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We also routinely develop properties with no pre-leasing.
−Removed: If we are unable to lease all or a substantial portion of our
−Removed: properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.
+Added: If we are unable to lease all or a substantial portion of our properties, or if the rental rates upon such leasing are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions to stockholders may be adversely affected.
We may be affected negatively by tenant bankruptcies and leasing delays.
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• fluctuations of occupancy and rental rates at newly completed properties, which depend on a number of factors, including market and economic conditions, resulting in lower than projected rental rates and a corresponding lower return on our investment;
−Removed: • complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits.
+Added: • complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits, including delays or challenges arising from community opposition, administrative appeals, legal proceedings or other third-party actions that may increase costs, delay project completion or prevent development altogether.
We face risks associated with property acquisitions .
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Our acquisition activities and their success are subject to the following risks:
−Removed: • when we are able to locate a desired property, competition from other real estate investors may significantly increase the purchase price;
+Added: • when we are able to locate desired property, competition from other real estate investors may significantly increase the purchase price;
• acquired properties may fail to perform as we project;
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As a result, if a claim were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.
−Removed: Coverage under our existing insurance policies may be inadequate to cover losses, or we may not be able to obtain adequate insurance at certain properties in the future .
+Added: Coverage under our existing insurance policies may be inadequate to cover losses, or we may not be able to obtain adequate insurance for certain properties in the future .
We generally maintain insurance policies related to our business, including casualty, general liability and other policies, covering our business operations, employees and assets as appropriate for the markets where our properties and business operations are located.
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In addition, there may be certain losses that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so, or insurance coverage may not be available, including losses due to fire, floods, wind, earthquakes, acts of war, acts of terrorism or riots.
−Removed: If an uninsured
−Removed: loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties.
+Added: If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties.
In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.
We face risks due to lack of geographic and real estate sector diversity.
−Removed: Substantially all of our properties are located in the Sunbelt region of the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina.
+Added: Substantially all of our properties are located in high-growth regions of the United States with an emphasis in the states of Texas, Florida, California, Arizona and North Carolina.
As of December 31, 2025, our largest markets were Houston and Dallas.
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Climate change and its effects, including compliance with new laws or regulations such as “green” building codes, may require us to make improvements to our existing properties or result in unanticipated losses that could affect our business and financial condition.
+Added: Climate-related regulatory, legal or market initiatives, including evolving energy efficiency standards, emissions reduction requirements, benchmarking or reporting obligations, or tenant-driven sustainability expectations, could require additional capital expenditures, operational changes or increased administrative costs.
To the extent that climate change causes an increase in catastrophic weather events, such as severe storms, fires or floods, our properties may be susceptible to an increase in weather-related damage.
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The potential impacts of future climate change on our properties could adversely affect our ability to lease, develop or sell our properties or to borrow using our properties as collateral.
+Added: Additionally, climate-related considerations may influence tenant location decisions, lease terms, property valuations or lender underwriting standards, which could adversely affect demand for our properties or the availability and cost of capital.
In addition, any proposed legislation enacted to address climate change could increase the costs of energy, utilities and overall development.
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Increases in interest rates would increase our interest expense.
−Removed: At December 31, 2024, we had no variable rate debt outstanding not protected by interest rate hedge contracts.
+Added: At December 31, 2025, we had $18,845,000 variable rate debt outstanding not protected by interest rate hedge contracts.
We may incur variable rate debt in the future.
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Our ability to execute our business strategy depends on our access to an appropriate blend of equity and debt financing, including common and preferred stock, lines of credit and other forms of secured and unsecured debt.
−Removed: We have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity securities on an as-needed basis, including shares under our Current ATM Program (as defined in Liquidity and Capital Resources in Part II, Item 7 of this Annual Report on Form 10-K).
+Added: We have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity securities on an as-needed basis, including shares under our at-the-market (“ATM”) program.
Sales of a substantial number of shares of our common stock (or the perception that such sales might occur), the issuance of common stock in connection with acquisitions and other equity issuances may dilute the holdings of our existing stockholders or reduce the market prices of our securities, or both.
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government in reaction to such events, could negatively impact our tenants’ businesses or our results of operations.
+Added: Changes in trade policy, including the imposition, expansion or modification of tariffs on imported goods, could further increase costs for certain of our tenants and could disrupt tenant inventory strategies, operating margins or expansion plans.
Most of our leases require the tenants to pay their pro rata share of operating expenses, including real estate taxes, insurance and common area maintenance, although a limited number of tenants have capped the amount of these operating expenses they are responsible for under their lease.
As a result, we believe that most of our leases mitigate our exposure to increases in costs and operating expenses resulting from inflation.
−Removed: However, there can be no assurance that our tenants would be able to absorb these expense increases and be able to continue to pay us their portion of operating expenses, capital expenditures and rent.
+Added: However, there can be no assurance that our tenants would be able to absorb these expense increases and be able to continue to pay us
+Added: their portion of operating expenses, capital expenditures and rent.
In addition, while most of our leases provide for scheduled rent increases, high levels of inflation could outpace these increases.
+Added: To the extent tariffs or other trade restrictions contribute to sustained inflationary pressures or increased costs across supply chains, our tenants' ability to absorb such costs and maintain their operations could be adversely affected.
As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our minimum debt service obligations and to pay dividends and distributions to shareholders could be adversely affected over time.
−Removed: There is no guarantee that we will be able to mitigate the effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation, and any related adverse effects on our results of operations and financial condition, remain unknown at this time.
+Added: There is no guarantee that we will be able to mitigate the effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation.
Additionally, inflationary pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not limited to, costs of construction materials, labor and services from third-party contractors and suppliers.
+Added: Tariffs on construction materials, equipment or component parts, or supply-chain disruptions associated with trade policy changes, could further increase development and redevelopment costs or delay project timelines.
Higher construction costs could adversely impact our investments in real estate assets and our expected yields on development and value-add projects.
Although the Company has an obligation to complete development projects currently under construction, the Company does not have any obligation to start new development projects in the future.
−Removed: EastGroup evaluates new development projects on a case-by-case basis including many factors such as construction costs, potential yields, and tenant demand, and no assurance can be given that inflationary pricing will not have a material adverse impact on our development pipeline and future results.
+Added: EastGroup evaluates new development projects on a case-by-case basis and considering many factors, including construction costs, potential yields, and tenant demand, and no assurance can be given that inflationary pricing will not have a material adverse impact on our development pipeline and future results.
The market value of our common stock could decrease based on our performance and market perception and conditions.
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and global economies.
+Added: Geopolitical tensions, changes in international trade relationships, and the imposition or escalation of tariffs or other trade restrictions could increase economic uncertainty, disrupt global and domestic supply chains, and adversely affect business confidence and investment decisions.
Currently these conditions have not impaired our ability to access capital markets and finance our operations.
However, our ability to access the capital markets may be restricted at a time when we would like, or need, to raise financing, which could have an impact on our flexibility to react to changing economic and business conditions.
−Removed: Furthermore, deteriorating economic conditions including business layoffs, downsizing, industry slowdowns and other similar factors that affect our customers could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio and in the collateral securing any loan investments we may make.
+Added: Furthermore, changes in industry conditions including business layoffs, downsizing, industry slowdowns, trade policy uncertainty, nearshoring, reshoring, logistics automation and other similar factors that affect our customers, could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio and in the collateral securing any loan investments we may make.
Additionally, an adverse economic situation could have an impact on our lenders or customers, causing them to fail to meet their obligations to us.
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Furthermore, we would no longer be required by the Internal Revenue Code to make any dividends to our stockholders as a condition of REIT qualification.
−Removed: If we were to fail to qualify as a REIT, subject to certain limitations in the Internal Revenue
−Removed: Code, corporate stockholders may be eligible for the dividends received deduction, and individual, trust and estate stockholders may be eligible to treat the dividends received from us as qualified dividend income taxable as net capital gains under the provisions of Section 1(h)(11) of the Internal Revenue Code.
−Removed: However, non-corporate stockholders (including individuals) will not be able to deduct 20% of certain dividends they receive from us in accordance with Section 199A of the Internal Revenue Code.
+Added: If we were to fail to qualify as a REIT, subject to certain limitations in the Internal Revenue Code, corporate stockholders may be eligible for the dividends received deduction, and individual, trust and estate stockholders may be eligible to treat the dividends received from us as qualified dividend income taxable as net capital gains under the provisions of Section 1(h)(11) of the Internal Revenue Code.
+Added: However, non-corporate stockholders (including individuals) will
+Added: not be able to deduct 20% of certain dividends they receive from us in accordance with Section 199A of the Internal Revenue Code.
The REIT qualification requirements are extremely complex, and interpretation of the U.S.
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We have severance and change in control agreements with certain of our officers that may deter changes in control of the Company.
−Removed: If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate any such officer’s employment other than for cause, or if any such officer elects to terminate his or her employment with us for reasons specified in the agreement, we will make a severance payment equal to the officer’s average annual compensation times an amount specified in the officer’s agreement, together with the officer’s base salary and vacation pay that have accrued but are unpaid through the date of termination.
+Added: If, within a certain time period (as set in the officer’s agreement) following a change in control, we terminate any
+Added: such officer’s employment other than for cause, or if any such officer elects to terminate his or her employment with us for reasons specified in the agreement, we will make a severance payment equal to the officer’s average annual compensation times an amount specified in the officer’s agreement, together with the officer’s base salary and vacation pay that have accrued but are unpaid through the date of termination.
These agreements may deter a change in control because of the increased cost for a third party to acquire control of the Company.
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We rely on information technology networks and systems, including the internet and third-party cloud-based service providers, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, and to maintain personal identifying information and customer and lease data.
+Added: In addition to enterprise information technology systems, we rely on technology and automated systems to operate and manage certain aspects of our properties and business processes.
We purchase some of our information technology from vendors, on whom our systems depend.
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In some cases, it may be difficult to anticipate or immediately detect such incidents and the damage they cause.
+Added: Cybersecurity incidents could also result in interruptions to tenant operations, impair our ability to provide services to tenants, or require us to incur significant costs to remediate systems, notify affected parties, comply with regulatory or contractual obligations, or respond to litigation or governmental inquiries.
Techniques used to obtain unauthorized access to, disable or sabotage information technology systems are increasingly diverse and sophisticated, including as a result of emerging technologies, such as artificial intelligence and machine learning.
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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.