Company: EGP
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000049600-25-000019
Chunk: 188

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-02-12
Form: 10-K
Item: Item 3
Chunk 188
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EastGroup applies ASC 842, Leases, for its ground leases, which are classified as operating leases.  As of December 31, 2023, the Company had operating properties subject to ground leases in Florida, Texas and Arizona.  In November and December 2024, EastGroup assumed ground leases in connection with the acquisitions of DFW Global Logistics Centre 5-8 in Dallas and Akimel Gateway in Phoenix; we recorded right of use assets and liabilities of $10,795,000 and $11,041,000, respectively.  As of December 31, 2024 and 2023, the unamortized balances of the Company’s right of use assets for its ground leases were $38,393,000 and $17,996,000, respectively.  The right of use assets for ground leases are included in Real estate properties on the Consolidated Balance Sheets.  The ground leases have terms of 40 to 65 years and renewal options of 15 to 35 years, except for one lease in Arizona which is automatically and perpetually renewed annually.  With the renewal options included, expiration dates range from August 2051 to December 2085.  The Company has included renewal options in the lease terms for calculating the ground lease assets and liabilities as the Company is reasonably certain it will exercise these options.  Total ground lease expenditures for the years ended December 31, 2024, 2023 and 2022 were $1,936,000, $1,758,000 and $1,755,000, respectively.  Payments are subject to increases at 3 to 10 year intervals based upon the agreed or appraised fair market value of the leased premises on the adjustment date or the Consumer Price Index percentage increase since the base rent date.  These future changes in payments will be considered variable payments and will not impact the assessment of the asset or liability unless there is a significant event that triggers reassessment, such as amendment with a change in the terms of the lease.  The weighted-average remaining lease terms for the Company's ground leases were 47 years and 35 years as of December 31, 2024 and 2023, respectively. The following schedule indicates approximate future minimum ground lease payments, including renewal periods, for these properties by year as of December 31, 2024:Years Ending December 31,(In thousands)2025$2,821 20262,951 20272,968 202