Urban Edge Properties

A question and answer session will follow the formal presentation. If anyone should require operator assistance, 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, Jeff Olson. Please go ahead.

Good morning and welcome to Urban Edge Properties' first quarter 2025 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. Reconciliations of these measures to GAAP results are available in our earnings release and our supplemental disclosure package. 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 had a great first quarter. generating results that exceeded our expectations, reporting FFO as adjusted of 35 cents per share, a 6% increase over the first quarter of last year, and the highest quarterly earnings result in UE's 10-year history. Same property NOI increased 3.8% compared to the first quarter of last year and benefited from rents commenced from our signed but not open pipeline, improved recovery ratios, and better than expected collections. Leasing momentum continued at a good pace in the first quarter with the execution of 42 leases totaling 434,000 square feet. This included 18 new leases in the quarter amounting to 118,000 square feet with same space cash leasing spreads of 34%. Our tenant retention ratio remains high at 95%. Our progress in attracting a desirable mix of shop tenants continued as our shop occupancy grew to a new record of 92.4%. Our leasing pipeline remains strong. Since the tariffs were announced in early April, we have not seen any changes in retailer demand at our properties. However, the investment sales market is showing early signs of slowing down. On the debt side, there has been limited CMBS issuance since April. Life insurance companies and banks are still actively lending on shopping centers, generally with spreads that have increased 10 to 30 basis points. On the equity side, many REITs and foreign investors are pausing. Transactions with private buyers remain active. This is highlighted by our successful $25 million sale of eight acres of land at Bergen Town Center, which has been approved for 460 residential units. Additionally, we are under contract to sell two more properties for $41 million, which will bring our total dispositions to $66 million this year at a 5% weighted average cap rate. We plan to reinvest this capital into accretive acquisitions that will enhance our portfolio quality and growth rate. Now, turning to our 2025 outlook. We are reiterating our 2025 full year guidance of achieving FFO as adjusted of $1.37 to $1.42 per share, reflecting growth of 4% at the midpoint. We would have likely increased our guidance by two cents a share if not for the economic volatility in April. While we had a stronger start to the year than we expected, The economic uncertainty has led us to project a more conservative outlook for the back half of the year. We will revisit our assumptions again next quarter to see if an increase in guidance is appropriate. Our five points of differentiation should continue to drive our growth. First, our properties are concentrated in the DC to Boston corridor, the most densely populated supply-constrained region of the country. Our average three-mile population density of approximately 200,000 people is the highest in the sector. Second, our forecasted growth in net operating income is one of the most visible in the sector, rooted in our $25 million signed but not open pipeline, representing 9% of our current net operating income. We have a large redevelopment pipeline totaling $156 million of projects expected to generate a 14% return. Fourth, we are actively recycling capital by selling some of our non-core lower cap assets and redeploying that capital into accretive acquisitions. Over the past 18 months, we have acquired over $550 million in assets at a 7.2% cap rate and sold approximately $450 million at a 5.2% cap rate. And finally, our balance sheet is conservatively built for market disruption, considering we have no corporate debt other than $50 million currently drawn on our line. We have 31 individual non-recourse mortgages totaling $1.6 billion, isolating market risk to individual assets rather than at the corporate level. Our remaining 43 properties are unencumbered. I will now turn it over to our Chief Operating Officer, Jeff Muehle.