Urban Edge Properties (NYSE: UE) (the "Company") today announced
its results for the quarter ended March 31, 2023.
“Urban Edge achieved a strong start to 2023 as we continued to
execute on our growth strategy," said Jeff Olson, Chairman and CEO.
"We are very pleased with the momentum of our leasing activity,
highlighted by our signed but not open pipeline which has grown for
the fourth consecutive quarter, increasing by $10 million to $31
million since the first quarter of 2022, and representing
approximately 13% of current annualized NOI. In addition, we are
thrilled with the successful refinancing of our mortgage loan
secured by Bergen Town Center which has reduced our debt maturities
through 2025 to $235 million, less than 15% of our current
outstanding indebtedness. Our team continues to focus on executing
the many exciting growth opportunities across our portfolio, and we
are on track with our plan to increase our NOI by at least 20% over
the next three years.”
Financial Results(1)(2)
- Generated a net loss attributable to common shareholders of
$19.1 million, or $(0.16) per diluted share, for the first quarter
of 2023 compared to net income of $9.5 million, or $0.08 per
diluted share, for the first quarter of 2022. The net loss was
driven by a non-cash impairment charge of $34.1 million, or $0.28
per diluted share, reducing the carrying value of Kingswood Center,
an office and retail property located in Brooklyn, NY.
- Generated Funds from Operations ("FFO") applicable to diluted
common shareholders of $38.6 million, or $0.32 per share, for the
quarter compared to $34.2 million, or $0.28 per share, for the
first quarter of 2022.
- Generated FFO as Adjusted applicable to diluted common
shareholders of $39.0 million, or $0.32 per share, for the quarter
compared to $34.5 million, or $0.28 per share, for the first
quarter of 2022. Our strong first quarter results were driven by
rent commencements on new leases, higher net recovery income, and
lower general and administrative expenses.
Operating Results(1)(3)
- Increased same-property Net Operating Income ("NOI"), including
properties in redevelopment, by 6.3% compared to the first quarter
of 2022. The increase was primarily due to rent commencements on
new leases and higher net recovery income. Excluding the collection
of amounts previously deemed uncollectible, the increase would have
been 6.2% compared to the first quarter of 2022.
- Increased same-property NOI, excluding properties in
redevelopment, by 5.1% compared to the first quarter of 2022. The
increase was primarily due to rent commencements on new leases and
higher net recovery income. Excluding the collection of amounts
previously deemed uncollectible, the increase would have been 4.8%
compared to the first quarter of 2022.
- Reported same-property portfolio leased occupancy of 95.3%, an
increase of 240 basis points compared to March 31, 2022 and a
decrease of 20 basis points compared to December 31, 2022.
- Reported consolidated portfolio leased occupancy, excluding
Sunrise Mall, of 94.6%, an increase of 420 basis points compared to
March 31, 2022 and a decrease of 20 basis points compared to
December 31, 2022.
- Executed 42 new leases, renewals and options totaling 430,000
sf during the quarter. Same-space leases totaled 412,000 sf and
generated an average rent spread of 7.5% on a cash basis.
Financing Activity
On April 6, 2023, the Company successfully refinanced the
mortgage secured by its property, Bergen Town Center, with a new
7-year fixed rate, $290 million loan. The proceeds from the new
loan were used to pay down the Company's previous mortgage on the
property which had an outstanding balance of $300 million. The
refinancing of this loan reduces the Company's debt maturing
through 2025 to $235 million, representing less than 15% of
outstanding indebtedness.
Balance Sheet and Liquidity(1)(4)
Balance sheet highlights as of March 31, 2023 include:
- Total liquidity of approximately $911 million, comprised of
$111 million of cash on hand and $800 million available under our
revolving credit agreement.
- Mortgages payable of $1.7 billion, with a weighted average term
to maturity of 3.9 years. Approximately 91% of our outstanding debt
is fixed rate. The weighted average term to maturity increased to
5.1 years upon the refinancing of Bergen Town Center.
- Total market capitalization of approximately $3.5 billion,
comprised of 122.6 million fully-diluted common shares valued at
$1.8 billion and $1.7 billion of debt.
- Net debt to total market capitalization of 45%.
Leasing, Development and Redevelopment
The Company recently received site plan approval from the
Paramus Planning Board to develop 456 apartments on the east side
of Bergen Town Center. The project features an impressive
architectural design with numerous amenities. It is located within
a short walk to two major supermarkets; with immediate access to NJ
State highways only nine miles from New York City and offers a
place to live, work, play and shop.
During the quarter, the Company executed 111,000 sf of new
leases, including a 25,400 sf lease with Burlington at Huntington
Commons.
The Company has $217.7 million of active redevelopment projects
under way, with estimated remaining costs to complete of $150.0
million. The active redevelopment projects are expected to generate
an approximate 12% unleveraged yield.
As of March 31, 2023, the Company has signed leases that have
not yet rent commenced that are expected to generate an additional
$31.3 million of future annual gross rent, representing
approximately 13% of current annualized NOI. Approximately $5.5
million of this amount is expected to be recognized in the
remainder of 2023.
Non-Cash Impairment
During the three months ended March 31, 2023, the Company
recognized a non-cash impairment charge of approximately $34
million, or $0.28 per share, related to Kingswood Center, an office
and retail property in Brooklyn, New York, which the Company
acquired in February 2020. Two-thirds of Kingswood Center’s 130,000
sf of gross leasable area consists of office space that has been
significantly impacted by the COVID-19 pandemic, causing declines
in occupancy. The property has $66 million of non-recourse mortgage
debt outstanding that matures in February 2028. The mortgage was
recently transferred to special servicing at the Company's request
considering the 2023 projected NOI will not cover debt service. The
projected negative cash flow of the property is reflected in the
2023 annual guidance outlined in this release as well as the FFO as
Adjusted target of $1.35 per diluted share for 2025 and the NOI
growth targets that were outlined during the Company’s April 18th
Investor Day.
2023 Earnings Guidance
The Company is reiterating its updated 2023 full-year guidance
ranges for FFO and FFO as Adjusted provided in our recent press
release and investor presentation on April 18th, estimating FFO of
$1.13 to $1.17 per diluted share, and FFO as Adjusted of $1.14 to
$1.18 per diluted share. This is an increase of $0.02 per diluted
share at the midpoint compared to the previous guidance provided in
our fourth quarter 2022 results. A reconciliation of the range of
estimated earnings, FFO and FFO as Adjusted, as well as the
assumptions used in our forecasting 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 May 9, 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 13736844.
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 May 9, 2023 at 11:30am ET
through May 23, 2023 at 11:59pm ET by dialing 1-844-512-2921 (Toll
Free) or 1-412-317-6671 (Toll/International) using conference ID
13736844.
(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 March 31, 2023.
(3)
Refer to page 11 for a reconciliation of net income to NOI and
Same-Property NOI for the quarter ended March 31, 2023.
(4)
Net debt as of March 31, 2023 is calculated as total consolidated
debt of $1.7 billion less total cash and cash equivalents,
including restricted cash, of $111 million.
2023 Earnings Guidance
The Company is reiterating its updated 2023 full-year guidance
ranges provided for FFO and FFO as Adjusted in our recent release
on April 18th, 2023, estimating FFO of $1.13 to $1.17 per diluted
share, and FFO as Adjusted of $1.14 to $1.18 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
$0.27 - $0.33
$0.03 - $0.06
Net income attributable to common
shareholders per diluted share
$0.26 - $0.32
$0.03 - $0.06
FFO per diluted share
$1.10 - $1.16
$1.13 - $1.17
FFO as adjusted per diluted share
$1.11 - $1.17
$1.14 - $1.18
The Company's full year FFO outlook is based on the following
assumptions:
- Same-property NOI growth, including properties in
redevelopment, of 0.0% to 2.0%
- Same-property NOI growth, including properties in
redevelopment, adjusted for the collection of amounts previously
deemed uncollectible of 1.5% to 3.5%
- No new acquisitions or dispositions
- Recurring G&A expenses ranging from $34.5 million to $36.5
million
- Interest and debt expense ranging from $71.0 million to $72.5
million
- Excludes items that impact FFO comparability, including
gain/loss 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
$
3,700
$
7,700
$
0.03
$
0.06
Less net (income) loss attributable to
noncontrolling interests in:
Operating partnership
(400
)
(400
)
—
—
Consolidated subsidiaries
600
600
—
—
Net income attributable to common
shareholders
3,900
7,900
0.03
0.06
Adjustments:
Rental property depreciation and
amortization
101,100
101,100
0.82
0.82
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
400
400
—
—
FFO Applicable to diluted common
shareholders
139,100
143,100
1.13
1.17
Adjustments to FFO:
Transaction, severance and litigation
expenses
1,100
1,100
0.01
0.01
FFO as Adjusted applicable to diluted
common shareholders
$
140,200
$
144,200
$
1.14
$
1.18
(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 properties for the three months
ended March 31, 2023 and 2022. 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 or sold during the
periods being compared. As such, same-property NOI assists in
eliminating disparities in net income due to the development,
redevelopment, acquisition or disposition 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 (net of cash) to annualized
Adjusted EBITDAre as of March 31, 2023, and net debt (net of cash)
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 properties for the three months ended March 31, 2023 and 2022.
Occupancy metrics presented for the Company's same-property
portfolio excludes 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
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 ongoing 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, including
the discontinuation of USD LIBOR, which will be replaced by SOFR
after June 30, 2023; (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)
March 31,
December 31,
2023
2022
ASSETS
Real estate, at cost:
Land
$
531,594
$
535,770
Buildings and improvements
2,469,064
2,468,385
Construction in progress
292,915
314,190
Furniture, fixtures and equipment
8,804
8,539
Total
3,302,377
3,326,884
Accumulated depreciation and
amortization
(801,391
)
(791,485
)
Real estate, net
2,500,986
2,535,399
Operating lease right-of-use assets
62,386
64,161
Cash and cash equivalents
62,142
85,518
Restricted cash
49,044
43,256
Tenant and other receivables
15,800
17,523
Receivable arising from the
straight-lining of rents
65,543
64,713
Identified intangible assets, net of
accumulated amortization of $42,613 and $40,983, respectively
60,181
62,856
Deferred leasing costs, net of accumulated
amortization of $20,529 and $20,107, respectively
27,649
26,799
Prepaid expenses and other assets
79,913
77,207
Total assets
$
2,923,644
$
2,977,432
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net
$
1,686,897
$
1,691,690
Operating lease liabilities
58,103
59,789
Accounts payable, accrued expenses and
other liabilities
94,766
102,519
Identified intangible liabilities, net of
accumulated amortization of $42,719 and $40,816, respectively
91,389
93,328
Total liabilities
1,931,155
1,947,326
Commitments and contingencies
Shareholders’ equity:
Common shares: $0.01 par value;
500,000,000 shares authorized and 117,571,250 and 117,450,951
shares issued and outstanding, respectively
1,174
1,173
Additional paid-in capital
1,010,522
1,011,293
Accumulated other comprehensive income
341
629
Accumulated deficit
(74,034
)
(36,104
)
Noncontrolling interests:
Operating partnership
40,262
39,209
Consolidated subsidiaries
14,224
13,906
Total equity
992,489
1,030,106
Total liabilities and equity
$
2,923,644
$
2,977,432
URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share
amounts)
Three Months Ended March
31,
2023
2022
REVENUE
Rental revenue
$
99,354
$
99,416
Other income
87
785
Total revenue
99,441
100,201
EXPENSES
Depreciation and amortization
25,084
24,527
Real estate taxes
15,677
15,975
Property operating
17,426
21,205
General and administrative
9,058
11,121
Real estate impairment loss
34,055
—
Lease expense
3,155
3,135
Total expenses
104,455
75,963
Gain on sale of real estate
356
—
Interest income
511
205
Interest and debt expense
(15,293
)
(14,004
)
Income (loss) before income taxes
(19,440
)
10,439
Income tax expense
(706
)
(905
)
Net income (loss)
(20,146
)
9,534
Less net (income) loss attributable to
noncontrolling interests in:
Operating partnership
788
(387
)
Consolidated subsidiaries
240
339
Net income (loss) attributable to common
shareholders
$
(19,118
)
$
9,486
Earnings (loss) per common share -
Basic:
$
(0.16
)
$
0.08
Earnings (loss) per common share -
Diluted:
$
(0.16
)
$
0.08
Weighted average shares outstanding -
Basic
117,450
117,330
Weighted average shares outstanding -
Diluted
117,450
117,393
Reconciliation of Net Income (Loss) to FFO and FFO as
Adjusted
The following table reflects the reconciliation of net income
(loss) to FFO and FFO as Adjusted for the three months ended March
31, 2023 and 2022. Net income (loss) 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 March
31,
(in thousands, except per share
amounts)
2023
2022
Net income (loss)
$
(20,146
)
$
9,534
Less net (income) loss attributable to
noncontrolling interests in:
Operating partnership
788
(387
)
Consolidated subsidiaries
240
339
Net income (loss) attributable to common
shareholders
(19,118
)
9,486
Adjustments:
Rental property depreciation and
amortization
24,809
24,298
Limited partnership interests in operating
partnership
(788
)
387
Gain on sale of real estate(2)
(356
)
—
Real estate impairment loss(3)
34,055
—
FFO Applicable to diluted common
shareholders
38,602
34,171
FFO per diluted common share(1)
0.32
0.28
Adjustments to FFO:
Transaction, severance and litigation
expenses
407
497
Reinstatement of receivables arising from
the straight-lining of rents, net
(36
)
(87
)
Tenant bankruptcy settlement income
—
(36
)
FFO as Adjusted applicable to diluted
common shareholders
$
38,973
$
34,545
FFO as Adjusted per diluted common
share(1)
$
0.32
$
0.28
Weighted Average diluted common
shares(1)
122,447
122,187
(1)
Weighted average diluted shares used to
calculate FFO per share and FFO as Adjusted per share for the three
months ended March 31, 2023 and 2022 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
three months ended March 31, 2023 relates to the release of escrow
funds from a property disposed of in a prior period.
(3)
During the three months ended March 31, 2023, the Company
recognized an impairment charge reducing the carrying value of
Kingswood Center, an office and retail property located in
Brooklyn, NY.
Reconciliation of Net Income (Loss) to NOI and Same-Property
NOI
The following table reflects the reconciliation of net income
(loss) to NOI, same-property NOI and same-property NOI including
properties in redevelopment for the three months ended March 31,
2023 and 2022. Net income (loss) 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 March
31,
(in thousands)
2023
2022
Net income (loss)
$
(20,146
)
$
9,534
Other expense (income)
226
(439
)
Depreciation and amortization
25,084
24,527
General and administrative expense
9,058
11,121
Gain on sale of real estate
(356
)
—
Interest income
(511
)
(205
)
Interest and debt expense
15,293
14,004
Income tax expense
706
905
Real estate impairment loss
34,055
—
Non-cash revenue and expenses
(2,263
)
(2,385
)
NOI
61,146
57,062
Adjustments:
Non-same property NOI and other(1)
(5,466
)
(4,394
)
Sunrise Mall net operating loss
1,014
1,354
Tenant bankruptcy settlement income and
lease termination income
(8
)
(110
)
Same-property NOI(2)
$
56,686
$
53,912
NOI related to properties being
redeveloped
5,232
4,339
Same-property NOI including properties in
redevelopment(3)
$
61,918
$
58,251
(1)
Non-same property NOI includes NOI related
to properties being redeveloped and properties acquired or disposed
in the period.
(2)
Excluding the collection of amounts
previously deemed uncollectible, the increase would have been 4.8%
compared to the first quarter of 2022.
(3)
Excluding the collection of amounts
previously deemed uncollectible, the increase would have been 6.2%
compared to the first quarter of 2022.
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted
EBITDAre
The following table reflects the reconciliation of net income
(loss) to EBITDAre and Adjusted EBITDAre for the three months ended
March 31, 2023 and 2022. Net income (loss) 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 March
31,
(in thousands)
2023
2022
Net income (loss)
$
(20,146
)
$
9,534
Depreciation and amortization
25,084
24,527
Interest and debt expense
15,293
14,004
Income tax expense
706
905
Gain on sale of real estate
(356
)
—
Real estate impairment loss
34,055
—
EBITDAre
54,636
48,970
Adjustments for Adjusted EBITDAre:
Transaction, severance and litigation
expenses
407
497
Reinstatement of receivables arising from
the straight-lining of rents, net
(36
)
(87
)
Tenant bankruptcy settlement income
—
(36
)
Adjusted EBITDAre
$
55,007
$
49,344
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005423/en/
For additional information: Mark Langer, EVP and Chief Financial
Officer 212-956-2556
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