Company: EGP
Filing Date: 2025-10-23
Form Type: 10-Q
Source: 0000049600-25-000109
Chunk: 15

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-10-23
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 development (primarily land). Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% leased as of the acquisition date (or will be less than 75% leased within one year of the acquisition date based on near term lease roll), or (2) 20% or greater of the cumulative gross cost of the property will be spent to redevelop the property.  Properties qualifying under these conditions are included in Development and value-add properties in the quarter in which (1) they are acquired, if condition 1 above is met, or (2) when construction to redevelop begins.  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 projects based on development activity.  As the property becomes occupied, depreciation commences on the occupied portion of the building, and costs are capitalized only for the portion of the building that remains vacant.  The Company transfers properties from Development and value-add properties to Real estate properties as follows:  (1) for development properties, at the earlier of 90% occupancy or one year after completion of the shell construction, and (2) for value-add properties, at the earlier of 90% occupancy or one year after acquisition or completion of redevelopment, as applicable.  Upon the earlier of 90% occupancy or one year after completion of the shell construction/value-add acquisition date, capitalization of development costs, including interest expense, property taxes and internal personnel costs, ceases and depreciation commences on the entire property (excluding the land).

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EASTGROUP PROPERTIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(7)REAL ESTATE PROPERTY ACQUISITIONS AND ACQUIRED INTANGIBLES

 Upon acquisition of real estate properties, EastGroup applies the principles of FASB ASC 805, Business Combinations.  The FASB Codification provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses.  Under the guidance, companies are required to utilize an initial screening test to