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NEW YORK--(BUSINESS WIRE)--Nov 3, 2022--
Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended September 30, 2022 and provided its outlook for the full-year 2022.
“We are very pleased with the third quarter performance including the continued momentum in our leasing velocity, which reflects strong demand from a broad set of retailers, especially throughout the suburbs around New York City, our largest market,” said Jeff Olson, Chairman and CEO. “Our recently executed lease with Target at Bruckner Commons and the improvement in shop occupancy this quarter with the addition of high-quality tenants including First Watch and Shake Shack are among the recent highlights. Notably, future gross rent from leases executed but not yet commenced grew to $28 million representing 12% of current annualized NOI, with one million square feet under active negotiation representing an additional 10% of annualized NOI.”
Financial Results (1)(2)
Operating Results (1)(3)
Balance Sheet and Liquidity (1)(4)
Balance sheet highlights as of September 30, 2022 include:
Leasing, Development and Redevelopment
The Company commenced $54.7 million of redevelopment projects and now has $260.9 million of active redevelopment projects under way, with estimated remaining costs to complete of $174.9 million. The active redevelopment projects are expected to generate an approximate 10% unleveraged yield.
Subsequent to the quarter, a lease was executed with Target to backfill 139,000 sf of the former Kmart space at Bruckner Commons, located in the Bronx, NY, and is included in the Company's active development, redevelopment and anchor repositioning projects. The addition of Target is expected to serve as a catalyst to further upgrade the tenant mix as additional junior anchors are added to the property.
As of September 30, 2022, the Company has signed leases that have not yet rent commenced that are expected to generate $23.8 million of future annual gross rent, representing approximately 10% of current annualized NOI. Approximately $0.6 million of this amount is expected to be recognized in the fourth quarter of 2022.
Financing Activity
On August 9, 2022, the Company restated and amended its revolving credit agreement which increased the credit facility size by $200 million to $800 million, and extended the maturity date to February 9, 2027 with two six-month extension options. Company borrowings under the amended agreement are subject to interest at SOFR plus 1.10% with an annual facility fee of 0.15% based on the Company's current leverage ratio as defined in the facility.
2022 Full-Year Outlook
The Company has provided its outlook for full-year performance estimating net income of $0.36 to $0.38 per diluted share, FFO of $1.16 to $1.17 per diluted share, and FFO as Adjusted of $1.17 to $1.19 per diluted share. A reconciliation of net income to FFO and FFO as Adjusted, as well as the assumptions related to the 2022 outlook are included on the following page.
Dividend Declaration
On November 2, 2022, the Board of Trustees declared a regular quarterly dividend of $0.16 per common share. The dividend will be payable on December 30, 2022 to common shareholders of record on December 15, 2022.
Earnings Conference Call Information
The Company will host an earnings conference call and audio webcast on November 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 13732646. 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 November 3, 2022 at 11:30am ET through November 17, 2022 at 11:59pm ET by dialing 1-844-512-2921 (Toll Free) or 1-412-317-6671 (Toll/International) using conference ID 13732646.
(1) Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.
(2) Refer to page 9 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended September 30, 2022.
(3) Refer to page 10 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended September 30, 2022.
(4) Net debt as of September 30, 2022 is calculated as total consolidated debt of $1.7 billion less total cash and cash equivalents, including restricted cash, of $152 million.
2022 Earnings Guidance
The Company has provided 2022 earnings guidance, estimating net income of $0.36 to $0.38 per diluted share, NAREIT FFO of $1.16 to $1.17 per diluted share, and FFO as Adjusted of $1.17 to $1.19 per diluted share. Below is a summary of the Company's 2022 outlook, assumptions used in our forecasting, and a reconciliation of the range of estimated earnings, NAREIT FFO, and FFO as Adjusted per diluted share.
2022 Full Year Outlook:
The Company's full year outlook is based on the following assumptions (in thousands):
| Guidance 2022E |
| Per Diluted Share (1) | ||||||||||||
(in thousands, except per share amounts) | Low |
| High |
| Low |
| High | ||||||||
Net income | $ | 44,200 |
|
| $ | 46,200 |
|
| $ | 0.36 |
|
| $ | 0.38 |
|
Less net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
| ||||||||
Operating partnership |
| (1,800 | ) |
|
| (1,800 | ) |
|
| (0.01 | ) |
|
| (0.01 | ) |
Consolidated subsidiaries |
| 1,000 |
|
|
| 1,000 |
|
|
| 0.01 |
|
|
| 0.01 |
|
Net income attributable to common shareholders |
| 43,400 |
|
|
| 45,400 |
|
|
| 0.35 |
|
|
| 0.37 |
|
Adjustments: |
|
|
|
|
|
|
| ||||||||
Rental property depreciation and amortization |
| 97,000 |
|
|
| 97,000 |
|
|
| 0.79 |
|
|
| 0.79 |
|
Gain on sale of real estate |
| (400 | ) |
|
| (400 | ) |
|
| — |
|
|
| — |
|
Limited partnership interests in operating partnership |
| 1,800 |
|
|
| 1,800 |
|
|
| 0.01 |
|
|
| 0.01 |
|
FFO Applicable to diluted common shareholders |
| 141,800 |
|
|
| 143,800 |
|
|
| 1.16 |
|
|
| 1.17 |
|
Adjustments to FFO: |
|
|
|
|
|
|
| ||||||||
Transaction, severance and other expenses |
| 1,800 |
|
|
| 1,800 |
|
|
| 0.01 |
|
|
| 0.01 |
|
Reinstatement of receivables arising from the straight-lining of rents, net of write-offs |
| (200 | ) |
|
| (200 | ) |
|
| — |
|
|
| — |
|
FFO as Adjusted applicable to diluted common shareholders | $ | 143,400 |
|
| $ | 145,400 |
|
| $ | 1.17 |
|
| $ | 1.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts may not foot due to rounding. |
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The Company's projections are based on management’s current beliefs and assumptions about the Company's business, and the industry and the markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2022 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the “Forward-Looking Statements” disclosures on page 6 of this document and “Risk Factors” disclosed in the Company's annual and quarterly reports filed with the Securities and Exchange Commission for more information.
Non-GAAP Financial Measures
The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:
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 nine months ended September 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, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic and related COVID-19 variants, including its potential 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 rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company’s share price; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates, rising inflation, and other factors, including the discontinuation of USD LIBOR, which 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) | |||||||
| September 30, |
| December 31, | ||||
| 2022 |
| 2021 | ||||
ASSETS |
|
|
| ||||
Real estate, at cost: |
|
|
| ||||
Land | $ | 544,358 |
|
| $ | 543,827 |
|
Buildings and improvements |
| 2,464,901 |
|
|
| 2,441,797 |
|
Construction in progress |
| 271,898 |
|
|
| 212,296 |
|
Furniture, fixtures and equipment |
| 8,303 |
|
|
| 7,530 |
|
Total |
| 3,289,460 |
|
|
| 3,205,450 |
|
Accumulated depreciation and amortization |
| (790,414 | ) |
|
| (753,947 | ) |
Real estate, net |
| 2,499,046 |
|
|
| 2,451,503 |
|
Operating lease right-of-use assets |
| 64,078 |
|
|
| 69,361 |
|
Cash and cash equivalents |
| 108,437 |
|
|
| 164,478 |
|
Restricted cash |
| 43,954 |
|
|
| 55,358 |
|
Tenant and other receivables |
| 16,398 |
|
|
| 15,812 |
|
Receivable arising from the straight-lining of rents |
| 64,214 |
|
|
| 62,692 |
|
Identified intangible assets, net of accumulated amortization of $39,307 and $37,361, respectively |
| 65,974 |
|
|
| 71,107 |
|
Deferred leasing costs, net of accumulated amortization of $19,621 and $17,641, respectively |
| 21,742 |
|
|
| 20,694 |
|
Prepaid expenses and other assets |
| 77,649 |
|
|
| 74,111 |
|
Total assets | $ | 2,961,492 |
|
| $ | 2,985,116 |
|
|
|
|
| ||||
LIABILITIES AND EQUITY |
|
|
| ||||
Liabilities: |
|
|
| ||||
Mortgages payable, net | $ | 1,695,776 |
|
| $ | 1,687,190 |
|
Operating lease liabilities |
| 59,581 |
|
|
| 64,578 |
|
Accounts payable, accrued expenses and other liabilities |
| 78,710 |
|
|
| 84,829 |
|
Identified intangible liabilities, net of accumulated amortization of $39,040 and $35,029, respectively |
| 95,371 |
|
|
| 100,625 |
|
Total liabilities |
| 1,929,438 |
|
|
| 1,937,222 |
|
Commitments and contingencies |
|
|
| ||||
Shareholders’ equity: |
|
|
| ||||
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,440,748 and 117,147,986 shares issued and outstanding, respectively |
| 1,173 |
|
|
| 1,170 |
|
Additional paid-in capital |
| 1,006,348 |
|
|
| 1,001,253 |
|
Accumulated other comprehensive income |
| 554 |
|
|
| — |
|
Accumulated deficit |
| (30,982 | ) |
|
| (7,091 | ) |
Noncontrolling interests: |
|
|
| ||||
Operating partnership |
| 41,387 |
|
|
| 39,616 |
|
Consolidated subsidiaries |
| 13,574 |
|
|
| 12,946 |
|
Total equity |
| 1,032,054 |
|
|
| 1,047,894 |
|
Total liabilities and equity | $ | 2,961,492 |
|
| $ | 2,985,116 |
|
URBAN EDGE PROPERTIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
| Three Months Ended |
| Nine Months Ended | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
REVENUE |
|
|
|
|
|
|
| ||||||||
Rental revenue | $ | 98,175 |
|
| $ | 105,985 |
|
| $ | 295,045 |
|
| $ | 294,257 |
|
Other income |
| 115 |
|
|
| 854 |
|
|
| 1,300 |
|
|
| 2,249 |
|
Total revenue |
| 98,290 |
|
|
| 106,839 |
|
|
| 296,345 |
|
|
| 296,506 |
|
EXPENSES |
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
| 24,343 |
|
|
| 23,171 |
|
|
| 73,561 |
|
|
| 68,534 |
|
Real estate taxes |
| 16,231 |
|
|
| 15,862 |
|
|
| 47,662 |
|
|
| 47,826 |
|
Property operating |
| 17,672 |
|
|
| 15,692 |
|
|
| 56,473 |
|
|
| 51,874 |
|
General and administrative |
| 9,852 |
|
|
| 10,134 |
|
|
| 31,607 |
|
|
| 28,286 |
|
Casualty and impairment loss |
| — |
|
|
| 372 |
|
|
| — |
|
|
| 372 |
|
Lease expense |
| 3,109 |
|
|
| 3,164 |
|
|
| 9,327 |
|
|
| 9,665 |
|
Total expenses |
| 71,207 |
|
|
| 68,395 |
|
|
| 218,630 |
|
|
| 206,557 |
|
Gain on sale of real estate |
| — |
|
|
| 6,926 |
|
|
| 353 |
|
|
| 18,648 |
|
Interest income |
| 294 |
|
|
| 77 |
|
|
| 713 |
|
|
| 303 |
|
Interest and debt expense |
| (15,266 | ) |
|
| (14,638 | ) |
|
| (43,511 | ) |
|
| (44,193 | ) |
Income before income taxes |
| 12,111 |
|
|
| 30,809 |
|
|
| 35,270 |
|
|
| 64,707 |
|
Income tax expense |
| (646 | ) |
|
| (704 | ) |
|
| (2,262 | ) |
|
| (905 | ) |
Net income |
| 11,465 |
|
|
| 30,105 |
|
|
| 33,008 |
|
|
| 63,802 |
|
Less net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
| ||||||||
Operating partnership |
| (455 | ) |
|
| (1,149 | ) |
|
| (1,348 | ) |
|
| (2,608 | ) |
Consolidated subsidiaries |
| 373 |
|
|
| (1,190 | ) |
|
| 835 |
|
|
| (961 | ) |
Net income attributable to common shareholders | $ | 11,383 |
|
| $ | 27,766 |
|
| $ | 32,495 |
|
| $ | 60,233 |
|
|
|
|
|
|
|
|
| ||||||||
Earnings per common share - Basic: | $ | 0.10 |
|
| $ | 0.24 |
|
| $ | 0.28 |
|
| $ | 0.51 |
|
Earnings per common share - Diluted: | $ | 0.10 |
|
| $ | 0.24 |
|
| $ | 0.28 |
|
| $ | 0.51 |
|
Weighted average shares outstanding - Basic |
| 117,382 |
|
|
| 117,087 |
|
|
| 117,359 |
|
|
| 117,009 |
|
Weighted average shares outstanding - Diluted |
| 121,683 |
|
|
| 117,137 |
|
|
| 121,472 |
|
|
| 122,212 |
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to FFO and FFO as Adjusted
The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the three and nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of FFO and FFO as Adjusted.
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(in thousands, except per share amounts) | 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
Net income | $ | 11,465 |
|
| $ | 30,105 |
|
| $ | 33,008 |
|
| $ | 63,802 |
|
Less net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
| ||||||||
Operating partnership |
| (455 | ) |
|
| (1,149 | ) |
|
| (1,348 | ) |
|
| (2,608 | ) |
Consolidated subsidiaries |
| 373 |
|
|
| (1,190 | ) |
|
| 835 |
|
|
| (961 | ) |
Net income attributable to common shareholders |
| 11,383 |
|
|
| 27,766 |
|
|
| 32,495 |
|
|
| 60,233 |
|
Adjustments: |
|
|
|
|
|
|
| ||||||||
Rental property depreciation and amortization |
| 24,100 |
|
|
| 22,941 |
|
|
| 72,855 |
|
|
| 67,898 |
|
Limited partnership interests in operating partnership |
| 455 |
|
|
| 1,149 |
|
|
| 1,348 |
|
|
| 2,608 |
|
Gain on sale of real estate |
| — |
|
|
| (6,926 | ) |
|
| (353 | ) |
|
| (18,648 | ) |
Real estate impairment loss |
| — |
|
|
| 372 |
|
|
| — |
|
|
| 372 |
|
FFO Applicable to diluted common shareholders |
| 35,938 |
|
|
| 45,302 |
|
|
| 106,345 |
|
|
| 112,463 |
|
FFO per diluted common share (1) |
| 0.29 |
|
|
| 0.37 |
|
|
| 0.87 |
|
|
| 0.92 |
|
Adjustments to FFO: |
|
|
|
|
|
|
| ||||||||
Transaction, severance and other expenses |
| 674 |
|
|
| 526 |
|
|
| 1,806 |
|
|
| 271 |
|
Reinstatement of receivables arising from the straight-lining of rents, net of write-offs |
| (102 | ) |
|
| (716 | ) |
|
| (235 | ) |
|
| (82 | ) |
Impact of lease terminations (2) |
| — |
|
|
| (11,078 | ) |
|
| — |
|
|
| (11,078 | ) |
Tenant bankruptcy settlement income |
| — |
|
|
| (464 | ) |
|
| (36 | ) |
|
| (752 | ) |
Tax impact of Puerto Rico transactions |
| — |
|
|
| 37 |
|
|
| — |
|
|
| (453 | ) |
FFO as Adjusted applicable to diluted common shareholders | $ | 36,510 |
|
| $ | 33,607 |
|
| $ | 107,880 |
|
| $ | 100,369 |
|
FFO as Adjusted per diluted common share (1) | $ | 0.30 |
|
| $ | 0.28 |
|
| $ | 0.88 |
|
| $ | 0.82 |
|
|
|
|
|
|
|
|
| ||||||||
Weighted Average diluted common shares (1) |
| 122,413 |
|
|
| 121,987 |
|
|
| 122,372 |
|
|
| 122,212 |
|
(1) | Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three months ended September 30, 2022 and 2021 and the nine months ended September 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. |
(2) | During the third quarter of 2021, net income includes $12.5 million of accelerated amortization of below-market lease intangibles resulting from the termination of our leases with Kmart and Sears. The $11.1 million adjustment to FFO in calculating FFO as Adjusted is net of the $1.4 million attributable to the noncontrolling interest in Sunrise Mall. |
Reconciliation of Net Income to NOI and Same-Property NOI
The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of NOI and same-property NOI.
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(in thousands) | 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
Net income | $ | 11,465 |
|
| $ | 30,105 |
|
| $ | 33,008 |
|
| $ | 63,802 |
|
Other (income) expense |
| 230 |
|
|
| (75 | ) |
|
| (300 | ) |
|
| (524 | ) |
Depreciation and amortization |
| 24,343 |
|
|
| 23,171 |
|
|
| 73,561 |
|
|
| 68,534 |
|
General and administrative expense |
| 9,852 |
|
|
| 10,134 |
|
|
| 31,607 |
|
|
| 28,286 |
|
Gain on sale of real estate |
| — |
|
|
| (6,926 | ) |
|
| (353 | ) |
|
| (18,648 | ) |
Interest income |
| (294 | ) |
|
| (77 | ) |
|
| (713 | ) |
|
| (303 | ) |
Interest and debt expense |
| 15,266 |
|
|
| 14,638 |
|
|
| 43,511 |
|
|
| 44,193 |
|
Income tax expense |
| 646 |
|
|
| 704 |
|
|
| 2,262 |
|
|
| 905 |
|
Real estate impairment loss |
| — |
|
|
| 372 |
|
|
| — |
|
|
| 372 |
|
Non-cash revenue and expenses |
| (1,922 | ) |
|
| (15,237 | ) |
|
| (6,287 | ) |
|
| (18,992 | ) |
NOI |
| 59,586 |
|
|
| 56,809 |
|
|
| 176,296 |
|
|
| 167,625 |
|
Adjustments: |
|
|
|
|
|
|
| ||||||||
Non-same property NOI and other (1) |
| (8,466 | ) |
|
| (6,273 | ) |
|
| (23,677 | ) |
|
| (18,143 | ) |
Sunrise Mall net operating loss |
| 1,637 |
|
|
| 1,023 |
|
|
| 3,338 |
|
|
| 2,661 |
|
Tenant bankruptcy settlement income and lease termination income |
| (7 | ) |
|
| (533 | ) |
|
| (117 | ) |
|
| (1,294 | ) |
Same-property NOI | $ | 52,750 |
|
| $ | 51,026 |
|
| $ | 155,840 |
|
| $ | 150,849 |
|
NOI related to properties being redeveloped |
| 4,964 |
|
|
| 5,829 |
|
|
| 13,930 |
|
|
| 16,083 |
|
Same-property NOI including properties in redevelopment | $ | 57,714 |
|
| $ | 56,855 |
|
| $ | 169,770 |
|
| $ | 166,932 |
|
(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 nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of EBITDAre and Adjusted EBITDAre.
| Three Months Ended |
| Nine Months Ended | ||||||||||||
(in thousands) | 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
Net income | $ | 11,465 |
|
| $ | 30,105 |
|
| $ | 33,008 |
|
| $ | 63,802 |
|
Depreciation and amortization |
| 24,343 |
|
|
| 23,171 |
|
|
| 73,561 |
|
|
| 68,534 |
|
Interest and debt expense |
| 15,266 |
|
|
| 14,638 |
|
|
| 43,511 |
|
|
| 44,193 |
|
Income tax expense |
| 646 |
|
|
| 704 |
|
|
| 2,262 |
|
|
| 905 |
|
Gain on sale of real estate |
| — |
|
|
| (6,926 | ) |
|
| (353 | ) |
|
| (18,648 | ) |
Real estate impairment loss |
| — |
|
|
| 372 |
|
|
| — |
|
|
| 372 |
|
EBITDAre |
| 51,720 |
|
|
| 62,064 |
|
|
| 151,989 |
|
|
| 159,158 |
|
Adjustments for Adjusted EBITDAre: |
|
|
|
|
|
|
| ||||||||
Transaction, severance and other expenses |
| 674 |
|
|
| 526 |
|
|
| 1,806 |
|
|
| 271 |
|
Reinstatement of receivables arising from the straight-lining of rents, net of write-offs |
| (102 | ) |
|
| (716 | ) |
|
| (235 | ) |
|
| (82 | ) |
Impact of lease terminations (1) |
| — |
|
|
| (12,481 | ) |
|
| — |
|
|
| (12,481 | ) |
Tenant bankruptcy settlement income |
| — |
|
|
| (464 | ) |
|
| (36 | ) |
|
| (752 | ) |
Adjusted EBITDAre | $ | 52,292 |
|
| $ | 48,929 |
|
| $ | 153,524 |
|
| $ | 146,114 |
|
|
|
|
|
|
|
|
| ||||||||
(1) Amount reflects accelerated amortization of $12.5 million of below-market lease intangibles related to the termination of our leases with Kmart and Sears in the third quarter of 2021 (classified within rental revenue in the consolidated statements of income). |
View source version on businesswire.com:https://www.businesswire.com/news/home/20221103005428/en/
CONTACT: Mark Langer, EVP and Chief Financial Officer
212-956-2556
KEYWORD: NEW YORK UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY REIT
SOURCE: Urban Edge Properties
Copyright Business Wire 2022.
PUB: 11/03/2022 07:00 AM/DISC: 11/03/2022 07:02 AM
http://www.businesswire.com/news/home/20221103005428/en