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Item 1. Business

2025-02-12 compared with 2024-02-14 · 53 added, 51 removed, 117 unchanged (47% of the section changed)

EastGroup Properties, Inc., which we refer to in this Annual Report as the “Company,” “EastGroup,” “we,” “us” or “our,” is an internally-managed equity REIT first organized in 1969.

EastGroup is focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Florida, Texas, Arizona, California and North Carolina.

EastGroup is focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States, primarily in the states of Texas, Florida, California, Arizona and North Carolina.

EastGroup’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets.

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The Company maintains a website at www.eastgroup.net.

The Company posts its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission (the “SEC”).

The Company posts to its website all of the reports it files or furnishes with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act, including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and the exhibits and amendments to those reports, as soon as reasonably practicable after it electronically files or furnishes such materials to the SEC.

In addition, the Company’s website includes items related to corporate governance matters, including, among other things, the Company’s corporate governance guidelines, charters of various committees of the Board of Directors, the Company's whistleblower program and the Company’s code of ethics and business conduct applicable to all employees, officers and directors.

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EastGroup maintains its principal executive office and headquarters in Ridgeland, Mississippi.

The Company also has regional offices in Atlanta, Dallas and Los Angeles and asset management offices in Orlando, Tampa, Houston and Phoenix.

EastGroup has property management offices in Jacksonville, Miami, Charlotte, Greenville, San Antonio, Austin and San Francisco.

Offices at these locations allow the Company to provide property management services to 83% of the Company’s operating portfolio on a square foot basis.

The Company also has regional offices in Dallas, Los Angeles and Atlanta and asset management offices in Houston, Orlando, Tampa and Phoenix.

EastGroup's property management teams are located in San Antonio, Austin, Miami, Jacksonville, San Francisco, Charlotte, Las Vegas and Greenville.

These locations allow the Company to provide property management services to 87% of the Company’s operating portfolio on a square foot basis.

In addition, the Company currently provides property administration (accounting of operations) for its entire portfolio.

The regional offices in Georgia, Texas and California provide oversight of the Company’s development and value-add program.

Properties that are either acquired but not stabilized or can be converted to a higher and better use are considered value-add properties.

The regional offices in Texas, California and Georgia provide oversight of the Company’s development and value-add program (as described in Note 1(e) in the Notes to Consolidated Financial Statements).

As of December 31, 2024 , EastGroup had 101 full-time employees.

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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.

The Company’s core markets are in the states of Texas, Florida, California, Arizona and North Carolina.

As of December 31, 2024 , EastGroup owned 536 industrial properties in 12 states.

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Properties ) for the year ended December 31, 2024 .

The properties in the development and value-add program were 18% leased as of December 31, 2023 .

The properties in the Company's development and value-add program were 21.8% leased as of December 31, 2024 .

During 2024, EastGroup increased its holdings in real estate properties through its acquisition and development programs.

The Company acquired 2,474,000 square feet of operating properties and 61.1 acres of land for a total of $403,773,000.

Also during 2023, the Company began construction of 11 development projects containing 2.4 million square feet and transferred 13

projects, which contain 2.3 million square feet and had costs of $271,568,000 at the date of transfer, from its development and value-add program to real estate properties.

During 2023, EastGroup sold three operating properties containing 231,000 square feet and 11.9 acres of land, which generated gross proceeds of $43,150,000.

The Company typically initially funds its development and acquisition programs through its unsecured bank credit facilities;

the total capacity of which was increased in January 2023 by $200,000,000, from $475,000,000 to $675,000,000 (as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K).

Also during 2024, the Company began construction of 10 development projects containing 1,585,000 square feet and transferred seven projects, which contain 1,519,000 square feet and had costs of $199,971,000 at the date of transfer, from its development and value-add program to real estate properties.

During 2024, EastGroup sold a group of operating properties in the Jackson, Mississippi market, containing 159,000 square feet and disposed of 5.4 acres of land in two markets, generating gross sales proceeds of $18,311,000.

In the near term, the Company funds its development and acquisition programs through its $675,000,000 unsecured bank credit facilities, as discussed under the heading Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K.

As market conditions permit, EastGroup issues equity 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.

Moody’s Investors Service has assigned the Company’s issuer rating of Baa2 with a stable outlook.

Moody’s Investors Service has assigned EastGroup an 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.

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The Company may also access the public debt market in the future as a means to raise capital.

EastGroup holds its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria.

EastGroup plans to hold its properties as long-term investments but may determine to sell certain properties that no longer meet its investment criteria.

The Company may provide financing to a prospective purchaser in connection with such sales of property if market conditions require.

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Subject to the requirements necessary to maintain EastGroup’s qualifications as a REIT, the Company may acquire securities of entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over those entities.

EastGroup has no present intention of acting as an underwriter of offerings of securities of other issuers.

The strategies and policies set forth above were determined and are subject to review by EastGroup’s Board of Directors, which may change such strategies or policies based upon its evaluation of the state of the real estate market, the performance of EastGroup’s assets, capital and credit market conditions, and other relevant factors.

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The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to use such property as collateral in its borrowings.

EastGroup’s properties have generally been subject to Phase I Environmental Site Assessments (“ESAs”) by independent environmental consultants and, as necessary, have been subjected to Phase II ESAs.

EastGroup’s properties have generally been subject to Phase I Environmental Site Assessments (“ESAs”) by independent environmental consultants and, as necessary, have

been subjected to Phase II ESAs.

These reports have not revealed any potential significant environmental liability.

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Risk Factors ” in this Annual Report for a discussion of material risks to EastGroup, including related to governmental regulations and environmental matters.

Environmental, Social and Governance (“ESG”) Matters

EastGroup’s commitment to ESG initiatives is evidenced by its building standards, corporate policies and procedures and company culture.

Corporate Responsibility Matters

EastGroup’s commitment to corporate responsibility initiatives is evidenced by its building standards, corporate policies and procedures and company culture.

At EastGroup, protecting the environment is important to the Company’s employees, customers and communities.

The Company strives to support sustainability through its commitment to build high performance and environmentally responsible properties.

Through EastGroup’s continued efforts, numerous properties have been Leadership in Energy and Environmental Design (“LEED”), Building Owners and Managers Association 360 and ENERGY STAR® certified, and while formal certification is not always pursued, the Company builds its development properties with the intention of meeting LEED certifiable standards.

The Company consistently invests in energy-efficient improvements throughout its portfolio, such as LED lighting, skylights, white reflective roofing, electric vehicle charging stations and smart sensor irrigation systems.

In June 2021, the Company amended and restated its unsecured revolving credit facility, providing for an incremental reduction in borrowing costs if a certain sustainability-linked metric is achieved.

This metric is based on a target number of newly-constructed buildings with qualifying electric vehicle charging stations as a percentage of total qualifying buildings for each fiscal year.

If the metric is achieved, the applicable interest rate margin on the Company’s $625,000,000 unsecured credit facility is reduced by one basis point for the following year.

For the years ended December 31, 2022 and 2023, the metric was exceeded, which allowed for the interest rate reduction in each of the years subsequent to achieving the metric.

The Company believes that its continued commitment to pursue environmentally conscious performance creates positive impacts on the environment and long-term value for the Company and its stakeholders.

During 2022, the Company furthered its commitment to ESG initiatives by partnering with a sustainability consulting firm and beginning to utilize an environmental data management platform, with the goal of more reliably tracking and benchmarking operational performance.

Using the data obtained from these efforts, EastGroup completed its first GRESB Real Estate Assessment during 2023, which provided the Company with additional insight into its ESG management and performance as compared to industry peers.

The Company also worked to formalize its approach toward ESG management and risk assessment during 2023 by creating an environmental management system and implementing an ESG due diligence scorecard for potential building acquisitions, which includes an assessment of each building’s environmental and resilience characteristics, as well as a physical climate risk assessment.

The Company released a Corporate Green Office Guide during 2022, which contains best environmental practices for its corporate offices, and it continues to seek additional ways to engage with tenants on environmental matters, including recycling initiatives, Earth Day celebrations, and other tenant appreciation events at many of its properties.

Through EastGroup’s continued efforts, numerous properties have been certified through the U.S.

Green Building Council's Leadership in Energy and Environmental Design (“LEED ® ”) green building program, ENERGY STAR ® and the BOMA 360 Performance Program ® of the Building Owners and Managers Association (“BOMA”) International ® .

While formal certification is not always pursued, the Company prioritizes the use of energy and water efficient fixtures during development and consistently invests in efficiency improvements for existing properties, such as LED lighting, white reflective roofing, electric vehicle charging stations and smart sensor irrigation systems.

The Company believes that its continued commitment to these practices creates positive impacts on the environment and long-term value for the Company and its stakeholders.

The Company has an unsecured revolving credit facility subject to a sustainability-linked pricing component, pursuant to which the applicable interest margin and facility fee may be adjusted annually based on a sustainability performance metric as calculated for the preceding year.

This metric is based on the number of newly-constructed buildings with qualifying electric vehicle charging stations as a percentage of total qualifying buildings for each fiscal year.

The impact to interest rates on the credit facility is further described in Note 5 in the Notes to Consolidated Financial Statements.

During 2024, EastGroup continued to work with a sustainability consulting firm to track and benchmark the Company's environmental data and further expand its corporate responsibility policies, practices and voluntary disclosures.

Using the data obtained from these efforts, EastGroup completed its second annual GRESB ® Real Estate Assessment, which provided the Company with additional insight into its environmental, social and governance management and performance as compared to its industry peers.

The Company also adopted its Corporate Responsibility Policy during 2024, formalizing EastGroup's commitments, goals and targets related to topics such as environmental sustainability, climate resilience, social responsibility, stakeholder engagement and corporate governance.

EastGroup assesses climate-related risks using information obtained through third-party risk and resilience assessments and seeks to engage with tenants on climate risk and other environmental matters, including through newsletters, recycling initiatives, Earth Day celebrations, and other tenant appreciation events at many of its properties.

In addition, EastGroup and its employees are committed to social responsibility and are active participants in the communities where they live and work.

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The honesty and integrity of the Company’s management and Board of Directors are critical assets in maintaining the trust of the Company’s investors, employees, customers, vendors and the communities in which the Company operates.

Readers are encouraged to visit the “Priorities” page of the Company’s website and review its latest Environmental, Social & Governance Reports for more detail regarding EastGroup’s ESG programs and initiatives.

Nothing on the Company’s website or in the referenced reports shall be deemed to be incorporated by reference into this Annual Report on Form 10-K.

Readers are encouraged to visit the “Priorities” page of the Company’s website and review its latest corporate responsibility reports and policies for more detail regarding EastGroup’s corporate responsibility programs and initiatives.

Nothing on the Company’s website or in the referenced reports or policies shall be deemed to be incorporated by reference into this Annual Report on Form 10-K.

Human Capital Matters

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• Workforce Diversity:

As of December 31, 2023, we employed 96 team members, 99% considered full-time and 1% part-time, located in 15 offices in Arizona, California, Florida, Georgia, Mississippi, North Carolina, South Carolina and Texas, and as of such date, none of these employees were members of a union or subject to a collective bargaining agreement.

As of December 31, 2024 , we employed 101 team members, across 15 locations in Texas, Florida, California, Arizona, North Carolina, Nevada, Georgia, Mississippi and South Carolina.

As of such date,

100% of these employees were full-time and none were members of a union or subject to a collective bargaining agreement.

Our team is comprised of the following types of personnel:

• asset, construction and property managers;

• accounting, administrative, human resources and information technology professionals;

• accounting, administrative, human resources, investor relations and information technology professionals;

• our corporate leadership team.

Our employee base is gender diverse, with 74% identifying as women as of December 31, 2023 and 64% of new hires in 2023 identifying as women.

As of December 31, 2024 , our employee base is gender diverse, comprised of 72% women and 28% men.

Also, of the employees hired during the year ended December 31, 2024 , 67% are women.

The officer group is comprised of 49% women and 51% men.

As of December 31, 2024 , 14% of our employees self-identified as members of a racial or ethnic minority group.

Our Board of Directors is 29% comprised of women, and one of seven Board members is a member of a racial or ethnic minority group.

With 96 employees and 7 directors, each team member plays a vital role in the success of the Company.

Our Board of Directors is 29% comprised of women, and one of the seven Board members is a member of a racial or ethnic minority group.

With 101 employees and seven directors, each team member plays a vital role in the success of the Company.

• Employee Tenure:

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76% of our employees at the manager level and above were promoted from within the Company.

Our voluntary turnover rate was 8%, and there was no involuntary turnover during the year ended December 31, 2023.

Our voluntary turnover rate was 4%, and our involuntary turnover rate was 1% during the year ended December 31, 2024 .

• Compensation, Benefits, Health and Safety:

We offer a comprehensive employee benefits program and what we believe are socially-responsible policies and practices in order to support the overall well-being of our employees and create a safe, professional and inclusive work environment.

Some of the benefits we offer include a robust 401(k) matching program, company-wide equity award program, generous personal leave policy, paid parental leave, flexible work schedules, paid time off for volunteering, annual health and wellness checkups, employer-paid health insurance for all full-time employees, tobacco cessation program, athletic club and tuition reimbursement programs, and a competitive pay structure.

We offer a competitive pay structure along with a comprehensive employee benefits program and what we believe are socially-responsible policies and practices in order to support the overall well-being of our employees and create a safe, professional and inclusive work environment.

Some of the benefits we offer include a robust 401(k) matching program with additional discretionary profit-sharing contributions, a company-wide equity compensation award program, generous personal leave, paid parental leave, flexible work schedules, paid time off for volunteering and annual health and wellness checkups, employer-paid health insurance for all full-time employees, access to mental healthcare, tobacco cessation program and athletic club and tuition reimbursement programs.

All of our employees are eligible for performance based annual bonuses based on a percentage of salary.

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We have a formal, certificate-based learning program for all employees;

learning objectives include topics such as diversity and inclusion, unconscious bias, anti-harassment, workplace violence & bullying and data security.

learning objectives include topics such as ethics and anti-corruption, cybersecurity, anti-discrimination, diversity, equity and inclusion, unconscious bias, anti-harassment, and workplace violence and bullying.

Additional trainings covering numerous environmental sustainability topics and trends are available to employees through our third-party sustainability consultant.

All of our employees participate in annual performance reviews and feedback sessions.

Our employees are provided with training, education and peer mentoring programs to further develop their professional skill set, enhancing the level of service provided to our customers and the quality of information disclosed to our stakeholders.

We have various policies and practices in place, including a Code of Ethics and Business Conduct, Whistleblower Program, Equal Opportunity and Commitment to Diversity, Human Rights Statement, Vendor Code of Conduct, ADA & Reasonable Accommodation, Commitment to Safety, Community Service, Family Medical Leave, Maternity and Paternity Leave, Standards of Conduct, Corporate Green Office Guide, Environmental Management System, Workplace Violence Prevention, Healthy, Wealthy, Wise Benefits Summary, and Cybersecurity.

Our employees are provided with training and peer mentoring programs to further develop their professional skill set, along with reimbursements for professional designations and continuing education, enhancing the level of service provided to our customers and the quality of information disclosed to our stakeholders.

We also offer a Director Education Program, providing educational resources to our Board of Directors.

We have various policies and practices in place, including a Code of Ethics and Business Conduct, Ethics Line, Standards of Conduct, Equal Opportunity & Commitment to Diversity, ADA & Reasonable Accommodation, Family Medical Leave, Parental Leave, Community Service, Workplace Violence Prevention, Cybersecurity, Corporate Responsibility Policy, Human Rights Statement, Vendor Code of Conduct, Commitment to Safety & Health and Safety Policy, Healthy, Wealthy, Wise Benefits Summary and an Environmental Management System.

• Company and Board Engagement:

We value our employees, and our focus on human capital management and other socially-responsible initiatives is at the forefront of discussions and decisions with both management and the Board of Directors.

On a regular basis, Company management holds ESG-related discussions with the Board of Directors;

We value our employees, and our focus on human capital management and other corporate responsibility initiatives is at the forefront of discussions and decisions with both management and the Board of Directors.

On a regular basis, Company management holds corporate responsibility discussions with the Board of Directors;

in 2024, our management and the Board of Directors formally met to discuss these topics four times.

The Nominating and Corporate Governance Committee of the Board of Directors has direct oversight over ESG and in 2023, met for two formal discussions on ESG and also received periodic updates from Company management.

The Nominating and Corporate Governance Committee of the Board of Directors has direct oversight of our corporate responsibility program and initiatives, and in 2024, met for two formal discussions on these topics and also received periodic updates from Company management.

Supplemental U.S.

Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under “Certain United States Federal Income Tax Considerations” in the prospectus dated December 16, 2022, contained in our Registration Statement on Form S-3 filed with the SEC on December 16, 2022.

SEC on December 16, 2022.

Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in such disclosures (as supplemented).

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and proper certifications are provided) will apply to (a) that portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S.

stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain

attributable to the sale or exchange of a U.S.

stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain attributable to the sale or exchange of a U.S.

real property interest by reason of the recipient not owning more than 10% of a class of our stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.

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federal withholding rate that we determine could apply.

New Treasury Regulations also provide new guidance regarding qualified foreign pension funds.

Treasury Regulations also provide new guidance regarding qualified foreign pension funds.

Accordingly, the discussion contained in the paragraph under “Certain United States Federal Income Tax Considerations – Taxation of Non-U.S.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business