Urban Edge Properties (UE) Q2 2024 earnings summary

Executive summary

• Achieved 7% earnings growth for Q2 2024, with net income rising to $32.0 million from $10.6 million in Q2 2023 and FFO as adjusted up 7% year-over-year.

• Portfolio as of June 30, 2024, included 75 properties totaling 17.2 million square feet, with shop occupancy reaching 90% and a target of 91%+ by year-end.

• Growth driven by strong operating fundamentals, record leasing activity with 47 deals in Q2, and accretive acquisitions in core markets.

• Raised 2024 FFO as adjusted guidance, now expecting 5% growth for the year and on track for the high end of the 2025 FFO target.

• Gains from asset sales and debt extinguishment, including a $21.7 million gain from Kingswood Center foreclosure, contributed to results.

Financial highlights

• FFO as adjusted was $0.32 per share in Q2 2024, with FFO per diluted share up to $0.49 from $0.31 in Q2 2023.

• Total revenue for Q2 2024 was $106.5 million, up $7.5 million year-over-year, driven by acquisitions and higher rents.

• Same-property NOI growth was 3.6% for Q2 2024 and 4.0% year-to-date; including redevelopment, growth was 2.9% and 3.9%, respectively.

• Shop occupancy increased by 520 basis points year-over-year and 140 basis points sequentially.

• Quarterly dividend of $0.17 per share/unit declared for Q2 2024.

Outlook and guidance

• Raised the low end of 2024 FFO as adjusted per share guidance by $0.02, with full-year FFO as adjusted expected at $1.29–$1.32 per share.

• Same-property NOI growth guidance midpoint increased to 5.25% for 2024, with expected range of 4.5%–6.0%.

• Signed but not open (SNO) pipeline expected to add $29 million in gross rent, boosting NOI by 11%.

• Guidance reflects $117 million of acquisitions and $37 million of dispositions closed to date; no further transactions assumed.

• Management expects to fund $109.2 million in remaining costs for 23 active development, redevelopment, or anchor repositioning projects.