The following is a summary of the Urban Edge Properties (UE) Q4 2023 Earnings Call Transcript:
Financial Performance:
Urban Edge Properties reported a 35% total return to shareholders in 2023, surpassing peer companies in the shopping center REIT sector.
The company executed leases that are expected to generate $27m of rent upon commencement, accounting for around 11% of their current NOI.
It has $168m worth of anchor repositioning and redevelopment projects that are expected to yield a 15% return, with over 90% of this pipeline being pre-leased.
UE aims to achieve an FFO of $1.35 per share or higher in 2025, reflecting a 6% increase in their annual dividend.
The same-property NOI growth declined by 1.3% compared to Q4 2022 but saw an increase of 2.5% for the full year.
UE reported an FFO as adjusted of $0.31 per share for Q4 and $1.25 per share for the full year, hitting the top end of the guidance range.
Business Progress:
UE maintains a concentrated portfolio in the D.C. to Boston corridor, making it challenging for new entrants due to limited land availability and high costs.
UE ended 2023 with acquisitions worth $34 million, including Heritage Square in New Jersey, bought at a going-in cap rate above 7.75%.
The company saw an increased same-property occupancy by 150 basis points to 96%.
They have leased approximately 2 million square feet through 2023, leading to an about 12% overall increase in rent spread.
The company has secured a debt strategy with 13% maturing through 2026, creating a well-laddered debt maturity profile.
They plan to increase shop occupancy to over 91% in 2024, as part of optimizing operations.
The lease occupancy is expected to grow, targeting 97-98% occupancy, with shop occupancy growing to 91% and anchor occupancy expected to exceed 98%.
More details: Urban Edge Properties IR
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