UE — Urban Edge Properties

Urban Edge Properties Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• FFO as Adjusted: $1.43 per share for the full year, up 6% from 2024.
• Fourth Quarter FFO as Adjusted: $0.36 per share.
• Same Property NOI Growth: 5% for the full year; 2.9% in Q4.
• Occupancy Rates: Year-end same property lease occupancy at 96.7%, with anchor occupancy at 97.5% (down 50 bps) and small shop occupancy at a record 92.6% (up 170 bps).
• Liquidity: Total liquidity of $849 million, with no amounts drawn on the line of credit.

2. Strategic Updates and Business Highlights:

• Executed 58 new leases in 2025, totaling over 360,000 square feet, with a record same space cash rent spread of 32%.
• Continued strong demand for high-quality retail spaces, with expectations for new lease spreads to remain above 20% in 2026.
• Completed 14 projects in 2025, generating unlevered yields of 19%, with $166 million of redevelopment projects underway expected to yield 14%.
• Acquired a property in New Jersey for approximately $54 million, expected to close by Q1 2026.

3. Forward Guidance and Outlook:

• 2026 FFO as Adjusted Guidance: $1.47 to $1.52 per share, reflecting 4.5% growth at the midpoint.
• Same Property NOI Growth Guidance: 2.75% to 3.75%.
• Anticipated NOI growth of approximately 5% in 2027, primarily driven by executed leases and contractual rent increases.
• Dividend increased by 11% to an annualized rate of $0.84 per share.

4. Bad News, Challenges, or Points of Concern:

• Decline in anchor occupancy attributed to taking back space from a tenant, with expectations to re-tenant at a strong spread.
• Higher snow removal expenses negatively impacted same property NOI growth by 110 basis points in Q4.
• Anticipated fallout from the closure of SACS at East Hanover and the impact of prior year collections affecting 2026 growth.
• Competitive pressures in the acquisition market, with cap rates continuing to compress, making it challenging to find attractive valuations.

5. Notable Q&A Insights:

• Management expressed confidence in achieving a steady state of shop occupancy around 94-96%, with ongoing opportunities to improve leasing terms.
• The acquisition market remains competitive, with a focus on capital recycling to enhance internal growth by exchanging lower growth assets for those with better potential.
• Concerns about tenant fallout were addressed, with management noting improved tenant stability compared to the previous year.
• Discussions highlighted the potential for redevelopment projects to drive significant growth, particularly at Bruckner, with expectations for substantial NOI increases in the coming years.

Overall, Urban Edge Properties demonstrated strong financial performance in 2025, with a positive outlook for 2026 driven by strategic leasing and redevelopment initiatives, despite facing some challenges related to occupancy and competitive pressures in the market.