Urban Edge Properties

Greetings and welcome to the Urban Edge Properties third quarter 2023 earnings conference call. At this time, all speakers are in a participant mode. A brief question and answer session will follow the formal presentation. If anyone should require operating assistance, please press star zero on your telephone keypad. As a reminder, this conference has been recorded. It is now my pleasure to introduce your host, Eitan Blumen. Thank you. You may begin.

Good morning and welcome to Urban Edge Properties 2023 Third Quarter Earnings Conference Call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer, Jeff Mualem, Chief Operating Officer, Mark Langer, Chief Financial Officer, Rob Milton, General Counsel, Scott Oster, Executive Vice President and Head of Leasing, and Andrea Drazen, Chief Accounting Officer. 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. Jeff Olson Great.

Thank you, Eitan, and good morning. Today, we are excited to be holding our earnings call from Puerto Rico. At our investor day in April of this year, we had a slide noting the sun is shining in Puerto Rico. That is true on many levels, including the transformations underway on our two properties here on the island, in addition to our overall operating performance and the progress we have made on our capital recycling initiatives. Starting with our results, we had one of the most productive quarters in our company's history. There are at least seven noteworthy accomplishments. First, we reported FFO as adjusted of 32 cents per share, up 7% compared to last year, and well above our budget, driven by higher rent, lower operating costs, and lower G&A. Second, leasing activity remains strong, with same property occupancy up 130 basis points over last year, and new leasing spreads of 26%. Our signed but not yet open pipeline amounts to $27 million, or 11% of net operating income, one of the highest rates in the industry. Third, we acquired two of the most prominent shopping centers in Boston. Shoppers World and Gateway Center for $309 million at a cap rate of approximately 7%. It is rare to have the opportunity to acquire assets of this quality and scale, especially in Boston, which now represents approximately 10% of our total value. Chopper's World is one of the most frequented open-air shopping centers in the Northeast, with over 11 million site visits in 2022. It is a large property encompassing 92 acres and 758,000 square feet of gross leaseable area. The property is in the center of the Golden Triangle, a dominant retail node in the Boston area. It is anchored by Best Buy, Nordstrom Rack, CJ Maxx, Marshalls, HomeSense, Sierra Trading, Kohl's, AMC, and a new grocer which is expected to open in July 2025. HeatWave Center comprises 639,000 square feet and has a three mile population of over 417,000 people. with annual average household incomes of $106,000. The property is only three miles from downtown Boston and sits on an 89-acre site with over 3,000 parking spaces in a rapidly densifying area. Tenants include Target, Costco, and Home Depot. Our fourth accomplishment was selling our East Hanover warehouse portfolio for $218 million at a 4.9% cap rate based on 2024 NOI in a 1031 transaction using net proceeds for the Boston acquisition. Fifth, we are in advanced negotiations on the sale of over $100 million of industrial, self-storage, and single-tenant retail properties at attractive pricing with cap rates in the mid to high 5% range. We are also in discussions to sell our residential land at Burgantown Center. Sixth, we obtained a new 10-year $82 million 6.6% mortgage on Las Catalinas while exercising a discounted payoff option on the prior $117 million mortgage resulting in a $43 million gain. And finally, we increased our earnings guidance for 2023 FFO as adjusted by six cents per share at the midpoint based on our strong third quarter results and our expectations for the balance of the year. This list reflects tremendous execution from every one of our business units. I am proud of our team's accomplishments. These results and our continued momentum in the fourth quarter give us confidence that we are on track to achieve our targeted FFO of $1.35 in 2025 as outlined at our Investor Day in April. I will now turn it over to our Chief Operating Officer, Jeff Muehlen.