• FFO as Adjusted: $0.35 per share, a 6% increase over the first quarter of last year.
• Same Property NOI: Increased 3.8% compared to the first quarter of last year.
• Leasing Activity: 42 leases totaling 434,000 square feet, with 18 new leases at a 34% cash leasing spread.
• Tenant Retention Ratio: 95%.
• Shop Occupancy: Reached a record 92.4%.
• Dispositions: $66 million in property sales at a 5% weighted average cap rate.
• Redevelopment Pipeline: $156 million expected to generate a 14% return.
• Balance Sheet Liquidity: Approximately $800 million, including $98 million in cash.
• Net Debt to Annualized EBITDA: 5.9 times.
• 2025 FFO Guidance: $1.37 to $1.42 per share, reflecting 4% growth at the midpoint.
• Same Property NOI Growth Guidance: 3% to 4% for 2025.

• Warning! GuruFocus has detected 8 Warning Signs with UE.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Urban Edge Properties (NYSE:UE) reported FFO as adjusted of $0.35 per share, marking a 6% increase over the previous year and the highest quarterly earnings in the company's history.
• The company achieved a same property NOI increase of 3.8% compared to the first quarter of the previous year, driven by improved recovery ratios and better-than-expected collections.
• Leasing momentum remained strong with the execution of 42 leases totaling 434,000 square feet, including 18 new leases with a 34% cash leasing spread.
• Tenant retention ratio is high at 95%, and shop occupancy reached a record 92.4%, indicating strong demand and successful tenant attraction.
• Urban Edge Properties (NYSE:UE) successfully completed a $25 million sale of land at Bergen Town Center and is under contract to sell two more properties for $41 million, with plans to reinvest in accretive acquisitions.

Negative Points

• The investment sales market is showing early signs of slowing down, which could impact future transactions.
• There has been limited CMBS issuance since April, and while life insurance companies and banks are still lending, spreads have increased by 10 to 30 basis points.
• Economic volatility in April has led the company to project a more conservative outlook for the second half of the year, despite a strong start.
• The same property lease rate decreased by 50 basis points over the previous quarter, primarily due to recapturing anchor spaces from retailers like Big Lots and Party City.
• The company has built in more conservative assumptions for the remainder of the year, incorporating contingencies for potential volatility in rent collections and tenant fallout.

Q & A Highlights

Q: Given the macro uncertainty with tariff policy, do you anticipate any changes in leasing timelines or occupancy impacts? A: Jeffrey Olson, CEO: We have not observed any slowdown from retailers across our portfolio or in discussions with other retail landlords. A major retail brokerage firm in New York reported no material changes in their lease negotiations, indicating stable demand.

Q: Can you provide more details on the announced dispositions and the cap rate spread between acquisitions and dispositions? A: Jeffrey Olson, CEO: We announced $66 million in dispositions at a 5% cap rate, including land for residential use at a 4% cap rate. Over the last 18 months, we've achieved a 200 basis point spread between acquisitions and dispositions, acquiring at low sevens and disposing at around 5%.

Q: What factors led to the decision not to raise guidance despite strong performance? A: Jeffrey Olson, CEO: We opted for a more conservative approach due to market volatility and added to our contingency. There were no specific tenant issues, but we felt it prudent not to raise guidance at this time.

Q: How does the use of 1031 exchanges impact your taxable income and dividend payouts? A: Mark Langer, CFO: 1031 exchanges allow us to defer gains, preventing an increase in taxable income and avoiding pressure to increase dividends. This strategy helps manage our tax obligations effectively.

Q: How do you view the performance of your portfolio in a potential recession compared to small grocery-anchored centers? A: Jeffrey Mooallem, COO: Our portfolio is well-positioned for a recessionary environment, with strong anchor tenants and less exposure to small shops. While grocery-anchored centers are priced higher, our properties are more insulated due to their tenant mix and balance sheet strength.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.