Urban Edge Properties (NYSE:UE) (the “Company”) today announced its
results for the quarter ended June 30, 2018.
Financial Results(1)(2)
Operating Results(1)
Excluding these properties, same-property cash NOI would have
increased by 3.2% for the quarter ended June 30, 2018.
Toys “R” Us Bankruptcy
The Company had nine Toys “R” Us (“Toys”) leases comprising
approximately 400,000 square feet which generated approximately $7.0
million in annual gross rents. Rents were paid in full through June 30,
2018.
The status of the nine Toys leases is as follows:
Development, Redevelopment and Anchor Repositioning Activity
During the second quarter, the Company completed two redevelopment
projects totaling $12.4 million at a blended yield of 13.6%, consisting
of a 40,000 sf build-to-suit for Best Buy at Bergen Town Center and a
new outparcel building at Marlton Commons for Shake Shack and honeygrow.
The Company has $207 million of active redevelopment projects underway
expected to generate a 7% unleveraged yield of which $87 million remains
to be funded.
The Company’s largest projects include Bergen Town Center and Bruckner
Commons. At Bergen, construction is underway on a 47,000 sf Burlington
expected to open in spring 2019. Enhanced food offerings include Cava
Grill, Ruth’s Chris Steakhouse and a daytime café. At Bruckner, ShopRite
opened in June and Burlington opened in July.
Disposition Activity
On April 26, 2018, the Company sold MacArthur Commons in Allentown, PA
for $55.3 million consistent with its plan to dispose of assets in
non-core markets. The Company recognized a $50.4 million gain in
connection with the sale.
Balance Sheet Highlights at June 30, 2018(1)(3)(4)
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. 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 includes leases signed, but for which rent has not
yet commenced. Same-property retail portfolio occupancy includes
shopping centers and malls that have been owned and operated for the
entirety of the reporting periods being compared totaling 77 properties
for the three months ended June 30, 2018 and 2017 and 75 properties for
the six months ended June 30, 2018 and 2017. Occupancy metrics presented
for the Company’s same-property retail 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,
properties sold, or under contract to be 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 with comparable gross
leasable area.
ADDITIONAL INFORMATION
For a copy of the Company’s supplemental disclosure package, please
access the “Investors” section of UE’s 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 amendments to those reports.
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 New York metropolitan
region. Urban Edge owns 88 properties totaling 16.3 million square feet
of gross leasable area.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Press Release 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 find many of these statements by looking for 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 these and our other forward-looking statements
are beyond our ability to control or predict; these factors include,
among others, the Company’s ability to complete its active development,
redevelopment and anchor repositioning projects, the Company’s ability
to pursue, finance and complete acquisition opportunities, the Company’s
ability to engage in the projects in its planned expansion and
redevelopment pipeline, the Company’s ability to achieve the estimated
unleveraged returns for such projects and acquisitions, the estimated
remediation and repair costs related to Hurricane Maria at the affected
properties. 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 our Annual Report on Form 10-K for the year ended
December 31, 2017 and the other documents filed by the Company with the
Securities and Exchange Commission.
For these statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue
reliance on our 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)
URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
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, 2018. 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.
Reconciliation of Net Income to Cash NOI and Same-Property Cash NOI
The following table reflects the reconciliation of net income to cash
NOI, same-property cash NOI and same-property cash NOI including
properties in redevelopment for the three and six months ended June 30,
2018 and 2017. Net income is considered the most directly comparable
GAAP measure. Refer to “Non-GAAP Financial Measures” on page 3 for a
description of cash NOI and same-property cash NOI.
Three Months Ended June 30,
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, 2018. 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.
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