Urban Edge Properties

Greetings and welcome to the Urban Edge Properties first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief 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, Areeba Ahmed. Investor Relations Associate. Thank you, Areeba. You may begin.

Good morning and welcome to Urban Edge Properties' first quarter 2024 earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer, Jeff Mualim, Chief Operating Officer, Mark Langer, Chief Financial Officer, Rob Milton, General Counsel, Scott Oster, EVP 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 results, financial condition, and business may differ. 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, including reference to our 2025 FFO as Adjusted Target. Reconciliations of these measures to GAAP results are available in our earnings release, supplemental disclosure package, and our April 2023 investor presentation in the Investors section of our website. At this time, it is my pleasure to introduce our Chairman and Chief Executive Officer, Jeff Olson.

Great. Thank you, Areeba, and good morning, everyone. We are off to a great start in 2024, and we are excited to build on our momentum, executing the growth strategy we outlined at our 2023 Investor Day. First quarter FFO as adjusted was 33 cents per share, a 4.4 percent increase compared to prior year. We executed our plan primarily due to higher NOI growth which was up 3.7 percent for our same property pool. We acquired two shopping centers within our core New Jersey markets, Heritage Square and Ledgewood Commons, for $117 million at an approximate cap rate of 8 percent. We financed these acquisitions with approximately $77 million of 6.1 percent fixed rate mortgage debt $38 million of asset sales at a 5% cap rate, and $18 million of equity issued under our ATM. These two transactions reflect ongoing momentum from the accretive deals we announced last year, including Shoppers World and Gateway Center in Boston, as Jeff will discuss momentarily. Since October of 2023, we have acquired four high-quality retail properties for $426 million at a weighted average cap rate of 7.2%, while disposing of non-core properties aggregating $356 million at a weighted average 5.2% cap rate. Based on our better-than-expected results, strong retail fundamentals and our recent acquisitions and dispositions, we have increased our 2024 FFO as adjusted guidance by 3 cents per share at the midpoint to $1.30 per share, implying 4% growth for this year, and we expect 2025 FFO as adjusted will be towards the high end of the $1.31 to $1.39 range implying 5% to 6% earnings growth. Leasing activity remains strong with same property occupancy up 140 basis points over last year with cash leasing spreads of 23% on new leases and overall leasing spreads of 10% when including renewals and options. Our signed but not open pipeline amounts to $27 million, or 10% of net operating income. Our $166 million redevelopment pipeline is expected to generate a 15% return. Over 90% of the GLA incorporated in this investment is pre-leased. Our balance sheet is in great shape. and our interest expense is more predictable because we completed almost $500 million of fixed-rate refinancings over the past year and now have only 11% of our total debt maturing through 2026. Our unencumbered asset pool has increased by $400 million to $1.5 billion in the past year. Our secure debt strategy eliminates risk at the corporate entity and the debt is easily assumable. Now is a good time to invest in the shopping center sector and Urban Edge in particular. Considering the leverage that retail landlords have today, coupled with our ability to create meaningful growth given our company's size, where even $117 million of acquisitions at an 8% cap rate moves the needle. Our high-quality portfolio is concentrated in the most densely populated supply-constrained markets of the country. The quality of our real estate, coupled with a scarcity of new supply and strong demand, should serve as a tailwind for the foreseeable future. I will now turn it over to our Chief Operating Officer, Jeff Muellem.