UE

Urban Edge Properties 2026 Q1 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026, for Urban Edge Properties (UE) and Urban Edge Properties LP (UELP). UE is a Maryland REIT focused on owning, managing, and developing retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. As of March 31, 2026, the portfolio consisted of 74 properties (70 shopping centers, 2 outlet centers, 2 malls) totaling approximately 17.3 million square feet with a consolidated occupancy of 89.9%.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased by $14.5 million (12.2%). This was driven by an $8.3 million increase in other income (environmental remediation reimbursement) and an $8.3 million increase in property rentals due to rent commencements and contractual increases.
• Profitability: Net income more than doubled to $23.5 million, primarily due to higher revenues and a $4.9 million decrease in depreciation and amortization (accelerated write-offs in the prior year).
• Acquisitions: The Company acquired The Village at Bridgewater Commons in Bridgewater, NJ, for $54.3 million in March 2026. No acquisitions were made in Q1 2025.
• Capital Expenditures: Investing cash outflows increased significantly to $94.8 million (from $20.7 million) due to the $54.3 million acquisition and a $19.8 million increase in development and capital improvements.
• Debt Structure: The Company amended its unsecured line of credit, reducing capacity to $700 million but extending maturity to 2030. It also executed two new term loans totaling $250 million (undrawn as of period end) and secured a new $62.5 million mortgage for Plaza at Woodbridge.

Outlook, Risks, and Unusual Items

• Dividends: The Board declared a quarterly dividend of $0.21 per share/unit for Q1 2026, an increase from $0.19 in Q1 2025.
• Tenant Bankruptcies:
  • Saks Global: Filed Chapter 11 in January 2026. One lease (27,100 sf) was rejected; the remaining lease (32,000 sf) is uncertain.
  • Wren Kitchens: Filed Chapter 7 in April 2026 and closed all U.S. locations. The Company is evaluating collectibility of $1.1 million in annual revenue from two leases, subject to a UK parent guaranty.
• Lease Termination: The Company agreed to pay a $25 million termination fee to a tenant to regain possession of a premise. The first $12.5 million installment was paid in January 2026; the second is expected in Q2 2026.
• Development Pipeline: 19 active development/redevelopment projects with $66.8 million remaining to be funded.
• Risks: Management cites inflation, geopolitical tensions, rising interest rates, and the impact of e-commerce on tenants as key risks. Insurance premiums are rising, and the Company maintains a captive insurance program with $5.0 million in accrued loss reserves.

Investor Verification Checklist

• Debt Maturities: Verify the refinancing strategy for approximately $205.8 million of debt maturing within the next 12 months.
• Tenant Exposure: Monitor the resolution of the Saks Global and Wren Kitchens bankruptcy proceedings and potential vacancy impacts.
• Lease Termination Cost: Confirm the timing and impact of the second $12.5 million lease termination payment on Q2 liquidity.
• Acquisition Integration: Assess the performance and stabilization timeline of the newly acquired Bridgewater Commons property.
• Interest Rate Hedging: Review the effectiveness of the three active interest rate swaps in mitigating variable rate exposure on the $30 million line of credit draw.