Urban Edge Properties (UE) 14 Feb 232022 Q4 Earnings call transcript

Greetings, and welcome to the Urban Edge Properties fourth quarter 2022 earnings conference call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Etan Bluman. Please go ahead, sir.

Good morning and welcome to Urban Edge Properties year-end earnings conference call.

President Jeff Operating and Financial Senior Officer; De Executive are Jeff Executive Officer; Vice today Milton, Chief Vita, Chief Rob Accounting of Mooallem, Mark Vice Andrea President me and Olson, Scott Leasing; Chief Chairman Officer; Danielle General Head Joining Counsel; Development; and Auster, Drazin, of Langer, Chief Officer.

and contain financial uncertainties, company's views numerous events and performance, Please does are to the assumptions, which not note of update. AND about risks today's the company forward-looking statements discussion to which may subject undertake future

will of to business, measures. Our filings actual supplemental future may are refer are GAAP results disclosure website results, differ SEC, the the financial information Please financial non-GAAP section these website. Investors also our in the condition company. to of we our to more release on our our and for Reconciliations available certain refer our which available materially. package with about discussion earnings and measures today, in In

this our Officer, Chairman pleasure and to time, introduce Executive Olson. Jeff my Chief it At is

and the year, AAA completed the increase Center, attributed morning, for year, Great. to as Briarcliff Etan, Towne at primarily during quarter fourth is rent Wholesale at Kohl's ShopRite an strong and a was This increase FFO to Uncle share XXXX with at good anchor the increase Bergen Lodi. XX% we $X.XX repositioning you, everyone. from another quarter. pleased year. year, Commons, at and Giuseppe's I adjusted projects per full for commencements Huntington, over including the $X.XX announce quarter Thank and that for am finished XX% the of last

significantly and the Riverwood rents. X.X%, recoveries, Center primarily acquisitions to up D.C., Washington, rent Boston, contributed growth. new higher due was Same-property shops of specialty percentage Woodmore also outside higher of Our this to commencements, prior at at NOI in Towne and in

our than more record the quarter feet new quarter, fourth the including X leases setting alone. of a year, to quality momentum teams, for record all Scott the in of was is outstanding, to fourth thanks of to noteworthy the tenants highlight during was robust added results. Auster feet leasing equally the being but million Special members legal, generating and of Our company for square it and square XXX,XXX The these portfolio. leasing, volume administrative

traffic Our assets centers and drive continue adjacent the that attract value enhance to to retailers best-in-class spaces. of our

Maxx, Cookies, quarter, This including T.J. Bond Golf new medical Crumbl and with we signed Cava, Vet users, leases Target, Dialysis. DaVita Galaxy, and

to the their Retailers many well led store its count, according and & store Wakefield, Cushman XXXX, importance rents. Las omnichannel in On resilient to consolidated two Health increased Bruckner. and XX% Nemours executing retailers This by US a shopping of Broomall, recognized million which Walgreens we and mortar role and Cherry the we of expand at our notable the level which XX%, our net lowest to following center since vacancy for annually, pandemic. level, growth to to is shopping $XX ability occupancy or the At to driving bodes increase continue thirds of Catalinas, XX% to from the at Children‘s year, During uncertainty stores, Wine brick have macro past remained plays income have a rate inflation. occupancy Hill, operating importantly, from our has Total has visibility at higher grow Navy) (Old and industry the the critical Montehiedra, economic derived face in center Most fulfillment.

Cinema, and an Party is of turnover our Beyond, tenant for tenants at-risk business. course, Bed, expected Bath & part Notable us include City. Of today Regal

Northeast. of strong most generate the many our densely populated, markets should of opportunities will them backfill as any supply-constrained we the in throughout that vacate properties comfortable are We are

metro York dense to of high important we asking with foot prices our earning is portfolio relative that Jersey, the frequent that increased home than to and home Bloomberg It throughout to in home the that in suburban as still centers, professionals the population due inventory. trips. area's Westchester New bidding largest X% noted further of in increased County year-over-year New note This wars point, market, more resulted recent country. lack demand where in work to by from our within more article traffic XXXX. the shopping remains strong shopping and occur A area, where XXXX, seen have compared by have On supports trend the rest northern our XX% housing in policies

this tenants spaces in expect Kmart, ShopRite, and retailers. and Toys underperforming other continue anchor T.J. trend as new Us, previously occupied by open Target, like We will Maxx, R

Sunrise New you $XX greater XXXX at a obtaining incremental entitlements conference FFO, early March, in Investor redevelopment for annualized Bergen look redevelopment XXX the Citi million include Center, advancing share million Day at units Towne XXth approximately in the million plans return XX% residential in $XXX commencing Bergen We our maturing at April of forward at York $XX Mall. our to at and seeing to for Center, Stock goals cost, our least mortgage on and projects at million $X.XX on new Exchange. many pipeline, the at activating addressing of million successfully gross another lease included $XX or in achieving at Towne Our rent executed $XX

started delighted am that Jeff us I Mooallem, January. our new Chief Lastly, with in Operating Officer,

last earnings Mark I me One, Equity worked previously Jeff the wonderful at during and ground it is to our call, see him hit with and on mentioned time running. our As

share first so at his Jeff? Edge. that over about Urban call month now a will I the he can Jeff turn thoughts few to

everyone. good and morning, Jeff Thanks,

assets Mark January, be Jeff be operations, like many started assets and coming my and first now large has I visited team have is leasing for projects one After in and the not create and renovations, entitlements, communities, efficiently opportunities because our it at mentioned, portfolio Jeff walked such did density I tremendous and with working chance of the sharing from by job the felt days and some off pipeline dense surface properties enhanced of in land can and last a look and park growth retailers Edge have our Investor the at I of quarter month term. fantastic tell the ways, uses inherent many at and our experienced, new to most our leasing, I end. information with one low and together and here. but XXXX, for April. XXXX, team The the most to years, Edge I more As already The will Urban on or expansions, that Day the been company, of periods class. roughly you the in am the at tenants. strong and as value found I excited have Bruckner underutilized is company closing supply-constrained of of culture and out completing One, home, unlock our my productive and opportunities team filled to and several centers, career, relationship some understanding I've in projects, and development start acquisitions about forward also expected only opportunity at exciting in fun XXXX, value. strong I the the selective redevelopment of Equity focused to with by see the market these whether a property two robust that Urban to a of a Commons is established of property dispositions. because following the of operating of long Commons, prior and short parcels portfolio The with infill have in more team Huntington to management thorough, thirds it all about is

it our chief Mark financial I will Langer. officer, now to turn over

the Thanks, XXXX Good quarter fourth key and with our discuss our an and close will on outline morning. I Jeff. assumptions liquidity, our impacting comment will results, guidance. balance of sheet drivers of

for fourth quarter at as last than fourth the quarter adjusted FFO with $X.XX results of as to year. were stronger share Our the compared per expected,

$X.XX full pertained our termination Half guidance to outperformance adjusted share end tax we generated this range. other FFO half above the and of high of real as share, lease a $X.XX and year, For the the per line settlements previously of payment, estate uncollectible, commencements NOI per to the by including and new X.X% recoveries percentage redevelopment, compared growth, year, increased deemed higher of rent from better rents, Same-property rents. to specialty rent. better percentage straight revenues and non-cash driven fourth amounts in quarter pertained last

leased same-property occupancy points leased XXX leasing, to consolidated Turning occupancy and points XXX year-over-year, increased portfolio year-over-year. increased basis basis

our third the we square building the occupancy is a adjacent increased points, predominantly acquired warehouses. to quarter, rate existing lease As of XXX,XXX Hanover to the XXX that that vacant industrial to execution at leased due East same-property XXXX foot in compared basis

peak second far of basis XX points of at During shop good shop same-property total the but level XX.X%. increased quarter our growth, a still portfolio XX% nearly occupancy quarter, in the to Very occupancy XXXX. below

further our We to expect occupancy One anchor shop growth space. and on come adjacent demand stimulate our repositioning note for occupancy. online projects side as same-property continue

XX%. Maxx execution Goucher at new the realized East our in of the in Given executed at Target spread outlets Full same-property with quarter Montehiedra, that these and leasing of current not at the are this properties was to spreads that in basis reflected year is Overall and T.J. new leases the XXXX expectations with and spreads same-property XX%. driven quarter, these especially line Hanover. in Montehiedra, industrial leases Bruckner consolidated the at XXX the T.J. more going were Target contributed excess XX%, Commons Commons, the occupancy positive outlets increase are leasing considering at place Galaxy redevelopment during Accordingly, reflects Commons, the taking pipeline in currently spreads large forward, at assets result. were the Bruckner pool. lease and at Golf point by in Maxx not The in

credit, of total of In undrawn quarter million our million, sheet, $XXX more terms $XXX the ended of total approximately line million. than $XXX of liquidity balance our cash and with including we

options several pursuing regarding are upcoming loan We Bergen's maturity.

the this of favorable at into Given negotiations, state to active specifics time, shortly. to a we get expect have won't I but these this any very resolution

XXXX have manageable million in maturities we and $XX to Looking ahead, very respectively. amounting million, minimal $XXX XXXX and and

In is commenced the as the to we to expect X.X net annualize times to pipeline continue EBITDA decline range debt X.X terms of leverage, rents. dropped to this leasing in to quarter, into converted our fourth our times and

initial share and for per $X.XX, as following expectations key range XXXX, assumptions. adjusted our our incorporates Turning guidance to the XXXX is to $X.XX FFO

same-property million gross fallout credit X% points for a loss, of Bath tenants a midpoint properties additional positive our million, $X.X future attributable or basis $X.X that basis spaces. to XXX $X.X million The the points to The bankruptcy. additional that This gross or Bed loss a expiration negative redevelopment, and range of reserve file locations. XXX NOI to of revenues X%. rents to an store assumes have now includes to We potential from which covers & million including Bed in are expected of Beyond filed to and $X of of guidance credit our expect lease growth, The $X.X $X million reserve approximately of other Bath approximately Bed, million pertains remaining $X general had the January, Bath for all related million closed. natural is store or

guidance of In to $X.X Party reserve our location Bath, XX% City. where million we reserve Regal incorporates a covering addition to exposure to $X have of million one Cinema, our related Bed and

$XX.X which million on uncollectible, Annual XXXX, $X.X will compares are the receive additional $X.X year. quarter expected executive expenses transition guidance at collections of excluding one-time terms which fourth In $XX.X assumes compares we dollars million, million the the to $XX.X the in deemed to we of costs XXXX. when G&A related approximately received in announced million to midpoint of XXXX last we an be for million to our amounts all in during past

the quarter, to no new three conference we We during forward closing, in million variable grateful XXXX, In look the No or Interest and on debt. execution expense that is due extract by about the to increase we other our G&A. expected at is assumed. dispositions, total in effort our platform and UE are team represents to acquisitions our refinancing activity the many provided or weeks opportunities operating to in $XX evaluate forward debt, million Florida. and in of to investors to year, dedication the maturing debt primarily rate continue reduce meeting X% material an which this and Hollywood, in $XX capital efficiencies rates again to mortgages with further Citi and for are our

for I over the now the will turn call to questions. operator

[Operator Instructions] with is from Van Our first Floris Dijkum Compass question Point.

you incremental some more to the quite actually outline earnings. you talk that ancillary the the the substantial, into yes, most I taking have big believe Maybe you ’XX. expect leasing pipeline And I shop repositionings, maybe which for do the you get million And is is can - perhaps, if to Thanks just anchor you an question. if of detail. also of part of then when guess $XX through Wanted guys. timing could pipeline, Morning my of in if hit in NOI, the when small benefit - to hit occupancy. how there is you Mark, going

You levels XX% current those peak. about points is occupancy rate expect going lease that shop which forward? peak mentioned basis the When back we to - your can for to rate your you're away going get XXX from of occupancy,

is which about is goal this which you of we of is it XXXX, why goals I'll increase that take two thirds from But objective $XX Mark, mean, the details, Jeff. annualized take another the And I Mark NOI of activate have is About our on our let year, that $XX our don't to an basis. S&O ’XX, XX%. by for Hi, details? our out in as but pipeline, to overall, Floris, for outlined of one I comes million. XX% XX, it’s million

Yes.

So, of dates It the ’XX. Floris, second that the how with on and given in annual, in show stabilization starts quarter while S&O, commensurate the we we've supplement. will our million $XX $X million, that, you in builds then hit that

coming start backend quarter. about in ’XX, So, is of in of it with XX% second the weighted it the

to because up I good getting had growth your said, over the points pick to believe XX. that the to shops, it, we've of months, XX In We us exactly can to as XXX question XX XXX terms next basis we on operators these call we're leasing your see continuously, as center open, team local seeing anchors they when but vibrant. what's really type becomes obviously the of those space whole stimulates point. the for happening What demand marketing is more is, the

tenants and Jeff he's the on what was and then comment pipeline, Mooallem question the leasing of leasing on terms in first Your to I'll ask seeing velocity.

seeing good really quarter Yes, the the we're and really in Yes. activity. morning. completed momentum good you really Hey, with as hasn't fourth we some mean, quarter. Floris, solid still know, shifted results, the first I

some I think on easing bit. that's the and feeling of supply margins pressure helped retailers are a the chain,

So, they're still to talking us locations. about new

we our And get as seen mentioned that Jeff his year. have of we're XXX,XXX pipeline this really haven't feet change. in to comments, done We any leasing hoping

year So, it we’re and good should still right into be now. digging it another

this Maybe one Thanks. you, follow-up, for and maybe is Mark.

put one Your take increased, down existing options $XXX part your million out when Center? mortgage for Bergen think Towne is the and Center, Or of could you and pay on the mortgage actually presumably because the that older part that? somewhat is to you value debt has incremental that cash of of capital Towne new Bergen use do you

this putting attractive all cash-out of very is may Yes, to I but of consider the is We small now. the think don't get it's amount in cash table. - refinancing, on a not live

that get some much I'd detail, in. won't too possible cash I say it's but there's into So,

Mark. Thanks, Great.

Thank you.

is with ISI. question next Evercore Samir Khanal Our from

sort how, at end your Good commentary, morning, to get I baking quite Bath, look to listen Party your get and of of when relates XXX? guess, Because the it here, of then midpoint to other - when mean, the fallouts. guidance, sort the Mark, how I do everybody. bit of City, you're I get guidance to I fallout as Bed to to a low you in potential

through the So, just end this low maybe you get us walk how at point. to

of function really a it's several Yes, things.

the on end. and the collections interest perspective, well NOI recoveries, prior accelerated an as then from from more full having high taking, basically getting expense fallout as a a it's hit less basis, So,

And beyond. so, mostly above driven fallout it's and by really,

isolated While others on watch have some there into kind get we Samir, several could the incorporated that are I've of that tenants, a list year.

for losses So, didn't I some it highlight. is of that just

that you Okay, economics a opening expand given mentioned concerns got that Can bucket, XXX,XXX there? you it. out Jeff, like on are more? negotiations does leasing in of comments, look underway. your What that the of bit micro the for And little sort feet about square

let I'm on bring with about the prospects. frontline. mean, previously about that Auster, tenants Maxx importantly, But pipeline occupied who's like morning, our well. on doing robust. to who's I excited the tenants - very what centers, these we T.J. into were pipeline are very that we this Target I head our not seeing were of that Scott credit talk and it's because that positions in leasing, had the I'm - they're he's just as who's better Yes, Scott? And following very But by is us joined going mean, because anchor

It's category other Samir. one with It's the for our definitely anchors. right of out that us another There's really now, Hey, both us last the are really now. boutique are one gym medical running that's talking the active that's categories very is guys the big It's on remember The call expanding. different I a there. definitely this all there Yes. category full gamut. - QSRs the right in about the us. for That's out line active and Fitness now. sizes is really right shops. busy

there The shops, general well. the So, retailers all now active right across out really the still it's are merchandise board, retailers. very as anchors, discount

both activity coming So, NOI the that with out of and level see we're we're happy of other growth side the of going really the to this.

the excites lows industry throughout what vacancy think were the I data fact most level. XXXX, at rates last - vacancy all-time I at was the point that that where - are in the comments shopping said Samir, rates I think center is to and me And my relative this

when than stabilize that level XX% push XX% that to XX%, that really we are rents, XX%. past. the push which confident that to we will were harder to the occupancy at rents ultimately backup So, time at we not a us we were do XX%, before. have And in But we will point, now we at is we for could lot

last thinking one Mall. or strategy me has - Sunrise come mean, up as current of behind for the what this I Thanks. And if some with may. sort that I the investors On property? is

work Yes. I mean we’re the with continuing community. to

five tenants have left at mall. the We remaining

on we're the We acre, that Jeff basis sleeves Day do about like forward for It's developed. April. Investor So, $X an million property. our makes his plan with have and we sense them sharing once look with up our hope it in rolling everyone, more working a also to in our to do and plans share at been plans those is we everyone. on

Thanks, everyone.

Thank you. [Operator instructions].

Our Ronald next from Morgan Kamdem with question Stanley. is

Hey, couple quick of just a ones.

bad I think NOI you that for can you of - same-store a some basis sort adjusted amount - those for mentioned what's for sort guidance reserves just into non-collection? So, to X.X, drag X.X but drag from of the translate on that debt? for dollar tenants, the Thanks. the the of what's points the

Ron. XXX about It's basis points,

Got it.

that's question, Okay, question of activity. this then back is leasing helpful. the leasing is to And sort - second sort again, another the of going -

across has sort group strong are sort sector. of hearing in the leasing We very been the of that

back, or the really you like I saying? given step seem inflation are tenants? It good, of you going ground, tenants is If mean, the What driving economy which on a it, with from the is any but idea anything take the just hearing are on that's that? what's impacting what challenged macro, sort doesn't

don't because later, that if for be is they space won't built. much think there that's they're get little being there act new very supply them to concerned I soon, Well, left

that's throughout quality there's occupancy available. So, the XX%- at maybe again, rates and country stabilize space just ish, less increase as

of York, we from the time that's add, would most because in the retailers I in to the Jersey, country. ones Ron, Boston And markets supply-constrained is their we that of such hear for New to relative do the that D.C. portfolio our New particular, corridor, all are difficult one And penetrate. rest that especially to case

years. we Because obviously of was recurring my that - a rate the then the lot last previous in Great. as sort lower take was than guide. that Is model? just is going And the on it the G&A forward should quick G&A one

fair is sort the assumption? - that that steady of state? new a Just Is

Yes, could any think, good there happen outsized standpoint, guide, you from - that's But that a run The a that fair recurring a if only the thing rate. matters. would assumption. adjust I we exclude was one-time we litigation-type gives

it me. That's Excellent. Thanks so much. for

Thank you.

with Our question next Street. Rojas Green from is Paulina

his Good profession. new for This morning. question is Jeff in

do from aspects your highlight most positive is you highlighted So, a And you excited squeezed Or the you another if the see where a level, in think Edge one the in of thing, in most prepared opportunity of said way, use in what be portfolio that general. you lot My things. to of the s this some is could Urban there remarks, is, covered strategic portfolio? you question you're about?

XX dense I an Good there's things in down at of activate, markets, But all we inherently morning, kind an basis. what it lot right? of with think, Paulina. a of Well, different comes is, properties to can all value attractive sort land strong

increase can certain And me, to basis might comes board, possibly different space in to to comes down from But really certainly in the rents an think So, leasing career, portfolios acquire. tenants to is to, looking none approval do In And it the down On over the dispose it on portfolio where your better it the Urban assets. as the be of adjacent for and things parcels at our of the renovations land land your then adding might REIT Edge ability at really value. land is new to my attractive result to or to be that. there the other at parts I across a all think having do there's worked the all several properties, focus. main country of properties, out property. I going and some entitlements a cases, grow be we size opportunity on processes an municipal through second

see the where of but a I'm get excited into these opportunities. we're specific these of there's So, lot going buttons, pull assets really to weeds on certainly kind and different each to of

transaction change pool you the at and the you. you Any seeing what how deep Thank is market the are margin? then of and today? How seeing? that regarding are buyers And

high that say if the sellers ask REIT in you including where shopping to rate between I'd X.X%t's are buyers, can rates that going And you financing in pay. still work. Paulina, for to are. spread much buyers what trading And a liquidity centers, want sector then range the there's above hard just has implied particular, and at a think do numbers, cap for look and to quality the I wide strip I probably strip the around lot us, most we're interest want willing in at according to get what mean, to not are X.X% think when of with to to that. market. X.XX% UE in of where numbers I particular, There's - make an really your

today? your disposed what's And appetite assets to

we're again, of think smart it, to would sellers. the that I liquidity, be sure think open-minded because to make we I but we lack of want

sense. makes That

$XX a to assets safe of think handful we'll assume probably million of I it's about a that are year. - dispose there But

Thank And you. modeling question. Okay. then one maybe

that come through be online. next read your you're of contribution redevelopments a you year, redevelopment, given scheduled assume Is NOI, this So, that fair the to I grew of and including excluding that redevelopments. have than leased for less everything positive year same-property saying? what should

Yes.

exactly you're - right. Following

contributor. be would Next year it a

for number ballpark Is there contribution? any that

‘XX. separately, we broken No, go even ‘XX flipping it's and positive you more and it so haven't but to as out

you. Thank Okay.

gentlemen, over for the this to Olson back and at questions would are time. Jeff to there floor further turn closing I comments. no like Ladies instructions]. [Operator

great Oh, and look and at you. seeing great. Valentine's everyone the upcoming at Day. you I forward a we'll Thank hope then conference to our Citi has Day, Investor

today's concludes teleconference. This

participation. lines for time. disconnect you may your Thank You your this at