Urban Edge Properties

And welcome to the Urban Edge Properties second 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. Should anyone 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. You may begin.

Good morning and welcome to Urban Edge Properties' second quarter 2024 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, 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. Our second quarter results reflect our continued progress towards achieving the goals we outlined at our April 2023 investor day. We generated 7% earnings growth for the quarter and raised our 2024 FFO as adjusted guidance by half a penny per share at the midpoint, reflecting 5% expected growth for the year. We continue to believe that we will reach the high end of our 2025 FFO target of $1.31 to $1.39 per share, implying 5% to 6% growth over 2024. The two biggest drivers of our growth are strong operating fundamentals and accretive acquisitions. Starting with operations, occupancy increased to 96.5 percent, up 150 basis points over last year, and up 30 basis points sequentially. We executed 23 new leases during the quarter, a record high for the company. Notably, our shop occupancy increased by 520 basis points compared to the second quarter of 2023, and by 140 basis points sequentially. This shop growth is a direct result of the anchor repositioning efforts we have completed over the last several years and the ongoing demand for high-quality retail space. Net operating income should continue to grow at higher than historical averages as we deliver spaces to tenants with signed leases and execute our redevelopment pipeline. Our signed but not open pipeline amounts to $29 million of gross rent, which should add another 11% to net operating income. Also, our $170 million redevelopment pipeline is expected to yield an impressive 15% return. Turning to acquisitions, we have acquired $426 million of shopping centers since October 2023 at a 7.2% cap rate, primarily funded with $356 million of asset sales at a 5.2% cap rate. We are in late stage negotiations to acquire several high quality shopping centers in the DC to Boston corridor, which will likely be funded with a mix of capital sources, including low cap rate, single tenant asset dispositions, mortgage debt, and equity. Our balance sheet is in great shape with only 11% of our total debt maturing through 2026. We are very pleased with our results and the growth opportunities we see ahead. I will now turn it over to our Chief Operating Officer, Jeff Muellem.