UE

Urban Edge Properties 2025 Q2 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2025, 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 the Washington, D.C. to Boston corridor. As of June 30, 2025, the portfolio consisted of 68 shopping centers, two outlet centers, and two malls totaling approximately 17.1 million square feet with a consolidated occupancy rate of 89.9%.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased by $7.5 million (7.1%) for the quarter and $16.1 million (7.4%) for the six months compared to 2024, driven by rent commencements, contractual increases, and acquisitions net of dispositions.
• Net Income Surge: Net income for the quarter more than doubled to $60.8 million from $32.0 million in Q2 2024. This was primarily driven by a $49.5 million gain on the sale of real estate (vs. $13.4 million in Q2 2024) and a significant reduction in the gain on extinguishment of debt recognized in the prior year ($21.7 million gain in Q2 2024 vs. a $0.2 million loss in Q2 2025).
• Property Dispositions: The Company sold two properties (MacDade Commons and Kennedy Commons) and one parcel (Bergen Town Center East) in Q2 2025, generating $64.4 million in proceeds.
• Expense Management: Depreciation and amortization decreased by $7.1 million for the quarter due to accelerated depreciation in the prior year on buildings taken out of service for redevelopment. General and administrative expenses increased by $2.3 million, largely due to severance costs.
• Debt Profile: The Company repaid a $50.2 million variable-rate mortgage on the Plaza at Woodbridge using proceeds from its revolving credit facility. Total mortgages payable decreased to $1.51 billion from $1.57 billion year-over-year.

Guidance, Outlook, and Risks

• Dividends: The Board declared a quarterly dividend of $0.19 per share/unit for Q1 and Q2 2025, representing an annualized rate of $0.76.
• Development Pipeline: There are 20 active development and redevelopment projects with total estimated costs of $141.8 million. Approximately $76.6 million remains to be funded as of June 30, 2025.
• Tenant Bankruptcies: On June 16, 2025, "At Home" filed for Chapter 11 bankruptcy. The Company holds two leases with At Home comprising 186,000 sq. ft. and generating $2.5 million in annual rental revenue. The outcome of this filing is uncertain.
• Insurance Costs: Management notes that insurance premiums have increased significantly and may continue to rise due to recent weather events (hurricanes, flooding), which could materially affect results if coverage cannot be obtained on reasonable terms.
• Capital Markets: The Company has an At-The-Market (ATM) equity program with $117.2 million of remaining capacity and a share repurchase program with $145.9 million remaining. No shares were issued under the ATM or repurchased during the first half of 2025.

Investor Verification Checklist

• Gain on Sale Sustainability: Verify the impact of the $49.5 million one-time gain on real estate sales on the reported net income and EPS, noting that core operating income (FFO/NOI) grew at a more moderate pace.
• At Home Bankruptcy Exposure: Monitor the resolution of the At Home bankruptcy proceedings to assess potential vacancy risk for 186,000 sq. ft. of leasable area.
• Debt Maturities: Review the schedule of debt maturities, specifically the $23.5 million due within the next 12 months, and the Company's refinancing strategy.
• Insurance Premiums: Track the impact of rising insurance costs on property operating expenses and the ability to pass these costs through to tenants.
• Development Funding: Confirm the funding sources for the remaining $76.6 million required for active redevelopment projects.