Urban Edge Properties Reports Second Quarter 2022 Results

Rhea-AI Summary

Urban Edge Properties (NYSE: UE) reported its Q2 2022 results, achieving a net income of $11.6 million, down from $12.5 million in Q2 2021. Funds from Operations (FFO) increased to $36.2 million, or $0.30 per share, compared to $35.4 million, or $0.29 per share year-over-year. The company executed a record 716,000 sq ft in leasing activity with a portfolio occupancy rate of 94.9%. Additionally, total liquidity stands at approximately $771 million. The company completed $20.7 million in redevelopment projects and acquired The Shops at Riverwood for $32.9 million, supporting its growth strategy.

Positive

• Record leasing activity with 716,000 sq ft executed in Q2 2022.
• Funds from Operations (FFO) increased to $36.2 million ($0.30 per share), up from $35.4 million ($0.29 per share) in Q2 2021.
• Portfolio occupancy at 94.9%, an increase of 270 basis points compared to the previous year.
• Total liquidity of approximately $771 million, enhancing financial stability.
• Commenced $20.7 million in redevelopment projects expected to yield 10% unleveraged return.

Negative

• Net income decreased to $11.6 million in Q2 2022 from $12.5 million in Q2 2021.
• Same-property Net Operating Income (NOI) growth was only 1.2%, hindered by previous uncollectible receipts.

NEW YORK--(BUSINESS WIRE)-- Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended June 30, 2022.

“We achieved record levels of leasing activity in the quarter with the highest volume in over six years,” said Jeff Olson, Chairman and CEO. “We are building on our leasing momentum by attracting high-quality tenants that best meet the needs of the surrounding communities.”

Financial Results⁽¹⁾⁽²⁾

• Generated net income attributable to common shareholders of $11.6 million, or $0.10 per diluted share, for the second quarter of 2022 compared to $12.5 million, or $0.11 per diluted share, for the second quarter of 2021 and $21.1 million, or $0.18 per diluted share, for the six months ended June 30, 2022 compared to $32.5 million, or $0.28 per diluted share, for the six months ended June 30, 2021.

• Generated Funds from Operations ("FFO") applicable to diluted common shareholders of $36.2 million, or $0.30 per share, for the quarter compared to $35.4 million, or $0.29 per share, for the second quarter of 2021 and $70.4 million, or $0.58 per share, for the six months ended June 30, 2022 compared to $67.2 million, or $0.55 per share, for the six months ended June 30, 2021.

• Generated FFO as Adjusted of $36.8 million, or $0.30 per share, for the quarter compared to $34.5 million, or $0.28 per share, for the second quarter of 2021 and $71.4 million, or $0.58 per share, for the six months ended June 30, 2022 compared to $66.8 million, or $0.55 per share for the six months ended June 30, 2021.

Operating Results⁽¹⁾⁽³⁾

• Increased same-property Net Operating Income ("NOI") by 1.2% compared to the second quarter of 2021. The second quarter of 2021 benefited from elevated receipts related to amounts previously deemed uncollectible. Excluding these amounts in both periods, same-property NOI growth would have been 6.0%.

• Same-property NOI, including properties in redevelopment, was flat compared to the second quarter of 2021. The second quarter of 2021 benefited from elevated receipts related to amounts previously deemed uncollectible. Excluding these amounts in both periods, same-property NOI growth, including properties in redevelopment, would have been 4.2%.

• Reported same-property portfolio leased occupancy of 94.9%, an increase of 100 basis points compared to March 31, 2022 and an increase of 270 basis points compared to June 30, 2021.

• Executed record leasing, including 37 new leases, renewals and options totaling 716,000 square feet ("sf") during the quarter, which generated average rent spreads of 9.6% on a cash basis and 19.0% on a straight-line basis.

• Issued our 2021 Environmental, Social and Governance report, highlighting significant progress advancing LED lighting, waste recycling, diversity, equity and inclusion, and charitable programs among other goals.

Balance Sheet and Liquidity⁽¹⁾⁽⁴⁾

Balance sheet highlights as of June 30, 2022 include:

• Total liquidity of approximately $771 million, comprised of $171 million of cash on hand and $600 million available under our revolving credit agreement.

• Mortgages payable of $1.7 billion with a weighted average term to maturity of 4.6 years.

• Total market capitalization of approximately $3.6 billion, comprised of 122.6 million fully-diluted common shares valued at $1.9 billion and $1.7 billion of debt.

• Net debt to total market capitalization of 43%.

Leasing, Development and Redevelopment

The Company executed 290,000 sf of new leases during the second quarter. New anchor leases include a 63,000 sf Ralph’s Food Warehouse and Urology Hub, an 18,000 sf medical office, to open in a portion of the prior Kmart space at The Outlets at Montehiedra, Nemours Children's Health at Broomall, and a 62,000 sf kosher grocer, Bingo Wholesale, at Burnside Commons.

The Company commenced $20.7 million of redevelopment projects during the quarter, including the previously mentioned anchor leases, resulting in a total of $205.8 million of active redevelopment projects under way, with estimated remaining costs to complete of $134.9 million. The active redevelopment projects are expected to generate an approximate 10% unleveraged yield.

During the quarter, the Company completed three redevelopment projects aggregating $22.9 million upon rent commencement of AAA Wholesale Group, the industrial conversion of our property in Lodi, NJ, Amazon Fresh in Broomall, PA, and Five Below and Skechers at Tonnelle Commons in North Bergen, NJ.

The Company has signed leases that have not yet rent commenced that are expected to generate $22.9 million of future annual gross rent, representing approximately 10% of current annualized NOI. Approximately $1.4 million of this amount is expected to be recognized during the remainder of 2022.

Acquisition Activity

On June 8, 2022, the Company closed on the acquisition of The Shops at Riverwood, a 78,000 sf grocery-anchored shopping center for a purchase price of $32.9 million. The center, which is located in the greater Boston area, is fully occupied and has an attractive and diverse mix of tenants. The initial in-place unleveraged yield on this transaction is approximately 6% and was partially funded with a 7-year, $21.5 million non-recourse mortgage with a fixed interest rate of 4.25%. This acquisition supports our overall strategy of acquiring high-quality, infill real estate with future growth potential.

Financing Activity

During June 2022, the Company refinanced the mortgage secured by its property Plaza at Woodbridge, located in Woodbridge, NJ, with a new $52.9 million, 5-year mortgage at a rate of 2.26% plus one-month Secured Overnight Financing Rate (“SOFR”). The Company also refinanced the mortgage secured by its property Plaza at Cherry Hill, located in Cherry Hill, NJ, with a new $29 million, 3-year mortgage that bears interest at the Prime Rate plus 50 basis points.

Earnings Conference Call Information

The Company will host an earnings conference call and audio webcast on August 3, 2022 at 8:30am ET. All interested parties can access the earnings call by dialing 1-877-407-9716 (Toll Free) or 1-201-493-6779 (Toll/International) using conference ID 13730150. The call will also be webcast and available in listen-only mode on the investors page of our website: www.uedge.com. A replay will be available at the webcast link on the investors page for one year following the conclusion of the call. A telephonic replay of the call will also be available starting August 3, 2022 at 11:30am ET through August 17, 2022 at 11:59pm ET by dialing 1-844-512-2921 (Toll Free) or 1-412-317-6671 (Toll/International) using conference ID 13730150.

⁽¹⁾ Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.
⁽²⁾ Refer to page 8 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended June 30, 2022.
⁽³⁾ Refer to page 9 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended June 30, 2022.
⁽⁴⁾ Net debt as of June 30, 2022 is calculated as total consolidated debt of $1.7 billion less total cash and cash equivalents, including restricted cash, of $171 million.

Non-GAAP Financial Measures

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

• FFO: The Company believes FFO is a useful, supplemental measure of its operating performance that is a recognized metric used extensively by the real estate industry and, in particular real estate investment trusts ("REITs"). FFO, as defined by the National Association of Real Estate Investment Trusts ("Nareit") and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business and rental property depreciation and amortization expense. The Company believes that financial analysts, investors and shareholders are better served by the presentation of comparable period operating results generated from FFO primarily because it excludes the assumption that the value of real estate assets diminishes predictably. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions.

• FFO as Adjusted: The Company provides disclosure of FFO as Adjusted because it believes it is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO as Adjusted is calculated by making certain adjustments to FFO to account for items the Company does not believe are representative of ongoing core operating results, including non-comparable revenues and expenses. The Company's method of calculating FFO as Adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

• NOI: The Company uses NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The Company calculates NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for non-cash rental income and expense, and income or expenses that we do not believe are representative of ongoing operating results, if any. In addition, the Company uses NOI margin, calculated as NOI divided by total revenue, which the Company believes is useful to investors for similar reasons.

• Same-property NOI: The Company provides disclosure of NOI on a same-property basis, which includes the results of properties that were owned and operated for the entirety of the reporting periods being compared, which total 69 and 68 properties for the three and six months ended June 30, 2022 and 2021, respectively. Information provided on a same-property basis excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area ("GLA") is taken out of service and also excludes properties acquired or sold during the periods being compared. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company's properties. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when it is designated as a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan that is expected to have a significant impact on its operating income. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. The Company has also provided disclosure of NOI on a same-property basis adjusted to include redevelopment properties. Same-property NOI may include other adjustments as detailed in the Reconciliation of Net Income to NOI and same-property NOI included in the tables accompanying this press release.

• EBITDAre and Adjusted EBITDAre: EBITDAre and Adjusted EBITDAre are supplemental, non-GAAP measures utilized by us in various financial ratios. The White Paper on EBITDAre, approved by Nareit's Board of Governors in September 2017, defines EBITDAre as net income (computed in accordance with GAAP), adjusted for interest expense, income tax (benefit) expense, depreciation and amortization, losses and gains on the disposition of depreciated property, impairment write-downs of depreciated property and investments in unconsolidated joint ventures, and adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. EBITDAre and Adjusted EBITDAre are presented to assist investors in the evaluation of REITs, as a measure of the Company's operational performance as they exclude various items that do not relate to or are not indicative of our operating performance and because they approximate key performance measures in our debt covenants. Accordingly, the Company believes that the use of EBITDAre and Adjusted EBITDAre, as opposed to income before income taxes, in various ratios provides meaningful performance measures related to the Company's ability to meet various coverage tests for the stated periods. Adjusted EBITDAre may include other adjustments not indicative of operating results as detailed in the Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre included in the tables accompanying this press release. The Company also presents the ratio of net debt (net of cash) to annualized Adjusted EBITDAre as of June 30, 2022, and net debt (net of cash) to total market capitalization, which it believes is useful to investors as a supplemental measure in evaluating the Company's balance sheet leverage. The presentation of EBITDAre and Adjusted EBITDAre is consistent with EBITDA and Adjusted EBITDA as presented in prior periods.

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

Operating Metrics

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

Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio leased occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 69 and 68 properties for the three and six months ended June 30, 2022 and 2021, respectively. Occupancy metrics presented for the Company's same-property portfolio excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold during the periods being compared.

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

ADDITIONAL INFORMATION

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

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

ABOUT URBAN EDGE

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

FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic and related COVID-19 variants, including its impact on our retail tenants and their ability to make rent and other payments or honor their commitments under existing leases; (ii) the loss or bankruptcy of major tenants; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as potential volatility in the Company’s share price; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates, rising inflation, and other factors, including the discontinuation of USD LIBOR, which is currently anticipated to occur in 2023; (ix) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

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

URBAN EDGE PROPERTIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts)
	June 30,				December 31,
	2022				2021
ASSETS
Real estate, at cost:
Land	$	546,913			$	543,827
Buildings and improvements		2,455,859				2,441,797
Construction in progress		258,330				212,296
Furniture, fixtures and equipment		7,922				7,530
Total		3,269,024				3,205,450
Accumulated depreciation and amortization		(775,931	)			(753,947	)
Real estate, net		2,493,093				2,451,503
Operating lease right-of-use assets		65,858				69,361
Cash and cash equivalents		125,483				164,478
Restricted cash		45,838				55,358
Tenant and other receivables		14,366				15,812
Receivable arising from the straight-lining of rents		63,749				62,692
Identified intangible assets, net of accumulated amortization of $39,845 and $37,361, respectively		68,886				71,107
Deferred leasing costs, net of accumulated amortization of $19,006 and $17,641, respectively		21,049				20,694
Prepaid expenses and other assets		71,977				74,111
Total assets	$	2,970,299			$	2,985,116
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net	$	1,699,844			$	1,687,190
Operating lease liabilities		61,265				64,578
Accounts payable, accrued expenses and other liabilities		74,913				84,829
Identified intangible liabilities, net of accumulated amortization of $38,026 and $35,029, respectively		97,327				100,625
Total liabilities		1,933,349				1,937,222
Commitments and contingencies
Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,442,769 and 117,147,986 shares issued and outstanding, respectively		1,173				1,170
Additional paid-in capital		1,002,679				1,001,253
Accumulated other comprehensive loss		(52	)			—
Accumulated deficit		(23,568	)			(7,091	)
Noncontrolling interests:
Operating partnership		42,771				39,616
Consolidated subsidiaries		13,947				12,946
Total equity		1,036,950				1,047,894
Total liabilities and equity	$	2,970,299			$	2,985,116

URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
REVENUE
Rental revenue	$	97,454			$	93,653			$	196,870			$	188,272
Other income		400				353				1,185				1,395
Total revenue		97,854				94,006				198,055				189,667
EXPENSES
Depreciation and amortization		24,691				22,488				49,218				45,363
Real estate taxes		15,456				15,363				31,431				31,964
Property operating		17,596				15,891				38,801				36,182
General and administrative		10,634				9,484				21,755				18,152
Lease expense		3,083				3,195				6,218				6,501
Total expenses		71,460				66,421				147,423				138,162
Gain on sale of real estate		353				—				353				11,722
Interest income		214				90				419				226
Interest and debt expense		(14,241	)			(14,728	)			(28,245	)			(29,555	)
Income before income taxes		12,720				12,947				23,159				33,898
Income tax (expense) benefit		(711	)			34				(1,616	)			(201	)
Net income		12,009				12,981				21,543				33,697
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership		(506	)			(584	)			(893	)			(1,459	)
Consolidated subsidiaries		123				150				462				229
Net income attributable to common shareholders	$	11,626			$	12,547			$	21,112			$	32,467
Earnings per common share - Basic:	$	0.10			$	0.11			$	0.18			$	0.28
Earnings per common share - Diluted:	$	0.10			$	0.11			$	0.18			$	0.28
Weighted average shares outstanding - Basic		117,364				116,981				117,347				116,969
Weighted average shares outstanding - Diluted		117,427				117,034				117,410				122,327

Reconciliation of Net Income to FFO and FFO as Adjusted

The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the three and six months ended June 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of FFO and FFO as Adjusted.

	Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except per share amounts)		2022				2021				2022				2021
Net income	$	12,009			$	12,981			$	21,543			$	33,697
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership		(506	)			(584	)			(893	)			(1,459	)
Consolidated subsidiaries		123				150				462				229
Net income attributable to common shareholders		11,626				12,547				21,112				32,467
Adjustments:
Rental property depreciation and amortization		24,457				22,272				48,755				44,958
Gain on sale of real estate		(353	)			—				(353	)			(11,722	)
Limited partnership interests in operating partnership		506				584				893				1,459
FFO Applicable to diluted common shareholders		36,236				35,403				70,407				67,162
FFO per diluted common share(1)		0.30				0.29				0.58				0.55
Adjustments to FFO:
Transaction, severance and other expenses (income)		635				120				1,132				(257	)
(Reinstatement)/write-off of receivables arising from the straight-lining of rents, net		(46	)			(239	)			(133	)			634
Tenant bankruptcy settlement income		—				(286	)			(36	)			(286	)
Tax impact of Puerto Rico transactions		—				(490	)			—				(490	)
FFO as Adjusted applicable to diluted common shareholders	$	36,825			$	34,508			$	71,370			$	66,763
FFO as Adjusted per diluted common share(1)	$	0.30			$	0.28			$	0.58			$	0.55
Weighted Average diluted common shares(1)		122,512				122,485				122,351				122,327

⁽¹⁾ Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three months ended June 30, 2022 and 2021 and the six months ended June 30, 2022 are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

Reconciliation of Net Income to NOI and Same-Property NOI

The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and six months ended June 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of NOI and same-property NOI.

	Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2022				2021				2022				2021
Net income	$	12,009			$	12,981			$	21,543			$	33,697
Other (income) expense		(91	)			161				(530	)			(450	)
Depreciation and amortization		24,691				22,488				49,218				45,363
General and administrative expense		10,634				9,484				21,755				18,152
Gain on sale of real estate		(353	)			—				(353	)			(11,722	)
Interest income		(214	)			(90	)			(419	)			(226	)
Interest and debt expense		14,241				14,728				28,245				29,555
Income tax expense (benefit)		711				(34	)			1,616				201
Non-cash revenue and expenses		(1,980	)			(2,482	)			(4,365	)			(3,755	)
NOI		59,648				57,236				116,710				110,815
Adjustments:
Non-same property NOI and other(1)		(7,362	)			(5,987	)			(14,989	)			(11,646	)
Sunrise Mall net operating loss		347				1,028				1,701				1,638
Tenant bankruptcy settlement income and lease termination income		—				(286	)			(110	)			(762	)
Same-property NOI	$	52,633			$	51,991			$	103,312			$	100,045
NOI related to properties being redeveloped		4,627				5,262				8,966				10,254
Same-property NOI including properties in redevelopment	$	57,260			$	57,253			$	112,278			$	110,299

⁽¹⁾ Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.

Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

The following table reflects the reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of EBITDAre and Adjusted EBITDAre.

	Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2022				2021				2022				2021
Net income	$	12,009			$	12,981			$	21,543			$	33,697
Depreciation and amortization		24,691				22,488				49,218				45,363
Interest and debt expense		14,241				14,728				28,245				29,555
Income tax expense (benefit)		711				(34	)			1,616				201
Gain on sale of real estate		(353	)			—				(353	)			(11,722	)
EBITDAre		51,299				50,163				100,269				97,094
Adjustments for Adjusted EBITDAre:
Transaction, severance and other expenses (income)		635				120				1,132				(257	)
(Reinstatement)/write-off of receivables arising from the straight-lining of rents, net		(46	)			(239	)			(133	)			634
Tenant bankruptcy settlement income		—				(286	)			(36	)			(286	)
Adjusted EBITDAre	$	51,888			$	49,758			$	101,232			$	97,185

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220803005300/en/

Mark Langer, EVP and Chief Financial Officer

212-956-2556

Source: Urban Edge Properties

FAQ

What were Urban Edge Properties' Q2 2022 earnings results?

Urban Edge Properties reported a net income of $11.6 million for Q2 2022, down from $12.5 million in Q2 2021.

How much did Urban Edge Properties generate in Funds from Operations (FFO) for Q2 2022?

The company generated $36.2 million in FFO for Q2 2022, or $0.30 per share, compared to $35.4 million, or $0.29 per share in the same period last year.

What is the leasing activity reported by Urban Edge Properties for Q2 2022?

Urban Edge Properties executed a record 716,000 sq ft in leasing activity during Q2 2022.

What is the current occupancy rate of Urban Edge Properties' portfolio?

The current portfolio occupancy rate is 94.9%, an increase of 270 basis points compared to June 30, 2021.

What is the liquidity position of Urban Edge Properties as of June 30, 2022?

Urban Edge Properties reported total liquidity of approximately $771 million.