Urban Edge Properties

Greetings and welcome to Urban Edge Properties' fourth quarter 2021 earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jennifer Holmes, Chief Accounting Officer. Thank you. You may begin.

Good morning and welcome to Urban Edge Properties' fourth quarter earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer, Mark Langer, Chief Financial Officer, Chris Walminster, Chief Operating Officer, Danielle DeVita, EVP of Development, Herb Eilberg, Chief Investment Officer, and Rob Milton, General Counsel. Please note, today's discussion may contain forward-looking statements about the company's views of future events and financial performance. which are subject to numerous assumptions, risks, and uncertainties, and which the company does not undertake to update. Our actual future results, financial condition, and business may differ materially. Please refer to our filings with the SEC, which are also available on our website for more information about the company. In our discussion today, we will refer to certain non-GAAP financial measures. Reconciliations of these measures to GAAP results are available in our earnings release and supplemental disclosure package in the investor section of our website. At this time, it is my pleasure to introduce our Chairman and Chief Executive Officer, Jeff Olson.

Great. Thank you, Jen, and good morning, everyone. We are pleased with our fourth quarter results. FFO, as adjusted, increased to 27 cents a share, up 15% compared to prior year. driven by a 16% increase in same property NOI, including redevelopment. We also announced a 7% increase to our quarterly dividend to 16 cents per share based on our expected performance in 2022. The open air retail sector continues its upward trajectory, especially throughout our portfolio of well-located properties in markets with high population density. We executed record leasing volumes in 2021 with 678,000 square feet of new leases at a 10 percent cash rent spread. We increased same property leased occupancy to 94 percent, up 250 basis points compared to prior year, and up 120 basis points compared to the third quarter. The gap between our leased versus physical occupancy in our same property pool is now 380 basis points. Getting these new tenants open is a top priority and will be a significant contributor to NOI growth. In total, we have $22 million of future gross revenue coming from executed leases not yet rent commenced which represents approximately 10% of our current NOI. Our leasing pipeline is robust, with over 1 million square feet of space under negotiation, putting us on track to achieve same property leased occupancy of 96% by the end of 2022. Recall, our occupancy averaged 98% from 2015 to 2018, and we expect to reach that level again. Our fourth quarter leasing activity includes two exciting future additions to Bergen Town Center, Kohl's and Hackensack Meridian Health. Kohl's is relocating one of its top performing stores to open a flagship location at Bergen. Hackensack Meridian Health The largest healthcare organization in New Jersey executed an 80,000 square foot lease for a new medical office building to be built on a vacant land parcel. We are advancing our redevelopment pipeline with $219 million of active projects, up 81 million since last quarter, expected to generate an 8% unleveraged yield. Further upside is expected from leasing surrounding vacant space, securing higher rents from adjacent tenants, and from achieving cap rate compression. Our redevelopment projects are relatively straightforward, lower risk anchor repositioning investments, having an average cost of $10 million, and where we have executed leases on nearly 90% of the incremental NOI. Our development team is doing a great job opening projects on time and within budget, considering the inflationary pressures and supply chain challenges we are all facing. Once we complete our redevelopments underway, nearly 60% of our portfolio value will have undergone a substantial repositioning since we spun from Vornado. The durability of our rent roll and cash flows is much stronger today than it was seven years ago. Spaces previously occupied by Kmart, Toys R Us, National Wholesale Liquidators, Century 21, and other vacancies have now been replaced with tenants such as ShopRite, Amazon Fresh, Uncle Giuseppe's, Aldi, Marshalls, Burlington, Kohl's, and the conversion of a large retail box into industrial. The strength of these anchors provides the catalyst for shop leasing, as evidenced by the 240 basis point increase in our shop occupancy over the past year to 83%, which we believe can be meaningfully higher as we execute our leasing plan. Transforming assets at this scale takes a deep bench of talent and the balance sheet to support it. We are proud that we have both. A key component of our growth strategy includes acquiring high-quality infill real estate with attractive in-place cash flow and future growth potential. In December, we acquired Woodmore Town Center, a 712,000 square foot open-air center in Glen Arden, Maryland, for $193 million, providing a leverage return of approximately 11%. The property is 97% leased and features a strong tenant lineup, including Wegmans, Costco, and Best Buy. This asset is an integral part of the surrounding community and we believe we can improve merchandising and operations over time to enhance tenant sales and grow rental revenue. Overall, we feel great about the current state of retail, the leasing and development progress that is underway, and our ability to grow our platform through quality acquisitions. I am proud of our team who has demonstrated resilience during challenging times while working cohesively to execute our strategic plan. We are excited to welcome our newest board member, Norman Jenkins. Norm brings over 25 years of experience in the real estate industry and currently serves as the president and CEO of Capstone Development. Finally, as part of our continued effort to increase communication with the investment community, we plan to host quarterly earnings calls going forward. I will now turn it over to Chris Wildminster, our Chief Operating Officer. Chris.