Urban Edge Properties - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - May 4, 2016

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Exhibit 99.2




 
 
URBAN EDGE PROPERTIES
 
SUPPLEMENTAL DISCLOSURE
PACKAGE
 
March 31, 2016
 
 







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






URBAN EDGE PROPERTIES
SUPPLEMENTAL DISCLOSURE
March 31, 2016
(unaudited)
 
 
TABLE OF CONTENTS
 
Page
Press Release
 
First Quarter 2016 Earnings Press Release
1
Additional Disclosures
8
 
 
Overview
 
Summary Financial Results and Ratios
9
 
 
Consolidated and Combined Financial Statements
 
Consolidated Balance Sheets
10
Consolidated and Combined Statements of Income
11
 
 
Non-GAAP Financial Measures and Supplemental Data
 
Supplemental Schedule of Net Operating Income
12
Earnings Before Interest, Taxes, Depreciation and Amortization
13
Consolidated Statements of Funds from Operations
14
Market Capitalization, Debt Ratios and Liquidity
15
Additional Disclosures
16
 
 
Leasing Data
 
Tenant Concentration - Top Twenty-Five Tenants
17
Leasing Activity
18
Retail Portfolio Lease Expiration Schedules
19
 
 
Property Data
 
Property Status Report
21
Property Acquisitions and Dispositions
25
Development, Redevelopment and Anchor Repositioning Projects
26
 
 
Debt Schedules
 
Debt Summary
28
Mortgage Debt Summary and Maturity Schedule
29
 
 







 
 
 
 
 
 
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 First Quarter 2016 Operating Results


                                    
NEW YORK, NY, May 4, 2016 - Urban Edge Properties (NYSE:UE) (the "Company") announced today its financial results for the three months ended March 31, 2016.

Highlights of the Quarter include:
•
Generated Recurring Funds from Operations of $32.4 million, or $0.31 per diluted share
•
Generated Funds from Operations ("FFO") of $33.5 million, or $0.32 per diluted share which includes $1.2 million of tenant bankruptcy settlement income
•
Net income attributable to common shareholders was $18.6 million, or $0.19 per diluted share. A reconciliation of net income attributable to common shareholders to FFO and the reconciling components to Recurring FFO are provided in the tables accompanying this press release
•
Same-property Net Operating Income (“NOI”) increased by 2.4% as compared to the first quarter of 2015 due to new rent commencements from higher occupancy and contractual rent increases. Same-property NOI excludes $1.2 million of tenant bankruptcy settlement income received during the quarter
•
Same-property NOI including properties in redevelopment increased by 1.8% for the first quarter of 2016 as compared to the first quarter in 2015. The expected loss of rents from former anchor tenants at Walnut Creek and Bruckner negatively impacted this result. New anchor tenants at Walnut Creek and Bruckner are expected to open in the fourth quarter of this year and the latter half of 2017, respectively. A reconciliation of income before income taxes to same-property NOI is provided in the tables accompanying this press release
•
Same-property retail portfolio occupancy increased by 50 basis points to 97.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
•
Consolidated retail portfolio occupancy increased by 20 basis points to 96.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
•
Executed new leases and renewals and exercised options totaling 168,000 square feet in 26 transactions. Same-space leases totaled 130,000 square feet at an average rental rate of $21.84 per square foot and an average rent spread of 22.0% from prior cash rents

Development, Redevelopment and Anchor Repositioning:
During the quarter, the Company completed the expansion of Home Depot in Freeport, NY and opened Panera Bread in East Hanover, NJ, for a total investment of $0.6 million. These two projects are expected to increase net operating income by $1.0 million annually upon stabilization, representing a 167% return on invested capital.

The Company commenced redevelopment on two projects during the quarter including recapturing a 38,900 square foot anchor box in Towson, MD and constructing a new building for Verizon in Turnersville, NJ. The Company expects to invest $9.1 million in these projects and generate a 13% incremental return.

As of March 31, 2016, the Company had approximately $131.0 million of active development, redevelopment and anchor repositioning projects underway of which $92.8 million remains to be funded. The Company expects to generate a 12% unleveraged return on these projects.


1

The Company continues to focus on its development and redevelopment pipeline, which includes an additional $172.0-$200.0 million of planned expansions and renovations expected to be completed over the next several years. The Company projects an unleveraged return of approximately 8% on these projects.

Balance Sheet Highlights:
At March 31, 2016:
•
Total market capitalization (including debt and equity) was approximately $4.0 billion comprised of 105.7 million shares of common shares outstanding (on a fully diluted basis) valued at $2.7 billion and $1.2 billion of debt
•
The ratio of net debt (net of cash) to total market capitalization was 27.1%
•
Net debt to annualized Adjusted Earnings before interest, tax, depreciation and amortization ("EBITDA") was 5.8x. A reconciliation of net income to EBITDA and Adjusted EBITDA are provided in the tables accompanying this press release
•
The Company had approximately $162.4 million of cash and cash equivalents and no amounts drawn on its $500.0 million revolving credit facility

Asset Disposition:
In March 2016, the Company executed a contract for the sale of a shopping center located in Waterbury, CT for $21.6 million, which is expected to be completed in the second quarter of 2016. This sale will be executed pursuant to a reverse Section 1031 exchange using the acquisition of the property in Queens, NY, completed in December 2015.


2

Non-GAAP Financial Measures
The Company believes FFO (combined with the primary GAAP presentations) 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. The National Association of Real Estate Investment Trusts ("NAREIT") stated in its April 2002 White Paper on FFO, "Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves." The Company also believes that Recurring FFO is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO, as defined by NAREIT and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated real estate assets, real estate impairment losses, rental property depreciation and amortization expense. The Company makes certain adjustments to FFO, which it refers to as Recurring FFO, to account for items it does not believe are representative of ongoing operating results, including transaction costs associated with acquisition and disposition activity and non-recurring revenue and expenses. The Company believes that financial analysts, investors and stockholders are better served by the presentation of comparable period operating results generated from its FFO and Recurring FFO measures. The Company's method of calculating FFO and Recurring FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
The Company uses NOI, which is a non-GAAP financial measure, internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from operating income or net income.
In this release, the Company has provided 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. Information on a same-property basis 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, sold, or that are in the foreclosure process during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally the first full year in which the property is 90% leased. 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 NOI on a same-property basis adjusted to include redevelopment properties. The Company calculates same-property NOI using operating 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.
EBITDA and Adjusted EBITDA are supplemental, non-GAAP measures utilized in various financial ratios. EBITDA and Adjusted EBITDA are presented to assist investors in the evaluation of REITs and 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. Accordingly, the Company believes that the use of EBITDA and Adjusted EBITDA as opposed to income before income taxes in various ratios, provides a meaningful performance measure as it relates to the Company's ability to meet various coverage tests for the stated periods.
FFO, Recurring FFO, NOI, same-property NOI, EBITDA and Adjusted EBITDA are presented to assist investors in analyzing the Company’s operating performance. Neither FFO nor Recurring FFO (i) represents cash flow from operations as defined by GAAP, (ii) is indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is an alternative to cash flow as a measure of liquidity, or (iv) should be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. The Company believes net income attributable to common shareholders is the most directly comparable GAAP financial measure to FFO and Recurring FFO while income before income taxes is the most directly comparable GAAP financial measure to NOI and same-property NOI and net income (loss) is the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA. Reconciliations of these measures to their respective comparable GAAP measures have been provided in the tables accompanying this press release.

3

Reconciliation of Net Income Attributable to Common Shareholders to FFO and Recurring FFO

The following table reflects the reconciliation of FFO and Recurring FFO to net income attributable to common shareholders, the most directly comparable GAAP measure, for the three months ended March 31, 2016.
 
Three Months Ended
March 31, 2016
 
(in thousands)
Net income attributable to common shareholders
$
18,638

Adjustments:
 
Rental property depreciation and amortization
13,755

Limited partnership interests in operating partnership
1,154

FFO Applicable to diluted common shareholders
33,547

FFO per diluted common share(1)
0.32

 
 
Tenant bankruptcy settlement income
(1,150
)
Transaction costs
50

Recurring FFO Applicable to diluted common shareholders
$
32,447

Recurring FFO per diluted common share(1)
$
0.31

 
 
Weighted average diluted common shares(1)
105,649

(1) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the period presented is higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million Operating Partnership and LTIP units which are redeemable into our common shares. These redeemable units are not included in the weighted average diluted share count for the period presented for GAAP purposes because their inclusion is anti-dilutive.

FFO and Recurring FFO are non-GAAP financial measures. The Company believes that FFO, as defined by NAREIT, is a widely used and appropriate supplemental measure of operating performance for REITs, and that it provides a relevant basis for comparison among REITs. The Company believes that Recurring FFO provides additional comparability between historical financial periods. Refer to “Non-GAAP Financial Measures” above.
 


4

Reconciliation of Income before Income Taxes to NOI and Same-Property NOI

The following table reflects the reconciliation of NOI and same-property NOI (with and without redevelopment) to income (loss) before income taxes, the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.

 
Three Months Ended March 31,
(Amounts in thousands)
2016
 
2015
Income (loss) before income taxes
$
20,124

 
$
(11,476
)
  Interest income
(167
)
 
(11
)
  Interest and debt expense
13,429

 
15,169

Operating income
33,386

 
3,682

Depreciation and amortization
13,915

 
13,732

General and administrative expense
6,720

 
12,326

Transaction costs
50

 
21,859

Subtotal
54,071

 
51,599

    Less: non-cash rental income
(2,142
)
 
(2,049
)
    Add: non-cash ground rent expense
331

 
349

NOI
52,260

 
49,899

Adjustments:
 
 
 
NOI related to properties being redeveloped
(3,974
)
 
(4,139
)
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Management and development fee income from non-owned properties
(455
)
 
(535
)
NOI related to properties acquired, disposed, or in foreclosure
(431
)
 
(110
)
Environmental remediation costs
—

 
1,379

Other
52

 
—

    Subtotal adjustments
(5,958
)
 
(4,665
)
Same-property NOI
$
46,302

 
$
45,234

Adjustments:

 

NOI related to properties being redeveloped
3,974

 
4,139

Same-property NOI including properties in redevelopment
$
50,276

 
$
49,373


NOI and same-property NOI are non-GAAP financial measures. The Company believes that same-property NOI is a widely used and appropriate supplemental measure of operating performance for comparison among REITs. Refer to “Non-GAAP Financial Measures” above.


5

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

The following table reflects the reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.
 
Three Months Ended
March 31,
(Amounts in thousands)
2016
 
2015
Net income (loss)
$
19,788

 
$
(12,017
)
Depreciation and amortization
13,915

 
13,732

Interest and debt expense
13,429

 
15,169

Income tax expense
336

 
541

EBITDA
47,468

 
17,425

Adjustments for Adjusted EBITDA:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off
—

 
7,143

Environmental remediation costs
—

 
1,379

Adjusted EBITDA
$
46,368

 
$
46,546

 
 
 
 

EBITDA and Adjusted EBITDA are non-GAAP financial measures. Refer to “Non-GAAP Financial Measures” above.


6

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 84 properties totaling 14.9 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 engage in the projects in its planned expansion and redevelopment pipeline and the Company's ability to achieve the estimated unleveraged returns for such projects. 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, 2015.

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.


7


URBAN EDGE PROPERTIES
 
 
 
ADDITIONAL DISCLOSURES
 
 
 
As of March 31, 2016
 
 
 
 
 
 
 

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 most recent Form 10-K and Form 10-Q. The results of operations of any property acquired are included in the Company's financial statements since the date of its 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 7 of this Supplemental Disclosure Package.




8


URBAN EDGE PROPERTIES
 
 
SUMMARY FINANCIAL RESULTS AND RATIOS
 
 
For the three months ended March 31, 2016 (unaudited)
 
(in thousands, except per share, sf, rent psf and financial ratio data)
 
 
 
 
 
 
 
Three months ended
 
 
March 31, 2016
Summary Financial Results
 
 
Total revenue
 
$
83,068

General & administrative expenses (G&A)
 
$
6,720

Adjusted EBITDA(7)
 
$
46,368

Net income attributable to common shareholders
 
$
18,638

Earnings per diluted share
 
$
0.19

Funds from operations (FFO)
 
$
33,547

FFO per diluted share
 
$
0.32

Recurring FFO
 
$
32,447

Recurring FFO per diluted share
 
$
0.31

Total dividends paid per share
 
$
0.20

Stock closing price low-high range
 
$22.22 to $25.99

Weighted average diluted shares used in EPS computations(1)
 
99,363

Weighted average diluted shares used in FFO computations(1)
 
105,649

 
 
 
Summary Property, Operating and Financial Data
 
 
# of Total properties / # of Retail properties
 
84 / 83

Gross leasable area (GLA) sf - retail portfolio(3)(5)
 
13,909,000

Weighted average annual rent psf - retail portfolio(3)(5)
 
$
16.85

Consolidated occupancy at end of period
 
94.9
%
Consolidated retail portfolio occupancy at end of period(5)
 
96.0
%
Same-property retail portfolio occupancy at end of period(5)(2)
 
97.0
%
Same-property retail portfolio physical occupancy at end of period(4)(5)(2)
 
95.4
%
Same-property NOI growth - cash basis(2)
 
2.4
%
Same-property NOI growth, including redevelopment properties
 
1.8
%
Cash NOI margin - Total portfolio
 
64.0
%
Expense recovery ratio - Total portfolio
 
94.5
%
New, renewal and option rent spread - cash basis
 
22.0
%
Net debt to total market capitalization(6)
 
27.1
%
Net debt to Adjusted EBITDA(6)
 
5.8
x
Adjusted EBITDA to interest expense(7)
 
3.6
x
Adjusted EBITDA to fixed charges(7)
 
2.6
x
 
 
 
(1) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the period presented is higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million units of limited partnership interests in the operating partnership which are redeemable for our common shares. These redeemable units are not included in the weighted average diluted share count for GAAP purposes for the period presented because their inclusion is anti-dilutive.
(2) The same-property pool for both 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, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and excludes properties acquired, sold, or that are in the foreclosure process 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 $16.21.
(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 15.
(7) See computation on page 13.

9


URBAN EDGE PROPERTIES
 
 
CONSOLIDATED BALANCE SHEETS
 
 
As of March 31, 2016 (unaudited) and December 31, 2015
 
 
(in thousands)
 
 
 
 
 
 
March 31,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 

Real estate, at cost:
 

 
 

Land
$
382,513

 
$
389,080

Buildings and improvements
1,613,510

 
1,630,539

Construction in progress
94,506

 
61,147

Furniture, fixtures and equipment
3,891

 
3,876

Total
2,094,420

 
2,084,642

Accumulated depreciation and amortization
(519,775
)
 
(509,112
)
Real estate, net
1,574,645

 
1,575,530

Cash and cash equivalents
162,354

 
168,983

Cash held in escrow and restricted cash
8,081

 
9,042

Tenant and other receivables, net of allowance for doubtful accounts of $2,061 and $1,926, respectively
9,306

 
10,364

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $181 and $148, respectively
89,046

 
88,778

Identified intangible assets, net of accumulated amortization of $22,781 and $22,090, respectively
33,262

 
33,953

Deferred leasing costs, net of accumulated amortization of $13,503 and $12,987, respectively
18,479

 
18,455

Deferred financing costs, net of accumulated amortization of $887 and $709, respectively
2,661

 
2,838

Prepaid expenses and other assets
10,160

 
10,988

Total assets
$
1,907,994

 
$
1,918,931

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

Liabilities:
 
 
 
Mortgages payable, net
$
1,230,349

 
$
1,233,983

Identified intangible liabilities, net of accumulated amortization of $67,117 and $65,220, respectively
152,958

 
154,855

Accounts payable and accrued expenses
39,508

 
45,331

Other liabilities
13,702

 
13,308

Total liabilities
1,436,517

 
1,447,477

Commitments and contingencies
 
 
 
Shareholders’ equity:
 
 
 
Common shares: $0.01 par value; 500,000,000 shares authorized and 99,381,500 and 99,290,952 shares issued and outstanding, respectively
994

 
993

Additional paid-in capital
476,227

 
475,369

Accumulated deficit
(39,638
)
 
(38,442
)
Noncontrolling interests:
 
 
 
Redeemable noncontrolling interests
33,541

 
33,177

Noncontrolling interest in consolidated subsidiaries
353

 
357

Total equity
471,477

 
471,454

Total liabilities and equity
$
1,907,994

 
$
1,918,931


10


URBAN EDGE PROPERTIES
 
 
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
 
 
For the three months ended March 31, 2016 and 2015 (unaudited)
 
(in thousands, except per share amounts)
 
 
 
 
 

 
Three Months Ended March 31,
 
2016
 
2015
REVENUE
 
 
 
Property rentals
$
58,929

 
$
57,586

Tenant expense reimbursements
22,507

 
24,303

Management and development fees
455

 
535

Other income
1,177

 
1,359

Total revenue
83,068

 
83,783

EXPENSES
 
 
 
Depreciation and amortization
13,915

 
13,732

Real estate taxes
13,249

 
12,824

Property operating
12,859

 
16,523

General and administrative
6,720

 
12,326

Ground rent
2,538

 
2,514

Transaction costs
50

 
21,859

Provision for doubtful accounts
351

 
323

Total expenses
49,682

 
80,101

Operating income
33,386

 
3,682

Interest income
167

 
11

Interest and debt expense
(13,429
)
 
(15,169
)
Income (loss) before income taxes
20,124

 
(11,476
)
Income tax expense
(336
)
 
(541
)
Net income (loss)
19,788

 
(12,017
)
Less (net income) loss attributable to noncontrolling interests in:
 
 
 
Operating partnership
(1,154
)
 
560

Consolidated subsidiaries
4

 
(6
)
Net income (loss) attributable to common shareholders
$
18,638

 
$
(11,463
)
 
 
 
 
Earnings (loss) per common share - Basic:
$
0.19

 
$
(0.12
)
Earnings (loss) per common share - Diluted:
$
0.19

 
$
(0.12
)
Weighted average shares outstanding - Basic
99,265

 
99,248

Weighted average shares outstanding - Diluted
99,363

 
99,248



11


URBAN EDGE PROPERTIES
 
 
SUPPLEMENTAL SCHEDULE OF NET OPERATING INCOME
 
 
For the three months ended March 31, 2016 and 2015
 
(in thousands)
 
 
 
 
 
 
Three Months Ended
March 31,
 
Percent Change
 
2016
 
2015
 
Total cash NOI(1)
 
 
 
 
 
Total revenue
$
79,281

 
$
79,920

 
(0.8)%
Total property operating expenses
(28,574
)
 
(30,436
)
 
(6.1)%
Cash NOI - total portfolio
$
50,707

 
$
49,484

 
2.5%
 
 
 
 
 
 
NOI margin (NOI / Total revenue)
64.0
%
 
61.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-property cash NOI(2)
 
 
 
 
 
Property rentals
$
51,208

 
$
49,933

 
 
Tenant expense reimbursements
20,740

 
22,657

 
 
Percentage rent
266

 
371

 
 
Total revenue
72,214

 
72,961

 
(1.0)%
Real estate taxes
(12,292
)
 
(11,908
)
 
 
Property operating
(11,156
)
 
(13,319
)
 
 
Ground rent
(2,206
)
 
(2,165
)
 
 
Provision for doubtful accounts(4)
(258
)
 
(335
)
 
 
Total property operating expenses
(25,912
)
 
(27,727
)
 
(6.5)%
Same-property cash NOI(3)
$
46,302

 
$
45,234

 
2.4%
 
 
 
 
 
 
NOI related to properties being redeveloped
$
3,974

 
$
4,139

 
 
Same-property cash NOI including properties in redevelopment
$
50,276

 
$
49,373

 
1.8%
 
 
 
 
 
 
Same-property physical occupancy(3)
95.4
%
 
94.9
%
 
 
Same-property leased occupancy(3)
97.0
%
 
96.5
%
 
 
Number of properties included in same-property analysis
78

 
 
 
 
 
 
 
 
 
 
(1) Total revenue includes cash received from tenant bankruptcy settlements and lease termination fees and excludes management and development fee income and non-cash amounts. Property operating expense amounts have been adjusted to exclude non-cash amounts.
(2) Excludes management and development fee income, 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.
(3) The same-property pool for both 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, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and properties acquired, sold, or are in the foreclosure process during the periods being compared. Same-property occupancy includes dark and paying tenants.
(4)  
Excludes $0.1 million of bad debt expense related to non-cash straight-line rents for the three months ended March 31, 2016. No such reserve was recorded for the three months ended March 31, 2015.

12


URBAN EDGE PROPERTIES
 
 
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION and AMORTIZATION (EBITDA)
For the three months ended March 31, 2016 and 2015
 
(in thousands)
 
 
 
 
 

 
Three Months Ended March 31,
 
2016
 
2015
Net income (loss)
$
19,788

 
$
(12,017
)
Depreciation and amortization
13,915

 
13,732

Interest expense
12,770

 
14,485

Amortization of deferred financing costs
659

 
684

Income tax expense
336

 
541

EBITDA
47,468

 
17,425

Adjustments for Adjusted EBITDA:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off
—

 
7,143

Environmental remediation costs
—

 
1,379

Adjusted EBITDA
$
46,368

 
$
46,546

 
 
 
 
Interest expense
$
12,770

 
$
14,485

 
 
 
 
Adjusted EBITDA to interest expense
3.6
x
 
3.2
x
 
 
 
 
Fixed charges
 
 
 
Interest and debt expense(1)
$
13,429

 
$
15,169

Scheduled principal amortization
4,130

 
3,687

Total fixed charges
$
17,559

 
$
18,856

 
 
 
 
Adjusted EBITDA to fixed charges
2.6
x
 
2.5
x
 
 
 
 
(1) Includes amortization of deferred financing costs


13


URBAN EDGE PROPERTIES
 
 
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
 
For the three months ended March 31, 2016 and 2015
 
(in thousands, except per share data)
 
 
 
 
 
 
Three Months Ended March 31,
 
2016
 
2015
Net income (loss) attributable to common shareholders
$
18,638

 
$
(11,463
)
Adjustments:
 
 
 
Rental property depreciation and amortization
13,755

 
13,538

Limited partnership interests in operating partnership(1)
1,154

 
(560
)
FFO Applicable to diluted common shareholders
33,547

 
1,515

FFO per diluted common share(2)
0.32

 
0.01

Adjustments for Recurring FFO:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off
—

 
7,143

Environmental remediation costs
—

 
1,379

Debt restructuring expenses
—

 
1,034

Recurring FFO Applicable to diluted common shareholders
$
32,447

 
$
31,670

Recurring FFO per diluted common share(2)
$
0.31

 
$
0.30

 
 
 
 
Weighted Average diluted common shares(2)
105,649

 
105,170

(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 Recurring FFO 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) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the periods presented are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million and 6.1 million LTIP and OP units which are redeemable into our common stock for the quarters ended March 31, 2016 and 2015, respectively. These redeemable units are not included in the weighted average diluted share count for GAAP purposes because their inclusion is anti-dilutive.








14


URBAN EDGE PROPERTIES
 
 
MARKET CAPITALIZATION, DEBT RATIOS AND LIQUIDITY
 
 
As of March 31, 2016
 
 
(in thousands, except share data)
 
 
 
 
 

 
March 31, 2016
Closing market price of common shares
$
25.84

Common stock shares
 
Basic common shares
99,269,181

Diluted common shares:
 
OP and LTIP units
6,150,224

Unvested restricted common shares and OPP units
270,635

Diluted common shares
105,690,040

 
 
Equity market capitalization
$
2,731,031

 
 
 
 
Total consolidated debt(2)
$
1,239,842

Cash and cash equivalents
(162,354
)
Net debt
$
1,077,488

 
 
Net Debt to Adjusted EBITDA(1)
5.8
x
 
 
Total consolidated debt(2)
$
1,239,842

Equity market capitalization
2,731,031

Total market capitalization
$
3,970,873

 
 
Net debt to total market capitalization at applicable market price
27.1
%
 
 
 
 
Gross real estate investments, at cost(3)
$
2,090,529

 
 
Net debt to gross real estate investments
51.5
%
 
 
 
 
(1) Adjusted EBITDA for the period has been annualized.
(2) Total consolidated debt excludes unamortized debt issuance costs.
(3) Excludes Furniture, fixtures and equipment.

15


URBAN EDGE PROPERTIES
 
 
ADDITIONAL DISCLOSURES
 
(in thousands)
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Certain non-cash items:
 
 
 

Straight-line rental income(1)
 
$
301

 
$
83

Amortization of below-market lease intangibles, net(1)
 
1,875

 
1,986

Straight-line ground rent expense(2)
 
(88
)
 
(106
)
Amortization of below-market lease intangibles, lessee(2)
 
(243
)
 
(243
)
Amortization of deferred financing costs(4)
 
(659
)
 
(684
)
Capitalized interest
 
518

 
—

Share-based compensation expense(3)
 
(1,297
)
 
(7,441
)
 
 
 
 
 
Capital expenditures:(5)
 
 
 
 
Development and redevelopment costs
 
$
9,755

 
$
3,597

Maintenance capital expenditures
 
560

 
1,888

Leasing commissions
 
604

 
354

Tenant improvements and allowances
 
1,557

 
77

Total capital expenditures
 
$
12,476

 
$
5,916

 
 
 
 
 
 
 
March 31, 2016
 
December 31, 2015
Prepaid expenses and other assets:
 
 
 
 
Prepaid expenses
 
$
7,723

 
$
8,521

Other assets
 
2,437

 
2,467

Total prepaid expenses and other assets
 
$
10,160

 
$
10,988

 
 
 
 
 
Other Liabilities:
 
 
 
 
Deferred ground rent expense
 
$
6,126

 
$
6,038

Deferred tax liability, net
 
3,620

 
3,607

Other
 
3,956

 
3,663

Total other liabilities
 
$
13,702

 
$
13,308

 
 
 
 
 
Accounts payable and accrued expenses:
 
 
 
 
Tenant prepaid/deferred revenue
 
$
15,112

 
$
16,097

Accrued capital expenditures and leasing costs
 
7,329

 
10,261

Other
 
17,067

 
18,973

Total accounts payable and accrued expenses
 
$
39,508

 
$
45,331

(1) Amounts included in the financial statement line item "Property rentals" in the consolidated and combined statements of income.
(2) Amounts included in the financial statement line item "Ground rent" in the consolidated and combined statements of income.
(3) Amounts included in the financial statement line item "General and Administrative" in the consolidated and combined statements of income. Includes $7.1 million of one-time expenses associated with the issuance of LTIP awards during the three months ended March 31, 2015.
(4) Amounts included in the financial statement line item "Interest and debt expense" in the consolidated and combined statements of income.
(5) Amounts are reported on a GAAP basis.

16


URBAN EDGE PROPERTIES
 
 
TENANT CONCENTRATION - TOP TWENTY-FIVE TENANTS
 
As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
Number of stores
Square feet
% of total square feet
Annualized base rent
% of total annualized base rent
Weighted average annual rent per square foot
Average remaining term of ABR(1)
The Home Depot
7

920,226

6.2%
$
15,801,538

7.1%
$
17.17

15.3

Wal-Mart/Sam's Wholesale
9

1,438,730

9.7%
10,726,552

4.8%
7.46

9.8

The TJX Companies, Inc.
15

542,522

3.7%
8,683,212

3.9%
16.01

5.6

Lowe's
6

976,415

6.6%
8,575,004

3.8%
8.78

11.5

Stop & Shop / Koninklijke Ahold NV
9

655,618

4.4%
7,949,895

3.6%
12.13

7.5

Best Buy & Co
7

312,952

2.1%
6,857,402

3.1%
21.91

8.0

Kohl's
8

716,345

4.8%
6,713,770

3.0%
9.37

5.6

ShopRite
5

336,612

2.3%
5,421,307

2.4%
16.11

7.6

BJ's Wholesale Club
4

454,297

3.1%
5,278,625

2.4%
11.62

10.6

Sears Holdings, Inc. (Sears and Kmart)
4

547,443

3.7%
5,154,142

2.3%
9.41

19.9

PetSmart, Inc.
9

235,309

1.6%
5,133,861

2.3%
21.82

4.5

Toys "R" Us
7

285,858

1.9%
3,685,514

1.7%
12.89

6.1

Staples, Inc.
8

167,554

1.1%
3,612,769

1.6%
21.56

3.5

Target
2

297,856

2.0%
3,448,666

1.5%
11.58

16.0

Whole Foods
2

100,682

0.7%
3,365,570

1.5%
33.43

11.7

Century 21
1

156,649

1.1%
3,085,619

1.4%
19.70

10.8

LA Fitness
4

181,342

1.2%
3,085,085

1.4%
17.01

11.4

Dick's Sporting Goods
3

151,136

1.0%
2,971,814

1.3%
19.66

2.8

Petco
8

132,210

0.9%
2,350,616

1.1%
17.78

5.0

24 Hour Fitness
1

53,750

0.4%
2,289,750

1.0%
42.60

15.8

National Wholesale Liquidator
1

171,216

1.2%
2,140,019

1.0%
12.50

6.8

Bed Bath & Beyond
4

143,973

1.0%
1,874,970

0.8%
13.02

4.8

The Gap, Inc.
5

67,768

0.5%
1,848,313

0.8%
27.27

4.7

Sleepy's
11

61,879

0.4%
1,738,693

0.8%
28.10

4.8

REI
2

48,237

0.3%
1,668,840

0.7%
34.60

4.4

 
 
 
 
 
 
 
 
Total/Weighted Average
142

9,156,579

61.9%
$
123,461,546

55.3%
$
13.48

9.5

 
 
 
 
 
 
 
 
(1) In years, excluding tenant renewal options. Total top twenty-five tenants is weighted based on annualized base rent ("ABR").

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


17


URBAN EDGE PROPERTIES
 
 
LEASING ACTIVITY
 
For the three months ended March 31, 2016
 
 
 
 
 
 
 
Category
Total Leases
Total Sq. Ft.
Same Space Leases
Same Space Sq. Ft.
Prior Rent PSF
New Rent PSF
Rent Spread
Same Space TIs PSF(1)
Same Space Avg Term
Three months ended March 31, 2016
 
 
 
 
 
 
(years)
New Leases
10
51,280

4
13,262

$
29.07

$
57.95

99.3
%
$
9.43

10.3

Renewals & Options
16
116,261

16
116,261

16.62

17.72

6.6
%
—

5.0

Totals/Average
26
167,541

20
129,523

$
17.90

$
21.84

22.0
%
$
0.97

5.6

 
 
 
 
 
 
 
 
 
 
(1) Includes both tenant improvements and landlord contributions.



18


URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE
 
As of March 31, 2016
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
1

13,000

0.1
%
$
27.79

11
24,000

1.2
%
$
53.25

12
37,000

0.3
%
$
44.31

2016(3)
3

69,000

0.6
%
14.19

43
100,000

4.8
%
40.31

46
169,000

1.2
%
29.64

2017
9

282,000

2.4
%
16.66

72
211,000

10.2
%
34.24

81
493,000

3.5
%
24.19

2018
21

1,011,000

8.6
%
10.56

52
140,000

6.7
%
45.80

73
1,151,000

8.3
%
14.84

2019
27

973,000

8.2
%
17.81

76
223,000

10.8
%
40.15

103
1,196,000

8.6
%
21.97

2020
29

1,115,000

9.4
%
15.89

53
180,000

8.7
%
41.40

82
1,295,000

9.3
%
19.43

2021
23

706,000

6.0
%
16.45

49
150,000

7.2
%
34.53

72
856,000

6.2
%
19.62

2022
17

916,000

7.7
%
10.95

34
99,000

4.8
%
36.77

51
1,015,000

7.3
%
13.47

2023
16

986,000

8.3
%
16.89

30
105,000

5.1
%
34.66

46
1,091,000

7.8
%
18.60

2024
23

1,224,000

10.3
%
11.27

34
128,000

6.2
%
23.72

57
1,352,000

9.7
%
12.45

2025
6

450,000

3.8
%
13.87

32
94,000

4.5
%
35.78

38
544,000

3.9
%
17.65

2026
7

543,000

4.6
%
8.88

34
140,000

6.7
%
24.25

41
683,000

4.9
%
12.03

Thereafter
41

3,329,000

28.1
%
14.09

29
146,000

7.0
%
31.83

70
3,475,000

25.0
%
14.84

Subtotal/Average
223

11,617,000

98.1
%
$
13.93

549
1,740,000

83.9
%
$
35.76

772
13,357,000

96.0
%
$
16.77

Vacant
11

219,000

1.9
%
 N/A
116
333,000

16.1
%
 N/A
127
552,000

4.0
%
 N/A
Total/Average
234

11,836,000

100
%
 N/A
665
2,073,000

100
%
 N/A
899
13,909,000

100
%
 N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration excludes tenant renewal options.
(2) Weighted average annual rent per square foot is calculated by annualizing tenant's base cash rent, including ground rent, and excludes tenant reimbursements and concessions and storage rent.
(3) Remainder of 2016.

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 $5.40 per square foot as of March 31, 2016.


19


URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE ASSUMING EXERCISE OF ALL RENEWALS AND OPTIONS
As of March 31, 2016
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
1

13,000

0.1
%
$
27.79

11

24,000

1.1%
$
53.25

12

37,000

0.3
%
$
44.31

2016(3)
1

12,000

0.1
%
25.70

33

66,000

3.2%
37.10

34

78,000

0.6
%
35.35

2017
4

89,000

0.8
%
21.28

44

109,000

5.2%
37.21

48

198,000

1.4
%
30.05

2018
4

76,000

0.6
%
19.60

40

101,000

4.9%
54.32

44

177,000

1.3
%
39.41

2019
3

142,000

1.2
%
12.39

49

121,000

5.9%
48.69

52

263,000

1.9
%
29.16

2020
6

116,000

1.0
%
39.24

41

124,000

6.0%
53.01

47

240,000

1.7
%
46.35

2021
7

142,000

1.2
%
19.90

39

103,000

5.0%
37.25

46

245,000

1.7
%
27.19

2022
3

122,000

1.0
%
12.80

37

123,000

5.9%
34.44

40

245,000

1.7
%
23.66

2023
5

320,000

2.7
%
17.47

26

78,000

3.7%
37.07

31

398,000

2.9
%
21.31

2024
11

215,000

1.8
%
17.59

39

117,000

5.6%
39.28

50

332,000

2.4
%
25.23

2025
7

262,000

2.2
%
21.23

29

91,000

4.4%
38.13

36

353,000

2.5
%
25.59

2026
8

264,000

2.2
%
18.41

41

153,000

7.4%
36.73

49

417,000

3.0
%
25.13

Thereafter
163

9,844,000

83.2
%
19.02

120

530,000

25.6%
41.36

283

10,374,000

74.6
%
20.17

Subtotal/Average
223

11,617,000

98.1
%
$
19.09

549

1,740,000

83.9%
$
41.56

772

13,357,000

96.0
%
$
22.02

Vacant
11

219,000

1.9
%
 N/A

116

333,000

16.1%
 N/A

127

552,000

4.0
%
 N/A

Total/Average
234

11,836,000

100
%
 N/A

665

2,073,000

100%
 N/A

899

13,909,000

100
%
 N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration includes tenant renewal options.
(2) Weighted average annual rent per square foot is calculated by annualizing tenant's base cash rent, including ground rent, and excludes tenant reimbursements and concessions and storage rent and is adjusted for assumed exercised options using option rents specified in the underlying leases. 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.
(3) Remainder of 2016.

Note: Amounts shown in table above includes 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 assuming exercise of all options at future tenant rent (excluded from the table above) is $5.55 per square foot as of March 31, 2016.


20
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of March 31, 2016
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


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

100.0%
 
$24.08
 
—
 
Best Buy
Vallejo (leased through 2043)(8)
 
45,000

100.0%
 
19.26
 
—
 
Best Buy
Walnut Creek (1149 South Main Street)(6)
 
31,000

100.0%
 
70.00
 
—
 
Anthropologie (lease not commenced)
Walnut Creek (Mt. Diablo) (4)
 
7,000

100.0%
 
74.00
 
—
 
Anthropologie
 
 
 
 
 
 
 
 
 
 
Connecticut:
 
 
 
 
 
 
 
 
 
Newington
 
189,000

100.0%
 
9.72
 
$10,656
(3) 
Wal-Mart, Staples
Waterbury
 
147,000

77.9%
 
15.87
 
$13,254
(3) 
ShopRite, Goodwill (lease not commenced)
 
 
 
 
 
 
 
 
 
 
Maryland:
 
 
 
 
 
 
 
 
 
Baltimore (Towson)
 
155,000

100.0%
 
16.89
 
$14,814
(3) 
Shoppers Food Warehouse, hhgregg, Staples, HomeGoods, Golf Galaxy
Glen Burnie
 
121,000

90.4%
 
9.87
 
—
 
Gavigan’s Home Furnishings, Pep Boys
Rockville
 
94,000

98.1%
 
24.19
 
—
 
Regal Cinemas
Wheaton
(leased through 2060)(8)
 
66,000

100.0%
 
16.36
 
—
 
Best Buy
 
 
 
 
 
 
 
 
 
 
Massachusetts:
 
 
 
 
 
 
 
 
 
Cambridge
(leased through 2033)(8)
 
48,000

100.0%
 
21.83
 
—
 
PetSmart, Modell’s Sporting Goods
Chicopee
 
224,000

100.0%
 
5.50
 
$7,875
(3) 
Wal-Mart
Milford
(leased through 2019)(8)
 
83,000

100.0%
 
9.01
 
—
 
Kohl’s
Springfield
 
182,000

100.0%
 
5.57
 
$5,432
(3) 
Wal-Mart
 
 
 
 
 
 
 
 
 
 
New Hampshire:
 
 
 
 
 
 
 
 
 
Salem
 
37,000

100.0%
 
12.58
 
—
 
Babies “R” Us
 
 
 
 
 
 
 
 
 
 
New Jersey:
 
 
 
 
 
 
 
 
 
Bergen Town Center - East, Paramus
 
211,000

92.9%
 
18.08
 
—
 
Lowe’s, REI
Bergen Town Center - West, Paramus
 
960,000

99.4%
 
31.28
 
$300,000
 
Target, Century 21, Whole Foods Market, Marshalls, Nordstrom Rack, Saks Off 5th, HomeGoods, Hennes & Mauritz, Bloomingdale’s Outlet, Nike Factory Store, Old Navy, Nieman Marcus Last Call Studio
Brick
 
278,000

95.3%
 
18.63
 
$30,303
(3) 
Kohl’s, ShopRite, Marshalls
Carlstadt
(leased through 2050)(8)
 
78,000

95.5%
 
23.38
 
—
 
Stop & Shop
Cherry Hill
 
261,000

97.3%
 
8.55
 
$13,151
(3) 
Wal-Mart, Toys “R” Us, Maxx Fitness (lease not commenced)
Dover
 
173,000

94.8%
 
13.59
 
$12,475
(3) 
ShopRite, T.J. Maxx
East Brunswick
 
427,000

100.0%
 
18.66
 
$34,773
(3) 
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

85.3%
 
19.01
 
$36,281
(3) 
The Home Depot, Dick’s Sporting Goods, Marshalls

21
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of March 31, 2016
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
 
Total Square Feet (1)
Percent Leased (1)
 
Weighted Average Annual Rent per sq ft (2)
 
Mortgage Debt(7)
 
Major Tenants
East Hanover (280 Route 10 West)
 
28,000

100.0%
 
34.71
 
$4,314
(3) 
REI
East Rutherford
 
197,000

100.0%
 
12.50
 
$12,891
(3) 
Lowe’s
Eatontown
 
30,000

73.9%
 
29.09
 
—
 
Petco
Englewood
 
41,000

64.1%
 
20.83
 
$11,537
 
New York Sports Club
Garfield
 
195,000

100.0%
 
13.67
 
—
 
Wal-Mart, Marshalls, Petsmart (lease not commenced), Burlington Coat Factory (lease not commenced)
Hackensack
 
275,000

94.4%
 
21.55
 
$38,464
(3) 
The Home Depot, Staples, Petco, 99 Ranch (lease not commenced)
Hazlet
 
95,000

100.0%
 
3.43
 
—
 
Stop & Shop (5)
Jersey City
 
236,000

100.0%
 
12.30
 
$19,232
(3) 
Lowe’s, P.C. Richard & Son
Kearny
 
104,000

98.2%
 
18.86
 
—
 
LA Fitness, Marshalls
Lawnside
 
147,000

99.3%
 
14.38
 
$10,136
(3) 
The Home Depot, PetSmart
Lodi (Route 17 North)
 
171,000

100.0%
 
12.50
 
$10,759
(3) 
National Wholesale Liquidators
Lodi (Washington Street)
 
85,000

83.6%
 
20.37
 
—
 
Blink Fitness, Aldi
Manalapan
 
208,000

100.0%
 
17.47
 
$19,960
(3) 
Best Buy, Bed Bath & Beyond, Babies “R” Us, Modell’s Sporting Goods, PetSmart
Marlton
 
213,000

100.0%
 
14.08
 
$16,373
(3) 
Kohl’s, ShopRite, PetSmart
Middletown
 
231,000

100.0%
 
13.15
 
$16,477
(3) 
Kohl’s, Stop & Shop
Montclair
 
18,000

100.0%
 
26.20
 
$2,495
(3) 
Whole Foods Market
Morris Plains
 
177,000

91.2%
 
21.47
 
$20,272
(3) 
Kohl’s, ShopRite (5)
North Bergen (Kennedy Boulevard)
 
62,000

100.0%
 
13.73
 
$4,834
(3) 
Food Bazaar
North Bergen (Tonnelle Avenue)
 
410,000

100.0%
 
20.47
 
$74,814
 
Wal-Mart, BJ’s Wholesale Club, PetSmart, Staples
North Plainfield
 
206,000

95.3%
 
9.27
 
—
 
Costco, The Tile Shop, La-Z-Boy (lease not commenced)
Paramus
(leased through 2033)(8)
 
63,000

100.0%
 
42.23
 
—
 
24 Hour Fitness
South Plainfield (leased through 2039)(8)
 
56,000

96.3%
 
20.53
 
$4,860
(3) 
Staples, Party City
Totowa
 
271,000

100.0%
 
16.96
 
$23,494
(3) 
The Home Depot, Bed Bath & Beyond, buy buy Baby, Marshalls, Staples
Turnersville
 
96,000

100.0%
 
9.62
 
—
 
Haynes Furniture Outlet (The Dump)
Union (2445 Springfield Avenue)
 
232,000

100.0%
 
17.85
 
$27,029
(3) 
The Home Depot
Union (Route 22 and Morris Avenue)
 
276,000

99.4%
 
18.43
 
$30,667
(3) 
Lowe’s, Toys “R” Us, Office Depot
Watchung
 
170,000

96.6%
 
16.65
 
$14,294
(3) 
BJ’s Wholesale Club
Woodbridge
 
226,000

84.1%
 
14.35
 
$19,596
(3) 
Wal-Mart
 
 
 
 
 
 
 
 
 
 
New York:
 
 
 
 
 
 
 
 
 
Bronx (1750-1780 Gun Hill Road)
 
77,000

100.0%
 
33.86
 
—
 
Planet Fitness, Aldi
Bronx (Bruckner Boulevard)(6)
 
501,000

78.1%
 
16.28
 
—
 
Kmart, Toys “R” Us
Buffalo (Amherst)
 
311,000

96.9%
 
9.19
 
—
 
BJ’s Wholesale Club, T.J. Maxx, HomeGoods, Toys “R” Us, LA Fitness
Commack
(leased through 2021)(8)
 
47,000

100.0%
 
19.22
 
—
 
PetSmart, Ace Hardware
Dewitt (leased through 2041)(8)
 
46,000

100.0%
 
22.51
 
—
 
Best Buy

22
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of March 31, 2016
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
 
Total Square Feet (1)
Percent Leased (1)
 
Weighted Average Annual Rent per sq ft (2)
 
Mortgage Debt(7)
 
Major Tenants
Freeport (240 West Sunrise Highway)
(leased through 2040)(8)
 
44,000

100.0%
 
20.28
 
—
 
Bob’s Discount Furniture
Freeport (437 East Sunrise Highway)
 
173,000

100.0%
 
21.95
 
$20,272
(3) 
The Home Depot, Staples
Huntington
 
204,000

99.7%
 
14.98
 
$15,801
(3) 
Kmart, Marshalls, Old Navy, Petco
Inwood
 
100,000

92.6%
 
19.00
 
—
 
Stop & Shop
Mount Kisco
 
189,000

100.0%
 
16.69
 
$15,187
 
Target, Stop & Shop
New Hyde Park (leased through 2029)(8)
 
101,000

100.0%
 
20.21
 
—
 
Stop & Shop
Oceanside
 
16,000

100.0%
 
28.00
 
—
 
Party City
Queens(6)
 
46,000

81.3%
 
36.99
 
—
 
 
Rochester
 
205,000

100.0%
 
3.08
 
$4,158
(3) 
Wal-Mart
Rochester (Henrietta)
(leased through 2056)(8)
 
165,000

94.2%
 
3.96
 
—
 
Kohl’s
Staten Island
 
165,000

88.8%
 
23.88
 
—
 
Western Beef, Planet Fitness
West Babylon
 
66,000

92.7%
 
17.11
 
—
 
Best Market, Rite Aid
 
 
 
 
 
 
 
 
 
 
Pennsylvania:
 
 
 
 
 
 
 
 
 
Allentown
 
372,000

100.0%
 
11.77
 
$28,432
(3) 
Burlington Coat Factory, Giant Food, Dick’s Sporting Goods, T.J. Maxx, Petco, BigLots
Bensalem
 
185,000

100.0%
 
12.84
 
$14,112
(3) 
Kohl’s, Ross Dress for Less, Staples, Petco
Bethlehem
 
147,000

94.4%
 
7.15
 
$5,302
(3) 
Giant Food, Petco
Broomall
 
169,000

100.0%
 
10.68
 
$10,136
(3) 
Giant Food, Planet Fitness, A.C. Moore, PetSmart
Glenolden
 
102,000

100.0%
 
12.41
 
$6,497
(3) 
Wal-Mart
Lancaster
 
228,000

100.0%
 
4.68
 
$5,120
(3) 
Lowe’s, Community Aid, Sleepy’s
Springfield
(leased through 2025)(8)
 
41,000

100.0%
 
20.90
 
—
 
PetSmart
Wilkes-Barre (461 - 499 Mundy Street)
 
204,000

91.8%
 
12.89
 
—
 
Bob’s Discount Furniture, Babies “R” Us,
Ross Dress for Less, Marshalls, Petco
Wyomissing
(leased through 2065)(8)
 
76,000

93.4%
 
15.86
 
—
 
LA Fitness, PetSmart
York
 
111,000

86.3%
 
8.75
 
$4,938
(3) 
Ashley Furniture, Tractor Supply Company, Aldi
 
 
 
 
 
 
 
 
 
 
South Carolina:
 
 
 
 
 
 
 
 
 
Charleston
(leased through 2063)(8)
 
45,000

100.0%
 
14.19
 
—
 
Best Buy
 
 
 
 
 
 
 
 
 
 
Virginia:
 
 
 
 
 
 
 
 
 
Norfolk
(leased through 2069)(8)
 
114,000

100.0%
 
7.08
 
—
 
BJ’s Wholesale Club
Tyson’s Corner
(leased through 2035)(8)
 
38,000

100.0%
 
43.04
 
—
 
Best Buy
 
 
 
 
 
 
 
 
 
 
Puerto Rico:
 
 
 
 
 
 
 
 
 
Las Catalinas
 
355,000

93.3%
 
36.34
 
$130,000
 
Kmart, Sears (not owned)
Montehiedra(6)
 
542,000

93.0%
 
18.32
 
$118,375
 
Kmart, The Home Depot, Marshalls, Caribbean Theatres, Tiendas Capri, Nike Factory Store

23
        
                                        

URBAN EDGE PROPERTIES
 
 
PROPERTY STATUS REPORT
As of March 31, 2016
 
 
(dollars in thousands, except per sf amounts)
 
 
 
 
 


Property
 
Total Square Feet (1)
Percent Leased (1)
 
Weighted Average Annual Rent per sq ft (2)
 
Mortgage Debt(7)
 
Major Tenants
 
 
 
 
 
 
 
 
 
 
Total Shopping Centers and Malls
 
13,909,000
96.0%
 
$16.85 (2)
 
$1,239,842
 
 
 
 
 
 
 
 
 
 
 
 
WAREHOUSES:
 
 
 
 
 
 
 
 
 
East Hanover - Five Buildings(6)
 
942,000

79.1%
 
4.71
 
—
 
J & J Tri-State Delivery, Foremost Groups Inc., PCS Wireless, Fidelity Paper & Supply Inc., Meyer Distributing Inc., Consolidated Simon Distributors Inc., Givaudan Flavors Corp.
Total Urban Edge Properties
 
14,851,000

95.0%
 
$16.21
 
$1,239,842
 
 
(1) Percent leased is expressed as a percent of total existing square feet (gross leasable area) subject to a lease.
(2) Weighted average annual rent per square foot including ground leases and executed leases for which rent has not commenced is calculated by annualizing tenant's current base rent (excluding any free rent periods), and excludes tenant reimbursements, 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 $19.39 per square foot.
(3) Property is included in a cross-collateralized securitization. The amount of mortgage debt secured by our properties at East Brunswick and East Hanover (200-240 Route 10 West) contains parcels that are separately identified in our 40 property cross-collateralized securitization.
(4) Our ownership of Walnut Creek (Mt. Diablo) is 95% at March 31, 2016.
(5) The tenant has ceased operations at this location but continues to pay rent.
(6) Not included in the same-property pool for the purposes of calculating same-property NOI as of March 31, 2016.
(7) Mortgage debt balances exclude unamortized debt issuance costs.
(8) 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.

24


URBAN EDGE PROPERTIES
 
 
PROPERTY ACQUISITIONS AND DISPOSITIONS
 
For the three months ended March 31, 2016
 
 
 
 
 
 
 
 
2016 Property Acquisitions:
 
 
 
 
 
 
 
 
 
 
 
 
None
 
 
 
 
 
 
 
 
 
 
 
 
 
2016 Property Dispositions:
 
 
 
 
 
 
 
 
 
 
 
 
None
 
 
 
 
 
 




25


URBAN EDGE PROPERTIES
 
 
DEVELOPMENT, REDEVELOPMENT AND ANCHOR REPOSITIONING PROJECTS
 
As of March 31, 2016
 
 
(in thousands, except square footage data)
 
 
 
 
 

PROPERTY
Project GLA(2)
Estimated Gross Cost(1)
 
Incurred as of 3/31/16
Balance to Complete (Gross Cost)
Target Stabilization Year(3)(6)
Project Description
ACTIVE PROJECTS:
 
 
 
 
 
 
Bruckner Boulevard
163,000
$
38,400

 
$
6,400

$
32,000

2018
Renovation and retenanting
East Hanover warehouses
942,000
24,000

 
18,800

5,200

2017
Renovation and retenanting
Montehiedra Town Center
542,000
20,800

 
8,700

12,100

2017
Conversion to outlet/value hybrid mall
Garfield(4)
84,000
18,800

 
2,900

15,900

2018
Addition of Burlington Coat, Petsmart and 17,000± sf of shop space
North Plainfield(4)
47,500
8,900

 
600

8,300

2018
Addition of La-Z-Boy and 20,000± sf of shop space
Towson(4)
38,900
7,000

 
—

7,000

2018
Anchor recapture and releasing
Hackensack(4)
75,000
4,600

 
300

4,300

2018
Anchor retenanting (99 Ranch)
Walnut Creek
31,000
4,400

 
300

4,100

2017
Anthropologie replacing Barnes & Noble
Turnersville(4)
3,500
2,100

 
100

2,000

2018
Replacing vacant Friendly's with Verizon store
Glen Burnie(4)
9,000
1,300

 
100

1,200

2018
New restaurant pad for Bubba's 33
Walnut Creek
(Mt. Diablo)(4)
7,000
600

 
—

600

2017
Z Gallerie replacing Anthropologie
Rockaway(4)
2,700
100

 
—

100

2017
Fast food pad (Popeyes)
Total
1,945,600
$
131,000

(5) 
$
38,200

$
92,800

 
 
 
 
 
 
 
 
 
 
COMPLETED PROJECTS PENDING TWELVE MONTH STABILIZATION:
 
Freeport(4)
155,000
100

 
100

—

2017
Home Depot expansion
East Hanover REI(4)
4,500
500

 
500

—

2017
Panera Bread opened 1Q16
Total
159,500
$
600

 
$
600

$
—

 
 
 
 
 
 
 
 
 
 
(1) Project costs includes the allocation of internal costs such as labor, interest, and taxes. The total estimated gross cost includes $11.7 million of construction costs and expenses paid by Vornado prior to the spin-off.
(2) Project GLA is subject to change based upon build-to-suit and other tenant-driven requirements.
(3) Target Stabilization Year reflects the first full year in which the anchor(s) is paying rent. Properties may continue to be reflected in development or redevelopment until they are included in the company's same-property NOI pool, which is normally one year from rent commencement.
(4) Results from these properties are included in our same-property metrics.
(5) The estimated unleveraged yield for total active projects including those pending stabilization is approximately 13% as of March 31, 2016, based on the total estimated project costs and the incremental unleveraged NOI expected from leasing activities directly attributable to the total active projects. The incremental unleveraged NOI for active projects does not include NOI generated outside the project scope, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property.
(6) Target stabilization years are estimated and are subject to change resulting from uncertainties inherent in the development process and not wholly under the Company's control.

26


URBAN EDGE PROPERTIES
 
 
DEVELOPMENT, REDEVELOPMENT AND ANCHOR REPOSITIONING PROJECTS
 
As of March 31, 2016
 
 
(in thousands, except square footage data)
 
 
 
 
 

PROPERTY
Potential Investment(1)
Estimated Stabilization Year(1)(4)
Project Description
DEVELOPMENT AND REDEVELOPMENT PIPELINE:
 
Bergen Town Center
$120,000-$130,000
2020
Expansion
Bergen East
$13,000-$15,000
2018
Approved pads for 60,000± sf of retail
Kearny
$8,000-$9,000
2018
25,000± sf expansion and new pad
Montehiedra outparcel
$7,000-$8,000
2018
20,000± sf retail
East Hanover
$4,000-$5,000
2018
Anchor repositioning
Brick
$4,000-$5,000
2017
Anchor repositioning
Morris Plains
$3,000-$7,000
2018
Anchor repositioning
Marlton
$3,000-$4,000
2018
Pads for 5,000± sf of retail
West Babylon
$3,000-$4,000
2018
10,000± sf of shops on excess land
Huntington
$2,000-$3,000
2018
Conversion of 11,000± sf of basement space into street-front retail
Woodbridge
$2,000-$3,000
2019
Conversion to pads
Cherry Hill
$1,000-$2,000
2019
Approved pad for 5,000± sf of retail
Lawnside
$1,000-$2,000
2019
Pad for 6,000± sf of retail
Multiple Pad Projects(2)
$1,000-$2,000
2018
New pads
Rockaway
±$1,000
2018
Supermarket expansion
Total
$172,000-$200,000
(3) 
 
(1) Estimated stabilization year and potential investment are estimated and are subject to change resulting from uncertainties inherent in the development process and not wholly under the Company's control.
(2) Multiple pad projects include possible pad additions at the following properties: East Rutherford, Union, Totowa and Signal Hill.
(3) The estimated unleveraged yield for total pipeline projects is approximately 8% as of March 31, 2016, based on the total estimated project specific costs and the incremental unleveraged NOI expected from leasing activities directly attributable to the total pipeline projects. The incremental unleveraged NOI for pipeline projects does not include NOI generated outside the project scope, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property.
(4) Estimated stabilization year reflects the first full year in which the anchor(s) is paying rent.



27


URBAN EDGE PROPERTIES
 
 
DEBT SUMMARY
 
As of March 31, 2016 and December 31, 2015
 
 
(in thousands)
 
 
 
 
 

 
March 31, 2016
 
December 31, 2015
Fixed rate debt
$
1,179,842

 
$
1,182,265

Variable rate debt
60,000

 
60,000

Total debt
$
1,239,842

 
$
1,242,265

 
 
 
 
% Fixed rate debt
95.2
%
 
95.2
%
% Variable rate debt
4.8
%
 
4.8
%
Total
100
%
 
100
%
 
 
 
 
 
 
 
 
Secured mortgage debt
$
1,239,842

 
$
1,242,265

Unsecured debt
—

 
—

Total debt
$
1,239,842

 
$
1,242,265

 
 
 
 
% Secured mortgage debt
100
%
 
100
%
% Unsecured mortgage debt
N/A

 
N/A

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

 
5.8 years

 
 
 
 
 
 
 
 
Total market capitalization (see page 15)
$
3,970,873

 
 
 
 
 
 
% Secured mortgage debt
31.2
%
 
 
% Unsecured debt
—
%
 
 
Total debt : Total market capitalization
31.2
%
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate on secured mortgage debt(1)
4.16
%
 
4.15
%
Weighted average interest rate on unsecured debt(2)
—
%
 
 
 
 
 
 
Note: All amounts and calculations exclude unamortized debt issuance costs on mortgages payable.
(1) Weighted average interest rates are calculated based on balances outstanding at the respective dates.
(2) No amounts are currently outstanding on the unsecured line of credit. To the extent borrowing occurs, the line bears interest at LIBOR plus 1.15% based on our current leverage metrics as defined in the revolving credit agreement. The line matures in February 2019 and has two six-month extension options.



28


URBAN EDGE PROPERTIES
 
 
MORTGAGE DEBT SUMMARY
 
As of March 31, 2016 (unaudited) and December 31, 2015
 
 
(dollars in thousands)
 
 
 
 
 
Debt Instrument
Maturity Date
Rate
March 31, 2016
December 31, 2015
Percent of Debt at March 31, 2016
North Bergen
1/9/18
4.59%
$
74,814

$
75,000

6.0
%
Englewood (3)
10/1/18
6.22%
11,537

11,537

0.9
%
40 property securitization - Fixed(4)
9/10/20
4.34%
529,929

533,459

42.7
%
40 property securitization - Variable (1)(4)
9/10/20
2.36%
60,000

60,000

4.8
%
Montehiedra, Puerto Rico (senior loan)(2)(6)
7/6/21
5.33%
88,375

88,676

7.1
%
Montehiedra, Puerto Rico (junior loan)(2)
7/6/21
3.00%
30,000

30,000

2.4
%
Bergen Town Center
4/8/23
3.56%
300,000

300,000

24.2
%
Las Catalinas
8/6/24
4.43%
130,000

130,000

10.5
%
Mt Kisco -Target(5)
11/15/34
6.40%
15,187

15,285

1.4
%
Total mortgage debt
 
4.16%
$
1,239,842

$
1,243,957

100
%
Unamortized debt issuance costs
 
 
(9,493
)
(9,974
)
 
Total mortgage debt, net
 
 
$
1,230,349

$
1,233,983

 
 
 
 
 
 
 
DEBT MATURITY SCHEDULE
 
 
 
 
 
 
 
 
 
 
 
Year
Scheduled Amortization
Balloon Payments
(Discount) Scheduled Amortization
Total
Weighted Average Interest rate at maturity
Percent of debt maturing
   2016(7)
$
12,352

$
—

$
(45
)
$
12,307

4.5%
1.0
%
2017
16,845

—

(61
)
16,784

4.4%
1.4
%
2018
16,218

83,551

(61
)
99,708

4.7%
8.0
%
2019
17,381

—

(61
)
17,320

4.4%
1.4
%
2020
13,787

521,387

(61
)
535,113

4.1%
43.2
%
2021
2,801

118,375

(61
)
121,115

4.7%
9.8
%
2022
2,942

—

(61
)
2,881

4.9%
0.2
%
2023
3,091

300,000

(61
)
303,030

3.6%
24.4
%
2024
2,201

119,050

(61
)
121,190

4.4%
9.8
%
Thereafter
10,992

—

(598
)
10,394

6.4%
0.8
%
Total
$
98,610

$
1,142,363

$
(1,131
)
$
1,239,842

4.2%
100
%
 
Unamortized debt issuance costs
 
(9,493
)
 
 
 
Mortgage debt, net
 
$
1,230,349

 
 
(1) Subject to a LIBOR floor of 1.00%, currently bears interest at LIBOR plus 136 bps.
(2) On January 6, 2015, we completed a loan restructuring applicable to the $120.0 million, 6.04% mortgage loan secured by Montehiedra Town Center. The loan has been extended from July 2016 to July 2021 and separated into two tranches, a senior $90.0 million position with interest at 5.33% to be paid currently, and a junior $30.0 million position with interest accruing at 3.0%. As part of the planned redevelopment of the property, the Company is committed to fund $20.0 million for leasing and building capital expenditures of which $10.1 million has been funded as of March 31, 2016.
(3) On March 30, 2015, we notified the lender that the property’s operating cash flow will be insufficient to pay the debt service; accordingly, at our request, the mortgage loan was transferred to the special servicer. As of March 31, 2016 we remain in discussions with the special servicer to restructure the terms of the loan including the possibility that the lender will take possession of the property.
(4) See Property Status Report on page 21 for each property that comprises the 40 property securitization.
(5) The mortgage payable balance on the loan secured by Mt. Kisco -Target includes $1.1 million of unamortized debt discount as of March 31, 2016 and December 31, 2015, respectively. The effective interest rate including amortization of the debt discount is 7.25% as of March 31, 2016.
(6) The carrying value of the senior loan secured by Montehiedra was presented net of unamortized fees of $1.7 million as of December 31, 2015. The net unamortized fees of $1.7 million were revised to be presented with the unamortized debt issuance costs.
(7) Remainder of 2016.

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Urban Edge Properties Reports