluding Income from Lease Terminations for the three and six
months ended June 30, 2021 and 2020.
                                                                  Three Months Ended                        Six Months Ended
                                                                       June 30,                                 June 30,
                                                               2021                2020                2021                   2020
                                                                                         (In thousands)
NET INCOME                                                 $   27,578             23,487              54,935                 46,785

Interest income                                                    (3)               (21)                 (4)                   (50)
Other revenue                                                     (13)              (215)                (27)                  (266)
Indirect leasing costs                                            134                166                 464                    274

Depreciation and amortization                                  31,349             28,570              61,662                 56,462

Company's share of depreciation from unconsolidated investment

                                                         34                 34                  68                     69
Interest expense                                                8,181              8,346              16,457                 16,803
General and administrative expense                              4,486              4,025               8,522                  7,306

Noncontrolling interest in PNOI of consolidated joint ventures

                                                          (16)               (41)                (31)                   (84)
PROPERTY NET OPERATING INCOME ("PNOI")                         71,730             64,351             142,046                127,299
PNOI from 2020 and 2021 acquisitions                             (772)              (130)             (1,456)                  (171)
PNOI from 2020 and 2021 development and value-add
properties                                                     (6,249)            (2,832)            (11,317)                (4,843)
PNOI from 2020 operating property dispositions                      -               (310)                  -                   (544)
Other PNOI                                                         42                 57                 101                    104
SAME PNOI                                                      64,751             61,136             129,374                121,845
Net lease termination fee income from same properties             (18)               (25)               (594)                  (469)

SAME PNOI EXCLUDING INCOME FROM LEASE TERMINATIONS $ 64,733

      61,111             128,780                121,376



The following table presents reconciliations of Net Income Attributable to EastGroup Properties, Inc. Common Stockholders to FFO Attributable to Common Stockholders for the three and six months ended June 30, 2021 and 2020.

                                                                     Three Months Ended                     Six Months Ended
                                                                          June 30,                              June 30,
                                                                  2021                2020              2021               2020
                                                                           

(In thousands, except per share data) NET INCOME ATTRIBUTABLE TO EASTGROUP PROPERTIES, INC. COMMON STOCKHOLDERS

                                                  $   27,558             23,484            54,897             46,781
Depreciation and amortization                                     31,349             28,570            61,662             56,462

Company's share of depreciation from unconsolidated investment

                                                            34                 34                68                 69
Depreciation and amortization from noncontrolling interest             -                (37)                -                (79)

FUNDS FROM OPERATIONS ("FFO") ATTRIBUTABLE TO COMMON STOCKHOLDERS

                                                  $   58,941             52,051           116,627            103,233

Net income attributable to common stockholders per diluted share

                                                         $     0.69               0.60          $   1.37               1.20

Funds from operations ("FFO") attributable to common stockholders per diluted share

                                $     1.47               1.33          $   2.92               2.65
Diluted shares for earnings per share and funds from
operations                                                        40,165             39,077            39,965             39,019




The Company analyzes the following performance trends in evaluating the revenues and expenses of the Company:


•The change in FFO per share represents the increase or decrease in FFO per
share from the current period compared to the same period in the prior year. For
the three months ended June 30, 2021, FFO was $1.47 per share compared with
$1.33 per share for the same period of 2020, an increase of 10.5%. For the six
months ended June 30, 2021, FFO was $2.92 per share compared with $2.65 per
share for the same period of 2020, an increase of 10.2%.

                                      -27-
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•For the three months ended June 30, 2021, PNOI increased by $7,379,000, or
11.5%, compared to the same period in 2020. PNOI increased $3,615,000 from same
property operations, $3,417,000 from newly developed and value-add properties
and $642,000 from 2020 and 2021 acquisitions; PNOI decreased $310,000 from
operating properties sold in 2020.

For the six months ended June 30, 2021, PNOI increased by $14,747,000, or 11.6%,
compared to the same period in 2020. PNOI increased $7,529,000 from same
property operations, $6,474,000 from newly developed and value-add properties
and $1,285,000 from 2020 and 2021 acquisitions; PNOI decreased $544,000 from
operating properties sold in 2020.

•The change in Same PNOI represents the PNOI increase or decrease for the same
operating properties owned during the entire current and prior year reporting
periods (January 1, 2020 through June 30, 2021). Same PNOI, excluding income
from lease terminations, increased 5.9% and 6.1% for the three and six months
ended June 30, 2021, respectively, as compared to the same periods in 2020.

•Same property average occupancy represents the average month-end percentage of
leased square footage for which the lease term has commenced as compared to the
total leasable square footage for the same operating properties owned during the
entire current and prior year reporting periods (January 1, 2020 through
June 30, 2021). Same property average occupancy was 97.3% for the three months
ended June 30, 2021, compared to 96.8% for the same period of 2020. Same
property average occupancy was 97.4% for the six months ended June 30, 2021,
compared to 96.8% for the same period of 2020.

•Occupancy is the percentage of leased square footage for which the lease term
has commenced as compared to the total leasable square footage as of the close
of the reporting period. Occupancy at June 30, 2021 was 96.8%. Quarter-end
occupancy ranged from 96.4% to 97.3% over the previous four quarters ended
June 30, 2020 to March 31, 2021.

•Rental rate change represents the rental rate increase or decrease on new and
renewal leases compared to the prior leases on the same space. Rental rate
increases on new and renewal leases (5.2% of total square footage) averaged
31.2% for the three months ended June 30, 2021. For the six months ended
June 30, 2021, rental rate increases on new and renewal leases (11.0% of total
square footage) averaged 28.3%.

•Lease termination fee income is included in Income from real estate operations.
Lease termination fee income for the three and six months ended June 30, 2021
was $18,000 and $594,000, respectively, compared to $25,000 and $469,000 for the
same periods of 2020.

•The Company records reserves for uncollectible rent as reductions to Income
from real estate operations; recoveries for uncollectible rent are recorded as
additions to Income from real estate operations. The Company recorded net
recoveries for uncollectible rent of $12,000 and $90,000 for the three and six
months ended June 30, 2021, respectively, compared to net reserves for
uncollectible rent of $725,000 and $1,220,000 for the same periods of 2020. We
evaluate the collectibility of rents and other receivables for individual leases
at each reporting period based on factors including, among others, tenant's
payment history, the financial condition of the tenant, business conditions and
trends in the industry in which the tenant operates and economic conditions in
the geographic area where the property is located. If evaluation of these
factors or others indicates it is not probable we will collect substantially all
rent we recognize an adjustment to rental revenue. If our judgment or estimation
regarding probability of collection changes we may adjust or record additional
rental revenue in the period such conclusion is reached. The Company followed
its normal process for recording reserves for uncollectible rent during the
three and six months ended June 30, 2021 and also evaluated all deferred rent
related to the COVID-19 pandemic for collectibility.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company's management considers the following accounting policies and estimates to be critical to the reported operations of the Company.


Acquisition and Development of Real Estate Properties
The FASB Codification 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. 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. Land is valued using comparable land sales
specific to the applicable market, provided by a third
                                      -28-
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party. The Company determines whether any financing assumed is above or below
market based upon comparison to similar financing terms for similar
properties. The cost of the properties acquired may be adjusted based on
indebtedness assumed from the seller that is determined to be above or below
market rates.

The purchase price is also allocated among the following categories of
intangible assets: the above or below market component of in-place leases, 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.

The relevance of this accounting policy will fluctuate given the transaction activity during the period.


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 properties
based on development activity.

                                      -29-
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FINANCIAL CONDITION
EastGroup's Total Assets were $2,855,622,000 at June 30, 2021, an increase of
$134,819,000 from December 31, 2020. Total Liabilities increased $32,006,000 to
$1,482,291,000, and Total Equity increased $102,813,000 to $1,373,331,000 during
the same period. The following paragraphs explain these changes in detail.

Assets

Real Estate Properties
Real estate properties increased $176,722,000 during the six months ended
June 30, 2021, primarily due to: (i) the transfer of 11 projects from
Development and value-add properties to Real estate properties (as detailed
under Development and Value-Add Properties below); (ii) capital improvements at
the Company's properties; and (iii) an operating property acquisition. These
increases were partially offset by the transfer of land costs from Real estate
properties to Development and value-add properties.

During the six months ended June 30, 2021, the Company made capital improvements
of $18,095,000 on existing and acquired properties (included in the Real Estate
Improvements table under Results of Operations). Also, the Company incurred
costs of $4,244,000 on development and value-add properties subsequent to
transfer to Real estate properties; the Company records these expenditures as
development and value-add costs on the Consolidated Statements of Cash Flows.

During 2021, EastGroup acquired the following operating properties:

                                                                                                      Date
OPERATING PROPERTIES ACQUIRED IN 2021              Location                   Size                  Acquired                  Cost
                                                                         (Square feet)                                   (In thousands)
Southpark Distribution Center 2               Phoenix, AZ                       79,000             06/10/2021           $        9,177



The Company had no stabilized operating property sales during the six months ended June 30, 2021.


Development and Value-Add Properties
EastGroup's investment in Development and value-add properties at June 30, 2021
consisted of projects in lease-up and under construction of $194,971,000 and
prospective development (primarily land) of $125,034,000. The Company's total
investment in Development and value-add properties at June 30, 2021 was
$320,005,000 compared to $359,588,000 at December 31, 2020. EastGroup
transferred 11 development and value-add projects to Real estate properties with
a total investment of $164,090,000 as of the date of transfer. Total capital
invested for development during the first six months of 2021 was $111,378,000,
which primarily consisted of costs of $93,822,000 and $12,927,000 as detailed in
the Development and Value-Add Properties Activity table below and costs of
$4,244,000 on properties subsequent to transfer to Real estate properties. The
capitalized costs incurred on development and value-add properties subsequent to
transfer to Real estate properties include capital improvements at the
properties and do not include other capitalized costs associated with
development (i.e., interest expense, property taxes and internal personnel
costs).

The Company capitalized internal development costs of $1,591,000 and $3,280,000 for the three and six months ended June 30, 2021, respectively, compared to $1,761,000 and $3,605,000 for the same periods of 2020.

During 2021, EastGroup acquired the following value-add properties:

                                                                                                         Date
VALUE-ADD PROPERTIES ACQUIRED IN 2021               Location                     Size                  Acquired                   Cost
                                                                            (Square feet)                                    (In thousands)
Access Point 1                                Greenville, SC                      156,000             01/15/2021           $        10,501
Northpoint 200                                Atlanta, GA                          79,000             01/21/2021                     6,516
Access Point 2                                Greenville, SC                      159,000             05/19/2021                    10,743
Cherokee 75 Business Center 2                 Atlanta, GA                         105,000             06/17/2021                     8,837
Total value-add property acquisitions                                             499,000                                  $        36,597



During the six months ended June 30, 2021, the Company acquired 15.1 acres of development land in Atlanta for $289,000.

Costs associated with these acquisitions are included in the Development and Value-Add Properties Activity table.

                                      -30-
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                                                                                  Costs Incurred
                                                                                                                                                                 Anticipated
DEVELOPMENT AND                                                                                                                                                    Building
VALUE-ADD PROPERTIES                          Costs Transferred        For the Six Months Ended                                              Projected            Conversion
ACTIVITY                                         in 2021 (1)                  6/30/2021                 Cumulative as of 6/30/2021          Total Costs              Date
                                                                                            (In thousands)
                         Building Size
LEASE-UP                 (Square feet)
Cherokee 75 Business
Center 2, Atlanta, GA
(2)                          105,000          $            -                     8,972                              8,972                       11,000              07/21
Northwest Crossing 1-3,
Houston, TX                  278,000                       -                     1,174                             23,496                       25,900              09/21
Ridgeview 1 & 2, San
Antonio, TX                  226,000                       -                     1,380                             18,473                       21,000              10/21
LakePort 1-3, Dallas,
TX                           194,000                       -                     1,041                             20,822                       25,300              12/21
Access Point 1,
Greenville, SC (2)           156,000                       -                    11,952                             11,952                       12,600              01/22
Access Point 2,
Greenville, SC (2)           159,000                       -                    10,803                             10,803                       12,400              05/22
Total Lease-Up             1,118,000                       -                    35,322                             94,518                      108,200
UNDER CONSTRUCTION

Gilbert Crossroads C &
D, Phoenix, AZ               178,000                       -                     9,819                             16,436                       21,900              12/21
Speed Distribution                                               (3)
Center, San Diego, CA        519,000                  17,758                    14,460                             32,218                       88,600              01/22
Grand Oaks 75 3, Tampa,
FL                           136,000                   2,198                     6,625                              8,823                       12,000              07/22
Steele Creek X,
Charlotte, NC                162,000                       -                     5,956                             10,190                       12,600              07/22
Horizon West 2 & 3,
Orlando, FL                  210,000                   5,505                     8,817                             14,322                       18,200              09/22
CreekView 9 & 10,
Dallas, TX                   145,000                   4,350                     1,136                              5,486                       17,200              12/22
Tri-County Crossing 5,
San Antonio, TX              105,000                   1,328                       275                              1,603                       10,300              01/23
Basswood 1 & 2, Fort
Worth, TX                    237,000                       -                     3,662                              8,416                       22,100              02/23
SunCoast 12, Fort
Myers, FL                     79,000                     960                       250                              1,210                        8,000              02/23
Tri-County Crossing 6,
San Antonio, TX              124,000                   1,576                       173                              1,749                        9,900              05/23

Total Under
Construction               1,895,000                  33,675                    51,173                            100,453                      220,800
                           Estimated
PROSPECTIVE DEVELOPMENT  Building Size
(PRIMARILY LAND)         (Square feet)

Fort Myers, FL               543,000                    (960)                      658                              7,564
Miami, FL                    376,000                       -                       497                             20,793
Orlando, FL                1,278,000                  (5,505)                    2,259                             24,432
Tampa, FL                    213,000                  (2,198)                      613                              4,138
Atlanta, GA                  155,000                       -                       411                              1,803
Jackson, MS                   28,000                       -                         -                                706
Charlotte, NC                313,000                       -                       113                              4,438

Dallas, TX                   556,000                  (4,350)                    1,325                             19,853
El Paso, TX                  168,000                       -                       298                              2,885
Fort Worth, TX               652,000                                               388                             14,938
Houston, TX                1,223,000                       -                       598                             21,356
San Antonio, TX              143,000                  (2,904)                      167                              2,128
Total Prospective
Development                5,648,000                 (15,917)                    7,327                            125,034
                           8,661,000          $       17,758                    93,822                            320,005

DEVELOPMENT AND
VALUE-ADD PROPERTIES
TRANSFERRED TO REAL                                                                                                                                                Building
ESTATE PROPERTIES        Building Size                                                                                                                  

Conversion

DURING 2021              (Square feet)                                                                                                                               Date
Gilbert Crossroads A &
B, Phoenix, AZ               140,000          $            -                         -                             16,768                                           01/21
CreekView 7 & 8,
Dallas, TX                   137,000                       -                     1,099                             17,658                                           03/21
Hurricane Shoals 3,
Atlanta, GA                  101,000                       -                       124                              8,935                                           03/21
Northpoint 200,
Atlanta, GA (2)               79,000                       -                     6,861                              6,861                                           03/21
Rancho Distribution
Center, Los Angeles, CA
(2)                          162,000                       -                         -                             27,325                                           03/21
World Houston 44,
Houston, TX                  134,000                       -                       399                              8,525                                           05/21
Gateway 4, Miami, FL         197,000                       -                       641                             22,688                                           06/21
Interstate Commons 2,
Phoenix, AZ (2)              142,000                       -                        50                             12,291                                           06/21
Settlers Crossing 3 &
4, Austin, TX                173,000                       -                     2,477                             19,981                                           06/21
SunCoast 7, Fort Myers,
FL                            77,000                       -                       276                              7,649                                           06/21
Tri-County Crossing 3 &
4, San Antonio, TX           203,000                       -                     1,000                             15,409                                           06/21
Total Transferred to                                                                                                                       (4)
Real Estate Properties     1,545,000          $            -                    12,927                            164,090



Footnotes for this table are on the following page.

                                      -31-
--------------------------------------------------------------------------------

(1) Represents costs transferred from Prospective Development (primarily land)
to Under Construction during the period. Negative amounts represent land
inventory costs transferred to Under Construction.
(2) Represents value-add properties acquired by EastGroup.
(3) Represents costs transferred from Real estate properties during the year.
(4) Represents cumulative costs at the date of transfer.

Accumulated Depreciation
Accumulated depreciation on real estate, development and value-add properties
increased $49,100,000 during the six months ended June 30, 2021, primarily due
to depreciation expense.

Other Assets
Other assets increased $8,329,000 during the six months ended June 30, 2021. A
summary of Other assets follows:
                                                                                                                 June 30,            December 31,
                                                                                                                   2021                  2020
                                                                                                                           (In thousands)
Leasing costs (principally commissions)                                                                        $ 106,954                 95,914
Accumulated amortization of leasing costs                                                                        (39,065)               (38,371)

Leasing costs (principally commissions), net of accumulated amortization

                                       67,889                 57,543

Acquired in-place lease intangibles                                                                               25,862                 28,107
Accumulated amortization of acquired in-place lease intangibles                                                  (13,167)               (13,554)

Acquired in-place lease intangibles, net of accumulated amortization

                                       12,695                 14,553

Acquired above market lease intangibles                                                                            1,825                  1,825

Accumulated amortization of acquired above market lease intangibles

                                       (1,352)                (1,231)

Acquired above market lease intangibles, net of accumulated amortization

                                          473                    594

Straight-line rents receivable                                                                                    47,229                 43,079
Accounts receivable                                                                                                8,099                  6,256

Interest rate swap assets                                                                                            141                      -
Right of use assets - Office leases (operating)                                                                    2,233                  2,131
Receivable for common stock offerings                                                                                  -                  1,942

Goodwill                                                                                                             990                    990

Prepaid expenses and other assets                                                                                 18,159                 22,491
Total Other assets                                                                                             $ 157,908                149,579




Liabilities
Unsecured bank credit facilities, net of debt issuance costs decreased
$126,631,000 during the six months ended June 30, 2021, mainly due to repayments
of $320,137,000 and new debt issuance costs incurred during the period,
partially offset by borrowings of $195,137,000 and the amortization of debt
issuance costs during the period. The Company's credit facilities are described
in greater detail under Liquidity and Capital Resources.

Unsecured debt, net of debt issuance costs increased $174,730,000 during the six
months ended June 30, 2021, primarily due to the closing of a $50 million senior
unsecured term loan in March, closing the private placement of $125 million of
senior unsecured notes in June and the amortization of debt issuance costs,
partially offset by new debt issuance costs incurred during the period. The
borrowings and repayments on Unsecured debt, net of debt issuance costs are
described in greater detail under Liquidity and Capital Resources.

Secured debt, net of debt issuance costs decreased $42,865,000 during the six
months ended June 30, 2021. The decrease resulted from the repayment of a
mortgage loan with a principal balance of $40,841,000 in March, regularly
scheduled principal payments of $2,083,000 and amortization of premiums on
Secured debt, net of debt issuance costs, partially offset by the amortization
of debt issuance costs during the period.

                                      -32-
--------------------------------------------------------------------------------

Accounts payable and accrued expenses increased $32,339,000 during the six
months ended June 30, 2021. A summary of the Company's Accounts payable and
accrued expenses follows:
                                                                                                              June 30,            December 31,
                                                                                                                2021                  2020
                                                                                                                       (In thousands)
Property taxes payable                                                                                      $  30,671                 3,524
Development costs payable                                                                                      19,553                 6,427
Real estate improvements and capitalized leasing costs payable                                                  6,398                 5,692
Interest payable                                                                                                6,601                 6,537
Dividends payable                                                                                              32,927                32,677
Book overdraft (1)                                                                                                  -                 5,176
Other payables and accrued expenses                                                                             5,762                 9,540
 Total Accounts payable and accrued expenses                                                                $ 101,912                69,573



(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, which is included in the Company's Unsecured bank credit
facilities, net of debt issuance costs.


Other liabilities decreased $5,567,000 during the six months ended June 30, 2021. A summary of the Company's Other liabilities follows:

                                                                                                                 June 30,            December 31,
                                                                                                                   2021                  2020
                                                                                                                          (In thousands)
Security deposits                                                                                              $  25,357                22,140
Prepaid rent and other deferred income                                                                            13,600                14,694
Operating lease liabilities - Ground leases                                                                       10,803                11,199
Operating lease liabilities - Office leases                                                                        2,282                 2,167

Acquired below-market lease intangibles                                                                            8,929                 9,019
   Accumulated amortization of below-market lease intangibles                                                     (6,673)               (6,168)

Acquired below-market lease intangibles, net of accumulated amortization

                                        2,256                 2,851

Interest rate swap liabilities                                                                                     3,942                10,752
Prepaid tenant improvement reimbursements                                                                            360                   364
Other liabilities                                                                                                  5,650                 5,650
 Total Other liabilities                                                                                       $  64,250                69,817





Equity
Additional paid-in capital increased $104,608,000 during the six months ended
June 30, 2021, primarily due to the issuance of common stock under the Company's
continuous common equity offering program (as discussed in Liquidity and Capital
Resources) and activity related to stock-based compensation (as discussed in
Note 16 in the Notes to Consolidated Financial Statements). During the six
months ended June 30, 2021, EastGroup issued 687,715 shares of common stock
under its continuous common equity offering program with net proceeds to the
Company of $103,803,000.

For the six months ended June 30, 2021, Distributions in excess of earnings increased $8,756,000 as a result of dividends on common stock of $63,653,000 exceeding Net Income Attributable to EastGroup Properties, Inc. Common Stockholders of $54,897,000.


Accumulated other comprehensive loss decreased $6,951,000 during the six months
ended June 30, 2021. The decrease resulted from the change in fair value of the
Company's interest rate swaps (cash flow hedges) which are further discussed in
Note 14 in the Notes to Consolidated Financial Statements.
                                      -33-
--------------------------------------------------------------------------------

RESULTS OF OPERATIONS
Net Income Attributable to EastGroup Properties, Inc. Common Stockholders for
the three and six months ended June 30, 2021 was $27,558,000 ($0.69 per basic
and diluted share) and $54,897,000 ($1.38 per basic share and $1.37 per diluted
share), respectively, compared to $23,484,000 ($0.60 per basic and diluted
share) and $46,781,000 ($1.20 per basic and diluted share) for the same periods
in 2020. The following paragraphs explain the change:

•PNOI increased by $7,379,000 ($0.18 per diluted share), or 11.5%, for the three
months ended June 30, 2021, as compared to the same period of 2020. PNOI
increased $3,615,000 from same property operations, $3,417,000 from newly
developed and value-add properties and $642,000 from 2020 and 2021 acquisitions;
PNOI decreased $310,000 from operating properties sold in 2020. Lease
termination fee income was $18,000 and $25,000 for the three month periods ended
June 30, 2021 and 2020, respectively. The Company recorded net recoveries for
uncollectible rent of $12,000 and net reserves for uncollectible rent of
$725,000 for the three months ended June 30, 2021 and 2020, respectively.
Straight-lining of rent increased Income from real estate operations by
$2,111,000 and $1,540,000 for the three months ended June 30, 2021 and 2020,
respectively.

PNOI increased by $14,747,000 ($0.37 per diluted share), or 11.6%, for the six
months ended June 30, 2021, as compared to the same period of 2020. PNOI
increased $7,529,000 from same property operations, $6,474,000 from newly
developed and value-add properties and $1,285,000 from 2020 and 2021
acquisitions; PNOI decreased $544,000 from operating properties sold in 2020.
Lease termination fee income was $594,000 and $469,000 for the six month periods
ended June 30, 2021 and 2020, respectively. The Company recorded net recoveries
for uncollectible rent of $90,000 and net reserves for uncollectible rent of
$1,220,000 for the six months ended June 30, 2021 and 2020, respectively.
Straight-lining of rent increased Income from real estate operations by
$3,986,000 and $2,830,000 for the six months ended June 30, 2021 and 2020,
respectively.

•There were no sales during the three and six months ended June 30, 2021, or during the same periods of 2020.


•Depreciation and amortization expense increased by $2,779,000 ($0.07 per
diluted share) and $5,200,000 ($0.13 per diluted share) during the three and six
months ended June 30, 2021, respectively, as compared to the same periods of
2020.
EastGroup signed 48 leases with free rent concessions on 1,718,000 square feet
during the three months ended June 30, 2021, with total free rent concessions of
$2,397,000 over the lives of the leases. During the same period of 2020, the
Company signed 45 leases with free rent concessions on 1,132,000 square feet
with total free rent concessions of $1,497,000 over the lives of the leases.

During the six months ended June 30, 2021, EastGroup signed 98 leases with free
rent concessions on 3,289,000 square feet with total free rent concessions of
$6,712,000 over the lives of the leases. During the same period of 2020, the
Company signed 83 leases with free rent concessions on 2,281,000 square feet
with total free rent concessions of $3,077,000 over the lives of the leases.

The Company's percentage of leased square footage was 98.3% at June 30, 2021, compared to 97.5% at June 30, 2020. Occupancy at June 30, 2021 was 96.8% compared to 97.0% at June 30, 2020.


Same property average occupancy represents the average month-end percentage of
leased square footage for which the lease term has commenced as compared to the
total leasable square footage for the same operating properties owned during the
entire current and prior year reporting periods (January 1, 2020 through
June 30, 2021). Same property average occupancy for the three and six months
ended June 30, 2021, was 97.3% and 97.4%, respectively, compared to 96.8% for
each of the same periods of 2020.

The same property average rental rate calculated in accordance with GAAP
represents the average annual rental rates of leases in place for the same
operating properties owned during the entire current and prior year reporting
periods (January 1, 2020 through June 30, 2021). The same property average
rental rate was $6.46 and $6.43 per square foot for the three and six months
ended June 30, 2021, respectively, compared to $6.08 and $6.10 per square foot
for the same periods of 2020.




                                      -34-
--------------------------------------------------------------------------------

Interest expense decreased $165,000 and $346,000 for the three and six months
ended June 30, 2021, compared to the same periods in 2020. The following table
presents the components of Interest expense for the three and six months ended
June 30, 2021 and 2020:
                                                                                                    Three Months Ended                                                Six Months Ended
                                                                                                         June 30,                                                         June 30,
                                                                                                                             Increase                                                            Increase
                                                                                      2021               2020               (Decrease)                2021                    2020              (Decrease)
                                                                                                                                        (In thousands)

VARIABLE RATE INTEREST EXPENSE Unsecured bank credit facilities interest - variable rate (excluding amortization of facility fees and debt issuance costs)

      $     217                 362                (145)                     592                   1,316               (724)
Amortization of facility fees - unsecured bank credit facilities                        197                 197                   -                      391                     393                 (2)

Amortization of debt issuance costs - unsecured bank credit facilities

                                                                              140                 140                   -                      280                     280                  -
  Total variable rate interest expense                                                  554                 699                (145)                   1,263                   1,989               (726)

FIXED RATE INTEREST EXPENSE


Unsecured debt interest (1)
(excluding amortization of debt issuance costs)                                       9,252               8,622                 630                   18,113                  16,696              1,417
Secured debt interest
(excluding amortization of debt issuance costs)                                         371               1,433              (1,062)                   1,113                   2,891             (1,778)
Amortization of debt issuance costs - unsecured debt                                    151                 158                  (7)                     288                     296                 (8)
Amortization of debt issuance costs - secured debt                                       10                  57                 (47)                      74                     115                (41)
  Total fixed rate interest expense                                                   9,784              10,270                (486)                  19,588                  19,998               (410)
Total interest                                                                       10,338              10,969                (631)                  20,851                  21,987             (1,136)
Less capitalized interest                                                            (2,157)             (2,623)                466                   (4,394)                 (5,184)               790
TOTAL INTEREST EXPENSE                                                            $   8,181               8,346                (165)                  16,457                  16,803               (346)



(1)Includes interest on the Company's unsecured debt with fixed interest rates
per the debt agreements or effectively fixed interest rates due to interest rate
swaps, as discussed in Note 14 in the Notes to Consolidated Financial
Statements.
The Company's variable rate interest expense decreased by $145,000 and $726,000
for the three and six months ended June 30, 2021, respectively, as compared to
the same periods in 2020 primarily due to decreases in the Company's weighted
average variable interest rates and average borrowings on its unsecured bank
credit facilities as shown in the following table:
                                                             Three Months Ended                                               Six Months Ended
                                                                  June 30,                                                        June 30,
                                                                                       Increase                                                        Increase
                                               2021                 2020              (Decrease)               2021                 2020              (Decrease)
                                                                                  (In thousands, except rates of interest)
Average borrowings on unsecured bank
credit facilities - variable rate         $        79,137              97,368              (18,231)              106,426              122,843      

(16,417)

Weighted average variable interest rates
(excluding amortization of facility fees
and debt issuance costs)                          1.11  %             1.50  %                                    1.12  %              2.14  %



The Company's fixed rate interest expense decreased by $486,000 and $410,000 for
the three and six months ended June 30, 2021, respectively, as compared to the
same periods in 2020 as a result of the unsecured debt and secured debt activity
described below.

Interest expense from fixed rate unsecured debt increased by $630,000 and
$1,417,000 during the three and six months ended June 30, 2021, respectively, as
compared to the same periods in 2020. The increases resulted from the Company's
unsecured debt activity described below.


                                      -35-
--------------------------------------------------------------------------------

The details of the unsecured debt obtained in 2020 and 2021 are shown in the
following table:
NEW UNSECURED
DEBT IN 2020
AND 2021            Effective Interest Rate        Date Obtained        Maturity Date           Amount
                                                                                            (In thousands)
$100 Million
Senior
Unsecured Term
Loan (1)                     2.39%                  03/25/2020           03/25/2027        $       100,000
$100 Million
Senior
Unsecured Notes              2.61%                  10/14/2020           10/14/2030                100,000
$75 Million
Senior
Unsecured Notes              2.71%                  10/14/2020           10/14/2032                 75,000
$50 Million
Senior
Unsecured Term
Loan (2)                     1.55%                  03/18/2021           03/18/2025                 50,000
$125 Million
Senior
Unsecured Notes              2.74%                  06/10/2021           06/10/2031                125,000
  Weighted
Average/Total
Amount for 2020
and 2021                     2.50%                                                         $       450,000



(1) The interest rate on this unsecured term loan is comprised of LIBOR plus 145
basis points subject to a pricing grid for changes in the Company's coverage
ratings. The Company entered into an interest rate swap to convert the loan's
LIBOR rate to a fixed interest rate, providing the Company a weighted average
effective interest rate on the term loan of 2.39% as of June 30, 2021. See Note
14 in the Notes to Consolidated Financial Statements for additional information
on the interest rate swaps.
(2) The interest rate on this unsecured term loan is comprised of LIBOR plus 100
basis points subject to a pricing grid for changes in the Company's coverage
ratings. The Company entered into an interest rate swap to convert the loan's
LIBOR rate to a fixed interest rate, providing the Company a weighted average
effective interest rate on the term loan of 1.55% as of June 30, 2021. See Note
14 in the Notes to Consolidated Financial Statements for additional information
on the interest rate swaps.

The increase in interest expense from the new unsecured debt was partially offset by the repayment of the following unsecured debt during 2020: UNSECURED DEBT REPAID IN 2020

                 Interest Rate       Date 

Repaid Payoff Amount

                                                                                    (In thousands)
$30 Million Senior Unsecured Notes                3.80%            08/28/2020      $       30,000
$75 Million Senior Unsecured Term Loan            3.45%            12/21/2020              75,000
Weighted Average/Total Amount for 2020            3.55%                     

$ 105,000




The increase in interest expense from unsecured debt was partially offset by a
decrease in secured debt interest expense. Interest expense from secured debt
decreased by $1,062,000 and $1,778,000 during the three and six month periods
ended June 30, 2021, as compared to the same periods in 2020 as a result of
regularly scheduled principal payments and the payoffs described in the table
below. Regularly scheduled principal payments on secured debt were $2,083,000
during the six months ended June 30, 2021. During the year ended December 31,
2020, regularly scheduled principal payments on secured debt were $8,436,000.
The details of the secured debt repaid in 2020 and 2021 are shown in the
following table:

SECURED DEBT REPAID IN 2020 AND 2021 Interest Rate Date Repaid Payoff Amount

(In thousands)

40th Avenue, Beltway Crossing 5,

Centennial Park, Executive Airport,

Interchange Park 1, Ocean View, Wetmore

 5-8 and World Houston 26, 28, 29 & 30            4.39%            

10/07/2020 $ 45,871

Colorado Crossing, Interstate

Distribution Center 1-3, Rojas Commerce

Park, Steele Creek 1 & 2, Venture

Distribution Center 1 and World Houston

 3, 4, 6, 7, 8 & 9                                4.75%            03/08/2021              40,841

Weighted Average/Total Amount for 2020

 and 2021                                         4.56%                            $       86,712


EastGroup did not obtain any new secured debt during 2020 or the first six months of 2021.


Interest costs during the period of construction of real estate properties are
capitalized and offset against interest expense. Capitalized interest decreased
$466,000 and $790,000 for the three and six months ended June 30, 2021,
respectively, as compared to the same periods of 2020, due to changes in
development spending and borrowing rates.

Depreciation and amortization expense increased $2,779,000 and $5,200,000 for
the three and six months ended June 30, 2021, respectively, as compared to the
same periods in 2020, primarily due to the operating properties acquired by the
Company in 2020 and 2021 and the properties transferred from Development and
value-add properties in 2020 and 2021, partially offset by operating properties
sold in 2020.

The Company did not sell any properties during the six months ended June 30, 2021 or 2020.

                                      -36-
--------------------------------------------------------------------------------


Real Estate Improvements
Real estate improvements for EastGroup's operating properties for the three and
six months ended June 30, 2021 and 2020 were as follows:
                                                                                              Three Months Ended                         Six Months Ended
                                                                                                   June 30,                                  June 30,
                                                           Estimated Useful Life            2021               2020                 2021                    2020
                                                                                                                       (In thousands)
Upgrade on Acquisitions                                            40 yrs               $     109                141                   154                     165
Tenant Improvements:
New Tenants                                                      Lease Life                 2,525              2,712                 5,167                   5,756

Renewal Tenants                                                  Lease Life                 1,507                676                 2,184                   2,005
Other:
Building Improvements                                             5-40 yrs                  1,621                772                 3,404                   1,990
Roofs                                                             5-15 yrs                  3,047              2,645                 6,062                   3,582
Parking Lots                                                      3-5 yrs                     169                313                   431                     349
Other                                                              5 yrs                      532                  6                   693                     353
Total Real Estate Improvements (1)                                                      $   9,510              7,265                18,095                  14,200


(1)Reconciliation of Total Real Estate Improvements to Real estate improvements on the Consolidated Statements of Cash Flows:

© Edgar Online, source Glimpses

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