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What changed in Urban Edge Properties's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Urban Edge Properties's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+243 added−242 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-14)

Top changes in Urban Edge Properties's 2023 10-K

243 paragraphs added · 242 removed · 184 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have an ESG Steering Committee (the “Steering Committee”) comprised of executives, senior leadership and other personnel of the Company. The Steering Committee meets periodically and is focused on setting, implementing, tracking, measuring, and communicating our progress related to ESG initiatives.
Biggest changeThe Company’s Board of Trustees oversees our ESG program with initial oversight responsibilities delegated to the Corporate Governance and Nominating Committee. Internally, we have an ESG Steering Committee (the “Steering Committee”) comprised of executives, senior leadership and other personnel of the Company.
The Company is subject to certain foreign and state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income and comprehensive income. In addition, the Company’s taxable REIT subsidiary (“TRS”) is subject to income tax at regular corporate rates. Supplemental U.S.
The Company is subject to certain foreign, state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income and comprehensive income. In addition, the Company’s taxable REIT subsidiary (“TRS”) is subject to income tax at regular corporate rates. Supplemental U.S.
Shareholders .” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S. federal withholding rate that we determine could apply. 5 The new Treasury Regulations also provide new guidance regarding qualified foreign pension funds.
Shareholders .” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S. federal withholding rate that we determine could apply. The Treasury Regulations also provide new guidance regarding qualified foreign pension funds.
ITEM 1. BUSINESS The Company Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland REIT that manages, develops, redevelops, and acquires retail real estate, primarily in the Washington, D.C. to Boston corridor.
ITEM 1. BUSINESS The Company Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland REIT that owns, manages, acquires, develops, and redevelops retail real estate, primarily in the Washington, D.C. to Boston corridor.
This program is designed to allow employees to not only gain a better understanding of culture issues tied to race, gender, and sexual orientation, but also drive engagement, build camaraderie, and learn from different perspectives.
This 4 program is designed to allow employees to not only gain a better understanding of culture issues tied to race, gender, and sexual orientation, but also drive engagement, build camaraderie, and learn from different perspectives.
Additionally, we have three board committees made up of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, each of which addresses risks specific to their respective 3 functional responsibilities and works closely with the Board of Trustees.
Additionally, we have three board committees made up of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, each of which addresses risks specific to their respective functional responsibilities and works closely with the Board of Trustees.
We aim to create an equitable workplace for all, and our CEO has signed the CEO Diversity and Inclusion Action Pledge on behalf of our Company, joining thousands of other CEOs and peers across the country to cultivate a trusting environment where our employees feel comfortable and are empowered to have discussions about diversity and inclusion.
We aim to create an equitable workplace for all, and our CEO has signed the CEO Diversity and Inclusion Action Pledge on behalf of our Company, joining thousands of other CEOs and peers across the country to cultivate a trusting environment where our employees feel comfortable and are empowered to have discussions about DE&I.
Available Information Copies of our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, including exhibits, and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners of us, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website (www.uedge.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
Available Information Copies of our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, including exhibits, and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners of us, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Exchange Act, are available free of charge through our website (www.uedge.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
The information on our website is not incorporated by reference in this Annual Report on Form 10-K. Our headquarters are located at 888 Seventh Avenue, New York, NY 10019. 4 Significant Tenants None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2022, 2021 and 2020.
The information on our website is not incorporated by reference in this Annual Report on Form 10-K. Our headquarters are located at 888 Seventh Avenue, New York, NY 10019. Significant Tenants None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2023, 2022 and 2021.
Through our wellness and DE&I programs, health and safety protocols and town hall meetings with all employees, among other initiatives, we continually strive to provide a workplace environment where employees are informed, engaged, feel empowered and can succeed. Further information on our corporate responsibility practices can be found on our website in the ESG section.
Through our wellness programs, DE&I initiatives, and town hall meetings with all employees, among other initiatives, we continually strive to provide a workplace environment where employees are informed, engaged, feel empowered and can succeed. Further information on our corporate responsibility practices can be found on our website in the ESG section.
Environmental From an environmental perspective, we have implemented and plan to continue to implement policies and practices with the goal of supporting the continued reduction of energy (thereby reducing greenhouse gas emissions), water, and waste production across the portfolio.
Environmental From an environmental perspective, we have implemented and plan to continue to implement policies and practices with the goal of supporting the continued reduction of energy, reducing greenhouse gas emissions and water consumption, and improving waste recycling across the portfolio.
The Home Depot, Inc. is our largest tenant and accounted for approximately $21.4 million, or 5.4%, of our total revenue for the year ended December 31, 2022.
The Home Depot, Inc. is our largest tenant and accounted for approximately $21.5 million, or 5.2%, of our total revenue for the year ended December 31, 2023.
As a part of this pledge, the Company has created a Days of Understanding initiative which provides different platforms such as a book club or a movie screening as a way to encourage our team to have open discussions on issues of diversity, equity and inclusion.
As a part of this pledge, the Company has created a Days of Understanding initiative which provides different platforms such as a book club or a movie screening as a way to encourage our team to have open discussions on issues of DE&I.
We are committed to providing a better shopping experience for our customers by spending capital to redevelop our centers, which also results in the creation of new jobs in construction and retail.
We are committed to providing a better shopping experience for our tenants’ customers and servicing nearby communities by spending capital to improve our centers, which also results in the creation of new jobs in construction and retail.
We will continue to explore opportunities throughout our portfolio to achieve similar upgrades in tenancy, to densify sites where feasible and to repurpose certain retail space to non-retail uses. Invest in target markets.
We will continue to explore opportunities throughout our portfolio to achieve similar upgrades in tenancy, to densify sites where feasible and to repurpose certain retail space to its highest and best use. Invest in target markets.
Our Corporate Governance Guidelines are re-evaluated annually, taking into account changing circumstances to ensure that the best interests of the Company and our shareholders are met. We maintain additional policies including our Code of Ethics, Conflict of Interest Policy, and Whistleblower Policy, on which all employees are trained. We are subject to federal, state and local regulations, including environmental regulations.
Our Corporate Governance Guidelines are re-evaluated annually, taking into account changing circumstances to ensure that the best interests of the Company and our shareholders are met. We maintain additional policies including our Code of Business Conduct and Ethics, Conflict of Interest Policy, Human Rights Policy, and Whistleblower Policy, on which all employees are trained.
As of the date of this Report on Form 10-K, we are not aware of any material costs of complying with government regulations, including environmental regulations, that would have a material adverse effect on our overall business, financial condition or results of operations.
Based on these assessments, we have accrued costs for remediation for environmental contamination at certain properties. As of the date of this Report on Form 10-K, we are not aware of any material costs of complying with government regulations, including environmental regulations, that would have a material adverse effect on our overall business, financial condition or results of operations.
Our efforts, like those mentioned above, are some of the many reasons Urban Edge Properties was named one of the best places to work in New Jersey by NJBIZ Magazine in 2022. The annual program identifies and recognizes the best employers in the state of New Jersey.
Our efforts, like those mentioned above, are some of the many reasons Urban Edge Properties was named one of the best places to work in New Jersey by NJBIZ Magazine in 2023, the second consecutive year we have received this recognition. The annual program identifies and recognizes the best employers in the state of New Jersey.
Our portfolio is currently comprised of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million square feet (“sf”) with a consolidated occupancy rate of 90.3%. For additional information on recent business developments, see Part II, Item 7.
Our portfolio is currently comprised of 71 shopping centers, two outlet centers, two malls and one industrial property totaling approximately 17.1 million square feet (“sf”) with a consolidated occupancy rate of 91%. For additional information on recent business developments, see Part II, Item 7.
Initiatives we have taken include the installation of energy-efficient roofing, LED lighting retrofits, high efficiency HVAC systems, electric vehicle charging stations and waste recycling and management. Additionally, we continue to explore solar and alternative energy opportunities to further reduce our consumption and carbon footprint.
Initiatives we have taken include the installation of energy-efficient roofing, LED lighting retrofits, high efficiency HVAC systems, electric vehicle charging stations and waste recycling and management programs. We are also exploring solar and alternative energy opportunities to further reduce our consumption and greenhouse gas emissions.
Develop and redevelop assets to their highest and best use. Our existing portfolio presents considerable opportunity to generate additional income at attractive returns by redeveloping underutilized existing space, developing new space through expanding our properties and developing pad sites, and incorporating non-retail uses such as industrial, multifamily, office, self-storage and other uses.
Develop and redevelop assets to their highest and best use. Our existing portfolio presents considerable opportunity to generate additional income at attractive returns by redeveloping underutilized existing space, developing new space through expanding our properties and developing pad sites.
The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S. shareholder that is attributable to the sale or exchange of a U.S. real property interest, unless it is paid to a withholding qualified holder.
The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S. shareholder that is attributable to the sale or exchange of a U.S. real property interest, unless it is paid to a withholding qualified holder. 5 In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of FIRPTA withholding under clause (iii) above the withholding rate is currently 21%.
Additionally, we are deliberate in our leasing approach by adding necessary retailers to neighborhoods lacking vital resources and those that appeal to the respective communities where the properties are located. Governance Our corporate governance standards and policies aim to promote ethical conduct, fair dealing, transparency and accountability. The Company is governed by a nine-member board comprised primarily of independent trustees.
Additionally, we are deliberate in our leasing approach by aiming to add necessary retailers to neighborhoods lacking vital resources and those that appeal to the respective communities where the properties are located. Governance Our corporate governance standards and policies aim to promote ethical conduct, fair dealing, transparency and accountability.
The Board of Trustees is focused on independence, diversity of thought, experience and ethical leadership, and is critical in the oversight of our risk-management processes.
The Company is governed by a nine-member board comprised primarily of independent trustees. The Board of Trustees is focused on independence, diversity of thought, experience and ethical leadership, and is critical in the oversight of our risk-management processes.
As of December 31, 2022, we have $216 million of active development, redevelopment, and anchor repositioning projects, of which $159.7 million remains to be funded. These projects are expected to generate an approximate 12% unleveraged yield.
As of December 31, 2023, we had $168.1 million of active development, redevelopment, and anchor repositioning projects, of which $112.2 million remains to be funded. These projects are expected to generate an approximate 15% unleveraged yield.
Our future success will depend, in part, on our ability to continue to attract, hire, and retain qualified personnel. Accordingly, we strive to offer competitive salaries and employee benefits to all employees and monitor salaries in our market areas.
Human Capital As of December 31, 2023, we had 109 employees. We believe that our people are our most valuable asset. Our future success will depend, in part, on our ability to continue to attract, hire, and retain qualified personnel. Accordingly, we strive to offer competitive salaries and employee benefits to all employees and monitor salaries in our market areas.
The Steering Committee has developed a comprehensive suite of environmental, social, and governance policies that inform and guide our ESG approach and drive our ESG goals forward.
The Steering Committee meets periodically and is focused on setting, implementing, tracking, measuring, and communicating our progress related to ESG initiatives. The Steering Committee has developed a comprehensive suite of ESG policies that inform and guide our ESG approach and drive our ESG goals forward.
Diversity, equity and inclusion (“DE&I”) initiatives are an integral part of our culture. We believe that a diverse workforce and an inclusive culture promotes growth, both personally and professionally, and is an important aspect in our ability to attract and retain talented employees.
We believe that a diverse workforce and an inclusive culture promotes growth, both personally and professionally, and is an important aspect in our ability to attract and retain talented employees. All employees are required to complete trainings on DE&I which cover a range of topics including best practices and education on unconscious bias.
Repurposing retail real estate with high-quality retailers, with a focus on grocers, and incorporating other uses including industrial, residential, self-storage, and medical, are increasingly important to our business plan.
Repurposing retail real estate with high-quality retailers, with a focus on grocers, department stores, discounters, entertainment offerings, and elevated food offerings is increasingly important to our business plan.
We have aligned our sustainability practices in accordance with the Global Reporting Initiative (“GRI”) standards and commensurate with the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-Related Financial Disclosures (“TCFD”) frameworks.
We have aligned our sustainability practices in accordance with the Global Reporting Initiative standards as well as the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures frameworks. On an annual basis, we publish an ESG Report and complete a Global Real Estate Sustainability Benchmarks submission to continue to measure our progress against peers.
Each month there is a theme with associated activities and employee incentives including the ability to earn additional money for health savings accounts. We understand the importance of work/life balance and allow employees the flexibility to maintain a hybrid in-office and remote working schedule.
Each month there is a theme with associated activities, challenges, and webcasts to promote growth and learning, as well as employee incentives including the ability to earn additional money for health savings accounts.
We are committed to maintaining sustainable operations and believe that our long-term sustainability goals will provide positive financial and environmental outcomes for shareholders, tenants, employees and the communities in which we invest. Social Our community involvement includes donations to various charitable organizations, hospitals, and relief funds as well as food and clothing drives.
We are committed to maintaining sustainable operations and believe that our long-term sustainability goals will align with positive outcomes for shareholders, tenants, employees and the communities in which we invest. We are subject to federal, state and local regulations, including environmental regulations. Each of our properties has been subjected to varying degrees of environmental assessment at various times.
In addition, we continue to partner with organizations like Relief Access Program for the Bronx (“RAP4Bronx”), a non-profit organization responsible for delivering meals to those suffering from food insecurity in the Bronx.
We continue to partner with Relief Access Program for the Bronx (“RAP4Bronx”) and Grassroots Grocery, two non-profit organizations focused on delivering meals to those affected by food insecurity in the five boroughs of NYC, by donating vacant space that serves as a warehouse and distribution hub for both organizations.
On an annual basis, we publish an ESG Report and complete a Global Real Estate Sustainability Benchmarks (“GRESB”) submission to continue to measure our progress against peers. We routinely reassess our plans and policies to evaluate compliance with regional and national requirements as well as industry best practices.
Additionally, we have conducted a materiality assessment to determine which ESG issues matter most to our stakeholders, tenants and employees. We routinely reassess our plans and policies to evaluate compliance with regional and national requirements as well as industry best practices.
See “Risks Related to Environmental Liability and Regulatory Compliance” in Part 1, Item 1A "Risk Factors" for further information regarding our risks related to government regulations. Human Capital At December 31, 2022, we had 115 employees. We believe that our people are our most valuable asset.
See “Risks Related to Environmental Liability and Regulatory Compliance” in Part 1, Item 1A “Risk Factors” for further information regarding our risks related to government regulations. 3 Social Our community involvement includes donations to various charitable organizations, hospitals, and relief funds as well as hosting community focused events at our properties that often include food and clothing drives.
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Many of these organizations and drives directly benefit the people and neighborhoods in which our properties are located. During 2022, the Company joined the NCSY Relief Missions, a Northern New Jersey based youth organization, in an immersive community engagement effort to help those affected by recent hurricane damage in Puerto Rico, near our property The Outlets at Montehiedra.
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We recognize that climate change poses a material risk to the real estate industry and understand the importance of assessing the physical and transitional risks that can affect each property.
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Our contributions towards RAP4Bronx include the donation of vacant space that serves as a warehouse and distribution hub for the organization, as well as monetary donations from the Company and our employees.
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We have completed a climate-related risk assessment of our portfolio, which our management team uses to identify asset-level exposure to climate-related risks and assess application of adaptation tactics and resilience measures to mitigate various risks.
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Each of our properties has been subjected to varying degrees of environmental assessment at various times. Based on these assessments, we have accrued costs for remediation for environmental contamination at certain properties.
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Our tenants also play a vital role in maximizing the impact we make, and as part of our initiatives we have created a tenant criteria manual focused on improving building energy and water efficiency that serves as a guideline for tenants undertaking construction projects at our properties to ensure they align with sustainable practices and our ESG objectives.
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We provide all employees with the equipment and resources necessary to work and perform their duties in a remote setting. We have implemented enhanced cleaning protocols within our offices and our properties to promote employee health and safety, which include cleaning and disinfecting high-touch surfaces daily, providing hand sanitizer and personal protective equipment such as face masks.
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Further, we have implemented green lease language into all new leases which includes several clauses designed to promote sustainability measures. The Green Lease Leaders program recognized these efforts as we received a Green Lease Leader award, developed by the Institute for Market Transformation and the U.S. Department of Energy’s Better Buildings Alliance.
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All employees are required to complete trainings on DE&I which cover a range of topics including best practices and education on unconscious bias.
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Many of these organizations and drives directly benefit the people and neighborhoods in which our properties are located. During 2023, the Company launched UE Cares, our volunteer initiative, which has partnered with local organizations to give back to our communities. Some of these local organizations include Helping Hands Food Pantry, Hackensack River Keeper, and St. John’s Soup Kitchen.
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In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of FIRPTA withholding under clause (iii) above the withholding rate is currently 21%.
Added
Additionally, this year the Company hosted a blood drive, partnering with Vitalant Blood Donation of Paramus, at Bergen Town Center, open to both employees and the general public.
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We allow employees the flexibility to maintain a hybrid in-office and remote working schedule to promote a healthy work-life balance while continuing to maximize engagement, collaboration, and efficiency. Diversity, equity and inclusion (“DE&I”) initiatives are an integral part of our culture.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNotably, as of December 31, 2022, one of our New York metropolitan area properties, The Outlets at Bergen Town Center, in Paramus, NJ, generated in excess of 10% of our annualized base rent. Collectively, our New York metropolitan area properties in the aggregate generated approximately 73% of our annualized base rent as of December 31, 2022.
Biggest changeCollectively, our New York metropolitan area properties in the aggregate generated approximately 67% of our annualized base rent as of December 31, 2023. Real estate markets are subject to economic downturns, and we cannot predict the economic conditions in the New York metropolitan area in either the short-term or long-term.
To dispose of low basis deferral or tax- 10 protected properties efficiently we from time to time use like-kind exchanges, which are intended to qualify for non-recognition of taxable gain, but can be difficult to consummate and result in the property for which the disposed assets are exchanged inheriting their low tax bases and other tax attributes (including tax protection covenants).
To dispose of low basis deferral or tax-protected properties efficiently we from time to time use like-kind exchanges, which are intended to qualify for non-recognition of taxable gain, but can be difficult to consummate and result in the property for which the disposed assets are exchanged 10 inheriting their low tax bases and other tax attributes (including tax protection covenants).
There is a separate requirement to distribute net capital gains or pay a corporate level tax in lieu thereof. Our access to debt or equity financing depends on the willingness of third parties to lend to or to make equity investments and on conditions in the capital markets generally.
There is a separate requirement to distribute net capital gains or pay a corporate level tax in lieu thereof. Our access to debt or equity financing depends on conditions in the capital markets generally and the willingness of third parties to lend to or to make equity investments.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” included in Part II, Item 7. in this Annual Report on Form 10-K and the Notes to Consolidated Financial Statements included in Part II, Item 8. in this Annual Report on Form 10-K.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” included in Part II, Item 7. in this Annual Report on Form 10-K and the Notes to Consolidated Financial Statements included in Part II, Item 8. in this Annual Report on Form 10-K.
Certain provisions of Maryland law, may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our shares, including: • “Business combination” provisions that, subject to certain exceptions, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting shares at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter impose fair price or super majority shareholder voting requirements on these combinations; and 16 • “Control share” provisions that provide the holders of “control shares” of a company (defined as shares that, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise voting power in the election of trustees within one of three increasing ranges) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of the voting power of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to their control shares, except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of Maryland law, may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our shares, including: • “Business combination” provisions that, subject to certain exceptions, prohibit certain business combinations between us and an “interested shareholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting shares at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the shareholder becomes an interested shareholder, and thereafter impose fair price or super majority shareholder voting requirements on these combinations; and • “Control share” provisions that provide the holders of “control shares” of a company (defined as shares that, when aggregated with other shares controlled by the shareholder, entitle the shareholder to exercise voting power in the election of trustees within one of three increasing ranges) acquired in a “control share acquisition” (defined as the 16 direct or indirect acquisition of ownership or control of the voting power of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to their control shares, except to the extent approved by our shareholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
A number of factors could negatively affect, or result in fluctuations in, the prices or trading volume of equity securities, including: • actual or anticipated changes in our operating results and changes in expectations of future financial performance; • our operating performance and the performance of other similar companies; • changes in the real estate industry, and in the retail industry, including growth in e-commerce, catalog companies and direct consumer sales; • our strategic decisions, such as acquisitions, dispositions, spin-offs, joint ventures, strategic investments or changes in business strategy; 17 • equity issuances or buybacks by us or the perception that such issuances or buybacks may occur or adverse reaction market reaction to any indebtedness we incur; • changes in the interest rate environment and/or the impact of rising inflation; • decreases in our distributions to shareholders; • changes in real estate valuations or market valuations of similar companies; • additions or departures of key management personnel; • publication of research reports about us or our industry by securities analysts, or negative speculation in the press or investment community; • the passage of legislation or other regulatory developments that adversely affect us, our tax status, or our industry; • changes in accounting principles; • our failure to satisfy the listing requirements of the NYSE; • our failure to comply with the requirements of the Sarbanes‑Oxley Act; • our failure to qualify as a REIT; and • general market conditions, including factors unrelated to our performance.
A number of factors could negatively affect, or result in fluctuations in, the prices or trading volume of equity securities, including: • actual or anticipated changes in our operating results and changes in expectations of future financial performance; • our operating performance and the performance of other similar companies; • changes in the real estate industry, and in the retail industry, including growth in e-commerce, catalog companies and direct consumer sales; • our strategic decisions, such as acquisitions, dispositions, spin-offs, joint ventures, strategic investments or changes in business strategy; • equity issuances or buybacks by us or the perception that such issuances or buybacks may occur or adverse reaction market reaction to any indebtedness we incur; 17 • changes in the interest rate environment and/or the impact of rising inflation; • decreases in our distributions to shareholders; • changes in real estate valuations or market valuations of similar companies; • additions or departures of key management personnel; • publication of research reports about us or our industry by securities analysts, or negative speculation in the press or investment community; • the passage of legislation or other regulatory developments that adversely affect us, our tax status, or our industry; • changes in accounting principles; • our failure to satisfy the listing requirements of the NYSE; • our failure to comply with the requirements of the Sarbanes‑Oxley Act; • our failure to qualify as a REIT; and • general market conditions, including factors unrelated to our performance.
A breach or significant and extended disruption in the functioning of our systems, including our primary website, may damage our reputation and cause us to lose customers, tenants and revenues, generate third-party claims, result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information, and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues, and we may not be 13 able to recover these expenses in whole or in any part from our service providers, responsible parties, or insurance carriers which could have a material adverse effect on our business and operations.
A breach or significant and extended disruption in the functioning of our systems, including our primary website, may damage our reputation and cause us to lose customers, tenants and revenues, generate third-party claims, result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information, and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues, and we may not be able to recover these expenses in whole or in any part from our service providers, responsible parties, or insurance carriers which could have a material adverse effect on our business and operations.
We maintain comprehensive, all-risk property and rental value insurance coverage on our properties, however losses resulting from a natural disaster may be subject to a deductible or not fully covered and such losses could adversely affect our cash flow, financial condition and results of operations. Some of our potential losses may not be covered by insurance.
We maintain comprehensive, all-risk property and rental value insurance coverage on our properties, however losses resulting from a natural disaster may be subject to a deductible or not fully covered and such losses could adversely affect our cash flow, financial condition and results of operations. 12 Some of our potential losses may not be covered by insurance.
Consequently, there can be no assurance that we will be able to make distributions at the anticipated distribution rate or any other rate. Risks related to Section 1031 Exchanges. From time to time we may dispose of properties in transactions that are intended to qualify as “like kind exchanges” under Section 1031 of the Code (“Section 1031 Exchanges”).
Consequently, there can be no assurance that we will be able to make distributions at the anticipated distribution rate or any other rate. 15 Risks related to Section 1031 Exchanges. From time to time we may dispose of properties in transactions that are intended to qualify as “like kind exchanges” under Section 1031 of the Code (“Section 1031 Exchanges”).
We maintain numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber security, workers’ compensation and automobile-related liabilities. However, all such policies are subject to the terms, conditions, exclusions, deductibles and sub-limits, among other limiting factors.
We maintain numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber, workers’ compensation and automobile-related liabilities. However, all such policies are subject to the terms, conditions, exclusions, deductibles and sub-limits, among other limiting factors.
In addition to the risks associated with real estate investments in general as described elsewhere, the risks associated with future development and redevelopment activities include: • expenditure of capital and time on projects that may never be completed; • failure or inability to obtain financing on favorable terms or at all; • inability to secure necessary zoning or regulatory approvals; 9 • higher than estimated construction or operating costs, including labor and material costs; • increased costs related to inflation, including higher costs of construction and financing; • inability to complete construction on schedule due to a number of factors, including inclement weather, labor disruptions, construction delays, delays or failure to receive zoning or other regulatory approvals, acts of terror or other acts of violence, or natural disasters (such as fires, seismic activity or floods); • significant time lag between commencement and stabilization resulting in delayed returns and greater risks due to fluctuations in the general economy, shifts in demographics and competition; • decrease in customer traffic during the redevelopment period causing a decrease in tenant sales; • inability to secure key anchor or other tenants at anticipated pace of lease-up or at all; and • occupancy and rental rates at a newly completed project that may not meet expectations.
In addition to the risks associated with real estate investments in general as described elsewhere, the risks associated with future development and redevelopment activities include: • expenditure of capital and time on projects that may never be completed; • failure or inability to obtain financing on favorable terms or at all; • inability to secure necessary zoning or regulatory approvals; • higher than estimated construction or operating costs, including labor and material costs; 9 • increased costs related to inflation, including higher costs of construction and financing; • inability to complete construction on schedule due to a number of factors, including inclement weather, labor disruptions, construction delays, supply chain issues, delays or failure to receive zoning or other regulatory approvals, acts of terror or other acts of violence, or natural disasters (such as fires, seismic activity or floods); • significant time lag between commencement and stabilization resulting in delayed returns and greater risks due to fluctuations in the general economy, shifts in demographics and competition; • decrease in customer traffic during the redevelopment period causing a decrease in tenant sales; • inability to secure key anchor or other tenants at anticipated pace of lease-up or at all; and • occupancy and rental rates at a newly completed project that may not meet expectations.
Companies across all industries are facing increasing scrutiny related to their ESG practices and reporting. Investors, customers, employees, and other stakeholders have begun to focus increasingly on ESG practices and to place increasing importance on the implications and social cost of their investments, purchases, and other interactions with companies.
Companies across all industries are facing increasing scrutiny related to their ESG practices and reporting. Investors, customers, employees, and other stakeholders have begun to focus increasingly on ESG practices and to place more importance on the implications and social cost of their investments, purchases, and other interactions with companies.
We may also choose to adopt other takeover defenses in the future. Any such actions could deter a transactions that may otherwise be in the interest of our shareholders. We may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions.
We may also choose to adopt other takeover defenses in the future. Any such actions could deter a transaction that may otherwise be in the interest of our shareholders. We may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions.
The federal government has enacted, and some of the states and localities in which we operate may enact, certain climate change laws and regulations or have begun regulating carbon footprints and greenhouse gas emissions.
The federal government has enacted, and some of the states and localities in which we operate may enact, certain climate change laws and regulations or have begun regulating carbon footprints and 13 greenhouse gas emissions.
Decreases in funds from operations due to unfinanced expenditures for acquisitions of properties or increases in the number of shares outstanding without commensurate increases in funds from operations would adversely affect our ability to maintain distributions to our 15 shareholders.
Decreases in funds from operations due to unfinanced expenditures for acquisitions of properties or increases in the number of shares outstanding without commensurate increases in funds from operations would adversely affect our ability to maintain distributions to our shareholders.
Actual or perceived threats associated with epidemics, pandemics or other public health crises, have had and could have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow, liquidity, and ability to access the capital markets and satisfy debt service obligations.
Actual or perceived threats associated with epidemics, pandemics or other public health crises have had, and could have in the future, a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow, liquidity, and ability to access the capital markets and satisfy debt service obligations.
We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.
We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.
Volatility in the financial markets like we are currently experiencing could affect our ability to access the capital markets at a time when we desire, or impact the cost at which we are able to do so, which could slow or deter our future growth.
Volatility in the financial markets could affect our ability to access the capital markets at a time when we desire, or impact the cost at which we are able to do so, which could slow or deter our future growth.
This increase, and any related impacts, including increased prices for consumer goods and higher interest rates and wages, and any fiscal or other policy interventions by the U.S. government in reaction to such events, could negatively impact our results of operations, and could also negatively impact our tenants’ businesses.
Rising inflation, and any related impacts, including increased prices for consumer goods and higher interest rates and wages, and any fiscal or other policy interventions by the U.S. government in reaction to such events, could negatively impact our results of operations, and could also negatively impact our tenants’ businesses.
With this increased focus and demand, public reporting regarding ESG practices is becoming more broadly expected. If our ESG practices and reporting do not meet investor, customer, or employee expectations, which continue to evolve, our reputation and tenant retention may be negatively impacted.
With this increased focus and demand, public reporting regarding ESG practices is becoming more broadly expected. If our ESG practices (including the speed of adoption of certain practices) and reporting do not meet investor, tenant, customer, or employee expectations, which continue to evolve, our reputation and tenant retention may be negatively impacted.
We have historically used moderate levels of leverage and expect to continue to incur indebtedness to support our activities. As of December 31, 2022, our outstanding indebtedness was $1.7 billion, of which $159.2 million was variable rate indebtedness.
We have historically used moderate levels of leverage and expect to continue to incur indebtedness to support our activities. As of December 31, 2023, our outstanding indebtedness was $1.7 billion, of which $281 million was variable rate indebtedness.
Spaces that accounted for approximately 14.9% of physical occupancy were vacant as of December 31, 2022, excluding leases signed but not commenced. In addition, leases accounting for approximately 28% of our annualized base rent for the fiscal year ended December 31, 2022 are scheduled to expire within the next three years.
Spaces that accounted for approximately 12.8% of physical occupancy were vacant as of December 31, 2023, excluding leases signed but not commenced. In addition, leases accounting for approximately 24% of our annualized base rent for the fiscal year ended December 31, 2023 are scheduled to expire within the next three years.
We may develop or redevelop properties when we believe that doing so is consistent with our business strategy. As of December 31, 2022, we had 25 active redevelopment projects in which we have invested a total of approximately $56.3 million, and based on our current plans and estimates, we anticipate it will cost an additional $159.7 million to complete.
We may develop or redevelop properties when we believe that doing so is consistent with our business strategy. As of December 31, 2023, we had 23 active redevelopment projects in which we have invested a total of approximately $55.9 million, and based on our current plans and estimates, we anticipate it will cost an additional $112.2 million to complete.
We also have two properties in California that could be impacted by earthquakes. As a result, we could become subject to business interruption, significant losses and repair costs, such as those we experienced from Hurricane Maria, which damaged and caused the temporary closure of our two properties in Puerto Rico.
As a result, we could become subject to business interruption, significant losses and repair costs, such as those we experienced from Hurricane Maria in 2017, which damaged and caused the temporary closure of our two properties in Puerto Rico.
RISKS RELATED TO BUSINESS CONTINUITY Risks related to our malls in Puerto Rico. Our two malls in Puerto Rico make up approximately 7% of our net operating income (“NOI”) for the year ended December 31, 2022.
RISKS RELATED TO BUSINESS CONTINUITY Risks related to our properties in Puerto Rico. Our two properties in Puerto Rico made up approximately 8% of our net operating income (“NOI”) for the year ended December 31, 2023.
RISKS RELATED TO ENVIRONMENTAL LIABILITY AND REGULATORY COMPLIANCE We may be adversely affected by laws, regulations or other issues related to climate change. We may become subject to laws or regulations related to climate change, which could cause our business, results of operations and financial condition to be impacted adversely.
We may become subject to laws or regulations related to climate change, which could cause our business, results of operations and financial condition to be impacted adversely.
If the cost or amount of our debt increases or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of default on our obligations, which could have a material adverse effect on our company, including our ability to make distributions to our shareholders.
If the cost or amount of our debt increases or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of default on our obligations, which could have a material adverse effect on our company, including our ability to make distributions to our shareholders. 11 Covenants in our existing financing agreements may restrict our operating, financing, redevelopment, development, acquisition and other activities.
Increases in interest rates could increase our financing costs over time, either through near-term borrowings on our existing variable-rate borrowings or 18 refinancing of our existing borrowings that may incur higher interest expenses related to the issuance of new debt. There is no guarantee we will be able to mitigate the impact of rising inflation.
Increases in interest rates could increase our financing costs over time, either through near-term borrowings on our existing variable-rate borrowings or refinancing of our existing borrowings that may incur higher interest expenses related to the issuance of new debt.
One of the factors that may influence the prices of our publicly-traded equity securities is the interest rate on our debt and the dividend yield on our common shares relative to market interest rates.
There is no guarantee we will be able to mitigate the impact of rising inflation. 18 One of the factors that may influence the prices of our publicly-traded equity securities is the interest rate on our debt and the dividend yield on our common shares relative to market interest rates.
Covenants in our existing financing agreements may restrict our operating, financing, redevelopment, development, acquisition and other activities. The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to reduce insurance coverage.
The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to reduce insurance coverage.
While our leases generally provide for fixed annual rent increases, high levels of inflation will likely outpace our contractual rent increases. As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to shareholders could be adversely affected over time.
As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to shareholders could be adversely affected over time.
RISKS RELATED TO OUR BUSINESS AND OPERATIONS Inflation and related volatility in the economy could negatively impact our results of operations and our tenants. Inflation in the United States accelerated in 2022 and may continue at an elevated level in the near-term.
RISKS RELATED TO OUR BUSINESS AND OPERATIONS Inflation and related volatility in the economy could negatively impact our results of operations and our tenants. Inflation in the United States accelerated during 2021 and 2022. During 2023, inflation decreased but remained at an elevated level relative to the years preceding 2021, and inflation may increase again in the future.
Real estate markets are subject to economic downturns, and we cannot predict the economic conditions in the New York metropolitan area in either the short-term or long-term. Poor economic or market conditions in the New York metropolitan area may adversely affect our cash flow, financial condition and results of operations.
Poor economic or market conditions in the New York metropolitan area may adversely affect our cash flow, financial condition and results of operations.
Any of these events could negatively impact our ability to lease space on terms and conditions we seek and could have a material adverse effect on our business and results of operations. As of December 31, 2022, we have individual, non-recourse mortgages on each of our Puerto Rico properties.
Any of these events could negatively impact our ability to lease space on terms and conditions we seek and could have a material adverse effect on our business and results of operations. Natural disasters could have a concentrated impact on us.
We have approximately $329 million of debt, with a weighted average interest rate of 3.7%, maturing within the next 12 months related to mortgage loans encumbering three of our properties.
As of the date of this filing, w e have approximately $70.8 million of mortgage debt, with a weighted average interest rate of 4.0%, maturing within the next 12 months related to mortgage loans encumbering two of our properties.
Compliance or failure to comply with the Americans with Disabilities Act, safety regulations or other requirements could result in substantial costs. The Americans with Disabilities Act (“ADA”) generally requires that public buildings, including our properties, meet certain federal requirements related to access and use by disabled persons.
The Americans with Disabilities Act (“ADA”) generally requires that public buildings, including our properties, meet certain federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants and/or legal fees to their counsel.
The combination of these circumstances could result in less disposable income for the purchase of goods sold in our malls and the inability of merchants to pay rent and other charges.
Such events, individually or in the aggregate, can disrupt the local economy and could result in less disposable income for the purchase of goods sold at our properties and the inability of merchants to pay rent and other charges.
We could also incur additional costs and devote additional resources to monitor, report and implement various ESG practices. If we fail, or are perceived to be failing, to meet the standards included in any sustainability 14 disclosure or the expectations of our various stakeholders, it could negatively impact our reputation, tenant and employee retention, and access to capital.
Our failure, or perceived failure, to meet the standards included in any sustainability disclosure or the expectations of our various stakeholders, could negatively impact our reputation, tenant and employee retention, and access to capital.
As a result, we believe that the structure of our leases reduces our exposure to increases in costs and operating expenses resulting from inflation. However, there can be no assurance that our tenants will be able to absorb these expense increases and be able to continue to pay us their portion of operating expenses, capital expenditures and rent.
However, there can be no assurance that our tenants will be able to absorb these expense increases and be able to continue to pay us their portion of operating expenses, capital expenditures and rent. While our leases generally provide for fixed annual rent increases, high levels of inflation will likely outpace our contractual rent increases.
As of December 31, 2022, approximately 9% of our current outstanding debt bore interest at variable rates based on the London Interbank Offered Rate (“LIBOR”), Secured Overnight Financing Rate (“SOFR”) or the Prime Rate, plus an applicable margin per the loan agreement.
As of December 31, 2023, approximately 16% of our current outstanding debt bore interest at variable rates based on the Secured Overnight Financing Rate (“SOFR”), plus an applicable margin per the respective loan agreements. We are exposed to risks related to a potential rising interest rate environment for our current or any future variable interest rate debt.
As of December 31, 2022, we had $1.7 billion of secured debt outstanding and 34 of our properties were encumbered by secured debt. As of December 31, 2022, we were in compliance with all debt covenants.
As of December 31, 2023, we had $1.6 billion of secured debt outstanding and 32 of our properties were encumbered by secured debt. As of December 31, 2023, we were in compliance with all debt covenants, with the exception of those related to our mortgage on Kingswood Center which has been in default since May 2023.
While we may enter into interest rate hedging transactions with counterparties, there can be no guarantee that the future financial condition of these counterparties will enable them to fulfill their obligations under such agreements. In 2017, U.K. regulators announced that they intend to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
Interest expense on our variable rate debt at December 31, 2023 would increase by approximately $2.3 million annually for every 100-basis-point increase in interest rates. While we may enter into interest rate hedging transactions with counterparties, there can be no guarantee that the future financial condition of these counterparties will enable them to fulfill their obligations under such agreements.
Puerto Rico faces significant fiscal and economic challenges, including those resulting from natural disasters such as hurricanes and earthquakes, the recent COVID-19 pandemic, and its government filing for bankruptcy protection in 2017. These factors have led to an emigration trend of Puerto Rico residents to the United States and elsewhere over the last several years.
Puerto Rico has faced significant fiscal and economic challenges in previous years, including its government filing for bankruptcy protection in 2017, and continues to face challenges resulting from natural disasters such as hurricanes and earthquakes.
As of December 31, 2022, our remaining exposure under the guarantee is $8.0 million, which will reduce to zero in approximately 3.8 years. 12 Natural disasters could have a concentrated impact on us. We own properties near the Atlantic Coast and in Puerto Rico which are subject to natural disasters such as hurricanes, floods and storm surges.
We own properties near the Atlantic Coast and in Puerto Rico which are subject to natural disasters such as hurricanes, floods, earthquakes and storm surges. We also have two properties in California that could be impacted by earthquakes.
Removed
We are exposed to risks related to a potential rising interest rate environment for our current or any future variable interest rate debt. Interest expense on our variable rate debt at December 31, 2022 would increase by approximately $1.6 million annually for every 100-basis-point increase in interest rates.
Added
See Part I, Item 1C. “Cybersecurity” in this Annual Report on Form 10-K for further information on our risk management, strategy and governance as it pertains to cyber risks. RISKS RELATED TO ENVIRONMENTAL LIABILITY AND REGULATORY COMPLIANCE We may be adversely affected by laws, regulations or other issues related to climate change.
Removed
As a result, U.S. regulators identified SOFR as their preferred alternative to USD LIBOR in derivatives and other financial contracts. Additionally, while U.S. official guidance states that there should be no new LIBOR trading after December 31, 2021, we expect that USD LIBOR will continue to be published until June 30, 2023.
Added
In 2022, the SEC proposed extensive rules aimed at enhancing and standardizing climate-related disclosures in an effort to foster greater consistency, comparability and reliability of climate-related information among public issuers.
Removed
We are not currently able to predict when LIBOR will cease to be available in the United States. When LIBOR is discontinued, the interest rates of our LIBOR- 11 indexed debt following such event will be based on either alternate reference rates, such as SOFR, or agreed upon replacement rates.
Added
The proposal, if adopted, would require public issuers to include prescribed climate-related information in their registration statements and annual reports, including information regarding greenhouse gas emissions and climate-related risks and opportunities and related financial impacts, governance and strategy.
Removed
While such an event would not affect our ability to borrow or maintain already outstanding borrowings, it could result in higher interest rates or additional hedging costs.
Added
Additionally, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a “carbon tax”), which could increase our operating costs.
Removed
We also have a limited corporate guarantee related to our mortgage on the Outlets at Montehiedra of $12.5 million that is reduced commensurate with the loan amortization schedule.
Added
All of these factors could result in additional costs and devoting additional resources to monitor, report and implement various ESG practices. 14 Compliance or failure to comply with the Americans with Disabilities Act, safety regulations or other requirements could result in substantial costs.
Removed
Any disclosure we make may include our policies and practices on a variety of ESG matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG reporting, our ESG practices or our speed of adoption.
Removed
Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants and/or legal fees to their counsel.

Item 2. Properties

Properties — owned and leased real estate

15 edited+3 added−5 removed1 unchanged
Biggest changeKisco 189,000 100.0% 17.59 Target, Stop & Shop New Hyde Park (leased through 2029) (3) 101,000 100.0% 21.93 Stop & Shop 20 Queens (Cross Bay Commons) 45,000 87.1% 42.17 Northwell Health Rochester (Henrietta) (leased through 2056) (3) 165,000 97.9% 4.62 Kohl's Staten Island (Forest Commons) 165,000 96.6% 24.84 Western Beef, Planet Fitness, Mavis Discount Tire, NYC Public School Yonkers Gateway Center 448,000 94.1% 16.02 Burlington, Marshalls, Homesense, Best Buy, DSW, PetSmart, Alamo Drafthouse Cinema Pennsylvania: Bensalem (Marten Commons) 185,000 96.6% 14.83 Kohl's, Ross Dress for Less, Staples, Petco Broomall (6) 168,000 75.8% 16.40 Amazon Fresh, Planet Fitness, PetSmart, Nemours Children's Hospital Glenolden (MacDade Commons) 102,000 100.0% 12.93 Walmart Lancaster (Lincoln Plaza) 228,000 100.0% 5.27 Lowe's, Community Aid, Mattress Firm Springfield (leased through 2025) (3) 41,000 100.0% 25.29 PetSmart Wilkes-Barre 184,000 92.5% 13.12 Bob's Discount Furniture, Ross Dress for Less, Marshalls, Petco, Wren Kitchens Wyomissing (leased through 2065) (3) 76,000 100.0% 14.70 LA Fitness, PetSmart South Carolina: Charleston (leased through 2063) (3) 45,000 100.0% 15.56 Best Buy Virginia: Norfolk (leased through 2069) (3) 114,000 100.0% 7.79 BJ's Wholesale Club Puerto Rico: Las Catalinas 355,000 86.2% 29.75 Sector Sixty6 (lease not commenced), Forever 21, Old Navy Montehiedra (6) 514,000 94.7% 20.02 The Home Depot, Marshalls, Caribbean Cinemas, Tiendas Capri, Old Navy, Ralph's Food Warehouse (lease not commenced), T.J.
Biggest changeMaxx Rutherford Commons 196,000 100.0% 13.32 Lowe's Stelton Commons (leased through 2039) (3) 56,000 100.0% 21.77 Staples, Party City Tonnelle Commons 410,000 100.0% 22.04 BJ's Wholesale Club, Walmart, PetSmart Totowa Commons 272,000 93.4% 21.74 The Home Depot, Staples, national tenant (lease not commenced) Town Brook Commons 231,000 97.0% 13.45 Stop & Shop, Kohl's Union (Vauxhall) 232,000 100.0% 17.85 The Home Depot West Branch Commons 279,000 96.1% 16.07 Lowe's, Burlington West End Commons 241,000 100.0% 11.80 Costco, The Tile Shop, La-Z-Boy, Petco, Da Vita Dialysis Woodbridge Commons 225,000 100.0% 13.59 Walmart, Dollar Tree, Advance Auto Parts New York: Amherst Commons 312,000 90.1% 10.74 BJ's Wholesale Club, Burlington, LA Fitness Bruckner Commons (6) 351,000 85.5% 35.55 ShopRite, Burlington Shops at Bruckner (6) 113,000 100.0% 39.04 Aldi, Marshalls, Five Below, Old Navy Burnside Commons 100,000 89.3% 17.40 Bingo Wholesale (leased not commenced) Cross Bay Commons 44,000 95.8% 40.80 Northwell Health Dewitt (leased through 2041) (3) 46,000 100.0% 19.36 Best Buy Forest Commons 165,000 96.6% 25.02 Western Beef, Planet Fitness, Advance Auto Parts, NYC Public School Gun Hill Commons 81,000 100.0% 38.03 Aldi, Planet Fitness Henrietta Commons(leased through 2056) (3) 165,000 97.9% 4.69 Kohl's Huntington Commons 208,000 96.5% 21.81 ShopRite, Marshalls, Old Navy, Petco, Burlington Kingswood Crossing 107,000 84.4% 44.42 Target, Marshalls, Maimonides Medical, Visiting Nurse Services (lease not commenced) Meadowbrook Commons (leased through 2040) (3) 44,000 100.0% 22.31 Bob's Discount Furniture 21 Mount Kisco Commons 189,000 100.0% 17.63 Target, Stop & Shop New Hyde Park (leased through 2029) (3) 101,000 100.0% 21.93 Stop & Shop Yonkers Gateway 448,000 94.9% 20.16 Burlington, Marshalls, Homesense, Best Buy, DSW, PetSmart, Alamo Drafthouse Cinema Pennsylvania: Broomall Commons (6) 168,000 75.8% 16.40 Amazon Fresh, Planet Fitness, PetSmart, Nemours Children's Hospital Lincoln Plaza 228,000 100.0% 5.27 Lowe's, Community Aid, Mattress Firm MacDade Commons 102,000 100.0% 12.96 Walmart Marten Commons 185,000 100.0% 15.14 Kohl's, Ross Dress for Less, Staples, Petco Springfield (leased through 2025) (3) 41,000 100.0% 25.29 PetSmart Wilkes-Barre Commons 184,000 100.0% 13.12 Bob's Discount Furniture, Ross Dress for Less, Marshalls, Petco, Wren Kitchen Wyomissing (leased through 2065) (3) 76,000 100.0% 14.83 LA Fitness, PetSmart South Carolina: Charleston (leased through 2063) (3) 45,000 100.0% 15.96 Best Buy Virginia: Norfolk (leased through 2069) (3) 114,000 100.0% 7.79 BJ's Wholesale Club Puerto Rico: Shops at Caguas 356,000 90.6% 30.02 Sector Sixty6, Forever 21, Old Navy The Outlets at Montehiedra (6) 531,000 95.4% 21.75 The Home Depot, Marshalls, Caribbean Cinemas, Old Navy, Ralph's Food Warehouse (lease not commenced), T.J.
Diablo), an 82.5% interest in Sunrise Mall in Massapequa, NY and lease 14 of our shopping centers under ground and/or building leases. As of December 31, 2022, we had $1.7 billion of outstanding mortgage indebtedness which is secured by our properties. The following pages provide details of our properties as of December 31, 2022.
Diablo), an 82.5% interest in Sunrise Mall in Massapequa, NY and lease 14 of our shopping centers under ground and/or building leases. As of December 31, 2023, we had $1.6 billion of outstanding mortgage indebtedness which is secured by our properties. The following pages provide details of our properties as of December 31, 2023.
Tenant leases comprising 10,000 square feet or more generally have lease terms of 10 to 25 years, and are considered anchor leases with one or more renewal options available upon expiration of the initial lease term.
Tenant leases under 10,000 square feet generally have lease terms of five years or less. Tenant leases comprising 10,000 square feet or more generally have lease terms of 10 to 25 years and are considered anchor leases with one or more renewal options available upon expiration of the initial lease term.
Excluding the ground leases where the Company is the lessor, the weighted average annual rent per square foot for our retail portfolio is $21.85 per square foot. (3) The Company is a lessee under a ground or building lease. The total square feet disclosed for the building will revert to the lessor upon lease expiration.
Excluding the ground leases where the Company is the lessor, the weighted average annual rent per square foot for our retail portfolio is $22.47 per square foot. (3) The Company is a lessee under a ground or building lease. The total square feet disclosed for the building will revert to the lessor upon lease expiration.
Occupancy The following table sets forth the consolidated retail portfolio leased occupancy rate (excluding industrial and self-storage space), square footage and weighted average annual base rent per square foot of properties in our retail portfolio as of December 31 for the last five years: December 31, 2022 (1) 2021 (1) 2020 2019 2018 Total square feet 14,495,000 14,469,000 15,221,000 14,277,000 15,407,000 Occupancy rate 94.3 % 91.1 % 88.7 % 92.4 % 92.6 % Average annual base rent per sf $19.89 $19.70 $18.97 $19.22 $17.90 (1) Excludes Sunrise Mall for the years ended December 31, 2022 and 2021.
Percentage rents accounted for approximately 1% of our total revenues for the year ended December 31, 2023. 22 Occupancy The following table sets forth the consolidated retail portfolio leased occupancy rate (excluding industrial and self-storage space), square footage and weighted average annual base rent per square foot of properties in our retail portfolio as of December 31 for the last five years: December 31, 2023 (1) 2022 (1) 2021 (1) 2020 2019 Total square feet 15,522,000 14,495,000 14,469,000 15,221,000 14,277,000 Occupancy rate 95.9 % 94.3 % 91.1 % 88.7 % 92.4 % Average annual base rent per sf $19.93 $19.89 $19.70 $18.97 $19.22 (1) Excludes Sunrise Mall and Kingswood Center for the year ended December 31, 2023, and also excludes Sunrise Mall for the years ended December 31, 2022 and 2021.
The majority of our leases provide for reimbursements of real estate taxes, insurance and common area maintenance charges (including roof and structure in shopping centers, unless it is the tenant’s direct responsibility), and percentage rents based on tenant sales volume. Percentage rents accounted for approximately 2% of our total revenues for the year ended December 31, 2022.
The majority of our leases provide for reimbursements of real estate taxes, insurance and common area maintenance charges (including roof and structure in shopping centers, unless it is the tenant’s direct responsibility), and percentage rents based on tenant sales volume.
Property Total Square Feet (1) Percent Leased (1) Weighted Average Annual Rent per sq ft (2) Major Tenants RETAIL PORTFOLIO: California: Walnut Creek (Olympic) 31,000 100.0% $80.50 Anthropologie Walnut Creek (Mt.
Property Total Square Feet (1) Percent Leased (1) Weighted Average Annual Rent per sq ft (2) Major Tenants RETAIL PORTFOLIO: California: Walnut Creek (Mt.
The Company also excludes 132,000 sf of self-storage from the report above. (2) Weighted average annual rent per square foot including ground leases and executed leases for which rent has not commenced is calculated by annualizing tenants’ current base rent (excluding any free rent periods), and excluding tenant reimbursements, concessions and storage rent.
(2) Weighted average annual rent per square foot including ground leases and executed leases for which rent has not commenced is calculated by annualizing tenants’ current base rent (excluding any free rent periods), and excluding tenant reimbursements, concessions and storage rent.
ITEM 2. PROPERTIES As of December 31, 2022, our portfolio was comprised of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million sf. We own our four malls, two industrial parks and 54 shopping centers 100% in fee simple. We own a 95% interest in Walnut Creek (Mt.
ITEM 2. PROPERTIES As of December 31, 2023, our portfolio was comprised of 71 shopping centers, two outlet centers, two malls and one industrial building totaling approximately 17.1 million sf. We own our two outlet centers, one mall, one industrial building and 56 shopping centers 100% in fee simple. We own a 95% interest in Walnut Creek (Mt.
The following table sets forth the occupancy rate, square footage and weighted average annual base rent per square foot of our industrial properties as of December 31 for the last five years: December 31, 2022 2021 2020 2019 2018 Total square feet 1,345,000 1,345,000 1,070,000 943,000 942,000 Occupancy rate 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Average annual base rent per sf $8.89 $6.04 $6.34 $5.70 $5.34 Major Tenants The following table sets forth information for our ten largest tenants by total revenues for the year ended December 31, 2022: Tenant Number of Stores Square Feet % of Total Square Feet 2022 Revenues (1) (in thousands) % of Total Revenues The Home Depot 6 808,926 4.7% $21,447 5.4% The TJX Companies (2) 21 671,521 3.9% 19,027 4.8% Lowe's Companies 6 976,415 5.7% 14,264 3.6% Walmart 5 708,435 4.2% 13,663 3.4% Best Buy 8 359,551 2.1% 10,682 2.7% Burlington 7 415,828 2.4% 10,476 2.6% Kohl's 8 767,345 4.5% 10,391 2.6% BJ's Wholesale Club 4 454,297 2.7% 8,667 2.2% Ahold Delhaize (Stop & Shop) 5 362,696 2.1% 8,090 2.0% ShopRite 5 361,058 2.1% 7,870 2.0% (1) Based on contractual revenues as determined by the tenants’ operating lease agreements.
The following table sets forth the occupancy rate, square footage and weighted average annual base rent per square foot of our industrial properties as of December 31 for the last five years: December 31, 2023 2022 2021 2020 2019 Total square feet 127,000 1,345,000 1,345,000 1,070,000 943,000 Occupancy rate 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Average annual base rent per sf $13.35 $8.89 $6.04 $6.34 $5.70 Major Tenants The following table sets forth information for our ten largest tenants by total revenues for the year ended December 31, 2023: Tenant Number of Stores Square Feet % of Total Square Feet 2023 Revenues (1) (in thousands) % of Total Revenues The Home Depot 6 770,742 4.6% $21,513 5.2% The TJX Companies (2) 22 723,350 4.3% 18,476 4.4% Lowe's Companies 6 976,415 5.8% 14,200 3.4% Walmart 5 708,435 4.2% 12,915 3.1% Kohl’s 9 855,561 5.1% 11,910 2.9% Best Buy 9 409,641 2.4% 11,026 2.6% Burlington 8 441,270 2.6% 10,639 2.6% ShopRite 5 361,683 2.1% 9,926 2.4% BJ's Wholesale Club 4 454,297 2.7% 8,719 2.1% PetSmart 12 278,451 1.6% 8,044 1.9% (1) Based on contractual revenues as determined by the tenants’ operating lease agreements.
Maxx, LA Fitness East Hanover (200 - 240 Route 10 West) 343,000 99.3% 21.60 The Home Depot, Dick's Sporting Goods, Saks Off 5th, Marshalls East Rutherford 197,000 98.2% 12.94 Lowe's Garfield 298,000 100.0% 16.01 Walmart, Burlington, Marshalls, PetSmart, Ulta Hackensack 275,000 99.4% 24.32 The Home Depot, Staples, Petco, 99 Ranch Hazlet 95,000 100.0% 3.96 Stop & Shop (5) Jersey City (Hudson Mall) 382,000 84.9% 18.17 Marshalls, Big Lots, Retro Fitness, Staples, Old Navy Jersey City (Hudson Commons) 236,000 100.0% 13.99 Lowe's, P.C.
Maxx, LA Fitness Carlstadt Commons (leased through 2050) (3) 78,000 98.3% 24.26 Stop & Shop Garfield Commons 298,000 100.0% 16.28 Walmart, Burlington, Marshalls, PetSmart, Ulta Greenbrook Commons 170,000 95.9% 18.64 BJ's Wholesale Club, Aldi Hackensack Commons 275,000 99.2% 25.89 The Home Depot, 99 Ranch, Staples, Petco Hanover Commons 343,000 99.3% 21.86 The Home Depot, Dick's Sporting Goods, Saks Off Fifth, Marshalls Hazlet 95,000 100.0% 3.96 Stop & Shop (5) Hudson Mall 381,000 83.0% 18.34 Marshalls, Big Lots, Retro Fitness, Staples, Old Navy Hudson Commons 236,000 100.0% 14.02 Lowe's, P.C.
Maxx (4), HomeGoods (3) and Homesense (1). 22 Lease Expirations The following table sets forth the anticipated expirations of tenant leases in our consolidated retail portfolio for each year from 2023 through 2033 and thereafter, assuming no exercise of renewal options or early termination rights: Percentage of Weighted Average Annual Number of Square Feet of Retail Properties Base Rent of Expiring Leases Year Expiring Leases Expiring Leases Square Feet Total Per Square Foot Month-To-Month 33 116,000 0.8% $ 2,884,920 $ 24.87 2023 80 643,000 4.4% 16,615,120 25.84 2024 116 1,521,000 10.5% 32,595,030 21.43 2025 86 1,256,000 8.7% 23,977,040 19.09 2026 99 922,000 6.4% 21,786,860 23.63 2027 100 1,116,000 7.7% 19,820,160 17.76 2028 75 1,143,000 7.9% 26,711,910 23.37 2029 73 1,536,000 10.6% 33,991,680 22.13 2030 45 1,205,000 8.3% 18,930,550 15.71 2031 33 1,025,000 7.1% 17,209,750 16.79 2032 50 433,000 3.0% 9,214,240 21.28 2033 42 710,000 4.9% 12,616,700 17.77 Thereafter 49 2,043,000 14.0% 34,567,560 16.92 Subtotal/Average 881 13,669,000 94.3% $ 271,876,410 $ 19.89 Vacant 171 826,000 5.7% N/A N/A Total (1) 1,052 14,495,000 100.0% $ 271,876,410 N/A (1) Total lease count excludes industrial tenant leases, temporary tenant leases, cart and kiosk leases and Sunrise Mall.
Maxx (3), HomeGoods (3) and Homesense (2). 23 Lease Expirations The following table sets forth the anticipated expirations of tenant leases in our consolidated retail portfolio for each year from 2023 through 2034 and thereafter, assuming no exercise of renewal options or early termination rights: Percentage of Weighted Average Annual Number of Square Feet of Retail Properties Base Rent of Expiring Leases Year Expiring Leases Expiring Leases Square Feet Total Per Square Foot Month-To-Month 35 122,000 0.8% $ 3,612,420 $ 29.61 2024 61 679,000 4.4% 12,262,740 18.06 2025 110 1,518,000 9.8% 29,509,920 19.44 2026 114 1,070,000 6.9% 26,632,300 24.89 2027 118 1,387,000 8.9% 23,842,530 17.19 2028 101 1,287,000 8.3% 32,059,170 24.91 2029 120 2,376,000 15.3% 53,958,960 22.71 2030 53 1,438,000 9.3% 19,628,700 13.65 2031 36 1,143,000 7.4% 18,139,410 15.87 2032 52 459,000 3.0% 10,006,200 21.80 2033 53 808,000 5.2% 15,448,960 19.12 2034 54 901,000 5.8% 20,317,550 22.55 Thereafter 49 1,691,000 10.8% 31,046,760 18.36 Subtotal/Average 956 14,879,000 95.9% $ 296,538,470 $ 19.93 Vacant 148 643,000 4.1% N/A N/A Total (1) 1,104 15,522,000 100.0% $ 296,538,470 N/A (1) Total lease count excludes industrial tenant leases, temporary tenant leases, cart and kiosk leases, Sunrise Mall and Kingswood Center.
Diablo) (4) 7,000 43.8% 72.00 Sweetgreen Connecticut: Newington 189,000 90.0% 9.55 Walmart, Staples Maryland: Towson (Goucher Commons) 155,000 90.0% 23.82 Sprouts, HomeGoods, Five Below, Ulta, Kirkland's, DSW, Golf Galaxy (lease not commenced) Rockville 94,000 98.0% 27.07 Regal Entertainment Group Wheaton (leased through 2060) (3) 66,000 100.0% 18.35 Best Buy Woodmore Towne Centre (6) 712,000 97.0% 17.72 Costco, Wegmans, At Home, Best Buy, LA Fitness, Nordstrom Rack Massachusetts: Cambridge (leased through 2033) (3) 48,000 100.0% 28.06 PetSmart, Central Rock Gym (lease not commenced) Hyde Park (The Shops at Riverwood) (6) 76,000 100.0% 24.42 Price Rite, Planet Fitness, Goodwill Revere (Wonderland Marketplace) 140,000 100.0% 13.45 Big Lots, Planet Fitness, Marshalls, Get Air Missouri: Manchester 131,000 100.0% 11.82 Pan-Asia Market, Academy Sports, Bob's Discount Furniture New Hampshire: Salem (leased through 2102) (3) 39,000 100.0% 10.20 Fun City New Jersey: Bergen Town Center - East, Paramus 253,000 93.8% 22.39 Lowe's, REI, Best Buy Bergen Town Center - West, Paramus 1,051,000 91.0% 31.26 Target, Whole Foods Market, Burlington, Marshalls, Nordstrom Rack, Saks Off 5th, HomeGoods, H&M, Bloomingdale's Outlet, Nike Factory Store, Old Navy, Kohl's 19 Brick 273,000 98.7% 20.62 ShopRite, Kohl's, Marshalls, Old Navy Carlstadt (leased through 2050) (3) 78,000 98.3% 24.04 Stop & Shop Cherry Hill (Plaza at Cherry Hill) 422,000 82.1% 15.32 Aldi, LA Fitness, Raymour & Flanigan, Total Wine, Guitar Center, Sam Ash Music East Brunswick 427,000 100.0% 14.89 Lowe's, Kohl's, Dick's Sporting Goods, P.C.
Maxx, Marshalls, Home Sense, Sierra Trading, Public Lands, Golf Galaxy, Nordstrom Rack, Hobby Lobby, AMC, Kohl's, Best Buy The Shops at Riverwood 79,000 100.0% 24.95 Price Rite, Planet Fitness, Goodwill Wonderland Marketplace 140,000 100.0% 14.05 Big Lots, Planet Fitness, Marshalls, Get Air Missouri: Manchester Plaza 131,000 100.0% 11.91 Pan-Asia Market, Academy Sports, Bob's Discount Furniture New Hampshire: Salem (leased through 2102) (3) 39,000 100.0% 10.40 Fun City New Jersey: Bergen Town Center - East 253,000 92.1% 21.97 Lowe's, Best Buy, REI 20 Bergen Town Center - West 1,018,000 96.3% 32.05 Target, Whole Foods Market, Burlington, Marshalls, Nordstrom Rack, Saks Off 5th, HomeGoods, H&M, Bloomingdale's Outlet, Nike Factory Store, Old Navy, Kohl's Briarcliff Commons 180,000 94.8% 24.65 Uncle Giuseppe's, Kohl's Brick Commons 273,000 98.7% 21.07 ShopRite, Kohl's, Marshalls, Old Navy Brunswick Commons 427,000 100.0% 15.16 Lowe's, Kohl's, Dick's Sporting Goods, P.C.
Richard & Son Kearny 120,000 100.0% 23.96 LA Fitness, Marshalls, Ulta Lodi (Washington Street) 43,000 100.0% 20.20 Dollar Tree Manalapan 208,000 87.7% 20.80 Best Buy, Raymour & Flanigan, PetSmart, Avalon Flooring Marlton 214,000 100.0% 16.58 ShopRite, Kohl's, PetSmart Middletown (Town Brook Commons) 231,000 97.0% 13.39 Stop & Shop, Kohl's Millburn 104,000 89.5% 28.96 Trader Joe's, CVS, PetSmart Montclair 18,000 100.0% 32.00 Whole Foods Market Morris Plains (Briarcliff Commons) (6) 176,000 94.7% 23.72 Uncle Giuseppe's, Kohl's North Bergen (Kennedy Commons) 62,000 100.0% 14.65 Food Bazaar North Bergen (Tonnelle Commons) 410,000 100.0% 21.95 BJ's Wholesale Club, Walmart, PetSmart North Plainfield (West End Commons) 241,000 100.0% 11.91 Costco, The Tile Shop, La-Z-Boy, Petco, DaVita Dialysis Paramus (leased through 2033) (3) 63,000 100.0% 49.97 24 Hour Fitness Rockaway 189,000 96.8% 15.16 ShopRite, T.J.
Richard & Son Kearny Commons 121,000 100.0% 24.47 LA Fitness, Marshalls, Ulta Kennedy Commons 62,000 100.0% 15.56 Food Bazaar Lodi Commons 43,000 100.0% 20.69 Dollar Tree Manalapan Commons 200,000 93.7% 23.17 Best Buy, Raymour & Flanigan, PetSmart, Avalon Flooring, Atlantic Health (lease not commenced), national apparel retailer (lease not commenced) Marlton Commons 214,000 100.0% 16.69 ShopRite, Kohl's, PetSmart Millburn 104,000 89.5% 29.05 Trader Joe's, CVS, PetSmart Montclair 18,000 100.0% 32.00 Whole Foods Market Paramus (leased through 2033) (3) 63,000 100.0% 49.97 24 Hour Fitness Plaza at Cherry Hill 417,000 83.1% 13.42 Aldi, Total Wine, LA Fitness, Raymour & Flanigan, Guitar Center, Sam Ash Music Plaza at Woodbridge 331,000 81.2% 20.36 Best Buy, Raymour & Flanigan, Lincoln Tech, UFC Gym (lease not commenced), and buybuy Baby Rockaway River Commons 189,000 96.8% 15.25 ShopRite, T.J.
(6) Not included in the same-property pool for the purposes of calculating same-property NOI for the quarter ended December 31, 2022 and 2021. (7) Includes the acquisition of 40 Carmans Road. (8) Includes 151 Ridgedale Avenue and 601 Murray Road which were acquired in August 2021.
(6) Not included in the same-property pool for the purposes of calculating same-property NOI for the quarter ended December 31, 2023 and 2022. (7) A portion of the property is under a ground lease through 2069. As of December 31, 2023, we had approximately 1,000 leases.
Removed
Maxx South Plainfield (Stelton Commons) (leased through 2039) (3) 56,000 100.0% 22.34 Staples, Party City Totowa 271,000 83.4% 18.04 The Home Depot, Bed Bath & Beyond, buybuy Baby, Staples Union (2445 Springfield Ave) 232,000 100.0% 17.85 The Home Depot Union (West Branch Commons) 278,000 98.7% 16.12 Lowe's, Burlington Watchung (Greenbrook Commons) 170,000 100.0% 18.83 BJ's Wholesale Club, Aldi (lease not commenced) Woodbridge (Woodbridge Commons) 225,000 100.0% 13.51 Walmart, Charisma Furniture Woodbridge (Plaza at Woodbridge) 332,000 91.6% 19.04 Best Buy, Raymour & Flanigan, Lincoln Tech, Retro Fitness, Bed Bath & Beyond and buybuy Baby New York: Bronx (Gun Hill Commons) 81,000 100.0% 37.62 Aldi, Planet Fitness Bronx (Bruckner Commons) (6) 396,000 74.6% 33.92 ShopRite, Burlington, Target (lease not commenced) Bronx (Shops at Bruckner) 115,000 100.0% 38.36 Marshalls, Old Navy, Five Below, Aldi (lease not commenced) Brooklyn (Kingswood Center) 129,000 90.6% 30.92 T.J.
Added
Diablo) (4) 7,000 100.0% $69.26 Sweetgreen Walnut Creek (Olympic) 31,000 100.0% 80.50 Anthropologie Connecticut: Newington Commons 189,000 90.0% 9.50 Walmart, Staples Maryland: Goucher Commons 155,000 92.5% 26.52 Sprouts, HomeGoods, Five Below, Ulta, Kirkland's, DSW, Golf Galaxy Rockville Town Center 98,000 100.0% 16.51 Regal Entertainment Group Wheaton (leased through 2060) (3) 66,000 100.0% 18.35 Best Buy Woodmore Towne Centre 712,000 97.7% 18.07 Costco, Wegmans, At Home, Best Buy, LA Fitness, Nordstrom Rack Massachusetts: Cambridge (leased through 2033) (3) 48,000 100.0% 28.06 PetSmart, Central Rock Gym Gateway Center (6) 640,000 100.0% 9.69 Costco, Target, Home Depot, Total Wine Shoppers World (6) 752,000 100.0% 22.50 T.J.
Removed
Maxx, Visiting Nurse Service of NY Brooklyn (Kingswood Crossing) 107,000 69.5% 41.86 Target, Marshalls, Maimonides Medical Buffalo (Amherst Commons) 311,000 98.1% 11.06 BJ's Wholesale Club, T.J.
Added
Maxx (lease not commenced), Burlington (lease not commenced) Total Retail Portfolio 15,522,000 95.9% $19.93 INDUSTRIAL: Lodi Route 17 127,000 100.0% 13.35 AAA Wholesale Group Total Industrial 127,000 100.0% $13.35 Kingswood Center (6) 129,000 73.5% 26.61 T.J.
Removed
Maxx, Burlington, HomeGoods, LA Fitness Dewitt (Marshall Plaza) (leased through 2041) (3) 46,000 100.0% 24.62 Best Buy Freeport (Meadowbrook Commons) (leased through 2040) (3) 44,000 100.0% 22.31 Bob's Discount Furniture Freeport (Freeport Commons) 173,000 100.0% 26.32 The Home Depot, Staples Huntington 207,000 81.3% 21.04 ShopRite, Marshalls, Old Navy, Petco Inwood (Burnside Commons) 100,000 90.7% 17.39 Bingo Wholesale (lease not commenced) Mt.
Added
Maxx, Visiting Nurse Service of NY Sunrise Mall (4)(6)(7) 1,228,000 30.5% 10.55 Macy's, Dick's Sporting Goods, Dave & Busters, Home Goods Total Urban Edge Properties 17,006,000 91.0% $19.69 (1) Percent leased is expressed as the percentage of gross leasable area subject to a lease, excluding temporary tenants. The Company also excludes 58,000 sf of self-storage from the report above.
Removed
Maxx (lease not commenced) Total Retail Portfolio 14,495,000 94.3% $19.89 INDUSTRIAL: East Hanover Warehouses (8) 1,218,000 100.0% 8.46 J & J Tri-State Delivery, Foremost Groups, PCS Wireless, Fidelity Paper & Supply, Decker Tape, Givaudan Flavors, Reliable Tire, Nutra-Med, Bestway Trucking (lease not commenced) Lodi (Route 17 North) 127,000 100.0% 12.97 AAA Wholesale Group Total Industrial 1,345,000 100.0% $8.89 Massapequa, NY (Sunrise Mall) (portion leased through 2069) (4)(6)(7) 1,228,000 33.4% 8.37 Macy's, Dick's Sporting Goods, Dave & Buster's, Raymour & Flanigan, Home Goods Total Urban Edge Properties 17,068,000 90.3% $18.62 (1) Percent leased is expressed as the percentage of gross leasable area subject to a lease, excluding temporary tenants.
Removed
These properties are included in our non-same property pool for the year ended December 31, 2022. 21 As of December 31, 2022, we had approximately 900 leases. Tenant leases under 10,000 square feet generally have lease terms of five years or less.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile we are unable to predict with certainty the outcome of any particular matter, management does not currently expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our results of operations or consolidated financial position. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 PART II
Biggest changeWhile we are unable to predict with certainty the outcome of any particular matter, management does not currently expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our results of operations or consolidated financial position. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 24 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 PART II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 24 PART II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 40 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCumulative (1) Total Return % Total Return $ as of Stock/Index 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 UE (31.7) 100.0 68.0 82.2 58.4 88.5 68.3 S&P 500 56.9 100.0 95.6 125.7 148.9 191.6 156.9 Russell 2000 22.4 100.0 89.0 111.7 134.0 153.9 122.4 Dow Jones Equity All REIT 24.5 100.0 95.9 123.5 117.5 166.0 124.5 Dow Jones US Real Estate Strip Centers (3.2) 100.0 85.4 108.6 74.5 107.2 96.8 25 (1) Cumulative total return is for the five years commencing December 31, 2017 and ending December 31, 2022.
Biggest changeCumulative (1) Total Return % Total Return $ as of Stock/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 UE 35.8 100.0 120.8 85.8 130.1 100.4 135.8 S&P 500 109.0 100.0 132.6 157.0 202.1 165.5 209.0 Russell 2000 62.1 100.0 126.5 151.8 174.3 138.7 162.1 Dow Jones Equity All REIT 44.8 100.0 129.0 122.8 173.4 130.1 144.8 Dow Jones US Real Estate Strip Centers 24.1 100.0 126.2 86.6 124.7 112.5 124.1 (1) Cumulative total return is for the five years commencing December 31, 2018 and ending December 31, 2023. 26 Operating Partnership Market Information and Distributions There is no established public market for our general and common limited partnership interests in the operating partnership (“OP Units”).
As of December 31, 2022, the Company has repurchased 5.9 million common shares at a weighted average share price of $9.22, for a total of $54.1 million. All share repurchases by the Company were completed between March and April of 2020. There is approximately $145.9 million remaining for share repurchases under this program.
As of December 31, 2023, the Company has repurchased 5.9 million common shares at a weighted average share price of $9.22, for a total of $54.1 million. All share repurchases by the Company were completed between March and April of 2020. There is approximately $145.9 million remaining for share repurchases under this program.
In March 2020, our Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s common shares. During the years ended December 31, 2022 and 2021, no shares were repurchased.
In March 2020, our Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s common shares. During the years ended December 31, 2023 and 2022, no shares were repurchased.
No assurances can be given regarding what portion, if any, of distributions in 2022 or subsequent years will constitute a return of capital for federal income tax purposes.
No assurances can be given regarding what portion, if any, of distributions in 2023 or subsequent years will constitute a return of capital for federal income tax purposes.
REIT Equity Index) and the Dow Jones US Real Estate Strip Centers (previously SNL REIT Retail Shopping Center Index) as provided by SNL Financial LC, for the five years commencing December 31, 2017 and ending December 31, 2022, assuming an investment of $100 and the reinvestment of all dividends into additional common shares during the holding period.
REIT Equity Index) and the Dow Jones US Real Estate Strip Centers (previously SNL REIT Retail Shopping Center Index) as provided by SNL Financial LC, for the five years commencing December 31, 2018 and ending December 31, 2023, assuming an investment of $100 and the reinvestment of all dividends into additional common shares during the holding period.
We did not repurchase any of our equity securities during the year ended December 31, 2022. Our employees will at times surrender common shares owned by them to satisfy statutory minimum federal, state and local tax obligations associated with the vesting of their restricted common shares. During the year ended December 31, 2022, 7,228 restricted common shares were surrendered.
We did not repurchase any of our equity securities during the year ended December 31, 2023. Our employees will at times surrender common shares owned by them to satisfy statutory minimum federal, state and local tax obligations associated with the vesting of their restricted common shares. During the year ended December 31, 2023, 7,637 restricted common shares were surrendered.
During the year ended, December 31, 2022, in connection with issuances of common shares by the Company pursuant to the Urban Edge Properties 2015 Employee Share Purchase Plan, the Operating Partnership issued an aggregate of 26,088 common limited partnership units to the Company in exchange for approximately $0.3 million, the aggregate proceeds of such common share issuances to the Company.
During the year ended, December 31, 2023, in connection with issuances of common shares by the Company pursuant to the Urban Edge Properties 2015 Employee Share Purchase Plan, the Operating Partnership issued an aggregate of 26,054 common limited partnership units to the Company in exchange for approximately $0.3 million, the aggregate proceeds of such common share issuances to the Company.
COMPARISON OF CUMULATIVE TOTAL RETURN (1) (1) $100 invested on December 31, 2017 in stock or index, including reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN (1) (1) $100 invested on December 31, 2018 in stock or index, including reinvestment of dividends.
During the year ended December 31, 2022, 250,000 units were redeemed for common shares and no units were redeemed for cash. Recent Sales of Unregistered Shares During the year ended December 31, 2022, the Company issued an aggregate of 250,000 common shares in exchange for 250,000 common limited partnership units held by certain limited partners of the Operating Partnership.
During the year ended December 31, 2023, 70,000 units were redeemed for common shares and no units were redeemed for cash. Recent Sales of Unregistered Shares During the year ended December 31, 2023, the Company issued an aggregate of 70,000 common shares in exchange for 70,000 common limited partnership units held by certain limited partners of the Operating Partnership.
We have determined the dividends paid on our common shares during 2022 and 2021 qualify for the following tax treatment: Total Distribution per Share Ordinary Dividends Long Term Capital Gains Return of Capital 2022 $ 0.64 $ 0.64 $ — $ — 2021 0.60 0.60 — — 24 Total Shareholder Return Performance The following performance graph compares the cumulative total shareholder return of our common shares with the Russell 2000 Index, the S&P 500 Index, Dow Jones Equity All REIT (previously SNL U.S.
We have determined the dividends paid on our common shares during 2023 and 2022 qualify for the following tax treatment: Total Distribution per Share Ordinary Dividends Long Term Capital Gains Return of Capital 2023 $ 0.64 $ 0.56 $ 0.08 $ — 2022 0.64 0.64 — — 25 Total Shareholder Return Performance The following performance graph compares the cumulative total shareholder return of our common shares with the Russell 2000 Index, the S&P 500 Index, Dow Jones Equity All REIT (previously SNL U.S.
Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. Purchases of Equity Securities by the Issuer and Affiliated Purchasers During the year ended December 31, 2022, 16,531 restricted common shares were forfeited by former employees in connection with their departure from the Company.
Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. Purchases of Equity Securities by the Issuer and Affiliated Purchasers During the year ended December 31, 2023, 10,178 restricted common shares were forfeited by former employees in connection with their departure from the Company.
Our Board of Trustees declared a quarterly dividend of $0.16 and $0.15 per share for each of the four quarters in 2022 and 2021, respectively. During the years ended December 31, 2022 and 2021, respectively, the Company declared distributions on common shares and OP units of $0.64 and $0.60 per share/unit in the aggregate.
Our Board of Trustees declared a quarterly dividend of $0.16 per share/unit for each of the four quarters in 2023 and 2022. During the years ended December 31, 2023 and 2022, the Company declared distributions on common shares and OP units of $0.64 per share/unit in the aggregate.
As of February 3, 2023, there were approximately 1,237 holders of record of our common shares. The Company elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015.
As of February 2, 2024, there were approximately 1,177 holders of record of our common shares. The Company elected to be taxed as a REIT under sections 856-860 of the Code, commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015.
Operating Partnership Market Information and Distributions There is no established public market for our general and common limited partnership interests in the operating partnership (“OP Units”). As of February 3, 2023, there were 117,485,171 general partnership units outstanding and 4,713,558 common limited partnership units outstanding, held by approximately 1,237 and 42 holders of record, respectively.
As of February 2, 2024, there were 117,727,117 general partnership units outstanding and 5,659,781 common limited partnership units outstanding, held by approximately 1,177 and 43 holders of record, respectively.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe expect to continue to add value to our portfolio through executing on our current leasing momentum, our active development, redevelopment and anchor repositioning projects, and commencement of leases signed but not yet opened. 2022 Highlights Set forth below are highlights of our leasing activities, completed and activated development, redevelopment and anchor repositioning projects, and property acquisitions: • Signed a record 69 new leases totaling approximately 1,032,434 square feet, including 55 new leases on a same-space (1) basis totaling 754,812 square feet at an average rental rate of $23.15 per square foot on a GAAP basis and 27 $21.34 per square foot on a cash basis, resulting in average rent spreads of 45.1% on a GAAP basis and 22.2% on a cash basis; • Renewed or extended 90 leases totaling 1,086,469 square feet, all of which are on a same-space (1) basis, at an average rental rate of $20.36 per square foot on a GAAP basis and $20.10 per square foot on a cash basis, generating average rent spreads of 9.2% on a GAAP basis and 6.0% on a cash basis; • Completed ten development, redevelopment and anchor repositioning projects, aggregating $105.2 million, four of which stabilized during the fourth quarter.
Biggest changeWe expect to continue to add value to our portfolio through executing our leasing pipeline, active development, redevelopment and anchor repositioning projects, commencing leases signed but not yet opened and identifying additional capital recycling opportunities. 2023 Highlights Set forth below are highlights of our leasing activities, completed and activated development, redevelopment and anchor repositioning projects, and property acquisitions: • Signed 64 new leases totaling approximately 486,201 square feet, including 49 new leases on a same-space (1) basis totaling 418,322 square feet at an average rental rate of $29.64 per square foot on a GAAP basis and $27.86 per square foot on a cash basis, resulting in average rent spreads of 39.0% on a GAAP basis and 24.2% on a cash basis; • Renewed or extended 110 leases totaling 1,519,738 square feet, all of which are on a same-space (1) basis, at an average rental rate of $24.35 per square foot on a GAAP basis and $23.95 per square foot on a cash basis, generating average rent spreads of 10.2% on a GAAP basis and 8.4% on a cash basis; 28 • Completed 11 development, redevelopment and anchor repositioning projects, aggregating $58.6 million, seven of which stabilized during the fourth quarter, highlighted by the opening of Sector Sixty6 at Shops at Caguas in October 2023; • Activated 12 development, redevelopment, and anchor repositioning projects aggregating $60.9 million, expected to generate an approximate 20% unleveraged yield; • Refinanced the $300 million mortgage secured by the Outlets at Bergen Town Center with a 7-year, $290 million loan at a fixed rate of 6.3%; • Refinanced the $117 million outstanding mortgage secured by Shops at Caguas (formerly Las Catalinas Mall) with a 10-year, $82 million loan at a fixed rate of 6.6%.
Estimated fair value may be based on discounted future cash flows utilizing 29 appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared.
Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared.
As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors.
As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition, disposition or foreclosure of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors.
While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring.
While there is judgment surrounding changes in designations, a property is removed from the same-property pool 34 when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring.
Executive Overview Our Company Urban Edge Properties (“UE”, “Urban Edge”, or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that manages, develops, redevelops, and acquires retail real estate, primarily in the Washington, D.C. to Boston corridor.
Executive Overview Our Company Urban Edge Properties (“UE”, “Urban Edge”, or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that owns, manages, acquires, develops, and redevelops retail real estate, primarily in the Washington, D.C. to Boston corridor.
We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excluding properties acquired or sold during the periods being compared.
We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excluding properties acquired, sold, or that are in the foreclosure process during the periods being compared.
Comparison of the Year Ended December 31, 2021 to December 31, 2020 Discussions of 2020 items and comparisons between the year ended December 31, 2021 and 2020, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Comparison of the Year Ended December 31, 2022 to December 31, 2021 Discussions of 2022 items and comparisons between the year ended December 31, 2022 and 2021, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Our status as a REIT requires that we generally distribute at least 90% of our REIT’s ordinary taxable income each year. Our Board of Trustees declared a quarterly dividend of $0.16 per common share and OP unit for each of the four quarters in 2022, or an annual rate of $0.64.
Our status as a REIT requires that we generally distribute at least 90% of our REIT’s ordinary taxable income each year. Our Board of Trustees declared a quarterly dividend of $0.16 per common share and OP unit for each of the four quarters in 2023, or an annual rate of $0.64.
A discussion of 2020 items and year-to-year comparisons between 2021 and 2020 are not included in this Annual Report on Form 10-K but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
A discussion of 2021 items and year-to-year comparisons between 2022 and 2021 are not included in this Annual Report on Form 10-K but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
In the case that these assumptions change materially, they could have a material impact on our results and financial statements. During 2022, we acquired two properties and utilized the above factors, including the use of a third party, to allocate the purchase price of these properties among various assets and liabilities.
In the case that these assumptions change materially, they could have a material impact on our results and financial statements. During 2023, we acquired two properties and utilized the above factors, including the use of a third party, to allocate the purchase price of these properties among various assets and liabilities.
Further information on these allocations can be found in Part II, Item 8, Note 4 of this Annual Report on Form 10-K. We have had no changes to our methods of fair value assessment and allocations during the year ended December 31, 2022.
Further information on these allocations can be found in Part II, Item 8, Note 4 of this Annual Report on Form 10-K. We have had no changes to our methods of fair value assessment and allocations during the year ended December 31, 2023.
The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the 28 accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.
The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the 29 accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.
Interest on variable rate debt is computed using rates in effect as of December 31, 2022. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Interest on variable rate debt is computed using rates in effect as of December 31, 2023. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Additionally, see Note 7 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent amendments to the Internal Revenue Code. 30 Results of Operations We derive substantially all of our revenue from rents received from tenants under existing leases on each of our properties.
Additionally, see Note 7 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent amendments to the Code. 31 Results of Operations We derive substantially all of our revenue from rents received from tenants under existing leases on each of our properties.
Real Estate - Estimates Related to Impairments Our properties are individually evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Real Estate - Estimates Related to Impairments Our properties are individually evaluated for impairment quarterly, and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 items and provides a year-to-year comparison between 2022 and 2021.
This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and provides a year-to-year comparison between 2023 and 2022.
Information provided on a same-property basis excludes properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired or sold during the periods being compared.
Information provided on a same-property basis excludes properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired, sold, or that are in the foreclosure process during the periods being compared.
Throughout this section, we have provided certain information on a “same-property” basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, which total 68 properties for the years ended December 31, 2022 and 2021.
Throughout this section, we have provided certain information on a “same-property” basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, which total 66 properties for the years ended December 31, 2023 and 2022.
The following table reflects the reconciliation of net income to FFO for the years ended December 31, 2022 and 2021.
The following table reflects the reconciliation of net income to FFO for the years ended December 31, 2023 and 2022.
Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. 33 Same-property NOI increased by $8.2 million, or 4.1%, for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. Same-property NOI increased by $2.3 million, or 1.1%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of December 31, 2022, Urban Edge owned approximately 96.1% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired.
The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of December 31, 2023, Urban Edge owned approximately 95.4% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired.
The amendments to Item 303(a)(b) MD&A were adopted in our Form 10-K for the year ended December 31, 2021. See Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements that may affect us.
These amendments were adopted in our Annual Report on Form 10-K for the year ended December 31, 2023. See Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements that may affect us.
We utilize interest rate derivative agreements to hedge the effect of rising interest rates on our variable rate debt. As of December 31, 2022, we were counter-party to one interest rate swap agreement and one interest rate cap agreement, both of which qualify for, and are designated as, hedging instruments.
We occasionally utilize interest rate derivative agreements to hedge the effect of rising interest rates on our variable rate debt. As of December 31, 2023, we were counterparty to one interest rate swap agreement and one interest rate cap agreement, both of which qualify for, and are designated as, hedging instruments.
Property operating expenses increased by $5.8 million to $74.3 million in the year ended December 31, 2022 from $68.5 million in the year ended December 31, 2021.
Property operating expenses decreased by $5.8 million to $68.6 million in the year ended December 31, 2023 from $74.3 million in the year ended December 31, 2022.
Our cash flow activities are summarized as follows: Year Ended December 31, (Amounts in thousands) 2022 2021 Net cash provided by operating activities $ 139,618 $ 135,273 Net cash used in investing activities (151,913) (311,160) Net cash used in financing activities (78,767) (23,530) Operating Activities Net cash provided by operating activities primarily consists of cash inflows from rental revenue and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.
Our cash flow activities are summarized as follows: Year Ended December 31, (Amounts in thousands) 2023 2022 Net cash provided by operating activities $ 163,015 $ 139,618 Net cash used in investing activities (117,702) (151,913) Net cash provided by (used in) financing activities 161 (78,767) 37 Operating Activities Net cash provided by operating activities primarily consists of cash inflows from rental revenue and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.
Recent Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met.
As these factors can result in changes to our estimates and result in material impairment losses, this is deemed a critical accounting estimate. 30 Recent Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met.
For the year ended December 31, (Amounts in thousands) 2022 2021 Net income $ 47,339 $ 107,815 Less net (income) loss attributable to noncontrolling interests in: Operating partnership (1,895) (4,296) Consolidated subsidiaries 726 (833) Net income attributable to common shareholders 46,170 102,686 Adjustments: Rental property depreciation and amortization 97,460 91,468 Gain on sale of real estate (353) (18,648) Real estate impairment loss — 468 Limited partnership interests in operating partnership (1) 1,895 4,296 FFO applicable to diluted common shareholders $ 145,172 $ 180,270 (1) Represents earnings allocated to Long-Term Incentive Plan (“LTIP”) and Operating Partnership (“OP”) unitholders for unissued common shares, which have been excluded for purposes of calculating earnings per diluted share for the periods presented because they are anti-dilutive. 35 Liquidity and Capital Resources Due to the nature of our business, the cash generated from operations is primarily paid to our shareholders and unitholders of the Operating Partnership in the form of distributions.
For the year ended December 31, (Amounts in thousands) 2023 2022 Net income $ 259,876 $ 47,339 Less net (income) loss attributable to noncontrolling interests in: Operating partnership (11,899) (1,895) Consolidated subsidiaries 520 726 Net income attributable to common shareholders 248,497 46,170 Adjustments: Rental property depreciation and amortization 107,695 97,460 Gain on sale of real estate (217,708) (353) Real estate impairment loss 34,055 — Limited partnership interests in operating partnership (1) 11,899 1,895 FFO applicable to diluted common shareholders $ 184,438 $ 145,172 (1) Represents earnings allocated to Long-Term Incentive Plan (“LTIP”) and OP unitholders for unissued common shares, which have been excluded for purposes of calculating earnings per diluted share for the periods presented because they are anti-dilutive. 36 Liquidity and Capital Resources Due to the nature of our business, the cash generated from operations is primarily paid to our shareholders and unitholders of the Operating Partnership in the form of distributions.
Contractual Obligations We have contractual obligations related to our mortgage loans that are both fixed and variable. Our variable rate loans bear interest at a floating rate based on LIBOR, SOFR and the Prime Rate plus an applicable margin ranging from 0.5% to 2.26%.
Contractual Obligations We have contractual obligations related to our mortgage loans and unsecured line of credit that are both fixed and variable. Our variable rate loans bear interest at a floating rate based on SOFR plus an applicable margin ranging from 1.10% to 2.26%.
(1) Same-space leases represent those leases signed on spaces for which there was a previous lease. 2023 Outlook We intend to create value and grow earnings, funds from operations, and cash flows by: • Adding essential tenants to our properties and positioning our retail environments with quality grocers, premium healthcare operators and elevated food offerings; • Managing our balance sheet to allow for flexibility and execution on financing and refinancing opportunities when identified; • Leasing vacant spaces, proactively extending leases, managing the exercise of tenant options and, when possible, replacing underperforming tenants with operators that can pay higher rents and positively impact our properties; • Expediting the delivery of space to tenants and the collection of rents from executed leases that have not yet commenced; • Generating additional income from our existing assets by redeveloping underutilized existing space, developing new space and pad sites, repositioning anchors, and incorporating non-retail uses such as industrial, self-storage, office and other uses; and • Acquiring assets that meet our investment criteria.
(1) Same-space leases represent those leases signed on spaces for which there was a previous lease. 2024 Outlook We intend to create value and grow earnings, funds from operations, and cash flows by: • Adding essential tenants to our properties and positioning our retail environments with a mix of high-quality tenants including grocers, discounters, premium healthcare operators and elevated food offerings; • Managing our balance sheet to allow for flexibility and execution on financing, refinancing, or prepayment opportunities when identified; • Managing and monitoring property operating and general and administrative expenses and identifying opportunities for savings; • Leasing vacant spaces, proactively extending leases, managing the exercise of tenant options and, when possible, replacing underperforming tenants with operators that can pay higher rents and positively impact our properties; • Expediting the delivery of space to tenants and the collection of rents from executed leases that have not yet commenced; • Generating additional income from our existing assets by redeveloping underutilized existing space, repositioning anchors, and monetizing unused land by developing new spaces and pad sites and researching additional income producing uses; and • Recycling capital by divesting non-retail and smaller assets in non-core markets and acquiring assets that meet our investment criteria in our target markets.
(2) Refer to page 34 for a reconciliation to the nearest GAAP measure. 31 Comparison of the Year Ended December 31, 2022 to December 31, 2021 Net income for the year ended December 31, 2022 was $47.3 million, compared to net income of $107.8 million for the year ended December 31, 2021.
(2) Refer to page 35 for a reconciliation to the nearest GAAP measure. 32 Comparison of the Year Ended December 31, 2023 to December 31, 2022 Net income for the year ended December 31, 2023 was $259.9 million, compared to net income of $47.3 million for the year ended December 31, 2022.
The following provides an overview of our key non-GAAP measures based on our consolidated results of operations (refer to NOI, same-property NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section): Year Ended December 31, (Amounts in thousands) 2022 2021 Net income $ 47,339 $ 107,815 FFO applicable to diluted common shareholders (1) 145,172 180,270 NOI (2) 240,898 223,811 Same-property NOI (2) 210,062 201,842 (1) Refer to page 35 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.
The following provides an overview of our key non-GAAP measures based on our consolidated results of operations (refer to NOI, same-property NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section): Year Ended December 31, (Amounts in thousands) 2023 2022 Net income $ 259,876 $ 47,339 FFO applicable to diluted common shareholders (1) 184,438 145,172 NOI (2) 250,129 240,898 Same-property NOI (2) 207,952 205,676 (1) Refer to page 36 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.
The increase is primarily attributable to an increase in interest rates on our cash deposits. Interest and debt expense increased by $1.0 million to $59.0 million in the year ended December 31, 2022 from $57.9 million in the year ended December 31, 2021.
The increase is attributable to higher average cash balances and higher interest rates on our deposits. Interest and debt expense increased by $16.0 million to $74.9 million in the year ended December 31, 2023 from $59.0 million in the year ended December 31, 2022.
There can be no assurance that we will be able to execute on our growth strategy, especially given the ongoing economic uncertainty. See Forward-Looking Statements in this Annual Report on Form 10-K.
There can be no assurance that we will be able to execute on our growth strategy. See “Forward-Looking Statements” in this Annual Report on Form 10-K.
The decrease is primarily attributable to: • $2.4 million decrease as a result of successful tax appeals and lowered assessments; and • $2.1 million of real estate taxes capitalized in connection with active development, redevelopment and anchor repositioning projects; offset by • $2.5 million increase as a result of property acquisitions net of dispositions.
The increase is primarily attributable to: • $2.3 million increase as a result of successful tax appeals and lowered assessments in 2022 and higher assessments, net of successful appeals in 2023; and • $1.3 million increase as a result of property acquisitions net of dispositions; offset by • $0.6 million increase in capitalized real estate taxes due to the commencement of development, redevelopment and anchor repositioning projects, offset by project completions.
We operate in a business that has significant investments in real estate and our estimates of valuation are subject to current market conditions and tenant operations, which drive future cash flows, and are beyond our control. As these factors can result in changes to our estimates and result in material impairment losses, this is deemed a critical accounting estimate.
We operate in a business that has significant investments in real estate and our estimates of valuation are subject to current market conditions and tenant operations, which drive future cash flows, and are beyond our control.
The decrease is primarily attributable to: • $47.5 million decrease in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in connection with certain lease terminations in 2021; and • $0.8 million decrease in management and development fee income; offset by • $16.2 million increase as a result of property acquisitions net of dispositions; • $3.2 million decrease in rental revenue deemed uncollectible; and • $1.8 million net increase in property rentals and tenant reimbursements due to rent commencements, contractual rent increases and higher tenant sales.
The increase is primarily attributable to: • $9.7 million increase as a result of property acquisitions net of dispositions; • $9.7 million increase in other income primarily driven by a litigation settlement payment received in the fourth quarter of 2023; • $1.6 million increase in property rentals and tenant reimbursements due to rent commencements and contractual rent increases, partially offset by tenant vacates; and • $1.2 million increase in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in connection with certain lease terminations in 2023; offset by • $3.2 million increase in rental revenue deemed uncollectible.
Real estate tax expense decreased by $2.0 million to $61.9 million in the year ended December 31, 2022 from $63.8 million in the year ended December 31, 2021.
Real estate tax expense increased by $3.0 million to $64.9 million in the year ended December 31, 2023 from $61.9 million in the year ended December 31, 2022.
Same-property NOI, including properties in redevelopment, increased by $6.4 million, or 2.9%, for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Same-property NOI, including properties in redevelopment, increased by $5.6 million, or 2.5%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The following table reconciles net income to NOI and same-property NOI for the years ended December 31, 2023 and 2022.
Investing Activities Net cash used in investing activities is impacted by the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.
Investing Activities Net cash used in investing activities is impacted by the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period. Net cash used in investing activities for the year ended December 31, 2023 decreased by $34.2 million compared to December 31, 2022.
The Company has 25 active development, redevelopment or anchor repositioning projects with total estimated costs of $216.0 million, of which $56.3 million has been incurred and $159.7 million remains to be funded as of December 31, 2022. 36 The following summarizes capital expenditures presented on a cash basis for the years ended December 31, 2022 and 2021: Year Ended December 31, (Amounts in thousands) 2022 2021 Capital expenditures: Development and redevelopment costs $ 77,360 $ 76,750 Capital improvements 36,285 14,944 Tenant improvements and allowances 2,399 3,683 Total capital expenditures $ 116,044 $ 95,377 Financing Activities Net cash used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other payments associated with our outstanding indebtedness.
The following summarizes capital expenditures presented on a cash basis for the years ended December 31, 2023 and 2022: Year Ended December 31, (Amounts in thousands) 2023 2022 Capital expenditures: Development and redevelopment costs $ 83,397 $ 77,360 Capital improvements 27,487 36,285 Tenant improvements and allowances 4,840 2,399 Total capital expenditures $ 115,724 $ 116,044 Financing Activities Net cash provided by or used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other payments associated with our outstanding indebtedness.
Depreciation and amortization increased by $6.1 million to $98.4 million in the year ended December 31, 2022 from $92.3 million in the year ended December 31, 2021.
Depreciation and amortization increased by $10.5 million to $109.0 million in the year ended December 31, 2023 from $98.4 million in the year ended December 31, 2022.
While we have not experienced any material adverse effects at this time, we are actively managing our business to respond to the ongoing economic and social impact from such events. See “Risk Factors” in Part I, Item 1A for more information.
We are actively managing our business to respond to the economic and social impact from events such as those described above. See “Risk Factors” in Part I, Item 1A for more information.
A gain on the sale of real estate of $0.4 million was recognized in 2022 in connection with the release of escrow funds related to a property disposed of in a prior period.
We recognized a gain on sale of real estate of $0.4 million in 2022 in connection with the release of escrow funds related to a property disposed of in a prior period. Interest income increased by $1.9 million to $3.0 million in the year ended December 31, 2023 from $1.1 million in the year ended December 31, 2022.
Such contracts will generally be due over the next two years; • Obligations related to maintenance contracts, since these contracts typically can be canceled upon 30 to 60 days’ notice without penalty; • Obligations related to employment contracts with certain executive officers, since all agreements are subject to cancellation by either the Company or the executive without cause upon notice; and • Recorded debt premiums or discounts that are not obligations.
Such contracts will generally be due over the next two years; • Obligations related to maintenance contracts, since these contracts typically can be canceled upon 30 to 60 days’ notice without penalty; • Obligations related to employment contracts with certain executive officers, since all agreements are subject to cancellation by either the Company or the executive without cause upon notice; and • Recorded debt premiums or discounts that are not obligations. 39 We believe that cash flows from our current operations, cash on hand, our line of credit under our revolving credit agreement, the potential to refinance our loans and our general ability to access the capital markets will be sufficient to finance our operations and fund our obligations in both the short-term and long-term.
The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items which significantly changed in the year ended December 31, 2022 as compared to the same period of 2021: For the year Ended December 31, (Amounts in thousands) 2022 2021 $ Change Total revenue $ 397,938 $ 425,082 $ (27,144) Depreciation and amortization 98,432 92,331 6,101 Real estate taxes 61,864 63,844 (1,980) Property operating expenses 74,334 68,531 5,803 General and administrative 43,087 39,152 3,935 Gain on sale of real estate 353 18,648 (18,295) Interest income 1,107 360 747 Interest and debt expense 58,979 57,938 1,041 Income tax expense 2,903 1,139 1,764 Total revenue decreased by $27.1 million to $397.9 million in the year ended December 31, 2022 from $425.1 million in the year ended December 31, 2021.
The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items which changed significantly in the year ended December 31, 2023 as compared to the same period of 2022: For the Year Ended December 31, (Amounts in thousands) 2023 2022 $ Change Total revenue $ 416,922 $ 397,938 $ 18,984 Depreciation and amortization 108,979 98,432 10,547 Real estate taxes 64,889 61,864 3,025 Property operating expenses 68,563 74,334 (5,771) General and administrative 37,070 43,087 (6,017) Real estate impairment loss 34,055 — 34,055 Gain on sale of real estate 217,708 353 217,355 Interest income 3,037 1,107 1,930 Interest and debt expense 74,945 58,979 15,966 Gain on extinguishment of debt 41,144 — 41,144 Income tax expense 17,800 2,903 14,897 Total revenue increased by $19.0 million to $416.9 million in the year ended December 31, 2023 from $397.9 million in the year ended December 31, 2022.
While the rate hikes enacted by the Federal Reserve have had a significant impact on interest rates and increased the cost of borrowing, we continue to see consumer confidence and a conviction in retail real estate.
The Federal Reserve took measures to mitigate the impact of inflation by raising its benchmark interest rate several times throughout 2022. While the rate hikes enacted by the Federal Reserve had a significant impact on interest rates and increased the cost of borrowing, we continued to see consumer confidence remain strong providing support for retail real estate.
The increase is primarily attributable to: • $3.0 million higher common area maintenance expenses across the portfolio as a result of increased repairs and maintenance, utility usage, cleaning, and landscaping at our properties in 2022 and spend reductions in 2021; and • $2.8 million increase as a result of property acquisitions net of dispositions.
The decrease is primarily attributable to: • $7.0 million lower common area maintenance expenses across the portfolio as a result of lower snow removal, utilities, and repairs and maintenance at our properties in 2023; offset by • $1.2 million increase as a result of property acquisitions net of dispositions.
Net cash provided by operating activities for the year ended December 31, 2022 increased by $4.3 million as compared to December 31, 2021, due to new lease commencements and collection of previously billed and deferred amounts from 2021.
Net cash provided by operating activities for the year ended December 31, 2023 increased by $23.4 million as compared to December 31, 2022.
We do not anticipate that the discontinuation of LIBOR will impact our ability to borrow or maintain already outstanding borrowings, but it could result in higher interest rates and accordingly, higher costs of borrowing to us.
In connection with reference rate reform and the discontinuation of LIBOR, all of our LIBOR-indexed debt has been transitioned to SOFR effective July 2023. The discontinuation of LIBOR did not have an impact on our ability to borrow or maintain already outstanding borrowings, but it could result in higher interest rates and accordingly, higher costs of borrowing to us.
The Federal Reserve has taken measures to suppress inflation by way of benchmark interest rate hikes, resulting in an increase in interest rates. As of December 31, 2022, approximately 91% of our outstanding debt is fixed rate, with the remaining 9% indexed to LIBOR, SOFR or the Prime Rate, plus an applicable margin per the loan agreement.
Throughout 2022 and the first half of 2023, the Federal Reserve raised the benchmark interest rate to mitigate rising inflation, resulting in an increase in the cost of borrowing. As of December 31, 2023, approximately 84% of our outstanding debt is fixed rate, with the remaining 16% indexed to SOFR, plus an applicable margin per the respective loan agreements.
Additionally, we have an $800 million revolving credit agreement with certain financial institutions which has a maturity date of February 9, 2027 and includes two six-month extension options. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on our revolving credit agreement.
We have an $800 million revolving credit agreement with certain financial institutions which has a maturity date of February 9, 2027 and includes two six-month extension options.
The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest. As of December 31, 2022, our portfolio was comprised of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million square feet.
The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest.
These amounts are readily available to fund the debt obligations discussed above which are coming due within the next year. Summary of Cash Flows Cash and cash equivalents, including restricted cash, was $128.8 million at December 31, 2022, compared to $219.8 million as of December 31, 2021, a decrease of $91.1 million.
At December 31, 2023, we had cash and cash equivalents, including restricted cash, of $174.2 million and $616.9 million available under our revolving credit agreement. These amounts are readily available to fund the debt obligations discussed above which are coming due within the next year.
Estimates are subjective and may change if additional damage is later assessed or if future cash flows are revised. During the year ended December 31, 2022, we have had no changes to the methods or assumptions used in our analyses of fair value of our real estate assets and have not incurred any material impairment losses.
We have had no changes to the methods or assumptions used in our analyses of fair value of our real estate assets during the year ended December 31, 2023.
Net cash used in investing activities for the year ended December 31, 2022, decreased by $159.2 million compared to December 31, 2021 due to a (i) $216.4 million decrease in cash used for acquisitions, offset by (ii) $36.5 million decrease in cash provided by the sale of properties and operating leases, and (iii) $20.7 million increase in cash used for real estate development and capital improvements.
The increase is attributed to (i) $312.6 million increase in cash provided by the sale of properties and operating leases, and (ii) $0.3 million decrease in cash used for real estate development and capital improvements, offset by (iii) $278.7 million increase in cash used for acquisitions.
On June 23, 2022, in conjunction with the refinancing of the mortgage loan encumbering our property Plaza at Woodbridge, we entered into an interest rate cap agreement (the “Cap Agreement”) with a third party to limit the maximum SOFR of our floating rate debt to 3%.
The proceeds from the loan were used to pay off the Company’s previous mortgage on the property which had an outstanding balance of $300 million. In May 2023, the Company entered into a two-year interest rate cap agreement with a third-party to limit the maximum SOFR of our Plaza at Woodbridge floating rate debt to 3%.
The increase is primarily attributable to: • $9.7 million increase as a result of property acquisitions net of dispositions; offset by • $3.6 million decrease due to assets taken out of service for active redevelopment projects and write-offs of fully depreciated assets and lease intangibles as a result of lease terminations and recurring depreciation.
The increase is primarily attributable to: • $6.3 million increase as a result of property acquisitions net of dispositions; and • $4.2 million increase due to assets placed in service for completion of redevelopment projects during the year.
We have approximately $329 million of debt maturing within the next 12 months related to mortgage loans encumbering three of our properties and are actively exploring our options to refinance them. At December 31, 2022, we had cash and cash equivalents, including restricted cash, of $128.8 million and no amounts drawn on our $800 million revolving credit agreement.
As of the date of this filing, we have approximately $70.8 million of debt maturing within the next 12 months related to mortgage loans encumbering two of our properties and are actively exploring our options to refinance or pay at maturity.
Net cash used in financing activities for the year ended December 31, 2022, increased by $55.2 million from the year ended December 31, 2021 primarily due to (i) $80.2 million increase in debt repayments primarily related to the refinancing of the mortgage loans encumbering Plaza at Cherry Hill and Plaza at Woodbridge in 2022, (ii) $13.8 million decrease in proceeds from borrowings under mortgage loans, (iii) $7.3 million of deferred financing fees paid in 2022 in connection with the increase and extension of our line of credit under our revolving credit agreement and the refinancing of our loans at Plaza at Cherry Hill and Plaza at Woodbridge, and (iv) $4.6 million decrease in cash contributed by noncontrolling interests, offset by (v) $50.7 million decrease in distributions paid to shareholders and unitholders of the Operating Partnership for the declaration of a special dividend in the fourth quarter of 2020, paid in January 2021.
The increase is primarily due to (i) $366.3 million increase in proceeds from borrowings under mortgage loans, (ii) $309.0 million increase in borrowings under the Company’s unsecured line of credit, and (iii) $0.3 million increase in cash contributed by noncontrolling interests, offset by (iv) $595.6 million increase in debt repayments related to mortgage loans and our unsecured line of credit, and (v) $1.2 million increase of deferred financing fees paid in connection with the financing and refinancing of mortgages during the year.
On August 15, 2022, we entered into an equity distribution agreement with various sales agents, pursuant to which we may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million (the “ATM Program”). The ATM Program replaces the Company’s previous at-the-market program established in June 2021.
Pursuant to the Equity Distribution Agreement, the Company may from time to time offer and sell, through the agents and forward sellers, the Company’s common shares, par value $0.01 per share, having an aggregate offering price of up to $250 million (the “ATM Program”). As of December 31, 2023, no common shares had been issued under the ATM Program.
General and administrative expenses increased by $3.9 million to $43.1 million in the year ended December 31, 2022 from $39.2 million in the year ended December 31, 2021.
General and administrative expenses decreased by $6.0 million to $37.1 million in the year ended December 31, 2023 from $43.1 million in the year ended December 31, 2022. The decrease is primarily attributable to lower employment expenses, professional fees and transaction costs.
For the year ended December 31, (Amounts in thousands) 2022 2021 Net income $ 47,339 $ 107,815 Other expense (125) (561) Depreciation and amortization 98,432 92,331 General and administrative expense 43,087 39,152 Real estate impairment loss — 468 Gain on sale of real estate (353) (18,648) Interest income (1,107) (360) Interest and debt expense 58,979 57,938 Income tax expense 2,903 1,139 Non-cash revenue and expenses (1) (8,257) (55,463) NOI 240,898 223,811 Adjustments: Sunrise Mall net operating loss 2,544 3,031 Tenant bankruptcy settlement income and lease termination income (822) (1,313) Real estate tax settlements related to prior periods (2) (1,441) — Non-same property NOI and other (3) (31,117) (23,687) Same-property NOI $ 210,062 $ 201,842 Adjustments: NOI related to properties being redeveloped 19,054 20,915 Same-property NOI including properties in redevelopment $ 229,116 $ 222,757 (1) Amount for the year ended December 31, 2021 includes accelerated amortization of $45.9 million of below-market intangible liabilities (classified within rental revenue in the consolidated statements of income and comprehensive income).
For the year ended December 31, (Amounts in thousands) 2023 2022 Net income $ 259,876 $ 47,339 Other income (9,097) (125) Depreciation and amortization 108,979 98,432 General and administrative expense 37,070 43,087 Real estate impairment loss 34,055 — Gain on sale of real estate (217,708) (353) Interest income (3,037) (1,107) Interest and debt expense 74,945 58,979 Gain on extinguishment of debt (41,144) — Income tax expense 17,800 2,903 Non-cash revenue and expenses (11,610) (8,257) NOI 250,129 240,898 Adjustments: Sunrise Mall net operating loss 2,427 2,544 Tenant bankruptcy settlement income and lease termination income (1,428) (822) Real estate tax settlements related to prior periods — (1,441) Non-same property NOI and other (1) (43,176) (35,503) Same-property NOI $ 207,952 $ 205,676 Adjustments: NOI related to properties being redeveloped 23,686 20,364 Same-property NOI including properties in redevelopment $ 231,638 $ 226,040 (1) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired, disposed, or that are in the foreclosure process during the periods being compared. 35 Funds From Operations FFO applicable to diluted common shareholders for the year ended December 31, 2023 was $184.4 million compared to $145.2 million for the year ended December 31, 2022.
As of December 31, 2022, there were no amounts drawn on the facility. Refer to Note 6 in Part II, Item 8 of this Annual Report on Form 10-K for more information related to our revolving credit agreement.
The letters of credit issued under the Agreement have reduced the amount available under the facility but remain undrawn and no separate liability has been recorded in association with them. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on our revolving credit agreement.
Below is a summary of our contractual obligations as of December 31, 2022: 37 Commitments Due by Period (Amounts in thousands) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Contractual cash obligations Long-term debt obligations (1) $ 1,971,471 $ 412,788 $ 340,947 $ 614,539 $ 603,197 Operating lease obligations (2) 82,875 9,321 15,286 12,661 45,607 Finance lease obligations (2) 6,750 109 218 251 6,172 $ 2,061,096 $ 422,218 $ 356,451 $ 627,451 $ 654,976 (1) Includes interest and principal payments.
Below is a summary of our contractual obligations as of December 31, 2023: Commitments Due by Period (Amounts in thousands) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Contractual cash obligations Long-term debt obligations (1) $ 2,133,088 $ 241,469 $ 309,697 $ 808,630 $ 773,292 Operating lease obligations (2) 72,480 9,429 12,780 11,798 38,473 Finance lease obligations (2) 6,641 109 233 254 6,045 $ 2,212,209 $ 251,007 $ 322,710 $ 820,682 $ 817,810 (1) Includes interest and principal payments.
The increase is primarily attributable to: • $4.3 million increase in interest expense in connection with the mortgage loans obtained for the acquisitions of Woodmore Towne Centre in December 2021 and The Shops at Riverwood in June 2022; and • $3.1 million increase in interest expense due to higher rates on our variable rate loans and the refinancing of our mortgage loans at Plaza at Cherry Hill and Plaza at Woodbridge in the second quarter of 2022; offset by • $6.4 million increase in capitalized interest expense due to an increase in active development, redevelopment and anchor repositioning projects.
The increase is primarily attributable to: • $11.0 million increase due to financings and refinancings of mortgage loans, net of repayments; • $3.7 million increase due to higher rates on our variable rate mortgage loans; • $3.2 million increase due to a draw on our line of credit to finance the acquisition of two properties in the fourth quarter of 2023; and • $0.7 million increase in amortization of deferred financing costs related to debt transactions during 2023; offset by • $2.6 million increase in capitalized interest expense due to an increase in active development, redevelopment and anchor repositioning projects.
Income tax expense increased by $1.8 million to $2.9 million in the year ended December 31, 2022 from $1.1 million in the year ended December 31, 2021. The increase is primarily attributable to the performance of our properties in Puerto Rico and final adjustments to state and local income taxes in 2021.
Income tax expense increased by $14.9 million to $17.8 million in the year ended December 31, 2023 from $2.9 million in the year ended December 31, 2022. The increase was primarily driven by an income tax expense recognized in the third quarter of 2023 related to the Shops at Caguas loan refinancing in August 2023.
As of December 31, 2022 we have not issued any common shares under the ATM Program. Refer to Note 14 , Equity and Noncontrolling Interest, in Part II, Item 8 of this Annual Report on Form 10-K for more information related to this program.
On January 2, 2024, the Company issued 73,550 common shares at a weighted average price of $18.30 per share under the ATM Program, generating net cash proceeds of $1.3 million. See Note 14 in Part II, Item 8 of this Annual Report on Form 10-K for more information regarding the ATM Program.
We recognized a gain on sale of real estate of $18.6 million in 2021 related to the sale of three properties and one property parcel. 32 Interest income increased by $0.7 million to $1.1 million in the year ended December 31, 2022 from $0.4 million in the year ended December 31, 2021.
We recognized a real estate impairment loss of $34.1 million in the first quarter of 2023, reducing the carrying value of an office and retail property located in Brooklyn, NY. 33 A gain on sale of real estate of $217.7 million was recognized in 2023 related to the sale of two properties and one property parcel.
Removed
Economic Considerations In March of 2020, the World Health Organization characterized the COVID-19 outbreak as a global pandemic.
Added
As of December 31, 2023, our portfolio was comprised of 17.1 million square feet including 71 shopping centers, two outlet centers, two malls and one industrial building. Economic Considerations Microeconomic and macroeconomic conditions have caused volatility in the financial markets, and a rapid rise in inflation since the beginning of 2022.
Removed
Many of our tenants faced adverse financial consequences from reduced business operations and restrictions related to the pandemic, and the Company’s results for 2020 were negatively impacted by tenant fallout from COVID-driven bankruptcies, uncollected or disputed rents from impacted tenants, and from abatements granted to tenants facing financial hardships due to the pandemic.
Added
The demand for retail spaces was strong as evidenced by the record number of new leases we executed in 2022. In 2023, the Federal Reserve continued its interest rate hikes raising the benchmark rate to above 5%. These rate increases proved to be successful in reducing inflation beginning in the second quarter of 2023.
Removed
Throughout 2021, the widespread distribution of vaccines and reduction of restrictions boosted economic confidence and increased consumer spending, resulting in a strengthened existing retail tenant base and an increase in demand for space. The Company saw leasing momentum and foot traffic at our properties return to near pre-pandemic levels.
Added
While inflation has decreased compared to the prior year, it remains at an elevated level relative to the years preceding 2021.
Removed
During 2022, microeconomic and macroeconomic conditions caused volatility in the financial markets and a rapid rise in inflation. The Federal Reserve has taken steps to mitigate the impact of inflation by raising its benchmark interest rate several times throughout the year.
Added
Despite the volatility in interest rates, we were able to complete the largest single asset refinancing in Company history with a new $290 million, 6.3% mortgage on Bergen Town Center on favorable terms compared to similar assets in the market.
Removed
Tenant sales have increased year-over-year and the demand for retail spaces remains strong as evidenced by the record number of new leases we executed in 2022. The geographic location of our portfolio has also proven to be beneficial. With hybrid and remote work becoming more common, consumers have demonstrated that convenience and proximity are valued.
Added
Our leasing activity remained strong in 2023, signing a record volume of leases in the fourth quarter and generating an average cash rent spread of 24% on new leases for the year.
Removed
The majority of our portfolio is located in one of the most supply-constrained and densely populated markets in the country and offers consumers easy access to essential services and retailers, including medical offices, grocers, and discounters.
Added
The proceeds were used in conjunction with exercising the discounted payoff option of the previous mortgage on the property which had a carrying value of $117 million and resulted in the recognition of a $43 million gain on the extinguishment of debt; • Acquired two properties, Shoppers World and Gateway Center, for a total purchase price of $312.2 million inclusive of transaction costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+8 added−3 removed4 unchanged
Biggest changeAs of December 31, 2022, the Company was a counterparty to two interest rate derivative agreements which have been designated as cash flow hedges. On June 23, 2022, in connection with the refinancing of one of our variable rate loans, we entered into a one-year interest rate cap agreement for a purchase price of approximately $0.3 million.
Biggest changeOn June 23, 2022, in connection with the refinancing of one of our variable rate loans, we entered into a one-year interest rate cap agreement for a purchase price of approximately $0.3 million, to limit the maximum SOFR of our Plaza at Woodbridge floating rate debt to 3%.
In making this determination and for purposes of the SEC’s market risk disclosure requirements, we have estimated the fair value of our financial instruments at December 31, 2022 based on pertinent information available to management as of that date.
In making this determination and for purposes of the SEC’s market risk disclosure requirements, we have estimated the fair value of our financial instruments at December 31, 2023 based on pertinent information available to management as of that date.
Although management is not aware of any factors that would significantly affect the estimated amounts as of December 31, 2022, future estimates of fair value and the amounts which may be paid or realized in the future may differ significantly from amounts presented. 39
Although management is not aware of any factors that would significantly affect the estimated amounts as of December 31, 2023, future estimates of fair value and the amounts which may be paid or realized in the future may differ significantly from amounts presented. 41
As of December 31, 2022, the estimated fair value of our consolidated debt was $1.5 billion. Other Market Risks As of December 31, 2022, we had no material exposure to any other market risks (including foreign currency exchange risk or commodity price risk).
As of December 31, 2023, the estimated fair value of our consolidated debt was $1.6 billion. 40 Other Market Risks As of December 31, 2023, we had no material exposure to any other market risks (including foreign currency exchange risk or commodity price risk).
(2) If the weighted average interest rate of our fixed rate debt increased by 1% (i.e. due to refinancing at higher rates), annualized interest expense would increase by approximately $15.4 million based on outstanding balances as of December 31, 2022.
(2) If the weighted average interest rate of our fixed rate debt increased by 1% (i.e. due to refinancing at higher rates), annualized interest expense would increase by approximately $14.6 million based on outstanding balances as of December 31, 2023.
As of December 31, 2022, our variable rate debt outstanding had rates indexed to LIBOR, SOFR, and the Prime Rate. 2022 2021 (Amounts in thousands) December 31, Balance Weighted Average Interest Rate Effect of 1% Change in Base Rates December 31, Balance Weighted Average Interest Rate Variable Rate $ 159,198 6.11% $ 1,592 $ 161,084 1.85% Fixed Rate 1,540,293 4.09% — (2) 1,534,324 4.10% $ 1,699,491 (1) $ 1,592 $ 1,695,408 (1) (1) Excludes unamortized debt issuance costs of $7.8 million and $8.2 million as of December 31, 2022 and December 31, 2021, respectively.
As of December 31, 2023, our variable rate debt outstanding had rates indexed to SOFR. 2023 2022 (Amounts in thousands) December 31, Balance Weighted Average Interest Rate Effect of 1% Change in Base Rates December 31, Balance Weighted Average Interest Rate Variable Rate $ 280,969 6.53% $ 2,287 (3) $ 159,198 6.11% Fixed Rate 1,462,766 4.88% — (2) 1,540,293 4.09% $ 1,743,735 (1) $ 2,287 $ 1,699,491 (1) (1) Excludes unamortized mortgage debt issuance costs of $12.6 million and $7.8 million as of December 31, 2023 and December 31, 2022, respectively.
Removed
Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt.
Added
Debt issuance costs related to our unsecured credit facility are included within prepaid expenses and other assets on the consolidated balance sheets.
Removed
Our exposure to a change in interest rates is summarized in the table below.
Added
(3) Excludes the impact of a 1% increase on our $52.3 million variable rate mortgage on Plaza at Woodbridge as the loan is hedged with an interest rate cap to limit the maximum SOFR to 3.0%.
Removed
The cap agreement has an expiration date of July 1, 2023 and limits the maximum SOFR of the variable loan it is hedged with to 3%. This derivative instrument is assessed quarterly and as of December 31, 2022 meets the criteria of an effective hedge.
Added
See Note 9 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information on the Plaza at Woodbridge interest rate cap.
Added
As of December 31, 2023, the Company was a counterparty to two interest rate derivative agreements which have been designated as cash flow hedges. These derivatives are assessed quarterly for hedge effectiveness and as of December 31, 2023, both meet the criteria of an effective hedge.
Added
In May 2023, the Company entered into a new two-year interest rate cap agreement for a purchase price of $1.1 million, to replace the previous interest rate cap agreement which expired on July 1, 2023.
Added
The new cap went into effect July 3, 2023 and expires on July 1, 2025, and is included in the prepaid expenses and other assets line item of the consolidated balance sheets.
Added
Discontinuation of LIBOR The LIBOR benchmark has been the subject of national, international and other regulatory guidance and proposals for reform and replacement, with LIBOR “settings” relevant to the Company no longer being published after June 30, 2023.
Added
As a result, we have entered into loan amendments with our lenders to transition all of our LIBOR-indexed debt to SOFR effective July 2023. The transitions did not have a material impact on the loans affected and the Company was able to maintain rates comparable to the rates in place prior to the SOFR transition.

Other UE 10-K year-over-year comparisons