EX-99.2 3 exhibit992-supplementaldis.htm EXHIBIT 99.2 Exhibit
Exhibit 99.2




 
 
URBAN EDGE PROPERTIES
 
SUPPLEMENTAL DISCLOSURE
PACKAGE
 
September 30, 2018
 
 



image3a22.jpg




 
 
 
 
Urban Edge Properties
888 7th Avenue, New York, NY 10019
NY Office: 212-956-2556
www.uedge.com
 






URBAN EDGE PROPERTIES
SUPPLEMENTAL DISCLOSURE
September 30, 2018
(unaudited)
 
 
TABLE OF CONTENTS
 
Page
Press Release
 
Third Quarter 2018 Earnings Press Release
1
 
 
Overview
 
Summary Financial Results and Ratios
10
 
 
Consolidated Financial Statements
 
Consolidated Balance Sheets
11
Consolidated Statements of Income
12
 
 
Non-GAAP Financial Measures and Supplemental Data
 
Supplemental Schedule of Net Operating Income
13
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)
14
Funds from Operations
15
Market Capitalization, Debt Ratios and Liquidity
16
Additional Disclosures
17
 
 
Leasing Data
 
Tenant Concentration - Top Twenty-Five Tenants
18
Leasing Activity
19
Retail Portfolio Lease Expiration Schedules
20
 
 
Property Data
 
Property Status Report
22
Property Acquisitions and Dispositions
25
Development, Redevelopment and Anchor Repositioning Projects
26
 
 
Debt Schedules
 
Debt Summary
28
Mortgage Debt Summary
29
Debt Maturity Schedule
30
 
 







 
image2a23.jpg
 
 
 
 
 
Urban Edge Properties
For additional information:
888 Seventh Avenue
Mark Langer, EVP and
New York, NY 10019
Chief Financial Officer
212-956-2556
 
 
 
 
 
 
 
 
 
FOR IMMEDIATE RELEASE:
 
 
 
 
Urban Edge Properties Reports Third Quarter 2018 Results
        
NEW YORK, NY, October 31, 2018 - Urban Edge Properties (NYSE:UE) (the "Company") today announced its results for the quarter ended September 30, 2018.

Financial Results(1)(2) 
•
Generated net income of $26.9 million, or $0.21 per diluted share, for the quarter and $109.7 million, or $0.86 per diluted share, for the nine months ended September 30, 2018.
•
Generated Funds from Operations applicable to diluted common shareholders ("FFO") of $48.5 million, or $0.38 per share, for the quarter compared to $40.0 million, or $0.32 per share, for the third quarter of 2017 and $132.2 million, or $1.04 per share, for the nine months ended September 30, 2018 compared to $152.1 million, or $1.32 per share, for the nine months ended September 30, 2017.
•
Generated FFO as Adjusted of $41.9 million, or $0.33 per share, for the quarter compared to $41.9 million, or $0.34 per share, for the third quarter of 2017 and $124.7 million, or $0.98 per share, for the nine months ended September 30, 2018 compared to $115.8 million, or $1.00 per share, for the nine months ended September 30, 2017.
•
FFO as Adjusted for the quarter excludes the $7.0 million net impact of Toys "R" Us lease terminations resulting from $16.5 million of income for the write-off of below market intangible liabilities partially offset by a $9.5 million lease termination payment, a $2.2 million gain on sale of land, $1.9 million of executive transition costs and $0.4 million of transaction costs. FFO as Adjusted for the nine months ended September 30, 2018 excludes the factors above as well as a $1.9 million net expense from the Toys "R" Us lease terminations, $2.5 million gain on extinguishment of debt, a $0.7 million hurricane related casualty gain and $0.6 million of environmental remediation costs.
Operating Results(1) 
•
Increased same-property cash Net Operating Income ("NOI") including properties in redevelopment by 2.2% compared to the third quarter of 2017 and by 1.9% compared to the nine months ended September 30, 2017. Third quarter and nine months ended September 30, 2018 results were negatively impacted by 150 basis points and 70 basis points, respectively, as a result of Toys "R" Us store closures.
•
Increased same-property cash NOI excluding properties in redevelopment by 0.7% over the third quarter of 2017 and by 1.2% compared to the nine months ended September 30, 2017. Third quarter and nine months ended September 30, 2018 results were negatively impacted by 140 basis points and 60 basis points, respectively, as a result of Toys "R" Us store closures.
•
Reported same-property retail portfolio occupancy of 95.2%, a decrease of 140 basis points compared to September 30, 2017, which includes a 170 basis point decline attributable to the Toys "R" Us vacancies.
•
Reported consolidated retail portfolio occupancy of 94.4%, a decrease of 140 basis points compared to September 30, 2017, which includes a 180 basis point decline attributable to the Toys "R" Us vacancies.
•
Executed 39 new leases, renewals and options totaling 429,000 square feet ("sf") during the quarter. Same-space leases totaled 410,000 sf and generated average rent spreads of 19.9% on a GAAP basis and 6.1% on a cash basis.


1

Toys "R" Us
The Company views the Toys "R" Us bankruptcy as an opportunity to upgrade its spaces with more vibrant retailers and to redevelop certain centers. The Company previously had nine Toys "R" Us leases comprising approximately 400,000 sf that paid an average base rent of $13 per sf, significantly below our estimate of current market rent.
The status of the nine leases is as follows:
•
One lease was assumed by Raymour & Flanigan.
•
The Company paid $15.5 million to recapture the leases at Bruckner Commons and Hudson Mall to accelerate the redevelopment of each property.
•
The Company is actively negotiating letters of intent with national value retailers for four vacancies.
•
Two vacancies are being marketed.

Development, Redevelopment and Anchor Repositioning Activity
During the third quarter, the Company completed two redevelopment projects totaling $20.2 million at The Outlets at Montehiedra Town Center in Puerto Rico and Lawnside Commons in New Jersey, which are expected to generate an unleveraged yield of 12%.

The Company also commenced three new redevelopment projects with estimated gross costs of $15.9 million expected to generate an unleveraged yield of 9%. The projects include (i) expanding Kearny Commons by 22,000 sf to accommodate Ulta, Starbucks and other tenants, (ii) repurposing 82,000 sf of vacant basement space at The Plaza at Woodbridge into a self-storage facility, and (iii) converting a former sit-down restaurant at Mt. Kisco Commons into Chipotle and another quick service restaurant.

The Company has $202 million of active redevelopment projects under way expected to generate a 7% unleveraged yield. Approximately $74 million of that amount remains to be funded.

Balance Sheet Highlights at September 30, 2018(1)(3)(4)(5) 
•
Total market capitalization of approximately $4.4 billion comprised of 127.1 million fully-diluted common shares valued at $2.8 billion and $1.6 billion of debt.
•
Net debt to total market capitalization of 25%.
•
Net debt to Adjusted Earnings before interest, tax, depreciation and amortization for real estate ("EBITDAre") of 4.7x.
•
$465.6 million of cash and cash equivalents, including restricted cash, and no amounts drawn on the $600 million revolving credit facility.



















(1) Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.
(2) Refer to page 5 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter and nine months ended September 30, 2018.
(3) Refer to page 7 for a reconciliation of net income to EBITDAre and annualized Adjusted EBITDAre for the quarter and nine months ended September 30, 2018.
(4) Net debt as of September 30, 2018 is calculated as total consolidated debt of $1.6 billion less total cash and cash equivalents, including restricted cash, of $465.6 million.
(5) Refer to page 16 for the calculation of market capitalization as of September 30, 2018.

2

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:
•
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 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 depreciated real estate assets, impairments on depreciable real estate, 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 diminish 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.
•
Cash NOI: The Company uses cash NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes cash NOI is useful to investors as a performance measure because, when compared across periods, cash 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 operating income or net income. The Company calculates cash NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for the following items: lease termination fees, bankruptcy settlement income, non-cash rental income and ground rent expense, and income or expenses that we do not believe are representative of ongoing operating results, if any.
•
Same-property Cash NOI: The Company provides disclosure of cash 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 totaling 83 properties for the three months ended September 30, 2018 and 2017 and 75 properties for the nine months ended September 30, 2018 and 2017. 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, sold, or under contract to be sold during the periods being compared. As such, same-property cash 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 cash NOI on a same-property basis adjusted to include redevelopment properties. Same-property cash NOI may include other adjustments as detailed in the Reconciliation of Net Income to cash NOI and same-property cash NOI included in the tables accompanying this press release.

3

•
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 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 September 30, 2018, 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 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 83 properties for the three months ended September 30, 2018 and 2017 and 75 properties for the nine months ended September 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.









4

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, 2018 and 2017, respectively. 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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
26,899

 
$
19,156

 
$
109,712

 
$
88,811

Less net income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating partnership
(2,688
)
 
(1,967
)
 
(11,041
)
 
(7,431
)
Consolidated subsidiaries
(11
)
 
(11
)
 
(34
)
 
(33
)
Net income attributable to common shareholders
24,200

 
17,178


98,637


81,347

Adjustments:
 
 
 
 
 
 
 
Rental property depreciation and amortization
21,639

 
20,855

 
72,969

 
59,886

Gain on sale of real estate
—

 
—

 
(50,440
)
 
—

Real estate impairment loss
—

 
—

 
—

 
3,467

Limited partnership interests in operating partnership
2,688

 
1,967

 
11,041

 
7,431

FFO Applicable to diluted common shareholders
48,527


40,000


132,207


152,131

FFO per diluted common share(1)
0.38

 
0.32


1.04


1.32

Adjustments to FFO:
 
 
 
 
 
 
 
Impact of Toys "R" Us, Inc. lease terminations(2)
(6,956
)
 
—

 
(5,081
)
 
—

Gain on sale of land
(2,185
)
 
(202
)
 
(2,185
)
 
(202
)
Tenant bankruptcy settlement income
(27
)
 
(115
)
 
(305
)
 
(628
)
Casualty (gain) loss, net(4)
(3
)
 
2,170

 
(691
)
 
2,170

Executive transition costs(3)
1,932

 
—

 
1,932

 
—

Transaction costs
396

 
95

 
396

 
278

Construction rental abatement
164

 
—

 
164

 
—

Tax impact from hurricane
3

 
—

 
229

 
—

Environmental remediation costs
—

 
—

 
584

 
—

(Gain) loss on extinguishment of debt
—

 
—

 
(2,524
)
 
1,274

Income from acquired leasehold interest
—

 
—

 
—

 
(39,215
)
FFO as Adjusted applicable to diluted common shareholders
$
41,851


$
41,948


$
124,726


$
115,808

FFO as Adjusted per diluted common share(1)
$
0.33

 
$
0.34


$
0.98


$
1.00

 
 
 
 
 
 
 
 
Weighted Average diluted common shares(1)
126,709

 
123,989

 
126,644

 
115,654

(1) Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three and nine months ended September 30, 2018 and the three months ended September 30, 2017 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 stock. These redeemable units are not included in the weighted average diluted share count for GAAP purposes because their inclusion is anti-dilutive. LTIP and OP units are included for the nine months ended September 30, 2017 as their inclusion is dilutive.
(2) Amount for the three months ended September 30, 2018 reflects the write-off of $16.5 million of below-market intangible liabilities (classified within property rental revenue), partially offset by a $9.5 million lease termination payment (classified within property operating expense). The amount for the nine months ended September 30, 2018 includes the write-off of $21.6 million of below-market intangible liabilities, partially offset by $15.5 million of lease termination payments and $1.0 million of a provision for doubtful accounts for reserves recorded on straight-line rents.
(3) Amount reflects costs associated with hiring a new Chief Operating Officer and a new President of Development and severance expenses related to the termination of a prior executive.
(4) The amount reflects insurance proceeds net of losses as a result of Hurricane Maria in Puerto Rico in September 2017 and a tornado in Wilkes-Barre, PA, in June 2018:
(in thousands)
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
Insurance proceeds, net of casualty related expenses
$
(58
)
 
$
1,248

Reversal of provision for doubtful accounts on previously reserved balances
142

 
369

Property rental and tenant reimbursement losses
(81
)
 
(926
)
Casualty gain, net
$
3

 
$
691


5

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 nine months ended September 30, 2018 and 2017, respectively. 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 September 30, 2018
 
Nine Months Ended September 30, 2018
(Amounts in thousands)
2018
 
2017
 
2018
 
2017
Net income
$
26,899

 
$
19,156

 
$
109,712

 
$
88,811

Management and development fee income from non-owned properties
(375
)
 
(369
)
 
(1,064
)
 
(1,199
)
Other income
(46
)
 
(38
)
 
(119
)
 
(124
)
Depreciation and amortization
21,833

 
20,976

 
73,544

 
60,505

General and administrative expense
9,702

 
7,025

 
25,579

 
22,998

Casualty and impairment loss (gain), net(5)
58

 
2,170

 
(1,248
)
 
5,637

Gain on sale of real estate
(2,185
)
 
(202
)
 
(52,625
)
 
(202
)
Interest income
(2,388
)
 
(719
)
 
(5,943
)
 
(1,182
)
Interest and debt expense
16,756

 
14,637

 
48,059

 
41,379

(Gain) loss on extinguishment of debt
—

 
—

 
(2,524
)
 
1,274

Income tax expense
115

 
318

 
741

 
942

Non-cash revenue and expenses
(19,514
)
 
(2,554
)
 
(28,595
)
 
(44,807
)
Cash NOI(1)
50,855


60,400


165,517


174,032

Adjustments:
 
 
 
 
 
 
 
Non-same property cash NOI(1)(2)
(6,627
)
 
(6,807
)
 
(38,027
)
 
(32,149
)
Tenant bankruptcy settlement and lease termination income
(27
)
 
(115
)
 
(1,004
)
 
(628
)
Natural disaster related operating (gain) loss(3)
(6
)
 
—

 
172

 
—

Lease termination payment
9,500

 
—

 
15,500

 
—

Construction rental abatement
164

 
—

 
164

 
—

Environmental remediation costs
—

 
—

 
584

 
—

Same-property cash NOI(6)
$
53,859

 
$
53,478


$
142,906


$
141,255

Cash NOI related to properties being redeveloped(4)
5,441

 
4,562

 
15,162

 
13,871

Same-property cash NOI including properties in redevelopment(6)
$
59,300

 
$
58,040


$
158,068


$
155,126

(1) Cash NOI is calculated as total property revenues less property operating expenses excluding the net effects of non-cash rental income and non-cash ground rent expense but includes bad debt expense.
(2) Non-same property cash NOI includes cash NOI related to properties being redeveloped and properties acquired or disposed.
(3) Amount reflects rental and tenant reimbursement losses, and reversals of provisions for payments received from tenants at Las Catalinas in Puerto Rico and Wilkes-Barre, PA.
(4) The third quarter of 2018 excludes a $0.1 million reversal of provisions for payments received from tenants at Montehiedra. The nine months ended September 30, 2018 excludes $0.6 million of rental and tenant reimbursement losses, partially offset by a $0.2 million reversal of provisions for payments received from tenants at Montehiedra.
(5) The three and nine months ended September 30, 2018 reflect insurance proceeds offset by hurricane-related expenses. The three and nine months ended September 30, 2017 reflect a casualty charge of $2.2 million to write-off the estimated net book value of the fixed assets damaged by Hurricane Maria and the nine months ended September 30, 2017 also include $3.5 million real estate impairment losses recorded as a result of the sale of our property in Eatontown, NJ.
(6) The results for the three and nine months ended September 30, 2018 were negatively impacted by Toys "R" Us store closures. Excluding these amounts, same-property cash NOI would have increased by 2.1% for the quarter and by 1.8% for the nine months ended September 30, 2018, and same-property cash NOI including properties in redevelopment would have increased by 3.7% for the quarter and by 2.6% for the nine months ended September 30, 2018:
 
 
 
Three Months Ended September 30,
 
Percent Change
 
Nine Months Ended September 30,
 
Percent Change
 
 
 
2018
 
2017
 
 
2018
 
2017
 
 
Same-property cash NOI
$
53,859

 
$
53,478

 
0.7%
 
$
142,906

 
$
141,255

 
1.2%
 
Cash NOI lost due to Toys "R" Us
761

 
—

 
 
 
865

 
—

 
 
 
Same-property cash NOI including item above
54,620

 
53,478

 
2.1%
 
143,771

 
141,255

 
1.8%
 
Cash NOI related to properties being redeveloped
5,441

 
4,562

 
 
 
15,162

 
13,871

 
 
 
Cash NOI lost due to Toys "R" Us at properties being redeveloped
142

 
—

 
 
 
200

 
—

 
 
 
Same-property cash NOI including properties in redevelopment and including item above
$
60,203


$
58,040

 
3.7%
 
$
159,133

 
$
155,126

 
2.6%

6

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, 2018 and 2017, respectively. 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 September 30,
 
Nine Months Ended September 30,
(Amounts in thousands)
2018
 
2017
 
2018
 
2017
Net income
$
26,899

 
$
19,156

 
$
109,712

 
$
88,811

Depreciation and amortization
21,833

 
20,976

 
73,544

 
60,505

Interest and debt expense
16,756

 
14,637

 
48,059

 
41,379

Income tax expense
115

 
318

 
741

 
942

Gain on sale of real estate
—

 
—

 
(50,440
)
 
—

Real estate impairment loss
—

 
—

 
—

 
3,467

EBITDAre
65,603


55,087


181,616


195,104

Adjustments for Adjusted EBITDAre:
 
 
 
 
 
 
 
Impact of Toys "R" Us, Inc. lease terminations(2)
(6,956
)
 
—

 
(5,081
)
 
—

Gain on sale of land
(2,185
)
 
(202
)
 
(2,185
)
 
(202
)
Tenant bankruptcy settlement income
(27
)
 
(115
)
 
(305
)
 
(628
)
Casualty gain, net(1)
(3
)
 
2,170

 
(691
)
 
2,170

Executive transition costs(3)
1,932

 
—

 
1,932

 
—

Construction rental abatement
164

 
—

 
164

 
—

Environmental remediation costs
—

 
—

 
584

 
—

(Gain) loss on extinguishment of debt
—

 
—

 
(2,524
)
 
1,274

Transaction costs
396

 
95

 
396

 
278

Income from acquired leasehold interest
—

 
—

 
—

 
(39,215
)
Adjusted EBITDAre
$
58,924

 
$
57,035


$
173,906


$
158,781

(1) Refer to footnote 4 on page 5, Reconciliation of Net Income to FFO and FFO as Adjusted, for the adjustments included in this line item.
(2) Amount for the three months ended September 30, 2018 reflects the write-off of $16.5 million of below-market intangible liabilities, partially offset by a $9.5 million lease termination payment. The amount for the nine months ended September 30, 2018 includes the write-off of $21.6 million of below-market intangible liabilities, partially offset by $15.5 million of lease termination payments and $1.0 million of a provision for doubtful accounts for reserves recorded on straight-line rents.
(3) Amount reflects costs associated with hiring a new Chief Operating Officer and a new President of Development and severance expenses related to the termination of a prior executive.

7

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 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 natural disasters at the affected properties and the loss of or bankruptcy of a major tenant and the impact of any such event. 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.


8


URBAN EDGE PROPERTIES
 
 
 
ADDITIONAL DISCLOSURES
 
 
 
As of September 30, 2018
 
 
 
 
 
 
 

Basis of Presentation
The information contained in the Supplemental Disclosure Package does not purport to disclose all items required by GAAP and is unaudited information. This Supplemental Disclosure Package should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018. The results of operations of any property acquired are included in the Company's financial statements since the date of acquisition, although such properties may be excluded from certain metrics disclosed in this Supplemental Disclosure Package.
Non-GAAP Financial Measures and Forward-Looking Statements
For additional information regarding non-GAAP financial measures and forward-looking statements, please see pages 3 and 8 of this Supplemental Disclosure Package.




9


URBAN EDGE PROPERTIES
 
 
SUMMARY FINANCIAL RESULTS AND RATIOS
 
 
For the three and nine months ended September 30, 2018 (unaudited)
 
(in thousands, except per share, sf, rent psf and financial ratio data)
 
 
 
 
 
 
 
Three months ended
 
Nine months ended
 
 
September 30, 2018
 
September 30, 2018
Summary Financial Results
 
 
 
 
Total revenue
 
$
112,214

 
$
313,237

General & administrative expenses (G&A)
 
$
9,702

 
$
25,579

Net income attributable to common shareholders
 
$
24,200

 
$
98,637

Earnings per diluted share
 
$
0.21

 
$
0.86

Adjusted EBITDAre(7)
 
$
58,924

 
$
173,906

Funds from operations (FFO)
 
$
48,527

 
$
132,207

FFO per diluted common share
 
$
0.38

 
$
1.04

FFO as Adjusted
 
$
41,851

 
$
124,726

FFO as Adjusted per diluted common share
 
$
0.33

 
$
0.98

Total dividends paid per share
 
$
0.22

 
$
0.66

Stock closing price low-high range (NYSE)
 
$21.65 to $23.28

 
$19.83 to $25.59

Weighted average diluted shares used in EPS computations(1)
 
114,156

 
114,236

Weighted average diluted common shares used in FFO computations(1)
 
126,709

 
126,644

 
 
 
 
 
Summary Property, Operating and Financial Data
 
 
 
 
# of Total properties / # of Retail properties
 
88 / 87

 
 
Gross leasable area (GLA) sf - retail portfolio(3)(5)
 
15,399,000

 
 
Weighted average annual rent psf - retail portfolio(3)(5)
 
$
17.70

 
 
Consolidated occupancy at end of period
 
94.7
%
 
 
Consolidated retail portfolio occupancy at end of period(5)
 
94.4
%
 
 
Same-property retail portfolio occupancy at end of period(5)(2)
 
95.2
%
 
 
Same-property retail portfolio physical occupancy at end of period(4)(5)(2)
 
93.9
%
 
 
Same-property cash NOI growth(2)
 
0.7
%
 
1.2
%
Same-property cash NOI growth, including redevelopment properties
 
2.2
%
 
1.9
%
Cash NOI margin - total portfolio
 
55.3
%
 
58.7
%
Expense recovery ratio - total portfolio
 
96.0
%
 
97.3
%
New, renewal and option rent spread - cash basis(8)
 
6.1
%
 
3.7
%
New, renewal and option rent spread - GAAP basis(9)
 
19.9
%
 
11.7
%
Net debt to total market capitalization(6)
 
25.1
%
 
25.1
%
Net debt to Adjusted EBITDAre(6)
 
4.7
x
 
4.7
x
Adjusted EBITDAre to interest expense(7)
 
3.7
x
 
3.8
x
Adjusted EBITDAre to fixed charges(7)
 
3.4
x
 
3.5
x
 
 
 
 
 
(1) Weighted average diluted common shares used to calculate FFO per share and FFO as Adjusted per share for the periods presented include OP and LTIP Units, which are excluded from the calculation of earnings per diluted share for the periods presented because their inclusion is anti-dilutive. FFO includes earnings allocated to unit holders as the inclusion of these units is dilutive to FFO per share.
(2) The same-property pool for both cash NOI and occupancy includes retail properties the Company consolidated, owned and operated for the entirety of both periods being compared and excludes properties under development and redevelopment, acquired, sold, or under contract to be sold during the periods being compared.
(3) GLA - retail portfolio excludes 942,000 square feet of warehouses. Weighted average annual rent per square foot for our retail portfolio and warehouses was $16.93.
(4) Physical occupancy includes tenants that have access to their leased space and includes dark and paying tenants.
(5) Our retail portfolio includes shopping centers and malls and excludes warehouses.
(6) See computation on page 16. Adjusted EBITDAre is annualized for purposes of calculating net debt to Adjusted EBITDAre.
(7) See computation on page 14.
(8) Rents have not been calculated on a straight-line basis. Previous/expiring rent is the rent at expiry and includes any percentage rent paid. New rent is the rent paid at commencement.
(9) Rents are calculated on a straight-line ("GAAP") basis. See computation on page 19.


10


URBAN EDGE PROPERTIES
 
 
CONSOLIDATED BALANCE SHEETS
 
 
As of September 30, 2018 (unaudited) and December 31, 2017
 
 
(in thousands, except share and per share amounts)
 
 
 
 
 
 
September 30,
 
December 31,
 
2018
 
2017
ASSETS
 
 
 

Real estate, at cost:
 

 
 

Land
$
533,859

 
$
521,669

Buildings and improvements
2,132,712

 
2,010,527

Construction in progress
79,488

 
133,761

Furniture, fixtures and equipment
6,662

 
5,897

Total
2,752,721

 
2,671,854

Accumulated depreciation and amortization
(633,675
)
 
(587,127
)
Real estate, net
2,119,046

 
2,084,727

Cash and cash equivalents
449,307

 
490,279

Restricted cash
16,269

 
10,562

Tenant and other receivables, net of allowance for doubtful accounts of $6,485 and $4,937, respectively
28,799

 
20,078

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $662 and $494, respectively
84,828

 
85,843

Identified intangible assets, net of accumulated amortization of $38,905 and $33,827, respectively
72,841

 
87,249

Deferred leasing costs, net of accumulated amortization of $16,043 and $14,796, respectively
21,088

 
20,268

Deferred financing costs, net of accumulated amortization of $2,508 and $1,740, respectively
2,475

 
3,243

Prepaid expenses and other assets
16,194

 
18,559

Total assets
$
2,810,847

 
$
2,820,808

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

Liabilities:
 
 
 
Mortgages payable, net
$
1,550,995

 
$
1,564,542

Accounts payable and accrued expenses
70,227

 
69,595

Identified intangible liabilities, net of accumulated amortization of $64,252 and $65,832, respectively
148,715

 
180,959

Other liabilities
17,656

 
15,171

Total liabilities
1,787,593

 
1,830,267

Commitments and contingencies
 
 
 
Shareholders’ equity:
 
 
 
Common shares: $0.01 par value; 500,000,000 shares authorized and 114,175,607 and 113,827,529 shares issued and outstanding, respectively
1,141

 
1,138

Additional paid-in capital
951,959

 
946,402

Accumulated deficit
(34,221
)
 
(57,621
)
Noncontrolling interests:
 
 
 
Operating partnership
103,937

 
100,218

Consolidated subsidiaries
438

 
404

Total equity
1,023,254

 
990,541

Total liabilities and equity
$
2,810,847

 
$
2,820,808


11


URBAN EDGE PROPERTIES
 
 
CONSOLIDATED STATEMENTS OF INCOME
 
 
For the three and nine months ended September 30, 2018 and 2017 (unaudited)
 
(in thousands, except share and per share amounts)
 
 
 
 
 

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
REVENUE
 
 
 
 
 
 
 
Property rentals
$
85,949

 
$
69,625

 
$
230,217

 
$
196,831

Tenant expense reimbursements
25,784

 
23,938

 
80,678

 
71,590

Management and development fees
375

 
369

 
1,064

 
1,199

Income from acquired leasehold interest
—

 
—

 
—

 
39,215

Other income
106

 
169

 
1,278

 
831

Total revenue
112,214

 
94,101

 
313,237

 
309,666

EXPENSES
 
 
 
 
 
 
 
Depreciation and amortization
21,833

 
20,976

 
73,544

 
60,505

Real estate taxes
16,374

 
15,872

 
47,736

 
43,975

Property operating
22,249

 
11,402

 
59,408

 
35,858

General and administrative
9,702

 
7,025

 
25,579

 
22,998

Casualty and impairment loss (gain), net
58

 
2,170

 
(1,248
)
 
5,637

Ground rent
2,722

 
2,891

 
8,210

 
7,997

Provision for doubtful accounts
79

 
575

 
2,588

 
1,674

Total expenses
73,017

 
60,911

 
215,817

 
178,644

Operating income
39,197

 
33,190

 
97,420

 
131,022

Gain on sale of real estate
2,185

 
202

 
52,625

 
202

Interest income
2,388

 
719

 
5,943

 
1,182

Interest and debt expense
(16,756
)
 
(14,637
)
 
(48,059
)
 
(41,379
)
Gain (loss) on extinguishment of debt
—

 
—

 
2,524

 
(1,274
)
Income before income taxes
27,014

 
19,474

 
110,453

 
89,753

Income tax expense
(115
)
 
(318
)
 
(741
)
 
(942
)
Net income
26,899

 
19,156

 
109,712

 
88,811

Less net income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating partnership
(2,688
)
 
(1,967
)
 
(11,041
)
 
(7,431
)
Consolidated subsidiaries
(11
)
 
(11
)
 
(34
)
 
(33
)
Net income attributable to common shareholders
$
24,200

 
$
17,178

 
$
98,637

 
$
81,347

 
 
 
 
 
 
 
 
Earnings per common share - Basic:
$
0.21

 
$
0.15

 
$
0.87

 
$
0.77

Earnings per common share - Diluted:
$
0.21

 
$
0.15

 
$
0.86

 
$
0.77

Weighted average shares outstanding - Basic
113,890

 
110,990

 
113,769

 
104,938

Weighted average shares outstanding - Diluted
114,156

 
111,260

 
114,236

 
115,323


12


URBAN EDGE PROPERTIES
 
 
SUPPLEMENTAL SCHEDULE OF NET OPERATING INCOME
 
 
For the three and nine months ended September 30, 2018 and 2017
 
(in thousands)
 
 
 
 
 
 
Three Months Ended September 30,
 
Percent Change
 
Nine Months Ended September 30,
 
Percent Change
 
2018
 
2017
 
 
2018
 
2017
 
Total cash NOI(1)
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$
91,899

 
$
90,908

 
1.1%
 
$
281,852

 
$
262,647

 
7.3%
Total property operating expenses
(41,044
)
 
(30,508
)
 
34.5%
 
(116,335
)
 
(88,615
)
 
31.3%
Cash NOI - total portfolio
$
50,855

 
$
60,400

 
(15.8)%
 
$
165,517

 
$
174,032

 
(4.9)%
 
 
 
 
 
 
 
 
 
 
 
 
NOI margin (NOI / Total revenue)(2)
55.3
%
 
66.4
%
 
 
 
58.7
%
 
66.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-property cash NOI(1)
 
 
 
 
 
 
 
 
 
 
 
Property rentals
$
59,788

 
$
59,678

 
 
 
$
155,843

 
$
153,134

 
 
Tenant expense reimbursements
23,384

 
21,868

 
 
 
63,415

 
59,856

 
 
Total revenue
83,172


81,546

 

 
219,258

 
212,990

 

Real estate taxes
(15,141
)
 
(14,623
)
 
 
 
(38,305
)
 
(36,891
)
 
 
Property operating
(10,770
)
 
(9,635
)
 
 
 
(29,965
)
 
(26,886
)
 
 
Ground rent
(3,227
)
 
(3,348
)
 
 
 
(6,852
)
 
(6,754
)
 
 
Provision for doubtful accounts(3)
(175
)
 
(462
)
 
 
 
(1,230
)
 
(1,204
)
 
 
Total property operating expenses
(29,313
)
 
(28,068
)
 

 
(76,352
)
 
(71,735
)
 

Same-property cash NOI(4)
$
53,859

 
$
53,478

 
0.7%
 
$
142,906

 
$
141,255

 
1.2%
 
 
 
 
 
 
 
 
 
 
 
 
Cash NOI related to properties being redeveloped
$
5,441

 
$
4,562

 
 
 
$
15,162

 
$
13,871

 
 
Same-property cash NOI including properties in redevelopment(4)
$
59,300

 
$
58,040

 
2.2%
 
$
158,068

 
$
155,126

 
1.9%
 
 
 
 
 
 
 
 
 
 
 
 
Same-property physical occupancy
93.9
%
 
96.3
%
 
 
 
96.4
%
 
97.9
%
 
 
Same-property leased occupancy
95.2
%
 
96.6
%
 
 
 
97.4
%
 
98.3
%
 
 
Number of properties included in same-property analysis
83

 
 
 
 
 
75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Refer to page 6 for a reconciliation of net income to cash NOI and same-property cash NOI.
(2) The NOI margins for the three and nine months ended September 30, 2018 include $9.5 million and $15.5 million in lease termination payments, respectively, for the Toys "R" Us leases at Bruckner Commons in the Bronx, NY and Hudson Mall in Jersey City, NJ. Excluding the lease termination payments, the NOI margin is 65.7% and 64.2% for the three and nine months ended September 30, 2018, respectively.
(3) Provision for doubtful accounts during the three and nine months ended September 30, 2018 was reduced by $0.9 million and $0.5 million, respectively, due to reversals of provisions for payments received from tenants related to tenant disputes and at risk tenants at Las Catalinas in Puerto Rico.
(4) Same-property cash NOI and same-property cash NOI including properties in redevelopment for the three and nine months ended September 30, 2018, exclude the following (gains)/losses as a result of natural disasters which will be included in our insurance claim submissions:
 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
 
Excluded from
Same-property Cash NOI (Las Catalinas and Wilkes-Barre)
 
Excluded from Same-property Cash NOI including redevelopment (Montehiedra)
 
Excluded from
Same-property Cash NOI (Las Catalinas and Wilkes-Barre)
 
Excluded from Same-property Cash NOI including redevelopment (Montehiedra)
Revenue
 
 
 
 
 
 
 
Property rentals
$
7

 
$
—

 
$
178

 
$
467

Tenant expense reimbursements
37

 
37

 
177

 
104

Operating expenses
 
 
 
 
 
 
 
Reversal of provision for doubtful accounts
(50
)
 
(92
)
 
(183
)
 
(186
)
Total casualty (gain) loss excluded
$
(6
)
 
$
(55
)
 
$
172

 
$
385


13


URBAN EDGE PROPERTIES
 
 
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION and AMORTIZATION for REAL ESTATE (EBITDAre)
For the three and nine months ended September 30, 2018 and 2017
 
(in thousands)
 
 
 
 
 

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
26,899

 
$
19,156

 
$
109,712

 
$
88,811

Depreciation and amortization
21,833

 
20,976

 
73,544

 
60,505

Interest expense
16,036

 
13,913

 
45,900

 
39,204

Amortization of deferred financing costs
720

 
724

 
2,159

 
2,175

Income tax expense
115

 
318

 
741

 
942

Gain on sale of real estate
—

 
—

 
(50,440
)
 
—

Real estate impairment loss
—

 
—

 
—

 
3,467

EBITDAre
65,603


55,087


181,616


195,104

Adjustments for Adjusted EBITDAre:
 
 
 
 
 
 
 
Impact of Toys "R" Us, Inc. lease terminations(1)
(6,956
)
 
—

 
(5,081
)
 
—

Gain on sale of land
(2,185
)
 
(202
)
 
(2,185
)
 
(202
)
Tenant bankruptcy settlement income
(27
)
 
(115
)
 
(305
)
 
(628
)
Casualty gain, net(1)
(3
)
 
2,170

 
(691
)
 
2,170

Executive transition costs(1)
1,932

 
—

 
1,932

 
—

Construction rental abatement
164

 
—

 
164

 
—

Environmental remediation costs
—

 
—

 
584

 
—

(Gain) loss on extinguishment of debt
—

 
—

 
(2,524
)
 
1,274

Transaction costs
396

 
95

 
396

 
278

Income from acquired leasehold interest
—

 
—

 
—

 
(39,215
)
Adjusted EBITDAre
$
58,924

 
$
57,035


$
173,906


$
158,781

 
 
 
 
 
 
 
 
Interest expense
$
16,036

 
$
13,913


$
45,900


$
39,204

 
 
 
 
 
 
 
 
Adjusted EBITDAre to interest expense
3.7
x
 
4.1
x

3.8
x

4.1
x
 
 
 
 
 
 
 
 
Fixed charges
 
 
 
 
 
 
 
Interest expense
$
16,036

 
$
13,913


$
45,900


$
39,204

Scheduled principal amortization
1,176

 
4,383

 
3,157

 
13,446

Total fixed charges
$
17,212

 
$
18,296


$
49,057


$
52,650

 
 
 
 
 
 
 
 
Adjusted EBITDAre to fixed charges
3.4
x
 
3.1
x

3.5
x

3.0
x
 
 
 
 
 
 
 
 
(1) Refer to footnotes on page 5, Reconciliation of Net Income to FFO and FFO as Adjusted, for the adjustments included in these respective line items.

14

URBAN EDGE PROPERTIES
 
 
FUNDS FROM OPERATIONS
 
For the three and nine months ended September 30, 2018
 
(in thousands, except per share amounts)
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
 
(in thousands)
 
(per share)
 
(in thousands)
 
(per share)
Net income
$
26,899

 
$
0.21

 
$
109,712

 
$
0.87

Less net income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating partnership
(2,688
)
 
(0.02
)
 
(11,041
)
 
(0.09
)
Consolidated subsidiaries
(11
)
 
—

 
(34
)
 
—

Net income attributable to common shareholders
24,200

 
0.19

 
98,637

 
0.78

Adjustments:
 
 
 
 
 
 
 
Rental property depreciation and amortization
21,639

 
0.17

 
72,969

 
0.57

Gain on sale of real estate
—

 
—

 
(50,440
)
 
(0.40
)
Limited partnership interests in operating partnership(1)
2,688

 
0.02

 
11,041

 
0.09

FFO applicable to diluted common shareholders
48,527

 
0.38

 
132,207

 
1.04

 
 
 
 
 
 
 
 
Impact of Toys "R" Us, Inc. lease terminations(3)
(6,956
)
 
(0.05
)
 
(5,081
)
 
(0.04
)
Gain on sale of land
(2,185
)
 
(0.02
)
 
(2,185
)
 
(0.02
)
Tenant bankruptcy settlement income
(27
)
 
—

 
(305
)
 
—

Casualty gain, net(3)
(3
)
 
—

 
(691
)
 
(0.01
)
Executive transition costs(3)
1,932

 
0.02

 
1,932

 
0.02

Transaction costs
396

 
—

 
396

 
—

Construction rental abatement
164

 
—

 
164

 
—

Tax impact from hurricane
3

 
—

 
229

 
—

Environmental remediation costs
—

 
—

 
584

 
0.01

Gain on extinguishment of debt
—

 
—

 
(2,524
)
 
(0.02
)
FFO as Adjusted applicable to diluted common shareholders
$
41,851


$
0.33

 
$
124,726

 
$
0.98

 
 
 
 
 
 
 
 
Weighted average diluted shares used to calculate EPS
114,156

 
 
 
114,236

 
 
Assumed conversion of OP and LTIP Units to common shares(2)
12,553

 
 
 
12,408

 
 
Weighted average diluted common shares - FFO
126,709

 
 
 
126,644

 
 
(1) Represents earnings allocated to LTIP and OP unit holders for unissued common shares which have been excluded for purposes of calculating earnings per diluted share for the periods presented. FFO applicable to diluted common shareholders and FFO as Adjusted applicable to diluted common shareholders calculations include earnings allocated to LTIP and OP unit holders and the respective weighted average share totals include the redeemable shares outstanding as their inclusion is dilutive.
(2) Operating Partnership ("OP") and Long-Term Incentive Plan ("LTIP") Units are excluded from the calculation of earnings per diluted share for the three and nine months ended September 30, 2018 because their inclusion is anti-dilutive. FFO includes earnings allocated to unitholders as the inclusion of these units is dilutive to FFO per share.
(3) Refer to footnotes on page 5, Reconciliation of Net Income to FFO and FFO as Adjusted, for the adjustments included in these respective line items.




15


URBAN EDGE PROPERTIES
 
 
MARKET CAPITALIZATION, DEBT RATIOS AND LIQUIDITY
 
 
As of September 30, 2018
 
 
(in thousands, except share amounts)
 
 
 
 
 

 
September 30, 2018
Closing market price of common shares
$
22.08

 
 
Basic common shares
114,175,607

OP and LTIP units
12,908,526

Diluted common shares
127,084,133

 
 
Equity market capitalization
$
2,806,018

 
 
 
 
Total consolidated debt(1)
$
1,563,375

Cash and cash equivalents including restricted cash
(465,576
)
Net debt
$
1,097,799

 
 
Net Debt to annualized Adjusted EBITDAre
4.7
x
 
 
Total consolidated debt(1)
$
1,563,375

Equity market capitalization
2,806,018

Total market capitalization
$
4,369,393

 
 
Net debt to total market capitalization at applicable market price
25.1
%
 
 
 
 
Cash and cash equivalents including restricted cash
$
465,576

Available under unsecured credit facility
600,000

Total liquidity
$
1,065,576

 
 
(1) Total consolidated debt excludes unamortized debt issuance costs of $12.4 million.


16


URBAN EDGE PROPERTIES
 
 
ADDITIONAL DISCLOSURES
 
(in thousands)
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
Certain non-cash items:
 
 
 

 
 
 
 
Straight-line rental income (expense)(1)
 
$
581

 
$
53

 
$
435

 
$
(360
)
Amortization of below-market lease intangibles, net(1)(7)
 
19,312

 
2,735

 
29,767

 
6,842

Straight-line ground rent expense(2)
 
(18
)
 
(54
)
 
(54
)
 
(161
)
Provision against receivables from straight-line rents(5)
 
(132
)
 
63

 
(825
)
 
—

Amortization of below-market lease intangibles, lessee(2)
 
(230
)
 
(243
)
 
(729
)
 
(729
)
Amortization of deferred financing costs(4)
 
(720
)
 
(724
)
 
(2,159
)
 
(2,175
)
Capitalized interest(4)
 
346

 
966

 
2,769

 
2,912

Share-based compensation expense(3)
 
(2,252
)
 
(1,889
)
 
(6,494
)
 
(5,248
)
 
 
 
 
 
 
 
 
 
Capital expenditures: (6)
 
 
 
 
 
 
 
 
Development and redevelopment costs
 
$
31,986

 
$
14,523

 
$
84,358

 
$
39,781

Maintenance capital expenditures
 
666

 
2,926

 
2,176

 
4,237

Leasing commissions
 
1,581

 
1,419

 
2,462

 
2,045

Tenant improvements and allowances
 
1,291

 
2,086

 
2,388

 
4,877

Total capital expenditures
 
$
35,524

 
$
20,954


$
91,384


$
50,940

 
 
 
 
 
 
 
 
 
 
 
September 30, 2018
 
December 31, 2017
 
 
 
 
Other Liabilities:
 
 
 
 
 
 
 
 
Deferred ground rent expense
 
$
6,568

 
$
6,499

 
 
 
 
Deferred tax liability, net
 
3,145

 
2,828

 
 
 
 
Other
 
7,943

 
5,844

 
 
 
 
Total other liabilities
 
$
17,656

 
$
15,171

 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses:
 
 
 
 
 
 
 
 
Tenant prepaid/deferred revenue
 
$
17,122

 
$
24,414

 
 
 
 
Accrued capital expenditures and leasing costs
 
27,031

 
16,438

 
 
 
 
Accrued interest payable
 
8,387

 
9,018

 
 
 
 
Security deposits
 
5,325

 
5,272

 
 
 
 
Other
 
12,362

 
14,453

 
 
 
 
Total accounts payable and accrued expenses
 
$
70,227

 
$
69,595

 
 
 
 
(1) Amounts included in the financial statement line item "Property rentals" in the consolidated statements of income.
(2) Amounts included in the financial statement line item "Ground rent" in the consolidated statements of income.
(3) Amounts included in the financial statement line item "General and administrative" in the consolidated statements of income.
(4) Amounts included in the financial statement line item "Interest and debt expense" in the consolidated statements of income.
(5) Amounts included in the financial statement line item "Provision for doubtful accounts" in the consolidated statements of income.
(6) Amounts presented on a cash basis.
(7) Amortization of below-market lease intangibles, net for the three and nine months ended September 30, 2018 include write-offs of below-market lease intangible liabilities of $16.5 million and $21.6 million, respectively, related to the recaptured Toys “R” Us leases.


17


URBAN EDGE PROPERTIES
 
 
TENANT CONCENTRATION - TOP TWENTY-FIVE TENANTS
 
As of September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
Number of stores
Square feet
% of total square feet
Annualized base rent ("ABR")
% of total ABR
Weighted average ABR per square foot
Average remaining term of ABR(1)
The Home Depot, Inc.
7

920,226

5.6%
$
16,224,371

6.0%
$
17.63

15.1
Walmart Inc.
9

1,438,730

8.8%
10,726,552

4.0%
7.46

7.5
Best Buy Co., Inc.
10

442,118

2.7%
10,542,649

3.9%
23.85

6.3
The TJX Companies, Inc.(2)
16

566,644

3.5%
9,646,252

3.6%
17.02

5.2
Lowe's Companies, Inc.
6

976,415

6.0%
8,575,004

3.2%
8.78

9.0
Ahold Delhaize(3)
8

589,907

3.6%
7,087,797

2.6%
12.02

8.4
Kohl's Corporation
8

716,345

4.4%
6,995,847

2.6%
9.77

4.7
PetSmart, Inc.
12

287,493

1.8%
6,740,340

2.5%
23.45

4.8
BJ's Wholesale Club
4

454,297

2.8%
5,314,730

2.0%
11.70

8.1
Sears Holdings Corporation(4)
4

547,443

3.4%
5,244,737

2.0%
9.58

27.6
Wakefern (ShopRite)
4

288,853

1.8%
5,152,646

1.9%
17.84

13.8
Staples, Inc.
9

186,030

1.1%
4,025,777

1.5%
21.64

2.2
Burlington Stores, Inc.
4

261,342

1.6%
3,917,188

1.5%
14.99

9.3
The Gap, Inc.(5)
8

123,784

0.8%
3,534,801

1.3%
28.56

3.2
Target Corporation
2

297,856

1.8%
3,448,666

1.3%
11.58

13.5
Century 21
1

156,649

1.0%
3,394,181

1.3%
21.67

8.3
Whole Foods Market, Inc.
2

100,682

0.6%
3,365,570

1.3%
33.43

9.2
LA Fitness International LLC
4

181,342

1.1%
3,165,032

1.2%
17.45

8.7
Bob's Discount Furniture
4

170,931

1.0%
3,008,485

1.1%
17.60

4.7
Dick's Sporting Goods, Inc.(6)
3

117,345

0.7%
2,650,253

1.0%
22.59

4.7
24 Hour Fitness
1

53,750

0.3%
2,564,520

1.0%
47.71

13.3
National Wholesale Liquidators(7)
1

171,216

1.0%
2,270,346

0.8%
13.26

4.3
URBN (Anthropologie)
1

31,450

0.2%
2,201,500

0.8%
70.00

10.0
Bed Bath & Beyond Inc.
5

149,879

0.9%
2,085,606

0.8%
13.92

4.7
Mattress Firm Inc.(8)            
13

74,021

0.5%
1,973,446

0.7%
26.66

5.5
 
 
 
 
 
 
 
 
Total/Weighted Average
146

9,304,748

57.0%
$
133,856,296

49.9%
$
14.39

9.0
 
 
 
 
 
 
 
 
(1) In years excluding tenant renewal options. The weighted average is based on ABR.
(2) Includes Marshalls (11), T.J. Maxx (3) and HomeGoods (2).
(3) Includes Stop & Shop (6) and Giant Food (2).
(4) Includes Kmart (4). Sears Holding Corporation ("Sears") declared bankruptcy on October 15, 2018. Sears generates approximately $8.5 million in annual gross rents, including tenant reimbursement income.
(5) Includes Old Navy (5), Gap (2) and Banana Republic (1).
(6) Includes Dick's Sporting Goods (2) and Golf Galaxy (1).
(7) National Wholesale Liquidators declared bankruptcy on October 24, 2018. National Wholesale Liquidators generates approximately $3.1 million in annual gross rents, including tenant reimbursement income.
(8) Mattress Firm declared bankruptcy on October 5, 2018. Mattress Firm generates approximately $2.6 million in annual gross rents, including tenant reimbursement income.



Note: Amounts shown in the table above include all retail properties including those in redevelopment on a cash basis other than tenants in free rent periods which are shown at their initial cash rent.

18


URBAN EDGE PROPERTIES
 
 
LEASING ACTIVITY
 
For the three and nine months ended September 30, 2018
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
 
GAAP(3)
 
Cash(2)
 
GAAP(3)
 
Cash(2)
New leases
 
 
 
 
 
 
 
Number of new leases executed
10

 
10

 
36

 
36

Total square feet
30,661

 
30,661

 
321,982

 
321,982

Number of same space leases(1)
5

 
5

 
13

 
13

Same space square feet
12,044

 
12,044

 
130,227

 
130,227

Prior rent per square foot
$
25.83

 
$
26.80

 
$
14.61

 
$
15.46

New rent per square foot
$
32.55

 
$
29.34

 
$
14.19

 
$
13.17

Same space weighted average lease term (years)
7.9

 
7.9

 
9.7

 
9.7

Same space TIs per square foot(4)
N/A

 
$
12.75

 
N/A

 
$
10.72

Rent spread
26.0
%
 
9.5
%
 
(2.9
)%
 
(14.8
)%
 
 
 
 
 
 
 
 
Renewals & Options
 
 
 
 
 
 
 
Number of new leases executed
29

 
29

 
67

 
67

Total square feet
397,910

 
397,910

 
1,138,789

 
1,138,789

Number of same space leases(1)
29

 
29

 
67

 
67

Same space square feet
397,910

 
397,910

 
1,138,789

 
1,138,789

Prior rent per square foot
$
17.81

 
$
19.38

 
$
16.41

 
$
17.22

New rent per square foot
$
21.31

 
$
20.55

 
$
18.57

 
$
18.19

Same space weighted average lease term (years)
8.3

 
8.3

 
6.4

 
6.4

Same space TIs per square foot(4)
N/A

 
$
—

 
N/A

 
$
0.44

Rent spread
19.7
%
 
6.0
%
 
13.2
 %
 
5.6
 %
 
 
 
 
 
 
 
 
Total New Leases and Renewals & Options
 
 
 
 
 
 
 
Number of new leases executed
39

 
39

 
103

 
103

Total square feet
428,571

 
428,571

 
1,460,771

 
1,460,771

Number of same space leases(1)
34

 
34

 
80

 
80

Same space square feet
409,954

 
409,954

 
1,269,016

 
1,269,016

Prior rent per square foot
$
18.05

 
$
19.60

 
$
16.22

 
$
17.04

New rent per square foot
$
21.64

 
$
20.80

 
$
18.12

 
$
17.67

Same space weighted average lease term (years)
8.3

 
8.3

 
6.8

 
6.8

Same space TIs per square foot(4)
N/A

 
$
0.37

 
N/A

 
$
1.49

Rent spread
19.9
%
 
6.1
%
 
11.7
 %

3.7
 %
(1) Leases executed on a same space basis include leases with comparable sf and with prior occupancy.
(2) Rents are not calculated on a straight-line (GAAP) basis. Previous/expiring rent is the rent at expiry and includes any percentage rent paid. New rent is the rent paid at commencement.
(3) Rents are calculated on a straight-line (GAAP) basis.
(4) Includes both tenant improvements and landlord contributions.


19


URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE
 
As of September 30, 2018
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
—

—

—
%
$
—

19

41,000

1.8%
$
34.19

19

41,000

0.3
%
$
34.19

2018
—

—

—
%
—

11

38,000

1.6%
32.32

11

38,000

0.3
%
32.32

2019
16

447,000

3.4
%
15.40

94

282,000

12.1%
32.98

110

729,000

4.7
%
22.20

2020
31

1,100,000

8.4
%
15.19

81

249,000

10.6%
35.76

112

1,349,000

8.8
%
18.98

2021
26

668,000

5.1
%
19.36

62

198,000

8.5%
35.63

88

866,000

5.6
%
23.08

2022
24

1,104,000

8.5
%
11.70

67

186,000

8.0%
33.92

91

1,290,000

8.4
%
14.90

2023
35

1,696,000

13.0
%
14.84

47

155,000

6.6%
34.78

82

1,851,000

12.0
%
16.51

2024
37

1,663,000

12.7
%
14.24

46

176,000

7.5%
28.25

83

1,839,000

11.9
%
15.58

2025
9

502,000

3.9
%
13.61

33

99,000

4.2%
36.04

42

601,000

3.9
%
17.30

2026
8

508,000

3.9
%
8.92

52

169,000

7.2%
31.05

60

677,000

4.4
%
14.44

2027
17

658,000

5.0
%
15.23

38

175,000

7.5%
37.90

55

833,000

5.4
%
19.99

2028
11

403,000

3.1
%
21.62

33

115,000

4.9%
37.79

44

518,000

3.4
%
25.21

Thereafter
50

3,741,000

28.6
%
14.77

32

152,000

6.5%
41.99

82

3,893,000

25.3
%
15.83

Subtotal/Average
264

12,490,000

95.6
%
$
14.76

615

2,035,000

87.0%
$
35.55

879

14,525,000

94.4
%
$
17.67

Vacant
16

571,000

4.4
%
 N/A

115

303,000

13.0%
 N/A

131

874,000

5.6
%
 N/A

Total/Average
280

13,061,000

100
%
 N/A

730

2,338,000

100%
 N/A

1,010

15,399,000

100
%
 N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration excludes tenant renewal options.
(2) Weighted average annual base rent per square foot is calculated by annualizing tenants' in-place, contractual, cash-basis rent including ground rent and excludes tenant reimbursements, concessions and storage rent.


Note: Amounts shown in table above include both current leases and signed leases that have not commenced on vacant spaces for all retail properties (including properties in redevelopment). The average base rent for our 942,000 square-foot warehouse property (excluded from the table above) is $5.21 per square foot as of September 30, 2018.

20


URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE ASSUMING EXERCISE OF ALL RENEWALS AND OPTIONS
As of September 30, 2018
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg ABR PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
—

—

—
%
$
—

19

41,000

1.8%
$
34.19

19

41,000

0.3
%
$
34.19

2018
—

—

—
%
—

10

36,000

1.5%
33.05

10

36,000

0.3
%
33.05

2019
9

325,000

2.5
%
11.13

72

201,000

8.6%
33.80

81

526,000

3.4
%
19.80

2020
6

104,000

0.8
%
22.32

66

175,000

7.5%
39.70

72

279,000

1.8
%
33.22

2021
6

121,000

0.9
%
18.25

41

108,000

4.6%
37.12

47

229,000

1.5
%
27.15

2022
4

92,000

0.7
%
8.35

40

108,000

4.6%
40.14

44

200,000

1.3
%
25.52

2023
9

402,000

3.1
%
17.89

30

92,000

3.9%
34.61

39

494,000

3.2
%
21.00

2024
9

157,000

1.2
%
18.57

42

123,000

5.3%
38.58

51

280,000

1.8
%
27.36

2025
10

329,000

2.5
%
19.84

28

91,000

3.9%
35.02

38

420,000

2.8
%
23.13

2026
7

184,000

1.4
%
14.52

44

127,000

5.4%
36.21

51

311,000

2.0
%
23.37

2027
8

300,000

2.3
%
17.32

32

88,000

3.8%
30.74

40

388,000

2.5
%
20.36

2028
9

426,000

3.3
%
14.39

25

71,000

3.0%
38.07

34

497,000

3.2
%
17.77

Thereafter
187

10,050,000

76.9
%
20.69

166

774,000

33.1%
42.80

353

10,824,000

70.3
%
22.27

Subtotal/Average
264

12,490,000

95.6
%
$
19.81

615

2,035,000

87.0%
$
38.82

879

14,525,000

94.4
%
$
22.47

Vacant
16

571,000

4.4
%
 N/A

115

303,000

13.0%
 N/A

131

874,000

5.6
%
 N/A

Total/Average
280

13,061,000

100
%
 N/A

730

2,338,000

100%
 N/A

1,010

15,399,000

100
%
 N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration includes tenant renewal options.
(2) Weighted average annual base rent per square foot is calculated by annualizing tenants' in-place, contractual, cash-basis rent including ground rent and excludes tenant reimbursements, concessions and storage rent and is adjusted assuming all option rents specified in the underlying leases are exercised. Weighted average annual base rent for leases whose future option rent is based on fair market value or CPI is reported at the last stated option rent in the respective lease.


Note: Amounts shown in table above include both current leases and signed leases that have not commenced on vacant spaces for all retail properties (including properties in redevelopment). The average base rent for our 942,000 square-foot warehouse property (excluded from the table above) assuming exercise of all options at future tenant rent is $6.03 per square foot as of September 30, 2018.

21
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of September 30, 2018
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
Total Square Feet (1)
Percent Leased(1)
Weighted Average ABR PSF(2)
Mortgage Debt(7)
Major Tenants
 
 
 
 
 
 
SHOPPING CENTERS AND MALLS:
 
 
California:
 
 
 
 
 
Signal Hill
45,000

100.0%
$26.49
—
Best Buy
Vallejo (leased through 2043)(3)
45,000

100.0%
12.00
—
Best Buy
Walnut Creek (Olympic)
31,000

100.0%
70.00
—
Anthropologie
Walnut Creek (Mt. Diablo) (4)
7,000

100.0%
118.45
—
Z Gallerie
Connecticut:
 
 
 
 
 
Newington
189,000

100.0%
9.97
—
Walmart, Staples
Maryland:
 
 
 
 
 
Baltimore (Towson)(6)
155,000

100.0%
24.08
—
Staples, HomeGoods, Golf Galaxy, Tuesday Morning, Ulta, Kirkland's, Five Below, Sprouts
Glen Burnie
129,000

100.0%
10.21
—
Gavigan's Home Furnishings, Pep Boys
Rockville
94,000

98.0%
26.25
—
Regal Entertainment Group
Wheaton (leased through 2060)(3)
66,000

100.0%
16.70
—
Best Buy
Massachusetts:
 
 
 
 
 
Cambridge (leased through 2033)(3)
48,000

100.0%
24.57
—
PetSmart, A.C. Moore (lease not commenced)
Chicopee
224,000

100.0%
5.50
—
Walmart
Milford (leased through 2019)(3)
83,000

100.0%
9.01
—
Kohl’s
Springfield
182,000

100.0%
5.60
—
Walmart
Missouri:
 
 
 
 
 
Manchester
131,000

100.0%
11.12
$12,500
Academy Sports, Bob's Discount Furniture, Pan-Asia Market
New Hampshire:
 
 
 
 
 
Salem (leased through 2102)(3)
37,000

100.0%
13.84
—
Babies "R" Us
New Jersey:
 
 
 
 
 
Bergen Town Center - East, Paramus
253,000

97.5%
21.69
—
Lowe's, Best Buy, REI, Kirkland's
Bergen Town Center - West, Paramus
966,000

97.8%
32.48
$300,000
Target, Century 21, Whole Foods Market, Marshalls, Nordstrom Rack, Saks Off 5th, HomeGoods, H&M, Bloomingdale's Outlet, Nike Factory Store, Old Navy, Neiman Marcus Last Call Studio, Burlington (under construction)
Brick
278,000

100.0%
19.69
$50,000
Kohl's, ShopRite, Marshalls, Kirkland's
Carlstadt (leased through 2050)(3)
78,000

100.0%
23.67
—
Stop & Shop
Cherry Hill (Cherry Hill Commons)
261,000

89.3%
9.74
—
Walmart, Toys “R” Us, Maxx Fitness
Cherry Hill (Plaza at Cherry Hill)
420,000

73.3%
13.11
$28,930
LA Fitness, Aldi, Raymour & Flanigan, Restoration Hardware, Total Wine, Guitar Center, Sam Ash Music
East Brunswick
427,000

100.0%
15.09
$63,000
Lowe’s, Kohl’s, Dick’s Sporting Goods, P.C. Richard & Son, T.J. Maxx, LA Fitness
East Hanover (200 - 240 Route 10 West)
343,000

98.2%
20.42
$63,000
The Home Depot, Dick's Sporting Goods, Saks Off Fifth, Marshalls, Burlington
East Hanover (280 Route 10 West)
28,000

100.0%
34.71
—
REI
East Rutherford
197,000

97.2%
12.43
$23,000
Lowe’s
Garfield
280,000

100.0%
14.78
$40,300
Walmart, Burlington, Marshalls, PetSmart, Ulta
Hackensack
275,000

100.0%
23.67
$66,400
The Home Depot, 99 Ranch, Staples, Petco,
Hazlet
95,000

100.0%
3.70
—
Stop & Shop(5)
Jersey City (Hudson Mall)
382,000

87.6%
15.93
$24,498
Marshalls, Big Lots, Retro Fitness, Staples, Old Navy
Jersey City (Hudson Commons)
236,000

100.0%
12.37
$29,000
Lowe’s, P.C. Richard & Son

22
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of September 30, 2018
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
Total Square Feet (1)
Percent Leased(1)
Weighted Average ABR PSF(2)
Mortgage Debt(7)
Major Tenants
Kearny
104,000

98.2%
19.53
—
LA Fitness, Marshalls, Ulta (lease not commenced), Starbucks (lease not commenced)
Lawnside
151,000

100.0%
16.40
—
The Home Depot, PetSmart
Lodi (Route 17 North)
171,000

100.0%
13.26
—
National Wholesale Liquidators
Lodi (Washington Street)
85,000

87.6%
20.90
—
Blink Fitness, Aldi, Dollar Tree, USPS
Manalapan
208,000

100.0%
18.33
—
Best Buy, Bed Bath & Beyond, Raymour & Flanigan, Modell’s Sporting Goods, PetSmart
Marlton
218,000

100.0%
15.33
$37,400
Kohl’s, ShopRite, PetSmart
Middletown
231,000

98.9%
13.11
$31,400
Kohl’s, Stop & Shop
Millburn
104,000

98.8%
25.18
$24,000
Trader Joe's, CVS, PetSmart
Montclair
21,000

100.0%
26.20
—
Whole Foods Market
Morris Plains(6)
177,000

63.0%
23.97
—
Kohl’s
North Bergen (Kennedy Blvd)
62,000

100.0%
14.83
—
Food Bazaar
North Bergen (Tonnelle Ave)
410,000

100.0%
20.59
$100,000
Walmart, BJ’s Wholesale Club, PetSmart, Staples
North Plainfield
241,000

100.0%
11.41
$25,100
Costco, The Tile Shop, La-Z-Boy, Petco, Da Vita Dialysis (lease not commenced)
Paramus (leased through 2033)(3)
63,000

100.0%
47.18
—
24 Hour Fitness
Rockaway
189,000

97.8%
14.95
$27,800
ShopRite, T.J. Maxx
South Plainfield (leased through 2039)(3)
56,000

96.3%
21.65
—
Staples, Party City
Totowa
271,000

100.0%
17.45
$50,800
The Home Depot, Bed Bath & Beyond, buybuy Baby, Marshalls, Staples
Turnersville
98,000

100.0%
9.94
—
Haynes Furniture Outlet (DBA The Dump)
Union (2445 Springfield Ave)
232,000

100.0%
17.85
$45,600
The Home Depot
Union (Route 22 and Morris Ave)
276,000

83.1%
17.06
—
Lowe’s, Office Depot
Watchung
170,000

98.3%
17.31
$27,000
BJ’s Wholesale Club
Westfield (One Lincoln Plaza)
22,000

89.9%
34.91
$4,730
Five Guys, PNC Bank
Woodbridge (Woodbridge Commons)
226,000

95.2%
12.70
$22,100
Walmart, Family Discount Furniture (lease not commenced)
Woodbridge (Plaza at Woodbridge)
414,000

62.2%
17.95
$55,340
Best Buy, Raymour & Flanigan, Lincoln Tech, Harbor Freight, Retro Fitness
New York:
 
 
 
 
 
Bronx (1750-1780 Gun Hill Road)
77,000

100.0%
35.78
$24,500
Planet Fitness, Aldi
Bronx (Bruckner Boulevard)(6)
371,000

81.3%
25.96
—
Kmart, Burlington, ShopRite
Bronx (Shops at Bruckner)
114,000

72.1%
40.73
$11,729
Marshalls, Old Navy
Buffalo (Amherst)
311,000

85.0%
9.97
—
BJ’s Wholesale Club, T.J. Maxx, HomeGoods, LA Fitness
Commack (leased through 2021)(3)
47,000

100.0%
20.69
—
PetSmart, Ace Hardware
Dewitt (leased through 2041)(3)
46,000

100.0%
22.51
—
Best Buy
Freeport (Meadowbrook Commons) (leased through 2040)(3)
44,000

100.0%
22.31
—
Bob’s Discount Furniture
Freeport (Freeport Commons)
173,000

100.0%
21.95
$43,100
The Home Depot, Staples
Huntington
204,000

96.4%
15.69
—
Kmart, Marshalls, Old Navy, Petco
Inwood
100,000

100.0%
19.72
—
Stop & Shop
Mt. Kisco
189,000

96.4%
16.44
$14,106
Target, Stop & Shop
New Hyde Park (leased through 2029)(3)
101,000

100.0%
20.21
—
Stop & Shop
Oceanside
16,000

100.0%
28.00
—
Party City
Queens
46,000

71.2%
39.53
—
 
Rochester
205,000

100.0%
3.08
—
Walmart

23
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of September 30, 2018
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
Total Square Feet (1)
Percent Leased(1)
Weighted Average ABR PSF(2)
Mortgage Debt(7)
Major Tenants
Rochester (Henrietta) (leased through 2056)(3)
165,000

100.0%
4.56
—
Kohl’s
Staten Island
165,000

91.7%
24.27
—
Western Beef, Planet Fitness, Mavis Discount Tire
West Babylon
66,000

97.6%
17.70
—
Best Market, Rite Aid
Yonkers Gateway Center(6)
438,000

98.5%
17.09
$32,092
Burlington, Best Buy, DSW, PetSmart, Alamo Drafthouse Cinema, Marshalls (under construction), Homesense (under construction)
Pennsylvania:
 
 
 
 
 
Bensalem
185,000

100.0%
12.91
—
Kohl's, Ross Dress for Less, Staples, Petco
Bethlehem
153,000

95.6%
8.18
—
Giant Food, Petco
Broomall
169,000

100.0%
10.25
—
Giant Food, Planet Fitness, A.C. Moore, PetSmart
Glenolden
102,000

100.0%
12.74
—
Walmart
Lancaster
228,000

100.0%
4.79
—
Lowe's, Community Aid, Mattress Firm
Springfield (leased through 2025)(3)
41,000

100.0%
22.99
—
PetSmart
Wilkes-Barre (461 - 499 Mundy Street)
179,000

79.6%
11.48
—
Bob's Discount Furniture, Ross Dress for Less, Marshalls, Petco, Tuesday Morning
Wyomissing (leased through 2065)(3)
76,000

100.0%
16.69
—
LA Fitness, PetSmart
York
111,000

100.0%
9.21
—
Ashley Furniture, Tractor Supply Company, Aldi, Crunch Fitness
South Carolina:
 
 
 
 
 
Charleston (leased through 2063)(3)
45,000

100.0%
15.10
—
Best Buy
Virginia:
 
 
 
 
 
Norfolk (leased through 2069)(3)
114,000

100.0%
7.08
—
BJ’s Wholesale Club
Tyson’s Corner (leased through 2035)(3)
38,000

100.0%
43.04
—
Best Buy
Puerto Rico:
 
 
 
 
 
Las Catalinas
356,000

88.1%
31.39
$130,000
Kmart, Forever 21
Montehiedra(6)
539,000

92.1%
17.80
$115,250
Kmart, The Home Depot, Marshalls, Caribbean Cinemas, Tiendas Capri
Total Shopping Centers and Malls
15,399,000

94.4%
$17.70
$1,522,675
 
WAREHOUSES:
 
 
 
 
 
East Hanover - Five Buildings(6)
942,000

100.0%
5.21
$40,700
J & J Tri-State Delivery, Foremost Groups, PCS Wireless, Fidelity Paper & Supply, Meyer Distributing, Consolidated Simon Distributors, Givaudan Flavors, Reliable Tire
Total Urban Edge Properties
16,341,000

94.7%
$16.93
$1,563,375
 
(1) Percent leased is expressed as the percentage of gross leasable area subject to a lease.
(2) Weighted average annual base rent per square foot is the current base rent on an annualized basis. It includes executed leases for which rent has not commenced and excludes tenant expense reimbursements, free rent periods, concessions and storage rent. Excluding ground leases where the Company is the lessor, the weighted average annual rent per square foot for our retail portfolio is $20.14 per square foot.
(3) The Company is a lessee under a ground or building lease. The total square feet disclosed for the building will revert to the lessor upon lease expiration except at Salem where the ground lease is for a portion of the parking area only.
(4) Our ownership of Walnut Creek (Mt. Diablo) is 95%.
(5) The tenant never commenced operations at this location but continues to pay rent.
(6) Not included in the same-property pool for the purposes of calculating same-property cash NOI.
(7) Mortgage debt balances exclude unamortized debt issuance costs.


24


URBAN EDGE PROPERTIES
 
 
PROPERTY ACQUISITIONS AND DISPOSITIONS
 
For the nine months ended September 30, 2018
 
 
(dollars in thousands)
 
 
 
 
 
2018 Property Acquisitions:
 
 
 
 
 
 
 
 
 
 
Date Acquired
Property Name
City
State
GLA
Price(1)
1/26/2018
938 Spring Valley Road
Maywood
NJ
2,000
$
705

2/23/2018
116 Sunrise Highway
Freeport
NY
4,750
425

2/28/2018
197 West Spring Valley Ave
Maywood
NJ
16,300
2,750

5/24/2018
7 Francis Place
Montclair
NJ
3,000
958

 
 
 
 
 
 
2018 Property Dispositions:
 
 
 
 
 
 
 
 
 
 
2/23/2018
Englewood(2)
Englewood
NJ
41,000
$
11,537

4/26/2018
MacArthur Commons
Allentown
PA
372,000
55,250

7/5/2018
Cherry Hill Commons Land
Cherry Hill
NJ
—
3,462

(1) Excludes $0.1 million of transaction costs related to property acquisitions.
(2) During 2017, our property in Englewood, NJ was transferred to a receiver. On January 31, 2018, the property was sold at a foreclosure sale and on February 23, 2018, the court order was received approving the sale and discharging the receiver of all assets and liabilities related to the property, including the $11.5 million mortgage secured by the property. We recognized a gain on extinguishment of debt of $2.5 million as a result of this transaction during the nine months ended September 30, 2018.



25

URBAN EDGE PROPERTIES
 
 
DEVELOPMENT, REDEVELOPMENT AND ANCHOR REPOSITIONING PROJECTS
 
As of September 30, 2018
 
 
(in thousands, except square footage data)
 
 
 
 
 
 
Estimated Gross Cost(1)
 
Incurred as of 9/30/18
Balance to Complete (Gross Cost)
Target Stabilization(2)
Description and status
ACTIVE PROJECTS
 
 
 
 
 
Bruckner
$
69,300

 
$
65,800

$
3,500

2Q19
Renovating 3 buildings; retenanting 134,000± sf; Urban Health; Burlington, ShopRite, Boston Market and T-Mobile open; 82% executed
Bergen Town Center-
Phase I(3)
55,800

 
40,800

15,000

2Q19
Adding Burlington to the main mall and 15,000± sf adjacent to REI (Kirkland’s open in 10,000 sf); expanding Kay (open): replacing branch bank with Cava Grill (open) and Sticky's Finger Joint; replacing east deck and upgrading west desk (complete)
Bergen Town Center-Phase IIB(3)
1,600

 
600

1,000

2Q19
Ruth’s Chris Steakhouse replacing Pot Belly & Pei Wei
Bergen Town Center-Phase IIC(3)
1,600

 
500

1,100

2Q19
Lands' End and a quick service restaurant (in lease) replacing dressbarn
Bergen Town Center-Phase IIIA(3)
2,300

 
1,700

600

2Q19
Children's Place moving to former Payless space (open); retenanting 8,500 sf of 10,000 sf with Express
Morris Plains
15,300

 
1,500

13,800

4Q19
Renovating façade; anchor repositioning and retenanting; adding Chick-fil-A
Yonkers(3)
11,300

 
3,200

8,100

3Q19
Repositioning vacant grocer box with Marshalls & Homesense
North Bergen(3)
11,200

 
2,900

8,300

4Q21
102,000± sf, self-storage facility on excess land
Kearny(3)
9,000

 
900

8,100

2Q20
Expanding by 22,000 sf to accommodate a 10,000 sf Ulta and other tenants and adding a freestanding Starbucks
Garfield - Phase II(3)
5,500

 
1,200

4,300

4Q19
18,000± sf of shops (Five Below executed for 50%)
Plaza at Woodbridge(3)
4,500

 
400

4,100

2Q22
Repurposing 82,000 sf of unused, conditioned basement space into self-storage
Towson - Phase II
4,300

 
4,200

100

4Q18
Replaced hhgregg with Sprouts (open)
Huntington(3)
3,600

 
1,200

2,400

4Q19
Converting 11,000± sf basement into street-front retail
Mt. Kisco(3)
2,400

 
400

2,000

2Q20
Converting former sit-down restaurant into a Chipotle and another quick service restaurant
Glen Burnie(3)
1,700

 
1,700

—

4Q18
Bubba's 33 restaurant on new pad
Woodbridge Commons(3)
1,400

 
200

1,200

4Q19
Furniture store (executed) replacing Syms
Cherry Hill Commons(3)
500

 
400

100

4Q18
Panda restaurant on new pad
Rockaway - Phase III(3)
800

 
800

—

2Q19
ShopRite on 6,000± sf expansion at its expense
Total
$
202,100

(4) 
$
128,400

$
73,700

 
 
 
 
 
 
 
 
(1) Estimated gross cost includes the allocation of internal costs such as labor, interest and taxes.
(2) Target Stabilization reflects the first quarter in which at least 80% of the expected cash NOI from the project is realized. A project achieving Target Stabilization is classified as Completed whether or not all costs have been expended and remains listed as a Completed project for one year in the table on page 27. The Target Stabilization date is an estimate and is subject to change resulting from uncertainties inherent in the development process and not wholly under the Company's control.
(3) Results from these properties are included in our same-property metrics.
(4) The estimated, unleveraged yield for Active projects is 7% based on total estimated project costs for and the incremental, unleveraged NOI directly attributable to the projects. The incremental, unleveraged NOI for Active projects excludes NOI generated outside the project scope such as the impact on future lease rollovers or on the long-term value of the property.



26

URBAN EDGE PROPERTIES
 
 
DEVELOPMENT, REDEVELOPMENT AND ANCHOR REPOSITIONING PROJECTS
 
As of September 30, 2018
 
 
(in thousands, except square footage data)
 
 
 
 
 
 
Estimated Gross Cost(1)
 
Incurred as of 9/30/18
Balance to Complete (Gross Cost)
Stabilization(2)
Description and status
COMPLETED PROJECTS
 
 
 
 
 
Montehiedra Town Center
$
18,100

 
$
18,100

$
—

3Q18
Redevelopment completed and 92% leased
Garfield - Phase I(3)
17,300

 
17,300

—

4Q17
Added Burlington, PetSmart, Ulta, Carter’s and America’s Best
Bergen Town Center-Phase IIA(3)
8,500

 
8,500

—

2Q18
Added Best Buy
North Plainfield(3)
6,900

 
6,500

400

1Q18
Added La-Z-Boy, Petco and DaVita Dialysis
Towson - Phase I
6,000

 
5,800

200

1Q18
Replaced Shoppers Food with Kirkland's, Tuesday Morning, Five Below and Ulta
East Hanover(3)
4,700

 
4,700

—

4Q17
Added Saks Off Fifth and Paper Store
Marlton(3)
3,100

 
3,000

100

2Q18
Added Shake Shack and honeygrow on new pad
Lawnside(3)
2,100

 
2,100

—

3Q18
Added Mattress Firm and T-Mobile
Rockaway - Phase II(3)
500

 
500

—

1Q18
Added ShopRite expansion
Rockaway - Phase I(3)
100

 
100

—

4Q17
Added Popeyes
Total
$
67,300

(6) 
$
66,600

$
700

 
 

 
Estimated Gross Cost(4)
Estimated Stabilization(4)(5)
Description and status
PIPELINE PROJECTS
Plaza at Cherry Hill(3)
$24,000-25,000
2020
Renovating center; preparing construction docs
Bergen Town Center-Phase IIIB(3)
$15,000-16,000
2020
Future projects to improve merchandising and maximize value of undeveloped land
Montehiedra outparcel
$7,000-8,000
2021
Developing 20,000± sf retail on excess land; marketing
West Babylon(3)
$3,000-4,000
2019
Developing 10,000± sf of shops; securing approvals
Gun Hill(3)
$1,000-2,000
2019
Expanding Aldi (executed); securing approvals
 
 
 
 
Total
$50,000-55,000
(6) 
 
(1) Estimated gross cost includes the allocation of internal costs such as labor, interest and taxes.
(2) Stabilization reflects the first quarter in which at least 80% of the expected cash NOI from the project is realized. A project achieving Stabilization is classified as Completed whether or not all costs have been expended and remains listed as a Completed project for one year in the table above.
(3) Results from these properties are included in our same-property metrics.
(4) Estimated Stabilization and Estimated Gross Cost are subject to change from uncertainties inherent in the development process and not wholly under the Company's control.
(5) Estimated Stabilization reflects the first year in which Target Stabilization occurs. See footnote 2 on page 26.
(6) The estimated unleveraged yields for Completed and Pipeline projects are 14% and 9%, respectively, based on the total estimated project costs of and the incremental unleveraged NOI expected from the projects. The incremental unleveraged NOI for Completed and Pipeline projects excludes NOI generated outside the project scope such as the impact on future lease rollovers or on the long-term value of the property.

27


URBAN EDGE PROPERTIES
 
 
DEBT SUMMARY
 
As of September 30, 2018 and December 31, 2017
 
 
(in thousands)
 
 
 
 
 

 
September 30, 2018
 
December 31, 2017
Fixed rate debt
$
1,393,875

 
$
1,408,817

Variable rate debt
169,500

 
169,500

Total debt
$
1,563,375

 
$
1,578,317

 
 
 
 
% Fixed rate debt
89.2
%
 
89.3
%
% Variable rate debt
10.8
%
 
10.7
%
Total
100
%
 
100
%
 
 
 
 
 
 
 
 
Secured mortgage debt
$
1,563,375

 
$
1,578,317

Unsecured debt
—

 
—

Total debt
$
1,563,375

 
$
1,578,317

 
 
 
 
% Secured mortgage debt
100
%

100
%
% Unsecured mortgage debt
N/A

 
N/A

Total
100
%
 
100
%
 
 
 
 
Weighted average remaining maturity on secured mortgage debt
6.9 years

 
7.6 years

 
 
 
 
 
 
 
 
Total market capitalization (see page 16)
$
4,369,393

 
 
 
 
 
 
% Secured mortgage debt
35.8
%
 
 
% Unsecured debt
—
%
 
 
Total debt : Total market capitalization
35.8
%
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate on secured mortgage debt(1)
4.09
%
 
4.03
%
 
 
 
 
Note: All amounts and calculations exclude unamortized debt issuance costs on mortgages payable.
(1) Weighted average interest rate is calculated based on balances outstanding at the respective dates.




28

URBAN EDGE PROPERTIES
 
 
MORTGAGE DEBT SUMMARY
 
As of September 30, 2018 (unaudited) and December 31, 2017
 
 
(dollars in thousands)
 
 
 
 
 
Debt Instrument
Maturity Date
Rate
September 30, 2018
December 31, 2017
Percent of Debt at September 30, 2018
Montehiedra, Puerto Rico (senior loan)
7/6/21

5.33
%
$
85,250

$
86,236

5.5
%
Montehiedra, Puerto Rico (junior loan)
7/6/21

3.00
%
30,000

30,000

1.9
%
Plaza at Cherry Hill(5)
5/24/22

3.70
%
28,930

28,930

1.9
%
Westfield - One Lincoln Plaza(5)
5/24/22

3.70
%
4,730

4,730

0.3
%
Plaza at Woodbridge(5)
5/25/22

3.70
%
55,340

55,340

3.5
%
Bergen Town Center
4/8/23

3.56
%
300,000

300,000

19.2
%
Shops at Bruckner
5/1/23

3.90
%
11,729

12,162

0.8
%
Hudson Mall(4)
12/1/23

5.07
%
24,498

25,004

1.6
%
Yonkers Gateway Center(6)
4/6/24

4.16
%
32,092

33,227

2.1
%
Las Catalinas
8/6/24

4.43
%
130,000

130,000

8.3
%
Hudson Commons(1)
11/15/24

4.00
%
29,000

29,000

1.8
%
Watchung(1)
11/15/24

4.00
%
27,000

27,000

1.7
%
Bronx (1750-1780 Gun Hill Road)(1)
12/1/24

4.00
%
24,500

24,500

1.6
%
Brick
12/10/24

3.87
%
50,000

50,000

3.2
%
North Plainfield
12/10/25

3.99
%
25,100

25,100

1.6
%
Middletown
12/1/26

3.78
%
31,400

31,400

2.0
%
Rockaway
12/1/26

3.78
%
27,800

27,800

1.8
%
East Hanover (200 - 240 Route 10 West)
12/10/26

4.03
%
63,000

63,000

4.0
%
North Bergen (Tonnelle Ave)
4/1/27

4.18
%
100,000

100,000

6.4
%
Manchester Plaza
6/1/27

4.32
%
12,500

12,500

0.8
%
Millburn
6/1/27

3.97
%
24,000

24,000

1.5
%
Totowa
12/1/27

4.33
%
50,800

50,800

3.2
%
Woodbridge Commons
12/1/27

4.36
%
22,100

22,100

1.4
%
East Brunswick
12/6/27

4.38
%
63,000

63,000

4.0
%
East Rutherford
1/6/28

4.49
%
23,000

23,000

1.5
%
Hackensack
3/1/28

4.36
%
66,400

66,400

4.2
%
Marlton
12/1/28

3.86
%
37,400

37,400

2.4
%
East Hanover Warehouses
12/1/28

4.09
%
40,700

40,700

2.6
%
Union (2445 Springfield Ave)
12/10/28

4.01
%
45,600

45,600

2.9
%
Freeport Commons
12/10/29

4.07
%
43,100

43,100

2.8
%
Garfield
12/1/30

4.14
%
40,300

40,300

2.6
%
Mt Kisco -Target(3)
11/15/34

6.40
%
14,106

14,451

0.9
%
Englewood(2)
—

—
%
—

11,537

—
%
Total mortgage debt
 
4.09
%
$
1,563,375

$
1,578,317

100
%
Unamortized debt issuance costs
 
 
(12,380
)
(13,775
)
 
Total mortgage debt, net
 
 
$
1,550,995

$
1,564,542

 
(1) 
Bears interest at one month LIBOR plus 190 bps.
(2) 
On January 31, 2018, our property in Englewood, NJ was sold at a foreclosure sale. Upon issuance of the court’s order on February 23, 2018, approving the sale and discharging the receiver, all assets and liabilities related to the property were removed.
(3) 
The mortgage payable balance on the loan secured by Mount Kisco (Target) includes $1.0 million of unamortized debt discount as of both September 30, 2018 and December 31, 2017, respectively. The effective interest rate including amortization of the debt discount is 7.29% as of September 30, 2018.
(4) 
The mortgage payable balance on the loan secured by Hudson Mall includes $1.3 million and $1.5 million of unamortized debt premium as of September 30, 2018 and December 31, 2017, respectively. The effective interest rate including amortization of the debt premium is 3.88% as of September 30, 2018.
(5) 
Bears interest at one month LIBOR plus 160 bps.
(6) 
The mortgage payable balance on the loan secured by Yonkers Gateway Center includes $0.7 million and $0.8 million of unamortized debt premium as of both September 30, 2018 and December 31, 2017, respectively. The effective interest rate including amortization of the debt premium is 3.76% as of September 30, 2018.


29

URBAN EDGE PROPERTIES
 
 
DEBT MATURITY SCHEDULE
 
As of September 30, 2018 (unaudited) and December 31, 2017
 
 
(dollars in thousands)
 
 
 
 
 

Year
Amortization
Balloon Payments
Premium/(Discount) Amortization
Total
Weighted Average Interest rate at maturity
Percent of Debt Maturing
2018(1)
$
744

$
—

$
87

$
831

4.6%
0.1
%
2019
3,908

—

336

4,244

4.6%
0.3
%
2020
7,236

—

335

7,571

4.4%
0.5
%
2021
8,020

115,250

334

123,604

4.7%
7.9
%
2022
11,565

89,000

334

100,899

3.8%
6.5
%
2023
14,683

329,432

311

344,426

3.7%
22.0
%
2024
13,036

261,360

(49
)
274,347

4.2%
17.5
%
2025
9,166

23,260

(61
)
32,365

4.1%
2.1
%
2026
8,949

115,104

(61
)
123,992

3.9%
7.9
%
Thereafter
20,994

530,578

(476
)
551,096

4.2%
35.2
%
Total
$
98,301

$
1,463,984

$
1,090

$
1,563,375

4.1%
100
%
 
Unamortized debt issuance costs
 
(12,380
)
 
 
 
Mortgage debt, net
 
$
1,550,995

 
 
(1) Remainder of 2018.


30