EastGroup Properties, Inc. (NYSE: EGP) (“The Company,” “We,” “EastGroup”) announced that on June 1, 2022, the Company closed the acquisition of an industrial real estate portfolio, Tulloch Corporation. Tulloch Corporation, a real estate company located within San Francisco and Sacramento markets, has properties in those two locations, representing 85% and 15% of their total portfolio net operating income, respectively. The portfolio consists of 14 properties totaling around 1.7 million square feet and two land parcels of approximately 10.5 acres in total.

Although the properties are currently 100% leased to 37 tenants, the average time remaining on the leases is less than three years. At the time of the acquisition of the properties by EastGroup, the annualized net operating income generated by the fully-occupied properties was approximately $17.1 million. The acquisition of Tulloch by EastGroup came at a consideration consisting of approximately 1.87 million newly issued shares of EastGroup common stock and a $60 million loan, which EastGroup plans to repay without penalty promptly.

The Company’s California portfolio, including operating properties and value-on in lease-up prior to this acquisition, is approximately 5.9 million square feet with an average rent growth of 54.5% on a straight-line basis, ending on March 31, 2022. Following this acquisition, the Company now owns approximately 7.6 million square feet in California, representing 21% of the Company’s annualized base rent. As of June 1, 2022, the Company’s California properties are 98.9% leased.

EastGroup’s CEO, Marshall Loeb, on the Company’s recent activity, stated, “We are thrilled to add Tulloch Corporation’s San Francisco area portfolio to EastGroup. The Tulloch family, over three generations built a very strong portfolio in terms of location, building quality and tenant quality. Within our portfolio, San Francisco has historically been one of our strongest markets and also one where we’ve been under allocated capital-wise.”

Brian Tulloch, the President of the Tulloch Corporation, said, “I’m very pleased with the sale to EastGroup. I’ve been a shareholder for a number of years, so I knew the Company prior to launching the sale process. Early on, I was hoping there would be a way to reach this joint outcome.”

EastGroup’s operating portfolio as of June 1, 2022, was 98.7% leased and 98.2% occupied.

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