Q3 2024 Urban Edge Properties Earnings Call Transcript
Key Points
- Urban Edge Properties (UE) reported a 9% growth in FFO per share compared to the third quarter of last year, driven by a 5.1% increase in same-property net operating income.
- The company successfully acquired $552 million worth of high-quality shopping centers at a 7% cap rate, funded through $425 million of dispositions of noncore assets.
- Leasing activity remained strong with 23 new leases executed at a same-space cash spread of 15%, and shop occupancy increased to 90.4%.
- Urban Edge Properties (UE) increased its 2024 FFO as adjusted guidance to $1.32 to $1.35 per share, reflecting a 7% expected FFO growth for the year.
- The company has a $159 million redevelopment pipeline expected to generate a 14% unlevered yield on cost, indicating strong future growth potential.
- The acquisition market has become more competitive, with cap rates compressing, making targeted property acquisitions more challenging.
- Same-property leased occupancy slightly decreased by 10 basis points compared to the prior quarter due to an expected lease termination.
- Uncollectible rental revenue was higher than the unusually low level recorded in the third quarter of last year, although it was 25 basis points lower than expected.
- The company issued approximately 4.4 million shares of common stock under its ATM, raising $84 million, which could dilute existing shareholders.
- Urban Edge Properties (UE) faces potential tenant risks from bankruptcies such as Big Lots, which could impact future revenue and occupancy rates.
Ladies and gentlemen, good morning, and welcome to the Urban Edge Properties third quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Areeba Ahmed, Investor Relations Associate. Please go ahead.
Good morning, and welcome to Urban Edge Properties third quarter 2024 earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer; Jeff Mooallem, Chief Operating Officer; Mark Langer, Chief Financial Officer; Rob Milton, General Counsel; Scott Auster, EVP and Head of Leasing; and Andrea Drazin, Chief Accounting Officer.
Please note, today's discussion may contain forward-looking statements about the company's views of future events and financial performance, which are subject to numerous assumptions, risks, and uncertainties and which the company does not undertake to update. Our actual results, financial condition and business may differ.
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