United States
Securities And Exchange Commission
Washington, DC 20549

Form 10-Q

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2022

OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number 1-12803

graphic

URSTADT BIDDLE PROPERTIES INC.
(Exact Name of Registrant as Specified in its Charter)

Maryland
04-2458042
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
   
321 Railroad Avenue, Greenwich CT
06830
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:  (203) 863-8200

N/A
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
         
Common Stock, par value $.01 per share
 
UBP
 
New York Stock Exchange
         
Class A Common Stock, par value $.01 per share
 
UBA
 
New York Stock Exchange
         
6.25% Series H Cumulative Preferred Stock
 
UBPPRH
 
New York Stock Exchange
         
5.875% Series K Cumulative Preferred Stock
 
UBPPRK
 
New York Stock Exchange
         
Common Stock Rights to Purchase Preferred Shares
 
N/A
 
New York Stock Exchange
         
Class A Common Stock Rights to Purchase Preferred Shares
 
N/A
 
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Accelerated filer 
   
Non-accelerated filer
Smaller reporting company
   
Emerging growth company
 
   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No

As of March 4, 2022 (latest date practicable), the number of shares of the Registrant's classes of Common Stock and Class A Common Stock outstanding was: 10,264,037 Common Shares, par value $.01 per share, and 30,161,094 Class A Common Shares, par value $.01 per share.






Index
 
Urstadt Biddle Properties Inc.
   
   
   
Part I. Financial Information
 
   
Item 1.
Financial Statements (Unaudited)
 
     
 
1
     
 
2
     
 
3
     
 
4
     
 
5
     
 
7
     
Item 2.
19
     
Item 3.
28
     
Item 4.
29
     
     
Part II. Other Information
 
     
Item 1.
30
     
Item 2.
31
     
Item 6.
32
     
33


URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

 
January 31, 2022
   
October 31, 2021
 
   
(Unaudited)
       
Assets
           
Real Estate Investments:
           
Real Estate– at cost
 
$
1,148,522
   
$
1,148,382
 
Less: Accumulated depreciation
   
(284,331
)
   
(278,605
)
     
864,191
     
869,777
 
Investments in and advances to unconsolidated joint ventures
   
28,159
     
29,027
 
     
892,350
     
898,804
 
                 
Cash and cash equivalents
   
24,579
     
24,057
 
Tenant receivables-net
   
23,909
     
23,806
 
Prepaid expenses and other assets
   
26,351
     
19,175
 
Deferred charges, net of accumulated amortization
   
7,590
     
8,010
 
Total Assets
 
$
974,779
   
$
973,852
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
Liabilities:
               
Revolving credit line
 
$
-
   
$
-
 
Mortgage notes payable and other loans
   
299,006
     
296,449
 
Accounts payable and accrued expenses
   
11,585
     
11,443
 
Deferred compensation – officers
   
48
     
62
 
Other liabilities
   
22,191
     
22,599
 
Total Liabilities
   
332,830
     
330,553
 
                 
Redeemable Noncontrolling Interests
   
66,573
     
67,395
 
                 
Commitments and Contingencies
   
     
 
                 
Stockholders’ Equity:
               
6.25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share); 4,600,000 shares issued and outstanding
   
115,000
     
115,000
 
5.875% Series K Cumulative Preferred Stock (liquidation preference of $25 per share); 4,400,000 shares issued and outstanding
   
110,000
     
110,000
 
Excess Stock, par value $0.01 per share; 20,000,000 shares authorized; none issued and outstanding
   
-
     
-
 
Common Stock, par value $0.01 per share; 30,000,000 shares authorized; 10,264,037 and 10,153,689 shares issued and outstanding
   
104
     
103
 
Class A Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 30,161,094 and 30,073,807 shares issued and outstanding
   
302
     
301
 
Additional paid in capital
   
528,807
     
528,713
 
Cumulative distributions in excess of net income
   
(174,940
)
   
(170,493
)
Accumulated other comprehensive loss
   
(3,897
)
   
(7,720
)
Total Stockholders' Equity
   
575,376
     
575,904
 
Total Liabilities and Stockholders' Equity
 
$
974,779
   
$
973,852
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

1

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
             
Revenues
           
Lease income
 
$
34,087
   
$
32,483
 
Lease termination
   
28
     
705
 
Other
   
1,440
     
1,089
 
Total Revenues
   
35,555
     
34,277
 
                 
Expenses
               
Property operating
   
7,002
     
6,314
 
Property taxes
   
5,923
     
5,861
 
Depreciation and amortization
   
7,144
     
7,518
 
General and administrative
   
2,680
     
2,644
 
Directors' fees and expenses
   
107
     
109
 
Total Operating Expenses
   
22,856
     
22,446
 
                 
Operating Income
   
12,699
     
11,831
 
                 
Non-Operating Income (Expense):
               
Interest expense
   
(3,302
)
   
(3,392
)
Equity in net income from unconsolidated joint ventures
   
267
     
350
 
Gain (loss) on sale of property
   
2
     
(28
)
Interest, dividends and other investment income
   
55
     
43
 
Net Income
   
9,721
     
8,804
 
                 
Noncontrolling interests:
               
Net income attributable to noncontrolling interests
   
(911
)
   
(912
)
Net income attributable to Urstadt Biddle Properties Inc.
   
8,810
     
7,892
 
Preferred stock dividends
   
(3,413
)
   
(3,413
)
                 
Net Income Applicable to Common and Class A Common Stockholders
 
$
5,397
   
$
4,479
 
                 
Basic Earnings Per Share:
               
  Per Common Share:
 
$
0.13
   
$
0.11
 
  Per Class A Common Share:
 
$
0.14
   
$
0.12
 
                 
Diluted Earnings Per Share:
               
  Per Common Share:
 
$
0.13
   
$
0.11
 
  Per Class A Common Share:
 
$
0.14
   
$
0.12
 
                 
Dividends Per Share:
               
Common
 
$
0.2145
   
$
0.125
 
Class A Common
 
$
0.2375
   
$
0.14
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

2

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In thousands)

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
             
Net Income
 
$
9,721
   
$
8,804
 
                 
Other comprehensive income (loss):
               
Change in unrealized losses on interest rate swaps
   
3,471
     
1,499
 
Change in unrealized losses on interest rate swaps-equity investees
   
352
     
258
 
                 
Total comprehensive income (loss)
   
13,544
     
10,561
 
Comprehensive income attributable to noncontrolling interests
   
(911
)
   
(912
)
                 
Total comprehensive income (loss) attributable to Urstadt Biddle Properties Inc.
   
12,633
     
9,649
 
Preferred stock dividends
   
(3,413
)
   
(3,413
)
                 
Total comprehensive income (loss) applicable to Common and Class A Common Stockholders
 
$
9,220
   
$
6,236
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

3

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
Three Months Ended
January 31,
 
   
2022
   
2021
 
Cash Flows from Operating Activities:
           
Net income
 
$
9,721
   
$
8,804
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
7,144
     
7,518
 
Straight-line rent adjustment
   
(5
)
   
568
 
Provision for tenant credit losses
   
200
     
1,654
 
(Gain)/loss on sale of property
   
(2
)
   
28
 
Restricted stock compensation expense and other adjustments
   
638
     
986
 
Deferred compensation arrangement
   
(13
)
   
17
 
Equity in net (income) of unconsolidated joint ventures
   
(267
)
   
(350
)
Distributions of operating income from unconsolidated joint ventures
   
267
     
350
 
Changes in operating assets and liabilities:
               
Tenant receivables
   
(298
)
   
(863
)
Accounts payable and accrued expenses
   
2,756
     
3,134
 
Other assets and other liabilities, net
   
(6,611
)
   
(7,216
)
Net Cash Flow Provided by Operating Activities
   
13,530
     
14,630
 
                 
Cash Flows from Investing Activities:
               
Deposits on acquisition of real estate investment
   
(500
)
   
-
 
Proceeds from sale of property
   
1,848
     
2,738
 
Improvements to properties and deferred charges
   
(3,020
)
   
(6,714
)
Investment in note receivable
   
-
     
(2,203
)
Return of capital from unconsolidated affiliates
   
1,438
     
-
 
Net Cash Flow (Used in) Investing Activities
   
(234
)
   
(6,179
)
                 
Cash Flows from Financing Activities:
               
Dividends paid -- Common and Class A Common Stock
   
(9,308
)
   
(5,486
)
Dividends paid -- Preferred Stock
   
(3,413
)
   
(3,413
)
Principal amortization repayments on mortgage notes payable
   
(1,697
)
   
(1,666
)
Repayment of mortgage note payable
   
(6,545
)
   
-
 
Proceeds from mortgage note payable
   
11,000
     
-
 
Acquisitions of noncontrolling interests
   
(1,358
)
   
(364
)
Distributions to noncontrolling interests
   
(911
)
   
(912
)
Payment of taxes on shares withheld for employee taxes
   
(590
)
   
(320
)
Net proceeds from the issuance of Common and Class A Common Stock
   
48
     
30
 
Net Cash Flow (Used in) Financing Activities
   
(12,774
)
   
(12,131
)
                 
Net Increase/(Decrease) In Cash and Cash Equivalents
   
522
     
(3,680
)
Cash and Cash Equivalents at Beginning of Period
   
24,057
     
40,795
 
                 
Cash and Cash Equivalents at End of Period
 
$
24,579
   
$
37,115
 
                 
Supplemental Cash Flow Disclosures:
               
Interest Paid
 
$
3,077
   
$
3,428
 

The accompanying notes to consolidated financial statements are an integral part of these statements.

4

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
Three Months Ended January 31, 2022 and 2021
(In thousands, except share and per share data)

 
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock Amount
   
Series K
Preferred
Stock
Issued
   
Series K
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income (loss)
   
Total
Stockholders’
Equity
 
                                                                         
Balances - October 31, 2021
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,153,689
   
$
103
     
30,073,807
   
$
301
   
$
528,713
   
$
(170,493
)
 
$
(7,720
)
 
$
575,904
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
5,397
     
-
     
5,397
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
3,823
     
3,823
 
Cash dividends paid :
                                                                                               
Common stock ($0.2145 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(2,201
)
   
-
     
(2,201
)
Class A common stock ($0.2375 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(7,107
)
   
-
     
(7,107
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
848
     
-
     
1,567
     
-
     
48
     
-
     
-
     
48
 
Shares issued under restricted stock plan
   
-
     
-
     
-
     
-
     
109,500
     
1
     
149,000
     
1
     
(2
)
   
-
     
-
     
-
 
Shares withheld for employee taxes
   
-
     
-
     
-
     
-
     
-
     
-
     
(27,680
)
   
-
     
(590
)
   
-
     
-
     
(590
)
Forfeiture of restricted stock
   
-
     
-
     
-
     
-
     
-
     
-
     
(35,600
)
   
-
     
-
     
-
     
-
     
-
 
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
638
     
-
     
-
     
638
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(536
)
   
-
     
(536
)
Balances - January 31, 2022
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,264,037
   
$
104
     
30,161,094
   
$
302
   
$
528,807
   
$
(174,940
)
 
$
(3,897
)
 
$
575,376
 
5



 
Series H
Preferred
Stock
Issued
   
Series H
Preferred
Stock Amount
   
Series K
Preferred
Stock
Issued
   
Series K
Preferred
Stock
Amount
   
Common
Stock
Issued
   
Common
Stock
Amount
   
Class A
Common
Stock
Issued
   
Class A
Common
Stock
Amount
   
Additional
Paid In
Capital
   
Cumulative
Distributions
In Excess of
Net Income
   
Accumulated
Other
Comprehensive
Income
   
Total
Stockholders’
Equity
 
                                                                         
Balances - October 31, 2020
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,073,652
   
$
102
     
29,996,305
   
$
300
   
$
526,027
   
$
(164,651
)
 
$
(15,707
)
 
$
571,071
 
Net income applicable to Common and Class A common stockholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
4,479
     
-
     
4,479
 
Change in unrealized losses on interest rate swap
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
1,757
     
1,757
 
Cash dividends paid :
                                                                                               
Common stock ($0.125per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(1,272
)
   
-
     
(1,272
)
Class A common stock ($0.14 per share)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(4,214
)
   
-
     
(4,214
)
Issuance of shares under dividend reinvestment plan
   
-
     
-
     
-
     
-
     
806
     
-
     
1,305
     
-
     
29
     
-
     
-
     
29
 
Shares issued under restricted stock plan
   
-
     
-
     
-
     
-
     
105,850
     
1
     
125,800
     
1
     
(2
)
   
-
     
-
     
-
 
Shares withheld for employee taxes
   
-
     
-
     
-
     
-
     
-
     
-
     
(23,249
)
   
-
     
(319
)
   
-
     
-
     
(319
)
Restricted stock compensation and other adjustments
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
986
     
-
     
-
     
986
 
Adjustments to redeemable noncontrolling interests
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(4,885
)
   
-
     
(4,885
)
Balances - January 31, 2021
   
4,600,000
   
$
115,000
     
4,400,000
   
$
110,000
     
10,180,308
   
$
103
     
30,100,161
   
$
301
   
$
526,721
   
$
(170,543
)
 
$
(13,950
)
 
$
567,632
 

The accompanying notes to consolidated financial statements are an integral part of these statements
6


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
Urstadt Biddle Properties Inc. (“Company”), a Maryland Corporation, is a real estate investment trust ("REIT"), engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers in the metropolitan tri-state area outside of the City of New York.  The Company's major tenants include supermarket chains and other retailers who sell basic necessities.  At January 31, 2022, the Company owned or had equity interests in 78 properties containing a total of 5.1 million square feet of Gross Leasable Area (“GLA”).

COVID-19 Pandemic
On March 11, 2020, the novel coronavirus disease (“COVID-19”) was declared a pandemic (“COVID-19 pandemic”) by the World Health Organization as the disease spread throughout the world.  During March 2020, measures to prevent the spread of COVID-19 were initiated, with federal, state and local government agencies issuing regulatory orders enforcing social distancing and limiting certain business operations and group gatherings in order to further prevent the spread of COVID-19.  While these regulatory orders vary by state and have changed over time, as of January 31, 2022 all of our tenants’ businesses were permitted to operate, in some cases subject to modified operation procedures. We have seen substantial improvement in foot traffic, retail activity and general business conditions for our tenants compared to the early days of the COVID-19 pandemic. The pandemic is still ongoing, however, with existing and new variants it is making the situation difficult to predict.

Principles of Consolidation and Use of Estimates
The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures in which the Company meets certain criteria in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation”. The Company has determined that such joint ventures should be consolidated into the consolidated financial statements of the Company. In accordance with ASC Topic 970-323 “Real Estate-General-Equity Method and Joint Ventures,” joint ventures that the Company does not control but otherwise exercises significant influence over, are accounted for under the equity method of accounting. See Note 4 for further discussion of the unconsolidated joint ventures. All significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Results of operations for the three months ended January 31, 2022 are not necessarily indicative of the results that may be expected for the year ending October 31, 2022. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2021.

The preparation of financial statements requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition, fair value estimates, and the collectability of tenant receivables and other assets and liabilities.  Actual results could differ from these estimates.  The consolidated balance sheet at October 31, 2021 has been derived from audited financial statements at that date.

Federal Income Taxes
The Company has elected to be treated as a REIT under Sections 856-860 of the Internal Revenue Code ("Code"). Under those sections, a REIT that, among other things, distributes at least 90% of real estate trust taxable income and meets certain other qualifications prescribed by the Code will not be taxed on that portion of its taxable income that is distributed.  The Company believes it qualifies as a REIT and intends to distribute all of its taxable income for fiscal 2022 in accordance with the provisions of the Code. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated financial statements.

The Company follows the provisions of ASC Topic 740, “Income Taxes” that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  Based on its evaluation, the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of January 31, 2022. As of January 31, 2022, the fiscal tax years 2018 through and including 2021 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.

Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and tenant receivables. The Company places its cash and cash equivalents with high quality financial institutions and the balances at times could exceed federally insured limits. The Company performs ongoing credit evaluations of its tenants and may require certain tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the terminal value of a tenant’s lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting the space. The Company has no dependency upon any single tenant.

Marketable Securities
Marketable equity securities are carried at fair value based upon quoted market prices in active markets with changes in fair value recognized in net income.

Derivative Financial Instruments
The Company occasionally utilizes derivative financial instruments, such as interest rate swaps, to manage its exposure to fluctuations in interest rates. The Company has established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. Derivative financial instruments must be effective in reducing the Company’s interest rate risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in net income. The Company has not entered into, and does not plan to enter into, derivative financial instruments for trading or speculative purposes. Additionally, the Company has a policy of entering into derivative contracts only with major financial institutions.

As of January 31, 2022, the Company believes it has no significant risk associated with non-performance of the financial institutions that are the counterparties to its derivative contracts.  At January 31, 2022, the Company had approximately $123.5 million in secured mortgage financings subject to interest rate swaps. Such interest rate swaps converted the LIBOR-based variable rates on the mortgage financings to an average fixed annual rate of 3.94% per annum. As of January 31, 2022 and October 31, 2021, the Company had a deferred liability of $4.1 million and $6.7 million, respectively (included in accounts payable and accrued expenses on the consolidated balance sheets), relating to the fair value of the Company’s interest rate swaps applicable to secured mortgages. As of January 31, 2022 and October 31, 2021, the Company had a deferred assets of  $1.4 million and $515,000, respectively, (included in other assets on the consolidated balance sheets) relating to the fair value of the Company’s interest rate swaps applicable to secured mortgages.

Charges and/or credits relating to the changes in fair values of such interest rate swaps are made to other comprehensive income/(loss) as the swaps are deemed effective and are classified as a cash flow hedge.

Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income applicable to Common and Class A Common stockholders and other comprehensive income (loss). Other comprehensive income (loss) includes items that are otherwise recorded directly in stockholders’ equity, such as unrealized gains and losses on interest rate swaps designated as cash flow hedges, including the Company's share from entities accounted for under the equity method of accounting. At January 31, 2022, accumulated other comprehensive loss consisted of net unrealized losses on interest rate swap agreements of $3.9 million, inclusive of the Company's share of accumulated comprehensive losses from joint ventures accounted for by the equity method of accounting.  At October 31, 2021, accumulated other comprehensive loss consisted of net unrealized losses on interest rate swap agreements of approximately $7.7 million, inclusive of the Company's share of accumulated comprehensive losses from joint ventures accounted for by the equity method of accounting. Unrealized gains and losses included in other comprehensive income/(loss) will be reclassified into earnings as gains and losses are realized.

Asset Impairment
On a periodic basis, management assesses whether there are any indicators that the value of its real estate investments may be impaired.  A property value is considered impaired when management’s estimate of current and projected operating cash flows (undiscounted and without interest) of the property over its remaining useful life is less than the net carrying value of the property.  Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.  To the extent impairment has occurred, the loss is measured as the excess of the net carrying amount of the property over the fair value of the asset.  Changes in estimated future cash flows due to changes in the Company’s plans or market and economic conditions could result in recognition of impairment losses which could be substantial.  As of January 31, 2022, management does not believe that the value of any of its real estate investments is impaired.
7




Acquisitions of Real Estate Investments, Capitalization Policy and Depreciation

Acquisition of Real Estate Investments:
The Company evaluates each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted for as a business combination. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business:

Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or

The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e. revenue generated before and after the transaction).

An acquired process is considered substantive if:

The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce), that is skilled, knowledgeable, and experienced in performing the process;

The process cannot be replaced without significant cost, effort, or delay; or

The process is considered unique or scarce.

Generally, the Company expects that acquisitions of real estate or in-substance real estate will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.

Acquisitions of real estate and in-substance real estate that do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions as the Company utilizes to determine fair value in a business combination.

The value of tangible assets acquired is based upon our estimation of value on an “as if vacant” basis. The value of acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. We assess the fair value of tangible and intangible assets based on numerous factors, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property.

The values of acquired above and below-market leases, which are included in prepaid expenses and other assets and other liabilities, respectively, are amortized over the terms of the related leases and recognized as either an increase (for below-market leases) or a decrease (for above-market leases) to rental revenue. The values of acquired in-place leases are classified in other assets in the accompanying consolidated balance sheets and amortized over the remaining terms of the related leases.

Capitalization Policy:
Land, buildings, property improvements, furniture/fixtures and tenant improvements are recorded at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Renovations and/or replacements, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.

Depreciation:
The Company is required to make subjective assessments as to the useful life of its properties for purposes of determining the amount of depreciation. These assessments have a direct impact on the Company’s net income.

Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

Buildings
30-40 years
Property Improvements
10-20 years
Furniture/Fixtures
3-10 years
Tenant Improvements
Shorter of lease term or their useful life

Sale of Investment Property and Property Held for Sale
The Company reports properties that are either disposed of or are classified as held for sale in continuing operations in the consolidated statement of income if the removal, or anticipated removal, of the asset(s) from the reporting entity does not represent a strategic shift that has or will have a major effect on an entity's operations and financial results when disposed of.

In September 2021, the Company entered into a purchase and sale agreement to sell its property located in Chester, NJ (the "Chester Property"), to an unrelated third party for a sale price of $1.96 million as that property no longer met its investment objectives.  In accordance with ASC Topic 360-10-45, the property met all the criteria to be classified as held for sale in the fourth quarter of fiscal 2021, and accordingly the Company recorded a loss on property held for sale of $342,000, which loss was included in continuing operations in the consolidated statement of income for the year ended October 31, 2021. The amount of the loss represented the net carrying amount of the property over the fair value of the asset less estimated cost to sell.  The net book value of the Chester Property was insignificant to financial statement presentation and as a result the Company did not include the asset as held for sale on its consolidated balance sheet at October 31, 2021.  In December 2021, the Chester Property sale was completed and the Company realized an additional loss on sale of property of $8,000, which loss is included in operations in the consolidated statement of income for the three months ended January 31, 2022.

The operating results of the Chester Property, which is included in  operations is as follows (amounts in thousands):

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
Revenues
 
$
-
   
$
-
 
Property operating expense
   
(13
)
   
(11
)
Depreciation and amortization
   
-
     
(14
)
Net Income (Loss)
 
$
(13
)
 
$
(25
)

8

Lease Income, Revenue Recognition and Tenant Receivables
Lease Income:

The Company accounts for lease income in accordance with ASC Topic 842 "Leases".

The Company's existing leases are generally classified as operating leases. However, certain longer-term leases (both lessee and lessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and an accelerated pattern of earnings recognition.

The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Additionally, most all lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and Common Area Maintenance ("CAM") costs (collectively, "Recoverable Costs") incurred.

Lease terms generally range from 1 to 5 years for tenant spaces under 10,000 square feet (“Shop Space”) and in excess of 5 years for spaces greater than 10,000 square feet (“Anchor Spaces”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If the tenants do not exercise renewal options and the leases mature, the tenants must relinquish their space so it can be leased to a new tenant, which generally involves some level of cost to prepare the space for re-leasing. These costs are capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.

CAM is a non-lease component of the lease contract under ASC Topic 842, and therefore would be accounted for under ASC Topic 606, Revenue from Contracts with Customers, and presented separate from lease income in the accompanying consolidated statements of income, based on an allocation of the overall contract price, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the lease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company, in accordance with ASC Topic 842, combines CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognize them together as lease income in the accompanying consolidated statements of income.

Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectability is considered probable at the commencement date. At lease commencement, the Company expects that collectability is probable for all of its leases due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from all operating leases is initially recognized on a straight-line basis.  Lease income each period is reduced by amounts considered uncollectable on a lease-by-lease basis, with any changes in collectability assessments recognized as a current period adjustment to lease income. For operating leases in which collectability of lease income is not considered probable, lease income is recognized on a cash basis and all previously recognized uncollected lease income, including straight-line rental income, is reversed in the period in which the lease income is determined not to be probable of collection.

The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant operating lease that would not have been incurred if the lease had not been obtained. These costs generally include third party broker payments, which are capitalized to deferred costs in the accompanying consolidated balance sheets and amortized over the expected term of the lease to depreciation and amortization expense in the accompanying consolidated statements of income.

COVID-19 Pandemic

Beginning in March 2020, many of the Company's properties were, and some continue to be, negatively impacted by the COVID-19 pandemic, as state governments mandated restrictions on the operation of non-essential businesses to prevent the spread of COVID-19, forcing many of our tenants’ businesses to close or reduce operations.  As a result, 402 of approximately 836 tenants in the Company's consolidated portfolio, representing 1.6 million square feet and approximately 44.8% of the Company's annualized base rent, asked for some type of rent deferral or concession. Approximately 117 of the 402 tenants withdrew their requests for rent relief or paid their rent in full. As public health and business conditions in the areas where our properties are located continue to improve, rent relief requests have greatly decreased and our properties are returning to normal operations. The primary strategy of the Company with respect to rent concession requests was to defer some portion of rents due for the months of April 2020 through the beginning of fiscal 2021 to be paid over a later part of the lease, preferably within a period of one year or less. In some instances, however, the Company determined that it was more appropriate to abate some portion of base rents. Most of the base rent deferrals or abatements entered into with tenants in the second half of fiscal 2021 and the first quarter of fiscal 2022 are additional deferrals or abatements for tenants who received prior rent concessions.

From the onset of COVID-19 through January 31, 2022, the Company completed 288 lease modifications, consisting of base rent deferrals totaling $4.0 million and rent abatements totaling $4.5 million. Included in the aforementioned amounts were 1 rent deferral and 8 rent abatements completed in the three months ended January 31, 2022, which deferred $50,581 and abated $123,559 of base rents and 9 rent deferrals and 23 rent abatements completed in the three months ended January 31, 2021, which deferred $399,000 and abated $2.0 million of base rents.

In April 2020, in response to the COVID-19 pandemic, the FASB staff issued guidance that it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, as if enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the lease contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each lease contract to determine whether enforceable rights and obligations for concessions exist in the lease contract and may elect to apply or not apply the lease modification guidance in Topic 842 to those contracts.

This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. For example, this election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The FASB staff expects that reasonable judgment will be exercised in making those determinations.

Most concessions will provide a deferral of payments with no substantive changes to the consideration in the original lease contract. A deferral affects the timing, but the amount of the consideration is substantially the same as that required by the original lease contract. The FASB staff expects that there will be multiple ways to account for those deferrals, none of which the staff believes are preferable over others. The Company has made the election not to analyze each lease contract, and believes that, based on FASB guidance, the appropriate way to account for the concessions as described above is to account for such concessions as if no changes to the lease contracts were made. Under that accounting, a lessor would increase its lease receivable (straight-line rents receivable) and would continue to recognize income during the deferral period, assuming that the collectability of the future rents under the lease contract are considered collectable.  If it is determined that the future rents of any lease contract are not collectable, the Company would treat that lease contract on a cash basis as defined in ASC Topic 842.

When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors, including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in lease income.

Revenue Recognition

In those instances, in which the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition on operating leases will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin.

Lease termination amounts are recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company. There is no way of predicting or forecasting the timing or amounts of future lease termination fees. Interest income is recognized as it is earned. Gains or losses on disposition of properties are recorded when the criteria for recognizing such gains or losses under U.S. GAAP have been met.

Percentage rent is recognized when a specific tenant’s sales breakpoint is achieved.

Tenant Receivables

The actions taken by federal, state and local governments to mitigate the spread of COVID-19, initially by ordering closures of non-essential businesses and ordering residents to generally stay at home, and subsequent phased re-openings have resulted in many of our tenants temporarily or even permanently closing their businesses, and for some, it has impacted their ability to pay rent although this situation is rapidly improving as a large part of the country becomes vaccinated and the pandemic continues to wane.

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash basis accounting in accordance with ASC Topic 842. We did not convert any additional tenants to cash-basis accounting in the second half of fiscal 2021 or the three months ended January 31, 2022.  As of January 31, 2022, 28 of the 89 tenants are no longer tenants in the Company's properties.  In addition, when one of the Company’s tenants is converted to cash-basis accounting in accordance with ASC Topic 842, all previously recorded straight-line rent receivables need to be reversed in the period that the tenant is converted to cash basis revenue recognition. During the three months ended January 31, 2022, we restored 3 of the original 89 tenants to accrual-basis revenue recognition as those tenants have demonstrated that they have paid all of their billed rents for six consecutive months and have no significant unpaid billings as of January 31, 2022.  When a tenant is restored to accrual-basis revenue recognition, the Company records revenue on the straight-line basis.  As such the Company recorded straight-line rent revenue in the amount of $24,000 for these 3 tenants in the three months ended January 31, 2022.In the three months ended January 31, 2021, the Company reversed straight-line rent revenue in the amount of $441,000 related to tenants coverted to cash-basis revenue recognition.

As of January 31, 2022, the Company is recording lease income on a cash basis for approximately 5.6% of our tenants in accordance with ASC Topic 842.

During the three months ended January 31, 2022 and 2021, we recognized collectability adjustments totaling $200,000 and $2.1 million, respectively. In addition, as a result of not converting any tenants to cash basis accounting in the three months ended January 31, 2022, we did not have any write-offs of previously recorded straight-line rent in the three months ended January 31, 2022.
 
At January 31, 2022 and October 31, 2021, $19,676,000 and $19,670,000, respectively, have been recognized as straight-line rents receivable (representing the current cumulative rents recognized prior to when billed and collectable as provided by the terms of the leases), all of which is included in tenant receivables in the accompanying consolidated financial statements.

The Company provides an allowance for doubtful accounts against the portion of tenant receivables that is estimated to be uncollectable. Such allowances are reviewed periodically. At January 31, 2022 and October 31, 2021, tenant receivables in the accompanying consolidated balance sheets are shown net of allowances for doubtful accounts of $7,542,000 and $7,469,000, respectively. Included in the aforementioned allowance for doubtful accounts is an amount for future tenant credit losses of approximately 10% of the deferred straight-line rents receivable which is estimated to be uncollectable.
9


Earnings Per Share
The Company calculates basic and diluted earnings per share in accordance with the provisions of ASC Topic 260, “Earnings Per Share.” Basic earnings per share (“EPS”) excludes the impact of dilutive shares and is computed by dividing net income applicable to Common and Class A Common stockholders by the weighted average number of Common shares and Class A Common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue Common shares or Class A Common shares were exercised or converted into Common shares or Class A Common shares and then shared in the earnings of the Company. Since the cash dividends declared on the Company’s Class A Common stock are higher than the dividends declared on the Common Stock, basic and diluted EPS have been calculated using the “two-class” method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to the weighted average of the dividends declared, outstanding shares per class and participation rights in undistributed earnings.

The following table sets forth the reconciliation between basic and diluted EPS (in thousands):

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
Numerator
           
Net income applicable to common stockholders – basic
 
$
1,194
   
$
977
 
Effect of dilutive securities:
               
Restricted stock awards
   
34
     
12
 
Net income applicable to common stockholders – diluted
 
$
1,228
   
$
989
 
                 
Denominator
               
Denominator for basic EPS – weighted average common shares
   
9,327
     
9,250
 
Effect of dilutive securities:
               
Restricted stock awards
   
383
     
143
 
Denominator for diluted EPS – weighted average common equivalent shares
   
9,710
     
9,393
 
                 
Numerator
               
Net income applicable to Class A common stockholders-basic
 
$
4,203
   
$
3,502
 
Effect of dilutive securities:
               
Restricted stock awards
   
(34
)
   
(12
)
Net income applicable to Class A common stockholders – diluted
 
$
4,169
   
$
3,490
 
                 
Denominator
               
Denominator for basic EPS – weighted average Class A common shares
   
29,659
     
29,590
 
Effect of dilutive securities:
               
Restricted stock awards
   
109
     
-
 
Denominator for diluted EPS – weighted average Class A common equivalent shares
   
29,768
     
29,590
 

Segment Reporting
The Company's primary business is the ownership, management, and redevelopment of retail properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, which consists of base rental income and tenant reimbursement income, less rental expenses and real estate taxes. Only one of the Company’s properties, located in Stamford, CT (“Ridgeway”), is considered significant as its revenue is in excess of 10% of the Company’s consolidated total revenues and accordingly is a reportable segment. The Company has aggregated the remainder of its properties as they share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in the same major metropolitan area, and have similar tenant mixes.

Ridgeway is located in Stamford, Connecticut and was developed in the 1950’s and redeveloped in the mid 1990’s. The property contains approximately 374,000 square feet of GLA.  It is the dominant grocery-anchored center and the largest non-mall shopping center located in the City of Stamford, Fairfield County, Connecticut.

Segment information about Ridgeway as required by ASC Topic 280 is included below:

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
Ridgeway Revenues
   
10.1
%
   
10.0
%
All Other Property Revenues
   
89.9
%
   
90.0
%
Consolidated Revenue
   
100.0
%
   
100.0
%

 
January 31,
2022
   
October 31,
2021
 
Ridgeway Assets
   
6.3
%
   
6.3
%
All Other Property Assets
   
93.7
%
   
93.7
%
Consolidated Assets (Note 1)
   
100.0
%
   
100.0
%

Note 1 - Ridgeway did not have any significant expenditures for additions to long lived assets in the three months ended January 31, 2022 or the year ended October 31, 2021.

 
January 31,
2022
   
October 31,
2021
 
Ridgeway Percent Leased
   
92
%
   
92
%

Ridgeway Significant Tenants by Annual Base Rents
 
Three Months Ended
January 31,
 
   
2022
   
2021
 
The Stop & Shop Supermarket Company
   
21
%
   
20
%
Bed, Bath & Beyond
   
15
%
   
14
%
Marshall’s Inc., a division of the TJX Companies
   
11
%
   
10
%
All Other Tenants at Ridgeway (Note 2)
   
53
%
   
56
%
Total
   
100
%
   
100
%

Note 2 - No other tenant accounts for more than 10% of Ridgeway’s annual base rents in any of the periods presented. Percentages are calculated as a ratio of the tenants' base rent divided by total base rent of Ridgeway.

Income Statement (In Thousands):
 
Three Months Ended
January 31, 2022
 
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
 
Revenues
 
$
3,639
   
$
31,916
   
$
35,555
 
Operating Expenses and Property Taxes
 
$
1,143
   
$
11,782
   
$
12,925
 
Interest Expense
 
$
418
   
$
2,884
   
$
3,302
 
Depreciation and Amortization
 
$
521
   
$
6,623
   
$
7,144
 
Net Income
 
$
1,557
   
$
8,164
   
$
9,721
 

Income Statement (In Thousands):
 
Three Months Ended
January 31, 2021
 
   
Ridgeway
   
All Other
Operating Segments
   
Total Consolidated
 
Revenues
 
$
3,461
   
$
30,816
   
$
34,277
 
Operating Expenses and Property Taxes
 
$
1,154
   
$
11,021
   
$
12,175
 
Interest Expense
 
$
428
   
$
2,964
   
$
3,392
 
Depreciation and Amortization
 
$
580
   
$
6,938
   
$
7,518
 
Net Income
 
$
1,299
   
$
7,505
   
$
8,804
 

10


Stock-Based Compensation
The Company accounts for its stock-based compensation plans under the provisions of ASC Topic 718, “Stock Compensation”, which requires that compensation expense be recognized, based on the fair value of the stock awards less estimated forfeitures. The fair value of stock awards is equal to the fair value of the Company’s stock on the grant date.  The Company recognizes compensation expense for its stock awards by amortizing the fair value of stock awards over the requisite service periods of such awards.  In certain cases, as defined in the participant agreements, the vesting of stock awards can be accelerated, which will result in the Company charging to compensation expense the remaining unamortized restricted stock compensation related to those stock awards.

Reclassifications
Certain prior period amounts have been reclassified to conform to the current period’s presentation.

New Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848).” ASU No. 2020-04 contains practical expedients for reference rate-reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended April 30, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

The Company has evaluated all other new ASUs issued by FASB, and has concluded that these updates do not have a material effect on the Company's consolidated financial statements as of January 31, 2022.


11

(2) UNSECURED REVOLVING CREDIT FACILITY

The Company has a $125 million unsecured revolving credit facility (the "Facility) with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also includes Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents).  The Facility gives the Company the option, under certain conditions, to increase the Facility's borrowing capacity to $175 million (subject to lender approval).  The maturity date of the Facility is March 29, 2024, with a one year extension at the Company's option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at the Company's option of the Eurodollar rate plus 1.45% to 2.20% or The Bank of New York Mellon's prime lending rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  The Company pays a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. The Company's ability to borrow under the Facility is subject to its compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit the Company's level of secured and unsecured indebtedness, including preferred stock, and additionally require the Company to maintain certain debt coverage ratios. The Company was in compliance with such covenants at January 31, 2022. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR.

In December 2021, the Company refinanced its existing $6.5 million first mortgage secured by our Boonton, NJ property.  The new mortgage has a principal balance of $11.0 million, has a term of 10 years, and requires payments of principal and interest at a fixed rate of 3.45%

12


(3) CONSOLIDATED JOINT VENTURES AND REDEEMABLE NONCONTROLLING INTERESTS

The Company has an investment in five joint ventures, UB Orangeburg, LLC ("Orangeburg"), McLean Plaza Associates, LLC ("McLean"), UB Dumont I, LLC ("Dumont") and UB New City I, LLC ("New City"), each of which owns a commercial retail property, and UB High Ridge, LLC ("High Ridge"), which owns three commercial real estate properties.  The Company has evaluated its investment in these five joint ventures and has concluded that these joint ventures are fully controlled by the Company and that the presumption of control is not offset by any rights of any of the limited partners or non-controlling members in these ventures and that the joint ventures should be consolidated into the consolidated financial statements of the Company in accordance with ASC Topic 810 "Consolidation".  The Company’s investment in these consolidated joint ventures is more fully described below:

Orangeburg

The Company, through a wholly-owned subsidiary, is the managing member and owns a 43.8% interest in Orangeburg, which owns a CVS-anchored shopping center. The other member (non-managing) of Orangeburg is the prior owner of the contributed property who, in exchange for contributing the net assets of the property, received units of Orangeburg equal to the value of the contributed property less the value of the assigned first mortgage payable. The Orangeburg operating agreement provides for the non-managing member to receive a quarterly cash distribution equal to the regular quarterly cash distribution declared by the Company for one share of the Company’s Class A Common stock, which amount is attributable to each unit of Orangeburg ownership. The quarterly cash distribution is paid from available cash, as defined, of Orangeburg. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of Orangeburg assets are to be distributed in accordance with the operating agreement. The non-managing member is not obligated to make any additional capital contributions to the partnership. Orangeburg has a defined termination date of December 31, 2097.  Since acquiring its initial interest in Orangeburg, the Company has made additional investments in the amount of $6.5 million in Orangeburg, and as a result, as of January 31, 2022 the Company's ownership percentage has increased to 43.8% from approximately 2.92% at inception.

McLean

The Company, through a wholly-owned subsidiary, is the managing member and owns a 53% interest in McLean, which owns an Acme grocery-anchored shopping center. The McLean operating agreement provides for the non-managing members to receive a fixed annual cash distribution equal to 5.05% of their invested capital.  The annual cash distribution is paid from available cash, as defined, of McLean. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of McLean assets are to be distributed in accordance with the operating agreement. The non-managing members are not obligated to make any additional capital contributions to the entity.

High Ridge

The Company is the managing member and owns a 26.9% interest in High Ridge.  The Company's initial investment was $5.5 million, and the Company has purchased additional interests from non-managing members totaling $9.7 million and has contributed $1.5 million in additional equity to the venture through January 31, 2022.  High Ridge, either directly or through a wholly-owned subsidiary, owns three commercial real estate properties, High Ridge Shopping Center, a grocery-anchored shopping center ("High Ridge Center"), and two single tenant commercial retail properties, one leased to JP Morgan Chase and one leased to CVS.  Two properties are located in Stamford, CT and one property is located in Greenwich, CT.  High Ridge Center is a shopping center anchored by a Trader Joe's grocery store.  The properties were contributed to the new entities by the former owners who received units of ownership of High Ridge equal to the value of properties contributed less liabilities assumed.  The High Ridge operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 4.96% of their invested capital.

Dumont

The Company is the managing member and owns a 36.4% interest in Dumont.  The Company's initial investment was $3.9 million, and the Company has purchased additional interests totaling $630,000 through January 31, 2022.  Dumont owns a retail and residential real estate property, which retail portion is anchored by a Stop & Shop grocery store.  The property is located in Dumont, NJ.  The property was contributed to the new entity by the former owners who received units of ownership of Dumont equal to the value of contributed property less liabilities assumed.   The Dumont operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 5.0% of their invested capital.

New City

The Company is the managing member and owns an 84.3% equity interest in New City.  The Company's initial investment was $2.4 million, and the Company has purchased additional interests totaling $289,300 through January 31, 2022.  New City owns a single tenant retail real estate property located in New City, NY, which is leased to a savings bank.  In addition, New City rents certain parking spaces on the property to the owner of an adjacent grocery-anchored shopping center.  The property was contributed to the new entity by the former owners who received units of ownership of New City equal to the value of contributed property. The New City operating agreement provides for the non-managing member to receive an annual cash distribution, currently equal to 5.00% of his invested capital.

Noncontrolling Interests

The Company accounts for noncontrolling interests in accordance with ASC Topic 810, “Consolidation.” Because the limited partners or noncontrolling members in Orangeburg, McLean, High Ridge, Dumont and New City have the right to require the Company to redeem all or a part of their limited partnership or limited liability company units for cash, or at the option of the Company, shares of its Class A Common stock at prices as defined in the governing agreements, the Company reports the noncontrolling interests in the consolidated joint ventures in the mezzanine section, outside of permanent equity, of the consolidated balance sheets at redemption value which approximates fair value. The value of the Orangeburg, McLean, and a portion of the High Ridge and Dumont redemptions are based solely on the price of the Company’s Class A Common stock on the date of redemption.   For the three months ended January 31, 2022 and 2021, the Company increased/(decreased) the carrying value of the noncontrolling interests by $536,000 and $4.9 million, respectively, with the corresponding adjustment recorded in stockholders’ equity.

The following table sets forth the details of the Company's redeemable non-controlling interests for the three months ended January 31, 2022 and the fiscal year ended October 31, 2021 (amounts in thousands):

 
January 31, 2022
   
October 31, 2021
 
Beginning Balance
 
$
67,395
   
$
62,071
 
Change in Redemption Value
   
536
     
10,450
 
Partial Redemption of High Ridge Noncontrolling Interest
   
(1,358
)
   
(5,126
)
                 
Ending Balance
 
$
66,573
   
$
67,395
 

13


(4) INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

At January 31, 2022 and October 31, 2021 investments in and advances to unconsolidated joint ventures consisted of the following (with the Company’s ownership percentage in parentheses) (amounts in thousands):

 
January 31, 2022
   
October 31, 2021
 
Chestnut Ridge Shopping Center (50%)
 
$
11,598
   
$
12,188
 
Gateway Plaza (50%)
   
6,680
     
6,845
 
Putnam Plaza Shopping Center (66.67%)
   
3,518
     
3,231
 
Midway Shopping Center, L.P. (11.79%)
   
3,830
     
3,982
 
Applebee's at Riverhead (50%)
   
1,810
     
2,058
 
81 Pondfield Road Company (20%)
   
723
     
723
 
Total
 
$
28,159
   
$
29,027
 

Chestnut Ridge Shopping Center

The Company, through a wholly-owned subsidiary, owns a 50% undivided tenancy-in-common interest in the 76,000 square foot Chestnut Ridge Shopping Center located in Montvale, New Jersey (“Chestnut”), which is anchored by a Fresh Market grocery store.

Gateway Plaza and Applebee's at Riverhead

The Company, through two wholly-owned subsidiaries, owns a 50% undivided tenancy-in-common interest in the Gateway Plaza Shopping Center ("Gateway") and Applebee's at Riverhead ("Applebee's").  Both properties are located in Riverhead, New York. Gateway, a 198,500 square foot shopping center, is anchored by a 168,000 square foot Walmart, which also has 27,000 square feet of in-line space that is leased and a 3,500 square foot outparcel that is leased.  Applebee's has a 5,400 square foot free-standing Applebee’s restaurant and a 7,200 square foot pad site that is leased.

Gateway is subject to an $11.0 million non-recourse first mortgage.  The mortgage matures on March 1, 2024 and requires payments of principal and interest at a fixed rate of interest of 4.2% per annum.

Midway Shopping Center, L.P.

The Company, through a wholly-owned subsidiary, owns an 11.79% equity interest in Midway Shopping Center L.P. (“Midway”), which owns a 247,000 square foot ShopRite-anchored shopping center in Westchester County, New York. Although the Company only has an approximate 12% equity interest in Midway, it controls 25% of the voting power of Midway and as such, has determined that it exercises significant influence over the financial and operating decisions of Midway and accounts for its investment in Midway under the equity method of accounting.

The Company has allocated the $7.4 million excess of the carrying amount of its investment in and advances to Midway over the Company’s share of Midway’s net book value to real property and is amortizing the difference over the property’s estimated useful life of 39 years.

Midway is subject to a non-recourse first mortgage in the amount of $24.5 million.  The loan requires payments of principal and interest at the rate of 4.80% per annum and will mature in 2027.

Putnam Plaza Shopping Center

The Company, through a wholly-owned subsidiary, owns a 66.67% (noncontrolling) undivided tenancy-in-common interest in the 189,000 square foot Tops-anchored Putnam Plaza Shopping Center (“Putnam Plaza”) located in Carmel, New York.

Putnam Plaza is subject to a non-recourse first mortgage payable in the amount of $17.9 million.  The mortgage requires monthly payments of principal and interest at a fixed rate of 4.81% and will mature in 2028.

81 Pondfield Road Company

The Company’s other investment in an unconsolidated joint venture is a 20% interest in a retail and office building in Westchester County, New York.

Equity Method of Accounting

The Company accounts for the above investments under the equity method of accounting since it exercises significant influence, but does not control the joint ventures.  The other venturers in the joint ventures have substantial participation rights in the financial decisions and operation of the ventures or properties, which preclude the Company from consolidating the investments. The Company has evaluated its investment in the joint ventures and has concluded that the joint ventures are not VIE's. Under the equity method of accounting, the initial investment is recorded at cost as an investment in unconsolidated joint venture, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions from the venture. Any difference between the carrying amount of the investment on the Company’s balance sheet and the underlying equity in net assets of the venture is evaluated for impairment at each reporting period.
14



(5) LEASES

Lessor Accounting

The Company's Lease income is comprised of both fixed and variable income, as follows:

Fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent. Income for these amounts is recognized on a straight line basis.

Variable lease income includes recoveries from tenants, which represents amounts that tenants are contractually obligated to reimburse the Company for the tenants’ portion of Recoverable Costs.  Generally, the Company’s leases provide for the tenants to reimburse the Company for Recoverable Costs based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.

The following table provides a disaggregation of lease income recognized during the three months ended January 31, 2022 and 2021, under ASC Topic 842, Leases, as either fixed or variable lease income based on the criteria specified in ASC Topic 842 (In thousands):

 
Three Months Ended
January 31,
 
   
2022
   
2021
 
Operating lease income:
           
Fixed lease income (Base Rent)
 
$
24,839
   
$
24,064
 
Variable lease income (Cost Recoveries)
   
9,274
     
9,978
 
Other lease related income, net:
               
Above/below market rent amortization
   
174
     
95
 
Uncollectable amounts in lease income
   
(113
)
   
(655
)
ASC Topic 842 cash basis lease income reversal
   
(87
)
   
(999
)
Total lease income
 
$
34,087
   
$
32,483
 

Future minimum rents under non-cancelable operating leases for the next five years and thereafter, excluding variable lease payments, are as follows (In thousands):

Fiscal Year Ending
     
2022 (a)
 
$
68,454
 
2023
   
77,158
 
2024
   
66,262
 
2025
   
55,049
 
2026
   
46,874
 
Thereafter
   
216,818
 
Total
 
$
530,615
 

(a) The future minimum rental income for fiscal 2022 includes amounts due between February 1, 2022 through October 31, 2022.

15


(6)  STOCKHOLDERS’ EQUITY

Authorized Stock
The Company's Charter authorizes 200,000,000 shares of stock.  The total number of shares of authorized stock consists of 100,000,000 shares of Class A Common Stock, 30,000,000 shares of Common Stock, 50,000,000 shares of Preferred Stock, and 20,000,000 shares of Excess Stock.

Restricted Stock Plan
The Company has a Restricted Stock Plan, as amended (the "Plan") that provides a form of equity compensation for employees of the Company.  The Plan, which is administered by the Company's compensation committee, authorizes grants of up to an aggregate of 5,500,000 shares of the Company’s common equity consisting of 350,000 Common shares, 350,000 Class A Common shares and 4,800,000 shares, which at the discretion of the compensation committee, may be awarded in any combination of Class A Common shares or Common shares.

During the three months ended January 31, 2022, the Company awarded 109,500 shares of Common Stock and 149,000 shares of Class A Common Stock to participants in the Plan.  The grant date fair value of restricted stock grants awarded to participants in 2022 was approximately $5.2 million.

A summary of the status of the Company’s non-vested Common and Class A Common shares as of January 31, 2022, and changes during the three months ended January 31, 2022 is presented below:

 
Common Shares
   
Class A Common Shares
 
Non-vested Shares
 
Shares
   
Weighted-Average
Grant-Date
Fair Value
   
Shares
   
Weighted-Average
Grant-Date
Fair Value
 
Non-vested at October 31, 2021
   
927,800
   
$
17.08
     
521,700
   
$
20.12
 
Granted
   
109,500
   
$
18.47
     
149,000
   
$
21.32
 
Vested
   
(103,100
)
 
$
18.30
     
(87,100
)
 
$
23.45
 
Forfeited
   
-
   
$
-
     
(35,600
)
 
$
19.51
 
Non-vested at January 31, 2022
   
934,200
   
$
17.11
     
548,000
   
$
19.95
 

As of January 31, 2022, there was $15.5 million of unamortized restricted stock compensation related to non-vested restricted stock grants awarded under the Plan.  The remaining unamortized expense is expected to be recognized over a weighted average period of 5.1 years. For the three months ended January 31, 2022 and 2021, amounts charged to compensation expense totaled $617,000 and $985,000, respectively.

Share Repurchase Program
The Board of Directors of the Company has approved a share repurchase program (“Current Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock and Class A Common stock in open market transactions.

The Company has repurchased 224,567 shares of Class A Common Stock and 29,154 shares of Common Stock under the Current Repurchase Program.  From the inception of all repurchase programs, the Company has repurchased 949,145 shares of Class A Common Stock and 33,754 shares of Common Stock.

Preferred Stock
The 6.25% Series H Senior Cumulative Preferred Stock ("Series H Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after September 18, 2022. The holders of our Series H Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series H Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series H Preferred Stock, together with all of the Company's other series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series H Preferred Stock will have the right to convert all or part of the shares of Series H Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock. Underwriting commissions and costs incurred in connection with the sale of the Series H Preferred Stock are reflected as a reduction of additional paid in capital.

The 5.875% Series K Senior Cumulative Preferred Stock ("Series K Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after October 1, 2024. The holders of our Series K Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series K Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series K Preferred Stock, together with all of the Company's other series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series K Preferred Stock will have the right to convert all or part of the shares of Series K Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock. Underwriting commissions and costs incurred in connection with the sale of the Series K Preferred Stock are reflected as a reduction of additional paid in capital.

16


(7) FAIR VALUE MEASUREMENTS

ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants.

ASC Topic 820’s valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy:

Level 1- Quoted prices for identical instruments in active markets
Level 2- Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in

markets that are not active; and model-derived valuations in which significant value drivers are observable
Level 3- Valuations derived from valuation techniques in which significant value drivers are unobservable

The Company calculates the fair value of the redeemable noncontrolling interests based on either quoted market prices on national exchanges for those interests based on the Company's Class A Common stock (level 1), contractual redemption prices per share as stated in governing agreements (level 2) or unobservable inputs considering the assumptions that market participants would make in pricing the obligations (level 3). The level 3 inputs used include an estimate of the fair value of the cash flow generated by the limited partnership or limited liability company in which the investor owns the joint venture units capitalized at prevailing market rates for properties with similar characteristics or located in similar areas.

The fair values of interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. The analysis reflects the contractual terms of the swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded, as of October 31, 2021 and January 31, 2022, that the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, the Company has determined that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.

The Company measures its redeemable noncontrolling interests and interest rate swap derivatives at fair value on a recurring basis. The fair value of these financial assets and liabilities was determined using the following inputs (amount in thousands):

       
Fair Value Measurements at Reporting Date Using
 
   
Total
   
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
   
Significant Other
Observable Inputs
(Level 2)
   
Significant
Unobservable Inputs
(Level 3)
 
January 31, 2022
                       
                         
Assets:
                       
Interest Rate Swap Agreement
 
$
1,372
   
$
-
   
$
1,372
   
$
-
 
                                 
Liabilities:
                               
Interest Rate Swap Agreement
 
$
4,121
   
$
-
   
$
4,121
   
$
-
 
Redeemable noncontrolling interests
 
$
66,573
   
$
20,866
   
$
45,161
   
$
546
 
                                 
October 31, 2021
                               
                                 
Assets:
                               
Interest Rate Swap Agreement
 
$
515
   
$
-
   
$
515
   
$
-
 
                                 
Liabilities:
                               
Interest Rate Swap Agreement
 
$
6,735
   
$
-
   
$
6,735
   
$
-
 
Redeemable noncontrolling interests
 
$
67,395
   
$
20,283
   
$
46,566
   
$
546
 


17


(8) COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, the Company is involved in legal actions relating to the ownership and operations of its properties.  In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.  At January 31, 2022, the Company had commitments of approximately $9.0 million for capital improvements to its properties and tenant-related obligations.

(9) SUBSEQUENT EVENTS

In February 2022, the Company refinanced its existing $22.8 million first mortgage secured by our Stratford, CT property.  The new mortgage has a principal balance of $35.0 million, has a term of 10 years, and requires payments of principal and interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”), plus an applicable spread.  Concurrent with entering into the mortgage, the Company entered into an interest rate swap agreement with the lender as the counterparty, which converts the variable rate based on SOFR to a fixed rate of interest totaling 3.0525% per annum.

In February 2022, the Company purchased, for $33.6 million, a 186,000 square foot grocery-anchored shopping center located in Shelton, CT. The Company funded the purchase price with available cash and a $20 million borrowing on its Facility.
18


2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements of the company and the notes thereto included elsewhere in this report.

Forward Looking Statements:

This Quarterly Report on Form 10-Q of Urstadt Biddle Properties Inc. (the "Company") contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  Such statements can generally be identified by such words as “anticipate”, “believe”, “can”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “seek”, “should”, “will” or variations of such words or other similar expressions and the negatives of such words.  All statements included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), business strategies, expansion and growth of our operations and other such matters, are forward-looking statements.  These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.  Such statements are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events and actual results, performance or achievements, financial and otherwise, may differ materially from the results, performance or achievements expressed or implied by the forward-looking statements.  We caution not to place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Important factors that we think could cause our actual results to differ materially from expected results are summarized below. One of the most significant factors, however, is the ongoing impact of the current outbreak of the novel coronavirus ("COVID-19") on the U.S., regional and global economies, the U.S. retail market and the broader financial markets. The current outbreak of COVID-19 has also impacted, and is likely to continue to impact, directly or indirectly, many of the other important factors listed below.

New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Important factors, among others, that may affect our actual results include:

negative impacts from the continued spread of COVID-19 or from the emergence of a new strain of novel corona virus, including on the U.S. or global economy or on our business, financial position or results of operations;

economic and other market conditions, including real estate and market conditions, as well as inflationary pressures, that could impact us, our properties or the financial stability of our tenants;

consumer spending and confidence trends, as well as our ability to anticipate changes in consumer buying practices and the space needs of tenants;

our relationships with our tenants and their financial condition and liquidity;

any difficulties in renewing leases, filling vacancies or negotiating improved lease terms;

the inability of our properties to generate increased, or even sufficient, revenues to offset expenses, including amounts we are required to pay to municipalities for real estate taxes, payments for common area maintenance expenses at our properties and salaries for our management team and other employees;

the market value of our assets and the supply of, and demand for, retail real estate in which we invest;

risks of real estate acquisitions and dispositions, including our ability to identify and acquire retail real estate that meet our investment standards in our markets, as well as the potential failure of transactions to close;

risks of operating properties through joint ventures that we do not fully control;

financing risks, such as the inability to obtain debt or equity financing on favorable terms or the inability to comply with various financial covenants included in our Unsecured Revolving Credit Facility (the "Facility") or other debt instruments we currently have or may subsequently obtain, as well as the level and volatility of interest rates, which could impact the market price of our common stock and the cost of our borrowings;

environmental risk and regulatory requirements;

risks related to our status as a real estate investment trust, including the application of complex federal income tax regulations that are subject to change;

legislative and regulatory changes generally that may impact us or our tenants;

as well as other risks identified in this Annual Report on Form 10-K under Item 1A. Risk Factors for the fiscal year ended October 31, 2021 and in the other reports filed by the Company with the Securities and Exchange Commission (the “SEC”).
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Executive Summary

Overview

We are a fully integrated, self-administered real estate company that has elected to be a Real Estate Investment Trust ("REIT") for federal income tax purposes, engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers, anchored by supermarkets, pharmacy/drug-stores and wholesale clubs, with a concentration in the metropolitan tri-state area outside of the City of New York. Other real estate assets include office properties, two self-storage facilities, single tenant retail or restaurant properties and office/retail mixed-use properties.  Our major tenants include supermarket chains and other retailers who sell basic necessities.

At January 31, 2022, we owned or had equity interests in 78 properties, which include equity interests we own in five consolidated joint ventures and six unconsolidated joint ventures, containing a total of 5.1 million square feet of Gross Leasable Area (“GLA”).    Of the properties owned by wholly-owned subsidiaries or joint venture entities that we consolidate, approximately 92.6% of the GLA was leased (91.9% at October 31, 2021).  Of the properties owned by unconsolidated joint ventures, approximately 94.0% of the GLA was leased (93.9% at October 31, 2021).  In addition, we own and operate self-storage facilities at two of our retail properties.  Both self-storage facilities are managed for us by Extra Space Storage, a publicly traded REIT.  One of the self-storage facilities is located in the back of our Yorktown Heights, NY shopping center in below grade space.  As of January 31, 2022, the self-storage facility had 57,389 of available GLA, which was 95.4% leased.  The rent per available square foot was $29.22.  As discussed later in this Item 2, we have also developed a second self-storage facility located in Stratford, CT with 90,000 square feet of available GLA.  The facility has been operational for approximately 12 months and is 49.0% leased.  We are also beginning construction of a third self-storage facility at our Pompton Lakes, NJ property and our anticipated investment to develop the facility is approximately $7 million.

In addition to our business of owning and managing real estate, we are also involved in the beer, wine and spirits retail business, through our ownership of six subsidiary corporations formed as taxable REIT subsidiaries.  Each subsidiary corporation owns and operates a beer, wine and spirits retail store at one of our shopping centers.  To manage our operations, we have engaged an experienced third-party, retail beer, wine and spirits manager, which also owns many stores of its own.  Each of these stores occupies space at one of our shopping centers, fulfilling a strategic need for a beer, wine and spirits business at such shopping center.  These stores are not currently providing material earnings in excess of what the Company would have earned from leasing the space to unrelated tenants at market rents.  However, these businesses are continuing to mature, and net sales and earnings may eventually become material to our financial position and net income.  Nevertheless, our primary business remains the ownership and management of real estate, and we expect that the beer, wine and spirts business will remain an ancillary aspect of our business model.  However, we may open additional beer, wine and spirits stores at other shopping centers if we determine that any such store would be a strategic fit for our overall business and the investment return analysis supports such a determination.

We have paid quarterly dividends to our stockholders continuously since our founding in 1969.

Impact of COVID-19

The spread of COVID-19 has had and may continue to have a significant impact on the global economy, the U.S. economy, the economies of the local markets throughout the northeast region in which our properties are located, and the broader financial markets. Nearly every industry was impacted directly or indirectly, and the U.S. market came under severe pressure due to numerous factors, including preventive measures taken by local, state and federal authorities to alleviate the public health crisis, such as mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders.  During the early part of the pandemic, these containment measures, as implemented by the tri-state area of Connecticut, New York and New Jersey, generally permitted businesses designated as “essential” to remain open, thereby limiting the operations of different categories of our tenants to varying degrees.  Most of these restrictions have been lifted as the COVID-19 situation in the tri-state area has significantly improved since the early days of the pandemic as a result of various factors, including a large portion of the population getting vaccinated, with most businesses now permitted to open at full capacity, but under other limitations intended to control the spread of COVID-19.

During these early days of the pandemic and beyond, we took a number of proactive measures, including:

implementing a work-from-home policy during the first few months of the pandemic for the health and safety of our staff, with employees returning to the office at less than 50% capacity in late May 2020 and at close to full capacity as of the summer of 2021;

providing assistance to tenants in identifying local, state and federal resources, such as that provided under the Coronavirus Aid, Relief, and Economic Security Act of 2020, as well as providing deferrals, and in some cases, abatements of rent to tenants on a case-by-case basis as discussed in more detail under “Rent Deferrals, Abatements and Lease Restructurings”;

launching a program designating dedicated parking spots for curbside pick-up at our shopping centers for use by all tenants and their customers, assisting restaurant tenants in securing municipal approvals for outdoor seating, and otherwise assisting tenants in many other ways to improve their business prospects; and

enhancing our liquidity position by borrowing $35 million under our Facility during March and April 2020, which was subsequently repaid, reducing our dividends paid in July 2020 to approximately 25% of pre-pandemic levels, then raising them to approximately 75% of pre-pandemic levels in July 2021 when the Company’s improved financial condition and prospects warranted such an increase, with a further increase in the first quarter of fiscal 2022 to approximately 85% of pre-pandemic levels.
Compared to the early days of the COVID-19 pandemic, we have seen substantial improvement in foot traffic, retail activity and general business conditions for our tenants.  However, such improvements have not been consistent across all tenants.  For a number of our tenants that operate businesses involving high contact interactions with their customers, such as spas and salons, the negative impact of COVID-19 has been more severe and the recovery more difficult.  Dry cleaners have also suffered as a result of many workers continuing to work from home Gyms and fitness tenants have experienced varying results, but are beginning to return to pre-pandemic normalcy. 

The following information is intended to provide certain information regarding the impact of the COVID-19 pandemic on our portfolio and our tenants.  As a result of the rapid development, fluidity and uncertainty surrounding this situation, we expect that the following statistical and other information could change going forward, potentially significantly:

As of January 31, 2022, all of our 72 retail shopping centers, stand-alone restaurants and stand-alone bank branches are open and operating, with approximately 99.6% of our tenants (based on Annualized Base Rent ("ABR")) open and fully or partially operating and approximately 0.4% of our tenants currently closed.

As of January 31, 2022, all of our shopping centers include necessity-based tenants, with approximately 70.3% of our tenants (based on ABR) designated as “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 essential businesses are 99.8% open.

As of January 31, 2022, approximately 86% of our GLA is located in properties anchored by grocery stores, pharmacies or wholesale clubs, 4% of our GLA is located in outdoor retail shopping centers adjacent to regional malls and 8% of our GLA is located in outdoor neighborhood convenience retail, with the remaining 2% of our GLA consisting of six suburban office buildings located in Greenwich, Connecticut and Bronxville, New York and three retail bank branches.  All six suburban office buildings are open and all of the retail bank branches are open.

As of March 1, 2022, we have received payment of approximately 94.8% and 96.3% of lease income, consisting of contractual base rent (leases in place without consideration of any deferral or abatement agreements), common area maintenance reimbursement and real estate tax reimbursement billed for April 2020 through January 2022, the first quarter (November 2021 through January 2022) of fiscal 2022, respectively, not including the application of any security deposits.

Rent Deferrals, Abatements and Lease Restructurings

Similar to other retail landlords across the United States, we received a number of requests for rent relief from 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.  We 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.  In evaluating these requests, we considered many factors, including the tenant’s financial strength, the tenant’s operating history, potential co-tenancy impacts, the tenant’s contribution to the shopping center in which it operates, our assessment of the tenant’s long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors.  Although each negotiation has been specific to that tenant, most concessions have been in the form of deferred rent for some portion of rents due in April through December 2020 or longer, to be paid back over the later part of the lease, preferably within a period of one year or less.  Some of these concessions have been in the form of rent abatements for some portion of tenant rents due in April through December 2020 or longer.

In addition, we have continued to receive a small number of follow-on requests from tenants to whom we had already provided temporary rent relief in the early days of the pandemic.  These tenants are generally ones whose businesses have been slower to recover from the pandemic, as discussed above, due to the high touch nature of their services or the impact of the remote workforce.  These requests, however, have been tapering off, and we did not receive any new requests during the quarter ended January 31, 2022 from tenants who had not previously requested rent relief.

Each reporting period, we must make estimates as to the collectability of our tenants’ accounts receivable related to base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on tenants’ businesses, and changes in tenants’ payment patterns when evaluating the adequacy of the allowance for doubtful accounts.

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash basis accounting in accordance with ASC Topic 842.  We did not convert any additional tenants to cash basis accounting since our second quarter of fiscal 2021. As of January 31, 2022, 28 of the 89 tenants are no longer tenants in the Company's properties.  In addition, when one of the Company’s tenants is converted to cash basis accounting in accordance with ASC Topic 842, all previously recorded straight-line rent receivables need to be reversed in the period that the tenant is converted to cash basis revenue recognition.

In continuing to evaluate the collectability of tenant lease income billings, during the three months ended January 31, 2022, we determined that lease payments for 3 tenants, who had previously been converted to cash-basis accounting as a result of our earlier assessment that their future lease payments were not probable of collection, were now probable of collection and they were restored to accrual basis accounting.  Our criteria for restoring a cash-basis tenant to accrual accounting required the tenant to demonstrate their ability to make current rental payments over the last 6 months and for that tenant to have no significant receivables as of January 31, 2022.  As a result of the change in assessment for these 3 tenants, we recorded $24,000 in lease income in the three months ended January 31, 2022 as a result of restoring those tenants' straight-line rent receivables.

During the three months ended January 31, 2022 and 2021, we recognized collectability adjustments totaling $200,000 and $2.1 million, respectively. 

As of January 31, 2022, the revenue from approximately 5.6% of our tenants (based on total commercial leases) is being recognized on a cash basis.

Each reporting period, management assesses whether there are any indicators that the value of its real estate investments may be impaired and has concluded that none of its investment properties are impaired at January 31, 2022. We will continue to monitor the economic, financial, and social conditions resulting from the COVID-19 pandemic and will assess our real estate asset portfolio for any impairment indicators as required under GAAP. If we determine that any of our real estate assets are impaired, we would be required to take impairment charges and such amounts could be material.  See Footnote 1 to the Notes to the Company’s Consolidated Financial Statements for additional discussion regarding our policies on impairment charges.
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Strategy, Challenges and Outlook

We have a conservative capital structure, which includes permanent equity sources of Common Stock, Class A Common Stock and two series of perpetual preferred stock, which are only redeemable at our option.  In addition, we have mortgage debt secured by some of our properties and a $125 million Facility.  We do not have any significant secured debt maturing until August of 2024.

Key elements of our growth strategy and operating policies are to:

maintain our focus on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, which we believe can provide a more stable revenue flow even during difficult economic times because of the focus on food and other types of staple goods;

acquire quality neighborhood and community shopping centers in the northeastern part of the United States with a concentration on properties in the metropolitan tri-state area outside of the City of New York, and unlock further value in these properties with selective enhancements to both the property and tenant mix, as well as improvements to management and leasing fundamentals, with hopes to grow our assets through acquisitions subject to the availability of acquisitions that meet our investment parameters;

selectively dispose of underperforming properties and re-deploy the proceeds into potentially higher performing properties that meet our acquisition criteria;

invest in our properties for the long term through regular maintenance, periodic renovations and capital improvements, enhancing their attractiveness to tenants and customers (e.g. curbside pick-up), as well as increasing their value;

leverage opportunities to increase GLA at existing properties, through development of pad sites and reconfiguring of existing square footage, to meet the needs of existing or new tenants;

proactively manage our leasing strategy by aggressively marketing available GLA, renewing existing leases with strong tenants, anticipating tenant weakness when necessary by pre-leasing their spaces and replacing below-market-rent leases with increased market rents, with an eye towards securing leases that include regular or fixed contractual increases to minimum rents;

improve and refine the quality of our tenant mix at our shopping centers;

maintain strong working relationships with our tenants, particularly our anchor tenants;

maintain a conservative capital structure with low debt levels; and

control property operating and administrative costs.

We believe our strategy of focusing on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, has been validated during the COVID-19 pandemic.  We believe the nature of our properties makes them less susceptible to economic downturns than other retail properties whose anchor tenants do not supply basic necessities.   During normal conditions, we believe that consumers generally prefer to purchase food and other staple goods and services in person, and even during the COVID-19 pandemic our supermarkets, pharmacies and wholesale clubs have been posting strong in-person sales.  Moreover, most of our grocery stores implemented or expanded curbside pick-up or partnered with delivery services to cater to the needs of their customers during the COVID-19 pandemic.

We recognize, however, that the pandemic may have accelerated a movement towards e-commerce that may be challenging for weaker tenants that lack an omni-channel sales or micro-fulfillment strategy.  We launched a program designating dedicated parking spots for curbside pick-up and are assisting tenants in many other ways to help them quickly adapt to these changing circumstances.  Many tenants have adapted to the new business environment through use of our curbside pick-up program, and early industry data seems to indicate that micro-fulfillment from retailers with physical locations may be a new competitive alternative to e-commerce.  It is too early to know which tenants will or will not be successful in making any changes that may be necessary.  It is also too early to determine whether these changes in consumer behavior are temporary or reflect long-term changes.

While we have seen substantial improvement in general business conditions, the pandemic is still ongoing, with existing and new variants making the situation difficult to predict. Moreover, challenges presented by inflation, labor shortages and supply chain disruptions could present continued or new challenges for our tenants. We expect that our rent collections could continue to be below our tenants’ contractual rent obligations during this business recovery and potentially beyond. We will continue to accrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to cash basis accounting in accordance with ASC Topic 842. However, we anticipate that some tenants eventually will be unable to pay amounts due, and we will incur losses against our rent receivables, the timing of which is not predictable.

As a REIT, we are susceptible to changes in interest rates, the lending environment, the availability of capital markets and the general economy.  The impacts of any changes are difficult to predict, particularly during the course of the current COVID-19 pandemic.

Transaction Highlights of Fiscal 2022; Recent Developments

Set forth below are highlights of our recent property acquisitions, potential acquisitions under contract, other investments, property dispositions and financings:

In September 2021, we entered into a purchase and sale agreement to sell our property located in Chester, NJ to an unrelated third party for a sale price of $1.96 million as that property no longer met our investment objectives.  In accordance with ASC Topic 360-10-45, the property met all the criteria to be classified as held for sale in the fourth quarter of fiscal 2021, and accordingly the Company recorded a loss on property held for sale of $342,000, which loss was included in continuing operations in the consolidated statement of income for the year ended October 31, 2021. This loss has been added back to our FFO as discussed below in this Item 2. The amount of the loss represented the net carrying amount of the property over the fair value of the asset less estimated cost to sell.  In December 2021, the Chester Property sale was completed and we realized an additional loss on sale of property of $8,000, which loss is included in continuing operations in the consolidated statement of income for the three months ended January 31, 2022.
In November 2021, we redeemed 59,819 units of UB High Ridge, LLC from noncontrolling members.  The total cash price paid for the redemptions were $1.4 million. As a result of the redemptions, our ownership percentage of High Ridge increased to 26.9% from 24.6% at October 31, 2021.

In December 2021, we refinanced our existing $6.5 million first mortgage payable secured by our Boonton, NJ property.  The new mortgage has a principal balance of $11 million and requires payments of principal and interest at a fixed interest rate of 3.45%.  The new mortgage matures in November 2031.

In February 2022, we sold one-free standing restaurant retail property located in Bloomfield, NJ, as that property no longer met our investment objectives.  The property was sold for $1.8 million and we will record a gain on sale of property in our second quarter of fiscal 2022 in the approximate amount of $550,000.

In February 2022, we refinanced our existing $22.8 million first mortgage secured by our Stratford, CT property.  The new mortgage has a principal balance of $35.0 million, has a term of 10 years, and requires payments of principal and interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”), plus an applicable spread.  Concurrent with entering into the mortgage, we entered into an interest rate swap agreement with the lender as the counterparty, which converts the variable rate based on SOFR to a fixed rate of interest totaling 3.0525% per annum.

In February 2022, we purchased, for $33.6 million, a 186,000 square foot grocery-anchored shopping center located in Shelton, CT. We funded the purchase price with available cash and a $20 million borrowing on our Facility.


Leasing

Overview

With significant progress made in vaccinating the U.S. public and signs of business improvement, we have observed a marked increase in leasing activity, including interest from potential new tenants and tenants interested in renewing their leases. However, some of our tenants are in the early stages of a potential recovery.  Moreover, challenges presented by inflation, labor shortages and supply chain disruptions could present continued or new challenges for our tenants. As a result, we may continue to experience higher than typical vacancy rates, take longer to fill vacancies and suffer potentially lower rental rates until the recovery becomes more robust.   

For the three months ended January 31, 2022, we signed leases for a total of 231,000 square feet of retail space in our consolidated portfolio.  New leases for vacant spaces were signed for 46,000 square feet at an average rental decrease of 4.9% on a cash basis.  Renewals for 185,000 square feet of space previously occupied were signed at an average rental increase of 2.6% on a cash basis.

Tenant improvements and leasing commissions averaged $45.89 per square foot for new leases for the three months ended January 31, 2022. We did not pay any significant tenant improvements and leasing commissions on renewal leases for the three months ended January 31, 2022. The average term for new leases was 5 years and the average term for renewal leases was 4 years.

The rental increases/decreases associated with new and renewal leases generally include all leases signed in arms-length transactions reflecting market leverage between landlords and tenants during the period. The comparison between average rent for expiring leases and new leases is determined by including minimum rent paid on the expiring lease and minimum rent to be paid on the new lease in the first year. In some instances, management exercises judgment as to how to most effectively reflect the comparability of spaces reported in this calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, the age of the expiring lease, capital investment made in the space and the specific lease structure. Tenant improvements include the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators or new entrances) that are required to make the space leasable.  Incentives (if applicable) include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

The leases signed in 2022 generally become effective over the following one to two years. There is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other reasons.

Impact of Inflation on Leasing

Our long-term leases contain provisions to mitigate the adverse impact of inflation on our operating results. Such provisions include clauses entitling us to receive (a) scheduled base rent increases and (b) percentage rents based upon tenants’ gross sales, which could increase as prices rise. In addition, many of our non-anchor leases are for terms of less than ten years, which permits us to seek increases in rents upon renewal at then current market rates if rents provided in the expiring leases are below then existing market rates. Most of our leases require tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.
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Critical Accounting Estimates

Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation and uncertainty and are reasonably likely to have a material impact on the financial condition or results of operations of the Company and require management’s most difficult, complex or subjective judgments.  Our most significant accounting estimates are as follows:

Valuation of investment properties
Revenue recognition
Determining the amount of our allowance for doubtful accounts

Valuation of Investment Properties
At each reporting period management must assess whether the value of any of its investment properties are impaired.  The judgement of impairment is subjective and requires management to make assumptions about future cash flows of an investment property and to consider other factors.  The estimation of these factors has a direct effect on valuation of investment properties and consequently net income.  As of January 31, 2022, management does not believe that any of our investment properties are impaired based on information available to us at January 31, 2022.

Revenue Recognition
Our main source of revenue is lease income from our tenants to whom we lease space at our 78 shopping centers. The COVID-19 pandemic has caused distress for many of our tenants as some of those tenant businesses were forced to close early in the pandemic, and although most have been allowed to re-open and operate, some categories of tenants have been slower to recover.  As a result, we have many tenants who have had difficulty paying all of their contractually obligated rents and we have reached agreements with many of them to defer or abate portions of the contractual rents due under their leases with the Company.  In accordance with ASC Topic 842, where appropriate, we will continue to accrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to cash basis accounting in accordance with ASC Topic 842. However, we anticipate that some tenants eventually will be unable to pay amounts due, and we will incur losses against our rent receivables, which would reduce lease income. The extent and timing of the recognition of such losses will depend on future developments, which are highly uncertain and cannot be predicted and these future losses could be material.

Allowance for Doubtful Accounts
GAAP requires us to bill our tenants based on the terms in their leases and to record lease income on a straight-line basis. When a tenant does not pay a billed amount due under their lease, it becomes a tenant account receivable, or an asset of the Company.  GAAP requires that receivables, like most assets, be recorded at their realizable value.  Each reporting period we analyze our tenant accounts receivable, and based on the information available to management at the time, record an allowance for doubtful accounts for any unpaid tenant receivable that we believe is uncollectable.  This analysis is subjective and the conclusions reached have a direct impact on net income.  As of January 31, 2022, the portion of our billed but unpaid tenant receivables, excluding straight-line rent receivables that we believe are collectable, amounts to $2.4 million.

For a further discussion of our accounting estimates and critical accounting policies, please see Note 1 in our consolidated financial statements included in Item 1 of this Form 10-Q.

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Liquidity and Capital Resources

Overview

At January 31, 2022, we had cash and cash equivalents of $24.6 million, compared to $24.1 million at October 31, 2021. Our sources of liquidity and capital resources include operating cash flows from real estate operations, proceeds from bank borrowings and long-term mortgage debt, capital financings and sales of real estate investments.  Substantially all of our revenues are derived from rents paid under existing leases, which means that our operating cash flow depends on the ability of our tenants to make rental payments.   For the three months ended January 31, 2022 and 2021, net cash flows from operating activities amounted to $13.5 million and $14.6 million, respectively.

Our short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service, management and professional fees, cash distributions to certain limited partners and non-managing members of our consolidated joint ventures, and regular dividends paid to our Common and Class A Common stockholders.  Cash dividends paid on Common and Class A Common stock for the three months ended January 31, 2022 and 2021 totaled $9.3 million and $5.5 million, respectively.  Historically, we have met short-term liquidity requirements, which is defined as a rolling twelve month period, primarily by generating net cash from the operation of our properties.

During the first two quarters of fiscal 2021, the Board of Directors declared and the Company paid quarterly dividends that were reduced from pre-pandemic levels, as more extensively discussed under the “Impact of COVID-19” section earlier in this Item 2.  Subsequent to the end of the second quarter, the Board of Directors increased our Common and Class A Common stock dividends when compared to the reduced dividends that have been paid during the pandemic.  In December 2021, the Board of Directors further increased the annualized dividend by $0.03 per Common and Class A Common share beginning with our January 2022 dividend, which was paid on January 14, 2022.  Future determinations regarding quarterly dividends will impact the Company's short-term liquidity requirements.

In December 2021 and February 2022, we generated $16.0 million in net proceeds from refinancing two secured non-recourse first mortgages that were maturing.

In February 2022, we purchased for $33.6 million, a 186,000 square foot grocery-anchored shopping center located in Shelton, CT. We funded the purchase price with available cash predominantly generated from the aforementioned mortgage refinancings and a $20 million borrowing on our Facility.

Our long-term liquidity requirements consist primarily of obligations under our long-term debt, dividends paid to our preferred stockholders, capital expenditures and capital required for acquisitions.  In addition, the limited partners and non-managing members of our five consolidated joint venture entities, McLean Plaza Associates, LLC, UB Orangeburg, LLC, UB High Ridge, LLC, UB Dumont I, LLC and UB New City I, LLC, have the right to require us to repurchase all or a portion of their limited partner or non-managing member interests at prices and on terms as set forth in the governing agreements.  See Note 3 to the consolidated financial statements included in Item 1 of this Report on Form 10-Q.  Historically, we have financed the foregoing requirements through operating cash flow, borrowings under our Facility, debt refinancings, new debt, equity offerings and other capital market transactions, and/or the disposition of under-performing assets, with a focus on keeping our debt level low.  We expect to continue doing so in the future.  We cannot assure you, however, that these sources will always be available to us when needed, or on the terms we desire.

Capital Expenditures

We invest in our existing properties and regularly make capital expenditures in the ordinary course of business to maintain our properties. We believe that such expenditures enhance the competitiveness of our properties. For the three months ended January 31, 2022, we paid approximately $3.0 million for property improvements, tenant improvements and leasing commission costs ($1.4 million representing property improvements, $0.8 million in property improvements related to our Stratford project and Pompton Lakes, NJ self-storage project (see paragraphs below) and approximately $0.9 million related to new tenant space improvements, leasing costs and capital improvements as a result of new tenant spaces).  The amount of these expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates. We expect to incur approximately $9.0 million for anticipated capital improvements, tenant improvements/allowances and leasing costs related to new tenant leases and property improvements during the remainder of fiscal 2022 and fiscal 2023.  This amount is inclusive of commitments for the Stratford, CT and Pompton Lakes, NJ developments discussed directly below.  These expenditures are expected to be funded from operating cash flows, bank borrowings or other financing sources.

We have begun construction of a new self-storage facility at our Pompton Lakes, NJ property.  Our investment in this development is estimated to be $7 million, which will be funded with available cash or borrowings on our Facility.

We are currently in the process of developing 3.4 acres of recently-acquired land adjacent to a shopping center we own in Stratford, CT.  We built one pad-site building that is leased to two retail chains and will be building another pad-site building once we receive approvals to move a cell tower to an alternate site on our property.  These two pad sites total approximately 5,200 square feet.  In addition, we built a recently opened self-storage facility of approximately 131,000 square feet, which is managed for us by a national self-storage company. The total project cost of the completed pad site and the completed self-storage facility was approximately $18.8 million (excluding land cost).  We plan on funding the development cost for the second pad site with available cash, borrowings on our Facility or other sources, as more fully described earlier in this Item 2.  The storage building is approximately 49.0% leased as of January 31, 2022.

Financing Strategy, Unsecured Revolving Credit Facility and other Financing Transactions

Our strategy is to maintain a conservative capital structure with low leverage levels by commercial real estate standards.  Mortgage notes payable and other loans of $299.0 million consist of $1.7 million in variable rate debt with an interest rate of 5.09% as of January 31, 2022 and $297.3 million in fixed-rate mortgage loans with a weighted average interest rate of 4.0% at January 31, 2022.  The mortgages are secured by 24 properties with a net book value of $506 million and have fixed rates of interest ranging from 3.4% to 4.9%.  The $1.7 million in variable rate debt is unsecured.  We may refinance our mortgage loans, at or prior to scheduled maturity, through replacement mortgage loans.  The ability to do so, however, is dependent upon various factors, including the income level of the properties, interest rates and credit conditions within the commercial real estate market. Accordingly, there can be no assurance that such re-financings can be achieved.  At January 31, 2022, we had 48 properties in our consolidated portfolio that were unencumbered by mortgages.

Included in the mortgage notes discussed above, we have eight promissory notes secured by properties we consolidate and three promissory notes secured by properties in joint ventures that we do not consolidate.  The interest rate on these 11 notes is based on some variation of the London Interbank Offered Rate (“LIBOR”) plus some amount of credit spread.  In addition, on the day these notes were executed by us, we entered into derivative interest rate swap contracts, the counterparty of which was either the lender on the aforementioned promissory notes or an affiliate of that lender.  These swap contracts are in accordance with the International Swaps and Derivatives Association, Inc ("ISDA").  These swap contracts convert the variable interest rate in the notes, which are based on LIBOR, to a fixed rate of interest for the life of each note. In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced that it extended publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021.  At some point, all contracts, including our 11 promissory notes and 11 swap contracts that use LIBOR, will no longer have the reference rate available and the reference rate will need to be replaced.  We have good working relationships with all of our lenders to our notes, who are also the counterparties to our swap contracts.  All indications we have received from our lenders and counterparties is that their goal is to have the replacement reference rate under the notes match the replacement rates in the swaps.  If this were to happen, we believe there would be no material effect on our financial position or results of operations.  However, because this will be the first time any of the reference rates for our promissory notes or swap contracts will stop being published, we cannot be sure how the replacement rate event will conclude.  Until we have more clarity from our lenders and counterparties on how they plan on dealing with this replacement rate event, we cannot be certain of the impact on the Company. See “Item 3. Quantitative and Qualitative Disclosures about Market Risk” included in this Report on Form 10-Q for additional information on our interest rate risk.

We currently maintain a ratio of total debt to total assets below 30.6% and a fixed charge coverage ratio of over 3.5 to 1 (excluding preferred stock dividends), which we believe will allow us to obtain additional secured mortgage loans or other types of borrowings, if necessary.  We own 48 properties in our consolidated portfolio that are not encumbered by secured mortgage debt.  At January 31, 2022, we had borrowing capacity of $124.2 million on our Facility (exclusive of the accordion feature discussed in the following paragraph).  Our Facility includes financial covenants that limit, among other things, our ability to incur unsecured and secured indebtedness.  See Note 2 in our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information on these and other restrictions.

We currently have a $125 million unsecured revolving credit facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also included Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents).  The Facility gives us the option, under certain conditions, to increase the Facility's borrowing capacity to $175 million (subject to lender approval).  The maturity date of Facility is March 29, 2024, with a one year extension at our option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at our option of either the Eurodollar rate plus 1.45% to 2.20% or The Bank of New York Mellon's prime lending rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  We pay a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. Our ability to borrow under the Facility is subject to its compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit our level of secured and unsecured indebtedness, including preferred stock, and additionally requires us to maintain certain debt coverage ratios. We were in compliance with such covenants at January 31, 2022. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR.

The Facility contains representations and financial and other affirmative and negative covenants usual and customary for this type of agreement.  So long as any amounts remain outstanding or unpaid under the Facility, we must satisfy certain financial covenants: 

unsecured indebtedness may not exceed $400 million;
secured indebtedness may not exceed 40% of gross asset value, as determined under the Facility;
total secured and unsecured indebtedness, excluding preferred stock, may not be more than 60% of gross asset value;
total secured and unsecured indebtedness, plus preferred stock, may not be more than 70% of gross asset value;
unsecured indebtedness may not exceed 60% of the eligible real asset value of unencumbered properties in the unencumbered asset pool as defined under the Facility;
earnings before interest, taxes, depreciation and amortization must be at least 175% of fixed charges, which exclude preferred stock dividends;
the net operating income from unencumbered properties must be 200% of unsecured interest expenses;
not more than 25% of the gross asset value and unencumbered asset pool may be attributable to the Company's pro rata share of the value of unencumbered properties owned by non-wholly owned subsidiaries or unconsolidated joint ventures; and
the number of un-mortgaged properties in the unencumbered asset pool must be at least 10 and at least 10 properties must be owned by the Company or a wholly owned subsidiary.

For purposes of these covenants, eligible real estate value is calculated as the sum of the Company's properties annualized net operating income for the prior four fiscal quarters capitalized at 6.75% and the purchase price of any eligible real estate asset acquired during the prior four fiscal quarters.  Gross asset value is calculated as the sum of eligible real estate value, the Company's pro rata share of eligible real estate value of eligible joint venture assets, cash and cash equivalents, marketable securities, the book value of the Company's construction projects and the Company's pro rata share of the book value of construction projects owned by unconsolidated joint ventures, and eligible mortgages and trade receivables, as defined in the agreement.

At January 31, 2022, we had no borrowings outstanding on our Facility.  In February 2022, we borrowed $20 million on the Facility to fund a portion of the purchase of a property acquisition (see Transaction Highlights of Fiscal 2022; Recent Developments above in this Item 2).

Unconsolidated Joint Venture Debt

We have six off-balance sheet investments in real property through unconsolidated joint ventures:

a 66.67% equity interest in the Putnam Plaza Shopping Center,

an 11.792% equity interest in Midway Shopping Center, L.P.,

a 50% equity interest in the Chestnut Ridge Shopping Center,

a 50% equity interest in the Gateway Plaza shopping center and the Riverhead Applebee’s Plaza, and

a 20% interest in a suburban office building with ground level retail.

These unconsolidated joint ventures are accounted for under the equity method of accounting, as we have the ability to exercise significant influence over, but not control of, the operating and financial decisions of these investments.  Our off-balance sheet arrangements are more fully discussed in Note 4, “Investments in and Advances to Unconsolidated Joint Ventures” in our financial statements in Item 1 of this Quarterly Report on Form 10-Q.  Although we have not guaranteed the debt of these joint ventures, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g. guarantees against fraud, misrepresentation and bankruptcy) on certain loans of the joint ventures.  The below table details information about the outstanding non-recourse mortgage financings on our unconsolidated joint ventures (amounts in thousands):

     
Principal Balance
 
Fixed Interest
   
Joint Venture Description
 
Location
 
Original Balance
 
At January 31, 2022
 
Rate Per Annum
 
Maturity Date
Midway Shopping Center
 
Scarsdale, NY
 
$
32,000
 
$
25,000
   
4.80%
 
Dec-2027
Putnam Plaza Shopping Center
 
Carmel, NY
 
$
18,900
 
$
18,100
   
4.81%
 
Oct-2028
Gateway Plaza
 
Riverhead, NY
 
$
14,000
 
$
11,300
   
4.18%
 
Feb-2024
Applebee's Plaza
 
Riverhead, NY
 
$
2,300
 
$
1,801
   
3.38%
 
Aug-2026


23

Net Cash Flows from:

Operating Activities

Net cash flows provided by operating activities amounted to $13.5 million for the three months ended January 31, 2022 compared to $14.6 million in the comparable period of fiscal 2021. The net decrease in operating cash flows when compared with the corresponding prior period was primarily related to an increase of variable lease income (cost recovery income) for an under accrual adjustment in the first quarter of fiscal 2021 which increased variable lease income in the first quarter of fiscal 2021, which creates a negative variance in the first quarter of fiscal 2022.  In addition, a decrease in lease termination income in the first quarter of fiscal 2022 when compared with the first quarter of fiscal 2021 predominantly related to a tenant who occupied multiple spaces in our portfolio that closed their stores and paid a large termination payment to us in the first quarter of fiscal 2021.

Investing Activities

Net cash flows used by investing activities amounted to $234,000 for the three months ended January 31, 2022 compared to $6.2 million in the comparable period of fiscal 2021. The decrease in net cash flows used by investing activities in the three months ended January 31, 2022 when compared to the corresponding prior period was the result of expending $3.7 million less on property improvements in the first three months of fiscal 2022 when compared with the corresponding prior period and making a $2.2 million investment in a note receivable in the first three months of fiscal 2021.

We regularly make capital investments in our properties for improvements, and pursuant to our obligations for tenant improvements and leasing commissions.

Financing Activities

The $643,000 increase in net cash flows used by financing activities for the three months ended January 31, 2022 when compared to the corresponding prior period was predominantly the result of paying $3.8 million more in common stock dividends in the first quarter of fiscal 2022 when compared to the corresponding prior period as the effect of the pandemic lessened on our company and our cash flow improved.  In addition, we redeemed $1 million more in noncontrolling units from members of one of our consolidated joint ventures in the first three months of fiscal 2022 when compared to the corresponding prior period.  This decrease was offset by generating $4.5 million in mortgage proceeds in the first quarter of fiscal 2022 when we refinanced our mortgage on our Boonton, NJ property.

Environmental Matters

Based on management's ongoing review of its properties, management is not aware of any environmental condition with respect to any of our properties that would be reasonably likely to have a material adverse effect on us. There can be no assurance, however, that (a) the discovery of environmental conditions that were previously unknown, (b) changes in law, (c) the conduct of tenants or (d) activities relating to properties in the vicinity of our properties, will not expose us to material liability in the future. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition and results of operations.
24

Results of Operations

The following information summarizes our results of operations for the three months ended January 31, 2022 and 2021 (amounts in thousands):

   
Three Months Ended
         
Change Attributable to
 
 
 
January 31,
   
Increase
         
Property
   
Properties Held In
 
Revenues
 
2022
   
2021
   
(Decrease)
   
% Change
   
Acquisitions/Sales
   
Both Periods (Note 1)
 
Base rents
 
$
25,014
   
$
24,159
   
$
855
     
3.5
%
 
$
(341
)
 
$
1,196
 
Recoveries from tenants
   
9,274
     
9,978
     
(704
)
   
(7.1
)%
   
(127
)
   
(577
)
Uncollectable amounts in lease income
   
(114
)
   
(655
)
   
541
     
(82.6
)%
   
-
     
541
 
ASC Topic 842 cash basis lease income reversal (including straight-line rent)
   
(87
)
   
(999
)
   
912
     
(91.3
)%
   
-
     
912
 
Total lease income
   
34,087
     
32,483
                                 
                                                 
Lease termination
   
28
     
705
     
(677
)
   
(96.0
)%
   
-
     
(677
)
Other income
   
1,440
     
1,089
     
351
     
32.2
%
   
(7
)
   
358
 
 
                                               
Operating Expenses
                                               
Property operating
   
7,002
     
6,314
     
688
     
10.9
%
   
(84
)
   
772
 
Property taxes
   
5,923
     
5,861
     
62
     
1.1
%
   
(25
)
   
87
 
Depreciation and amortization
   
7,144
     
7,519
     
(375
)
   
(5.0
)%
   
(34
)
   
(341
)
General and administrative
   
2,680
     
2,644
     
36
     
1.4
%
   
n/a
     
n/a
 
 
                                               
Non-Operating Income/Expense
                                               
Interest expense
   
3,302
     
3,392
     
(90
)
   
(2.7
)%
   
-
     
(90
)
Interest, dividends, and other investment income
   
55
     
43
     
12
     
27.9
%
   
n/a
     
n/a
 
 
 
Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2022 and 2021 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 increased by 3.5% to $25.0 million for the three months ended January 31, 2022 as compared with $24.2  million in the corresponding period of 2021. 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 2022, we sold one property totaling 9,100 square feet. In fiscal 2021, we sold two properties totaling  105,000 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, 2022 when compared with the corresponding period in fiscal 2021.

Properties Held in Both Periods:

Revenues

Base Rent

For properties held in both periods, base rent for the three month period ended January 31, 2022, increased by $1.2 million, when compared with the corresponding prior period.  This increase was primarily a result of new leasing completed after the first quarter of fiscal 2021 predominantly at three properties.

In the first three months of fiscal 2022, we leased or renewed approximately 231,000 square feet (or approximately 5.2% of total GLA).  At January 31, 2022, our consolidated properties were 92.6% leased (91.9% leased at October 31, 2021).

Tenant Recoveries
In the three month period ended January 31, 2022, recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) decreased by a net $577,000, when compared with the corresponding prior period.

The decrease in tenant recoveries was the result of an under accrual adjustment in the first quarter of fiscal 2021. 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 first quarter of fiscal 2021, and caused a negative variance in the first quarter of fiscal 2022.

Uncollectable Amounts in Lease Income
In the three month period ended January 31, 2022, uncollectable amounts in lease income decreased by $541,000. In the second quarter of fiscal 2020, we significantly increased our uncollectable amounts in lease income based on our assessment of the collectability of existing non-credit small shop tenants' receivables given the on-set of the COVID-19 pandemic in March 2020.  A number of non-credit small shop tenants' businesses were deemed non-essential by the states in which they operate and forced to close for a portion of the second and third quarters of fiscal 2020.  This placed stress on our small shop tenants and made it difficult for many of them to pay their rents when due. This stress continued through our first quarter of fiscal 2021.  Our assessment was that any billed but unpaid rents would likely be uncollectable. During the three months ended January 31, 2022, many of our tenants continued to see signs of business improvement as regulatory restrictions continued to relax and individuals continued to return to pre-pandemic activities. As a result, the uncollectable amounts in lease income declined during such period when compared with the corresponding period of the prior year.

ASC Topic 842 Cash Basis Lease Income Reversals
We adopted ASC Topic 842 "Leases" at the beginning of fiscal 2020.  ASC Topic 842 requires, among 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. 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 determined that as a result of the COVID-19 pandemic, 89 tenants' future lease payments were no longer probable of collection. All such tenants were converted to cash basis after our second quarter of fiscal 2020 and prior to our third quarter of fiscal 2021. As of January 31, 2022, 28 of these 89 tenants are no longer tenants in the Company's properties. During the fourth quarter of fiscal 2021, we restored 13 of the original 89 tenants to accrual-basis revenue recognition, and we restored an additional 3 tenants to accrual-basis accounting in the three months ended January 31, 2022. The tenants that were restored to accrual-basis accounting had paid all of their billed rents for six consecutive months and had no significant unpaid billings outstanding when restored to accrual-basis accounting. As a result of the restoration of the 3 tenants, we recorded $24,000 in straight-line rent in the three months ended January 31, 2022. As of January 31, 2022, 45 tenants continue to be accounted for on a cash basis, or approximately 5.6% of our tenants.  Many of our cash-basis tenants are now paying a larger portion of their billed rents, which results in an increase in revenue recognition for those tenants accounted for on a cash basis when compared with the corresponding period of the prior year.

Expenses

Property Operating
In the three month period ended January 31, 2022, property operating expenses increased by $772,000. This was primarily a result of having higher common area maintenance expenses in the three months of fiscal 2022 when compared with the corresponding prior period related to snow removal, environmental remediation costs and management costs.

Property Taxes
In the three month period ended January 31, 2022, property tax expenses were relatively unchanged when compared with the corresponding prior period.

Interest
In the three month period ended January 31, 2022, interest expenses were relatively unchanged when compared with the corresponding prior period.

Depreciation and Amortization
In the three month period ended January 31, 2022, depreciation and amortization decreased by $341,000 when compared with the corresponding prior period. This decrease was the result of a write-off of tenant improvements related to a tenant that vacated six locations in our portfolio in the first quarter of fiscal 2021.

General and Administrative Expenses
In the three month period ended January 31, 2022, general and administrative expenses were relatively unchanged when compared with the corresponding prior period.


25

Funds from Operations

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 FFO 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 months ended January 31, 2022 and 2021 (amounts in thousands):

Reconciliation of Net Income Available to Common and Class A Common Stockholders To Funds From Operations:
 
Three Months Ended
 
   
January 31,
 
   
2022
   
2021
 
Net Income Applicable to Common and Class A Common Stockholders
 
$
5,397
   
$
4,479
 
                 
Real property depreciation
   
5,738
     
5,702
 
Amortization of tenant improvements and allowances
   
991
     
1,315
 
Amortization of deferred leasing costs
   
397
     
476
 
Depreciation and amortization on unconsolidated joint ventures
   
375