JACKSON, Miss., Aug. 31, 2012 /PRNewswire/ -- EastGroup Properties, Inc. (NYSE: EGP) today announced the closing of an $80 million unsecured term loan. The loan has a six-year term and interest only payments. It bears interest at the annual rate of LIBOR plus 190 basis points subject to a pricing grid for changes in the Company's leverage or credit ratings. The Company also entered into an interest rate swap to convert the loan's LIBOR rate to a fixed interest rate, providing the Company an effective fixed rate of 2.92% per annum as of closing. The Company plans to use the proceeds to reduce its variable rate bank borrowings.
EastGroup also announced the acquisition of Wiegman Distribution Center II in Hayward, California for $7,475,000. Built in 1998, this state-of-the-art business distribution building contains 84,000 square feet and is 100% leased to two customers. It is projected to generate a first year GAAP yield of 5.75%. This acquisition increases EastGroup's ownership in the San Francisco Bay area to over one million square feet, which are currently 100% leased.
EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being the leading provider in its markets of functional, flexible, and quality business distribution space for location sensitive customers primarily in the 5,000 to 50,000 square foot range. The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio currently includes over 30 million square feet.Certain statements in this release are forward-looking and as such are based upon the Company's current belief as to the outcome and timing of future events. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including the risks and uncertainties detailed from time to time in the Company's SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company's results could differ materially from those expressed in the forward-looking statements.