United States
Securities And Exchange Commission
Washington, DC 20549


Form 10-Q


☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934


For the quarterly period ended January 31, 20182023


OR


□ ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934


For the transition period from _____to_____


Commission File Number 1-12803


graphic


Urstadt Biddle Properties Inc.URSTADT BIDDLE PROPERTIES INC.
(Exact Name of Registrant as Specified in its Charter)


Maryland
04-2458042
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
  
321 Railroad Avenue,GreenwichCT
06830
(Address of principal executive offices)(Zip Code)


Registrant's telephone number, including area code:  (203) 863-8200


N/A
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareUBPNew York Stock Exchange
Class A Common Stock, par value $.01 per shareUBANew York Stock Exchange
6.25% Series H Cumulative Preferred StockUBPPRHNew York Stock Exchange
5.875% Series K Cumulative Preferred StockUBPPRKNew York Stock Exchange
Common Stock Rights to Purchase Preferred Shares
N/ANew York Stock Exchange
Class A Common Stock Rights to Purchase Preferred Shares
N/ANew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒    No ☐


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and "emerging“emerging growth company"company” in Rule 12b-2of12b-2 of the Exchange Act.


Large accelerated filer ☐
Accelerated filer☒
  
Non-accelerated filer ☐
(Do not check if a smaller reporting company)
Smaller reporting company ☐
  
Emerging growth company ☐
  


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Indicate by check mark whether the Registrantregistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☒


As of  March 6, 20182023 (latest date practicable), the number of shares of the Registrant's classes of Common Stock and Class A Common Stock outstanding was: 9,818,59810,357,529 Common Shares, par value $.01 per share, and 29,812,21728,969,866 Class A Common Shares, par value $.01 per share.






Index
 
Urstadt Biddle Properties Inc.
  
  
  
Part I. Financial Information
 
  
Item 1.Financial Statements (Unaudited) 
   
 
Consolidated Balance Sheets – January 31, 20182023 (Unaudited) and October 31, 2017.2022.
1
   
 
Consolidated Statements of Income (Unaudited) – Three months endedJanuary 31, 20182023 and 2017.2022.
2
   
 
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three months endedJanuary 31, 20182023 and 2017.2022.
3
   
 
Consolidated Statements of Cash Flows (Unaudited) –   Three months endedJanuary 31, 20182023 and 2017.2022.
4
   
 
Consolidated Statement of Stockholders' Equity (Unaudited) – Three months endedJanuary 31, 2018.2023 and 2022.
5
   
 
Notes to Consolidated Financial Statements.
7
   
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
19
   
Item 3.
Quantitative and Qualitative Disclosures about Market Risk.Risk.
29
   
Item 4.
Controls and Procedures.Procedures.
30
   
   
Part II. Other Information
 
   
Item 1.
Legal Proceedings.Proceedings.
31
   
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
32
   
Item 6.
Exhibits.
33
   
Signatures
34


1

Index

URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)


 January 31, 2018  October 31, 2017  January 31, 2023  October 31, 2022 
 (Unaudited)     (Unaudited)    
Assets            
Real Estate Investments:            
Real Estate– at cost $1,095,259  $1,090,402  $1,193,552  $1,190,356 
Less: Accumulated depreciation  (201,010)  (195,020)  (309,593)  (303,488)
  894,249   895,382   883,959   886,868 
Investments in and advances to unconsolidated joint ventures  37,887   38,049   28,601   29,586 
  932,136   933,431   912,560   916,454 
                
Cash and cash equivalents  4,508   8,674   14,094   14,966 
Restricted cash  2,399   2,306 
Tenant receivables  22,573   21,554 
Tenant receivables-net  24,228   22,889 
Prepaid expenses and other assets  22,360   18,881   36,254   34,559 
Deferred charges, net of accumulated amortization  11,596   11,867   8,180   8,458 
Total Assets $995,572  $996,713  $995,316  $997,326 
                
LIABILITIES AND STOCKHOLDERS' EQUITY        
LIABILITIES AND STOCKHOLDERS’ EQUITY        
                
Liabilities:                
Revolving credit line $6,000  $4,000  $37,500  $30,500 
Mortgage notes payable and other loans  295,475   297,071   300,500   302,316 
Accounts payable and accrued expenses  6,515   4,200   9,633   5,399 
Deferred compensation – officers  62   96   56   54 
Other liabilities  21,530   22,755   22,551   23,205 
Total Liabilities  329,582   328,122   370,240   361,474 
                
Redeemable Noncontrolling Interests  79,999   81,361   61,206   61,550 
                
Commitments and Contingencies              
                
Stockholders' Equity:        
6.75% Series G Cumulative Preferred Stock (liquidation preference of $25 per share); 3,000,000 shares issued and outstanding  75,000   75,000 
6.25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share); 4,600,000 shares issued and outstanding  115,000   115,000 
Excess Stock, par value $0.01 per share; 20,000,000 shares authorized; none issued and outstanding  -   - 
Common Stock, par value $0.01 per share; 30,000,000 shares authorized; 9,818,598 and 9,664,778 shares issued and outstanding  99   97 
Class A Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 29,818,877 and 29,728,744 shares issued and outstanding  298   297 
Stockholders’ Equity:        
6.25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share); 4,600,000 shares issued and outstanding
  115,000   115,000 
5.875% Series K Cumulative Preferred Stock (liquidation preference of $25 per share); 4,400,000 shares issued and outstanding
  110,000   110,000 
Excess Stock, par value $0.01 per share; 20,000,000 shares authorized; none issued and outstanding
  -   - 
Common Stock, par value $0.01 per share; 30,000,000 shares authorized; 10,357,529 and 10,247,072 shares issued and outstanding
  105   104 
Class A Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 28,970,166 and 28,963,433 shares issued and outstanding
  290   290 
Additional paid in capital  514,690   514,217   509,815   511,471 
Cumulative distributions in excess of net income  (124,248)  (120,123)  (183,483)  (179,754)
Accumulated other comprehensive income  5,152   2,742 
Accumulated other comprehensive income (loss)  12,143   17,191 
Total Stockholders' Equity  585,991   587,230   563,870   574,302 
Total Liabilities and Stockholders' Equity $995,572  $996,713  $995,316  $997,326 


The accompanying notes to consolidated financial statements are an integral part of these statements.


1
2
Index
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOMEINCOME (UNAUDITED)
(In thousands, except per share data)


 
Three Months Ended
January 31,
  
Three Months Ended
January 31,
 
 2018  2017  2023  2022 
            
Revenues            
Base rents $23,584  $21,112 
Recoveries from tenants  8,207   7,073 
Lease termination income  -   24 
Other income  1,204   861 
Lease income $35,739  $34,087 
Lease termination  1,557   28 
Other  1,001   1,440 
Total Revenues  32,995   29,070   38,297   35,555 
                
Expenses                
Property operating  6,306   5,148   6,965   7,002 
Property taxes  5,147   4,848   5,918   5,923 
Depreciation and amortization  6,949   6,581   8,404   7,144 
General and administrative  2,419   2,455   2,726   2,680 
Provision for tenant credit losses  210   78 
Acquisition costs  -   103 
Directors' fees and expenses  102   83   119   107 
Total Operating Expenses  21,133   19,296   24,132   22,856 
                
Operating Income  11,862   9,774   14,165   12,699 
                
Non-Operating Income (Expense):                
Interest expense  (3,423)  (3,257)  (3,647)  (3,302)
Equity in net income from unconsolidated joint ventures  560   514   420   267 
Gain (loss) on sale of property  (4)  2 
Interest, dividends and other investment income  80   173   134   55 
Net Income  9,079   7,204   11,068   9,721 
                
Noncontrolling interests:                
Net income attributable to noncontrolling interests  (1,095)  (222)  (853)  (911)
Net income attributable to Urstadt Biddle Properties Inc.  7,984   6,982   10,215   8,810 
Preferred stock dividends  (3,063)  (3,570)  (3,413)  (3,413)
                
Net Income Applicable to Common and Class A Common Stockholders $4,921  $3,412  $6,802  $5,397 
                
Basic Earnings Per Share:                
Per Common Share: $0.12  $0.08  $0.17  $0.13 
Per Class A Common Share: $0.13  $0.09  $0.18  $0.14 
                
Diluted Earnings Per Share:                
Per Common Share: $0.12  $0.08  $0.16  $0.13 
Per Class A Common Share: $0.13  $0.09  $0.18  $0.14 
                
Dividends Per Share:                
Common $0.24  $0.235  $0.2250  $0.2145 
Class A Common $0.27  $0.265  $0.2500  $0.2375 


The accompanying notes to consolidated financial statements are an integral part of these statements.


2
3
Index
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In thousands)


 
Three Months Ended
January 31,
  
Three Months Ended
January 31,
 
 2018  2017  2023  2022 
            
Net Income $9,079  $7,204  $11,068  $9,721 
                
Other comprehensive income:        
Change in unrealized income on interest rate swaps  2,410   4,209 
Other comprehensive income (loss):        
Change in unrealized gains (losses) on interest rate swaps  (4,365)  3,471 
Change in unrealized gains (losses) on interest rate swaps-equity investees  (683)  352 
                
Total comprehensive income  11,489   11,413   6,020   13,544 
Comprehensive income attributable to noncontrolling interests  (1,095)  (222)  (853)  (911)
                
Total Comprehensive income attributable to Urstadt Biddle Properties Inc.  10,394   11,191 
Total comprehensive income attributable to Urstadt Biddle Properties Inc.  5,167   12,633 
Preferred stock dividends  (3,063)  (3,570)  (3,413)  (3,413)
                
Total comprehensive income applicable to Common and Class A Common Stockholders $7,331  $7,621  $1,754  $9,220 


The accompanying notes to consolidated financial statements are an integral part of these statements.


3
4
Index
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
Three Months Ended
January 31,
 
  2023  2022 
Cash Flows from Operating Activities:      
Net income $11,068  $9,721 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  8,404   7,144 
Straight-line rent adjustment  (372)  (5)
Provision for tenant credit losses  (20)  200 
(Gain)/loss on sale of property  4   (2)
Restricted stock compensation expense and other adjustments  926   638 
Deferred compensation arrangement  2   (13)
Equity in net (income) of unconsolidated joint ventures  (420)  (267)
Distributions of operating income from unconsolidated joint ventures  420   267 
Changes in operating assets and liabilities:        
Tenant receivables  (948)  (298)
Accounts payable and accrued expenses  4,234   2,756 
Other assets and other liabilities, net  (6,563)  (6,611)
Net Cash Flow Provided by Operating Activities  16,735   13,530 
         
Cash Flows from Investing Activities:        
Deposits on acquisition of real estate  -   (500)
Proceeds from sale of property  -   1,848 
Improvements to properties and deferred charges  (5,262)  (3,020)
Return of capital from unconsolidated affiliates  265   1,438 
Net Cash Flow (Used in) Investing Activities  (4,997)  (234)
         
Cash Flows from Financing Activities:        
Dividends paid -- Common and Class A Common Stock  (9,572)  (9,308)
Dividends paid -- Preferred Stock  (3,413)  (3,413)
Principal amortization repayments on mortgage notes payable  (1,887)  (1,697)
Repayment of mortgage note payable  -   (6,545)
Proceeds from mortgage note payable  -   11,000 
Proceeds from revolving credit facility  7,000   - 
Acquisitions of noncontrolling interests  (1,303)  (1,358)
Distributions to noncontrolling interests  (853)  (911)
Payment of taxes on shares withheld for employee taxes  (493)  (590)
Repurchase of Common and Class A Common stock  (2,143)  - 
Net proceeds from the issuance of Common and Class A Common Stock  54   48 
Net Cash Flow (Used in) Financing Activities  (12,610)  (12,774)
         
Net Increase/(Decrease) In Cash and Cash Equivalents  (872)  522 
Cash and Cash Equivalents at Beginning of Period  14,966   24,057 
         
Cash and Cash Equivalents at End of Period $14,094  $24,579 
         
Supplemental Cash Flow Disclosures:        
Interest Paid $3,572  $3,077 

  
Three Months Ended
January 31,
 
  2018  2017 
Cash Flows from Operating Activities:      
Net income $9,079  $7,204 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  6,949   6,581 
Straight-line rent adjustment  (217)  (238)
Provision for tenant credit losses  210   78 
Restricted stock compensation expense and other adjustments  666   810 
Deferred compensation arrangement  (33)  (38)
Equity in net (income) of unconsolidated joint ventures  (560)  (514)
Distributions of operating income from unconsolidated joint ventures  560   514 
Changes in operating assets and liabilities:        
Tenant receivables  (1,012)  (3,145)
Accounts payable and accrued expenses  2,819   5,175 
Other assets and other liabilities, net  (5,789)  (4,985)
Restricted Cash  (93)  94 
Net Cash Flow Provided by Operating Activities  12,579   11,536 
         
Cash Flows from Investing Activities:        
Acquisitions of real estate investments  (121)  (8,852)
Investments in and advances to unconsolidated joint ventures  -   (138)
Deposits on acquisition of real estate investment  (10)  (2,500)
Return of deposits on acquisition of real estate investments  -   500 
Improvements to properties and deferred charges  (2,389)  (2,643)
Distributions to noncontrolling interests  (1,095)  (222)
Return of capital from unconsolidated joint ventures  136   271 
Net Cash Flow (Used in) Investing Activities  (3,479)  (13,584)
         
Cash Flows from Financing Activities:        
Dividends paid -- Common and Class A Common Stock  (10,408)  (10,148)
Dividends paid -- Preferred Stock  (3,063)  (3,570)
Principal repayments on mortgage notes payable  (1,604)  (1,512)
Repayment of revolving credit line borrowings  (4,000)  - 
Proceeds from revolving credit line borrowings  6,000   15,000 
Shares withheld for employee taxes  (240)  - 
Net proceeds from the issuance of Common and Class A Common Stock  49   49 
Net Cash Flow (Used in) Financing Activities  (13,266)  (181)
         
Net (Decrease) In Cash and Cash Equivalents  (4,166)  (2,229)
Cash and Cash Equivalents at Beginning of Period  8,674   7,271 
         
Cash and Cash Equivalents at End of Period $4,508  $5,042 
         
Supplemental Cash Flow Disclosures:        
Interest Paid $3,252  $3,199 


The accompanying notes to consolidated financial statements are an integral part of these statements.


4
5
Index
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' STOCKHOLDERS’ EQUITY (UNAUDITED)
Three Months Ended January 31, 2023 and 2022
(In thousands, except share and per share data)


 
6.75%
Series G
Preferred
Stock
Issued
  
6.75%
Series G
Preferred
Stock A
Amount
  
6.25%
Series H
Preferred
Stock
Issued
  
6.25%
Series H
Preferred
Stock
Amount
  
Common
Stock
Issued
  
Common
Stock
Amount
  
Class A
Common
Stock
Issued
  
Class A
Common
Stock
Amount
  
Additional
Paid In
Capital
  
Cumulative
Distributions
In Excess of
Net Income
  
Accumulated
Other
Comprehensive
Income (loss)
  
Total
Stockholders'
Equity
  
Series H
Preferred
Stock
Issued
  
Series H
Preferred
Stock Amount
  
Series K
Preferred
Stock
Issued
  
Series K
Preferred
Stock
Amount
  
Common
Stock
Issued
  
Common
Stock
Amount
  
Class A
Common
Stock
Issued
  
Class A
Common
Stock
Amount
  
Additional
Paid In
Capital
  
Cumulative
Distributions
In Excess of
Net Income
  
Accumulated
Other
Comprehensive
Income (loss)
  
Total
Stockholders’
Equity
 
                                                                        
Balances - October 31, 2017  3,000,000  $75,000   4,600,000  $115,000   9,664,778  $97   29,728,744  $297  $514,217  $(120,123) $2,742  $587,230 
Balances - October 31, 2022  4,600,000  $115,000   4,400,000  $110,000   10,247,072  $104   28,963,433  $290  $511,471  $(179,754) $17,191  $574,302 
Net income applicable to Common and Class A common stockholders  -   -   -   -   -   -   -   -   -   4,921   -   4,921   -   -   -   -   -   -   -   -   -   6,802   -   6,802 
Change in unrealized income on interest rate swap  -   -   -   -   -   -   -   -   -   -   2,410   2,410 
Change in unrealized gains on interest rate swap  -   -   -   -   -   -   -   -   -   -   (5,048)  (5,048)
Cash dividends paid :                                                                                                
Common stock ($0.24 per share)  -   -   -   -   -   -   -   -   -   (2,356)  -   (2,356)
Class A common stock ($0.27 per share)  -   -   -   -   -   -   -   -   -   (8,052)  -   (8,052)
Common stock ($0.225 per share)
  -   -   -   -   -   -   -   -   -   (2,331)  -   (2,331)
Class A common stock ($0.25 per share)
  -   -   -   -   -   -   -   -   -   (7,241)  -   (7,241)
Issuance of shares under dividend reinvestment plan  -   -   -   -   1,120   -   1,469   -   49   -   -   49   -   -   -   -   944   -   2,013   -   54   -   -   54 
Shares issued under restricted stock plan  -   -   -   -   152,700   2   102,800   1   (3)  -   -   -   -   -   -   -   109,800   1   151,750   1   (2)  -   -   - 
Shares withheld for employee taxes  -   -   -   -   -   -   (10,886)  -   (240)  -   -   (240)  -   -   -   -   -   -   (26,014)  -   (493)  -   -   (493)
Forfeiture of restricted stock  -   -   -   -   -   -   (3,250)  -   -   -   -   -   -   -   -   -   -   -   (5,000)  -   -   -   -   - 
Repurchase of Common and Class A Common stock  -   -   -   -   (287)  -   (116,016)  (1)  (2,141)  -   -   (2,142)
Restricted stock compensation and other adjustments  -   -   -   -   -   -   -   -   667   -   -   667   -   -   -   -   -   -   -   -   926   -   -   926 
Adjustments to redeemable noncontrolling interests  -   -   -   -   -   -   -   -   -   1,362   -   1,362   -   -   -   -   -   -   -   -   -   (959)  -   (959)
Balances - January 31, 2018  3,000,000  $75,000   4,600,000  $115,000   9,818,598  $99   29,818,877  $298  $514,690  $(124,248) $5,152  $585,991 
Balances - January 31, 2023  4,600,000  $115,000   4,400,000  $110,000   10,357,529  $105   28,970,166  $290  $509,815  $(183,483) $12,143  $563,870 

5
Index


 
Series H
Preferred
Stock
Issued
  
Series H
Preferred
Stock Amount
  
Series K
Preferred
Stock
Issued
  
Series K
Preferred
Stock
Amount
  
Common
Stock
Issued
  
Common
Stock
Amount
  
Class A
Common
Stock
Issued
  
Class A
Common
Stock
Amount
  
Additional
Paid In
Capital
  
Cumulative
Distributions
In Excess of
Net Income
  
Accumulated
Other
Comprehensive
Income
  
Total
Stockholders’
Equity
 
                                     
Balances - October 31, 2021  4,600,000  $115,000   4,400,000  $110,000   10,153,689  $103   30,073,807  $301  $528,713  $(170,493) $(7,720) $575,904 
Net income applicable to Common and Class A common stockholders  -   -   -   -   -   -   -   -   -   5,397   -   5,397 
Change in unrealized losses on interest rate swap  -   -   -   -   -   -   -   -   -   -   3,823   3,823 
Cash dividends paid :                                                
Common stock ($0.2145 per share)
  -   -   -   -   -   -   -   -   -   (2,201)  -   (2,201)
Class A common stock ($0.2375 per share)
  -   -   -   -   -   -   -   -   -   (7,107)  -   (7,107)
Issuance of shares under dividend reinvestment plan  -   -   -   -   848   -   1,567   -   48   -   -   48 
Shares issued under restricted stock plan  -   -   -   -   109,500   1   149,000   1   (2)  -   -   - 
Shares withheld for employee taxes  -   -   -   -   -   -   (27,680)  -   (590)  -   -   (590)
Forfeiture of restricted stock  -   -   -   -   -   -   (35,600)  -   -   -       - 
Repurchase of Common and Class A Common stock  -   -   -   -   -   -   -   -   -   -   -   - 
Restricted stock compensation and other adjustments  -   -   -   -   -   -   -   -   638   -   -   638 
Adjustments to redeemable noncontrolling interests  -   -   -   -   -   -   -   -   -   (536)  -   (536)
Balances - January 31, 2022  4,600,000  $115,000   4,400,000  $110,000   10,264,037  $104   30,161,094  $302  $528,807  $(174,940) $(3,897) $575,376 

The accompanying notes to consolidated financial statements are an integral part of these statements
6
6
Index


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1) ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Business
Urstadt Biddle Properties Inc. ("Company"(“Company”), a Maryland Corporation,corporation, is a real estate investment trust (REIT)("REIT"), engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers in the northeastern part of the United States with a concentration in the metropolitan New York tri-state area outside of the City of New York.  The Company's major tenants include supermarket chains and other retailers who sell basic necessities.  At January 31, 2018,2023, the Company owned or had equity interests in 8277 properties containing a total of 5.15.3 million square feet of Gross Leasable Area ("GLA"(“GLA”).


COVID-19 Pandemic
On March 11, 2020, the novel coronavirus disease (“COVID-19”) was declared a pandemic (“COVID-19 pandemic”) by the World Health Organization as the disease spread throughout the world.  During March 2020, measures to prevent the spread of COVID-19 were initiated, with federal, state and local government agencies issuing regulatory orders enforcing social distancing and limiting certain business operations and group gatherings in order to further prevent the spread of COVID-19.  While these regulatory orders vary by state and have changed over time, as of January 31, 2023 most of our tenants’ businesses are operating normally. We have seen foot traffic, retail activity and general business conditions for most of our tenants essentially return to pre-pandemic levels.

Principles of Consolidation and Use of Estimates
The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and joint ventures in which the Company meets certain criteria in accordance with Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Codification ("ASC"(“ASC”) Topic 810, "Consolidation"“Consolidation”. The Company has determined that such joint ventures should be consolidated into the consolidated financial statements of the Company. In accordance with ASC Topic 970-323 "Real“Real Estate-General-Equity Method and Joint Ventures,"” joint ventures that the Company does not control but otherwise exercises significant influence over, are accounted for under the equity method of accounting. See Note 5 for further discussion of the unconsolidated joint ventures. All significant intercompany transactions and balances have been eliminated in consolidation.


The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("(“U.S. GAAP"GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Results of operations for the three months ended January 31, 20182023 are not necessarily indicative of the results that may be expected for the year ending October 31, 2018.2023. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company'sCompany’s annual report on Form 10-K for the fiscal year ended October 31, 2017.2022.


The preparation of financial statements requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition, fair value estimates, and the collectability of tenant receivables and other assets and liabilities.  Actual results could differ from these estimates.  The consolidated balance sheet at October 31, 20172022 has been derived from audited financial statements at that date.


Federal Income Taxes
The Company has elected to be treated as a REIT under Sections 856-860 of the Internal Revenue Code (Code)("Code"). Under those sections, a REIT that, among other things, distributes at least 90% of real estate trust taxable income and meets certain other qualifications prescribed by the Code will not be taxed on that portion of its taxable income that is distributed.  The Company believes it qualifies as a REIT and intends to distribute all of its taxable income for fiscal 20182023 in accordance with the provisions of the Code. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated financial statements.


The Company follows the provisions of ASC Topic 740, "Income Taxes"“Income Taxes” that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  Based on its evaluation, the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of January 31, 2018.2023. As of January 31, 2018,2023, the fiscal tax years 20142019 through and including 20172022 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.


Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and tenant receivables. The Company places its cash and cash equivalents with high quality financial institutions and the balances at times could exceed federally insured limits. The Company performs ongoing credit evaluations of its tenants and may require certain tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the terminal value of a tenant'stenant’s lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost rent and the costs associated with re-tenanting the space. The Company has no dependency upon any single tenant.


Marketable Securities
Marketable equity securities are carried at fair value based upon quoted market prices in active markets with changes in fair value recognized in net income.

Derivative Financial Instruments
The Company occasionally utilizes derivative financial instruments, such as interest rate swaps, to manage its exposure to fluctuations in interest rates. The Company has established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. Derivative financial instruments must be effective in reducing the Company'sCompany’s interest rate risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in net income. The Company has not entered into, and does not plan to enter into, derivative financial instruments for trading or speculative purposes. Additionally, the Company has a policy of entering into derivative contracts only with major financial institutions.


As of January 31, 2018,2023, the Company believes it has no significant risk associated with non-performance of the financial institutions that are the counterparties to its derivative contracts.  At January 31, 2018,2023, the Company had approximately $89.1$154.8 million in secured mortgage financings subject to interest rate swaps. Such interest rate swaps converted the LIBOR-basedLIBOR or Secured Overnight Financing Rate (“SOFR”)-based variable rates on the mortgage financings to an averagea fixed annual rate of 3.62%3.74% per annum. As of January 31, 20182023 and October 31, 2017,2022, the Company had a deferred liabilityassets of  $70,000 and $574,000, respectively (included in accounts payable and accrued expense on the consolidated balance sheets) and a deferred asset of $5.2$11.5 million and $3.3$15.9 million, respectively (included in prepaid expenses and other assets on the consolidated balance sheets), relating to the fair value of the Company'sCompany’s interest rate swaps applicable to secured mortgages.


Charges and/or credits relating to the changes in fair values of such interest rate swaps are made to other comprehensive income/(loss) as the swaps are deemed effective and are classified as a cash flow hedge.


Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income applicable to Common and Class A Common stockholders and other comprehensive income (loss). Other comprehensive income (loss) includes items that are otherwise recorded directly in stockholders'stockholders’ equity, such as unrealized gains and losses on interest rate swaps designated as cash flow hedges.hedges, including the Company's share from entities accounted for under the equity method of accounting. At January 31, 2018,2023, accumulated other comprehensive income consisted of net unrealized gains on interest rate swap agreements of $5.2 million.$12.1 million, inclusive of the Company's share of accumulated comprehensive income from joint ventures accounted for by the equity method of accounting.  At October 31, 2017,2022, accumulated other comprehensive income consisted of net unrealized gains on interest rate swap agreements of approximately $2.7 million.$17.2 million, inclusive of the Company's share of accumulated comprehensive income from joint ventures accounted for by the equity method of accounting. Unrealized gains and losses included in other comprehensive income/(loss) will be reclassified into earnings as gains and losses are realized.


Asset Impairment
On a periodic basis, management assesses whether there are any indicators that the value of its real estate investments may be impaired.  A property value is considered impaired when management'smanagement’s estimate of current and projected operating cash flows (undiscounted and without interest) of the property over its remaining useful life is less than the net carrying value of the property.  Such cash flow projections consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.  To the extent impairment has occurred, the loss is measured as the excess of the net carrying amount of the property over the fair value of the asset.  Changes in estimated future cash flows due to changes in the Company'sCompany’s plans or market and economic conditions could result in recognition of impairment losses which could be substantial.  ManagementAs of January 31, 2023, management does not believe that the value of any of its real estate investments is impaired at January 31, 2018.
impaired.
7
7
Index



Acquisitions of Real Estate Investments, Capitalization Policy and Depreciation


Acquisition of Real Estate Investments:
The Company evaluates each acquisition of real estate or in-substance real estate (including equity interests in entities that predominantly hold real estate assets) to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted for as a business combination. If either of the following criteria is met, the integrated set of assets and activities acquired would not qualify as a business:


• Substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets; or


• The integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e. revenue generated before and after the transaction).


An acquired process is considered substantive if:


• The process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce), that is skilled, knowledgeable, and experienced in performing the process;


• The process cannot be replaced without significant cost, effort, or delay; or


• The process is considered unique or scarce.


Generally, the Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related intangible assets) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.


Acquisitions of real estate and in-substance real estate whichthat do not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis. As a result, asset acquisitions do not result in the recognition of goodwill or a bargain purchase gain. The relative fair values used to allocate the cost of an asset acquisition are determined using the same methodologies and assumptions as the Company utilizes to determine fair value in a business combination.


The value of tangible assets acquired is based upon our estimation of value on an "as“as if vacant"vacant” basis. The value of acquired in-place leases includes the estimated costs during the hypothetical lease-up period and other costs that would have been incurred in the execution of similar leases under the market conditions at the acquisition date of the acquired in-place lease. We assess the fair value of tangible and intangible assets based on numerous factors, including estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including the historical operating results, known trends, and market/economic conditions that may affect the property.


The values of acquired above and below-market leases, which are included in prepaid expenses and other assets and other liabilities, respectively, are amortized over the terms of the related leases and recognized as either an increase (for below-market leases) or a decrease (for above-market leases) to rental revenue. The values of acquired in-place leases are classified in other assets in the accompanying consolidated balance sheets and amortized over the remaining terms of the related leases.


Capitalization Policy:
Land, buildings, property improvements, furniture/fixtures and tenant improvements are recorded at cost. Expenditures for maintenance and repairs are charged to operations as incurred. Renovations and/or replacements, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.


Depreciation:
The Company is required to make subjective assessments as to the useful life of its properties for purposes of determining the amount of depreciation. These assessments have a direct impact on the Company'sCompany’s net income.


Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:


Buildings30-40 years
Property Improvements10-20 years
Furniture/Fixtures3-10 years
Tenant ImprovementsShorter of lease term or their useful life

8
Sale of Investment Property and Property Held for Sale
The Company reports properties that are either disposed of or are classified as held for sale in continuing operations in the consolidated statement of income if the removal, or anticipated removal, of the asset(s) from the reporting entity does not represent a strategic shift that has or will have a major effect on an entity's operations and financial results when disposed of.   The

In September 2021, the Company did not classify any propertiesentered into a purchase and sale agreement to sell its property located in Chester, NJ (the "Chester Property"), to an unrelated third party for a sale price of $1.96 million as that property no longer met its investment objectives.  In accordance with ASC Topic 360-10-45, the property met all the criteria to be classified as held for sale in the fourth quarter of fiscal 2021, and accordingly the Company recorded a loss on property held for sale of $342,000, which loss was included in continuing operations in the consolidated statement of income for the year ended October 31, 2021. The amount of the loss represented the net carrying amount of the property over the fair value of the asset less estimated cost to sell.  The net book value of the Chester Property was insignificant to financial statement presentation and as a result the Company did not include the asset as held for sale on its consolidated balance sheet at October 31, 2021.  In December 2021, the Chester Property sale was completed and the Company realized an additional loss on sale of property of $8,000, which loss is included in operations in the consolidated statement of income for the three months ended January 31, 20182022.

The operating results of the Chester Property, which is included in operations is as follows (amounts in thousands):

 
Three Months Ended
January 31,
 
  2023  2022 
Revenues $-  $- 
Property operating expense  -   (13)
Depreciation and amortization  -   - 
Net Income (Loss) $-  $(13)

8
Index
Lease Income, Revenue Recognition and October 31, 2017.Tenant Receivables

Lease Income:

The Company accounts for lease income in accordance with ASC Topic 842 "Leases".

The Company's existing leases are generally classified as operating leases. However, certain longer-term leases (both lessee and lessor leases) may be classified as direct financing or sales type leases, which may result in selling profit and an accelerated pattern of earnings recognition.

The Company leases space to tenants under agreements with varying terms that generally provide for fixed payments of base rent, with designated increases over the term of the lease. Some of the lease agreements contain provisions that provide for additional rents based on tenants' sales volume ("percentage rent"). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. Additionally, most all lease agreements contain provisions for reimbursement of the tenants' share of actual real estate taxes, insurance and Common Area Maintenance ("CAM") costs (collectively, "Recoverable Costs") incurred.

Lease terms generally range from 1 to 5 years for tenant spaces under 10,000 square feet (“Shop Space”) and in excess of 5 years for spaces greater than 10,000 square feet (“Anchor Spaces”). Many leases also provide the option for the tenants to extend their lease beyond the initial term of the lease. If the tenants do not exercise renewal options and the leases mature, the tenants must relinquish their space so it can be leased to a new tenant, which generally involves some level of cost to prepare the space for re-leasing. These costs are capitalized and depreciated over the shorter of the life of the subsequent lease or the life of the improvement.

CAM is a non-lease component of the lease contract under ASC Topic 842, and therefore would be accounted for under ASC Topic 606, Revenue from Contracts with Customers and presented separate from lease income in the accompanying consolidated statements of income, based on an allocation of the overall contract price, which is not necessarily the amount that would be billable to the tenants for CAM reimbursements per the terms of the lease contract. As the timing and pattern of providing the CAM service to the tenant is the same as the timing and pattern of the tenants' use of the underlying lease asset, the Company, in accordance with ASC Topic 842, combines CAM with the remaining lease components, along with tenants' reimbursement of real estate taxes and insurance, and recognizes them together as lease income in the accompanying consolidated statements of income.

Lease income for operating leases with fixed payment terms is recognized on a straight-line basis over the expected term of the lease for all leases for which collectability is considered probable at the commencement date. At lease commencement, the Company expects that collectability is probable for all of its leases due to the Company’s credit checks on tenants and other creditworthiness analysis undertaken before entering into a new lease; therefore, income from all operating leases is initially recognized on a straight-line basis.  Lease income each period is reduced by amounts considered uncollectable on a lease-by-lease basis, with any changes in collectability assessments recognized as a current period adjustment to lease income. For operating leases in which collectability of lease income is not considered probable, lease income is recognized on a cash basis and all previously recognized uncollected lease income, including straight-line rental income, is reversed in the period in which the lease income is determined not to be probable of collection.

The Company, as a lessor, may only defer as initial direct costs the incremental costs of a tenant operating lease that would not have been incurred if the lease had not been obtained. These costs generally include third party broker payments, which are capitalized to deferred costs in the accompanying consolidated balance sheets and amortized over the expected term of the lease to depreciation and amortization expense in the accompanying consolidated statements of income.

Revenue Recognition
Revenues from operating leases include revenues from properties. Rental income is generally recognized based on the terms of leases entered into with tenants.
In those instances in which the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition on operating leases will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. Minimum rental income from leases with scheduled rent increases is recognized on a straight-line basis over the lease term.  At January 31, 2018 and October 31, 2017, $17,586,000 and $17,349,000, respectively, has been recognized as straight-line rents receivable (representing the current cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases), all of which is included in tenant receivables in the accompanying consolidated financial statements. Percentage rent is recognized when a specific tenant's sales breakpoint is achieved. Property operating expense recoveries from tenants of common area maintenance, real estate taxes and other recoverable costs are recognized in the period the related expenses are incurred. Lease incentives are amortized as a reduction of rental revenue over the respective tenant lease terms.

Lease termination amounts are recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company. There is no way of predicting or forecasting the timing or amounts of future lease termination fees. Interest income is recognized as it is earned. Gains or losses on disposition of properties are recorded when the criteria for recognizing such gains or losses under U.S. GAAP have been met.


Percentage rent is recognized when a specific tenant’s sales breakpoint is achieved.

Tenant Receivables

During the early days of the COVID-19 pandemic, the actions taken by federal, state and local governments to mitigate the spread of COVID-19, (i) initially by ordering closures of non-essential businesses and ordering residents to generally stay at home, and (ii) subsequently by phasing re-openings resulted in many of our tenants temporarily, or even permanently, closing their businesses, and for some, their ability to pay rent was impacted.

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash-basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash-basis accounting in accordance with ASC Topic 842.

We did not convert any additional tenants to cash-basis accounting in the second half of fiscal 2021, fiscal 2022 or the three months ended January 31, 2023.  As of January 31, 2023, 36 of the 89 tenants are no longer tenants in the Company's properties.

As of January 31, 2023, the Company is recording lease income on a cash basis for approximately 3.3% of our tenants in accordance with ASC Topic 842.

At January 31, 2023 and October 31, 2022, $20,315,000 and $19,895,000, respectively, have been recognized as straight-line rents receivable (representing the current cumulative rents recognized prior to when billed and collectable, as provided by the terms of the leases), all of which is included in tenant receivables in the accompanying consolidated financial statements.

The Company provides an allowance for doubtful accounts against the portion of tenant receivables that is estimated to be uncollectible.uncollectable. Such allowances are reviewed periodically. At January 31, 20182023 and October 31, 2017,2022, tenant receivables in the accompanying consolidated balance sheets are shown net of allowances for doubtful accounts of $4,516,000$6,382,000 and $4,543,000,$6,213,600, respectively. Included in the aforementioned allowance for doubtful accounts is an amount for future tenant credit losses of approximately 10% of the deferred straight-line rents receivable, which is estimated to be uncollectible.uncollectable.

9
Index


Earnings Per Share
The Company calculates basic and diluted earnings per share in accordance with the provisions of ASC Topic 260, "Earnings“Earnings Per Share."” Basic earnings per share ("EPS"(“EPS”) excludes the impact of dilutive shares and is computed by dividing net income applicable to Common and Class A Common stockholders by the weighted average number of Common shares and Class A Common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue Common shares or Class A Common shares were exercised or converted into Common shares or Class A Common shares and then shared in the earnings of the Company. Since the cash dividends declared on the Company'sCompany’s Class A Common stock are higher than the dividends declared on the Common Stock, basic and diluted EPS have been calculated using the "two-class"“two-class” method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to the weighted average of the dividends declared, outstanding shares per class and participation rights in undistributed earnings.


The following table sets forth the reconciliation between basic and diluted EPS (in thousands):


 
Three Months Ended
January 31,
  
Three Months Ended
January 31,
 
 2018  2017  2023  2022 
Numerator            
Net income applicable to common stockholders – basic $1,012  $690  $1,562  $1,194 
Effect of dilutive securities:                
Restricted stock awards  43   32   44   34 
Net income applicable to common stockholders – diluted $1,055  $722  $1,606  $1,228 
                
Denominator                
Denominator for basic EPS – weighted average common shares  8,558   8,382   9,413   9,327 
Effect of dilutive securities:                
Restricted stock awards  500   533   385   383 
Denominator for diluted EPS – weighted average common equivalent shares  9,058   8,915   9,798   9,710 
                
Numerator                
Net income applicable to Class A common stockholders-basic $3,909  $2,722  $5,240  $4,203 
Effect of dilutive securities:                
Restricted stock awards  (43)  (32)  (44)  (34)
Net income applicable to Class A common stockholders – diluted $3,866  $2,690  $5,196  $4,169 
                
Denominator                
Denominator for basic EPS – weighted average Class A common shares  29,372   29,311   28,420   29,659 
Effect of dilutive securities:                
Restricted stock awards  120   128   108   109 
Denominator for diluted EPS – weighted average Class A common equivalent shares  29,492   29,439   28,528   29,768 

Segment Reporting
The Company's primary business is the ownership, management, and redevelopment of retail properties. The Company reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, which consists of base rental income and tenant reimbursement income, less rental expenses and real estate taxes. Only one of the Company'sCompany’s properties, located in Stamford, CT ("Ridgeway"(“Ridgeway”), is considered significant as its revenue is in excess of 10% of the Company'sCompany’s consolidated total revenues and accordingly is a reportable segment. The Company has aggregated the remainder of its properties as they share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in the same major metropolitan area, and have similar tenant mixes.


Ridgeway is located in Stamford, Connecticut and was developed in the 1950's1950’s and redeveloped in the mid 1990's.1990’s. The property contains approximately 374,000 square feet of GLA.  It is the dominant grocery-anchored center and the largest non-mall shopping center located in the City of Stamford, Fairfield County, Connecticut.


Segment information about Ridgeway as required by ASC Topic 280 is included below:


 
Three Months Ended
January 31,
 
Three Months Ended
January 31,
 
 2018 2017 2023  2022 
Ridgeway Revenues 10.5% 11.9%  10.0%  10.1%
All Other Property Revenues 89.5% 88.1%  90.0%  89.9%
Consolidated Revenue 100.0% 100.0%  100.0%  100.0%


 
January 31,
2018
 
October 31,
2017
 
January 31,
2023
  
October 31,
2022
 
Ridgeway Assets 7.3% 7.2%  6.4%  6.5%
All Other Property Assets 92.7% 92.8%  93.6%  93.5%
Consolidated Assets (Note 1) 100.0% 100.0%  100.0%  100.0%


Note 1 - Ridgeway did not have any significant expenditures for additions to long lived assets in the three months ended January 31, 20182023 or the year ended October 31, 2017.2022.


  
January 31,
2018
 
October 31,
2017
Ridgeway Percent Leased 96% 96%
 
January 31,
2023
  
October 31,
2022
 
Ridgeway Percent Leased  98%  98%


 
Three Months Ended
January 31,
Ridgeway Significant Tenants by Annual Base Rents 
Three Months Ended
January 31,
 
 2018 2017 2023  2022 
The Stop & Shop Supermarket Company 20% 19%  21%  21%
Bed, Bath & Beyond 14% 14%
Marshall's Inc., a division of the TJX Companies 10% 11%
Bed, Bath & Beyond (Note 3)  15%  15%
Marshall’s Inc., a division of the TJX Companies  11%  11%
All Other Tenants at Ridgeway (Note 2) 56% 56%  53%  53%
Total 100% 100%  100%  100%


Note 2 - No other tenant accounts for more than 10% of Ridgeway'sRidgeway’s annual base rents in any of the periods presented. Percentages are calculated as a ratio of the tenants' base rent divided by total base rent of Ridgeway.


Income Statement (In Thousands): 
Three Months Ended
January 31, 2018
 
  Ridgeway  
All Other
Operating Segments
  Total Consolidated 
Revenues $3,453  $29,542  $32,995 
Operating Expenses $976  $10,477  $11,453 
Interest Expense $577  $2,846  $3,423 
Depreciation and Amortization $681  $6,268  $6,949 
Income from Continuing Operations $1,219  $7,860  $9,079 

Note 3 - Bed Bath and Beyond's lease expired on January 31, 2023 and that tenant has vacated the property. The Company is in the process of negotiating a lease for a large portion of this space with a national retailer.
Income Statement (In Thousands): 
Three Months Ended
January 31, 2017
 
  Ridgeway  
All Other
Operating Segments
  Total Consolidated 
Revenues $3,465  $25,605  $29,070 
Operating Expenses $1,086  $8,910  $9,996 
Interest Expense $612  $2,645  $3,257 
Depreciation and Amortization $1,111  $5,470  $6,581 
Income from Continuing Operations $656  $6,548  $7,204 



Income Statement (In Thousands): 
Three Months Ended
January 31, 2023
 
  Ridgeway  
All Other
Operating Segments
  Total Consolidated 
Revenues $3,893  $34,404  $38,297 
Operating Expenses and Property Taxes $1,153  $11,730  $12,883 
Interest Expense $396  $3,251  $3,647 
Depreciation and Amortization $554  $7,850  $8,404 
Net Income $1,790  $9,278  $11,068 

Income Statement (In Thousands): 
Three Months Ended
January 31, 2022
 
  Ridgeway  
All Other
Operating Segments
  Total Consolidated 
Revenues $3,639  $31,916  $35,555 
Operating Expenses and Property Taxes $1,143  $11,782  $12,925 
Interest Expense $418  $2,884  $3,302 
Depreciation and Amortization $521  $6,623  $7,144 
Net Income $1,557  $8,164  $9,721 

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Index

Stock-Based Compensation
The Company accounts for its stock-based compensation plans under the provisions of ASC Topic 718, "Stock Compensation"“Stock Compensation”, which requires that compensation expense be recognized, based on the fair value of the stock awards less estimated forfeitures. The fair value of stock awards is equal to the fair value of the Company'sCompany’s stock on the grant date.  The Company recognizes compensation expense for its stock awards by amortizing the fair value of stock awards over the requisite service periods of such awards.  In certain cases, as defined in the participant agreements, the vesting of stock awards can be accelerated, which will result in the Company charging to compensation expense the remaining unamortized restricted stock compensation related to those stock awards.


Reclassifications
Certain prior period amounts have been reclassified to conform to the current period'speriod’s presentation.

New Accounting Standards
In May 2014, the FASB issued Accounting Standards Update ("ASU") ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying ASU 2014-09, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB's ASC. ASU 2014-09 is effective for annual reporting periods (including interim periods within that reporting period) beginning after December 15, 2016 and shall be applied using either a full retrospective or modified retrospective approach. Early application is not permitted. In August 2015, FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all public companies for all annual periods beginning after December 15, 2017 with early adoption permitted only as of annual reporting periods beginning after December 31, 2016, including interim periods within the reporting period.  In March 2016,2020, the FASB issued ASU 2016-08No. 2020-04, “Reference Rate Reform (Topic 848).” ASU No. 2020-04 contains practical expedients for reference rate-reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as an amendment to ASU 2014-09,reference rate reform activities occur. During the amendment clarifies how to identifythree months ended April 30, 2020, the unit of accounting for the principal versus agent evaluation, howCompany elected to apply the control principlehedge accounting expedients related to certain typesprobability and the assessments of arrangements, such as service transaction, and reframedeffectiveness for future LIBOR-indexed cash flows to assume that the indicators inindex upon which future hedged transactions will be based matches the guidance to focusindex on evidence that an entity is acting as a principal rather than as an agent.the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company is currently assessing the potential impact that the adoption of ASU 2014-09 and ASU 2016-08 will have on its consolidated financial statements.  While we are still completing the assessment ofcontinues to evaluate the impact of ASU 2014-09the guidance and ASU 2016-08 on our consolidated financial statements, we believe the majority of our revenue falls outside of the scope of this guidance.

In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 significantlymay apply other elections as applicable as additional changes the accounting for leases by requiring lessees to recognize assets and liabilities for leases greater than 12 months on their balance sheet. The lessor model stays substantially the same; however, there were modifications to conform lessor accounting with the lessee model, eliminate real estate specific guidance, further define certain lease and non-lease components, and change the definition of initial direct costs of leases requiring significantly more leasing related costs to be expensed upfront. ASU 2016-02 is effective for the Company in the first quarter of fiscal 2020, and we are currently assessing the impact this standard will have on the Company's consolidated financial statements.market occur.


The Company has evaluated all other new ASU'sASUs issued by FASB, and has concluded that these updates do not have a material effect on the Company's consolidated financial statements as of January 31, 2018.2023.

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Index

(2) REAL ESTATE INVESTMENTSUNSECURED REVOLVING CREDIT FACILITY


The Company is currently under contract to purchase, for $13.1 million, a 26,900 square foot shopping center located in its primary marketplace.  The Company will fund the acquisition with available cash, the issuance of unsecured notes payable to the seller, and borrowings on its unsecured revolving credit facility (see note 3).

In October 2017, the Company purchased a promissory note secured by a mortgage on 470 Main Street in Ridgefield, CT ("470 Main"), which comprises part of the Yankee Ridge retail and office mixed-use property.  The note was purchased from the existing lender.  In January 2018, the Company completed foreclosure of the note and became the owner of 470 Main.  Total consideration paid for the note, including costs, totaled $3.1 million.  470 Main is a 24,200 square foot building with ground and first floor retail and second floor office space.  The Company funded the note purchase with available cash.

The Company accounted for the purchase of the 470 Main as an asset acquisition and allocated the total consideration transferred for the acquisition, including transaction costs, to the individual assets and liabilities acquired on a relative fair value basis.

The financial information set forth below summarizes the Company's purchase price allocation for the property acquired during the three months ended January 31, 2018 (in thousands).

  470 Main 
    
Assets:   
Land $293 
Building and improvements $2,786 
In-place leases $68 
Above market leases $25 
     
Liabilities:    
In-place leases $- 
Below Market Leases $43 

(3) MORTGAGE NOTES PAYABLE, BANK LINES OF CREDIT AND OTHER LOANS

The Company has a $100$125 million unsecured revolving credit facility (the "Facility") with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also includes Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agent)agents).  The Facility gives the Company the option, under certain conditions, to increase the Facility's borrowing capacity up to $150$175 million (subject to lender approval).  The maturity date of the Facility is August 23, 2020March 29, 2024, with a one-yearone year extension at the Company's option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at the Company's option of Eurodollar ratethe Secured Overnight Finance Rate ("SOFR") plus 1.35%1.55% to 1.95%2.30% or The Bank of New York Mellon's prime lending rate plus 0.35%0.45% to 0.95%,1.20% based on consolidated indebtedness.total indebtedness, as defined.  The Company pays a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% per annum based on outstanding borrowings during the year. The Facility contains certain representations, financial and other covenants typical for this type of facility. The Company's ability to borrow under the Facility is subject to its compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit the Company's level of secured and unsecured indebtedness, including preferred stock, and additionally require the Company to maintain certain debt coverage ratios. The Company was in compliance with such covenants at January 31, 2018.2023.

During the three months ended January 31, 2018, the Company borrowed $6 million on the Facility to fund capital improvements. During the three months ended January 31, 2018, the Company repaid $4 million on the Facility with available cash.

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Index


(4)
(3) CONSOLIDATED JOINT VENTURES AND REDEEMABLE NONCONTROLLING INTERESTS.INTERESTS


The Company has an investment in fivefour joint ventures, UB Ironbound, LP ("Ironbound"), UB Orangeburg, LLC ("Orangeburg"), McLean Plaza Associates, LLC ("McLean") and UB Dumont I, LLC ("Dumont"), each of which owns a commercial retail property, and UB High Ridge, LLC ("UB High Ridge"), which owns three commercial real estate properties.  The Company has evaluated its investment in these fivefour joint ventures and has concluded that these joint ventures are fully controlled by the Company and that the presumption of control is not offset by any rights of any of the limited partners or non-controlling members in these ventures and that the joint ventures should be consolidated into the consolidated financial statements of the Company in accordance with ASC Topic 810 "Consolidation".  The Company'sCompany’s investment in these consolidated joint ventures is more fully described below:


Ironbound (Ferry Plaza)Orangeburg


The Company through a wholly-owned subsidiary, is the general partner and owns 84% of one consolidated limited partnership, Ironbound, which owns a grocery anchored shopping center.

The Ironbound limited partnership has a defined termination date of December 31, 2097. The partners in Ironbound are entitled to receive an annual cash preference payable from available cash of the partnership. Any unpaid preferences accumulate and are paid from future cash, if any. The balance of available cash, if any, is distributed in accordance with the respective partner's interests. Upon liquidation of Ironbound, proceeds from the sale of partnership assets are to be distributed in accordance with the respective partnership interests. The limited partners are not obligated to make any additional capital contributions to the partnership.

Orangeburg

The Company, through a wholly-owned subsidiary, is the managing member and owns a 43.2%43.8% interest in Orangeburg, which owns a drug store anchoredCVS-anchored shopping center. The other member (non-managing) of Orangeburg is the prior owner of the contributed property, who,which, in exchange for contributing the net assets of the property, received units of Orangeburg equal to the value of the contributed property less the value of the assigned first mortgage payable. The Orangeburg operating agreement provides for the non-managing member to receive an annuala quarterly cash distribution equal to the regular quarterly cash distribution declared by the Company for one share of the Company'sCompany’s Class A Common stock, which amount is attributable to each unit of Orangeburg ownership. The annualquarterly cash distribution is paid from available cash, as defined, of Orangeburg. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of Orangeburg assets are to be distributed in accordance with the operating agreement. The non-managing member is not obligated to make any additional capital contributions to the partnership. Orangeburg has a defined termination date of December 31, 2097.  Since purchasing this property,acquiring its initial interest in Orangeburg, the Company has made additional investments in the amount of $6.4$6.5 million in Orangeburg, and as a result, as of January 31, 20182023 the Company's ownership percentage hashad increased to 43.2%43.8% from approximately 2.92% at inception.


McLean Plaza


The Company, through a wholly-owned subsidiary, is the managing member and owns a 53% interest in McLean, which owns a grocery anchoredan Acme grocery-anchored shopping center. The McLean operating agreement provides for the non-managing members to receive a fixed annual cash distribution equal to 5.05% of their invested capital.  The annual cash distribution is paid from available cash, as defined, of McLean. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of McLean assets are to be distributed in accordance with the operating agreement. The non-managing members are not obligated to make any additional capital contributions to the entity.


UB High Ridge


The Company is the managing member and owns an 8.8%a 30.3% interest in UB High Ridge, LLC.Ridge.  The Company's initial investment was $5.5 million.  UBmillion, and the Company has acquired additional interests from non-managing members totaling $11.7 million and has contributed $1.5 million in additional equity to the venture through January 31, 2023.  High Ridge, either directly or through a wholly-owned subsidiary, owns three commercial real estate properties, High Ridge Shopping Center, a grocery anchoredTrader Joe's grocery-anchored shopping center ("High Ridge"Ridge Center"), and two single tenant commercial retail properties, one leased to JP Morgan Chase ("Chase Property") and one leased to CVS ("CVS Property").CVS.  Two properties are located in Stamford, CT and one property is located in Greenwich, CT.  High Ridge is a shopping center anchored by a Trader Joe's grocery store. The properties were contributed to the new entities by the former owners who received units of ownership of UB High Ridge equal to the value of properties contributed less liabilities assumed.  The UB High Ridge operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 5.46%5.22% of their invested capital. High Ridge has a defined termination date of December 31, 2099.


UB Dumont I, LLC


The Company is the managing member and owns a 31.4%43.1% interest in UB Dumont I, LLC.Dumont.  The Company's initial investment was $3.9 million.million, and the Company has acquired additional interests from non-managing members totaling $1.5 million through January 31, 2023.  Dumont owns a retail and residential real estate property, whichthe retail portion of which is anchored by a Stop and& Shop grocery store.  The property is located in Dumont, NJ.  The property was contributed to the new entity by the former owners who received units of ownership of Dumont equal to the value of contributed property less liabilities assumed.   The Dumont operating agreement provides for the non-managing members to receive an annual cash distribution, currently equal to 5.05%5.0% of their invested capital.


Noncontrolling Interests


The Company accounts for noncontrolling interests in accordance with ASC Topic 810, "Consolidation."“Consolidation.” Because the limited partners or noncontrolling members in Ironbound, Orangeburg, McLean, UB High Ridge and Dumont have the right to require the Company to redeem all or a part of their limited partnership or limited liability company units for cash, or at the option of the Company, shares of its Class A Common stock at prices as defined in the governing agreements, the Company reports the noncontrolling interests in the consolidated joint ventures in the mezzanine section, outside of permanent equity, of the consolidated balance sheets at redemption value which approximates fair value. The value of the Orangeburg, McLean, and a portion of the UB High Ridge and Dumont redemptions are based solely on the price of the Company'sCompany’s Class A Common stock on the date of redemption.   For the three months ended January 31, 20182023 and 2017,2022, the Company increased/(decreased) the carrying value of the noncontrolling interests by $(1.4)$1.0 million and $681,000,$536,000, respectively, with the corresponding adjustment recorded in stockholders'stockholders’ equity.


The following table sets forth the details of the Company's redeemable non-controlling interests atfor the three months ended January 31, 20182023 and the fiscal year ended October 31, 20172022 (amounts in thousands):


 January 31, 2018  October 31, 2017  January 31, 2023  October 31, 2022 
Beginning Balance $81,361  $18,253  $61,550  $67,395 
Change in Redemption Value  (1,362)  (666)  
959
   (1,948)
Initial UB High Ridge Noncontrolling Interest  -   55,217 
Initial Dumont Noncontrolling Interest  -   8,557 
Partial Redemption of High Ridge Noncontrolling Interest  
(643
)
  (2,681)
Partial Redemption of Dumont Noncontrolling Interest  
(660
)
  (168)
Redemption of UB Rye, LLC Noncontrolling Interest  
-
   (546)
Redemption of New City Noncontrolling Interest  
-
   (502)
                
Ending Balance $79,999  $81,361  $61,206  $61,550 


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Index

(5)
(4) INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES


At January 31, 20182023 and October 31, 20172022 investments in and advances to unconsolidated joint ventures consisted of the following (with the Company'sCompany’s ownership percentage in parentheses) (amounts in thousands):


 January 31, 2018  October 31, 2017  January 31, 2023  October 31, 2022 
Chestnut Ridge and Plaza 59 Shopping Centers (50%) $17,977  $18,032 
Gateway Plaza (50%)  6,838   6,873 
Putnam Plaza Shopping Center (66.67%)  5,963   5,968 
Midway Shopping Center, L.P. (11.642%)  4,559   4,639 
Applebee's at Riverhead (50%)  1,827   1,814 
81 Pondfield Road Company (20%)  723   723 
Chestnut Ridge Shopping Center (50%)
 $11,569  $11,617 
Gateway Plaza (50%)
  5,309   5,858 
Putnam Plaza Shopping Center (66.67%)
  4,609   4,952 
Midway Shopping Center, L.P. (11.79%)
  3,572   3,647 
Applebee's at Riverhead (50%)
  2,819   2,789 
81 Pondfield Road Company (20%)
  723   723 
Total $37,887  $38,049  $28,601  $29,586 


Chestnut Ridge and Plaza 59 Shopping CentersCenter


The Company, through two wholly owned subsidiaries,a wholly-owned subsidiary, owns a 50% undivided tenancy-in-common interest in the 76,000 square foot Chestnut Ridge Shopping Center located in Montvale, New Jersey ("Chestnut"(“Chestnut”), which is anchored by a Fresh Market grocery store, and the 24,000 square foot Plaza 59 Shopping Center located in Spring Valley, New York ("Plaza 59"), which is anchored by a local grocer.store.


Gateway Plaza and Applebee's at Riverhead


The Company, through two wholly ownedwholly-owned subsidiaries, owns a 50% undivided tenancy-in-common interest in theeach of Gateway Plaza Shopping Center ("Gateway") and Applebee's at RiverheadPlaza ("Applebee's").  Both properties are located in Riverhead, New York. Gateway, a 198,500 square foot shopping center, is anchored by a 168,000 square foot Walmart, which also has 27,000 square feet of in-line space that is partially leased and a newly constructed 3,500 square foot outparcel that is leased.  Applebee's has a 5,400 square foot free standingfree-standing Applebee's restaurant withand a 7,200 square foot pad site that is leased.site.


Gateway is subject to a $12.7 million non-recourse first mortgage payable.in the amount of $14.0 million. The mortgage loan matures on MarchJuly 1, 20242032 and requires payments of interest only for the first 7 years at a rate equal to the SOFR plus 1.75% and then requires payments of principal and interest atfor the duration of the loan.  Concurrent with entering into the mortgage, Gateway entered into an interest rate swap agreement, which converts the variable rate based on SOFR to a fixed interest rate of interest4.07% per annum for the term of 4.2% per annum.the mortgage note.


Midway Shopping Center, L.P.


The Company, through a wholly ownedwholly-owned subsidiary, owns an 11.64%11.79% equity interest in Midway Shopping Center L.P. ("Midway"(“Midway”), which owns a 247,000 square foot ShopRite-anchored shopping center in Westchester County,Scarsdale, New York. Although the Company only has an approximateless than a 12% equity interest in Midway, it controls 25% of the voting power of Midway and as such, has determined that it exercises significant influence over the financial and operating decisions of Midway and accounts for its investment in Midway under the equity method of accounting.


The Company has allocated the $7.4 million excess of the carrying amount of its investment in and advances to Midway over the Company'sCompany’s share of Midway'sMidway’s net book value to real property and is amortizing the difference over the property'sproperty’s estimated useful life of 39 years.


Midway is subject to a non-recourse first mortgage in the amount of $28.3$23.4 million.  The loan requires payments of principal and interest at the rate of 4.80% per annum and will mature in 2027.2027.


Putnam Plaza Shopping Center


The Company, through a wholly ownedwholly-owned subsidiary, owns a 66.67% (noncontrolling) undivided tenancy-in-common interest in the 189,000 square foot Tops-anchored Putnam Plaza Shopping Center ("(“Putnam Plaza"Plaza”) located in Carmel, New York, which is anchored by a Tops grocery store.York.


Putnam Plaza is subject to a non-recourse first mortgage payable in the amount of $18.9$17.6 million.  The mortgage requires monthly payments of principal and interest at a fixed rate of 4.17%4.81% and will mature in 2024.2028.


81 Pondfield Road Company


The Company'sCompany’s other investment in an unconsolidated joint venture is a 20% interest in a retail and office building in Westchester County,Bronxville, New York.


Equity Method of Accounting

The Company accounts for the above investments under the equity method of accounting since it exercises significant influence, but does not control the joint ventures.  The other venturers in the joint ventures have substantial participation rights in the financial decisions and operation of the ventures or properties, which preclude the Company from consolidating the investments. The Company has evaluated its investment in the joint ventures and has concluded that the joint ventures are not VIE's.Variable Interest Entities ("VIE's"). Under the equity method of accounting, the initial investment is recorded at cost as an investment in unconsolidated joint venture, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions from the venture. Any difference between the carrying amount of the investment on the Company'sCompany’s balance sheet and the underlying equity in net assets of the venture is evaluated for impairment at each reporting period.periodically.
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Index


(5) LEASES

Lessor Accounting

The Company's Lease income is comprised of both fixed and variable income, as follows:

Fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent. Income for these amounts is recognized on a straight line basis.

Variable lease income includes recoveries from tenants, which represents amounts that tenants are contractually obligated to reimburse the Company for the tenants’ portion of Recoverable Costs.  Generally, the Company’s leases provide for the tenants to reimburse the Company for Recoverable Costs based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.

The following table provides a disaggregation of lease income recognized during the three months ended January 31, 2023 and 2022, under ASC Topic 842, Leases, as either fixed or variable lease income based on the criteria specified in ASC Topic 842 (In thousands):

 
Three Months Ended
January 31,
 
  2023  2022 
Operating lease income:      
Fixed lease income (Base Rent) $26,650  $24,839 
Variable lease income (Cost Recoveries)  8,886   9,274 
Other lease related income, net:        
Above/below market rent amortization  183   174 
Uncollectable amounts in lease income  (104)  (113)
ASC Topic 842 cash basis lease income reversal (Including straight-line rent reversals)  124   (87)
Total lease income $35,739  $34,087 

Future minimum rents under non-cancelable operating leases for the next five years and thereafter, excluding variable lease payments, are as follows (In thousands):

Fiscal Year Ending   
2023 (a) $72,364 
2024  88,577 
2025  76,595 
2026  67,580 
2027  58,869 
Thereafter  241,633 
Total $605,618 

(a) The future minimum rental income for fiscal 2023 includes amounts due between February 2023 through October 31, 2023.

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Index

(6)  STOCKHOLDERS'STOCKHOLDERS’ EQUITY


Authorized Stock
The Company's Charter authorizes 200,000,000 shares of stock.  The total number of shares of authorized stock consists of 100,000,000 shares of Class A Common Stock, 30,000,000 shares of Common Stock, 50,000,000 shares of Preferred Stock, and 20,000,000 shares of Excess Stock.


Restricted Stock Plan
The Company has a Restricted Stock Plan, as amended (the "Plan") that provides a form of equity compensation for employees of the Company.  The Plan, which is administered by the Company's compensation committee, authorizes grants of up to an aggregate of 4,500,0005,500,000 shares of the Company'sCompany’s common equity consisting of 350,000 Common shares, 350,000 Class A Common shares and 3,800,0004,800,000 shares, which at the discretion of the compensation committee, may be awarded in any combination of Class A Common shares or Common shares.


During the three months ended January 31, 2018,2023, the Company awarded 152,700109,800 shares of Common Stock and 102,800151,750 shares of Class A Common Stock to participants in the Plan.  The grant date fair value of restricted stock grants awarded to participants in 20182023 was approximately $5.0$4.9 million.


A summary of the status of the Company'sCompany’s non-vested Common and Class A Common shares as of January 31, 2018,2023, and changes during the three months ended January 31, 20182023 is presented below:


 Common Shares  Class A Common Shares  Common Shares  Class A Common Shares 
Non-vested Shares Shares  
Weighted-Average
Grant-Date
Fair Value
  Shares  
Weighted-Average
Grant-Date
Fair Value
  Shares  
Weighted-Average
Grant-Date
Fair Value
  Shares  
Weighted-Average
Grant-Date
Fair Value
 
Non-vested at October 31, 2017  1,274,150  $17.02   412,275  $20.60 
Non-vested at October 31, 2022  934,200  $17.11   547,300  $19.96 
Granted  152,700  $17.70   102,800  $22.10   109,800  $18.29   151,750  $18.97 
Vested  (170,950) $15.78   (57,200) $18.07   (102,200) $15.65   (88,150) $22.24 
Forfeited  -  $-   (3,250) $21.93   -  $-   (5,000) $19.84 
Non-vested at January 31, 2018  1,255,900  $17.22   454,625  $21.13 
Non-vested at January 31, 2023  941,800  $17.40   605,900  $19.38 


As of January 31, 2018,2023, there was $17.5$16.2 million of unamortized restricted stock compensation related to non-vested restricted stock grants awarded under the Plan.  The remaining unamortized expense is expected to be recognized over a weighted average period of 5.14.6 years. For the three month periodsmonths ended January 31, 20182023 and 20172022, amounts charged to compensation expense totaled $975,000$926,000 and $944,000,$617,000, respectively.


Share Repurchase Program
The Board of Directors of the Company has approved a share repurchase program ("(“Current Program"Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock and Class A Common stock and Series G Cumulative Preferred Stock in open market transactions.


TheFor the three month period ended January 31, 2023, the Company has repurchased 188,753116,016 shares of Class A Common Stock at an average price per Class A Common share of $18.39 and 287 shares of Common Stock at an average price per Common Share of $18.40.  The Company has repurchased 602,014 shares of Class A Common Stock and 7,127 shares of Common Stock under the Current Repurchase Program.  From the inception of all repurchase programs, the Company has repurchased 4,600 shares of Common Stock and 913,3312,268,093 shares of Class A Common Stock.  For the three months ended January 31, 2018Stock and 2017, the Company did not repurchase any53,758 shares of stock under the Current Program.Common Stock.


Preferred Stock
The 6.75% Series G Senior Cumulative Preferred Stock ("Series G Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after October 28, 2019. The holders of our Series G Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series G Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series G Preferred Stock, together with all of the Company's other Series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series G Preferred Stock will have the right to convert all or part of the shares of Series G Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock. Underwriting commissions and costs incurred in connection with the sale of the Series G Preferred Stock are reflected as a reduction of additional paid in capital.

The 6.25% Series H Senior Cumulative Preferred Stock ("Series H Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at 25.00$25.00 per share at the Company's option on or after September 18, 2022. The holders of our Series H Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series H Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series H Preferred Stock, together with all of the Company's other Seriesseries of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series H Preferred Stock will have the right to convert all or part of the shares of Series H Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock.Underwriting commissions and costs incurred in connection with the sale of the Series H Preferred Stock are reflected as a reduction of additional paid in capital.

The 5.875% Series K Senior Cumulative Preferred Stock ("Series K Preferred Stock") is non-voting, has no stated maturity and is redeemable for cash at $25.00 per share at the Company's option on or after October 1, 2024. The holders of our Series K Preferred Stock have general preference rights with respect to liquidation and quarterly distributions. Except under certain conditions, holders of the Series K Preferred Stock will not be entitled to vote on most matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of Series K Preferred Stock, together with all of the Company's other series of preferred stock (voting as a single class without regard to series) will have the right to elect two additional members to serve on the Company's Board of Directors until the arrearage has been cured. Upon the occurrence of a Change of Control, as defined in the Company's Articles of Incorporation, the holders of the Series K Preferred Stock will have the right to convert all or part of the shares of Series K Preferred Stock held by such holders on the applicable conversion date into a number of the Company's shares of Class A common stock.Underwriting commissions and costs incurred in connection with the sale of the Series K Preferred Stock are reflected as a reduction of additional paid in capital.

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Index

(7) FAIR VALUE MEASUREMENTS


ASC Topic 820, "Fair“Fair Value Measurements and Disclosures"Disclosures” defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants.


ASC Topic 820's820’s valuation techniques are based on observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company'sCompany’s market assumptions. These two types of inputs have created the following fair value hierarchy:


Level 1- Quoted prices for identical instruments in active markets
Level 2- Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in

markets that are not active; and model-derived valuations in which significant value drivers are observable
Level 3- Valuations derived from valuation techniques in which significant value drivers are unobservable


The Company calculates the fair value of the redeemable noncontrolling interests based on either quoted market prices on national exchanges for those interests based on the Company's Class A Common stock (level 1), contractual redemption prices per share as stated in governing agreements (level 2) or unobservable inputs considering the assumptions that market participants would make in pricing the obligations (level 3). The level 3 inputs used include an estimate of the fair value of the cash flow generated by the limited partnership or limited liability company in which the investor owns the joint venture units capitalized at prevailing market rates for properties with similar characteristics or located in similar areas.


The fair values of interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. The analysis reflects the contractual terms of the swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves ("(“significant other observable inputs"inputs”). The fair value calculation also includes an amount for risk of non-performance using "significant“significant unobservable inputs"inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded, as of October 31, 20172022 and January 31, 2018,2023, that the fair value associated with the "significant“significant unobservable inputs"inputs” relating to the Company'sCompany’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, the Company has determined that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon "significant“significant other observable inputs"inputs”.


The Company measures its redeemable noncontrolling interests and interest rate swap derivatives at fair value on a recurring basis. The fair value of these financial assets and liabilities was determined using the following inputs (amount in thousands):


     Fair Value Measurements at Reporting Date Using 
  Total  
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
  
Significant Other
Observable Inputs
(Level 2)
  
Significant
Unobservable Inputs
(Level 3)
 
January 31, 2018
            
Assets:            
Interest Rate Swap Agreement $5,222  $-  $$5,222  $- 
                 
Liabilities:                
Interest Rate Swap Agreement $70  $-  $70  $- 
Redeemable noncontrolling interests $79,999  $22,446  $53,788  $3,765 
                 
October 31, 2017
                
Assets:                
Interest Rate Swap Agreement $3,316  $-  $3,316  $- 
                 
Liabilities:                
Interest Rate Swap Agreement $574  $-  $574  $- 
Redeemable noncontrolling interests $81,361  $23,709  $53,788  $3,864 

    Fair Value Measurements at Reporting Date Using 
  Total  
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
  
Significant Other
Observable Inputs
(Level 2)
  
Significant
Unobservable Inputs
(Level 3)
 
January 31, 2023
            
             
Assets:            
Interest Rate Swap Agreement $11,500  $-  $11,500  $- 
                 
Liabilities:                
Redeemable noncontrolling interests $61,206  $18,561  $42,645  $- 
                 
October 31, 2022
                
                 
Assets:                
Interest Rate Swap Agreement $15,856  $-  $15,856  $- 
                 
Liabilities:                
Redeemable noncontrolling interests $61,550  $11,979  $49,571  $- 
Fair market value measurements based upon Level 3 inputs changed (in thousands) from $3,846 at October 31, 2016 to $3,864 at October 31, 2017 as a result of a $18 increase in the redemption value of the Company's noncontrolling interest in Ironbound in accordance with the application of ASC Topic 810.  Fair market value measurements based upon Level 3 inputs changed from $3,864 at October 31, 2017 to $3,765 at January 31, 2018 as a result of a $99 decrease in the redemption value of the Company's noncontrolling interest in Ironbound in accordance with the application of ASC Topic 810.


Fair Value of Financial Instruments
17
The carrying values of cash and cash equivalents, restricted cash, mortgage note receivable, tenant receivables, prepaid expenses, other assets, accounts payable and accrued expenses are reasonable estimates of their fair values because of the short-term nature of these instruments. The carrying value of the Facility is deemed to be at fair value since the outstanding debt is directly tied to monthly LIBOR contracts. Mortgage notes payable that were assumed in property acquisitions were recorded at their fair value at the time they were assumed.

Index
The estimated fair value of mortgage notes payable and other loans was approximately $288 million at January 31, 2018 and $296 million at October 31, 2017, respectively. The estimated fair value of mortgage notes payable is based on discounting the future cash flows at a year-end risk adjusted borrowing rate currently available to the Company for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within Level 2 of the fair value hierarchy.

Although management is not aware of any factors that would significantly affect the estimated fair value amounts from October 31, 2017, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

(8) COMMITMENTS AND CONTINGENCIES


In the normal course of business, from time to time, the Company is involved in legal actions relating to the ownership and operations of its properties.  In management'smanagement’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company.  At January 31, 2018,2023, the Company had commitments of approximately $4.6$11.2 million for capital improvements to its properties and tenant-related obligations.
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Item
2.Management's Discussion and Analysis of Financial Condition and Results of Operations


The following discussion should be read in conjunction with the consolidated financial statements of the Companycompany and the notes thereto included elsewhere in this report.


Forward Looking Statements:


This Quarterly Report on Form 10-Q of Urstadt Biddle Properties Inc. (the "Company"), including this Item 2, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  Such statements can generally be identified by such words as "anticipate"“anticipate”, "believe"“believe”, "can"“can”, "continue"“continue”, "could"“could”, "estimate"“estimate”, "expect"“expect”, "intend"“intend”, "may"“may”, "plan"“plan”, "seek"“seek”, "should"“should”, "will"“will” or variations of such words or other similar expressions and the negatives of such words.  All statements included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), business strategies, expansion and growth of our operations and other such matters, are forward-looking statements.  These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.  Such statements are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events and actual results, performance or achievements, financial and otherwise, may differ materially from the results, performance or achievements expressed or implied by the forward-looking statements.  Risks, uncertainties and otherWe caution not to place undue reliance upon any forward-looking statements, which speak only as of the date made. We do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

Important factors that mightwe think could cause such differences, someour actual results to differ materially from expected results are summarized below.

New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which could be material, include, but are not limited to:any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.


Important factors, among others, that may affect our actual results include:

negative impacts from the continued spread of COVID-19 or from the emergence of a new strain of novel corona virus, including on the U.S. or global economy or on our business, financial position or results of operations;

economic and other market conditions, including local real estate and market conditions, as well as inflationary pressures, that could impact us, our properties or the financial stability of our tenants;


consumer spending and confidence trends, as well as our ability to anticipate changes in consumer buying practices and the space needs of tenants;

our relationships with our tenants and their financial condition and liquidity;

any difficulties in renewing leases, filling vacancies or negotiating improved lease terms;

the inability of our properties to generate increased, or even sufficient, revenues to offset expenses, including amounts we are required to pay to municipalities for real estate taxes, payments for common area maintenance expenses at our properties and salaries for our management team and other employees;

the market value of our assets and the supply of, and demand for, retail real estate in which we invest;

risks of real estate acquisitions and dispositions, including our ability to identify and acquire retail real estate that meet our investment standards in our markets, as well as the potential failure of transactions to close;

risks of operating properties through joint ventures that we do not fully control;

financing risks, such as the inability to obtain debt or equity financing on favorable terms or the inability to comply with various financial covenants included in our Unsecured Revolving Credit Facility (the "Facility") or other debt instruments we currently have or may subsequently obtain, as well as the level and volatility of interest rates;rates, which could impact the market price of our common stock and the cost of our borrowings;

any difficulties in renewing leases, filling vacancies or negotiating improved lease terms;

the inability of the Company's properties to generate revenue increases to offset expense increases;


environmental risk and regulatory requirements;

risks of real estate acquisitions and dispositions (including the failure of transactions to close);

risks of operating properties through joint ventures that we do not fully control;


risks related to our status as a real estate investment trust, including the application of complex federal income tax regulations that are subject to change;


as well as legislative and regulatory changes generally that may impact us or our tenants;

other risks identified in ourthis Annual Report on Form 10-K under Item 1A. Risk Factors for the fiscal year ended October 31, 2017 under Item 1A. Risk Factors2022 and in the other reports filed by the Company with the Securities and Exchange Commission (the "SEC"“SEC”).

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Executive Summary


Overview


We are a fully integrated, self-administered real estate company that has elected to be a REITReal Estate Investment Trust ("REIT") for federal income tax purposes, engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers, with a concentrationanchored by supermarkets, pharmacy/drug-stores and wholesale clubs, located in the metropolitan New York tri-state area outside of the City of New York. Other real estate assets include office properties, two self-storage facilities, single tenant retail or restaurant properties and office/retail mixed usemixed-use properties.  Our major tenants include supermarket chains and other retailers who sell basic necessities.


At January 31, 2018,2023, we owned or had equity interests in 8277 properties which include equity interests we own in seven consolidated joint ventures and seven unconsolidated joint ventures, containing a total of 5.15.3 million square feet of Gross Leasable Area ("GLA"(“GLA”)., which include equity interests in four consolidated joint ventures and six unconsolidated joint ventures. Of the properties owned by wholly-owned subsidiaries or consolidated joint venture entities, that we consolidate, approximately 92.5%94.1% of the GLA was leased (92.7%(93.0% at October 31, 2017)2022).  Of the properties owned by unconsolidated joint ventures, approximately 97.7%94.4% of the GLA was leased unchanged from(94.4% at October 31, 2017.2022).  In addition, we own and operate self-storage facilities at two of our retail properties.  Both self-storage facilities are managed for us by Extra Space Storage, a publicly traded REIT.  One of the self-storage facilities is located in the back of our Yorktown Heights, NY shopping center in below grade space.  As of January 31, 2023, the self-storage facility had 57,389 square feet of available GLA, which was 92.0% leased. As discussed later in this Item 2, we have also developed a second self-storage facility located in Stratford, CT with 90,000 square feet of available GLA.  The Stratford facility has been operational for approximately 21 months and is 91.0% leased.  We are also nearing completion on construction of a third self-storage facility at our Pompton Lakes, NJ property and our anticipated total investment to develop the facility is approximately $8.2 million.


In addition to our business of owning and managing real estate, we are also involved in the beer, wine and spirits retail business, through our ownership of six subsidiary corporations formed as taxable REIT subsidiaries.  Each subsidiary corporation owns and operates a beer, wine and spirits retail store at one of our shopping centers.  To assist with the management of our operations, we have engaged an experienced third-party, retail beer, wine and spirits manager, which also owns many stores of its own.  Each of these stores occupies space at one of our shopping centers, fulfilling a strategic need for a beer, wine and spirits business at such shopping center.  These stores are not currently providing material earnings in excess of what the Company would have earned from leasing the space to unrelated tenants at market rents.  However, these businesses are continuing to mature, and net sales and earnings may eventually become material to our financial position and net income.  Nevertheless, our primary business remains the ownership and management of real estate, and we expect that the beer, wine and spirts business will remain an ancillary aspect of our business model.  We may open additional beer, wine and spirits stores at other shopping centers if we determine that any such store would be a strategic fit for our overall business and the investment return analysis supports such a determination.

We have paid quarterly dividends to our shareholdersstockholders continuously since our founding in 19691969.

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic.  During the early part of the pandemic, the U.S. market came under severe pressure due to numerous factors, including preventive measures taken by local, state and federal authorities to alleviate the public health crisis, such as mandatory business closures, quarantines and restrictions on travel.  These measures, as implemented by the tri-state area of Connecticut, New York and New Jersey, generally permitted businesses designated as “essential” to remain open, but limited the operations of other categories of our tenants to varying degrees.  These restrictions have increasedbeen long since lifted, and the levelnegative impact of dividend paymentsthe COVID-19 pandemic appears to be much improved, with most tenant businesses operating at pre-pandemic levels.  For certain categories of our shareholders for 24 consecutive years.tenants, such as dry cleaners and some small format fitness tenants, however, the negative impact of COVID-19 was more severe and the recovery is still in progress.


We derive substantiallyThe following information is intended to provide certain information regarding the impact of the COVID-19 pandemic on our portfolio and our tenants:

As of January 31, 2023, all of our revenues71 retail shopping centers, stand-alone restaurants and stand-alone bank branches are open and operating.

As of January 31, 2023, approximately 87% of our GLA is located in properties anchored by grocery stores, pharmacies or wholesale clubs, 4% of our GLA is located in outdoor retail shopping centers adjacent to regional malls, and 8% of our GLA is located in outdoor neighborhood convenience retail, with the remaining 1% of our GLA consisting of six suburban office buildings located in Greenwich, Connecticut and Bronxville, New York and three retail bank branches.  All six suburban office buildings are open and all of the retail bank branches are open.

Rent Deferrals, Abatements and Lease Restructurings

Similar to other retail landlords across the United States, we received a number of requests for rent relief from tenants, with most requests received during the early days of the COVID-19 pandemic when stay-at-home orders were in place and many businesses were required to close.  We evaluated each request on a case-by-case basis to determine the best course of action, recognizing that in many cases some type of concession may be appropriate and beneficial to our long-term interests.  Although each negotiation has been specific to that tenant, most concessions were in the form of deferred rent for some portion of rents due in April 2020 through the beginning of fiscal 2021, to be paid back over the later part of the lease, preferably within a period of one year or less.  Some of these concessions were in the form of rent abatements for some portion of tenant rents due.

Each reporting period, we must make estimates as to the collectability of our tenants’ accounts receivable related to base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic trends, including the impact of the COVID-19 pandemic on tenants’ businesses, and changes in tenants’ payment patterns when evaluating the adequacy of the allowance for doubtful accounts.

As a result, in accordance with ASC Topic 842, we revised our collectability assumptions for many of our tenants that were most significantly impacted by COVID-19. This amount includes changes in our collectability assessments for certain tenants in our portfolio from probable to not probable, which requires that revenue recognition for those tenants be converted to cash basis accounting, with previously uncollected billed rents reversed in the current period.  From the beginning of the COVID-19 pandemic through the end of our second quarter of fiscal 2021, we converted 89 tenants to cash basis accounting in accordance with ASC Topic 842.  We have not converted any additional tenants to cash basis accounting since our second quarter of fiscal 2021. As of January 31, 2023, 36 of the 89 tenants are no longer tenants in the Company's properties.  In addition, when one of the Company’s tenants is converted to cash basis accounting in accordance with ASC Topic 842, all previously recorded straight-line rent receivables need to be reversed in the period, in which the tenant is converted to cash basis revenue recognition.

During the three months ended January 31, 2022, we recognized collectability adjustments totaling $176,000.  We did not have any significant collectability adjustments in the three months ended January 31, 2023. 

As of January 31, 2023, the revenue from approximately 3.3% of our tenants (based on total commercial leases) is being recognized on a cash basis.

Each reporting period, management assesses whether there are any indicators that the value of the Company’s real estate investments may be impaired, and management has concluded that none of the Company’s investment properties are impaired at January 31, 2023. We will continue to monitor the economic, financial, and social conditions resulting from the COVID-19 pandemic and assess our real estate asset portfolio for any impairment indicators as required under GAAP. If we determine that any of our real estate assets are impaired, we will be required to take impairment charges, and such amounts could be material.  See Footnote 1 to the Notes to the Company’s Consolidated Financial Statements for additional discussion regarding our policies on impairment charges.
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Strategy, Challenges and Outlook

We have a conservative capital structure, which includes permanent equity sources of Common Stock, Class A Common Stock and two series of perpetual preferred stock, which are only redeemable at our option.  In addition, we have mortgage debt secured by some of our properties and a $125 million Facility.  We do not have any significant secured debt maturing until August of 2024.

Key elements of our growth strategy and operating expense reimbursements received pursuant to long-term leases andpolicies are to:

maintain our focus our investment activities on community and neighborhood shopping centers, anchored principally by regional supermarketsupermarkets, pharmacy chains or pharmacy chains.  Wewholesale clubs, which we believe that because consumers need to purchasecan provide a more stable revenue flow even during difficult economic times, given the focus on food and other types of staple goods and services generally available at supermarket or pharmacy anchored shopping centers, the nature of our investments provides for relatively stable revenue flows even during difficult economic times.goods;

We have a conservative capital structure and we have one $9.9 million mortgage maturing in July 2018, which is in the process of being refinanced with the existing lender.  Thereafter, we do not have any additional secured debt maturing until May 2019.

We focus on increasing cash flow, and consequently the value of our properties, and seek continued growth through strategic re-leasing, renovations and expansions of our existing properties and selective acquisitions of income-producing properties.  Key elements of our growth strategies and operating policies are to:


acquire quality neighborhood and community shopping centers in the northeastern part of the United States with a concentration on properties in the metropolitan New York tri-state area outside of the City of New York, and unlock further value in these properties with selective enhancements to both the property and tenant mix, as well as improvements to management and leasing fundamentals.  Ourfundamentals, with the hope is to growof growing our assets through acquisitions, by 5% to 10% per year on a dollar value basis subject to the availability of acquisitions that meet our investment parameters;


selectively dispose of underperforming properties and re-deploy the proceeds into potentially higher performing properties that meet our acquisition criteria;


invest in our properties for the long-termlong term through regular maintenance, periodic renovations and capital improvements, enhancing their attractiveness to tenants and customers (e.g. curbside pick-up), as well as increasing their value;


leverage opportunities to increase GLA at existing properties, through development of pad sites and reconfiguring of existing square footage, to meet the needs of existing or new tenants;


proactively manage our leasing strategy by aggressively marketing available GLA, renewing existing leases with strong tenants, anticipating tenant weakness when necessary by pre-leasing their spaces and replacing weak ones when necessary,below-market-rent leases with increased market rents, with an eye towards securing leases that include regular or fixed contractual increases to minimum rents, replacing below-market-rent leases with increased market rents when possiblerents;

improve and further improvingrefine the quality of our tenant mix at our shopping centers;


maintain strong working relationships with our tenants, particularly our anchor tenants;


maintain a conservative capital structure with low leveragedebt levels; and


control property operating and administrative costs.


Our hope is to grow our assets through acquisitions by 5% to 10% per year on a dollar value basis, subject to the availability of acquisitions that meet our investment parameters, although we cannot guarantee that investment properties meeting our investment specifications will be available to us.

Highlights of Fiscal 2018; Recent Developments

Set forth below are highlights of our recent property acquisitions, potential acquisitions under contract, other investments, property dispositions and financings:

The Company is currently under contract to purchase, for $13.1 million, a 26,900 square foot shopping center located in its primary marketplace.  The Company will fund the acquisition with available cash, the issuance of unsecured notes payable to the seller, and borrowings on its unsecured revolving credit facility.

In October 2017, the Company purchased a promissory note secured by a mortgage on 470 Main Street in Ridgefield, CT ("470 Main"), which comprises part of the Yankee Ridge retail and office mixed-use property.  The note was purchased from the existing lender.  In January 2018, the Company completed foreclosure of the note and became the owner of 470 Main.  Total consideration paid for the note, including costs, totaled $3.1 million.  470 Main is a 24,200 square foot building with ground and first floor retail and second floor office space.  The Company funded the note purchase with available cash.

Known Trends; Outlook

We believe thatour strategy of focusing on community and neighborhood shopping center REITs face opportunities and challenges that are both common to and unique from other REITs and real estate companies.     As a shopping center REIT, we are focused on certain challenges that are unique tocenters, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, has been validated during the retail industry.  In particular, we recognize the challenges presented by e-commerce to brick-and-mortar retail establishments, including our tenants. However, we believe that because consumers prefer to purchase food and other staple goods and services available at supermarkets in person, the nature of our properties makes them less vulnerable to the encroachment of e-commerce than other properties whose tenants may more directly compete with the internet.   Moreover, weCOVID-19 pandemic.  We believe the nature of our properties makes them less susceptible to economic downturns than other retail properties whose anchor tenants aredo not supermarkets orsupply basic necessities.   During normal conditions, we believe that consumers generally prefer to purchase food and other staple goods providers.  and services in person, and even during the COVID-19 pandemic our supermarkets, pharmacies and wholesale clubs have been posting strong in-person sales.  Moreover, most of our grocery stores implemented or expanded curbside pick-up or partnered with delivery services to cater to the needs of their customers during the COVID-19 pandemic.

We note,recognize, however, that the pandemic may have accelerated a movement towards e-commerce that may be challenging for weaker tenants that lack an omni-channel sales or micro-fulfillment strategy.  We launched a program designating dedicated parking spots for curbside pick-up and are assisting tenants in many prospective in-lineother ways.  Many tenants are seeking smaller spaces thanhave adapted to the new business environment through use of our curbside pick-up program, and early industry data seems to indicate that micro-fulfillment from retailers with physical locations may be a new competitive alternative to e-commerce. 

We have seen significant improvement in general business conditions, but the public health situation is difficult to predict.  Moreover, challenges presented by inflation, labor shortages, supply chain disruptions and uncertainties in the past, as a result, in part, of internet encroachment on their brick-and-mortar business.   When feasible, we actively work to place tenants that are less susceptible to internet encroachment, such as restaurants, fitness centers, healthcare and personal services.U.S. economy could present continued or new challenges for our tenants. We will continue to be sensitiveaccrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to these considerations when we establish the tenant mix at our shopping centers, and believe that our strategy of focusing on supermarket anchors is a strong one.cash basis accounting in accordance with ASC Topic 842.

In the metropolitan tri-state area outside of New York City, demographics (income, density, etc.) remain strong and opportunities for new development, as well as acquisitions, are competitive, with high barriers to entry.  We believe that this will remain the case for the foreseeable future, and have focused our growth strategy accordingly.


As a REIT, we are susceptible to changes in interest rates, the lending environment, the availability of capital markets and the general economy.  For example, some experts are predicting an increased interest rate environment, which could negatively impactDuring the attractivenesspast year, the United States, as well as many other parts of REIT stock to investors and our borrowing activities.  It is also possible, however, that higherthe world, has experienced rising interest rates, could signal a stronger economy, resultingtightening lending environment, and a disrupted capital market. While recent indicators point toward an improvement in greater spending by consumers.  The impact of suchtheses market factors, any future changes are difficult to predict.


Transaction Highlights of Fiscal 2023; Recent Developments

Set forth below are highlights of our recent property acquisitions, potential acquisitions under contract, other investments, property dispositions and financings:

In December 2022, we redeemed 29,653  units of UB High Ridge, LLC ("High Ridge") from a non-managing member.  The U.S. Congress has passed sweeping tax reform legislation that made significant changes to corporate and individual tax rates andtotal cash price paid for the calculation of taxes, as well as international tax rules for U.S. domestic corporations.redemptions was $643,000. As a REIT,result of the redemptions, our ownership percentage of High Ridge increased to 30.3% from 29.2% at October 31, 2022.

In January 2023, we are generally not requiredredeemed 31,451 units of UB Dumont, LLC ("Dumont") from a non-managing member.  The total cash price paid for the redemption was $660,400. As a result of the redemptions, our ownership percentage of Dumont increased to pay federal taxes otherwise applicable43.1% from 37.8% at October 31, 2022.

From November 1, 2022 to regular corporations if we comply withDecember 19, 2022, the various tax regulations governing REITs.  Stockholders, however, are generally requiredCompany repurchased 116,016 shares of Class A Common Stock at an average per share price of $18.39 and 287 shares of Common Stock at an average per share price of $18.40 under a previously announced stock repurchase program through a Rule 10b5-1(c)(1) agreement entered into between the Company and its broker Deutsche Bank Securities Inc. We believed the repurchase was a good use of our cash and a way to pay taxes on REIT dividends.  Tax reform legislation would affect the way in which dividends paid onadd value to our stock are taxed by the holder of that stock and could impact our stock price or how stockholders and potential investors view an investment in REITs.   In addition, while certain elements of tax reform legislation would not impact us directly as a REIT, they could impact the geographic markets in which we operate, the tenants that populate our shopping centers and the customers who frequent our properties in ways, both positive and negative, that are difficult to anticipate.stockholders.



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Leasing


Rollovers
Overview


With the negative impacts of the COVID-19 pandemic largely behind us and most tenant businesses operating at pre-pandemic levels, we have observed a marked increase in leasing activity, including interest from potential new tenants and tenants interested in renewing their leases. However, challenges presented by inflation, labor shortages, supply chain disruptions and uncertainties in the U.S. economy could present continued or new challenges for our tenants.   

For the three months ended January 31, 2018,2023, we signed leases for a total of 108,000158,200 square feet of retail space in our consolidated portfolio.  New leases for vacant spaces were signed for 23,00073,800 square feet at an average rental decreaseincrease of 0.6%10.3% on a cash basis.  Renewals for 85,00084,400 square feet of space previously occupied were signed at an average rental increase of 3.8%4.6% on a cash basis.


Tenant improvements and leasing commissions averaged $31.62$64.69 per square foot for new leases and $3.85 per square foot for renewals for the three months ended January 31, 2018.2023. We did not pay any significant tenant improvements and leasing commissions on renewal leases for the three months ended January 31, 2023. The average term for new leases was 6.46 years and the average term for renewal leases was 43 years.


The rental increases/decreases associated with new and renewal leases generally include all leases signed in arms-length transactions reflecting market leverage between landlords and tenants during the period. The comparison between average rent for expiring leases and new leases is determined by including minimum rent paid on the expiring lease and minimum rent to be paid on the new lease in the first year. In some instances, management exercises judgment as to how to most effectively reflect the comparability of spaces reported in this calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, the age of the expiring lease, capital investment made in the space and the specific lease structure. Tenant improvements include the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease, but may also include base building costs (i.e. expansion, escalators or new entrances) that are required to make the space leasable.  Incentives (if applicable) include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.


The leases signed in 20182023 generally become effective over the following one to two years. There is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other matters.reasons.

In 2018, we believe our leasing volume will be in-line with our historical averages with overall positive increases in rental income for renewal leases and flat to slightly positive increases for new leases. However, changes in rental income associated with individual signed leases on comparable spaces may be positive or negative, and we can provide no assurance that the rents on new leases will continue to increase at the above described levels, if at all.

Significant Events with Impacts on Leasing

In July 2015, one of our largest tenants, A&P, filed a voluntary petition under chapter 11 of title 11 of the United States Bankruptcy Code (the "Bankruptcy Code").  Subsequently, A&P determined that it would be liquidating the company. Prior to A&P filing for bankruptcy, A&P leased and occupied nine spaces totaling 365,000 square feet in our portfolio.  The bankruptcy process relating to our nine spaces is complete with eight of the nine A&P leases having been assumed by new operators in the bankruptcy process or re-leased by the Company to new operators.  The remaining lease, located in our Pompton Lakes shopping center, totaling 63,000 square feet was rejected by A&P in bankruptcy and we are in the process of marketing that space for re-lease.  In July 2017, one other 36,000 square foot space formerly occupied by A&P that we had released to a local grocery operator became vacant as that operator failed to perform under their lease and was evicted.  We are currently finalizing a lease with a new grocery operator for this location.  In February 2018, Tops Markets, LLC filed a voluntary petition under chapter 11 of title 11 of the Bankruptcy Code.  Tops Markets is a tenant at a property owned by an unconsolidated joint venture in which we have a 66.67% ownership interest.  The space is 61,000 square feet and the lease runs through 2026.  As of the date of this report, Tops Markets is still performing under its lease.


Impact of Inflation on Leasing


Our long-term leases contain provisions to mitigate the adverse impact of inflation on our operating results. Such provisions include clauses entitling us to receive (a) scheduled base rent increases and (b) percentage rents based upon tenants'tenants’ gross sales, which generallycould increase as prices rise. In addition, many of our non-anchor leases are for terms of less than ten years, which permits us to seek increases in rents upon renewal at then currentthen-current market rates if rents provided in the expiring leases are below then existingthen-current market rates. Most of our leases require tenants to pay a share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation.

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Critical Accounting PoliciesEstimates


Critical accounting policiesestimates are those estimates made in accordance with GAAP that involve a significant level of estimation and uncertainty and are both importantreasonably likely to have a material impact on the presentation of the Company's financial condition andor results of operations of the Company and require management'smanagement’s most difficult, complex or subjective judgments.  Our most significant accounting estimates are as follows:

Valuation of investment properties
Determining the amount of our allowance for doubtful accounts

Valuation of Investment Properties
At each reporting period management must assess whether the value of any of its investment properties are impaired.  The judgement of impairment is subjective and requires management to make assumptions about future cash flows of an investment property and to consider other factors.  The estimation of these factors has a direct effect on valuation of investment properties and consequently net income.  As of January 31, 2023, management does not believe that any of our investment properties are impaired based on information available to us at January 31, 2023.

Allowance for Doubtful Accounts
GAAP requires us to bill our tenants based on the terms in their leases and to record lease income on a straight-line basis. When a tenant does not pay a billed amount due under their lease, it becomes a tenant account receivable, or an asset of the Company.  GAAP requires that receivables, like most assets, be recorded at their realizable value.  Each reporting period we analyze our tenant accounts receivable, and based on the information available to management at the time, record an allowance for doubtful accounts for any unpaid tenant receivable that we believe is uncollectable.  This analysis is subjective and the conclusions reached have a direct impact on net income.  As of January 31, 2023, the portion of our billed but unpaid tenant receivables, excluding straight-line rent receivables that we believe are collectable, amounts to $2.0 million.

For a further discussion about the Company'sof our accounting estimates and critical accounting policies, please see Note 1 to thein our consolidated financial statements of the Company included in Item 1 of this Quarterly Report on Form 10-Q.


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Liquidity and Capital Resources


Overview


At January 31, 2018,2023, we had cash and cash equivalents of $4.5$14.1 million, compared to $8.7$15.0 million at October 31, 2017.2022. Our sources of liquidity and capital resources include operating cash flowflows from real estate operations, proceeds from bank borrowings and long-term mortgage debt, capital financings and sales of real estate investments.  Substantially all of our revenues are derived from rents paid under existing leases, which means that our operating cash flow depends on the ability of our tenants to make rental payments.   For the three months ended January 31, 20182023 and 2017,2022, net cash flows from operating activities amounted to $12.6$16.7 million and $11.5$13.5 million, respectively.


Our short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service, management and professional fees, cash distributions to certain limited partners and non-managing members of our consolidated joint ventures, dividends paid to our preferred stockholders and regular dividends paid to our Common and Class A Common stockholders, which we expect to continue.stockholders.  Cash dividends paid on Common and Class A Common stock for the three months ended January 31, 20182023 and 20172022 totaled $10.4$9.6 million and $10.1$9.3 million, respectively.  Historically, we have met short-term liquidity requirements, which is defined as a rolling twelve month period, primarily by generating net cash from the operation of our properties.   We believe that

In December 2022, the Board of Directors further increased the annualized dividend by approximately $0.05 per Common and Class A Common share beginning with our net cash provided by operations willJanuary 2023 dividend  Although we intend to continue to declare quarterly dividends on our Common shares and Class A Common shares, no assurances can be sufficientmade as to fund our short-term liquiditythe amounts of any future dividends.  The declaration of any future dividends by us is within the discretion of the Board of Directors and will be dependent upon, among other things, the earnings, financial condition and capital requirements including paymentof the Company, as well as any other factors deemed relevant by the Board of Directors.  Two principal factors in determining the amounts of dividends necessaryare (i) the requirement of the Internal Revenue Code that a real estate investment trust distribute to maintainshareholders at least 90% of its real estate investment trust taxable income, and (ii) the amount of the Company's available cash.

In November and December 2022, we repurchased 116,016 shares of our federal income tax REIT status.Class A Common stock at an average price of $18.39 per share and 287 shares of our Common stock at an average price per share of $18.40. All share repurchases were funded with available cash and proceeds from investment property sales.


Our long-term liquidity requirements consist primarily of obligations under our long-term debt, dividends paid to our preferred stockholders, capital expenditures and capital required for acquisitions.  In addition, the limited partners and non-managing members of our fivefour consolidated joint venture entities, Ironbound, McLean Plaza Associates, LLC, UB Orangeburg, LLC, UB High Ridge, LLC and UB Dumont I, LLC, have the right to require the Companyus to repurchase all or a portion of their limited partner or non-managing member interests at prices and on terms as set forth in the governing agreements.  See Note 4 to the consolidated financial statements included in Item 1 of this Report on Form 10-Q.  Historically, we have financed the foregoing requirements through operating cash flow, borrowings under our Facility, debt refinancings, new debt, equity offerings and other capital market transactions, and/or the disposition of under-performing assets, with a focus on keeping our leveragedebt level low.  We expect to continue doing so in the future.  We cannot assure you, however, that these sources will always be available to us when needed, or on the terms we desire.

We are currently in contract to purchase a shopping center in our primary marketplace for $13.1 million.  We plan on funding the purchase with a combination of available cash, borrowings on our Facility and the issuance of unsecured notes to the seller of the property.


Capital Expenditures


We invest in our existing properties and regularly make capital expenditures in the ordinary course of business to maintain our properties. We believe that such expenditures enhance the competitiveness of our properties. For the three months ended January 31, 2018,2023, we paid approximately $2.4$5.3 million for property improvements, tenant improvements and leasing commission costs (approximately $1.7($1.3 million representing property improvements, $2.2 million in property improvements related to our Pompton Lakes, NJ self-storage project (see paragraph below) and approximately $737,000$1.7 million related to new tenant space improvements, leasing costs and capital improvements as a result of new tenant spaces).  The amount of these expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates. We expect to incur approximately $4.6$11.2 million predominantly for anticipated capital improvements, tenant improvements/allowances and leasing costs related to new tenant leases and property improvements during the remainder of fiscal 2018.2023 and fiscal 2024.  This amount is inclusive of our remaining commitments for the Pompton Lakes, NJ developments discussed directly below.  These expenditures are expected to be funded from operating cash flows, bank borrowings or other financing sources.


We are nearing completion on construction of a new self-storage facility at our Pompton Lakes, NJ property.  Our total investment in this development at completion is estimated to be approximately $8.2 million. As of January 31, 2023, we have invested approximately $7.9 million, which has been funded with available cash.  Any remaining investment will be funded with available cash or borrowings on our Facility.

We remain in the process of developing 3.4 acres of recently-acquired land adjacent to a shopping center we own in Stratford, CT.  We built one pad-site building that is leased to two retail chains and will be building another pad-site building once we receive approvals to move a cell tower to an alternate site on our adjacent shopping center property.  These two pad sites total approximately 5,200 square feet.  In addition, we built a recently-opened self-storage facility of approximately 131,000 square feet, which is managed for us by a national self-storage company. The total project cost of the completed pad site and the completed self-storage facility was approximately $18.8 million (excluding land cost).  We plan on funding the development cost for the second pad site with available cash, borrowings on our Facility or other sources, as more fully described earlier in this Item 2.  The Stratford self-storage building is approximately 91.0% leased as of January 31, 2023.

Financing Strategy, Unsecured Revolving Credit Facility and other Financing Transactions


Our strategy is to maintain a conservative capital structure with low leverage levels by commercial real estate standards.  Mortgage notes payable and other loans of $295.5$300.5 million consist entirely of $1.7 million in variable rate debt with an interest rate of 4.55% as of January 31, 2023 and $298.8 million in fixed-rate mortgage loan indebtednessloans, with a weighted average interest rate of 4.2%3.8% at January 31, 2018.  These2023.  The mortgages are secured by 2623 properties with a net book value of $565$489 million and have fixed rates of interest ranging from 3.5%3.1% to 6.6%5.6%.  The $1.7 million in variable rate debt is unsecured.  We may refinance our mortgage loans, at or prior to scheduled maturity, through replacement mortgage loans.  The ability to do so, however, is dependent upon various factors, including the income level of the properties, interest rates and credit conditions within the commercial real estate market. Accordingly, there can be no assurance that such re-financings can be achieved.

At January 31, 2018,2023, we had $6 million48 properties in our consolidated portfolio that were unencumbered by mortgages.

Included in the mortgage notes discussed above, we have nine promissory notes secured by properties we consolidate and two promissory notes secured by properties in joint ventures that we do not consolidate, the interest rate on which 11 notes is based on some variation of variable-rate debt consistingthe London Interbank Offered Rate (“LIBOR”) or Secured Overnight Financing Rate ("SOFR"), plus a specified credit spread amount.  In addition, on each of draws on our Facility (see below) that was not fixed through anthe dates these notes were executed by us, we entered into a corresponding derivative interest rate swap contract, the counterparty of which was either the lender on the aforementioned promissory notes or otherwise. an affiliate of that lender.  These swap contracts are in accordance with the International Swaps and Derivatives Association, Inc ("ISDA").  These swap contracts convert the variable interest rate in the notes, which are based on LIBOR or SOFR, to a fixed rate of interest for the life of each note. In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, subsequently announced that it extended publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  In August and December 2022, we amended six mortgages and their related interest rate swap agreements to include market standard provisions for determining the benchmark replacement rate for LIBOR in the form of SOFR.   We are in the process of working with the lenders and counterparties to amend the remaining promissory notes and swap contracts that reference LIBOR. We have good working relationships with all of our lenders/counterparties, and expect that the replacement reference rate under the amended notes will continue to match the replacement rates in the swaps.  Therefore, we believe there would be no material effect on our financial position or results of operations. See "ItemItem 3. Quantitative and Qualitative Disclosures about Market Risk"Risk” included in this Report on Form 10-Q for additional information on our interest rate risk.


We currently maintain a ratio of total debt to total assets below 31%34.0% and a fixed charge coverage ratio of over 3.423.6 to 1 (excluding preferred stock dividends), which we believe will allow us to obtain additional secured mortgage loans or other types of borrowings, if necessary.  We own 4948 properties in our consolidated portfolio that are not encumbered by secured mortgage debt.  At January 31, 2018,2023, we had borrowing capacity of $93$86.7 million on our Facility.Facility (exclusive of the accordion feature discussed in the following paragraph).  Our Facility includes financial covenants that limit, among other things, our ability to incur unsecured and secured indebtedness.  See Note 3 in our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information on these and other restrictions.


We currently have a $100$125 million unsecured revolving credit facility with a syndicate of three banks BNYled by The Bank of New York Mellon, BMO andas administrative agent.  The syndicate also included Wells Fargo Bank N.A. withand Bank of Montreal (co-syndication agents).  The Facility gives us the abilityoption, under certain conditions, to additionally increase the Facility's borrowing capacity to $150$175 million subject(subject to lender approval.approval).  The maturity date of the Facility is August 23, 2020March 29, 2024, with a one-yearone year extension at our option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of upletters of credit (up to $10 million of letters of credit.million).  Borrowings will bear interest at our option of Eurodollar rateeither SOFR plus 1.35%1.55% to 1.95%2.30%, or The Bank of New York Mellon's prime lending rate plus 0.35%0.45% to 0.95%,1.20% based on consolidated total indebtedness, as defined.  We pay a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% per annum, based on outstanding borrowings during the year.  As of January 31, 2018, $93 million was available to be drawn on the Facility. Our ability to borrow under the Facility is subject to itsour compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit our level of secured and unsecured indebtedness, including preferred stock, and additionally requirerequires us to maintain certain debt coverage ratios. We were in compliance with such covenants at January 31, 2018.2023. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR.


During
The Facility contains representations and financial and other affirmative and negative covenants usual and customary for this type of agreement.  So long as any amounts remain outstanding or unpaid under the three months ended January 31, 2018,Facility, we borrowed $6 million on our Facility to fund capital improvements to our properties. Formust satisfy certain financial covenants: 

unsecured indebtedness may not exceed $400 million;
secured indebtedness may not exceed 40% of gross asset value, as determined under the three months ended January 31, 2018 we repaid $4 millionFacility;
total secured and unsecured indebtedness, excluding preferred stock, may not be more than 60% of borrowings on our Facility, with available cash.gross asset value;

total secured and unsecured indebtedness, plus preferred stock, may not be more than 70% of gross asset value;
Net Cash Flows from:

Operating Activities

Net cash flows provided by operating activities amounted to $12.6 million forunsecured indebtedness may not exceed 60% of the three months ended January 31, 2018 compared to $11.5 millioneligible real asset value of unencumbered properties in the comparable periodunencumbered asset pool as defined under the Facility;
earnings before interest, taxes, depreciation and amortization must be at least 175% of fiscal 2017. The increase infixed charges, which exclude preferred stock dividends;
the net operating cash flows when compared withincome from unencumbered properties must be 200% of unsecured interest expenses;
not more than 25% of the corresponding prior period was due primarilygross asset value and unencumbered asset pool may be attributable to the Company generating additional operating incomeCompany's pro rata share of the value of unencumbered properties owned by non-wholly owned subsidiaries or unconsolidated joint ventures; and
the number of un-mortgaged properties in the three months ended January 31, 2018 fromunencumbered asset pool must be at least 10 and at least 10 properties acquired after the first quarter of fiscal 2017 and properties acquired in the first three months of fiscal 2018.

Investing Activities

Net cash flows used in investing activities amounted to $3.5 million for the three months ended January 31, 2018 compared to net cash flows used in investing activities of $13.6 million in the comparable period of fiscal 2017. The decrease in net cash flows used in investing activities in fiscal 2018 when compared to the corresponding prior period was the result of the Company expending less on the acquisition of real estate investments in the first three months of fiscal 2018 when compared with the corresponding period of fiscal 2017.

We regularly make capital investments in our properties for property improvements, tenant improvements costs and leasing commissions.

Financing Activities

Net cash flows used in financing activities amounted to $13.3 million in the first three months of fiscal 2018 compared with $181,000 in the comparable period of fiscal 2017. The net increase in cash flows used in financing activities in the first three months of fiscal 2018 versus the same period of fiscal 2017 was predominantly the result of the Company borrowing $15 million on its Facility in the first three months of fiscal 2017 and only borrowing a net $2 million in the first three months of fiscal 2018.  In addition, we increased the annualized dividend on the outstanding Common and Class A Common stock by $0.02 per share in December 2017.  This increase was partially offsetmust be owned by the Company incurring $507,000 less in preferred stock dividends inor a wholly owned subsidiary.

For purposes of these covenants, eligible real estate value is calculated as the first three monthssum of fiscal 2018 when compared with the corresponding prior period.  In October 2017, the Company redeemed it Series F preferred stock and replaced it with a new Series H preferred stock, which had a lower coupon rate than the redeemed Series F preferred stock.
Results of Operations

The following information summarizes our results of operationsCompany's properties annualized net operating income for the three months ended January 31, 2018 and 2017 (amounts in thousands):

  Three Months Ended             
  January 31,        Change Attributable to: 
  2018  2017  Increase (decrease)  % Change  Property Acquisitions/Sales  Properties Held in Both Periods (Note 1) 
Revenues                  
Base rents $23,584  $21,112  $2,472   11.7% $2,032  $440 
Recoveries from tenants  8,207   7,073   1,134   16.0%  605   529 
Mortgage interest and other  1,204   861   343   39.8%  (11)  354 
                         
Operating Expenses                        
Property operating expenses  6,306   5,148   1,158   22.5%  275   883 
Property taxes  5,147   4,848   299   6.2%  159   140 
Depreciation and amortization  6,949   6,581   368   5.6%  735   (367)
General and administrative expenses  2,419   2,455   (36)  -1.5%  n/a   n/a 
                         
Other Income/Expenses                        
Interest expense  3,423   3,257   166   5.1%  247   (81)
Interest, dividends and other investment income  80   173   (93)  -53.8%  n/a   n/a 

Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2018 and 2017.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

Revenues

Base rents increased by 11.7% to $23.6 million in the three month period ended January 31, 2018, as compared with $21.1 million in the comparable period of 2017.  The increase in base rentsprior four fiscal quarters capitalized at 6.75% and the changes in other income statement line items were attributable to:

Property Acquisitions and Properties Sold:

Inpurchase price of any eligible real estate asset acquired during the prior four fiscal 2017,quarters.  Gross asset value is calculated as the Company purchased four properties totaling 114,700 square feetsum of GLA, invested in two joint ventures that own four properties totaling 173,600 square feet, whose operations we consolidate, and sold two properties totaling 203,800 square feet.  In the first three months of fiscal 2018, the Company purchased one property totaling 24,200 square feet.  These properties accounted for all of the revenue and expense changes attributable to property acquisitions and sales in the three months ended January 31, 2018 when compared with fiscal 2017.

Properties Held in Both Periods:

Revenues

Base Rent
The increase in base rents for properties held in both periods was predominantly caused by new leasing activity at three properties held in both periods that created a positive variance in base rent of $300,000 in the three months ended January 31, 2018 when compared to the first quarter of fiscal 2017.  In addition, the increase in base rents for properties held in both periods was caused by the vacating of a tenant at one of our properties in the first quarter of fiscal 2017 prior to the original expiration of their lease, requiring the Company to write off $116,000 in straight-line rent receivable relating to that tenant in the first quarter of fiscal 2017, which creates a positive variance in base rent for the three months ended January 31, 2018 when compared with the first quarter of fiscal 2017.  These combined increases were partially offset by a $154,000 negative base rent variance as a result of our 36,000 square foot grocery space at our Valley Ridge property being occupied in the first quarter of fiscal 2017 but not in the first quarter of fiscal 2018 (see "Significant Events with Impact on Leasing" earlier in this Item 2).

In fiscal 2018, the Company leased or renewed approximately 108,000 square feet (or approximately 2.5% of total consolidated property leasable area).  At January 31, 2018,eligible real estate value, the Company's consolidated properties were 92.5% leased (92.7% leased at October 31, 2017).

Tenant Recoveries
Forpro rata share of eligible real estate value of eligible joint venture assets, cash and cash equivalents, marketable securities, the three months ended January 31, 2018, recoveries from tenants for properties owned in both periods (which represents reimbursements from tenants for operating expenses and property taxes) increased by $529,000. This increase was a result of an increase in both property operating expenses and property tax expense in the consolidated portfolio for properties owned for the entire periods of fiscal 2018 and 2017.

Expenses

Property operating expenses increased by $883,000 in the three month period ended January 31, 2018 when compared with the corresponding prior period as a result of an increase in snow removal expenses.

Real estate taxes increased by $140,000 in the three month period ended January 31, 2018 when compared with the corresponding prior period as a result of an increase in tax assessments.

Interest expense decreased by $81,000 in the three month period ended January 31, 2018 when compared with the corresponding prior period as a result of the Company refinancing its largest secured mortgage in July 2017, reducing the interest rate from 5.52% to 3.398%, and the Company having $17 million less drawn on its Facility.

Depreciation and amortization expense decreased by $367,000 in the three month period ended January 31, 2018 when compared with the corresponding prior period as a result of increased depreciation expense for tenant improvements in the first three months of fiscal 2017 related to tenant improvements for two tenants that vacated the shopping center prior to the original expiration of their leases.

General and Administrative Expenses

General and administrative expense was relatively unchanged in the three months ended January 31, 2018 when compared to the corresponding prior period.
Funds from Operations

We consider Funds from Operations ("FFO") to be an additional measure of our operating performance.  We report FFO in addition to net income applicable to common stockholders and net cash provided by operating activities.  Management has adopted the definition suggested by The National Association of Real Estate Investment Trusts ("NAREIT") and defines FFO to mean net income (computed in accordance with GAAP) excluding gains or losses from sales of property, plus real estate-related depreciation and amortization and after adjustments for unconsolidated joint ventures.

Management considers FFO a meaningful, additional measure of operating performance because it primarily excludes the assumption that thebook value of the Company's real estate assets diminishes predictably over timeconstruction projects and industry analysts have accepted it as a performance measure.  FFO is presented to assist investors in analyzing the performanceCompany's pro rata share of the Company.  It is helpfulbook value of construction projects owned by unconsolidated joint ventures, and eligible mortgages and trade receivables, as it excludes various items included in net income that are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization.  However, FFO:

does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other eventsdefined in the determination of net income); andagreement.


should not be considered an alternative to net income as an indication of our performance.

FFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs.  The table below provides a reconciliation of net income applicable to Common and Class A Common Stockholders in accordance with GAAP to FFO for the three  month periods endedAt January 31, 2018 and 2017 (amounts in thousands):2023, we have $37.5 million outstanding on our Facility.

  Three Months Ended 
  January 31, 
  2018  2017 
       
Net Income Applicable to Common and Class A Common Stockholders $4,921  $3,412 
         
Real property depreciation  5,458   4,964 
Amortization of tenant improvements and allowances  1,042   1,326 
Amortization of deferred leasing costs  426   267 
Depreciation and amortization on unconsolidated joint ventures  403   396 
         
Funds from Operations Applicable to Common and Class A Common Stockholders $12,250  $10,365 


FFO amounted to $12.3 million in the first three months of fiscal 2018 compared to $10.4 million in the comparable period of fiscal 2017.  The net increase in FFO is attributable, among other things, to: (i) the additional net income generated from properties acquired in fiscal 2017 and the first three months of fiscal 2018; (ii) a decrease in preferred stock dividends of $507,000 as a result of the Company redeeming its Series F preferred stock in October 2017 and replacing it with its Series H preferred stock.  The Series H preferred stock has a lower interest rate and the outstanding principal of the Series H preferred stock is $14.4 million less than the redeemed Series F preferred stock.  This increase was partially offset by (iii) a $132,000 increased charge for bad debt expense in this year's first quarter when compared with last year's first quarter and (iv) $90,000 decrease in interest income generated as a result of the one mortgage receivable the Company had outstanding being repaid in October 2017.
Unconsolidated Joint Venture Debt
Off-Balance Sheet Arrangements


We have sevensix off-balance sheet investments in real property through unconsolidated joint ventures:


a 66.67% equity interest in the Putnam Plaza Shopping Center,


an 11.642%11.792% equity interest in the Midway Shopping Center, L.P.,


a 50% equity interest in the Chestnut Ridge Shopping Center, and Plaza 59 Shopping Centers,


a 50% equity interest in theeach of Gateway Plaza shopping centerShopping Center and the Riverhead Applebee'sApplebee’s Plaza, and


a 20% interest in a suburban office building with ground level retail.


These unconsolidated joint ventures are accounted for under the equity method of accounting, as we have the ability to exercise significant influence over, but not control of, the operating and financial decisions of these investments.  Our off-balance sheet arrangements are more fully discussed in Note 5, "Investments4, “Investments in and Advances to Unconsolidated Joint Ventures"Ventures” in our financial statements in Item 1 of this Quarterly Report on Form 10-Q.  Although we have not guaranteed the debt of these joint ventures, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g. guarantees against fraud, misrepresentation and bankruptcy) on certain loans of the joint ventures.  The below table details information about the outstanding non-recourse mortgage financings on our unconsolidated joint ventures (amounts in thousands):


     Principal Balance          Principal Balance Fixed Interest  
Joint Venture DescriptionLocation Original Balance  At January 31, 2018  Fixed Interest Rate Per Annum Maturity Date Location Original Balance At January 31, 2023 Rate Per Annum Maturity Date
Midway Shopping CenterScarsdale, NY $32,000  $28,257   4.80%Dec-2027 Scarsdale, NY $32,000 $23,400  4.80% Dec-2027
Putnam Plaza Shopping CenterCarmel, NY $21,000  $18,937   4.17%Oct-2024 Carmel, NY $18,900 $17,600  4.81% Oct-2028
Gateway PlazaRiverhead, NY $14,000  $12,656   4.18%Feb-2024 Riverhead, NY $14,000 $14,000  4.07% July 2032
Applebee's PlazaRiverhead, NY $1,300  $1,034   5.98%Aug-2026
Applebee's PlazaRiverhead, NY $1,000  $901   3.38%Aug-2026

Environmental Matters
Based upon management's ongoing review of its properties, management is not aware of any environmental condition with respect to any of the Company's properties that would be reasonably likely to have a material adverse effect on the Company. There can be no assurance, however, that (a) the discovery of environmental conditions that were previously unknown, (b) changes in law, (c) the conduct of tenants or (d) activities relating to properties in the vicinity of the Company's properties, will not expose the Company to material liability in the future. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of the Company's tenants, which could adversely affect the Company's financial condition and results of operations.

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Net Cash Flows from:

Operating Activities

Net cash flows provided by operating activities amounted to $16.7 million for the three months ended January 31, 2023 compared to $13.5 million in the comparable period of fiscal 2022. The net increase in operating cash flows when compared with the corresponding prior period was primarily related to new leasing in the portfolio completed after the first quarter of fiscal 2022 and in fiscal 2023 and the net operating income from our Shelton Square acquisition, which closed after the first quarter of fiscal 2022.

Investing Activities

Net cash flows used by investing activities amounted to $5.0 million for the three months ended January 31, 2023 compared to net cash used by investing activities in the amount of $234,000 in the comparable period of fiscal 2022. The increase in net cash flows used by investing activities in the three months ended January 31, 2023 when compared to the corresponding prior period was the result of investing $2.2 million more in improvements to our properties than we did in the first quarter of fiscal 2022.  In addition, the increase in net cash used was the result of selling one investment property in the first quarter of fiscal 2022, which generated net proceeds of $1.8 million, we did not sell any properties in the first quarter of fiscal 2023 and receiving $1.1 million less in distributions from our unconsolidated joint ventures in the first quarter of fiscal 2023 when compared with last year’s first quarter.

We regularly make capital investments in our properties for improvements, and pursuant to our obligations for tenant improvements and leasing commissions.

Financing Activities

The small decrease in net cash flows used by financing activities for the three months ended January 31, 2023, when compared to the corresponding prior period, was predominantly the result of borrowing $7 million on our Facility in the first quarter of fiscal 2023, we did not have any borrowing activity on our facility in the first quarter of fiscal 2022.  This was offset by investing $2.1 million to repurchase our common stock in the first quarter of fiscal 2023, we did not repurchase any common stock in the first quarter of fiscal 2022.  In addition, in the first quarter of fiscal 2022 we refinanced a mortgage loan and increased the principal by $4.5 million.
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Results of Operations

The following information summarizes our results of operations for the three months ended January 31, 2023 and 2022 (amounts in thousands):

  Three Months Ended     Change Attributable to 
  January 31,  Increase     Property  Properties Held In 
Revenues 2023  2022  (Decrease)  % Change  Acquisitions/Sales  Both Periods (Note 1) 
Base rents $26,833  $24,989  $1,844   7.4% $797  $1,047 
Recoveries from tenants  8,886   9,274   (388)  (4.2)%  194   (582)
Uncollectable amounts in lease income  (104)  (113)  9   (8.0)%  -   9 
ASC Topic 842 cash basis lease income reversal (including straight-line rent)  124   (63)  187   (296.8)%  -   187 
Total lease income  35,739   34,087                 
                         
Lease termination  1,557   28   1,529   5,460.7%  -   1,529 
Other income  1,001   1,440   (439)  (30.5)%  (10)  (429)
                         
Operating Expenses                        
Property operating  6,965   7,002   (37)  (0.5)%  158   (195)
Property taxes  5,918   5,923   (5)  (0.1)%  65   (70)
Depreciation and amortization  8,404   7,144   1,260   17.6%  282   978 
General and administrative  2,726   2,680   46   1.7%  n/a   n/a 
                         
Non-Operating Income/Expense                        
Interest expense  3,647   3,302   345   10.4%  -   345 
Interest, dividends, and other investment income  134   55   79   143.6%  n/a   n/a 
 Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2023 and 2022 and for interest expense the amount also includes parent company interest expense.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

Base rents increased by 7.4% to $26.8 million for the three months ended January 31, 2023, as compared with $25.0 million in the corresponding period of 2022. The change in base rent and the changes in other income statement line items analyzed in the table above were attributable to:

Property Acquisitions and Properties Sold:

In fiscal 2022, we acquired one property totaling 188,000 square feet and sold three properties totaling 14,300 square feet. These properties accounted for all of the revenue and expense changes attributable to property acquisitions and sales in the three months ended January 31, 2023, when compared with the corresponding period in fiscal 2022.

Properties Held in Both Periods:

Revenues

Base Rent

For properties held in both periods, base rent for the three months ended January 31, 2023 increased by $1.0 million when compared with the corresponding prior period.  This positive variance in the three months ended January 31, 2023 when compared with the corresponding prior period, was primarily a result of net new leasing in the portfolio after the first quarter of fiscal 2022 predominantly at 10 properties.

In the first three months of fiscal 2023, we leased or renewed approximately 158,200 square feet (or approximately 3.5% of total GLA).  At January 31, 2023, our consolidated properties were 94.1% leased (93.0% leased at October 31, 2022).

Tenant Recoveries
In the three months ended January 31, 2023, recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) decreased by a net $582,000, when compared with the corresponding prior period, predominantly related to the recalculation of one tenant's real estate tax reimbursement calculations, which resulted in additional billings to that tenant in the first quarter of fiscal 2022, which creates negative variance in the first quarter of fiscal 2023.

Lease Termination Income
In the three months ended January 31, 2023, lease termination income increased by $1.5 million when compared with the corresponding prior period, related predominantly to three lease termination settlements reached with three different tenants in the first quarter of fiscal 2023. Those tenants had vacated their premises and reached agreement with the company to settle the remaining obligations under their leases.

Uncollectable Amounts in Lease Income
In the three months ended January 31, 2023, uncollectable amounts in lease income was relatively unchanged from the corresponding prior period.

ASC Topic 842 Cash Basis Lease Income Reversals
We adopted ASC Topic 842 "Leases" at the beginning of fiscal 2020.  ASC Topic 842 requires, among other things, that if the collectability of a specific tenant’s future lease payments as contracted are not probable of collection, revenue recognition for that tenant must be converted to cash-basis accounting and be limited to the lesser of the amount billed or collected from that tenant. In addition, any straight-line rental receivables would need to be reversed in the period that the collectability assessment changed to not probable.  As a result of continuing to analyze our entire tenant base, we determined that as a result of the COVID-19 pandemic, 89 tenants' future lease payments were no longer probable of collection. All such tenants were converted to cash basis after our second quarter of fiscal 2020 and prior to our third quarter of fiscal 2021. As of January 31, 2023, 36 of these 89 tenants are no longer tenants in the Company's properties. There were no significant charges related to cash-basis tenants in the three months ended January 31, 2023 and 2022.

Expenses

Property Operating
In the three months ended January 31, 2023, property operating expenses were relatively unchanged when compared with the corresponding prior period.

Property Taxes
In the three months ended January 31, 2023, property tax expenses were relatively unchanged when compared with the corresponding prior period.

Interest
In the three months ended January 31, 2023, interest expense increased by $345,000 when compared with the corresponding prior period.  The increase was mainly the result of having higher amounts drawn on our Facility coupled with higher interest rates as interest on the Facility is calculated on a variable rate.

Depreciation and Amortization
In the three months ended January 31, 2023, depreciation and amortization increased by $978,000 when compared with the corresponding prior period.  This increase was related to additional tenant improvement amortization resulting from the termination of three tenant leases at our Orange Meadows property, which terminations were required so that we can deliver the combined spaces to a new tenant.

General and Administrative Expenses
In the three months ended January 31, 2023, general and administrative expenses were relatively unchanged when compared with the corresponding prior period.

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Funds from Operations

We consider FFO to be an additional measure of our operating performance.  We report FFO in addition to net income applicable to common stockholders and net cash provided by operating activities.  Management has adopted the definition suggested by The National Association of Real Estate Investment Trusts (“NAREIT”) and defines FFO to mean net income (computed in accordance with GAAP), excluding gains or losses from sales of property, plus real estate-related depreciation and amortization and after adjustments for unconsolidated joint ventures.

Management considers FFO to be a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of the company’s real estate assets diminishes predictably over time, and industry analysts have accepted FFO as a performance measure.  FFO is presented to assist investors in analyzing the performance of the company.  It is helpful as it excludes various items included in net income that are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization.  However, FFO:

does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); and

should not be considered an alternative to net income as an indication of our performance.

FFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs.  The table below provides a reconciliation of net income applicable to Common and Class A Common stockholders in accordance with GAAP to FFO for the three months ended January 31, 2023 and 2022 (amounts in thousands):

Reconciliation of Net Income Available to Common and Class A Common Stockholders To Funds From Operations: Three Months Ended 
  January 31, 
  2023  2022 
Net Income Applicable to Common and Class A Common Stockholders $6,802  $5,397 
         
Real property depreciation  5,914   5,738 
Amortization of tenant improvements and allowances  1,998   991 
Amortization of deferred leasing costs  478   397 
Depreciation and amortization on unconsolidated joint ventures  371   375 
(Gain)/loss on sale of property  4   (2)
         
Funds from Operations Applicable to Common and Class A Common Stockholders $15,567  $12,896 


FFO amounted to $15.6 million in the three months ended January 31, 2023, compared to $12.9 million in the corresponding period of fiscal 2022.  The net increase in FFO is attributable, among other things to:

Increases:

A $1.8 million increase in base rent for new leasing in the portfolio after the first quarter of fiscal 2022 predominantly at 10 properties.
The net operating income from our Shelton Square acquisition, which closed after the first quarter of fiscal 2022.
•
An increase in lease termination income of $1.5 million when compared with the corresponding prior period, related predominantly to three lease termination settlements reached with three different tenants in the first quarter of fiscal 2023. Those tenants had vacated their premises and reached agreement with the company to settle the remaining obligations under their leases.

Decreases:

An increase in interest expense of $345,000 when compared with the corresponding prior period.  The increase was mainly the result of having higher amounts drawn on our Facility coupled with higher interest rates, as interest on the Facility is calculated on a variable rate.
A $388,000 net decrease in recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) when compared with the corresponding prior period, predominantly related to the recalculation of one tenant's real estate tax reimbursement calculations, which resulted in additional billings to that tenant in the first quarter of fiscal 2022, which creates negative variance in the first quarter of fiscal 2023.
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Same Property Net Operating Income
We present Same Property Net Operating Income ("Same Property NOI"), which is a non-GAAP financial measure. Same Property NOI excludes from Net Operating Income (“NOI”) properties that have not been owned for the full periods presented. The most directly comparable GAAP financial measure to NOI is operating income.  To  calculate NOI, operating income is adjusted to add back depreciation and amortization, general and administrative expense, interest expense, amortization of above and below-market lease intangibles and to exclude straight-line rent adjustments, interest, dividends and other investment income, equity in net income of unconsolidated joint ventures, and gain/loss on sale of operating properties.

We use Same Property NOI internally as a performance measure, and we believe Same Property NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Our management also uses Same Property NOI to evaluate property level performance and to make decisions about resource allocations. Further, we believe Same Property NOI is useful to investors as a performance measure because, when compared across periods, Same Property NOI reflects the impact on operations from trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from income from continuing operations. Same Property NOI excludes certain components from net income attributable to Urstadt Biddle Properties Inc. in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Same Property NOI presented by us may not be comparable to Same Property NOI reported by other REITs that define Same Property NOI differently.

 Three Months Ended January 31,
  20232022% Change
Same Property Operating Results:    
     
Number of Properties (Note 1) 72 
     
Revenue (Note 2)    
Base Rent (Note 3) $25,966$25,2452.9%
Uncollectable amounts in lease income-same property (104)(113)(8.0)%
ASC Topic 842 cash-basis
lease income reversal-same property
 124(87)(242.5)%
Recoveries from tenants 8,6889,270(6.3)%
Other property income 137336(59.2)%
  34,81134,6510.5%
     
Expenses    
Property operating 4,0983,9064.9%
Property taxes 5,8935,913(0.3)%
Other non-recoverable operating expenses 64754917.9%
  10,63810,3682.6%
     
Same Property Net Operating Income $24,173$24,283(0.5)%
     
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure:    
     
Other reconciling items:    
Other non same-property net operating income 74630 
Other Interest income 180125 
Other Dividend Income 88 
Consolidated lease termination income 1,55728 
Consolidated amortization of above and below market leases 183174 
Consolidated straight line rent income 3725 
Equity in net income of unconsolidated joint ventures 420267 
Taxable REIT subsidiary income/(loss) (3)186 
Solar income/(loss) 2(211) 
Unrealized holding gains arising during the periods -- 
Gain on marketable securities -- 
Interest expense (3,647)(3,302) 
General and administrative expenses (2,726)(2,680) 
Uncollectable amounts in lease income (104)(113) 
Uncollectable amounts in lease income-same property 104113 
ASC Topic 842 cash-basis lease income reversal 124(87) 
ASC Topic 842 cash-basis lease income reversal-same property (124)87 
Directors fees and expenses (119)(107) 
Depreciation and amortization (8,404)(7,144) 
Adjustment for intercompany expenses and other (1,670)(1,943) 
     
Total other -net (13,101)(14,564) 
Income from continuing operations 11,0729,71913.9%
Gain (loss) on sale of real estate (4)2 
Net income 11,0689,72113.9%
Net income attributable to noncontrolling interests (853)(911) 
Net income attributable to Urstadt Biddle Properties Inc. $10,215$8,81015.9%
     
Same Property Operating Expense Ratio (Note 4) 87.0%94.4%(7.5)%

Note 1 - Includes only properties owned for the entire period of both periods presented.

Note 2 - Excludes straight line rent, above/below market lease rent, lease termination income.

Note 3 - Base rents for the three month period ended January 31, 2023 are reduced by approximately $0, for rents that were deferred, and approximately $0, for rents that were abated, because of COVID-19. Base rents for the three month period ended January 31, 2023, are increased by approximately $19,000, in COVID-19 deferred rents that were billed and collected in the fiscal 2023 periods.

Base rents for the three month period ended January 31, 2022 are reduced by approximately $51,000, for rents that were deferred, and approximately $124,000 for rents that were abated, because of COVID-19. Base rents for the three month period ended January 31, 2022, are increased by approximately $287,000, in COVID-19 deferred rents that were billed and collected in the fiscal 2022 periods.

Note 4 -Represents the percentage of property operating expense and real estate tax.
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Item 3.  3.  Quantitative and Qualitative Disclosures about Market Risk


We are exposed to interest rate risk primarily through our borrowing activities, which predominantly include fixed-rate mortgage debt and, in limited circumstances, variable rate debt.  As of January 31, 2018,2023, we had total mortgage debt and other notes payable of $295.5$298.8 million, of which 100% was fixed-rate, inclusive of variable rate mortgages that have been swapped to fixed interest rates using interest rate swap derivatives contracts.


For our fixed-rate debt, there is inherent rollover risk for borrowings as they mature and are renewed at current market rates.  The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Company'sour future financing requirements.
To reduce our exposure to interest rate risk on variable-rate debt, we use interest rate swap agreements for example, to convert some of our variable-rate debt to fixed-rate debt.  As of January 31, 2018,2023, we had sevennine open derivative financial instruments.instruments that relate to promissory notes secured by properties that we consolidate.  These interest rate swaps are cross collateralizedcross-collateralized with mortgages on properties in Rye, NY, Ossining, NY, Yonkers, NY, Orangeburg, NY, Southeast, NY, Stamford, CT, Greenwich CT, Darien, CT, Stratford, CT. and Greenwich CT.Dumont, NJ.  The Rye swaps expire in October 2019, the Ossining swap expires in October 2024, the Yonkers swap expires in November 2024, the Orangeburg swap expires in October 2024, the Southeast swap expires in June 2029, the Stamford swap expires in July 2027, and the Greenwich swaps expire in October 2026, allthe Darien swap expires in March 2028, the Stratford swap expires in February 2032, and the Dumont, NJ swap expires in August 2027, in each case concurrent with the maturity of the respective mortgages.  All of the aforementioned derivatives contracts are adjusted to fair market value at each reporting period.  The Company hasWe have concluded that all of the aforementioned derivatives contracts are effective cash flow hedges as defined in ASC Topic 815.  We are required to evaluate the effectiveness at inception and at each reporting date.  As a result of the aforementioned derivatives contracts being effective cash flow hedges, all changes in fair market value are recorded directly to stockholders equity in accumulated comprehensive income and have no effect on our earnings.

Under existing guidance, the earningspublication of the Company.LIBOR reference rate was to be discontinued beginning on or around the end of 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021.  However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, subsequently announced that it extended publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.  In August and December 2022, we amended six mortgages and their related interest rate swap agreements to include market standard provisions for determining the benchmark replacement rate for LIBOR in the form of SOFR.   We are in the process of working with the lenders and counterparties to amend the remaining promissory notes and swap contracts that reference LIBOR. We have good working relationships with all of our lenders/counterparties, and expect that the replacement reference rate under the amended notes will continue to match the replacement rates in the swaps.  Therefore, we believe there would be no material effect on our financial position or results of operations.  See “We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates” under Item 1A of our October 31, 2022 annual report on Form 10-K for more information.

At January 31, 2023, we had $37.5 million in borrowings outstanding on our Facility, which bears interest at SOFR plus 1.55%.  If interest rates were to rise 1%, our interest expense as a result of the variable rate would increase by any amount outstanding multiplied by 1% per annum.
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Item 4.Controls and Procedures


Evaluation of Disclosure Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report.��  Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.


Changes in Internal Controls
During the quarter ended January 31, 2018,2023, there were no changes in the Company'sour internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company'sour internal control over financial reporting.



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PART II – OTHER INFORMATION


Item 1. Legal Proceedings


TheIn the ordinary course of business, the Company is not involved in any litigation that in management's opinion would result in alegal proceedings. There are no material adverse effect onlegal proceedings presently pending against the Company's ownership, management or operation of its properties.Company.



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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds


TheFollowing its initial December 2013 authorization, in June 2017, our Board of Directors of the Company has approvedre-approved a share repurchase program ("Prior Repurchase Program") for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock,Stock and Class A Common stockStock in open market transactions.

On October 3, 2022, our Board of Directors re-approved a new share repurchase program (“Current Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common Stock and Series G Cumulative Preferred stockClass A Common Stock in open market transactions. The Current Repurchase Program was announced on October 3, 2022 and has no set expiration date. The timing and actual number of shares purchased under the program depend upon marketplace conditions and other factors.  For the three month period ended January 31, 2018,2023, the Company did not repurchase anyrepurchased 116,016 shares of Class A Common stock and 287 shares of Common stock under the Program.  DuringCurrent Repurchase Program through a Rule 10b5-1(c)(1) agreement entered into between the three months ended January 31, 2018 3,250 restrictedCompany and its broker Deutsche Bank Securities Inc.

Table A (Class A Common shares)

The following table sets forth Class A Common shares were forfeitedrepurchased by former employees.  Fromthe Company during the three month period ended January 31, 2023:


Period 
Total Number
of Shares
Purchased
  
Average Price
Per Share
Purchased
  
Total Number
Shares Re-
purchased as
Part of Publicly
Announced
Plan or
Program (a)
  
Maximum
Number of
Shares That
May be
Purchased
Under the Plan
or Program (a)
 
November 1, 2022 – November 30, 2022  40,268  $18.38   40,268   1,466,807 
December 1, 2022 – December 31, 2022  75,748  $18.39   75,748   1,390,859 
January 1, 2023 – January 31, 2023  -   -   -   1,390,859 

(a)  See paragraph above regarding the Prior Repurchase Program and the Current Repurchase Program.  The number of shares listed under the column “The Maximum Number of Shares That May be Purchased Under the Plan or Program” of Table A is inclusive of the number of shares listed under the same column of Table B.

Table B (Common shares)

The following table sets forth Common shares repurchased by the Company during the three month period ended January 31, 2023:

Period 
Total Number
of Shares
Purchased
  
Average Price
Per Share
Purchased
  
Total Number
Shares Re-
purchased as
Part of Publicly
Announced
Plan or
Program (a)
  
Maximum
Number of
Shares That
May be
Purchased
Under the Plan
or Program (a)
 
November 1, 2022 – November 30, 2022  87  $18.46   87   1,466,807 
December 1, 2022 – December 31, 2022  200  $18.37   200   1,390,859 
January 1, 2023 – January 31, 2023  -   -   -   1,390,859 

(a)  See paragraph above regarding the Prior Repurchase Program and the Current Repurchase Program.  The number of shares listed under the column “The Maximum Number of Shares That May be Purchased Under the Plan or Program” of Table B is inclusive of the number of shares listed under the same column of Table A.

In addition, from time to time, we could be deemed to have repurchased shares as a result of shares withheld for tax purposes upon a stock compensation related vesting event.
During the three months endedJanuary 31, 2023, the Company repurchased 26,014 shares for an aggregate purchase price of $492,870 (weighted average price of $18.95 per share) in connection with shares of Class A Common Stock surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection with the vesting of restricted stock award pursuant to the Company's Restricted Stock Award Plan.
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Item 6.  Exhibits


10.14
10.1
Change of Control Agreement dated June 7, 2016 between the Company and Miyun Sung.* #
10.15
First Amendment No. 1 to the Amended and Restated Credit Agreement, dated August 23, 2016,as of January 26, 2023, by and among the Company,Urstadt Biddle Properties Inc., The Bank of New York Mellon, as Administrative Agent, and BMO Capital Markets, as Co-Syndication Agent, and Wells Fargo Bank, N.A. and Bank of Montreal (as co-syndication agents), (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as Co-Syndication Agent, and the Lenders named.*filed on January 27, 2023).
  
31.1
Certification of the Chief Executive Officer of Urstadt Biddle Properties Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
  
31.2
Certification of the Chief Financial Officer of Urstadt Biddle Properties Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
  
32
Certification of the Chief Executive Officer and Chief Financial Officer of Urstadt Biddle Properties Inc. pursuant to Section 906 of Sarbanes-Oxley Act of 2002.**
  
101101.INSThe following materials from Urstadt Biddle Properties Inc.'s Quarterly Report on Form 10-Q forInline XBRL Instance Document (the instance document does not appear in the quarter ended January 31, 2018, formatted inInteractive Data File because its XBRL (Extensible Business Reporting Language): (1)tags are embedded within the Consolidated Balance Sheets, (2) the Consolidated Statements of Income, (3) the Consolidated Statements of Comprehensive Income (4) the Consolidated Statements of Cash Flows, (5) the Consolidated Statement of Stockholders' Equity, and (6) Notes to Consolidated Financial Statements that have been detail tagged.Inline XBRL document).
  
101.SCH#  Management contract, compensation plan arrangementInline XBRL Taxonomy Extension Schema Document.
  
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
  * Filed herewith
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


*Filed herewith.
**Furnished herewith.
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S I G N A T U R E S






Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


URSTADT BIDDLE PROPERTIES INC.
  (Registrant)
  
 
By: /s/ Willing L. Biddle
 Willing L. Biddle
 Chief Executive Officer
 (Principal Executive Officer)
  
 
By: /s/ John T. Hayes
 John T. Hayes
 Senior Vice President &
 Chief Financial Officer
 (Principal Financial Officer
Dated: March 9, 201810, 2023and Principal Accounting Officer




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