Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the first quarter ended January 31, 2021 and provided information
regarding financial and operational activities considering the
ongoing COVID-19 pandemic.
The following are statistics about our portfolio that are useful
in assessing the impact of COVID-19 on our business:
COVID-19 UPDATE (as of
January 31, 2021)
- Of our 81 properties, 67 are shopping centers, 3 are
free-standing, net-leased retail bank branches and 4 are restaurant
properties. The remaining properties are 6 small suburban office
buildings in Greenwich, CT and Bronxville, NY and a childcare
center in Chester, NJ.
- All 74 of our shopping centers, free-standing, net-leased
retail bank branches and restaurant properties are open and
operating, with 99.1% of our total tenants open and operating based
on Annualized Base Rent (“ABR”).
- All of our shopping centers include necessity-based tenants,
with approximately 70.7% of our tenants, based on ABR, either
designated “essential businesses” during the early stay-at-home
period of the pandemic in the tri-state area or otherwise permitted
to operate through curbside pick-up and other modified operating
procedures in accordance with state guidelines. These businesses
are 98.9% open based on ABR.
- Of the 870 tenants in our consolidated portfolio, we have
received rent relief requests from 401 tenants, with most requests
received during the early days of the pandemic when stay-at-home
orders were in place and many businesses were required to close.
Subsequently, 116 of such 401 tenants withdrew their requests for
rent relief or paid rent in full. We continue to receive a small
number of new requests, and, in some cases, follow-on requests from
tenants to which we had previously provided temporary rent relief.
We have evaluated each request on a case-by-case basis to determine
the best course of action, recognizing that in many cases some type
of concession may be appropriate and beneficial to our long-term
interests. Each negotiation has been specific to the individual
tenant. Some concessions have been granted in the form of deferred
rent and some have been in the form of rent abatements, in each
case for some portion of rents due during calendar 2020 and/or
2021-2023. From the beginning of the pandemic through January 31,
2021, we have completed 266 lease modifications, consisting of base
rent deferrals totaling $3.8 million, or 3.9% of our ABR, and rent
abatements totaling $3.4 million, or 3.5% of our ABR. Included in
these amounts were the 32 rent deferrals and abatements completed
in the three months ended January 31, 2021, which deferred $399,000
of base rents, or 0.4% of our ABR, and abated $2.0 million of base
rents, or 2.0% of our ABR. Included in the $2.0 million
aforementioned amount is $1.0 million of base rents for periods
subsequent to January 31, 2021.
RENTAL COLLECTIONS
UPDATE (as of February 28, 2021)
- 88.4% of the total base rent, common area maintenance charges
(“CAM”) and real estate taxes payable for the period of April
through October 2020 has been paid. This percentage is based on
collections of pre-pandemic contractual lease amounts billed,
exclusive of the application of any security deposits.
- 90.3% of the total base rent, CAM and real estate taxes payable
for the first quarter of 2021 has been paid. This percentage is
based on collections of pre-pandemic contractual lease amounts
billed, exclusive of the application of any security deposits.
- 81.7% of the total base rent, CAM and real estate taxes payable
for February 2021 has been paid to date. This percentage is based
on collections of pre-pandemic contractual lease amounts billed,
exclusive of the application of any security deposits.
- We increased our provision for uncollectable tenant accounts
receivable by $654,000 for the three months ended January 31, 2021
($0.02 per Class A Common share), primarily as a result of
uncertainty regarding the ongoing COVID-19 pandemic. This figure
represents a financial reporting charge to earnings and Funds From
Operations (“FFO”) (1), but the company intends to collect all
unpaid rents from its tenants to the extent feasible.
- In accordance with generally accepted accounting principles
(“GAAP”), if the company determines that the collection of a
tenant’s future lease payments is not probable, the company must
change the revenue recognition for that tenant to cash-basis from
accrual basis. In light of the financial pressure that COVID-19 has
been placing on many of our tenants, we have re-evaluated all of
the tenants in our consolidated portfolio, and, as a result of that
assessment, we have switched 80 tenants (16 converted in the three
months ended January 31, 2021), or 9.2% of the approximately 870
tenants in our consolidated portfolio, to cash-basis accounting.
This assessment required the company to write-off an additional
$999,000 in billed but uncollected rents related to these 80
tenants, for the three months ended January 31, 2021, and an
additional $441,000 in straight-line rent receivables related to
the 16 tenants converted to cash-basis accounting for the three
months ended January 31, 2021 (combined representing $0.04 per
Class A Common share). This figure represents a financial reporting
charge to earnings and FFO, but the company intends to collect all
unpaid rents from its tenants to the extent feasible.
- We have $37.1 million of cash and cash equivalents currently on
our balance sheet.
- We have $64 million available on our unsecured revolving credit
facility.
- We have no material mortgage debt maturing until January 31,
2022.
- We continue to temporarily redirect our acquisitions
department’s efforts to include tenant lease modification
negotiations.
- We have taken proactive measures to manage costs, including
reducing, where feasible, our common area maintenance spending. We
have one ongoing construction project with approximately $2.0
million remaining to complete the project. Otherwise, only minimal
construction is underway.
- The health and safety of the company’s employees and their
families is a top priority. In mid-March 2020, we seamlessly
transitioned 100% of our workforce to working on a remote basis. In
accordance with Connecticut State regulations, our office re-opened
at less than 50% capacity on May 20, 2020, with employees
encouraged to continue working from home when feasible, consistent
with business needs.
FIRST QUARTER
2021
- $4.5 million net income attributable to common stockholders
($0.12 income per diluted Class A Common share).
- $12.4 million of FFO ($0.33 per diluted Class A Common
share).
- FFO was reduced by $2.1 million ($0.06 per Class A share) as a
result of the above-noted increases in the COVID-19 related tenant
accounts receivable reserves and write-offs in the quarter.
- 89.8% of our consolidated portfolio was leased at January 31,
2021.
- 13.2% average decrease in base rental rates on new leases over
the last four quarters.
- 2.3% average decrease in base rental rates on lease renewals
over the last four quarters.
- On January 15, 2021, we paid a $0.14 per share quarterly cash
dividend on our Class A Common Stock and a $0.125 per share
quarterly cash dividend on our Common Stock.
(1) A reconciliation of GAAP net income to FFO is provided at
the end of this press release.
Dividend
Declarations
- In December 2020, the company’s Board of Directors approved
dividends of $0.14 per Class A Common share and $0.125 per Common
share that were paid on January 15, 2021. As a result of COVID-19
and the continuing economic uncertainty resulting from the COVID-19
pandemic, this dividend was lower than pre-pandemic dividend levels
and unchanged compared to last quarter’s dividend. This reduced
dividend retained $5.5 million of cash in the first quarter of 2021
when compared with pre-pandemic common stock dividend levels. At
our next regularly scheduled Board of Directors meeting on March
17, 2021, the company’s Board of Directors will continue to assess
the company’s financial performance and economic outlook and make a
determination regarding dividends for the second quarter. At a
minimum, the company intends to pay Class A Common and Common stock
dividends in the remainder of fiscal 2021 that are at least equal
to the amount required to maintain compliance with its REIT taxable
income distribution requirements.
- In addition, in December 2020, the company’s Board of Directors
declared the regular contractual quarterly dividend with respect to
each of the company’s Series H and Series K cumulative redeemable
preferred stock that was paid on January 29, 2021 to shareholders
of record on January 15, 2021.
“Our thoughts and prayers continue to go out to all of those
impacted by the COVID-19 pandemic, along with great appreciation
and respect for those operating every day on the front lines”, said
Willing L. Biddle, President and Chief Executive Officer. Mr.
Biddle continued…. “This quarter was relatively quiet as the
acquisitions market is essentially frozen, and we continued to
focus on assisting our tenants with the difficulties they are
experiencing with decreased sales due to operating restrictions and
public uneasiness regarding the virus. All our shopping centers are
open, functioning and generally bustling with customers who are
acting in a socially-responsible manner by wearing masks and
socially-distancing. Thankfully, due to our long-term strategy, 84%
of our properties, measured by square footage, are anchored by
grocery stores, wholesale clubs or pharmacies, and these businesses
have remained open throughout the pandemic. We find encouraging an
apparent increase in public confidence, evidenced by consumers
returning to their usual activities, spurred in our area by falling
virus infection rates and the increasing number of vaccinations.
Our nation is fortunate to have superior biotech companies, which,
in partnership with the government, so quickly developed multiple
effective vaccines. Like nearly all our retail REIT peers, our
earnings have been negatively impacted as a result of
pandemic-induced reductions in tenant collections, but this
pandemic will end. In fact, rent collections were relatively solid
in the first quarter of fiscal 2021, averaging 90.3% versus 89.8%
in the fourth quarter of fiscal 2020. Our anchor grocery stores,
drug stores, and wholesale clubs continue to experience strong
sales, but weakness continues in those categories of tenants most
impacted by restrictions, namely, fitness, dry cleaners, nail and
hair salons, certain restaurants and daycare. While there has been
some government assistance for these categories via the Paycheck
Protection Program and other programs, the assistance has been
insufficient in many cases, and it has been largely left to
landlords and the owners of businesses in these categories to
finance the losses. Nevertheless, we are seeing increasing green
shoots of leasing activity in our portfolio. We renewed 171,000
square feet of space and signed 18,000 square feet of new leases in
the first quarter of fiscal 2021. Also noteworthy is that the
ground lease for the former Toys “R” Us/ Babies “R” Us space at one
of our Danbury, CT shopping centers has been sold to Ocean State
Job Lot, which plans to open a 45,000 sf store this summer. In
addition, a new Lidl supermarket is under construction at our
Pompton Lakes NJ property, with a projected fall 2021 opening. We
also completed the development of a 130,000 square foot
self-storage facility adjacent to our Stratford, CT shopping
center, and our manager, Extra Space Storage, is encouraged by the
early leasing activity. In summary, we are very much looking
forward to this coming summer, when we expect to see an increase in
business for our tenants and similarly increased leasing activity.
While we are unsure when we will have the ability to increase
rents, we do see increasing demand for space. Finally, while the
acquisitions market is currently near-frozen, we think the effects
of the last year will cause some properties in our area to trade
during 2021, and the few recent sales of grocery-anchored centers
in other parts of the country indicate that capitalization rates on
sales of quality properties in good locations remain strong.”
Net income applicable to Class A Common and Common stockholders
for the first quarter of fiscal 2021 was $4,479,000 or $0.12 per
diluted Class A Common share and $0.11 per diluted Common share,
compared to net income of $5,071,000 or $0.13 per diluted Class A
Common share and $0.12 per diluted Common share in last year’s
first quarter.
FFO for the first quarter of fiscal 2021 was $12,375,000 or
$0.33 per diluted Class A Common share and $0.29 per diluted Common
share, compared with $12,897,000 or $0.34 per diluted Class A
Common share and $0.30 per diluted Common share in last year’s
first quarter.
Both net income applicable to Class A Common and Common
stockholders and FFO for the three months ended January 31, 2021
were reduced by $2.1 million (approximately $0.06 per Class A
Common share) primarily due to COVID-19 related collectability
adjustments to accounts receivable and straight-line rent
receivable.
At January 31, 2021, the company’s consolidated properties were
89.8% leased (versus 90.4% at the end of fiscal 2020) and 88.0%
occupied (versus 88.5% at the end of fiscal 2020). The company
currently has 461,400 square feet of vacancy in its consolidated
portfolio, 79,000 square feet of which is in the lease negotiation
stage. In addition, the company is negotiating letters of intent
with potential tenants on another 62,000 square feet of vacant
space. Also, as previously discussed, at January 31, 2021, the
leased percentage treats as leased, and the January 31, 2021
occupancy percentage treats as unoccupied, 65,700 square feet of
retail space (1.5% of our consolidated square footage) formerly
ground leased by Toys “R” Us and Babies “R” Us for $0 at the
company’s Danbury Square shopping center in Danbury, CT. The new
owner of this ground lease, which acquired the lease out of the
Toys “R” Us bankruptcy process, has sold the lease to a national
retailer, Ocean State Job Lot, who have not taken occupancy of the
space as of today. This vacancy has no cash flow impact on the
company.
Both the percentage of property leased, and the percentage of
property occupied referenced in the preceding paragraph exclude the
company’s unconsolidated joint ventures. At January 31, 2021, the
company had equity interests in six unconsolidated joint ventures
(719,000 square feet), which were 91.1% leased, unchanged from
October 31, 2020.
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
81 properties containing approximately 5.2 million square feet of
space. Listed on the New York Stock Exchange since 1970, it
provides investors with a means of participating in ownership of
income-producing properties. It has paid 204 consecutive quarters
of uninterrupted dividends to its shareholders since its
inception.
Certain statements contained herein may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, risks associated with the timing of and costs associated
with property improvements, financing commitments and general
competitive factors.
(Table Follows)
Urstadt Biddle Properties Inc.
(NYSE: UBA and UBP)
Three Months Ended January 31,
2021 and 2020 Results (Unaudited)
(in thousands, except per share
data)
Three Months Ended January
31,
2021
2020
Revenues
Lease income
$32,483
$32,945
Lease termination
705
209
Other
1,089
1,194
Total Revenues
34,277
34,348
Expenses
Property operating
6,314
5,929
Property taxes
5,861
5,810
Depreciation and amortization
7,518
7,135
General and administrative
2,644
2,777
Directors' fees and expenses
109
105
Total Operating Expenses
22,446
21,756
Operating Income
11,831
12,592
Non-Operating Income (Expense):
Interest expense
(3,392)
(3,339)
Equity in net income from unconsolidated
joint ventures
350
513
Gain (loss) on sale of property
(28)
(339)
Interest, dividends and other investment
income
43
94
Net Income
8,804
9,521
Noncontrolling interests:
Net income attributable to noncontrolling
interests
(912)
(1,038)
Net income attributable to Urstadt Biddle
Properties Inc.
7,892
8,483
Preferred stock dividends
(3,413)
(3,412)
Net Income Applicable to Common and
Class A Common Stockholders
$4,479
$5,071
Basic Earnings Per Share:
Per Common Share:
$ 0.11
$ 0.12
Per Class A Common Share:
$ 0.12
$ 0.14
Diluted Earnings Per Share:
Per Common Share:
$ 0.11
$ 0.12
Per Class A Common Share:
$ 0.12
$ 0.13
Weighted Average Number of Shares
Outstanding – (Diluted):
Class A Common and Class A Common
Equivalent
29,590
29,648
Common and Common Equivalent
9,393
9,447
Results of Operations
The following information summarizes our results of operations
for the three months ended January 31, 2021 and 2020 (amounts in
thousands):
Three Months Ended
Change Attributable to
January 31,
Increase
Property
Properties Held In
Revenues
2021
2020
(Decrease)
% Change
Acquisitions/Sales
Both Periods (Note 1)
Base rents
$24,159
$25,292
$(1,133)
(4.5) %
$66
$(1,199)
Recoveries from tenants
9,978
7,995
1,983
24.8%
-
1,983
Uncollectable amounts in lease income
(655)
(342)
(313)
91.5%
-
(313)
ASC Topic 842 cash basis lease income
reversal
(999)
-
(999)
100.0%
-
(999)
Lease termination
705
209
496
237.3%
-
496
Other income
1,089
1,194
(105)
(8.8)%
(24)
(81)
Operating Expenses
Property operating
6,314
5,929
385
6.5%
(7)
392
Property taxes
5,861
5,810
51
0.9%
-
51
Depreciation and amortization
7,518
7,135
383
5.4%
76
307
General and administrative
2,644
2,777
(133)
(4.8)%
n/a
n/a
Non-Operating Income/Expense
Interest expense
3,392
3,339
53
1.6%
0
53
Interest, dividends, and other investment
income
43
94
(51)
(54.3)%
n/a
n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2021 and 2020 and for
interest expense the amount also includes parent company interest
expense. All other properties are included in the property
acquisition/sales column. There are no properties excluded from the
analysis.
Base rents decreased by 4.5% to $24.2 million for the three
month period ended January 31, 2021 as compared with $25.3 million
in the comparable period of 2020. The change in base rent and the
changes in other income statement line items analyzed in the table
above were attributable to:
Property Acquisitions and Properties
Sold:
In the first three months of fiscal 2020, we sold two properties
totaling 18,100 square feet. These properties accounted for all of
the revenue and expense changes attributable to property
acquisitions and sales in the three months ended January 31, 2021
when compared with fiscal 2020.
Properties Held in Both
Periods:
Revenues
Base Rent
The net decrease in base rents for the three month period ended
January 31, 2021, when compared to the corresponding prior period,
was predominantly caused by a reduction of $441,000 in the first
three months of fiscal 2021 for a reversal of straight-line rents
for tenants whose revenue recognition was switched to cash-basis
accounting in accordance with ASC Topic 842. There was no such
reversal in the first three months of fiscal 2020. In addition, the
reduction of base rents was caused by a decrease in occupancy rates
in the first quarter of fiscal 2021 when compared with the
corresponding prior period, predominantly related to the vacancies
at nine properties.
In the first three months of fiscal 2021, we leased or renewed
approximately 189,000 square feet (or approximately 4.2% of total
GLA). At January 31, 2021, the Company’s consolidated properties
were 89.8% leased (90.4% leased at October 31, 2020).
Tenant Recoveries
In the three month period ended January 31, 2021, recoveries
from tenants (which represent reimbursements from tenants for
operating expenses and property taxes) increased by a net $2.0
million when compared with the corresponding prior period.
The increase in tenant recoveries for the three month period
ended January 31, 2021 when compared to the corresponding prior
period was the result of having higher common area maintenance
expenses in the three month period of fiscal 2021 when compared
with the three month period of fiscal 2020 related to roof repairs,
canopy repairs, and parking lot repairs. In addition, we completed
the 2020 annual reconciliations for both common area maintenance
and real estate taxes in the first quarter of fiscal 2021 and those
reconciliations resulted in us billing our tenants more than we had
anticipated and accrued for in the prior period, which increased
tenant reimbursement income in the current quarter.
Uncollectable Amounts in Lease
Income
In the three month period ended January 31, 2021, uncollectable
amounts in lease income increased by $313,000. This increase was
predominantly the result of our assessment of the collectability of
existing non-credit small shop tenants' receivables given the
on-going COVID-19 pandemic. A number of non-credit small shop
tenants' businesses were deemed non-essential by the states where
they operate and were forced to close for a portion of fiscal 2020.
Our assessment was based on the premise that as we emerge from the
COVID-19 pandemic, our non-credit small shop tenants will need to
use most of their resources to re-establish their business footing
and any existing accounts receivable attributable to these tenants
would most likely be uncollectable.
ASC Topic 842 Cash Basis Lease Income
Reversals
The Company adopted ASC Topic 842 "Leases" at the beginning of
fiscal 2020. ASC Topic 842 requires amongst other things, that if
the collectability of a specific tenant’s future lease payments as
contracted are not probable of collection, revenue recognition for
that tenant must be converted to cash-basis accounting and be
limited to the lesser of the amount billed or collected from that
tenant, and in addition, any straight-line rental receivables would
need to be reversed in the period that the collectability
assessment changed to not probable. As a result of continuing to
analyze our entire tenant base, we have determined that as a result
of the COVID-19 pandemic, 80 tenants' future lease payments were no
longer probable of collection (9.2% of our approximate 870
tenants), this included 16 tenants who were converted to cash-basis
accounting in this first quarter of fiscal 2021. As a result of
this assessment in three months ended January 31, 2021, we reversed
$999,000 of lease income, consisting of billed lease income for all
80 tenants, and prior billed but uncollected accounts receivable
related to the 16 tenants converted to cash-basis accounting the
first quarter of fiscal 2021, which represented 1.0% of our ABR.
This reduction is a direct reduction of lease income in the
consolidated statement of income for the three months ended January
31, 2021.
Expenses
Property Operating
In the three month period ended January 31, 2021, property
operating expenses increased by $392,000 as a result of having
higher common area maintenance expenses in the three month period
of fiscal 2021 when compared with the three month period of fiscal
2020 related to roof repairs, canopy repairs, and parking lot
repairs.
Property Taxes
In the three month period ended January 31, 2021, property tax
expense was relatively unchanged when compared with the
corresponding prior period.
Interest
In the three month period ended January 31, 2021, interest
expense was relatively unchanged when compared with the
corresponding prior period.
Depreciation and Amortization
In the three month period ended January 31, 2021, depreciation
and amortization increased by $307,000 when compared with the prior
period, primarily as a result of a write-off of tenant improvements
related to a tenant that vacated six locations in our portfolio in
fiscal 2021 and increased depreciation for tenant improvements for
two large grocery store re-tenanting projects at our Eastchester,
NY and Wayne, NJ properties after the first quarter of fiscal
2020.
General and Administrative
Expenses
In the three month period ended January 31, 2021, general and
administrative expenses decreased by $133,000 when compared with
the corresponding prior period, primarily as a result of a decrease
in restricted stock compensation amortization expense caused by a
lower grant date stock price in January 2021 and a decrease in
costs for business travel as many industry conventions were
cancelled due to the COVID-19 pandemic.
Non-GAAP Financial Measure
Funds from Operations (“FFO”)
We consider FFO to be an additional measure of our operating
performance. We report FFO in addition to net income applicable to
common stockholders and net cash provided by operating activities.
Management has adopted the definition suggested by The National
Association of Real Estate Investment Trusts (“NAREIT”) and defines
FFO to mean net income (computed in accordance with GAAP) excluding
gains or losses from sales of property, plus real estate-related
depreciation and amortization and after adjustments for
unconsolidated joint ventures.
Management considers FFO to be a meaningful, additional measure
of operating performance because it primarily excludes the
assumption that the value of the company’s real estate assets
diminishes predictably over time and industry analysts have
accepted it as a performance measure. FFO is presented to assist
investors in analyzing the performance of the company. It is
helpful as it excludes various items included in net income that
are not indicative of our operating performance, such as gains (or
losses) from sales of property and depreciation and amortization.
However, FFO:
- does not represent cash flows from operating activities in
accordance with GAAP (which, unlike FFO, generally reflects all
cash effects of transactions and other events in the determination
of net income); and
- should not be considered an alternative to net income as an
indication of our performance.
FFO as defined by us may not be comparable to similarly titled
items reported by other real estate investment trusts due to
possible differences in the application of the NAREIT definition
used by such REITs. The table below provides a reconciliation of
net income applicable to Common and Class A Common stockholders in
accordance with GAAP to FFO for the three month period ended
January 31, 2021 and 2020. (Amounts in thousands)
(Table Follows)
Urstadt Biddle Properties Inc.
(NYSE: UBA and UBP)
Three Months Ended January 31,
2021 and 2020
(in thousands, except per share
data)
Reconciliation of Net Income Available to
Common and Class A Common Stockholders To Funds From
Operations:
Three Months Ended
January 31,
2021
2020
Net Income Applicable to Common and Class
A Common Stockholders
$4,479
$5,071
Real property depreciation
5,702
5,671
Amortization of tenant improvements and
allowances
1,315
1,036
Amortization of deferred leasing costs
476
407
Depreciation and amortization on
unconsolidated joint ventures
375
373
(Gain)/loss on sale of property
28
339
Funds from Operations Applicable to Common
and Class A Common Stockholders
$12,375
$12,897
Weighted Average Number of Shares
Outstanding (Diluted):
Class A Common and Class A Common
Equivalent
29,590
29,648
Common and Common Equivalent
9,393
9,447
FFO amounted to $12.4 million in the three months ended January
31, 2021 compared to $12.9 million in the comparable period of
fiscal 2020. The net decrease in FFO is attributable, among other
things to:
Decreases:
- A decrease in lease income related to additional vacancies in
the portfolio in the first three months of 2021 predominantly at 9
properties.
- A decrease of $164,000 in percentage rent collected in the
first three months of fiscal 2021 when compared with the
corresponding prior period.
- An increase in uncollectable amounts in lease income of
$313,000. This increase was the result of an increase in our
assessment of the collectability of existing non-credit small shop
tenants' receivables given the on-going COVID-19pandemic. A number
of non-credit small shop tenants' businesses were deemed
non-essential by the states where they operate and were forced to
close for a portion of our third quarter until states loosened
their restrictions and allowed almost all of our tenants to
re-open, although some with operational restrictions. Our
assessment was based on the premise that as we emerge from the
COVID-19 pandemic, our non-credit small shop tenants will need to
use most of their resources to re-establish their business footing,
and any existing accounts receivable attributable to those tenants
would most likely be uncollectable.
- An increase in the write-off of lease income in the first
quarter for tenants in our portfolio whose future lease payments
were deemed to be not probable of collection, requiring us under
GAAP to convert revenue recognition for those tenants to cash-basis
accounting. This caused a write-off of lease income in the three
months ended January 31, 2021 of $999,000, which consisted of the
reversal of billed lease income for all 80 tenants converted to
cash-basis accounting and the write-off of accounts receivable
related to the 16 tenants converted to cash-basis accounting in the
first quarter of fiscal 2021. In addition, we reversed accrued
straight-line rents receivable for these aforementioned 16 tenants
of $441,000. There were no such reversals of lease income in the
three months ended January 31, 2020 .
Increases:
- An increase in variable lease income (cost recovery income)
related to an under-accrual adjustment in recoveries from tenants
for real estate taxes and common area maintenance in the first
quarter of fiscal 2021, which resulted in a positive variance in
the first quarter of fiscal 2021 when compared to the same period
of fiscal 2020 .
- A $495,000 increase in lease termination income in the first
three months of fiscal 2021 when compared with the corresponding
prior period as a result of one tenant who occupied multiple spaces
in our portfolio ceasing operations and buying out the remaining
terms of their leases.
- A net decrease in general and administrative expenses of
$133,000, predominantly related to a decrease in compensation and
benefits expense for the reduced amortization expense of restricted
stock as a result of a lower common stock price on the January 2021
grant date.
Non-GAAP Financial Measure
Same Property Net Operating Income
We present Same Property Net Operating Income ("Same Property
NOI"), which is a non-GAAP financial measure. Same Property NOI
excludes from Net Operating Income (“NOI”) properties that have not
been owned for the full periods presented. The most directly
comparable GAAP financial measure to NOI is operating income. To
calculate NOI, operating income is adjusted to add back
depreciation and amortization, general and administrative expense,
interest expense, amortization of above and below-market lease
intangibles and to exclude straight-line rent adjustments,
interest, dividends and other investment income, equity in net
income of unconsolidated joint ventures, and gain/loss on sale of
operating properties.
We use Same Property NOI internally as a performance measure and
believe Same Property NOI provides useful information to investors
regarding our financial condition and results of operations because
it reflects only those income and expense items that are incurred
at the property level. Our management also uses Same Property NOI
to evaluate property level performance and to make decisions about
resource allocations. Further, we believe Same Property NOI is
useful to investors as a performance measure because, when compared
across periods, Same Property NOI reflects the impact on operations
from trends in occupancy rates, rental rates and operating costs on
an unleveraged basis, providing perspective not immediately
apparent from income from continuing operations. Same Property NOI
excludes certain components from net income attributable to Urstadt
Biddle Properties Inc. in order to provide results that are more
closely related to a property’s results of operations. For example,
interest expense is not necessarily linked to the operating
performance of a real estate asset and is often incurred at the
corporate level as opposed to the property level. In addition,
depreciation and amortization, because of historical cost
accounting and useful life estimates, may distort operating
performance at the property level. Same Property NOI presented by
us may not be comparable to Same Property NOI reported by other
REITs that define Same Property NOI differently.
Table Follows:
Urstadt Biddle Properties
Inc.
Same Property Net Operating
Income
(In thousands, except for
number of properties and percentages)
Three
Months Ended January 31,
2021
2020
%
Change
Same Property Operating Results:
Number of Properties (Note 4)
76
Revenue (Note 2)
Base Rent
$24,553
$25,016
-1.9%
Uncollectable amounts in lease income-same
property
(654)
(343)
90.7%
ASC Topic 842 cash-basis
lease income reversal-same property
(999)
-
100%
Recoveries from tenants
9,972
7,991
24.8%
Other property income
44
132
-66.7%
32,916
32,796
0.4%
Expenses
Property operating
3,903
3,383
15.4%
Property taxes
5,854
5,802
0.9%
Other non-recoverable operating
expenses
364
427
-14.8%
10,121
9,612
5.3%
Same Property Net Operating Income
$22,795
$23,184
-1.7%
Other reconciling
items:
Other non same-property net operating
income
30
42
Other Interest income
108
141
Consolidated lease termination income
704
209
Consolidated amortization of above and
below market leases
110
177
Consolidated straight line rent income
(568)
62
Equity in net income of unconsolidated
joint ventures
350
513
Taxable REIT subsidiary income/(loss)
380
131
Solar income/(loss)
(154)
(112)
Storage income/(loss)
253
236
Interest expense
(3,392)
(3,339)
General and administrative expenses
(2,644)
(2,777)
Provision for tenant credit losses
(654)
(343)
Provision for tenant credit losses-same
property
654
343
ASC Topic 842 cash-basis lease income
reversal
(999)
-
ASC Topic 842 cash-basis lease income
reversal-same property
999
-
Directors fees and expenses
(109)
(105)
Depreciation and amortization
(7,518)
(7,135)
Adjustment for intercompany expenses and
other
(1,513)
(1,367)
Total other-net
(13,963)
(13,324)
Income from continuing operations
8,832
9,860
-10.4%
Gain (loss) on sale of real estate
(28)
(339)
Net income
8,804
9,521
-7.5%
Net income attributable to noncontrolling
interests
(912)
(1,038)
Net income attributable to Urstadt Biddle
Properties Inc.
$7,892
8,483
-7.0%
Same Property Operating Expense Ratio
(Note 1)
102.2%
87.0%
15.2%
Note 1 - Represents the percentage of property operating expense
and real estate tax expense recovered from tenants under operating
leases. Note 2 - Excludes straight-line rent, above/below market
lease rent, lease termination income, and bad debt expense. Note 3
- Base rents for the three months ended January 31, 2021 are
reduced by approximately $399,000 in rents that were deferred and
approximately $1.0 million, in rents that were abated because of
COVID-19. Note 4 - Includes only properties owned for the entire
period of both periods presented
Urstadt Biddle Properties
Inc.
Balance Sheet
Highlights
(in thousands)
January 31,
October 31,
2021
2020
(Unaudited)
Assets
Cash and Cash Equivalents
$37,115
$40,795
Real Estate investments before
accumulated depreciation
$1,151,423
$1,149,182
Investments in and advances to
unconsolidated joint ventures
$29,050
$28,679
Total Assets
$1,009,002
$1,010,179
Liabilities
Revolving credit line
$35,000
$35,000
Mortgage notes payable and other
loans
$297,519
$299,434
Total Liabilities
$374,778
$377,037
Redeemable Noncontrolling
Interests
$66,592
$62,071
Preferred Stock
$225,000
$225,000
Total Stockholders’ Equity
$567,632
$571,071
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311006014/en/
Willing L. Biddle, CEO or John T. Hayes, CFO Urstadt Biddle
Properties Inc. (203) 863-8200
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