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REAL ESTATE PROPERTIES | 12 Months Ended
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Dec. 31, 2018
Real Estate [Abstract] |
REAL ESTATE PROPERTIES | REAL ESTATE PROPERTIES The Company’s Real estate properties and Development and value-add properties at December 31, 2018 and 2017 were as follows:
| December 31,
2018 |  | 2017
(In thousands)
Real estate properties: |  |  |
Land | $ | 380,684 |  |  | 345,424 |
Buildings and building improvements | 1,732,592 |  |  | 1,587,130 |
Tenant and other improvements | 440,205 |  |  | 404,180 |
Development and value-add properties (1) | 263,664 |  |  | 242,014 |
| 2,817,145 |  |  | 2,578,748 |
Less accumulated depreciation | (814,915 | ) |  | (749,601 | )
| $ | 2,002,230 |  |  | 1,829,147 |
(1) | Value-add properties are defined as properties that are either acquired but not stabilized or can be converted to a higher and better use. Acquired properties meeting either of the following two conditions are considered value-add properties: (1) Less than 75% occupied as of the acquisition date (or will be less than 75% occupied within one year of acquisition date based on near term lease roll), or (2) 20% or greater of the acquisition cost will be spent to redevelop the property.
EastGroup acquired operating properties during 2018, 2017 and 2016 as discussed in Note 1(j). The Company sold operating properties during 2018, 2017 and 2016 as shown in the table below. The results of operations and gains and losses on sales for the properties sold during the periods presented are reported in continuing operations on the Consolidated Statements of Income and Comprehensive Income. The gains and losses on sales are included in Gain, net of loss, on sales of real estate investments. The Company did not classify any properties as held for sale as of December 31, 2018 and 2017. Sales of Real Estate A summary of Gain, net of loss, on sales of real estate investments for the years ended December 31, 2018, 2017 and 2016 follows:
Real Estate Properties |  | Location |  | Size (in Square Feet) |  | Date Sold |  | Net Sales Price |  | Basis |  | Recognized Gain (Loss)
|  |  |  |  |  |  |  | (In thousands)
2018 |  |  |  |  |  |  |  |  |  |  |  |
World Houston 18 |  | Houston, TX |  | 33,000 |  |  | 01/26/2018 |  | $ | 2,289 |  |  | 1,211 |  |  | 1,078 |
56 Commerce Park |  | Tampa, FL |  | 181,000 |  |  | 03/20/2018 |  | 12,032 |  |  | 2,888 |  |  | 9,144 |
35th Avenue Distribution Center |  | Phoenix, AZ |  | 125,000 |  |  | 07/26/2018 |  | 7,683 |  |  | 3,632 |  |  | 4,051 |
Total for 2018 |  |  |  |  |  |  |  | $ | 22,004 |  |  | 7,731 |  |  | 14,273 |
2017 |  |  |  |  |  |  |  |  |  |  |  |
Stemmons Circle |  | Dallas, TX |  | 99,000 |  |  | 05/12/2017 |  | $ | 5,051 |  |  | 1,329 |  |  | 3,722 |
Techway Southwest I-IV |  | Houston, TX |  | 415,000 |  |  | 06/19/2017 |  | 32,506 |  |  | 14,373 |  |  | 18,133 |
Total for 2017 |  |  |  |  |  |  |  | $ | 37,557 |  |  | 15,702 |  |  | 21,855 |
2016 |  |  |  |  |  |  |  |  |  |  |  |
Northwest Point Distribution and Service Centers |  | Houston, TX |  | 232,000 |  |  | 02/12/2016 |  | $ | 15,189 |  |  | 5,080 |  |  | 10,109 |
North Stemmons III |  | Dallas, TX |  | 60,000 |  |  | 03/04/2016 |  | 3,131 |  |  | 1,908 |  |  | 1,223 |
North Stemmons II |  | Dallas, TX |  | 26,000 |  |  | 04/12/2016 |  | 1,203 |  |  | 765 |  |  | 438 |
Lockwood Distribution Center |  | Houston, TX |  | 392,000 |  |  | 04/18/2016 |  | 14,024 |  |  | 4,154 |  |  | 9,870 |
West Loop Distribution Center 1 & 2 |  | Houston, TX |  | 161,000 |  |  | 04/19/2016 |  | 13,154 |  |  | 3,564 |  |  | 9,590 |
America Plaza |  | Houston, TX |  | 121,000 |  |  | 04/28/2016 |  | 7,938 |  |  | 3,378 |  |  | 4,560 |
Interstate Commons Distribution Center 1 & 2 |  | Phoenix, AZ |  | 142,000 |  |  | 05/31/2016 |  | 9,906 |  |  | 3,568 |  |  | 6,338 |
Castilian Research Center (1) |  | Santa Barbara, CA |  | 30,000 |  |  | 06/28/2016 |  | 7,698 |  |  | 7,513 |  |  | 185 |
Memphis I |  | Memphis, TN |  | 92,000 |  |  | 12/16/2016 |  | 1,482 |  |  | 1,625 |  |  | (143 | )
Total for 2016 |  |  |  |  |  |  |  | $ | 73,725 |  |  | 31,555 |  |  | 42,170 |
(1) | EastGroup owned 80% of Castilian Research Center through a joint venture. The information shown for this transaction also includes the 20% attributable to the Company's noncontrolling interest partner.
The table above includes sales of operating properties; the Company also sold parcels of land during the years presented. During the year ended December 31, 2018, the Company sold a parcel of land in Houston generating gross proceeds of $2,577,000 and recognized a gain of $86,000. During the year ended December 31, 2017, EastGroup sold parcels of land in El Paso and Dallas for $3,778,000 and recognized a net gain of $293,000. During the year ended December 31, 2016, EastGroup sold parcels of land in Houston, Dallas and Orlando for $5,400,000 and recognized net gains of $733,000. The net gains on sales of land are included in Other on the Consolidated Statements of Income and Comprehensive Income. Development and Value-Add Properties The Company’s development and value-add program as of December 31, 2018, was comprised of the properties detailed in the table below. Costs incurred include capitalization of interest costs during the period of construction. The interest costs capitalized on development projects for 2018 were $6,334,000 compared to $5,765,000 for 2017 and $5,340,000 for 2016. In addition, EastGroup capitalized internal development costs of $4,696,000 during the year ended December 31, 2018, compared to $4,754,000 during 2017 and $3,789,000 in 2016. Total capital invested for development and value-add properties during 2018 was $167,667,000, which primarily consisted of costs of $134,957,000 and $21,736,000 as detailed in the Development and Value-Add Properties Activity table below and costs of $8,556,000 on projects subsequent to transfer to Real estate properties. The capitalized costs incurred on development projects 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).
DEVELOPMENT AND VALUE-ADD PROPERTIES ACTIVITY |  |  |  | Costs Incurred |  |  |  | Anticipated Building Conversion Date
|  |  | Costs Transferred in 2018 (1) |  | For the Year Ended 12/31/18 |  | Cumulative as of 12/31/18 |  | Estimated Total Costs (2) |
|  |  |  | (In thousands) |  |
|  | (Unaudited) |  |  |  |  |  |  |  | (Unaudited) |  | (Unaudited)
LEASE-UP |  | Building Size (Square feet) |  |  |  |  |  |  |  |  |  |
Siempre Viva, San Diego, CA |  | 115,000 |  |  | $ | — |  |  | 14,075 |  |  | 14,075 |  |  | 14,400 |  |  | 01/19
CreekView 121 3 & 4, Dallas, TX |  | 158,000 |  |  | — |  |  | 3,489 |  |  | 13,800 |  |  | 16,200 |  |  | 03/19
Falcon Field, Phoenix, AZ |  | 96,000 |  |  | — |  |  | 5,285 |  |  | 8,232 |  |  | 9,400 |  |  | 05/19
Gateway 1, Miami, FL |  | 200,000 |  |  | 9,110 |  |  | 11,131 |  |  | 20,241 |  |  | 25,000 |  |  | 05/19
Broadmoor 2, Atlanta, GA |  | 111,000 |  |  | 705 |  |  | 5,709 |  |  | 6,414 |  |  | 7,400 |  |  | 11/19
Total Lease-Up |  | 680,000 |  |  | 9,815 |  |  | 39,689 |  |  | 62,762 |  |  | 72,400 |  |  |
UNDER CONSTRUCTION |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Horizon XI, Orlando, FL |  | 135,000 |  |  | 3,171 |  |  | 5,552 |  |  | 8,723 |  |  | 10,400 |  |  | 01/20
Settlers Crossing 1, Austin, TX |  | 77,000 |  |  | — |  |  | 4,704 |  |  | 6,260 |  |  | 7,400 |  |  | 01/20
Settlers Crossing 2, Austin, TX |  | 83,000 |  |  | — |  |  | 5,442 |  |  | 7,115 |  |  | 8,400 |  |  | 01/20
SunCoast 5, Ft. Myers, FL |  | 81,000 |  |  | 2,704 |  |  | 3,831 |  |  | 6,535 |  |  | 7,700 |  |  | 01/20
Airport Commerce Center 3, Charlotte, NC |  | 96,000 |  |  | — |  |  | 4,060 |  |  | 5,793 |  |  | 7,300 |  |  | 02/20
Parc North 5, Dallas, TX |  | 100,000 |  |  | 1,683 |  |  | 5,270 |  |  | 6,953 |  |  | 9,200 |  |  | 02/20
Steele Creek V, Charlotte, NC |  | 54,000 |  |  | 1,366 |  |  | 1,948 |  |  | 3,314 |  |  | 5,800 |  |  | 03/20
Horizon VI, Orlando, FL |  | 148,000 |  |  | 3,418 |  |  | 4,807 |  |  | 8,225 |  |  | 12,700 |  |  | 04/20
Ten West Crossing 8, Houston, TX |  | 132,000 |  |  | 1,947 |  |  | 4,643 |  |  | 6,590 |  |  | 10,900 |  |  | 04/20
Tri-County Crossing 1 & 2, San Antonio, TX |  | 203,000 |  |  | 2,012 |  |  | 6,883 |  |  | 8,895 |  |  | 14,600 |  |  | 04/20
Eisenhauer Point 7 & 8, San Antonio, TX |  | 336,000 |  |  | 4,916 |  |  | 8,174 |  |  | 13,090 |  |  | 24,500 |  |  | 05/20
CreekView 121 5 & 6, Dallas, TX |  | 139,000 |  |  | 3,675 |  |  | 1,930 |  |  | 5,605 |  |  | 14,900 |  |  | 07/20
Total Under Construction |  | 1,584,000 |  |  | 24,892 |  |  | 57,244 |  |  | 87,098 |  |  | 133,800 |  |  |
PROSPECTIVE DEVELOPMENT (PRIMARILY LAND) |  | Estimated Building Size (Square feet) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Phoenix, AZ |  | 315,000 |  |  | — |  |  | 6,809 |  |  | 6,809 |  |  |  |  |
Ft. Myers, FL |  | 488,000 |  |  | (2,704 | ) |  | 1,914 |  |  | 13,322 |  |  |  |  |
Miami, FL |  | 650,000 |  |  | (9,110 | ) |  | 14,565 |  |  | 36,331 |  |  |  |  |
Orlando, FL |  | 214,000 |  |  | (6,589 | ) |  | 1,188 |  |  | 5,719 |  |  |  |  |
Tampa, FL |  | 32,000 |  |  | — |  |  | — |  |  | 1,560 |  |  |  |  |
Atlanta, GA |  | 100,000 |  |  | (705 | ) |  | 224 |  |  | 726 |  |  |  |  |
Jackson, MS |  | 28,000 |  |  | — |  |  | — |  |  | 706 |  |  |  |  |
Charlotte, NC |  | 600,000 |  |  | (1,366 | ) |  | 1,846 |  |  | 7,209 |  |  |  |  |
Austin, TX |  | 180,000 |  |  | — |  |  | 722 |  |  | 3,742 |  |  |  |  |
Dallas, TX |  | 612,000 |  |  | (5,358 | ) |  | 7,954 |  |  | 12,192 |  |  |  |  |
Houston, TX (3) |  | 1,123,000 |  |  | (2,969 | ) |  | (1,782 | ) |  | 16,439 |  |  |  |  |
San Antonio, TX |  | 908,000 |  |  | (6,928 | ) |  | 4,584 |  |  | 9,049 |  |  |  |  |
Total Prospective Development |  | 5,250,000 |  |  | (35,729 | ) |  | 38,024 |  |  | 113,804 |  |  |  |  |
|  | 7,514,000 |  |  | $ | (1,022 | ) |  | 134,957 |  |  | 263,664 |  |  |  |  |
DEVELOPMENT AND VALUE-ADD PROPERTIES TRANSFERRED TO REAL ESTATE PROPERTIES DURING 2018 |  | Building Size (Square feet) |  |  |  |  |  |  |  |  |  |  |  |  |  | Building Conversion Date
Alamo Ridge IV, San Antonio, TX |  | 97,000 |  |  | $ | — |  |  | 320 |  |  | 7,417 |  |  |  |  | 03/18
Oak Creek VII, Tampa, FL |  | 116,000 |  |  | — |  |  | 601 |  |  | 6,732 |  |  |  |  | 03/18
Weston, Ft. Lauderdale, FL |  | 134,000 |  |  | — |  |  | 222 |  |  | 15,742 |  |  |  |  | 03/18
Progress Center 1 & 2, Atlanta, GA |  | 132,000 |  |  | — |  |  | 143 |  |  | 10,476 |  |  |  |  | 04/18
Horizon X, Orlando, FL |  | 104,000 |  |  | — |  |  | 3,352 |  |  | 6,902 |  |  |  |  | 05/18
SunCoast 4, Ft. Myers, FL |  | 93,000 |  |  | — |  |  | 71 |  |  | 9,191 |  |  |  |  | 05/18
Country Club V, Tucson, AZ |  | 305,000 |  |  | — |  |  | 7,078 |  |  | 21,029 |  |  |  |  | 06/18
Eisenhauer Point 3, San Antonio, TX |  | 71,000 |  |  | — |  |  | 231 |  |  | 6,390 |  |  |  |  | 06/18
Kyrene 202 III, IV & V, Phoenix, AZ |  | 166,000 |  |  | — |  |  | 1,146 |  |  | 12,689 |  |  |  |  | 09/18
Steele Creek VII, Charlotte, NC |  | 120,000 |  |  | — |  |  | 795 |  |  | 8,592 |  |  |  |  | 09/18
Eisenhauer Point 6, San Antonio, TX |  | 85,000 |  |  | — |  |  | 1,356 |  |  | 5,406 |  |  |  |  | 10/18
Horizon XII, Orlando, FL |  | 140,000 |  |  | — |  |  | 653 |  |  | 11,883 |  |  |  |  | 10/18
Eisenhauer Point 5, San Antonio, TX |  | 98,000 |  |  | — |  |  | 2,012 |  |  | 7,816 |  |  |  |  | 11/18
West Road 5, Houston, TX |  | 58,000 |  |  | 1,022 |  |  | 3,756 |  |  | 4,778 |  |  |  |  | 11/18
Total Transferred to Real Estate Properties |  | 1,719,000 |  |  | $ | 1,022 |  |  | 21,736 |  |  | 135,043 |  |  | (4) |  |
Footnotes for the Development and Value-Add Properties Activity table are on the following page.
(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) | Included in these costs are development obligations of $52.4 million and tenant improvement obligations of $13.6 million on properties under development.
(3) | Negative amount represents land inventory costs transferred to Under Construction and land sold on 3/28/18.
(4) | Represents cumulative costs at the date of transfer.
Future Minimum Rental Receipts Under Non-Cancelable Leases The following schedule indicates approximate future minimum rental receipts under non-cancelable leases for real estate properties by year as of December 31, 2018:
Years Ending December 31, |  | (In thousands)
2019 |  | $ | 226,330 |
2020 |  | 195,850 |
2021 |  | 151,564 |
2022 |  | 112,007 |
2023 |  | 82,262 |
Thereafter |  | 163,499 |
Total minimum receipts |  | $ | 931,512 |
Ground Leases As of December 31, 2018, the Company owned two properties in Florida, two properties in Texas and one property in Arizona that are subject to ground leases. These leases have terms of 40 to 50 years, expiration dates of August 2031 to November 2037, and renewal options of 15 to 35 years, except for the one lease in Arizona which is automatically and perpetually renewed annually. Total ground lease expenditures for the years ended December 31, 2018, 2017 and 2016 were $783,000, $760,000 and $756,000, 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. The following schedule indicates approximate future minimum ground lease payments for these properties by year as of December 31, 2018: Future Minimum Ground Lease Payments
Years Ending December 31, |  | (In thousands)
2019 |  | $ | 791 |
2020 |  | 791 |
2021 |  | 791 |
2022 |  | 791 |
2023 |  | 791 |
Thereafter |  | 9,343 |
Total minimum payments |  | $ | 13,298 |

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 + Details
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