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     113  0 Kommentare Urban Edge Properties Reports Third Quarter 2023 Results

    Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended September 30, 2023 and updated its outlook for full-year 2023.

    "Urban Edge had one of its best quarters in Company history, continuing the positive momentum we have generated year-to-date,” said Jeff Olson, Chairman and CEO. “Earnings growth for the quarter was strong at 7% compared to last year, driven by higher rent, lower operating costs, and lower G&A, and we have continued to advance our strategic priorities. After quarter end, we acquired two of the most prominent shopping centers in Boston for $309 million, sold our East Hanover Warehouse portfolio for $218 million, and are negotiating the sale of over $100 million of non-core assets. These capital recycling transactions should increase 2024 FFO as Adjusted by $5 million annually, or $0.04 per share. Based on the strong third quarter results and the successful capital recycling progress we have achieved, we are increasing our 2023 guidance for FFO as Adjusted by $0.06 per share at the midpoint."

    Financial Results(1)(2)

    (in thousands, except per share amounts)

     

    3Q23

    3Q22

     

    YTD 2023

    YTD 2022

    Net income attributable to common shareholders

     

    $

    36,118

    $

    11,383

     

    $

    27,262

    $

    32,495

    Net income per diluted share

     

     

    0.31

     

    0.10

     

     

    0.23

     

    0.28

    Funds from Operations ("FFO")

     

     

    64,242

     

    35,938

     

     

    138,762

     

    106,345

    FFO per diluted share

     

     

    0.53

     

    0.29

     

     

    1.13

     

    0.87

    FFO as Adjusted

     

     

    38,981

     

    36,510

     

     

    115,134

     

    107,880

    FFO as Adjusted per diluted share

     

     

    0.32

     

    0.30

     

     

    0.94

     

    0.88

    Net income for the nine months ended September 30, 2023 included a $26.7 million, or $0.22 per diluted share, gain on debt extinguishment, net of tax, as a result of the Las Catalinas refinancing transaction completed in the third quarter of 2023. FFO for the nine months ended September 30, 2023 benefited from rent commencements on new leases, lease termination income, higher net recovery income, and lower operating and general and administrative expenses.

    Same-Property Operating Results Compared to the Prior Year Period(3)

     

     

    3Q23

     

    YTD 2023

    Same-property Net Operating Income ("NOI") growth

     

    1.5 %

     

    3.0 %

    Same-property NOI growth, including properties in redevelopment

     

    3.3 %

     

    4.5 %

    Same-property NOI growth, adjusted for the collection of amounts previously deemed uncollectible

     

    4.6 %

     

    4.7 %

    Same-property NOI growth, including properties in redevelopment, adjusted for the collection of amounts previously deemed uncollectible

     

    6.4 %

     

    6.2 %

    Increases in same-property NOI metrics for the three and nine months ended September 30, 2023 were primarily driven by rent commencements on new leases, higher net recovery income and lower operating expenses.

    Operating Results(1)

    • Reported same-property portfolio leased occupancy of 95.0%, an increase of 130 basis points compared to September 30, 2022 and a decrease of 50 basis points compared to June 30, 2023.
    • Reported consolidated portfolio leased occupancy, excluding Sunrise Mall, of 94.2%, an increase of 240 basis points compared to September 30, 2022 and a decrease of 50 basis points compared to June 30, 2023.
    • The decrease in occupancy compared to June 30, 2023 is primarily attributable to recapturing 128,000 sf previously occupied by Bed Bath & Beyond, for which the Company is in active discussions with replacement tenants.
    • Executed 46 new leases, renewals and options totaling 568,000 sf during the quarter. Same-space leases totaled 538,000 sf and generated an average rent spread of 12.5% on a cash basis.

    Lesen Sie auch

    Financing Activity

    On August 30, 2023, the Company refinanced the mortgage secured by its property, Las Catalinas Mall, with a new 10-year, $82 million loan bearing interest at a fixed rate of 6.6%. The prior loan was modified in 2020 to provide the Company with a discounted payoff option of $72.5 million, effective in August 2023. The proceeds from the new loan were used to pay off the Company's previous mortgage on the property which had a carrying value of $117 million. As a result of exercising the discounted payoff option, the Company recognized a $43 million gain on debt extinguishment for the three months ended September 30, 2023 and a related $16.3 million income tax expense.

    The Company has limited debt maturities aggregating $312 million, which represent approximately 19% of outstanding debt, coming due through December 31, 2026 at a weighted average interest rate of 4.8%.

    Acquisition and Disposition Activity

    On October 23, 2023, the Company closed on the $309 million acquisition of Shoppers World and Gateway Center, two high-quality shopping centers in the greater Boston area. Shoppers World is the premier open air shopping center in the Boston suburbs and totals 758,000 sf, anchored by Best Buy, Nordstrom Rack and several TJX Companies concepts including T.J. Maxx, Marshalls, HomeSense, and Sierra Trading. Gateway Center, a 639,000 sf shopping center, is anchored by Target, Costco and Home Depot. These properties support the Company's strategy of acquiring high-quality retail real estate with future growth potential while providing us with critical mass in the Boston market.

    On October 20, 2023, the Company closed on the sale of its 1.2 million sf East Hanover, NJ industrial portfolio for a price of $217.5 million, representing a 4.9% cap rate on forward NOI. The portfolio was secured by a $40 million mortgage loan that was repaid at closing. The sale was structured as part of a 1031 exchange transaction used to partially fund the Boston acquisitions with the remaining balance funded using the Company's line of credit. The Company is actively negotiating the sale of more than $100 million of non-core assets.

    Leasing, Development and Redevelopment

    During the quarter, the Company executed 113,000 sf of new leases at cash rent spreads of 26%, including leases with Burlington at The Outlets at Montehiedra and Atlantic Health at Manalapan Commons.

    The Company commenced four redevelopment projects with estimated aggregate costs of $21.7 million during the quarter and now has $168.5 million of active redevelopment projects underway, with estimated remaining costs to complete of $93.8 million. The active redevelopment projects are expected to generate an approximate 12% unleveraged yield. During the quarter, two redevelopment projects were stabilized with aggregate costs of $6.1 million.

    As of September 30, 2023, the Company has signed leases that have not yet rent commenced that are expected to generate an additional $27.2 million of future annual gross rent, representing approximately 11% of current annualized NOI. Approximately $1.0 million of this amount is expected to be recognized in the fourth quarter of 2023 and an additional $14 million is expected to be recognized during 2024.

    Balance Sheet and Liquidity(1)(4)

    Balance sheet highlights as of September 30, 2023 include:

    • $77.9 million of cash and cash equivalents, including restricted cash, and no amounts drawn under our $800 million revolving credit agreement.
    • Mortgages payable of $1.7 billion, with a weighted average term to maturity of 5.2 years. Approximately 95% of our outstanding debt is fixed rate or hedged.
    • Total market capitalization of approximately $3.5 billion, comprised of 122.9 million fully-diluted common shares valued at $1.9 billion and $1.7 billion of debt.
    • Net debt to total market capitalization of 45%.

    2023 Earnings Guidance

    Based on the strong third quarter results and recent capital recycling activity, the Company has increased its 2023 full-year guidance ranges for FFO and FFO as Adjusted, raising both the low and high end of the range by $0.06 per share. The new guidance ranges reflect FFO of $1.39 to $1.43 per diluted share, and FFO as Adjusted of $1.22 to $1.25 per diluted share. A reconciliation of the range of estimated earnings, FFO and FFO as Adjusted, as well as the assumptions used in our guidance can be found on page 4 of this release.

    Earnings Conference Call Information

    The Company will host an earnings conference call and audio webcast on October 31, 2023 at 8:30am ET. All interested parties can access the earnings call by dialing 1-877-407-9716 (Toll Free) or 1-201-493-6779 (Toll/International) using conference ID 13740635. The call will also be webcast and available in listen-only mode on the investors page of our website: www.uedge.com. A replay will be available at the webcast link on the investors page for one year following the conclusion of the call. A telephonic replay of the call will also be available starting October 31, 2023 at 11:30am ET through November 14, 2023 at 11:59pm ET by dialing 1-844-512-2921 (Toll Free) or 1-412-317-6671 (Toll/International) using conference ID 13740635.

    (1)

    Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.

    (2)

    Refer to page 10 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended September 30, 2023.

    (3)

    Refer to page 11 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended September 30, 2023.

    (4)

    Net debt as of September 30, 2023 is calculated as total consolidated debt of $1.7 billion less total cash and cash equivalents, including restricted cash, of $78 million.

    2023 Earnings Guidance

    The Company has increased its 2023 full-year guidance ranges, estimating FFO of $1.39 to $1.43 per diluted share, and FFO as Adjusted of $1.22 to $1.25 per diluted share. Below is a summary of the Company's 2023 outlook, assumptions used in our forecasting, and a reconciliation of the range of estimated earnings, FFO, and FFO as Adjusted per diluted share.

     

     

    Previous Guidance

     

    Revised Guidance

    Net income per diluted share

     

    $0.02 - $0.05

     

    $0.27 - $0.31

    Net income attributable to common shareholders per diluted share

     

    $0.02 - $0.05

     

    $0.26 - $0.30

    FFO per diluted share

     

    $1.13 - $1.16

     

    $1.39 - $1.43

    FFO as adjusted per diluted share

     

    $1.16 - $1.19

     

    $1.22 - $1.25

    The Company's full year FFO outlook is based on the following assumptions:

    • Same-property NOI growth, including properties in redevelopment, of 2.25% to 3.25%.
    • Same-property NOI growth, including properties in redevelopment, adjusted for the collection of amounts previously deemed uncollectible of 3.5% to 4.5%.
    • Acquisitions of $309 million and dispositions ranging from $217.5 million to $240 million.
    • Recurring G&A expenses ranging from $34.0 million to $36.0 million.
    • Interest and debt expense ranging from $74.5 million to $75.5 million.
    • Excludes items that impact FFO comparability, including gains and/or losses on extinguishment of debt, transaction, severance, litigation, or any one-time items outside of the ordinary course of business.

     

    Guidance 2023E

     

    Per Diluted Share(1)

    (in thousands, except per share amounts)

    Low

     

    High

     

    Low

     

    High

    Net income

    $

    33,400

     

     

    $

    37,800

     

     

    $

    0.27

     

     

    $

    0.31

     

    Less net (income) loss attributable to noncontrolling interests in:

     

     

     

     

     

     

     

    Operating partnership

     

    (1,800

    )

     

     

    (1,800

    )

     

     

    (0.01

    )

     

     

    (0.01

    )

    Consolidated subsidiaries

     

    700

     

     

     

    700

     

     

     

    0.01

     

     

     

    0.01

     

    Net income attributable to common shareholders

     

    32,300

     

     

     

    36,700

     

     

     

    0.26

     

     

     

    0.30

     

    Adjustments:

     

     

     

     

     

     

     

    Rental property depreciation and amortization

     

    102,800

     

     

     

    102,800

     

     

     

    0.84

     

     

     

    0.84

     

    Gain on sale of real estate

     

    (400

    )

     

     

    (400

    )

     

     

     

     

     

     

    Real estate impairment loss

     

    34,100

     

     

     

    34,100

     

     

     

    0.28

     

     

     

    0.28

     

    Limited partnership interests in operating partnership

     

    1,800

     

     

     

    1,800

     

     

     

    0.01

     

     

     

    0.01

     

    FFO Applicable to diluted common shareholders

     

    170,600

     

     

     

    175,000

     

     

     

    1.39

     

     

     

    1.43

     

    Adjustments to FFO:

     

     

     

     

     

     

     

    Transaction, severance, litigation and other expenses

     

    2,200

     

     

     

    1,600

     

     

     

    0.02

     

     

     

    0.01

     

    Gain on extinguishment of debt, net

     

    (42,300

    )

     

     

    (42,300

    )

     

     

    (0.34

    )

     

     

    (0.34

    )

    Impact of property in foreclosure

     

    3,200

     

     

     

    3,100

     

     

     

    0.03

     

     

     

    0.03

     

    Tax impact of Puerto Rico financing and prior year refund

     

    15,600

     

     

     

    15,600

     

     

     

    0.13

     

     

     

    0.13

     

    FFO as Adjusted applicable to diluted common shareholders

    $

    149,300

     

     

    $

    153,000

     

     

    $

    1.22

     

     

    $

    1.25

    (1)

    Amounts may not foot due to rounding.

    The Company is providing a projection of anticipated net income solely to satisfy the disclosure requirements of the Securities and Exchange Commission. The Company's projections are based on management’s current beliefs and assumptions about the Company's business, and the industry and the markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2023 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the “Forward-Looking Statements” disclosures on page 7 of this document and “Risk Factors” disclosed in the Company's annual and quarterly reports filed with the Securities and Exchange Commission for more information.

    Non-GAAP Financial Measures

    The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:

    • FFO: The Company believes FFO is a useful, supplemental measure of its operating performance that is a recognized metric used extensively by the real estate industry and, in particular real estate investment trusts ("REITs"). FFO, as defined by the National Association of Real Estate Investment Trusts ("Nareit") and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business, earnings from consolidated partially owned entities and rental property depreciation and amortization expense. The Company believes that financial analysts, investors and shareholders are better served by the presentation of comparable period operating results generated from FFO primarily because it excludes the assumption that the value of real estate assets diminishes predictably. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions.
    • FFO as Adjusted: The Company provides disclosure of FFO as Adjusted because it believes it is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO as Adjusted is calculated by making certain adjustments to FFO to account for items the Company does not believe are representative of ongoing core operating results, including non-comparable revenues and expenses. The Company's method of calculating FFO as Adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
    • NOI: The Company uses NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The Company calculates NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for non-cash rental income and expense, impairments on depreciable real estate or land, and income or expenses that we do not believe are representative of ongoing operating results, if any. In addition, the Company uses NOI margin, calculated as NOI divided by total property revenue, which the Company believes is useful to investors for similar reasons.
    • Same-property NOI: The Company provides disclosure of NOI on a same-property basis, which includes the results of properties that were owned and operated for the entirety of the reporting periods being compared, which total 70 and 68 properties for the three and nine months ended September 30, 2023 and 2022, respectively. Information provided on a same-property basis excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area ("GLA") is taken out of service and also excludes properties acquired, sold, or that are in the foreclosure process during the periods being compared. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition, disposition, or foreclosure of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company's properties. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when it is designated as a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan that is expected to have a significant impact on its operating income. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. The Company has also provided disclosure of NOI on a same-property basis adjusted to include redevelopment properties. Same-property NOI may include other adjustments as detailed in the Reconciliation of Net Income to NOI and same-property NOI included in the tables accompanying this press release. We also present this metric excluding the collection of amounts previously deemed uncollectible.
    • EBITDAre and Adjusted EBITDAre: EBITDAre and Adjusted EBITDAre are supplemental, non-GAAP measures utilized by us in various financial ratios. The White Paper on EBITDAre, approved by Nareit's Board of Governors in September 2017, defines EBITDAre as net income (computed in accordance with GAAP), adjusted for interest expense, income tax (benefit) expense, depreciation and amortization, losses and gains on the disposition of depreciated property, impairment write-downs of depreciated property and investments in unconsolidated joint ventures, and adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. EBITDAre and Adjusted EBITDAre are presented to assist investors in the evaluation of REITs, as a measure of the Company's operational performance as they exclude various items that do not relate to or are not indicative of our operating performance and because they approximate key performance measures in our debt covenants. Accordingly, the Company believes that the use of EBITDAre and Adjusted EBITDAre, as opposed to income before income taxes, in various ratios provides meaningful performance measures related to the Company's ability to meet various coverage tests for the stated periods. Adjusted EBITDAre may include other adjustments not indicative of operating results as detailed in the Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre included in the tables accompanying this press release. The Company also presents the ratio of net debt to annualized Adjusted EBITDAre as of September 30, 2023, and net debt to total market capitalization, which it believes is useful to investors as a supplemental measure in evaluating the Company's balance sheet leverage. The presentation of EBITDAre and Adjusted EBITDAre is consistent with EBITDA and Adjusted EBITDA as presented in prior periods.

    The Company believes net income is the most directly comparable GAAP financial measure to the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables accompanying this press release.

    Operating Metrics

    The Company presents certain operating metrics related to our properties, including occupancy, leasing activity and rental rates. Operating metrics are used by the Company and are useful to investors in facilitating an understanding of the operational performance for our properties.

    Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio leased occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 70 and 68 properties for the three and nine months ended September 30, 2023 and 2022, respectively. Occupancy metrics presented for the Company's same-property portfolio exclude properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold, and properties that are in the foreclosure process during the periods being compared.

    Executed new leases, renewals and exercised options are presented on a same-space basis. Same-space leases represent those leases signed on spaces for which there was a previous lease.

    The Company occasionally provides disclosures by tenant categories which include anchors, shops and industrial/self-storage. Anchors and shops are further broken down by local, regional and national tenants. We define anchor tenants as those who have a leased area of >10,000 sf. Local tenants are defined as those with less than five locations. Regional tenants are those with five or more locations in a single region. National tenants are defined as those with five or more locations and operate in two or more regions.

    ADDITIONAL INFORMATION

    For a copy of the Company’s supplemental disclosure package, please access the "Investors" section of our website at www.uedge.com. Our website also includes other financial information, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports.

    The Company uses, and intends to continue to use, the “Investors” page of its website, which can be found at www.uedge.com as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the “Investors” page, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

    ABOUT URBAN EDGE

    Urban Edge Properties is a NYSE listed real estate investment trust focused on owning, managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. Urban Edge owns 76 properties totaling 17.2 million square feet of gross leasable area.

    FORWARD-LOOKING STATEMENTS

    Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic and related COVID-19 variants; (ii) the loss or bankruptcy of major tenants; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company’s share price; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates, rising inflation, and other factors; (ix) the Company’s ability to pay down, refinance, hedge, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

    We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for any forward-looking statements included in this Press Release. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Press Release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Press Release.

    URBAN EDGE PROPERTIES

    CONSOLIDATED BALANCE SHEETS

    (In thousands, except share and per share amounts)

     

     

    September 30,

     

    December 31,

     

    2023

     

    2022

    ASSETS

     

     

     

    Real estate, at cost:

     

     

     

    Land

    $

    541,961

     

     

    $

    535,770

     

    Buildings and improvements

     

    2,517,038

     

     

     

    2,468,385

     

    Construction in progress

     

    280,341

     

     

     

    314,190

     

    Furniture, fixtures and equipment

     

    9,472

     

     

     

    8,539

     

    Total

     

    3,348,812

     

     

     

    3,326,884

     

    Accumulated depreciation and amortization

     

    (842,328

    )

     

     

    (791,485

    )

    Real estate, net

     

    2,506,484

     

     

     

    2,535,399

     

    Operating lease right-of-use assets

     

    57,377

     

     

     

    64,161

     

    Cash and cash equivalents

     

    50,793

     

     

     

    85,518

     

    Restricted cash

     

    27,131

     

     

     

    43,256

     

    Tenant and other receivables

     

    15,823

     

     

     

    17,523

     

    Receivable arising from the straight-lining of rents

     

    67,499

     

     

     

    64,713

     

    Identified intangible assets, net of accumulated amortization of $46,448 and $40,983, respectively

     

    54,823

     

     

     

    62,856

     

    Deferred leasing costs, net of accumulated amortization of $21,928 and $20,107, respectively

     

    27,945

     

     

     

    26,799

     

    Prepaid expenses and other assets

     

    73,969

     

     

     

    77,207

     

    Total assets

    $

    2,881,844

     

     

    $

    2,977,432

     

     

     

     

     

    LIABILITIES AND EQUITY

     

     

     

    Liabilities:

     

     

     

    Mortgages payable, net

    $

    1,643,333

     

     

    $

    1,691,690

     

    Operating lease liabilities

     

    54,197

     

     

     

    59,789

     

    Accounts payable, accrued expenses and other liabilities

     

    90,017

     

     

     

    102,519

     

    Identified intangible liabilities, net of accumulated amortization of $45,929 and $40,816, respectively

     

    87,000

     

     

     

    93,328

     

    Total liabilities

     

    1,874,547

     

     

     

    1,947,326

     

    Commitments and contingencies

     

     

     

    Shareholders’ equity:

     

     

     

    Common shares: $0.01 par value; 500,000,000 shares authorized and 117,639,177 and 117,450,951 shares issued and outstanding, respectively

     

    1,175

     

     

     

    1,173

     

    Additional paid-in capital

     

    1,013,306

     

     

     

    1,011,293

     

    Accumulated other comprehensive income

     

    1,334

     

     

     

    629

     

    Accumulated deficit

     

    (65,295

    )

     

     

    (36,104

    )

    Noncontrolling interests:

     

     

     

    Operating partnership

     

    42,166

     

     

     

    39,209

     

    Consolidated subsidiaries

     

    14,611

     

     

     

    13,906

     

    Total equity

     

    1,007,297

     

     

     

    1,030,106

     

    Total liabilities and equity

    $

    2,881,844

     

     

    $

    2,977,432

     

     

    URBAN EDGE PROPERTIES

    CONSOLIDATED STATEMENTS OF INCOME

    (In thousands, except per share amounts)

     

     

    Three Months Ended

    September 30,

     

    Nine Months Ended

    September 30,

     

    2023

     

    2022

     

    2023

     

    2022

    REVENUE

     

     

     

     

     

     

     

    Rental revenue

    $

    101,732

     

     

    $

    98,175

     

     

    $

    299,859

     

     

    $

    295,045

     

    Other income

     

    102

     

     

     

    115

     

     

     

    481

     

     

     

    1,300

     

    Total revenue

     

    101,834

     

     

     

    98,290

     

     

     

    300,340

     

     

     

    296,345

     

    EXPENSES

     

     

     

     

     

     

     

    Depreciation and amortization

     

    26,922

     

     

     

    24,343

     

     

     

    77,519

     

     

     

    73,561

     

    Real estate taxes

     

    16,182

     

     

     

    16,231

     

     

     

    47,980

     

     

     

    47,662

     

    Property operating

     

    16,618

     

     

     

    17,672

     

     

     

    49,752

     

     

     

    56,473

     

    General and administrative

     

    8,938

     

     

     

    9,852

     

     

     

    27,903

     

     

     

    31,607

     

    Real estate impairment loss

     

     

     

     

     

     

     

    34,055

     

     

     

     

    Lease expense

     

    3,159

     

     

     

    3,109

     

     

     

    9,470

     

     

     

    9,327

     

    Total expenses

     

    71,819

     

     

     

    71,207

     

     

     

    246,679

     

     

     

    218,630

     

    Gain on sale of real estate

     

     

     

     

     

     

     

    356

     

     

     

    353

     

    Interest income

     

    565

     

     

     

    294

     

     

     

    1,640

     

     

     

    713

     

    Interest and debt expense

     

    (19,006

    )

     

     

    (15,266

    )

     

     

    (52,430

    )

     

     

    (43,511

    )

    Gain on extinguishment of debt, net

     

    43,029

     

     

     

     

     

     

    42,540

     

     

     

     

    Income before income taxes

     

    54,603

     

     

     

    12,111

     

     

     

    45,767

     

     

     

    35,270

     

    Income tax expense

     

    (17,063

    )

     

     

    (646

    )

     

     

    (17,810

    )

     

     

    (2,262

    )

    Net income

     

    37,540

     

     

     

    11,465

     

     

     

    27,957

     

     

     

    33,008

     

    Less net (income) loss attributable to noncontrolling interests in:

     

     

     

     

     

     

     

    Operating partnership

     

    (1,555

    )

     

     

    (455

    )

     

     

    (1,211

    )

     

     

    (1,348

    )

    Consolidated subsidiaries

     

    133

     

     

     

    373

     

     

     

    516

     

     

     

    835

     

    Net income attributable to common shareholders

    $

    36,118

     

     

    $

    11,383

     

     

    $

    27,262

     

     

    $

    32,495

     

     

     

     

     

     

     

     

     

    Earnings per common share - Basic:

    $

    0.31

     

     

    $

    0.10

     

     

    $

    0.23

     

     

    $

    0.28

     

    Earnings per common share - Diluted:

    $

    0.31

     

     

    $

    0.10

     

     

    $

    0.23

     

     

    $

    0.28

     

    Weighted average shares outstanding - Basic

     

    117,543

     

     

     

    117,382

     

     

     

    117,492

     

     

     

    117,359

     

    Weighted average shares outstanding - Diluted

     

    122,205

     

     

     

    121,683

     

     

     

    117,627

     

     

     

    121,472

     

     

    Reconciliation of Net Income to FFO and FFO as Adjusted

    The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the three and nine months ended September 30, 2023 and 2022, respectively. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of FFO and FFO as Adjusted.

     

    Three Months Ended

    September 30,

     

    Nine Months Ended

    September 30,

    (in thousands, except per share amounts)

    2023

     

    2022

     

    2023

     

    2022

    Net income

    $

    37,540

     

     

    $

    11,465

     

     

    $

    27,957

     

     

    $

    33,008

     

    Less net (income) loss attributable to noncontrolling interests in:

     

     

     

     

     

     

     

    Consolidated subsidiaries

     

    133

     

     

     

    373

     

     

     

    516

     

     

     

    835

     

    Operating partnership

     

    (1,555

    )

     

     

    (455

    )

     

     

    (1,211

    )

     

     

    (1,348

    )

    Net income attributable to common shareholders

     

    36,118

     

     

     

    11,383

     

     

     

    27,262

     

     

     

    32,495

     

    Adjustments:

     

     

     

     

     

     

     

    Rental property depreciation and amortization

     

    26,569

     

     

     

    24,100

     

     

     

    76,590

     

     

     

    72,855

     

    Limited partnership interests in operating partnership

     

    1,555

     

     

     

    455

     

     

     

    1,211

     

     

     

    1,348

     

    Gain on sale of real estate(2)

     

     

     

     

     

     

     

    (356

    )

     

     

    (353

    )

    Real estate impairment loss(3)

     

     

     

     

     

     

     

    34,055

     

     

     

     

    FFO Applicable to diluted common shareholders

     

    64,242

     

     

     

    35,938

     

     

     

    138,762

     

     

     

    106,345

     

    FFO per diluted common share(1)

     

    0.53

     

     

     

    0.29

     

     

     

    1.13

     

     

     

    0.87

     

    Adjustments to FFO:

     

     

     

     

     

     

     

    Tax impact of Las Catalinas financing(6)

     

    16,302

     

     

     

     

     

     

    16,302

     

     

     

     

    Impact of property in foreclosure(4)

     

    1,148

     

     

     

     

     

     

    1,921

     

     

     

     

    Transaction, severance and litigation expenses

     

    325

     

     

     

    674

     

     

     

    1,724

     

     

     

    1,806

     

    Impact of tenant bankruptcies and write-off/reinstatement of intangibles(5)

     

    (7

    )

     

     

    (102

    )

     

     

    (351

    )

     

     

    (271

    )

    Income tax refund related to prior periods

     

     

     

     

     

     

     

    (684

    )

     

     

     

    Gain on extinguishment of debt, net(7)

     

    (43,029

    )

     

     

     

     

     

    (42,540

    )

     

     

     

    FFO as Adjusted applicable to diluted common shareholders

    $

    38,981

     

     

    $

    36,510

     

     

    $

    115,134

     

     

    $

    107,880

     

    FFO as Adjusted per diluted common share(1)

    $

    0.32

     

     

    $

    0.30

     

     

    $

    0.94

     

     

    $

    0.88

     

     

     

     

     

     

     

     

     

    Weighted Average diluted common shares(1)

     

    122,273

     

     

     

    122,413

     

     

     

    122,322

     

     

     

    122,372

     

    (1)

    Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three and nine months ended September 30, 2023 and 2022, respectively, are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

    (2)

    The gain on sale of real estate for the nine months ended September 30, 2023 relates to the release of escrow funds from a property disposed of in a prior period.

    (3)

    During the nine months ended September 30, 2023, the Company recognized an impairment charge reducing the carrying value of Kingswood Center, an office and retail property located in Brooklyn, NY.

    (4)

    In April 2023, the Company notified the lender of its mortgage secured by Kingswood Center that the cash flows generated by the property are insufficient to cover the debt service and that the Company is unwilling to fund future shortfalls. As such, the Company defaulted on the loan and adjusted for the default interest incurred for the second quarter of 2023. In August 2023, the property was transferred to receivership and the Company's management agreement was terminated. As a result, the Company has no operational responsibility at the property and has no right to the underlying cash flows or obligations to fund operational or capital expenditures. The Company determined it is appropriate to exclude the operating results of Kingswood Center from FFO as Adjusted as we have no rights or obligations related to the property.

    (5)

    Includes the acceleration and write-off of lease intangibles related to tenant bankruptcies, and the write-offs and reinstatements of receivables arising from the straight-lining of rents for tenants moved to and from the cash basis of accounting.

    (6)

    Amount reflects the tax-related impact of the $43 million gain on extinguishment of debt related to the Las Catalinas loan refinancing that occurred in August 2023.

    (7)

    The gain for the nine months ended September 30, 2023 is net of the $0.5 million loss recognized in the second quarter of 2023 for the early payoff of the Plaza at Cherry Hill loan.

     

    Reconciliation of Net Income to NOI and Same-Property NOI

    The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and nine months ended September 30, 2023 and 2022, respectively. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of NOI and same-property NOI.

     

    Three Months Ended

    September 30,

     

    Nine Months Ended

    September 30,

    (in thousands)

    2023

     

    2022

     

    2023

     

    2022

    Net income

    $

    37,540

     

     

    $

    11,465

     

     

    $

    27,957

     

     

    $

    33,008

     

    Depreciation and amortization

     

    26,922

     

     

     

    24,343

     

     

     

    77,519

     

     

     

    73,561

     

    Interest and debt expense

     

    19,006

     

     

     

    15,266

     

     

     

    52,430

     

     

     

    43,511

     

    General and administrative expense

     

    8,938

     

     

     

    9,852

     

     

     

    27,903

     

     

     

    31,607

     

    Gain on extinguishment of debt, net

     

    (43,029

    )

     

     

     

     

     

    (42,540

    )

     

     

     

    Other expense (income)

     

    208

     

     

     

    230

     

     

     

    678

     

     

     

    (300

    )

    Income tax expense

     

    17,063

     

     

     

    646

     

     

     

    17,810

     

     

     

    2,262

     

    Gain on sale of real estate

     

     

     

     

     

     

     

    (356

    )

     

     

    (353

    )

    Real estate impairment loss

     

     

     

     

     

     

     

    34,055

     

     

     

     

    Interest income

     

    (565

    )

     

     

    (294

    )

     

     

    (1,640

    )

     

     

    (713

    )

    Non-cash revenue and expenses

     

    (2,723

    )

     

     

    (1,922

    )

     

     

    (7,773

    )

     

     

    (6,287

    )

    NOI

     

    63,360

     

     

     

    59,586

     

     

     

    186,043

     

     

     

    176,296

     

    Adjustments:

     

     

     

     

     

     

     

    Sunrise Mall net operating loss

     

    458

     

     

     

    1,637

     

     

     

    1,926

     

     

     

    3,338

     

    Tenant bankruptcy settlement income and lease termination income

     

    (987

    )

     

     

    (7

    )

     

     

    (1,244

    )

     

     

    (117

    )

    Non-same property NOI and other(1)

     

    (5,583

    )

     

     

    (4,827

    )

     

     

    (19,999

    )

     

     

    (17,717

    )

    Same-property NOI(2)

    $

    57,248

     

     

    $

    56,389

     

     

    $

    166,726

     

     

    $

    161,800

     

    NOI related to properties being redeveloped

     

    5,497

     

     

     

    4,347

     

     

     

    17,841

     

     

     

    14,852

     

    Same-property NOI including properties in redevelopment(3)

    $

    62,745

     

     

    $

    60,736

     

     

    $

    184,567

     

     

    $

    176,652

     

    (1)

    Non-same property NOI includes NOI related to properties being redeveloped and properties acquired, disposed, or that are in the foreclosure process during the periods being compared.

    (2)

    Excluding the collection of amounts previously deemed uncollectible, the increase would have been 4.6% compared to the third quarter of 2022 and 4.7% compared to the nine months ended September 30, 2022.

    (3)

    Excluding the collection of amounts previously deemed uncollectible, the increase would have been 6.4% compared to the third quarter of 2022 and 6.2% compared to the nine months ended September 30, 2022.

     

    Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

    The following table reflects the reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2023 and 2022, respectively. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of EBITDAre and Adjusted EBITDAre.

     

    Three Months Ended

    September 30,

     

    Nine Months

    Ended September 30,

    (in thousands)

    2023

     

    2022

     

    2023

     

    2022

    Net income

    $

    37,540

     

     

    $

    11,465

     

     

    $

    27,957

     

     

    $

    33,008

     

    Depreciation and amortization

     

    26,922

     

     

     

    24,343

     

     

     

    77,519

     

     

     

    73,561

     

    Interest and debt expense

     

    19,006

     

     

     

    15,266

     

     

     

    52,430

     

     

     

    43,511

     

    Income tax expense

     

    17,063

     

     

     

    646

     

     

     

    17,810

     

     

     

    2,262

     

    Gain on sale of real estate

     

     

     

     

     

     

     

    (356

    )

     

     

    (353

    )

    Real estate impairment loss

     

     

     

     

     

     

     

    34,055

     

     

     

     

    EBITDAre

     

    100,531

     

     

     

    51,720

     

     

     

    209,415

     

     

     

    151,989

     

    Adjustments for Adjusted EBITDAre:

     

     

     

     

     

     

     

    Transaction, severance and litigation expenses

     

    325

     

     

     

    674

     

     

     

    1,724

     

     

     

    1,806

     

    Impact of property in foreclosure(1)

     

    (316

    )

     

     

     

     

     

    (316

    )

     

     

     

    Gain on extinguishment of debt, net

     

    (43,029

    )

     

     

     

     

     

    (42,540

    )

     

     

     

    Impact of tenant bankruptcies and write-off/reinstatement of intangibles

     

    (7

    )

     

     

    (102

    )

     

     

    (351

    )

     

     

    (271

    )

    Adjusted EBITDAre

    $

    57,504

     

     

    $

    52,292

     

     

    $

    167,932

     

     

    $

    153,524

     

    (1)

    Adjustment reflects the operating income for Kingswood Center, excluding $1.5 million of interest and debt expense that is already adjusted for the purposes of calculating EBITDAre. See footnote 4 on page 10 for additional information.

     


    The Urban Edge Properties Stock at the time of publication of the news with a raise of +1,87 % to 14,74USD on NYSE stock exchange (31. Oktober 2023, 01:04 Uhr).


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    Urban Edge Properties Reports Third Quarter 2023 Results Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended September 30, 2023 and updated its outlook for full-year 2023. "Urban Edge had one of its best quarters in Company history, continuing the positive …