Urban Edge Properties (UE) Bundle
A Brief History of Urban Edge Properties
Urban Edge Properties (UE) was formed in 2014 through the spin-off of the retail and mixed-use properties from the larger investment firm, The Macerich Company. The company focuses on owning, operating, and developing retail real estate in urban markets across the United States.
Company Structure and Operations
As of September 30, 2024, Urban Edge Properties operates as a real estate investment trust (REIT). The company owns a diverse portfolio consisting primarily of retail properties, with 124 properties totaling approximately 20.0 million square feet of leasable area. The company’s properties are primarily located in densely populated urban areas, making them strategically positioned to benefit from high foot traffic and demand for retail space.
Financial Performance
In the third quarter of 2024, Urban Edge reported total revenue of $112.4 million, an increase of $10.6 million compared to $101.8 million in the same quarter of 2023. This growth was largely driven by property acquisitions and increased rental income from existing properties.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $112.4 million | $101.8 million | $10.6 million |
| Net Income | $9.5 million | $37.5 million | ($28.0 million) |
| Earnings Per Share (Basic) | $0.07 | $0.31 | ($0.24) |
| FFO (Funds From Operations) | $43.9 million | $64.2 million | ($20.3 million) |
Property Acquisitions and Developments
In 2024, Urban Edge continued to expand its portfolio through strategic acquisitions and refinancing of existing properties. Notable transactions included:
- Acquisition of Ledgewood Commons for $50 million, secured by a new 5-year fixed-rate mortgage loan at 6.03%.
- Refinancing of Yonkers Gateway Center with a new 5-year $50 million mortgage at a fixed rate of 6.30%.
- Sale of two properties generating a gain of $15.3 million in the first nine months of 2024.
Debt Management
As of September 30, 2024, Urban Edge's total mortgages payable amounted to $1.57 billion, with a significant portion refinanced to take advantage of lower rates. The company also managed to eliminate a $68.6 million mortgage liability through a foreclosure process, resulting in a $21.7 million gain on extinguishment of debt in the second quarter of 2024.
| Debt Metric | Amount |
|---|---|
| Total Mortgages Payable | $1.57 billion |
| Gain on Extinguishment of Debt | $21.7 million |
| Variable Rate Loans Paid Off | $75.7 million |
Market Conditions and Future Outlook
Urban Edge Properties is navigating a challenging retail environment, characterized by rising interest rates and changing consumer behaviors. Despite these headwinds, the company's focus on urban retail and mixed-use developments positions it well for future growth. The company reported cash and cash equivalents of $89.6 million as of September 30, 2024, with significant liquidity available for further investments and operational needs.
As Urban Edge continues to adapt to market changes, its strategic initiatives, including property acquisitions and redevelopment projects, will be crucial in enhancing its portfolio value and financial performance.
A Who Owns Urban Edge Properties (UE)
Major Shareholders
As of 2024, Urban Edge Properties (UE) has a diverse ownership structure consisting of institutional investors and individual shareholders. The largest shareholders include:
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | Approximately 90% | 112,384,212 |
| Individual Investors | Approximately 10% | 12,487,135 |
Institutional Ownership
The institutional ownership of Urban Edge Properties is significant, with several key players holding substantial stakes:
| Institution | Ownership Percentage | Number of Shares Held |
|---|---|---|
| The Vanguard Group | 22.1% | 27,500,000 |
| BlackRock, Inc. | 19.7% | 24,800,000 |
| State Street Corporation | 14.3% | 18,000,000 |
| Invesco Ltd. | 5.6% | 7,000,000 |
| Other Institutions | 28.3% | 35,084,212 |
Executive and Board Ownership
Members of the executive team and board of trustees also hold a notable number of shares:
| Name | Position | Shares Held |
|---|---|---|
| Jeffrey W. Berman | CEO | 1,250,000 |
| John M. Loughlin | Chairman | 600,000 |
| Other Executives | Various | 1,500,000 |
Recent Stock Performance
As of September 30, 2024, Urban Edge Properties' stock price was approximately $18.71 per share, reflecting a slight increase from the previous quarter:
| Date | Stock Price | Market Capitalization |
|---|---|---|
| June 30, 2024 | $18.50 | $2.28 billion |
| September 30, 2024 | $18.71 | $2.32 billion |
Distribution History
Urban Edge Properties has consistently paid dividends to its shareholders:
| Year | Quarterly Dividend | Total Annual Dividend |
|---|---|---|
| 2023 | $0.16 | $0.64 |
| 2024 | $0.17 | $0.68 (projected) |
Conclusion on Ownership Structure
The ownership of Urban Edge Properties is characterized by significant institutional investment, with the majority of shares held by large asset management firms. This institutional backing provides stability and confidence in the company’s financial practices and long-term growth strategy.
Urban Edge Properties (UE) Mission Statement
Mission Statement Overview
Urban Edge Properties aims to leverage its extensive portfolio of retail and mixed-use properties to create vibrant community spaces while maximizing shareholder value. The company focuses on strategic acquisitions and operational excellence in the retail sector, emphasizing sustainability and community engagement.
Core Values
- Community Engagement: Urban Edge prioritizes the development of properties that enhance local communities.
- Sustainability: The company is committed to environmentally responsible practices in its operations and developments.
- Customer Focus: Providing exceptional service to tenants and customers is central to the company's mission.
- Innovation: Urban Edge embraces technological advancements to improve property management and tenant experiences.
Strategic Goals
Urban Edge Properties has set several strategic goals to guide its operations through 2024:
- Expand its portfolio through targeted acquisitions of high-quality retail properties.
- Enhance tenant relationships and retention through dedicated support and services.
- Implement sustainable building practices across its properties to reduce environmental impact.
- Increase operational efficiency through technology and data analytics.
Financial Performance
As of September 30, 2024, Urban Edge Properties reported a net income of $43,936,000, compared to $27,957,000 for the same period in 2023. The total revenue for the nine months ended September 30, 2024, was $328,599,000, reflecting a growth from $300,340,000 in 2023.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Income (in thousands) | $43,936 | $27,957 |
| Total Revenue (in thousands) | $328,599 | $300,340 |
| Rental Revenue (in thousands) | $328,167 | $299,859 |
| Comprehensive Income (in thousands) | $43,413 | $28,694 |
| Earnings per Share - Basic | $0.35 | $0.23 |
| Earnings per Share - Diluted | $0.35 | $0.23 |
Recent Acquisitions
In 2024, Urban Edge Properties successfully acquired several properties to enhance its portfolio:
- Heritage Square, Watchung, NJ - Acquired for $33.8 million.
- Ledgewood Commons, Roxbury Township, NJ - Acquired for $83.2 million.
Debt and Financing
As of September 30, 2024, Urban Edge Properties had total mortgages payable of $1,515,379,000, with an average interest rate of approximately 6.03% for newly secured loans. The company also secured a 5-year, $50 million mortgage loan for Ledgewood Commons at a fixed rate of 6.03%.
| Debt Metric | Amount (in thousands) |
|---|---|
| Total Mortgages Payable | $1,515,379 |
| Average Interest Rate | 6.03% |
| New Mortgage Secured (Ledgewood Commons) | $50,000 |
Dividend Distribution
For the nine months ended September 30, 2024, Urban Edge Properties declared distributions of $0.51 per common share and OP Unit, compared to $0.48 for the same period in 2023.
| Distribution Metric | 2024 | 2023 |
|---|---|---|
| Distributions per Unit | $0.51 | $0.48 | Distributions per Share | $0.51 | $0.48 |
How Urban Edge Properties (UE) Works
Company Overview
Urban Edge Properties is a publicly traded real estate investment trust (REIT) that focuses on owning, operating, and redeveloping retail properties. As of September 30, 2024, the company operates a diverse portfolio of properties across the United States.
Financial Performance
For the nine months ended September 30, 2024, Urban Edge Properties reported significant financial metrics:
| Financial Metric | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Total Revenue | $328,599 | $300,340 | $28,259 |
| Net Income | $43,936 | $27,957 | $15,979 |
| Funds from Operations (FFO) | $141,382 | $138,762 | $2,620 |
| Net Operating Income (NOI) | $202,892 | $186,043 | $16,849 |
| Same-Property NOI | $161,459 | $155,882 | $5,577 |
Revenue Breakdown
The increase in total revenue is primarily attributed to:
- $16.7 million increase from property acquisitions, net of dispositions.
- $11.4 million increase in property rentals and tenant reimbursements due to rent commencements and contractual rent increases.
- $1.4 million decrease in rental revenue deemed uncollectible.
- $0.4 million increase in lease termination income.
Expenses Overview
For the same period, Urban Edge Properties faced the following expenses:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Depreciation and Amortization | $112,906 | $77,519 | $35,387 |
| Real Estate Taxes | $52,142 | $47,980 | $4,162 |
| Property Operating Expenses | $57,188 | $49,752 | $7,436 |
| Interest and Debt Expense | $62,004 | $52,430 | $9,574 |
Cash Flow Analysis
Urban Edge Properties' cash flow activities for the nine months ended September 30, 2024 included:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Net Cash Provided by Operating Activities | $100,738 | $102,852 | ($2,114) |
| Net Cash Used in Investing Activities | ($146,344) | ($86,475) | ($59,869) |
| Net Cash Used in Financing Activities | ($38,998) | ($67,227) | $28,229 |
Property Acquisitions and Dispositions
In 2024, Urban Edge Properties has been active in property transactions:
- Acquisition of Ledgewood Commons for $83.2 million.
- Disposal of two properties for a total of $34.8 million, resulting in a gain of $15.3 million.
Debt Management
As of September 30, 2024, Urban Edge Properties' debt management included:
- Outstanding mortgage debt consists of fixed-rate loans.
- Only variable rate exposure is related to a line of credit, which had no outstanding balance.
- Recent refinancing of the Yonkers Gateway Center with a new mortgage loan of $50 million at 6.30% interest.
Shareholder Distributions
For the three months ended September 30, 2024, Urban Edge Properties declared distributions of:
- $0.17 per common share/unit, compared to $0.16 per share/unit in 2023.
Market Position and Future Outlook
Urban Edge Properties continues to focus on enhancing its portfolio through strategic acquisitions and redevelopments, maintaining a strong financial foundation to support ongoing operations and growth initiatives.
How Urban Edge Properties (UE) Makes Money
Revenue Sources
Urban Edge Properties generates revenue primarily from rental income derived from its portfolio of retail and mixed-use properties. For the three months ended September 30, 2024, total revenue amounted to $112.4 million, reflecting an increase of $10.6 million compared to the same period in 2023. The components of this revenue include:
| Revenue Component | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Fixed Lease Revenue | $83,098 | $75,956 | $7,142 |
| Variable Lease Revenue | $29,164 | $25,776 | $3,388 |
| Other Income | $165 | $102 | $63 |
| Total Revenue | $112,427 | $101,834 | $10,593 |
Key Financial Metrics
For the nine months ended September 30, 2024, Urban Edge Properties reported total revenue of $328.6 million, which is an increase of $28.3 million from $300.3 million in the same period in 2023. The breakdown of relevant financial metrics is as follows:
| Financial Metric | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Total Revenue | $328,599 | $300,340 | $28,259 |
| Net Income | $43,936 | $27,957 | $15,979 |
| Depreciation and Amortization | $112,906 | $77,519 | $35,387 |
| Property Operating Expenses | $57,188 | $49,752 | $7,436 |
Operational Expenses
Urban Edge Properties incurs several key expenses that impact its profitability. For the nine months ended September 30, 2024, operating expenses totaled $259.7 million, which includes:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Real Estate Taxes | $52,142 | $47,980 | $4,162 |
| Interest and Debt Expense | $62,004 | $52,430 | $9,574 |
| General and Administrative Expenses | $27,829 | $27,903 | ($74) |
| Property Operating Expenses | $57,188 | $49,752 | $7,436 |
Net Operating Income (NOI)
Net Operating Income (NOI) is a critical metric for Urban Edge Properties, reflecting the profitability of its properties. For the nine months ended September 30, 2024, the NOI was $202.9 million, compared to $186.0 million for the same period in 2023, marking an increase of $16.9 million.
| Metric | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| NOI | $202,892 | $186,043 | $16,849 |
Acquisitions and Dispositions
Urban Edge Properties also enhances its revenue through strategic acquisitions and dispositions of properties. The company experienced a $16.7 million increase in revenue due to property acquisitions, net of dispositions, during the nine months ended September 30, 2024.
Debt Management
The company actively manages its debt portfolio, which significantly impacts its financial performance. As of September 30, 2024, Urban Edge Properties had a total interest and debt expense of $62 million for the nine months ended September 30, 2024. The company recognized a $21.4 million gain on extinguishment of debt during this period, reflecting its efforts to manage debt effectively.
Tax Implications
Urban Edge Properties is subject to corporate income taxes in Puerto Rico, which includes a flat tax rate of 18.5% and a maximum surcharge of 37.5%. For the nine months ended September 30, 2024, the income tax expense was $1.7 million, compared to $17.8 million for the same period in 2023, indicating a significant reduction due to prior refinancing impacts.
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Article updated on 8 Nov 2024
Resources:
- Urban Edge Properties (UE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Urban Edge Properties (UE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Urban Edge Properties (UE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.