UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 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 ~~March 31,~~September 30, 2021


☐						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: 001-36523 (Urban Edge Properties)

Commission File Number: 333-212951-01 (Urban Edge Properties LP)

URBAN EDGE PROPERTIES

URBAN EDGE PROPERTIES LP

(Exact name of Registrant as specified in its charter)

Maryland

(Urban Edge Properties)

47-6311266

Delaware

(Urban Edge Properties LP)

36-4791544

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

888 Seventh Avenue

New York

10019

(Address of Principal Executive Offices)

(Zip Code)


Registrant’s telephone number including area code:		(212)	956-2556

Securities registered pursuant to Section 12(b) of the Act:
Title of class of registered securities	Trading symbol	Name of exchange on which registered
Common shares of beneficial interest, par value $0.01 per share	UE	The New 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.

Urban Edge Properties Yes x NO o Urban Edge Properties LP Yes x NO o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Urban Edge Properties Yes x NO o Urban Edge Properties LP Yes x NO o

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 accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Urban Edge Properties:

Large Accelerated Filer

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

Urban Edge Properties LP:

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated Filer

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 pursuant to Section 13(a) of the Exchange Act.

Urban Edge Properties o Urban Edge Properties LP o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Urban Edge Properties YES ☐ NO x Urban Edge Properties LP YES ☐ NO x

As of ~~April 23,~~October 29, 2021, Urban Edge Properties had ~~117,026,289~~117,137,788 common shares outstanding.

URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED ~~MARCH 31,~~SEPTEMBER 30, 2021

TABLE OF CONTENTS

PART I

Item 1.

Financial Statements

Consolidated Financial Statements of Urban Edge Properties:

Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Changes in Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)

Consolidated Financial Statements of Urban Edge Properties LP:

Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 and December 31, ~~2020 (unaudited)~~

~~Consolidated Statements of Income for the Three Months Ended March 31, 2021 and~~ 2020 (unaudited)

Consolidated Statements of ~~Changes in Equity~~Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)

Consolidated Statements of ~~Cash Flows~~Changes in Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)

Urban Edge Properties and Urban Edge Properties LP

Notes to Consolidated Financial Statements (unaudited)

1113

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2628

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

3840

Item 4.

Controls and Procedures

3941

PART II

Item 1.

Legal Proceedings

3941

Item 1A.

Risk Factors

3941

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

4042

Item 3.

Defaults Upon Senior Securities

4042

Item 4.

Mine Safety Disclosures

4042

Item 5.

Other Information

4143

Item 6.

Exhibits

4143

Signatures

4244

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~March 31,~~September 30, 2021 of Urban Edge Properties and Urban Edge Properties LP. Unless stated otherwise or the context otherwise requires, references to “UE” and “Urban Edge” mean Urban Edge Properties, a Maryland real estate investment trust (“REIT”), and references to “UELP” and the “Operating Partnership” mean Urban Edge Properties LP, a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively UE, UELP and those entities/subsidiaries consolidated by UE.

UELP is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. UE is the sole general partner and also a limited partner of UELP. As the sole general partner of UELP, UE has exclusive control of UELP’s day-to-day management.

As of ~~March 31,~~September 30, 2021, UE owned an approximate ~~95.6%~~96% ownership interest in UELP. The remaining approximate ~~4.4%~~4% interest is owned by other limited partners. The other limited partners of UELP are members of management, our Board of Trustees and contributors of property interests acquired. Under the limited partnership agreement of UELP, unitholders may present their common units of UELP for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Upon presentation of a common unit for redemption, UELP must redeem the unit for cash equal to the then value of a share of UE’s common shares, as defined by the limited partnership agreement. In lieu of cash redemption by UELP, however, UE may elect to acquire any common units so tendered by issuing common shares of UE in exchange for the common units. If UE so elects, its common shares will be exchanged for common units on a one-for-one basis. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. UE generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having UELP pay cash. With each such exchange or redemption, UE’s percentage ownership in UELP will increase. In addition, whenever UE issues common shares other than to acquire common units of UELP, UE must contribute any net proceeds it receives to UELP and UELP must issue to UE an equivalent number of common units of UELP. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of UE and UELP into this single report provides the following benefits:

•enhances investors’ understanding of UE and UELP by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both UE and UELP; and

•creates time and cost efficiencies throughout the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between UE and UELP in the context of how UE and UELP operate as a consolidated company. The financial results of UELP are consolidated into the financial statements of UE. UE does not have any other significant assets, liabilities or operations, other than its investment in UELP, nor does it have employees of its own. UELP, not UE, generally executes all significant business relationships other than transactions involving the securities of UE. UELP holds substantially all of the assets of UE and retains the ownership interests in the Company's joint ventures. UELP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by UE, which are contributed to the capital of UELP in exchange for units of limited partnership in UELP, as applicable, UELP generates all remaining capital required by the Company’s business. These sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit agreement, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of UE and UELP. The limited partners of UELP are accounted for as partners’ capital in UELP’s financial statements and as noncontrolling interests in UE’s financial statements. The noncontrolling interests in UELP’s financial statements include the interests of unaffiliated partners in consolidated entities. The noncontrolling interests in UE’s financial statements include the same noncontrolling interests at UELP’s level and limited partners of UELP. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at UE and UELP levels.

To help investors better understand the key differences between UE and UELP, certain information for UE and UELP in this report has been separated, as set forth below: Item 1. Financial Statements (unaudited), which includes specific disclosures for UE and UELP, Note 14, Equity and Noncontrolling Interest and Note 16, Earnings Per Share and Unit.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of UE and UELP in order to establish that the requisite certifications have been made and that UE and UELP are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

URBAN EDGE PROPERTIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)


		March 31,		December 31,			September 30,		December 31,
		2021		2020			2021		2020
ASSETS	ASSETS					ASSETS
Real estate, at cost:	Real estate, at cost:					Real estate, at cost:
Land	Land	$	563,346	$	568,662	Land	$	557,890	$	568,662
Buildings and improvements	Buildings and improvements	2,331,880		2,326,450		Buildings and improvements	2,364,061		2,326,450
Construction in progress	Construction in progress	40,629		44,689		Construction in progress	108,915		44,689
Furniture, fixtures and equipment	Furniture, fixtures and equipment	7,118		7,016		Furniture, fixtures and equipment	7,519		7,016
Total	Total	2,942,973		2,946,817		Total	3,038,385		2,946,817
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(741,874)		(730,366)		Accumulated depreciation and amortization	(768,329)		(730,366)
Real estate, net	Real estate, net	2,201,099		2,216,451		Real estate, net	2,270,056		2,216,451
Operating lease right-of-use assets	Operating lease right-of-use assets	79,185		80,997		Operating lease right-of-use assets	75,654		80,997
Cash and cash equivalents	Cash and cash equivalents	324,508		384,572		Cash and cash equivalents	268,952		384,572
Restricted cash	Restricted cash	52,412		34,681		Restricted cash	53,840		34,681
Tenant and other receivables	Tenant and other receivables	16,549		15,673		Tenant and other receivables	18,178		15,673
Receivable arising from the straight-lining of rents	Receivable arising from the straight-lining of rents	60,980		62,106		Receivable arising from the straight-lining of rents	61,444		62,106
Identified intangible assets, net of accumulated amortization of $33,980 and $37,009, respectively		53,714		56,184
Deferred leasing costs, net of accumulated amortization of $16,494 and $16,419, respectively		18,237		18,585
Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively						Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively	50,719		56,184
Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively						Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively	17,413		18,585
Prepaid expenses and other assets	Prepaid expenses and other assets	70,198		70,311		Prepaid expenses and other assets	65,565		70,311
Total assets	Total assets	$	2,876,882	$	2,939,560	Total assets	$	2,881,821	$	2,939,560

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net	Mortgages payable, net	$	1,584,978	$	1,587,532	Mortgages payable, net	$	1,573,702	$	1,587,532
Operating lease liabilities	Operating lease liabilities	73,327		74,972		Operating lease liabilities	70,071		74,972
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	71,745		132,980		Accounts payable, accrued expenses and other liabilities	94,514		132,980
Identified intangible liabilities, net of accumulated amortization of $73,898 and $71,375, respectively		145,462		148,183
Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively						Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively	128,479		148,183
Total liabilities	Total liabilities	1,875,512		1,943,667		Total liabilities	1,866,766		1,943,667
Commitments and contingencies		0		0
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)	0		0
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,026,289 and 117,014,317 shares issued and outstanding, respectively		1,170		1,169
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,137,788 and 117,014,317 shares issued and outstanding, respectively						Common shares: $0.01 par value; 500,000,000 shares authorized and 117,137,788 and 117,014,317 shares issued and outstanding, respectively	1,170		1,169
Additional paid-in capital	Additional paid-in capital	987,518		989,863		Additional paid-in capital	997,085		989,863
Accumulated deficit	Accumulated deficit	(37,145)		(39,467)		Accumulated deficit	(31,968)		(39,467)
Noncontrolling interests:	Noncontrolling interests:					Noncontrolling interests:
Operating partnership	Operating partnership	43,523		38,456		Operating partnership	40,006		38,456
Consolidated subsidiaries	Consolidated subsidiaries	6,304		5,872		Consolidated subsidiaries	8,762		5,872
Total equity	Total equity	1,001,370		995,893		Total equity	1,015,055		995,893
Total liabilities and equity	Total liabilities and equity	$	2,876,882	$	2,939,560	Total liabilities and equity	$	2,881,821	$	2,939,560

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except share and per share amounts)


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020				2021		2020		2021		2020
REVENUE	REVENUE						REVENUE
Rental revenue	Rental revenue	$	94,619	$	93,000		Rental revenue	$	105,985	$	75,359	$	294,257	$	241,624
Management and development fees	Management and development fees	365		314			Management and development fees	280		404		911		1,003
Other income	Other income	677		46			Other income	574		75		1,338		190
Total revenue	Total revenue	95,661		93,360			Total revenue	106,839		75,838		296,506		242,817
EXPENSES	EXPENSES						EXPENSES
Depreciation and amortization	Depreciation and amortization	22,875		23,471			Depreciation and amortization	23,171		22,888		68,534		69,658
Real estate taxes	Real estate taxes	16,601		14,966			Real estate taxes	15,862		14,916		47,826		44,778
Property operating	Property operating	20,291		14,537			Property operating	15,692		13,436		51,874		39,867
General and administrative	General and administrative	8,668		9,847			General and administrative	10,134		8,700		28,286		36,600
Casualty and impairment loss							Casualty and impairment loss	372		—		372		—
Lease expense	Lease expense	3,306		3,434			Lease expense	3,164		3,415		9,665		10,200
Total expenses	Total expenses	71,741		66,255			Total expenses	68,395		63,355		206,557		201,103
Gain on sale of real estate	Gain on sale of real estate	11,722		39,775			Gain on sale of real estate	6,926		—		18,648		39,775
Interest income	Interest income	136		1,683			Interest income	77		282		303		2,387
Interest and debt expense	Interest and debt expense	(14,827)		(17,175)			Interest and debt expense	(14,638)		(18,136)		(44,193)		(53,884)
Income before income taxes		20,951		51,388
Income tax expense		(235)		(100)
Net income		20,716		51,288
Gain on extinguishment of debt							Gain on extinguishment of debt	—		—		—		34,908
Income (loss) before income taxes							Income (loss) before income taxes	30,809		(5,371)		64,707		64,900
Income tax (expense) benefit							Income tax (expense) benefit	(704)		(459)		(905)		13,103
Net income (loss)							Net income (loss)	30,105		(5,830)		63,802		78,003
Less net (income) loss attributable to noncontrolling interests in:	Less net (income) loss attributable to noncontrolling interests in:						Less net (income) loss attributable to noncontrolling interests in:
Operating partnership	Operating partnership	(875)		(2,308)			Operating partnership	(1,149)		225		(2,608)		(3,373)
Consolidated subsidiaries	Consolidated subsidiaries	79		0			Consolidated subsidiaries	(1,190)		—		(961)		—
Net income attributable to common shareholders		$	19,920	$	48,980
Net income (loss) attributable to common shareholders							Net income (loss) attributable to common shareholders	$	27,766	$	(5,605)	$	60,233	$	74,630

Earnings per common share - Basic:		$	0.17	$	0.40
Earnings per common share - Diluted:		$	0.17	$	0.40
Earnings (loss) per common share - Basic:							Earnings (loss) per common share - Basic:	$	0.24	$	(0.05)	$	0.51	$	0.63
Earnings (loss) per common share - Diluted:							Earnings (loss) per common share - Diluted:	$	0.24	$	(0.05)	$	0.51	$	0.63
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	116,956		120,966			Weighted average shares outstanding - Basic	117,087		116,625		117,009		118,033
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	117,024		121,051			Weighted average shares outstanding - Diluted	117,137		116,625		122,212		118,111

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

(In thousands, except share and per share amounts)

Common Shares Noncontrolling Interests (“NCI”)
Shares Amount Additional
Paid-In Capital Accumulated Earnings
(Deficit) Operating Partnership Consolidated Subsidiaries Total Equity
Balance, December 31, 2019 121,370,125 $ 1,213 $ 1,019,149 $ (52,546) $ 46,536 $ 424 $ 1,014,776
Net income attributable to common shareholders — — — 48,980 — — 48,980
Net income attributable to noncontrolling interests — — — — 2,308 0 2,308
Limited partnership interests:
Units redeemed for common shares 1,025,836 10 8,336 — 0 — 8,346
Reallocation of noncontrolling interests — — 907 — (9,253) — (8,346)
Common shares issued 30,292 1 30 (30) — — 1
Repurchase of common shares (4,452,223) (45) (42,756) — — — (42,801)
Dividends to common shareholders ($0.22 per share) — — — (26,647) — — (26,647)
Distributions to redeemable NCI ($0.22 per unit) — — — — (1,314) — (1,314)
Share-based compensation expense — — 1,151 0 2,097 — 3,248
Share-based awards retained for taxes (17,999) — (328) — — — (328)
Balance, March 31, 2020 117,956,031 $ 1,179 $ 986,489 $ (30,243) $ 40,374 $ 424 $ 998,223


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2020	116,701,311	$	1,166	$	984,933	$	1,012	$	39,575	$	424	$	1,027,110
Net loss attributable to common shareholders	—	—		—		(5,605)		—		—		(5,605)
Net loss attributable to noncontrolling interests	—	—		—		—		(225)		—		(225)
Limited partnership interests:


Reallocation of noncontrolling interests	—	—		1,866		—		(1,866)		—		—




Share-based compensation expense	—	—		637		—		1,967		—		2,604

Balance, September 30, 2020	116,701,311	$	1,166	$	987,436	$	(4,593)	$	39,451	$	424	$	1,023,884

Common Shares Noncontrolling Interests (“NCI”)
Shares Amount Additional
Paid-In Capital Accumulated Earnings
(Deficit) Operating Partnership Consolidated Subsidiaries Total Equity
Balance, December 31, 2020 117,014,317 $ 1,169 $ 989,863 $ (39,467) $ 38,456 $ 5,872 $ 995,893
Net income attributable to common shareholders — — — 19,920 — — 19,920
Net income (loss) attributable to noncontrolling interests — — — — 875 (79) 796
Limited partnership interests:
Reallocation of noncontrolling interests — — (2,817) — 2,817 — 0
Common shares issued 24,283 1 83 (83) — — 1
Dividends to common shareholders ($0.15 per share) — — — (17,515) — — (17,515)
Distributions to redeemable NCI ($0.15 per unit) — — — — (711) — (711)
Contributions from noncontrolling interests — — — — — 511 511
Share-based compensation expense — — 597 0 2,086 — 2,683
Share-based awards retained for taxes (12,311) — (208) — — — (208)
Balance, March 31, 2021 117,026,289 $ 1,170 $ 987,518 $ (37,145) $ 43,523 $ 6,304 $ 1,001,370


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2021	117,137,337	$	1,170	$	990,255	$	(42,157)	$	43,568	$	6,154	$	998,990
Net income attributable to common shareholders	—	—		—		27,766		—		—		27,766
Net income (loss) attributable to noncontrolling interests	—	—		—		—		1,149		1,190		2,339
Limited partnership interests:
Units redeemed for common shares	—	—		—		—		(6,302)		—		(6,302)
Reallocation of noncontrolling interests	—	—		6,302		—		—		—		6,302
Common shares issued	451	—		21		(20)		—		—		1
Dividends to common shareholders ($0.15 per share)	—	—		—		(17,557)		—		—		(17,557)
Distributions to redeemable NCI ($0.15 per unit)	—	—		—		—		(711)		—		(711)
Contributions from noncontrolling interests	—	—		—		—		—		1,418		1,418
Share-based compensation expense	—	—		507		—		2,302		—		2,809

Balance, September 30, 2021	117,137,788	$	1,170	$	997,085	$	(31,968)	$	40,006	$	8,762	$	1,015,055

See notes to consolidated financial statements (unaudited).


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, December 31, 2019	121,370,125	$	1,213	$	1,019,149	$	(52,546)	$	46,536	$	424	$	1,014,776
Net income attributable to common shareholders	—	—		—		74,630		—		—		74,630
Net income attributable to noncontrolling interests	—	—		—		—		3,373		—		3,373
Limited partnership interests:
Units redeemed for common shares	1,279,389	11		8,617		—		—		—		8,628

Reallocation of noncontrolling interests	—	—		9,724		—		(18,352)		—		(8,628)
Common shares issued	53,193	1		234		(30)		—		—		205
Repurchase of common shares	(5,873,923)	(59)		(54,082)		—		—		—		(54,141)
Dividends to common shareholders ($0.22 per share)	—	—		—		(26,647)		—		—		(26,647)
Distributions to redeemable NCI ($0.22 per unit)	—	—		—		—		(1,314)		—		(1,314)
Share-based compensation expense	—	—		5,255		—		9,208		—		14,463
Share-based awards retained for taxes	(127,473)	—		(1,461)		—		—		—		(1,461)
Balance, September 30, 2020	116,701,311	$	1,166	$	987,436	$	(4,593)	$	39,451	$	424	$	1,023,884


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, December 31, 2020	117,014,317	$	1,169	$	989,863	$	(39,467)	$	38,456	$	5,872	$	995,893
Net income attributable to common shareholders	—	—		—		60,233		—		—		60,233
Net income attributable to noncontrolling interests	—	—		—		—		2,608		961		3,569
Limited partnership interests:
Units redeemed for common shares	100,000	—		840		—		(6,302)		—		(5,462)
Reallocation of noncontrolling interests	—	—		4,614		—		848		—		5,462
Common shares issued	36,533	1		308		(124)		—		—		185
Dividends to common shareholders ($0.45 per share)	—	—		—		(52,610)		—		—		(52,610)
Distributions to redeemable NCI ($0.45 per unit)	—	—		—		—		(2,152)		—		(2,152)
Contributions from noncontrolling interests	—	—		—		—		—		1,929		1,929
Share-based compensation expense	—	—		1,670		—		6,548		—		8,218
Share-based awards retained for taxes	(13,062)	—		(210)		—		—		—		(210)
Balance, September 30, 2021	117,137,788	$	1,170	$	997,085	$	(31,968)	$	40,006	$	8,762	$	1,015,055

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	20,716	$	51,288	Net income	$	63,802	$	78,003
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	23,330		23,977		Depreciation and amortization	69,872		70,965
Gain on sale of real estate	Gain on sale of real estate	(11,722)		(39,775)		Gain on sale of real estate	(18,648)		(39,775)
Casualty and impairment loss						Casualty and impairment loss	372		—
Gain on extinguishment of debt						Gain on extinguishment of debt	—		(34,908)

Amortization of below market leases, net	Amortization of below market leases, net	(2,412)		(2,249)		Amortization of below market leases, net	(19,775)		(6,803)
Noncash lease expense	Noncash lease expense	1,813		1,806		Noncash lease expense	5,343		5,655
Straight-lining of rent	Straight-lining of rent	964		(674)		Straight-lining of rent	338		9,503
Share-based compensation expense	Share-based compensation expense	2,683		3,248		Share-based compensation expense	8,218		14,463

Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Tenant and other receivables	Tenant and other receivables	(876)		2,558		Tenant and other receivables	(2,505)		(2,812)
Deferred leasing costs	Deferred leasing costs	(600)		(636)		Deferred leasing costs	(1,735)		(1,110)
Prepaid expenses and other assets	Prepaid expenses and other assets	(6,879)		(9,786)		Prepaid expenses and other assets	512		(11,656)
Lease liabilities	Lease liabilities	(1,645)		(1,578)		Lease liabilities	(4,901)		(5,017)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(6,547)		(7,383)		Accounts payable, accrued expenses and other liabilities	(7,756)		(1,679)
Net cash provided by operating activities	Net cash provided by operating activities	18,825		20,796		Net cash provided by operating activities	93,137		74,829
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Real estate development and capital improvements	Real estate development and capital improvements	(7,810)		(6,538)		Real estate development and capital improvements	(46,447)		(18,266)
Acquisitions of real estate	Acquisitions of real estate	0		(92,132)		Acquisitions of real estate	(54,547)		(92,132)
Proceeds from sale of operating properties	Proceeds from sale of operating properties	23,208		54,402		Proceeds from sale of operating properties	34,482		54,402
Net cash provided by (used in) investing activities		15,398		(44,268)
Net cash used in investing activities						Net cash used in investing activities	(66,512)		(55,996)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	Debt repayments	(2,727)		(2,076)		Debt repayments	(14,324)		(87,567)
Dividends to common shareholders	Dividends to common shareholders	(71,348)		(26,647)		Dividends to common shareholders	(106,441)		(26,647)
Distributions to redeemable noncontrolling interests	Distributions to redeemable noncontrolling interests	(2,784)		(1,314)		Distributions to redeemable noncontrolling interests	(4,225)		(1,314)
Taxes withheld for vested restricted shares	Taxes withheld for vested restricted shares	(208)		(328)		Taxes withheld for vested restricted shares	(210)		(1,461)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	511		0		Contributions from noncontrolling interests	1,929		—
Borrowings under unsecured credit facility	Borrowings under unsecured credit facility	0		250,000		Borrowings under unsecured credit facility	—		250,000
Proceeds from mortgage loan borrowings						Proceeds from mortgage loan borrowings	—		90,250
Repurchase of common shares	Repurchase of common shares	0		(38,656)		Repurchase of common shares	—		(54,141)
Debt issuance costs						Debt issuance costs	—		(2,298)
Proceeds related to the issuance of common shares						Proceeds related to the issuance of common shares	185		205
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(76,556)		180,979		Net cash (used in) provided by financing activities	(123,086)		167,027
Net (decrease) increase in cash and cash equivalents and restricted cash	Net (decrease) increase in cash and cash equivalents and restricted cash	(42,333)		157,507		Net (decrease) increase in cash and cash equivalents and restricted cash	(96,461)		185,860
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136		Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	376,920	$	642,643	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

See notes to consolidated financial statements (unaudited).


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2021		2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest, net of amounts capitalized of $81 and $125, respectively		$	16,015	$	16,291
Cash payments for interest, net of amounts capitalized of $734 and $513, respectively						Cash payments for interest, net of amounts capitalized of $734 and $513, respectively	$	44,424	$	52,771
Cash payments for income taxes	Cash payments for income taxes	3		6		Cash payments for income taxes	5,077		482
NON-CASH INVESTING AND FINANCING ACTIVITIES	NON-CASH INVESTING AND FINANCING ACTIVITIES					NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures included in accounts payable and accrued expenses	Accrued capital expenditures included in accounts payable and accrued expenses	8,632		2,013		Accrued capital expenditures included in accounts payable and accrued expenses	32,600		7,330
Write-off of fully depreciated and impaired assets	Write-off of fully depreciated and impaired assets	1,107		5,225		Write-off of fully depreciated and impaired assets	5,336		10,748

Mortgage debt forgiven in refinancing						Mortgage debt forgiven in refinancing	—		30,000
Assumption of debt through the acquisition of real estate	Assumption of debt through the acquisition of real estate	0		72,473		Assumption of debt through the acquisition of real estate	—		72,473
Accrued common share repurchase		0		4,145

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	384,572	$	432,954	Cash and cash equivalents at beginning of period	$	384,572	$	432,954
Restricted cash at beginning of period	Restricted cash at beginning of period	34,681		52,182		Restricted cash at beginning of period	34,681		52,182
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	324,508	$	622,667	Cash and cash equivalents at end of period	$	268,952	$	646,432
Restricted cash at end of period	Restricted cash at end of period	52,412		19,976		Restricted cash at end of period	53,840		24,564
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	376,920	$	642,643	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except unit and per unit amounts)


		March 31,		December 31,			September 30,		December 31,
		2021		2020			2021		2020
ASSETS	ASSETS					ASSETS
Real estate, at cost:	Real estate, at cost:					Real estate, at cost:
Land	Land	$	563,346	$	568,662	Land	$	557,890	$	568,662
Buildings and improvements	Buildings and improvements	2,331,880		2,326,450		Buildings and improvements	2,364,061		2,326,450
Construction in progress	Construction in progress	40,629		44,689		Construction in progress	108,915		44,689
Furniture, fixtures and equipment	Furniture, fixtures and equipment	7,118		7,016		Furniture, fixtures and equipment	7,519		7,016
Total	Total	2,942,973		2,946,817		Total	3,038,385		2,946,817
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(741,874)		(730,366)		Accumulated depreciation and amortization	(768,329)		(730,366)
Real estate, net	Real estate, net	2,201,099		2,216,451		Real estate, net	2,270,056		2,216,451
Operating lease right-of-use assets	Operating lease right-of-use assets	79,185		80,997		Operating lease right-of-use assets	75,654		80,997
Cash and cash equivalents	Cash and cash equivalents	324,508		384,572		Cash and cash equivalents	268,952		384,572
Restricted cash	Restricted cash	52,412		34,681		Restricted cash	53,840		34,681
Tenant and other receivables	Tenant and other receivables	16,549		15,673		Tenant and other receivables	18,178		15,673
Receivable arising from the straight-lining of rents	Receivable arising from the straight-lining of rents	60,980		62,106		Receivable arising from the straight-lining of rents	61,444		62,106
Identified intangible assets, net of accumulated amortization of $33,980 and $37,009, respectively		53,714		56,184
Deferred leasing costs, net of accumulated amortization of $16,494 and $16,419, respectively		18,237		18,585
Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively						Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively	50,719		56,184
Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively						Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively	17,413		18,585
Prepaid expenses and other assets	Prepaid expenses and other assets	70,198		70,311		Prepaid expenses and other assets	65,565		70,311
Total assets	Total assets	$	2,876,882	$	2,939,560	Total assets	$	2,881,821	$	2,939,560

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net	Mortgages payable, net	$	1,584,978	$	1,587,532	Mortgages payable, net	$	1,573,702	$	1,587,532
Operating lease liabilities	Operating lease liabilities	73,327		74,972		Operating lease liabilities	70,071		74,972
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	71,745		132,980		Accounts payable, accrued expenses and other liabilities	94,514		132,980
Identified intangible liabilities, net of accumulated amortization of $73,898 and $71,375, respectively		145,462		148,183
Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively						Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively	128,479		148,183
Total liabilities	Total liabilities	1,875,512		1,943,667		Total liabilities	1,866,766		1,943,667
Commitments and contingencies		0		0
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)	0		0
Equity:	Equity:					Equity:
Partners’ capital:	Partners’ capital:					Partners’ capital:
General partner: 117,026,289 and 117,014,317 units outstanding, respectively		988,688		991,032
Limited partners: 5,352,644 and 4,729,010 units outstanding, respectively		46,205		41,302
General partner: 117,137,788 and 117,014,317 units outstanding, respectively						General partner: 117,137,788 and 117,014,317 units outstanding, respectively	998,255		991,032
Limited partners: 4,849,749 and 4,729,010 units outstanding, respectively						Limited partners: 4,849,749 and 4,729,010 units outstanding, respectively	42,396		41,302
Accumulated deficit	Accumulated deficit	(39,827)		(42,313)		Accumulated deficit	(34,358)		(42,313)
Total partners’ capital	Total partners’ capital	995,066		990,021		Total partners’ capital	1,006,293		990,021
Noncontrolling interest in consolidated subsidiaries	Noncontrolling interest in consolidated subsidiaries	6,304		5,872		Noncontrolling interest in consolidated subsidiaries	8,762		5,872
Total equity	Total equity	1,001,370		995,893		Total equity	1,015,055		995,893
Total liabilities and equity	Total liabilities and equity	$	2,876,882	$	2,939,560	Total liabilities and equity	$	2,881,821	$	2,939,560

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except unit and per unit amounts)


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020				2021		2020		2021		2020
REVENUE	REVENUE						REVENUE
Rental revenue	Rental revenue	$	94,619	$	93,000		Rental revenue	$	105,985	$	75,359	$	294,257	$	241,624
Management and development fees	Management and development fees	365		314			Management and development fees	280		404		911		1,003
Other income	Other income	677		46			Other income	574		75		1,338		190
Total revenue	Total revenue	95,661		93,360			Total revenue	106,839		75,838		296,506		242,817
EXPENSES	EXPENSES						EXPENSES
Depreciation and amortization	Depreciation and amortization	22,875		23,471			Depreciation and amortization	23,171		22,888		68,534		69,658
Real estate taxes	Real estate taxes	16,601		14,966			Real estate taxes	15,862		14,916		47,826		44,778
Property operating	Property operating	20,291		14,537			Property operating	15,692		13,436		51,874		39,867
General and administrative	General and administrative	8,668		9,847			General and administrative	10,134		8,700		28,286		36,600
Casualty and impairment loss							Casualty and impairment loss	372		—		372		—
Lease expense	Lease expense	3,306		3,434			Lease expense	3,164		3,415		9,665		10,200
Total expenses	Total expenses	71,741		66,255			Total expenses	68,395		63,355		206,557		201,103
Gain on sale of real estate	Gain on sale of real estate	11,722		39,775			Gain on sale of real estate	6,926		—		18,648		39,775
Interest income	Interest income	136		1,683			Interest income	77		282		303		2,387
Interest and debt expense	Interest and debt expense	(14,827)		(17,175)			Interest and debt expense	(14,638)		(18,136)		(44,193)		(53,884)
Income before income taxes		20,951		51,388
Income tax expense		(235)		(100)
Net income		20,716		51,288
Less net loss attributable to NCI in consolidated subsidiaries		79		0
Net income attributable to unitholders		$	20,795	$	51,288
Gain on extinguishment of debt							Gain on extinguishment of debt	—		—		—		34,908
Income (loss) before income taxes							Income (loss) before income taxes	30,809		(5,371)		64,707		64,900
Income tax (expense) benefit							Income tax (expense) benefit	(704)		(459)		(905)		13,103
Net income (loss)							Net income (loss)	30,105		(5,830)		63,802		78,003
Less net income attributable to NCI in consolidated subsidiaries							Less net income attributable to NCI in consolidated subsidiaries	(1,190)		—		(961)		—
Net income (loss) attributable to unitholders							Net income (loss) attributable to unitholders	$	28,915	$	(5,830)	$	62,841	$	78,003

Earnings per unit - Basic:		$	0.17	$	0.41
Earnings per unit - Diluted:		$	0.17	$	0.40
Earnings (loss) per unit - Basic:							Earnings (loss) per unit - Basic:	$	0.24	$	(0.05)	$	0.52	$	0.64
Earnings (loss) per unit - Diluted:							Earnings (loss) per unit - Diluted:	$	0.24	$	(0.05)	$	0.51	$	0.63
Weighted average units outstanding - Basic	Weighted average units outstanding - Basic	120,763		125,844			Weighted average units outstanding - Basic	120,903		120,618		120,839		122,332
Weighted average units outstanding - Diluted	Weighted average units outstanding - Diluted	122,166		126,755			Weighted average units outstanding - Diluted	121,987		120,618		122,212		123,174

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

(In thousands, except unit and per unit amounts)

Total Shares General Partner Total Units
Limited Partners(1)
Accumulated Earnings
(Deficit) NCI in Consolidated Subsidiaries Total Equity
Balance, December 31, 2019 121,370,125 $ 1,020,362 5,833,318 $ 50,156 $ (56,166) $ 424 $ 1,014,776
Net income attributable to unitholders — — — — 51,288 — 51,288
Common units issued as a result of common shares issued by Urban Edge 30,292 31 164,462 — (30) — 1
Equity redemption of OP units 1,025,836 8,346 (1,025,836) 0 — — 8,346
Repurchase of common shares (4,452,223) (42,801) — — — — (42,801)
Limited partnership units issued, net — — 0 — — — 0
Reallocation of noncontrolling interests — 907 — (9,253) — — (8,346)
Distributions to Partners ($0.22 per unit) — — — — (27,961) — (27,961)
Share-based compensation expense — 1,151 — 2,097 — — 3,248
Share-based awards retained for taxes (17,999) (328) — — — — (328)
Balance, March 31, 2020 117,956,031 $ 987,668 4,971,944 $ 43,000 $ (32,869) $ 424 $ 998,223


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Earnings (Deficit)		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2020	116,701,311	$	986,099	4,676,787	$	40,911	$	(324)	$	424	$	1,027,110
Net loss attributable to unitholders	—	—		—	—		(5,830)		—		(5,830)




Reallocation of noncontrolling interests	—	1,866		—	(1,866)		—		—		—

Share-based compensation expense	—	637		—	1,967		—		—		2,604

Balance, September 30, 2020	116,701,311	$	988,602	4,676,787	$	41,012	$	(6,154)	$	424	$	1,023,884

(1) Limited partners have a ~~4.0%~~3.9% common limited partnership interest in the Operating Partnership as of ~~March 31,~~September 30, 2020 in the form of units of interest in the OP Units and LTIP units.

Total Shares General Partner Total Units
Limited Partners(2)
Accumulated
Deficit NCI in Consolidated Subsidiaries Total Equity
Balance, December 31, 2020 117,014,317 $ 991,032 4,729,010 $ 41,302 $ (42,313) $ 5,872 $ 995,893
Net income attributable to unitholders — — — — 20,795 — 20,795
Net loss attributable to noncontrolling interests — — — — — (79) (79)
Common units issued as a result of common shares issued by Urban Edge 24,283 84 0 — (83) — 1
Limited partnership units issued, net — — 623,634 — — — 0
Reallocation of noncontrolling interests — (2,817) — 2,817 — — 0
Distributions to Partners ($0.15 per unit) — — — — (18,226) — (18,226)
Contributions from noncontrolling interests — — — — — 511 511
Share-based compensation expense — 597 — 2,086 — — 2,683
Share-based awards retained for taxes (12,311) (208) — — — — (208)
Balance, March 31, 2021 117,026,289 $ 988,688 5,352,644 $ 46,205 $ (39,827) $ 6,304 $ 1,001,370


	Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Deficit		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2021	117,137,337	$	991,425	5,376,145	$	46,396	$	(44,985)	$	6,154	$	998,990
Net income attributable to unitholders	—	—		—	—		28,915		—		28,915
Net income attributable to noncontrolling interests	—	—		—	—		—		1,190		1,190
Common units issued as a result of common shares issued by Urban Edge	451	21		(526,396)	—		(20)		—		1
Equity redemption of OP units	—	—		—	(6,302)		—		—		(6,302)

Reallocation of noncontrolling interests	—	6,302		—	—		—		—		6,302
Distributions to Partners ($0.15 per unit)	—	—		—	—		(18,268)		—		(18,268)
Contributions from noncontrolling interests	—	—		—	—		—		1,418		1,418
Share-based compensation expense	—	507		—	2,302		—		—		2,809

Balance, September 30, 2021	117,137,788	$	998,255	4,849,749	$	42,396	$	(34,358)	$	8,762	$	1,015,055

(2) Limited partners have a ~~4.4%~~4.0% common limited partnership interest in the Operating Partnership as of ~~March 31,~~September 30, 2021 in the form of units of interest in the OP Units and LTIP units.

See notes to consolidated financial statements (unaudited).


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Earnings (Deficit)		NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2019	121,370,125	$	1,020,362	5,833,318	$	50,156	$	(56,166)	$	424	$	1,014,776
Net income attributable to unitholders	—	—		—	—		78,003		—		78,003
Common units issued as a result of common shares issued by Urban Edge	53,193	235		122,858	—		(30)		—		205
Equity redemption of OP units	1,279,389	8,628		(1,279,389)	—		—		—		8,628
Repurchase of common shares	(5,873,923)	(54,141)		—	—		—		—		(54,141)

Reallocation of noncontrolling interests	—	9,724		—	(18,352)		—		—		(8,628)
Distributions to Partners ($0.22 per unit)	—	—		—	—		(27,961)		—		(27,961)
Share-based compensation expense	—	5,255		—	9,208		—		—		14,463
Share-based awards retained for taxes	(127,473)	(1,461)		—	—		—		—		(1,461)
Balance, September 30, 2020	116,701,311	$	988,602	4,676,787	$	41,012	$	(6,154)	$	424	$	1,023,884

(1) Limited partners have a 3.9% common limited partnership interest in the Operating Partnership as of September 30, 2020 in the form of units of interest in the OP Units and LTIP units.


	Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Deficit		NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2020	117,014,317	$	991,032	4,729,010	$	41,302	$	(42,313)	$	5,872	$	995,893
Net income attributable to unitholders	—	—		—	—		62,841		—		62,841
Net income attributable to noncontrolling interests	—	—		—	—		—		961		961
Common units issued as a result of common shares issued by Urban Edge	36,533	309		220,739	—		(124)		—		185
Equity redemption of OP units	100,000	840		(100,000)	(6,302)		—		—		(5,462)

Reallocation of noncontrolling interests	—	4,614		—	848		—		—		5,462
Distributions to Partners ($0.45 per unit)	—	—		—	—		(54,762)		—		(54,762)
Contributions from noncontrolling interests	—	—		—	—		—		1,929		1,929
Share-based compensation expense	—	1,670		—	6,548		—		—		8,218
Share-based awards retained for taxes	(13,062)	(210)		—	—		—		—		(210)
Balance, September 30, 2021	117,137,788	$	998,255	4,849,749	$	42,396	$	(34,358)	$	8,762	$	1,015,055

(2) Limited partners have a 4.0% common limited partnership interest in the Operating Partnership as of September 30, 2021 in the form of units of interest in the OP Units and LTIP units.

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	20,716	$	51,288	Net income	$	63,802	$	78,003
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	23,330		23,977		Depreciation and amortization	69,872		70,965
Gain on sale of real estate	Gain on sale of real estate	(11,722)		(39,775)		Gain on sale of real estate	(18,648)		(39,775)
Casualty and impairment loss						Casualty and impairment loss	372		—
Gain on extinguishment of debt						Gain on extinguishment of debt	—		(34,908)

Amortization of below market leases, net	Amortization of below market leases, net	(2,412)		(2,249)		Amortization of below market leases, net	(19,775)		(6,803)
Noncash lease expense	Noncash lease expense	1,813		1,806		Noncash lease expense	5,343		5,655
Straight-lining of rent	Straight-lining of rent	964		(674)		Straight-lining of rent	338		9,503
Share-based compensation expense	Share-based compensation expense	2,683		3,248		Share-based compensation expense	8,218		14,463

Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Tenant and other receivables	Tenant and other receivables	(876)		2,558		Tenant and other receivables	(2,505)		(2,812)
Deferred leasing costs	Deferred leasing costs	(600)		(636)		Deferred leasing costs	(1,735)		(1,110)
Prepaid expenses and other assets	Prepaid expenses and other assets	(6,879)		(9,786)		Prepaid expenses and other assets	512		(11,656)
Lease liabilities	Lease liabilities	(1,645)		(1,578)		Lease liabilities	(4,901)		(5,017)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(6,547)		(7,383)		Accounts payable, accrued expenses and other liabilities	(7,756)		(1,679)
Net cash provided by operating activities	Net cash provided by operating activities	18,825		20,796		Net cash provided by operating activities	93,137		74,829
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Real estate development and capital improvements	Real estate development and capital improvements	(7,810)		(6,538)		Real estate development and capital improvements	(46,447)		(18,266)
Acquisitions of real estate	Acquisitions of real estate	0		(92,132)		Acquisitions of real estate	(54,547)		(92,132)
Proceeds from sale of operating properties	Proceeds from sale of operating properties	23,208		54,402		Proceeds from sale of operating properties	34,482		54,402
Net cash provided by (used in) investing activities		15,398		(44,268)
Net cash used in investing activities						Net cash used in investing activities	(66,512)		(55,996)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	Debt repayments	(2,727)		(2,076)		Debt repayments	(14,324)		(87,567)
Distributions to partners	Distributions to partners	(74,132)		(27,961)		Distributions to partners	(110,666)		(27,961)
Taxes withheld for vested restricted units	Taxes withheld for vested restricted units	(208)		(328)		Taxes withheld for vested restricted units	(210)		(1,461)
Borrowings under unsecured credit facility	Borrowings under unsecured credit facility	0		250,000		Borrowings under unsecured credit facility	—		250,000
Proceeds from mortgage loan borrowings						Proceeds from mortgage loan borrowings	—		90,250
Repurchase of common shares	Repurchase of common shares	0		(38,656)		Repurchase of common shares	—		(54,141)
Debt issuance costs						Debt issuance costs	—		(2,298)
Proceeds related to the issuance of common shares						Proceeds related to the issuance of common shares	185		205
Contributions from noncontrolling interests	Contributions from noncontrolling interests	511		0		Contributions from noncontrolling interests	1,929		—
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(76,556)		180,979		Net cash (used in) provided by financing activities	(123,086)		167,027
Net (decrease) increase in cash and cash equivalents and restricted cash	Net (decrease) increase in cash and cash equivalents and restricted cash	(42,333)		157,507		Net (decrease) increase in cash and cash equivalents and restricted cash	(96,461)		185,860
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136		Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	376,920	$	642,643	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

See notes to consolidated financial statements (unaudited).

911


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2021		2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest, net of amounts capitalized of $81 and $125, respectively		$	16,015	$	16,291
Cash payments for interest, net of amounts capitalized of $734 and $513, respectively						Cash payments for interest, net of amounts capitalized of $734 and $513, respectively	$	44,424	$	52,771
Cash payments for income taxes	Cash payments for income taxes	3		6		Cash payments for income taxes	5,077		482
NON-CASH INVESTING AND FINANCING ACTIVITIES	NON-CASH INVESTING AND FINANCING ACTIVITIES					NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures included in accounts payable and accrued expenses	Accrued capital expenditures included in accounts payable and accrued expenses	8,632		2,013		Accrued capital expenditures included in accounts payable and accrued expenses	32,600		7,330
Write-off of fully depreciated and impaired assets	Write-off of fully depreciated and impaired assets	1,107		5,225		Write-off of fully depreciated and impaired assets	5,336		10,748

Mortgage debt forgiven in refinancing						Mortgage debt forgiven in refinancing	—		30,000
Assumption of debt through the acquisition of real estate	Assumption of debt through the acquisition of real estate	0		72,473		Assumption of debt through the acquisition of real estate	—		72,473
Accrued common share repurchase		0		4,145

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH	RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	384,572	$	432,954	Cash and cash equivalents at beginning of period	$	384,572	$	432,954
Restricted cash at beginning of period	Restricted cash at beginning of period	34,681		52,182		Restricted cash at beginning of period	34,681		52,182
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	324,508	$	622,667	Cash and cash equivalents at end of period	$	268,952	$	646,432
Restricted cash at end of period	Restricted cash at end of period	52,412		19,976		Restricted cash at end of period	53,840		24,564
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	376,920	$	642,643	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

See notes to consolidated financial statements (unaudited).

1012

URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.ORGANIZATION

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust focused on managing, developing, redeveloping, and acquiring retail real estate in urban communities, primarily in the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of the Company’s real estate properties and other assets. Unless the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries.

The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of ~~March 31,~~September 30, 2021, Urban Edge owned approximately ~~95.6%~~96% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired. Urban Edge serves as the sole general partner of the Operating Partnership. The third-party unitholders have limited rights over the Operating Partnership such that they do not have characteristics of a controlling financial interest. As such, the Operating Partnership is considered a variable interest entity (“VIE”), and the Company is the primary beneficiary which consolidates it. The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest.

As of ~~March 31,~~September 30, 2021, our portfolio consisted of 7068 shopping centers, 5 malls and 2 industrial parks totaling approximately ~~16.2~~16.4 million square feet (“sf”), which is inclusive of a 95% controlling interest in Walnut Creek, CA (Mt. Diablo), and an 82.5% controlling interest in Sunrise Mall, in Massapequa, NY.

2.BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions of Form 10-Q. Certain information and footnote disclosures included in our annual financial statements have been condensed or omitted. In the opinion of management, the consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and the Operating Partnership and the results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended ~~March 31,~~September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. Accordingly, these consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities Exchange Commission (“SEC”).

The consolidated balance sheets as of ~~March 31,~~September 30, 2021 and December 31, 2020 reflect the consolidation of wholly-owned subsidiaries and those entities in which we have a controlling financial interest. As of ~~March 31,~~September 30, 2021 and December 31, 2020, excluding the Operating Partnership, we consolidated 2 VIEs with total assets of ~~$44.2~~$64.6 million and $43.6 million, respectively and total liabilities of ~~$32.0~~$45.1 million and $31.5 million, respectively. The consolidated statements of income for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 include the consolidated accounts of the Company and the Operating Partnership. All intercompany transactions have been eliminated in consolidation.

In accordance with ASC 205 Presentation of Financial Statements, certain prior year balances have been reclassified in order to conform to the current period presentation.

Our primary business is the ownership, management, redevelopment, development and operation of retail shopping centers and malls. We do not distinguish from our primary business or group our operations on a geographical basis for purposes of measuring performance. The Company’s chief operating decision maker reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. None of our tenants accounted for more than 10% of our revenue or property operating income as of ~~March 31,~~September 30, 2021. We aggregate all of our properties into 1 reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operations, as well as long-term average financial performance.

1113

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Real Estate — Real estate is carried at cost, net of accumulated depreciation and amortization. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant renovations that improve or extend the useful lives of assets are capitalized. As real estate is undergoing redevelopment activities, all property operating expenses directly associated with and attributable to the redevelopment, including interest, are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the property when completed. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of redeveloped property, the excess is charged to impairment expense. The capitalization period begins when redevelopment activities are ~~underway~~under way and ends when the project is substantially complete. Depreciation is recognized on a straight-line basis over estimated useful lives which range from one to 40 years.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price based on these assessments on a relative fair value basis. We assess fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. We record acquired intangible assets (including acquired above-market leases, acquired in-place leases and tenant relationships) and acquired intangible liabilities (including below-market leases) at their estimated fair value. We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired.

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events and changes include macroeconomic conditions, including those caused by global pandemics, like the recent coronavirus disease pandemic (“COVID-19” or the “COVID-19 pandemic”), which resulted in property operational disruption and indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis taking into account the appropriate capitalization rate in determining a future terminal value. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under ~~negotiation.~~negotiations, less selling costs. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the projected future cash flows change based on uncertain market conditions, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements.

Tenant and Other Receivables and Changes in Collectibility Assessment — Tenant receivables include unpaid amounts billed to tenants, disputed enforceable charges and accrued revenues for future billings to tenants for property expenses. We evaluate the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements. In light of the recent and ongoing COVID-19 pandemic, the Company is closely monitoring changes in the collectibility assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences. We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842 Leases. Management exercises judgment in assessing collectibility and considers payment history, current credit status and publicly available information about the financial condition of the tenant, among other factors. Tenant receivables, ~~including~~and receivables arising from the straight-lining of rents, are written-off directly when management deems ~~that~~ the collectibility of substantially all future lease payments from a specific lease is not probable, ~~for collection,~~ at which point, the Company will begin recognizing revenue from such leases prospectively, based on actual amounts received. This write-off effectively reduces cumulative non-cash rental income recognized from the straight-lining of rents since lease commencement. ~~In addition, future revenue recognition~~If the Company subsequently determines that it is ~~limited to amounts paid by~~probable it will collect substantially all of the ~~lessee. We generally reclassify tenant~~lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance, including those arising from the straight-lining of rents, adjusting for the amount related to the ~~accrual basis of accounting, if and~~period when ~~collectability of substantially all~~ the ~~remaining contractual~~ lease ~~payments is reasonably probable.~~was accounted for on a cash basis.

Recently Issued Accounting Literature — Effective for the fiscal period beginning January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses. In connection with the adoption of ASU 2016-03, we also adopted (i) ASU 2018-19 Codification Improvements to ASC 326, Financial Instruments - Credit Losses, (ii) ASU 2019-04, Codification Improvements to ASC 326, Financial Statements - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments, (iii) ASU 2019-05 Financial Instruments - Credit Losses (ASC 326): Targeted Transition Relief and (iv) ASU 2019-11 Codification Improvements to ASC 326, Financial Instruments - Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses for certain types of financial instruments and also modifies the impairment model with new methodology for estimating credits losses. In November 2018, the FASB issued ASU 2018-19

Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which included amendments to clarify receivables arising from operating leases are within the scope ASC 842 Leases. Due to the adoption of ASC 842 on January 1, 2019, the Company includes rental revenue deemed uncollectible as a reduction to rental revenue in "Rental revenue" in the consolidated statements of income. As of ~~March 31,~~September 30, 2021, the Company did not have any material outstanding financial

instruments. The adoption of ASU 2016-13 ~~has had no~~did not have a material impact to our consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12 Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of the income tax accounting. ASU 2019-12 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2020. Early adoption is permitted. We adopted ASU 2019-12 effective January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements and disclosures.

In March 2020 and January 2021, the FASB issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04 and ASU 2021-01, which allows entities to account for the modification as if the modification was not substantial. We will disclose the nature of and reason for electing the optional expedient in each interim and annual financial statement period if and when applicable through December 31, 2022.

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief, that lessors provide to mitigate the economic effects of COVID-19 on lessees, is a lease modification under ASC 842. Instead, when the cash flows resulting from the lease concession granted for COVID-19 rent relief are substantially the same or less than the cash flows of the original contract, an entity may elect to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract).

The FASB stated that there are multiple ways to account for rent concessions, none of which the FASB believes are more preferable than the others. Two of those methods are: (i) account for the concessions as if no changes to the lease contract were made; under that accounting, a lessor would continue to increase its lease receivable and continue to recognize income, referred to as the “receivable approach”; or (ii) account for the deferred payments or abatements as variable lease payments; under that accounting, a lessor would recognize the payment as income in profit or loss in the period in which the changes in facts and circumstances on which the variable lease payments are based occurred, referred to as the “variable approach”.

The Company ~~is evaluating its~~makes this election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances. As of ~~March 31,~~September 30, 2021, the Company has granted rent deferrals ~~with an aggregate deferral amount of $8.2 million, with $5.2 million~~ accounted ~~for~~ under both the receivable approach by electing the Lease Modification Q&A and ~~$3.0 million accounted for~~ as modifications due to term extensions of the leases. The Company has also granted abatements ~~with an aggregate abatement amount of $6.7 million as of March 31, 2021, $1.0 million~~ accounted for under both the variable approach and ~~$5.7 million accounted for~~ as modifications due to the executed agreements including other rental term modifications, such as term extensions and substantial changes in cash flows. The Company remains in active discussions with its impacted tenants to grant further concessions. The full future impact of the Lease Modification Q&A is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 and the elections made by the Company at the time of entering into such concessions. Refer to Note 10 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q.

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company or the Operating Partnership, or they are not expected to have a material impact on our consolidated financial statements.

1315

4. ACQUISITIONS AND DISPOSITIONS

Acquisitions

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021 ~~0 acquisitions were completed by the Company. During the three months ended March 31,~~and 2020, we closed on the following acquisitions:

Date Purchased

Property Name

City

State

Square Feet

Purchase Price

Date Purchased

Property Name

City

State

Square Feet

Purchase Price(1)

(in thousands)

August 10, 2021

601 Murray Road

East Hanover

88,000

18,312

August 19, 2021

151 Ridgedale Avenue

East Hanover

187,000

37,759

2021 Total

56,071

(in thousands)

February 12, 2020

Kingswood Center

Brooklyn

130,000

90,212

February 12, 2020

Kingswood Center

Brooklyn

130,000

90,212

February 12, 2020

Kingswood Crossing

Brooklyn

110,000

77,077

February 12, 2020

Kingswood Crossing

Brooklyn

110,000

77,077

2020 Total

167,289

(1)

2020 Total

167,289

(1) The total purchase price for the properties acquired during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020 includes $0.6 million and $2.5 million, respectively, of transaction costs incurred related to the acquisitions.

~~On February 12, 2020, the Company~~The 2 industrial properties, acquired in August 2021, are adjacent to our existing 943,000 sf warehouse park in East Hanover, NJ. The acquisition of 151 Ridgedale Avenue was partially funded via a Section 1031 exchange (a “1031 exchange”) using cash proceeds from previous dispositions.

Kingswood Center and Kingswood Crossing, ~~for $167.3 million, including transaction costs. The properties~~acquired in February 2020, are located along Kings Highway in the Midwood neighborhood of Brooklyn, NY and were funded via 1031 exchanges using cash proceeds from dispositions. Additionally, as part of the acquisition of Kingswood Center, the Company assumed a $65.5 million mortgage, which matures in 2028.

The aggregate purchase price of the above property acquisitions ~~has~~have been allocated as follows:


Property Name	Property Name	Land		Buildings and improvements		Identified intangible assets(1)		Identified intangible liabilities(1)		Debt premium		Total Purchase Price		Property Name	Land		Buildings and improvements		Identified intangible assets(1)		Identified intangible liabilities(1)		Debt premium		Total Purchase Price
(in thousands)	(in thousands)													(in thousands)
601 Murray Road														601 Murray Road	$	2,075	$	14,733	$	1,722	$	(218)	$	—	$	18,312
151 Ridgedale Avenue														151 Ridgedale Avenue	2,990		35,509		—		(740)		—		37,759
2021 Total														2021 Total	$	5,065	$	50,242	$	1,722	$	(958)	$	—	$	56,071

Kingswood Center	Kingswood Center	$	15,690	$	76,766	$	9,263	$	(4,534)	$	(6,973)	$	90,212	Kingswood Center	$	15,690	$	76,766	$	9,263	$	(4,534)	$	(6,973)	$	90,212
Kingswood Crossing	Kingswood Crossing	8,150		64,159		4,768		0		0		77,077		Kingswood Crossing	8,150		64,159		4,768		—		—		77,077
2020 Total	2020 Total	$	23,840	$	140,925	$	14,031	$	(4,534)	$	(6,973)	$	167,289	2020 Total	$	23,840	$	140,925	$	14,031	$	(4,534)	$	(6,973)	$	167,289

(1) As of ~~March 31,~~September 30, 2021, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2021 were 7.6 years and 1.4 years, respectively. The remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2020 were 8.1 years and ~~9.6~~9.1 years, respectively.

Dispositions

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021,, we disposed of ~~one property~~3 properties and ~~one~~1 property parcel and received proceeds of ~~$23.6~~$34.9 million, net of selling costs, resulting in a ~~$11.7~~an $18.6 million ~~net~~ gain on sale of real estate. Of these dispositions completed during the nine months ended September 30, 2021, two were completed as a 1031 exchange with the acquisition of 151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale for income tax purposes.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, we disposed of 3 properties and received proceeds of $58.1 million, net of selling costs, resulting in a $39.8 million net gain on sale of real estate. The sale of ~~all 3 dispositions~~these properties were completed as 1031 exchanges with Kingswood Crossing as a result of the sales occurring within 180 days of the Company’s acquisition.

1416

5. IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES

Our identified intangible assets (acquired in-place and above-market leases) and liabilities (acquired below-market leases), net of accumulated amortization, were ~~$53.7~~$50.7 million and ~~$145.5~~$128.5 million, respectively, as of ~~March 31,~~September 30, 2021 and $56.2 million and $148.2 million, respectively, as of December 31, 2020.

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of ~~$2.4~~$15.0 million and $19.8 million for the three and nine months ended ~~March 31,~~September 30, 2021, respectively, and ~~$2.2~~$2.3 million and $6.8 million for the same ~~period~~periods in 2020.

Amortization of acquired in-place leases inclusive of customer relationships resulted in additional depreciation and amortization expense of ~~$2.1~~$2.2 million and $6.1 million for the three and nine months ended ~~March 31,~~September 30, 2021, respectively, and ~~$2.0~~$2.1 million and $6.3 million for the same ~~period~~periods in 2020.

On September 29, 2021, the Company entered into agreements to terminate our three remaining Kmart and Sears leases effective October 15, 2021. The modification of these leases resulted in accelerated amortization of the below-market intangible lease liabilities and in-place lease intangible assets of $12.5 million and $0.4 million, respectively.

The following table sets forth the estimated annual amortization income and expense related to intangible assets and liabilities for the remainder of 2021 and the five succeeding years:


(Amounts in thousands)	(Amounts in thousands)	Below-Market		Above-Market		In-Place Lease		(Amounts in thousands)	Below-Market		Above-Market		In-Place Lease
Year	Year	Operating Lease Amortization		Operating Lease Amortization		Amortization		Year	Operating Lease Amortization		Operating Lease Amortization		Amortization
2021(1)	2021(1)	$	7,891	$	(860)	$	(5,576)	2021(1)	$	35,787	$	(284)	$	(1,886)
2022	2022	10,449		(803)		(5,962)		2022	7,223		(803)		(6,198)
2023	2023	10,404		(695)		(4,822)		2023	7,178		(695)		(5,057)
2024	2024	10,168		(631)		(4,335)		2024	6,942		(631)		(4,570)
2025	2025	9,995		(452)		(3,702)		2025	6,761		(452)		(3,922)
2026	2026	9,660		(434)		(3,466)		2026	6,383		(434)		(3,609)

(1) Remainder of 2021.

Includes accelerated amortization of below-market leases of $33.5 million related to the leases with Kmart and Sears.

1517

6. MORTGAGES PAYABLE

The following is a summary of mortgages payable as of ~~March 31,~~September 30, 2021 and December 31, 2020.


			Interest Rate at	March 31,		December 31,				Interest Rate at
(Amounts in thousands)	(Amounts in thousands)	Maturity	March 31, 2021	2021		2020		(Amounts in thousands)	Maturity	September 30, 2021	September 30, 2021		December 31, 2020
First mortgages secured by:	First mortgages secured by:							First mortgages secured by:
Variable rate	Variable rate							Variable rate
Cherry Hill (Plaza at Cherry Hill)(1)	Cherry Hill (Plaza at Cherry Hill)(1)	5/24/2022	1.72%	$	28,930	$	28,930	Cherry Hill (Plaza at Cherry Hill)(1)	5/24/2022	1.69%	$	28,541	$	28,930
Westfield (One Lincoln Plaza)~~(1)~~(3)	Westfield (One Lincoln Plaza)~~(1)~~(3)	5/24/2022	1.72%	4,730		4,730		Westfield (One Lincoln Plaza)~~(1)~~(3)	5/24/2022	1.69%	—		4,730
Woodbridge (Plaza at Woodbridge)(1)	Woodbridge (Plaza at Woodbridge)(1)	5/25/2022	1.72%	55,340		55,340		Woodbridge (Plaza at Woodbridge)(1)	5/25/2022	1.69%	54,595		55,340
Jersey City (Hudson Commons)(2)	Jersey City (Hudson Commons)(2)	11/15/2024	2.02%	28,448		28,586		Jersey City (Hudson Commons)(2)	11/15/2024	1.99%	28,172		28,586
Watchung(2)	Watchung(2)	11/15/2024	2.02%	26,484		26,613		Watchung(2)	11/15/2024	1.99%	26,226		26,613
Bronx (1750-1780 Gun Hill Road)(2)	Bronx (1750-1780 Gun Hill Road)(2)	12/1/2024	2.02%	25,049		25,172		Bronx (1750-1780 Gun Hill Road)(2)	12/1/2024	1.99%	24,803		25,172
Total variable rate debt	Total variable rate debt			168,981		169,371		Total variable rate debt			162,337		169,371
Fixed rate	Fixed rate							Fixed rate
Bergen Town Center - West, Paramus	Bergen Town Center - West, Paramus	4/8/2023	3.56%	300,000		300,000		Bergen Town Center - West, Paramus	4/8/2023	3.56%	300,000		300,000
Bronx (Shops at Bruckner)	Bronx (Shops at Bruckner)	5/1/2023	3.90%	10,189		10,351		Bronx (Shops at Bruckner)	5/1/2023	3.90%	9,864		10,351
Jersey City (Hudson Mall)	Jersey City (Hudson Mall)	12/1/2023	5.07%	22,713		22,904		Jersey City (Hudson Mall)	12/1/2023	5.07%	22,345		22,904
Yonkers Gateway Center	Yonkers Gateway Center	4/6/2024	4.16%	28,058		28,482		Yonkers Gateway Center	4/6/2024	4.16%	27,207		28,482
Brick	Brick	12/10/2024	3.87%	50,000		50,000		Brick	12/10/2024	3.87%	49,778		50,000
North Plainfield	North Plainfield	12/10/2025	3.99%	25,100		25,100		North Plainfield	12/10/2025	3.99%	25,100		25,100
Las Catalinas	Las Catalinas	2/1/2026	4.43%	126,759		127,669		Las Catalinas	2/1/2026	4.43%	124,897		127,669
Middletown	Middletown	12/1/2026	3.78%	31,400		31,400		Middletown	12/1/2026	3.78%	31,400		31,400
Rockaway	Rockaway	12/1/2026	3.78%	27,800		27,800		Rockaway	12/1/2026	3.78%	27,800		27,800
East Hanover (200 - 240 Route 10 West)	East Hanover (200 - 240 Route 10 West)	12/10/2026	4.03%	63,000		63,000		East Hanover (200 - 240 Route 10 West)	12/10/2026	4.03%	63,000		63,000
North Bergen (Tonnelle Ave)	North Bergen (Tonnelle Ave)	4/1/2027	4.18%	100,000		100,000		North Bergen (Tonnelle Ave)	4/1/2027	4.18%	100,000		100,000
Manchester	Manchester	6/1/2027	4.32%	12,500		12,500		Manchester	6/1/2027	4.32%	12,500		12,500
Millburn	Millburn	6/1/2027	3.97%	23,270		23,381		Millburn	6/1/2027	3.97%	23,055		23,381
Totowa	Totowa	12/1/2027	4.33%	50,800		50,800		Totowa	12/1/2027	4.33%	50,800		50,800
Woodbridge (Woodbridge Commons)	Woodbridge (Woodbridge Commons)	12/1/2027	4.36%	22,100		22,100		Woodbridge (Woodbridge Commons)	12/1/2027	4.36%	22,100		22,100
East Brunswick	East Brunswick	12/6/2027	4.38%	63,000		63,000		East Brunswick	12/6/2027	4.38%	63,000		63,000
East Rutherford	East Rutherford	1/6/2028	4.49%	23,000		23,000		East Rutherford	1/6/2028	4.49%	23,000		23,000
Brooklyn (Kingswood Center)	Brooklyn (Kingswood Center)	2/6/2028	5.07%	71,475		71,696		Brooklyn (Kingswood Center)	2/6/2028	5.07%	71,035		71,696
Hackensack	Hackensack	3/1/2028	4.36%	66,400		66,400		Hackensack	3/1/2028	4.36%	66,400		66,400
Marlton	Marlton	12/1/2028	3.86%	37,400		37,400		Marlton	12/1/2028	3.86%	37,400		37,400
East Hanover Warehouses	East Hanover Warehouses	12/1/2028	4.09%	40,700		40,700		East Hanover Warehouses	12/1/2028	4.09%	40,700		40,700
Union (2445 Springfield Ave)	Union (2445 Springfield Ave)	12/10/2028	4.01%	45,600		45,600		Union (2445 Springfield Ave)	12/10/2028	4.01%	45,600		45,600
Freeport (Freeport Commons)	Freeport (Freeport Commons)	12/10/2029	4.07%	43,100		43,100		Freeport (Freeport Commons)	12/10/2029	4.07%	43,100		43,100
Montehiedra	Montehiedra	6/1/2030	5.00%	80,712		81,141		Montehiedra	6/1/2030	5.00%	79,831		81,141
Montclair	Montclair	8/15/2030	3.15%	7,250		7,250		Montclair	8/15/2030	3.15%	7,250		7,250
Garfield	Garfield	12/1/2030	4.14%	40,300		40,300		Garfield	12/1/2030	4.14%	40,300		40,300
Mt Kisco	Mt Kisco	11/15/2034	6.40%	12,813		12,952		Mt Kisco	11/15/2034	6.40%	12,526		12,952
Total fixed rate debt	Total fixed rate debt			1,425,439		1,428,026		Total fixed rate debt			1,419,988		1,428,026
Total mortgages payable								Total mortgages payable			1,582,325		1,597,397
		Total mortgages payable		1,594,420		1,597,397			Unamortized debt issuance costs		(8,623)		(9,865)
		Unamortized debt issuance costs		(9,442)		(9,865)
Total mortgages payable, net of unamortized debt issuance costs				1,584,978		1,587,532
Total mortgages payable, net								Total mortgages payable, net			$	1,573,702	$	1,587,532

(1)Bears interest at one month LIBOR plus 160 bps.

(2)Bears interest at one month LIBOR plus 190 bps.

(3)Loan repaid in July 2021 in connection with the disposition of the property.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of ~~March 31,~~September 30, 2021. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of ~~March 31,~~September 30, 2021, we were in compliance with all debt covenants.

1618

As of ~~March 31,~~September 30, 2021, the principal repayments of the Company’s total outstanding debt for the next five years and thereafter are as follows:


(Amounts in thousands)	(Amounts in thousands)			(Amounts in thousands)
Year Ending December 31,	Year Ending December 31,			Year Ending December 31,
2021(1)	2021(1)	$	11,538	2021(1)	$	4,114
2022	2022	103,586		2022	98,915
2023	2023	349,814		2023	349,814
2024	2024	163,720		2024	163,720
2025	2025	40,946		2025	40,946
2026	2026	230,694		2026	230,694
Thereafter	Thereafter	694,122		Thereafter	694,122

(1) Remainder of 2021.

Revolving Credit Agreement

On June 3, 2020, we entered into a third amendment to the Agreement, which among other things, ~~modifies~~modified certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter ~~period~~ annualized. Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to ~~increase if our leverage ratio increases above predefined thresholds.~~change. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x.

~~NaN~~No amounts were drawn or outstanding under the Agreement as of ~~March 31,~~September 30, 2021 or December 31, 2020, respectively. Financing costs associated with executing the Agreement of ~~$3.1~~$2.5 million and $3.3 million as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively, are included in the prepaid expenses and other assets line item of the consolidated balance sheets, as deferred financing costs, ~~net in the consolidated balance sheets.~~net.

Mortgage on Las Catalinas Mall

In April 2020, we notified the servicer of the $129 million non-recourse mortgage loan on Las Catalinas Mall in Puerto Rico that cash flow would be insufficient to service the debt and that we were unwilling to fund the shortfalls. In December 2020, the non-recourse mortgage loan on Las Catalinas Mall was modified to convert the mortgage from an amortizing 4.43% loan to interest only payments, starting at 3.00% in 2021 and increasing 50 basis points annually until returning to 4.43% in 2024 and thereafter, and to include the ability for the Company to repay the loan at a discounted value of $72.5 million, beginning in August 2023 through the extended maturity date of February 2026.

While it is possible we will be able to repay the loan at the discounted value, it is contingent upon certain factors including the future operating performance of the property as well as the ability to meet all required payments on the loan. Therefore, in accordance with ASC 470-60 Troubled Debt Restructurings, the Company did not recognize a gain at the time of the restructuring, as the future cash payments, including contingent payments, are greater than the carrying value of the mortgage payable.

We have accrued interest of $5.4 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of ~~March 31,~~September 30, 2021. We incurred $1.2 million of lender fees in connection with the loan modification which are treated as a reduction of the mortgage payable balance and amortized over the term of the loan in accordance with the provisions under ASC ~~470-60~~ 470-60.

~~Troubled Debt Restructurings~~.

Mortgage on The Outlets at Montehiedra

In connection with the refinancing of the loan secured by The Outlets at Montehiedra (“Montehiedra”) in the second quarter of 2020, the Company ~~has~~ provided a $12.5 million limited corporate guarantee of the mortgage secured by Montehiedra that is triggered only if any of the following events occur: (1) certain reserve accounts were not funded as of a specified date (which funding did occur in full at closing), (2) the lease to Sears Holding Corporation (“Kmart”) at Montehiedra is terminated for any reason or (3) the Kmart lease is materially amended and a debt service coverage ratio falls below a specified threshold. In February 2021, Kmart announced that it would be closing the store related to such lease, but it is not yet evident whether the lease will be terminated or amended. No triggering events have occurred that would require the release of the guarantee and the tenant has lease obligations through 2023. The guarantee would be released should certain financial metrics at Montehiedra be achieved even if the Kmart box remains vacant.guarantee. The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately ~~six years based on~~five years. As of September 30, 2021, the ~~scheduled amortization.~~remaining exposure under the guarantee is $10.3 million. There was no separate liability recorded related to this guarantee.

7. INCOME TAXES

The Company elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015. With the exception of the Company’s taxable REIT subsidiary (“TRS”), to the extent the Company meets certain requirements under the Code, the Company will not be taxed on its federal taxable income. If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates, including any alternative minimum tax, which, for corporations, was repealed under the Tax Cuts and Jobs Act (“TCJA”) and may not be able to qualify as a REIT for the four subsequent taxable years. In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income.

For U.S. federal income tax purposes, the REIT and other minority members are partners in the Operating Partnership. As such, the partners are required to report their share of taxable income on their respective tax returns. However, during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020, certain non-real estate operating activities that could not be performed by the REIT, occurred through the Company’s taxable REIT subsidiary (“TRS”), and the Company’s TRS is subject to federal, state and local income taxes. These income taxes are included in the income tax expense in the consolidated statements of income.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the REIT was subject to Puerto Rico corporate income taxes on its allocable share of the Company’s Puerto Rico operating activities. For the three months ended March 31, 2021 and 2020, the Puerto Rico income tax expense was $0.2 million and $0.1 million, respectively. All amounts for the three months ended March 31, 2021 and 2020 are included in income tax expense on the consolidated statements of income.

The Puerto Rico corporate income tax consists of a flat 18.5% tax rate plus a graduated income surcharge tax for a maximum corporate income tax rate of 37.5%. In addition, the REIT is subject to a 10% branch profit tax on the earnings and profits generated from its allocable share of the Company’s Puerto Rico operating activities and such tax is included in income tax expense in the consolidated statements of income.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020 ~~both Puerto Rico malls were~~the Company also had activities occurring in special partnerships ~~and~~ subject to a Puerto Rico 29% non-resident withholding tax on the net income from operating activities allocated to the Operating Partnership.

During the nine months ended September 30, 2020, the Company completed a refinancing and legal entity restructuring transaction at The Outlets at Montehiedra in San Juan, PR, which resulted in a deferred tax asset, net of $13.1 million and recognized an accompanying income tax benefit on its consolidated statements of income. As a result, for the three and nine months ended September 30, 2020 the Company recorded an income tax benefit of $1.3 million and $14.8 million, respectively, which is included in income tax benefit (expense) in the consolidated statements of income.

For the tax year ended December 31, 2020, the Company recognized a gain on extinguishment of debt for U.S. federal income tax purposes and implemented various tax planning strategies to limit its impact on the Company’s overall U.S. federal taxable income. The strategies implemented resulted in the recognition of an estimated state and local income tax expense of $4.5 million for the REIT during the year ended December 31, 2020. During the nine months ended September 30, 2021, the Company refined the estimated state and local income tax accrued in 2020 and recognized an income tax benefit of $0.5 million.

For the three and nine months ended September 30, 2021, the Puerto Rico income tax expense was $0.7 million and $1.4 million, respectively and the REIT’s state and local income tax benefit was $0.5 million for the nine months ended September 30, 2021. There was no state and local income tax benefit recognized for the three months ended September 30, 2021. All amounts for the three and nine months ended September 30, 2021 and 2020 are included in income tax expense on the consolidated statements of income.

8. LEASES

All rental revenue was generated from operating leases for the three and nine months ended ~~March 31,~~September 30, 2021 and ~~March 31,~~September 30, 2020, respectively. The components of rental revenue for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020 were as follows:

Three Months Ended March 31,
(Amounts in thousands)
2021 2020
Rental Revenue
Fixed lease revenue $ 65,653 $ 69,097
Variable lease revenue 28,966 23,903
Total rental revenue $ 94,619 $ 93,000


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Rental Revenue
Fixed lease revenue(1)	$	80,961	$	53,396	$	216,200	$	174,141
Variable lease revenue	25,024		21,963		78,057		67,483
Total rental revenue	$	105,985	$	75,359	$	294,257	$	241,624

(1) Amount includes write-off of $12.5 million of below-market intangible liabilities related to the termination of the Kmart and Sears leases.

9. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement and Disclosures defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

There were no financial assets or liabilities measured at fair value on a recurring or non-recurring basis as of ~~March 31,~~September 30, 2021 and December 31, 2020.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash and cash equivalents and mortgages payable. Cash and cash equivalents are carried at cost, which approximates fair value. The fair value of mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist. The fair value of cash and cash equivalents is classified as Level 1 and the fair values of mortgages payable is classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments as of ~~March 31,~~September 30, 2021 and December 31, 2020.


		As of March 31, 2021				As of December 31, 2020					As of September 30, 2021				As of December 31, 2020
(Amounts in thousands)	(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:	Assets:									Assets:
Cash and cash equivalents	Cash and cash equivalents	$	324,508	$	324,508	$	384,572	$	384,572	Cash and cash equivalents	$	268,952	$	268,952	$	384,572	$	384,572
Liabilities:	Liabilities:									Liabilities:
Mortgages payable(1)	Mortgages payable(1)	$	1,594,420	$	1,610,513	$	1,597,397	$	1,611,868	Mortgages payable(1)	$	1,582,325	$	1,588,270	$	1,597,397	$	1,611,868

(1) Carrying amounts exclude unamortized debt issuance costs of ~~$9.4~~$8.6 million and $9.9 million as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively.

Nonfinancial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We assess the carrying value of our properties for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Such events and changes include macroeconomic conditions, including those caused by global pandemics, such as COVID-19, which may result in property operational disruption and indicate that the carrying amount may not be recoverable.

No material impairment charges were recognized during the three and nine months ended ~~March 31,~~September 30, 2021 or ~~March 31,~~ 2020.

10. COMMITMENTS AND CONTINGENCIES

There are various legal actions against us in the ordinary course of business. After consultation with legal counsel, we have concluded that the outcome of such matters will not have a material adverse effect on our financial condition, results of operations, or cash flows.

Redevelopment and Anchor Repositioning

As of ~~March 31,~~September 30, 2021, we had approximately ~~$121.1~~$152.4 million of active development, redevelopment and anchor repositioning projects under way, of which ~~$81.7~~$91.1 million remains to be funded. Further, while we have identified future projects in our development pipeline, we are under no obligation to execute and fund any of these projects and each of these projects is being reevaluated considering market conditions.

Termination of Kmart and Sears Leases

On September 29, 2021, the Company reached an agreement with Transform HoldCo LLC, the owner and operator of Kmart and Sears, to terminate its remaining leases at Bruckner Commons, Sunrise Mall and The Outlets at Montehiedra effective October 15, 2021. The Company recorded a $20 million accrual as of September 30, 2021, for the payment made on October 15, 2021, to recapture control of these spaces. As controlling these anchor spaces is a critical aspect of the value creation plans the Company has under way to reposition these spaces, the $20 million has been capitalized as construction in progress.

Insurance

The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $50 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses. On December 23, 2020, the Company initiated litigation in New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.

Insurance premiums are typically charged directly to each of the properties but not all of the cost of such premiums are recovered. The Company is responsible for deductibles, losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material.

We continue to monitor the state of the insurance market and the scope and costs of available coverage. We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.

Certain of our loans and other agreements contain customary covenants requiring the maintenance of insurance coverage. Although we believe that we currently have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders or other counterparties insist on greater coverage than we are able to obtain, such requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

Environmental Matters

Each of our properties has been subjected to varying degrees of environmental assessment at various times. Based on these assessments, we have accrued costs of $1.7 million and $1.8 million on our consolidated balance sheets as of ~~both March 31,~~September 30, 2021 and December 31, 2020, respectively, for remediation costs for environmental contamination at certain properties. While this accrual reflects our best estimates of the potential costs of remediation at these properties, there can be no assurance that the actual costs will not exceed these amounts. Although we are not aware of any other material environmental contamination, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us.

Pandemic-Related Contingencies

On ~~January 30,~~March 11, 2020, ~~the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by~~ the World Health Organization ~~("WHO"). On March 11, 2020, WHO~~ characterized the COVID-19 outbreak as a pandemic. Since March ~~the continually evolving COVID-19 pandemic impacted our tenants and business operations. The Company has taken precautions to protect the safety, health and well-being of its employees and tenants.~~

Many of our tenants have faced adverse financial consequences from reduced business operations and social distancing requirements resulting from the COVID-19 pandemic. As of March 31, 2021, substantially all of our portfolio's gross leasable area was open for business and the Company collected approximately 93% of rental revenue for the first quarter of 2021. Since the pandemic was declared in 2020, the Company has granted rent concessions and other lease-related relief, such as rent deferrals, to ~~certain~~tenants impacted ~~tenants. We evaluate rent relief requests on a case-by-case basis and not all requests are granted.~~by the pandemic. Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income. ~~As of March 31, 2021,~~

Other than adjusting revenue for tenant receivables that may not be collectible, the Company executed rent deferrals aggregating $8.2 million with a weighted average payback period of approximately 18 months. Additionally, as of March 31, 2021, the Company executed rent abatements aggregating $6.7 million.

~~The~~ Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this ~~time, with the exception of abatements already discussed with tenants or tenant receivables that may not be collected.~~time.

Bankruptcies

Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration. In the event a tenant with a significant number of leases or square footage in our shopping centers files for bankruptcy and rejects its leases with us, we could experience a reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants in arrears or operating retail formats that are experiencing significant changes in competition, business practice, or store closings in other locations. Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection since the pandemic was declared. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

11. PREPAID EXPENSES AND OTHER ASSETS

The following is a summary of the composition of the prepaid expenses and other assets in the consolidated balance sheets:


		Balance at					Balance at
(Amounts in thousands)	(Amounts in thousands)	March 31, 2021		December 31, 2020		(Amounts in thousands)	September 30, 2021		December 31, 2020
Other assets	Other assets	$	6,879	$	5,953	Other assets	$	9,463	$	5,953
Deferred tax asset, net	Deferred tax asset, net	39,484		39,677		Deferred tax asset, net	38,376		39,677
Deferred financing costs, net of accumulated amortization of $5,097 and $4,819, respectively		3,069		3,347
Deferred financing costs, net of accumulated amortization of $5,653 and $4,819, respectively						Deferred financing costs, net of accumulated amortization of $5,653 and $4,819, respectively	2,512		3,347
Finance lease right-of-use asset	Finance lease right-of-use asset	2,724		2,724		Finance lease right-of-use asset	2,724		2,724
Real estate held for sale	Real estate held for sale	0		7,056		Real estate held for sale	—		7,056
Prepaid expenses:	Prepaid expenses:					Prepaid expenses:
Real estate taxes	Real estate taxes	8,097		8,093		Real estate taxes	7,560		8,093
Insurance	Insurance	7,888		1,583		Insurance	3,298		1,583
Licenses/fees	Licenses/fees	2,057		1,878		Licenses/fees	1,632		1,878
Total Prepaid expenses and other assets	Total Prepaid expenses and other assets	$	70,198	$	70,311	Total Prepaid expenses and other assets	$	65,565	$	70,311

12. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

The following is a summary of the composition of accounts payable, accrued expenses and other liabilities in the consolidated balance sheets:


		Balance at					Balance at
(Amounts in thousands)	(Amounts in thousands)	March 31, 2021		December 31, 2020		(Amounts in thousands)	September 30, 2021		December 31, 2020
Dividend payable	Dividend payable	$	0	$	55,905	Dividend payable	$	—	$	55,905
Deferred tenant revenue	Deferred tenant revenue	22,775		26,594		Deferred tenant revenue	23,958		26,594
Accrued interest payable	Accrued interest payable	9,423		11,095		Accrued interest payable	9,437		11,095
Accrued capital expenditures and leasing costs(1)	Accrued capital expenditures and leasing costs(1)	9,387		7,797		Accrued capital expenditures and leasing costs(1)	33,115		7,797
Security deposits	Security deposits	5,781		5,884		Security deposits	6,720		5,884
Finance lease liability	Finance lease liability	2,996		2,993		Finance lease liability	3,001		2,993
Accrued payroll expenses	Accrued payroll expenses	3,098		5,797		Accrued payroll expenses	6,811		5,797
Other liabilities and accrued expenses	Other liabilities and accrued expenses	18,285		16,915		Other liabilities and accrued expenses	11,472		16,915

Total accounts payable, accrued expenses and other liabilities	Total accounts payable, accrued expenses and other liabilities	$	71,745	$	132,980	Total accounts payable, accrued expenses and other liabilities	$	94,514	$	132,980

(1) Amount includes $20 million due in connection with the agreements to terminate our three Kmart and Sears leases.

13. INTEREST AND DEBT EXPENSE

The following table sets forth the details of interest and debt expense in the consolidated statements of income:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020			(Amounts in thousands)	2021		2020		2021		2020
Interest expense	Interest expense	$	14,070	$	16,469		Interest expense	$	13,893	$	17,433	$	41,946	$	51,771
Amortization of deferred financing costs	Amortization of deferred financing costs	757		706			Amortization of deferred financing costs	745		703		2,247		2,113
Total Interest and debt expense	Total Interest and debt expense	$	14,827	$	17,175		Total Interest and debt expense	$	14,638	$	18,136	$	44,193	$	53,884

14. EQUITY AND NONCONTROLLING INTEREST

At-The-Market Program

On May 5, 2021 the Company established an at-the-market equity program (the “ATM Program”), pursuant to which the Company may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million. Sales under the ATM Program may be made from time to time, as needed, by means of ordinary brokers’ transactions or other transactions that are deemed to be “at the market” offerings, in privately negotiated transactions, which may include block trades, or as otherwise agreed with the sales agents.

As of September 30, 2021, the Company has not issued any common shares under the ATM Program. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs. The Company has no obligation to sell any shares under the ATM Program.

Share Repurchase Program

In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s common shares. Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company’s shares, trading volume and general market conditions. The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, 0no shares were repurchased by the Company. During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, the Company repurchased ~~4.5~~5.9 million common shares at a weighted average share price of ~~$9.61~~$9.22 under this program, for a total of ~~$42.8~~$54.1 million.

Dividends and Distributions

During the three months ended ~~March 31,~~September 30, 2021, ~~and March 31, 2020,~~ the Company declared distributions on common shares and OP units of $0.15 per share/unit. During the three months ended September 30, 2020, the Company temporarily suspended dividends as a result of the COVID-19 pandemic and resulting uncertainty, and as such, no dividends were declared on our common shares or OP units. During the nine months ended September 30, 2021 and 2020, respectively, the Company declared distributions on our common shares and OP units of $0.45 and $0.22 per share/unit ~~respectively.~~in the aggregate.

Noncontrolling Interests in Operating Partnership

Noncontrolling interests in the Operating Partnership reflected on the consolidated balance sheets of the Company are comprised of OP units and limited partnership interests in the Operating Partnership in the form of LTIP unit awards. LTIP unit awards were granted to certain executives pursuant to our 2015 Omnibus Share Plan (the “Omnibus Share Plan”) and our 2018 Inducement Equity Plan (the “Inducement Plan”). OP units were issued to contributors in exchange for their property interests in connection with the Company’s property acquisitions in 2017.

The total of the OP units and LTIP units represent a 4.0% and 4.2% weighted-average interest in the Operating Partnership for the three and nine months ended ~~March 31, 2021.~~September 30, 2021, respectively. Holders of outstanding vested LTIP units may, from and after two years from the date of issuance, redeem their LTIP units for cash, or for the Company’s common shares on a 1-for-one basis, solely at our election. Holders of outstanding OP units may redeem their units for cash or the Company’s common shares on a 1-for-one basis, solely at our election.

Noncontrolling Interests in Consolidated Subsidiaries

The Company’s noncontrolling interests relate to the 5% interest held by others in our property in Walnut Creek, CA (Mount Diablo) and 17.5% held by others in our property in Massapequa, NY. The net income attributable to noncontrolling interests is presented separately in our consolidated statements of income.

15. SHARE-BASED COMPENSATION

Share-Based Compensation Expense

Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income, is summarized as follows:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020			(Amounts in thousands)	2021		2020		2021		2020
Share-based compensation expense components:	Share-based compensation expense components:						Share-based compensation expense components:
Restricted share expense	Restricted share expense	$	178	$	260		Restricted share expense	$	98	$	199	$	365	$	653
Stock option expense	Stock option expense	413		868			Stock option expense	384		432		1,181		4,559
LTIP expense(1)	LTIP expense(1)	1,130		1,183			LTIP expense(1)	1,326		1,023		3,659		6,323
Performance-based LTI expense(2)	Performance-based LTI expense(2)	956		915			Performance-based LTI expense(2)	976		944		2,889		2,886
Deferred share unit (“DSU”) expense	Deferred share unit (“DSU”) expense	6		22			Deferred share unit (“DSU”) expense	25		6		124		42
Total Share-based compensation expense	Total Share-based compensation expense	$	2,683	$	3,248		Total Share-based compensation expense	$	2,809	$	2,604	$	8,218	$	14,463

(1) LTIP expense includes the time-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.

(2) Performance-based LTI expense includes the 2017 OPP plan and the performance-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.

2021 Long-Term Incentive Plan

On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”). The Plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-half of the program) and performance goals tied to our relative and absolute total shareholder return (“TSR”) during the three-year performance period following their grant (one-half of the program). The total grant date fair value under the 2021 LTI Plan was $7.8 million comprising both performance-based and time-based awards as described further below:

Performance-based awards

For the performance-based awards under the 2021 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year performance measurement period (the “Performance Period”) beginning on February 10, 2021 and ending on February 9, 2024. The Company granted performance-based awards under the 2021 LTI Plan that represent 398,977 LTIP Units. The fair value of the performance-based award portion of the 2021 LTI Plan on the date of grant was $3.9 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.

Under the Absolute TSR component, 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period

is equal to 18%, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27%, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36%. The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 1615 companies. Under the Relative TSR Component, 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35th percentile of the peer group, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55th percentile of the peer group, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75th percentile of the peer group, with earning determined using linear interpolation if in between such relative and absolute TSR thresholds.

Time-based awards

The time-based awards granted under the 2021 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years. As of ~~March 31,~~September 30, 2021, the Company granted time-based awards under the 2021 LTI Plan that represent 273,615 LTIP units with a grant date fair value of $3.9 million.

16. EARNINGS PER SHARE AND UNIT

Urban Edge Earnings per Share

We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of Urban Edge common shares and participating securities is calculated according to dividends declared and participating rights in undistributed earnings. Restricted shares issued pursuant to our share-based compensation program are considered participating securities, and as such have non-forfeitable rights to receive dividends.

The following table sets forth the computation of our basic and diluted earnings per share:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per share amounts)	(Amounts in thousands, except per share amounts)	2021		2020			(Amounts in thousands, except per share amounts)	2021		2020		2021		2020
Numerator:	Numerator:						Numerator:
Net income attributable to common shareholders		$	19,920	$	48,980
Net income (loss) attributable to common shareholders							Net income (loss) attributable to common shareholders	$	27,766	$	(5,605)	$	60,233	$	74,630
Less: Earnings allocated to unvested participating securities	Less: Earnings allocated to unvested participating securities	(12)		(34)			Less: Earnings allocated to unvested participating securities	(12)		4		(29)		(50)
Net income available for common shareholders - basic		$	19,908	$	48,946
Net income (loss) available for common shareholders - basic							Net income (loss) available for common shareholders - basic	$	27,754	$	(5,601)	$	60,204	$	74,580
Impact of assumed conversions:	Impact of assumed conversions:						Impact of assumed conversions:
OP and LTIP units	OP and LTIP units	0		0			OP and LTIP units	—		—		2,608		—
Net income available for common shareholders - dilutive	Net income available for common shareholders - dilutive	$	19,908	$	48,946		Net income available for common shareholders - dilutive	$	27,754	$	(5,601)	$	62,812	$	74,580

Denominator:	Denominator:						Denominator:
Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	116,956		120,966			Weighted average common shares outstanding - basic	117,087		116,625		117,009		118,033
Effect of dilutive securities(1):	Effect of dilutive securities(1):						Effect of dilutive securities(1):

Restricted share awards	Restricted share awards	68		85			Restricted share awards	50		—		56		78
Assumed conversion of OP and LTIP units	Assumed conversion of OP and LTIP units	0		0			Assumed conversion of OP and LTIP units	—		—		5,147		—
Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	117,024		121,051			Weighted average common shares outstanding - diluted	117,137		116,625		122,212		118,111

Earnings per share available to common shareholders:	Earnings per share available to common shareholders:						Earnings per share available to common shareholders:
Earnings per common share - Basic		$	0.17	$	0.40
Earnings per common share - Diluted		$	0.17	$	0.40
Earnings (loss) per common share - Basic							Earnings (loss) per common share - Basic	$	0.24	$	(0.05)	$	0.51	$	0.63
Earnings (loss) per common share - Diluted							Earnings (loss) per common share - Diluted	$	0.24	$	(0.05)	$	0.51	$	0.63

(1) For the three months ended ~~March 31,~~September 30, 2021 and the three and nine months ended September 30, 2020, ~~respectively,~~ the effect of the redemption of OP and LTIP units for Urban Edge common shares would have an anti-dilutive effect on the calculation of diluted EPS. Accordingly, the impact of such redemption has not been included in the determination of diluted EPS for these periods.

2426

Operating Partnership Earnings per Unit

The following table sets forth the computation of basic and diluted earnings per unit:


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per unit amounts)	(Amounts in thousands, except per unit amounts)	2021		2020			(Amounts in thousands, except per unit amounts)	2021		2020		2021		2020
Numerator:	Numerator:						Numerator:
Net income attributable to unitholders		$	20,795	$	51,288
Net income (loss) attributable to unitholders							Net income (loss) attributable to unitholders	$	28,915	$	(5,830)	$	62,841	$	78,003
Less: net income attributable to participating securities	Less: net income attributable to participating securities	(12)		(34)			Less: net income attributable to participating securities	(12)		4		(29)		(50)
Net income available for unitholders		$	20,783	$	51,254
Net income (loss) available for unitholders							Net income (loss) available for unitholders	$	28,903	$	(5,826)	$	62,812	$	77,953

Denominator:	Denominator:						Denominator:
Weighted average units outstanding - basic	Weighted average units outstanding - basic	120,763		125,844			Weighted average units outstanding - basic	120,903		120,618		120,839		122,332
Effect of dilutive securities issued by Urban Edge	Effect of dilutive securities issued by Urban Edge	68		85			Effect of dilutive securities issued by Urban Edge	50		—		56		78
Unvested LTIP units	Unvested LTIP units	1,335		826			Unvested LTIP units	1,034		—		1,317		764
Weighted average units outstanding - diluted	Weighted average units outstanding - diluted	122,166		126,755			Weighted average units outstanding - diluted	121,987		120,618		122,212		123,174

Earnings per unit available to unitholders:	Earnings per unit available to unitholders:						Earnings per unit available to unitholders:
Earnings per unit - Basic		$	0.17	$	0.41
Earnings per unit - Diluted		$	0.17	$	0.40
Earnings (loss) per unit - Basic							Earnings (loss) per unit - Basic	$	0.24	$	(0.05)	$	0.52	$	0.64
Earnings (loss) per unit - Diluted							Earnings (loss) per unit - Diluted	$	0.24	$	(0.05)	$	0.51	$	0.63

2527

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can ~~find~~identify many of these statements by ~~looking for~~ words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to individuals adversely impacted by the COVID-19 pandemic, and to large and small businesses, particularlyits impact on our retail tenants ~~that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders~~ and social distancing practices, (b) the duration of any such orders or other formal recommendations for social distancing, and the speed and extent to which revenues of our retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenantstheir ability to make rent and other payments or honor ~~other~~their commitments under existing leases, (d) the potential adverse impact on returns from redevelopment projects, and (e) the broader impact of the severe economic contraction and increase in unemployment that has occurred in the short term, and negative consequences that will occur if these trends are not quickly reversed;leases; (ii) the loss or bankruptcy of major ~~tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic;~~tenants; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant, particularly, in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and under which conditions potential tenants will be able to operate physical retail locations in the future;tenant; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as ~~the recent significant decline~~potential volatility in the Company’s share ~~price from prices prior to the spread of the COVID-19 pandemic;~~price; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of ~~LIBOR after 2021;~~LIBOR; (ix) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; and (xv) the loss of key executives. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the other documents filed by the Company with the SEC, including the information contained in this Quarterly Report on Form 10-Q.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part I of this Quarterly Report on Form 10-Q.

Overview

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that manages, develops, redevelops, and acquires retail real estate, primarily in the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of the Company’s real estate properties and other assets. Unless

the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries.

As of ~~March 31,~~September 30, 2021, our portfolio consisted of 7068 shopping centers, five malls and two industrial parks totaling approximately ~~16.2~~16.4 million square feet.

Critical Accounting Policies and Estimates

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 contains a description of our critical accounting policies, including accounting for real estate, leases and revenue recognition. For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, there were no material changes to these policies.

Recent Accounting Pronouncements

Refer to Note 3 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that may affect us.

Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases on each of our properties. This revenue includes fixed base rents, recoveries of expenses that we have incurred and that we pass through to the individual tenants and percentage rents that are based on specified percentages of tenants’ revenue, in each case as provided in the respective leases.

Our primary cash expenditures consist of our property operating and capital costs, general and administrative expenses, and interest and debt expense. Property operating expenses include: real estate taxes, repairs and maintenance, management expenses, insurance and utilities; general and administrative expenses include payroll, professional fees, information technology, office expenses and other administrative expenses; and interest and debt expense primarily consists of interest on our mortgage debt. In addition, we incur substantial non-cash charges for depreciation and amortization on our properties. We also capitalize certain expenses, such as taxes, interest and salaries related to properties under development or redevelopment until the property is ready for its intended use.

Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions, dispositions, developments, redevelopments and changes in accounting policies. The results of operations of any acquired properties are included in our financial statements as of the date of acquisition. Our results of operations are affected by national, regional and local economic conditions, as well as macroeconomic conditions, which are at times subject to volatility and uncertainty. The current COVID-19 pandemic has increased volatility and uncertainty and has created significant economic disruption in many markets. Vaccinations for the COVID-19 virus have ~~begun to be~~been widely distributed among the general U.S. population, which has loosened restrictions previously mandated on our tenants identified as nonessential; however the potential emergence of vaccine-resistant variants of COVID-19 may trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. The long-term consequences of the various restrictions taken during the pandemic on consumer behavior is currently unknown. Specifically, the revenue and sales volume for certain tenants identified as nonessential may decline significantly as demand for their services and products declines potentially longer term. We are actively managing our business to respond to the ongoing economic and social impact and uncertainty relating to the COVID-19 pandemic; however, our future near term and potentially longer term results of operations may be significantly adversely affected. See “Pandemic-Related Contingencies” under Liquidity and Capital Resources and “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The following provides an overview of our key financial metrics based on our consolidated results of operations (refer to Net Operating Income (“NOI”), same-property NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020			(Amounts in thousands)	2021		2020		2021		2020
Net income		$	20,716	$	51,288
Net income (loss)							Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
FFO applicable to diluted common shareholders(1)	FFO applicable to diluted common shareholders(1)	31,759		34,794			FFO applicable to diluted common shareholders(1)	45,302		16,880		112,463		107,330
NOI(2)	NOI(2)	53,579		57,669			NOI(2)	56,809		46,019		167,625		151,020
Same-property NOI(2)	Same-property NOI(2)	51,303		54,126			Same-property NOI(2)	55,676		43,940		159,925		140,057

(1) Refer to page 3235 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.

(2) Refer to page 3134 for a reconciliation to the nearest GAAP measure.

~~Development/~~Redevelopment ~~Activity~~and Anchor Repositioning

The Company has ~~twelve~~sixteen active development, redevelopment or anchor repositioning projects with total estimated costs of ~~$121.1~~$152.4 million, of which ~~$39.4~~$61.3 million (or ~~33%~~40%) ~~has~~have been incurred and ~~$81.7~~$91.1 million remains to be funded as of ~~March 31,~~September 30, 2021. We plan on generating additional income from our existing assets by redeveloping underutilized existing space, developing new space and pad sites, repositioning anchors, and incorporating non-retail uses such as industrial, self-storage, office and other uses. We continue to monitor the stabilization dates of these projects as a result of the impact of the COVID-19 pandemic on our tenants and vendors. We have identified future projects in our development pipeline, but we are under no obligation to execute and fund any of these projects and each of these projects is being reevaluated considering market conditions.

Termination of Kmart and Sears Leases

Acquisition/Disposition Activity

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, we disposed of ~~one property~~three properties and one property parcel and received proceeds of ~~$23.6~~$34.9 million, net of selling costs, resulting in ~~$11.7~~an $18.6 million ~~net~~ gain on sale of real estate.

~~No properties were acquired~~ Of these dispositions completed during the ~~three~~nine months ended ~~March 31, 2021. However, we continue~~September 30, 2021, two were completed as a 1031 exchange with the acquisition of 151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale for income tax purposes.

In August 2021, the Company acquired two industrial properties, which are adjacent to ~~monitor the market for potential acquisitions that meet~~ our ~~investment criteria.~~existing 943,000 sf warehouse park in East Hanover, NJ. The acquisition of 151 Ridgedale Avenue was partially funded via a Section 1031 exchange using cash proceeds from previous dispositions.

Equity Activity

Equity award activity during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 included: (i) ~~273,615~~333,333 stock options vested, (ii) 325,625 LTIP units granted, ~~(ii) 32,618~~(iii) 151,398 LTIP units vested, (iv) 2,886 LTIP units forfeited, (v) 34,532 restricted shares vested, ~~(iii)~~(vi) 17,933 restricted shares granted, and ~~(iv) 1,142~~(vii) 5,945 restricted ~~shared~~shares forfeited. Refer to Note 15 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for more information regarding the Company’s equity award activity.

2830

Comparison of the Three Months Ended ~~March 31,~~September 30, 2021 to ~~March 31,~~September 30, 2020

Net income for the three months ended ~~March 31,~~September 30, 2021 was ~~$20.7~~$30.1 million, compared to a net ~~income~~loss of ~~$51.3~~$5.8 million for the three months ended ~~March 31,~~September 30, 2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended ~~March 31,~~September 30, 2021 as compared to the same period of 2020:


		Three Months Ended March 31,							Three Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020		$ Change		(Amounts in thousands)	2021		2020		$ Change
Total revenue	Total revenue	$	95,661	$	93,360	$	2,301	Total revenue	$	106,839	$	75,838	$	31,001

Property operating expenses	Property operating expenses	20,291		14,537		5,754		Property operating expenses	15,692		13,436		2,256
General and administrative		8,668		9,847		(1,179)
General and administrative expenses								General and administrative expenses	10,134		8,700		1,434

Gain on sale of real estate	Gain on sale of real estate	11,722		39,775		(28,053)		Gain on sale of real estate	6,926		—		6,926
Interest and debt expense	Interest and debt expense	14,827		17,175		(2,348)		Interest and debt expense	14,638		18,136		(3,498)

Total revenue increased by ~~$2.3~~$31.0 million to ~~$95.7~~$106.8 million in the ~~first~~third quarter of 2021 from ~~$93.4~~$75.8 million in the ~~first~~third quarter of 2020. The increase is primarily attributable to:

•$~~3.5~~12.5 million ~~increase as a result~~ of ~~property acquisitions net~~accelerated amortization of ~~dispositions;~~below-market intangibles in connection with the termination of our Kmart and Sears leases in the third quarter of 2021;

•$~~2.5~~10.9 million decrease in rental revenue deemed uncollectible;

•$5.4 million increase in non-cash revenue due to $4.7 million write-offs of receivables arising from the straight-lining of rents for tenants put on cash basis in the third quarter of 2020 compared to a $0.7 million reinstatement of straight-line balances, net, for the third quarter of 2021 in connection with tenants moved from cash basis to accrual basis;

•$0.9 million increase in tenant reimbursement income due to higher common area maintenance ~~expenses;~~expenses for utilities, insurance, repairs and maintenance, and security in the third quarter of 2021 and the Sunrise Mall acquisition in December 2020;

•$0.8 million increase in percentage rent; and

•$~~1.1~~0.4 million ~~net~~ increase in lease termination ~~income and other income, partially offset by~~

•~~$0.5 million decrease in rental revenue deemed uncollectible;~~

•~~$3.4 million net decrease in property rentals due to lease terminations and modifications, offset by rent commencements and contractual rent increases; and~~

•~~$0.9 million increase in write-offs of receivables arising from the straight-lining of rents in connection with leases recognized on a cash basis.~~income.

Property operating expenses increased by ~~$5.8~~$2.3 million to ~~$20.3~~$15.7 million in the ~~first~~third quarter of 2021 from ~~$14.5~~$13.4 million in the ~~first~~third quarter of 2020. The increase is primarily attributable to:

•$~~4.0 million increase in common area maintenance expenses primarily related to snow removal; and~~

•~~$1.8~~1.4 million increase as a result of property acquisitions, net of ~~dispositions.~~dispositions; and

•$0.9 million higher common area maintenance expenses across the portfolio as a result of spend reductions and limited center hours due to COVID-19 interruptions in the third quarter of 2020.

General and administrative expenses ~~decreased~~increased by ~~$1.2~~$1.4 million to $10.1 million in the third quarter of 2021 from $8.7 million in the ~~first~~third quarter of 2020. This is primarily attributable to an increase in professional fees, transaction costs and other expenses.

A gain on the sale of real estate of $6.9 million was recognized in the third quarter of 2021 in connection with the disposition of our property in Turnersville, NJ.

Interest and debt expense decreased by $3.5 million to $14.6 million in the third quarter of 2021 from ~~$9.8~~$18.1 million in the ~~first~~third quarter of 2020. The decrease is primarily attributable to:

•$~~0.6~~2.6 million ~~decrease in share-based compensation expense due to vesting of prior period awards; and~~

•~~$0.6 million decrease in salary and bonus related expenses.~~

We recognized a gain on sale of real estate of $11.7 million in the first quarter of 2021 due to the sale of one property in East Hanover, NJ and a portion of a property in Lodi, NJ. We recognized a gain on sale of real estate of $39.8 million in the first quarter of 2020 due to the sale of three operating properties.

~~Interest and debt expense decreased by $2.3 million to $14.8 million in the first quarter of 2021 from $17.2 million in the first quarter of 2020. The decrease is primarily attributable to:~~

•~~$1.5 million decrease~~ as a result of the troubled debt restructuring of the mortgage secured by Las Catalinas Mall in Puerto Rico in December 2020;

•$~~0.6 million decrease on variable-rate debt due to lower interest rates; and~~

•~~$0.2~~0.7 million of interest inincurred in the ~~first~~third quarter of 2020 resulting from the $250 million draw on our revolving credit agreement in March 2020. All borrowings were repaid in November ~~2020.~~2020; and

•

$0.2 million higher capitalized interest on development and redevelopment projects.

2931

Comparison of the Nine Months Ended September 30, 2021 to September 30, 2020

Net income for the nine months ended September 30, 2021 was $63.8 million, compared to net income of $78.0 million for the nine months ended September 30, 2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the nine months ended September 30, 2021 as compared to the same period of 2020:


	Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		$ Change
Total revenue	$	296,506	$	242,817	$	53,689

Property operating expenses	51,874		39,867		12,007
General and administrative expenses	28,286		36,600		(8,314)
Interest income	303		2,387		(2,084)
Gain on sale of real estate	18,648		39,775		(21,127)
Interest and debt expense	44,193		53,884		(9,691)
Gain on extinguishment of debt	—		34,908		(34,908)
Income tax expense (benefit)	905		(13,103)		14,008

Total revenue increased by $53.7 million to $296.5 million in the nine months ended September 30, 2021 from $242.8 million in the nine months ended September 30, 2020. The increase is primarily attributable to:

•$23.6 million decrease in rental revenue deemed uncollectible;

•$13.0 million of below-market lease income driven by accelerated amortization of intangibles in connection with the termination of our Kmart and Sears leases in the third quarter of 2021;

•$9.2 million increase in non-cash revenue driven by straight-line write-offs for tenants put on cash basis during 2020 compared to a reinstatement of straight-line balances, net of write-offs, during 2021;

•$6.0 million increase in tenant reimbursement income due to higher common area maintenance expenses;

•$1.1 million increase in percentage rent driven by higher tenant sales in 2021; and

•$0.8 million net increase in lease termination income and other income.

Property operating expenses increased by $12.0 million to $51.9 million in the nine months ended September 30, 2021 from $39.9 million in the nine months ended September 30, 2020. The increase is primarily attributable to:

•$6.5 million increase in common area maintenance expenses across the portfolio as a result of spend reductions and limited center hours due to COVID-19 interruptions during 2020; and

•$5.5 million increase as a result of property acquisitions, net of dispositions.

General and administrative expenses decreased by $8.3 million to $28.3 million in the nine months ended September 30, 2021 from $36.6 million in the nine months ended September 30, 2020. The decrease is primarily attributable to:

•$7.2 million of executive transition costs incurred in the second quarter of 2020 including accelerated amortizations of unvested equity awards; and

•$1.1 million net decrease in transaction, severance and other expenses.

Interest income decreased by $2.1 million to $0.3 million in the nine months ended September 30, 2021 from $2.4 million in the nine months ended September 30, 2020. The decrease is primarily attributed to lower interest rates.

We recognized a gain on sale of real estate of $18.6 million in the nine months ended September 30, 2021 due to the sale of three properties and one property parcel. We recognized a gain on sale of real estate of $39.8 million in the nine months ended September 30, 2020 due to the sale of three operating properties.

Interest and debt expense decreased by $9.7 million to $44.2 million in the nine months ended September 30, 2021 from $53.9 million in the nine months ended September 30, 2020. The decrease is primarily attributable to:

•$6.2 million as a result of the troubled debt restructuring of the mortgage secured by Las Catalinas Mall in Puerto Rico in December 2020;

•$1.8 million of interest incurred from the $250 million draw on our revolving credit agreement in March 2020. All borrowings were repaid in November 2020;

•$0.9 million lower variable-rate debt due to lower interest rates; and

•$0.8 million decrease due to the refinancing of the mortgage secured by The Outlets at Montehiedra.

A gain on extinguishment of debt of $34.9 million in the second quarter of 2020 was recognized as a result of the refinancing of the mortgage secured by The Outlets at Montehiedra, consisting of the forgiveness of the $30 million junior loan plus accrued

interest of $5.4 million, offset by the write-off of $0.4 million of unamortized deferred financing fees and $0.1 million of transaction costs.

Income tax decreased from a $13.1 million benefit for the nine months ended September 30, 2020 to an expense of $0.9 million for the nine months ended September 30, 2021, primarily attributable to the tax impact of the mortgage refinancing and legal entity restructuring transactions related to our mall in Puerto Rico, The Outlets at Montehiedra during the nine months ended September 30, 2020.

Non-GAAP Financial Measures

We use NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to that of our peers. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The most directly comparable GAAP financial measure to NOI is net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. We calculate NOI by adjusting net income to add back depreciation and amortization expense, general and administrative expenses, casualty and real estate impairment losses, interest and debt expense, income tax expense and non-cash lease expense, and deduct management and development fee income from non-owned properties, gains on sale of real estate, interest income, non-cash rental income resulting from the straight-lining of rents and amortization of acquired below market leases net of above market leases. NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "Cash NOI." There have been no changes to the calculation of this metric. However, the Company has decided to refer to this metric as "NOI" instead of "Cash NOI" to further clarify that, consistent with the definition of this metric, the revenue and expenses reflected in this metric include some accrued amounts and are not limited to amounts for which the Company actually received or made cash payment during the applicable period.

We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excludes properties acquired or sold during the periods being compared. We also exclude for the following items in calculating same-property NOI: lease termination fees, bankruptcy settlement income, and income and expenses that we do not believe are representative of ongoing operating results, if any. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors. Same-property NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "same-property Cash NOI." There have been no changes to the calculation of this metric.

Throughout this section, we have provided certain information on a “same-property” basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, which total 71 and 69 properties for the three and nine months ended ~~March 31,~~September 30, 2021 and ~~2020.~~2020, respectively. Information provided on a same-property basis excludes properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired or sold during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

~~Same-property NOI decreased by $2.8 million, or 5.2%, for the three months ended March 31, 2021, compared to the three months ended March 31, 2020.~~

3033

Same-property NOI increased by $11.7 million, or 26.7%, for the three months ended September 30, 2021, compared to the three months ended September 30, 2020 and increased by $19.9 million, or 14.2%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.

The following table reconciles net income to NOI and same-property NOI for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020, respectively.


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020			(Amounts in thousands)	2021		2020		2021		2020
Net income		$	20,716	$	51,288
Net income (loss)							Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
Management and development fee income from non-owned properties	Management and development fee income from non-owned properties	(365)		(314)			Management and development fee income from non-owned properties	(280)		(404)		(911)		(1,003)
Other (income) expense		(246)		255
Other expense							Other expense	205		257		387		713
Depreciation and amortization	Depreciation and amortization	22,875		23,471			Depreciation and amortization	23,171		22,888		68,534		69,658
General and administrative expense	General and administrative expense	8,668		9,847			General and administrative expense	10,134		8,700		28,286		36,600
Gain on sale of real estate	Gain on sale of real estate	(11,722)		(39,775)			Gain on sale of real estate	(6,926)		—		(18,648)		(39,775)
Interest income	Interest income	(136)		(1,683)			Interest income	(77)		(282)		(303)		(2,387)
Interest and debt expense	Interest and debt expense	14,827		17,175			Interest and debt expense	14,638		18,136		44,193		53,884
Income tax expense		235		100
Gain on extinguishment of debt							Gain on extinguishment of debt	—		—		—		(34,908)
Income tax expense (benefit)							Income tax expense (benefit)	704		459		905		(13,103)
Real estate impairment loss							Real estate impairment loss	372		—		372		—
Non-cash revenue and expenses	Non-cash revenue and expenses	(1,273)		(2,695)			Non-cash revenue and expenses	(15,237)		2,095		(18,992)		3,338
NOI(1)	NOI(1)	53,579		57,669			NOI(1)	56,809		46,019		167,625		151,020
Adjustments:	Adjustments:						Adjustments:
Non-same property NOI(2)		(1,801)		(3,540)
Non-same property NOI and other(2)							Non-same property NOI and other(2)	(600)		(1,828)		(6,406)		(10,205)
Tenant bankruptcy settlement income and lease termination income	Tenant bankruptcy settlement income and lease termination income	(475)		(3)			Tenant bankruptcy settlement income and lease termination income	(533)		(251)		(1,294)		(758)
Same-property NOI	Same-property NOI	$	51,303	$	54,126		Same-property NOI	$	55,676	$	43,940	$	159,925	$	140,057
NOI related to properties being redeveloped	NOI related to properties being redeveloped	869		1,278			NOI related to properties being redeveloped	1,019		931		2,778		3,271
Same-property NOI including properties in redevelopment	Same-property NOI including properties in redevelopment	$	52,172	$	55,404		Same-property NOI including properties in redevelopment	$	56,695	$	44,871	$	162,703	$	143,328

(1) We have historically defined this metric as “Cash NOI.” There have been no changes to the calculation.

(2) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period. Amounts for 2021 include Sunrise Mall which generated a net loss for the three and nine months ended September 30, 2021, respectively.

3134

Funds From Operations

FFO was ~~$31.8~~$45.3 million for the three months ended ~~March 31,~~September 30, 2021 compared to ~~$34.8~~$16.9 million for the three ~~March 31,~~months ended September 30, 2020. FFO was $112.5 million for the nine months ended September 30, 2021 compared to $107.3 million for the nine months ended September 30, 2020.

We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ (“Nareit”) definition. Nareit defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business, and rental property depreciation and amortization expense. We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period to period both internally and among our peers because this non-GAAP measure excludes net gains on sales of depreciable real estate, real estate impairment losses, rental property depreciation and amortization expense which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. We believe the presentation of comparable period operating results generated from FFO provides useful information to investors because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT and impairments on depreciable real estate or land related to a REIT's main business. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions. FFO may not be comparable to similarly titled measures employed by others.

Three Months Ended March 31,
(Amounts in thousands) 2021 2020
Net income $ 20,716 $ 51,288
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership (875) (2,308)
Consolidated subsidiaries 79 —
Net income attributable to common shareholders 19,920 48,980
Adjustments:
Rental property depreciation and amortization 22,686 23,281
Gain on sale of real estate (11,722) (39,775)
Limited partnership interests in operating partnership(1)
875 2,308
FFO applicable to diluted common shareholders $ 31,759 $ 34,794


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership	(1,149)		225		(2,608)		(3,373)
Consolidated subsidiaries	(1,190)		—		(961)		—
Net income (loss) attributable to common shareholders	27,766		(5,605)		60,233		74,630
Adjustments:
Rental property depreciation and amortization	22,941		22,710		67,898		69,102
Gain on sale of real estate	(6,926)		—		(18,648)		(39,775)
Limited partnership interests in operating partnership(1)	1,149		(225)		2,608		3,373
Real estate impairment loss	372		—		372		—
FFO applicable to diluted common shareholders	$	45,302	$	16,880	$	112,463	$	107,330

(1) Represents earnings allocated to LTIP and OP unitholders for unissued common shares which have been excluded for purposes of calculating earnings per diluted share for the periods presented.

3235

Liquidity and Capital Resources

Due to the nature of our business, the cash generated from operations is primarily paid to our shareholders and unitholders of the Operating Partnership in the form of distributions. Our status as a REIT requires that we generally distribute at least 90% of our REIT’s ordinary taxable income each year. Our Board of Trustees declared a quarterly dividend of $0.15 per common share and OP unit for each of the first ~~quarter~~three quarters of 2021, or an annual rate of $0.60. Historically, we have paid regular cash dividends; however, the timing, declaration, amount and payment of distributions to shareholders and unitholders of the Operating Partnership fall within the discretion of our Board of Trustees. Our Board of Trustees’ decisions regarding the payment of dividends ~~depends~~depend on many factors, such as maintaining our REIT status, our financial condition, earnings, capital requirements, debt service obligations, limitations under our financing arrangements, industry practice, legal requirements, regulatory constraints, uncertainties related to the COVID-19 pandemic and other factors.

Property rental income is our primary source of cash flow and is dependent on a number of factors, including our occupancy level and rental rates, as well as our tenants’ ability to pay rent. Our properties have historically provided us with a relatively consistent stream of cash flow that enables us to pay operating expenses, debt service and recurring capital expenditures. The COVID-19 pandemic ~~has~~ had an adverse impact on our short-term cash flow by negatively impacting our tenants’ ability to pay rent. As of ~~April~~September 30, 2020, we had collected 79% of property rentals and tenant expense reimbursements billed in the quarter. Throughout the pandemic, we have worked with our tenants to evaluate the need for and offer rent relief, including in the form of rent concessions and rent deferrals. As of October 29, 2021, we have collected 92% of amounts billed during the ~~Company collected 95% of rental revenue for the first quarter of 2021, compared with 95%, 90% and 82% for the fourth,~~ third ~~and second~~ quarter of 2020, ~~respectively.~~and the collection rate has substantially improved each subsequent quarter. We ~~continue to monitor significant longer term adverse impacts on our cash flow~~have collected 97% of rents and ~~financial condition related to~~tenant expense reimbursements billed during the ~~COVID-19 pandemic.~~nine months ended September 30, 2021. Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales.

Our short-term cash requirements consist of normal recurring operating expenses, lease obligations, regular debt service requirements, recurring expenditures (general & administrative expenses), expenditures related to leasing activity and distributions to shareholders and unitholders of the Operating Partnership. Our long-term capital requirements consist primarily of maturities under our long-term debt agreements, development and redevelopment costs and potential acquisitions.

At ~~March 31,~~September 30, 2021, we had cash and cash equivalents, including restricted cash, of ~~$377~~$323 million and no amounts drawn on our $600 million revolving credit agreement, which matures on January 29, 2024.

TheThe Company continues to monitor the COVID-19 pandemic and its impact on our overall liquidity position and outlook. The ultimate impact that COVID-19 may have on our operational and financial performance over the next 12 months is currently uncertain and will depend on many factors, including without limitation, its magnitude and duration and the adverse financial impact on our tenants from potential reduced business operations and social distancing requirements, which may impact tenants’ ability to generate sales at sufficient levels to cover operating costs such as rent. Our ability to utilize amounts available under our revolving credit facility in the future will depend on our continued compliance with the applicable financial covenants and other terms of our revolving credit agreement, which may be impacted by failure of tenants to pay rent. We have no debt scheduled to mature until the second quarter of 2022. We currently believe that cash on hand, available revolving credit and general ability to access the capital markets, should be sufficient to finance our operations and fund our debt service requirements and capital expenditures over the next 12 months.

On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA”) was enacted into law as the third set of legislation aimed at assisting individuals and businesses during the COVID-19 pandemic. Among other things, the ARPA extends several of the relief measures enacted as a part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and the Consolidated Appropriations Act, 2021, enacted on March 27, 2020 and December 27, 2020, respectively. Each set of legislation contains substantial tax-and-spending packages intended to provide additional economic stimulus to address the impact of the COVID-19 pandemic. The Company has not applied for or received any loans authorized under this legislation; however, the Company may avail itself of certain tax provisions within the legislation that may be used to reduce taxable income or other tax obligations.

Summary of Cash Flows

Cash and cash equivalents, including restricted cash, was ~~$376.9~~$322.8 million at ~~March 31,~~September 30, 2021, compared to $419.3 million at December 31, 2020 and ~~$642.6~~$671.0 million at ~~March 31,~~September 30, 2020, a decrease of ~~$42.3~~$96.5 million and ~~$265.7~~$348.2 million, respectively. Our cash flow activities are summarized as follows:


		Three Months Ended March 31,							Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020		$ Change		(Amounts in thousands)	2021		2020		$ Change
Net cash provided by operating activities	Net cash provided by operating activities	$	18,825	$	20,796	$	(1,971)	Net cash provided by operating activities	$	93,137	$	74,829	$	18,308
Net cash provided by (used in) investing activities		15,398		(44,268)		59,666
Net cash (used in) provided by financing activities		(76,556)		180,979		(257,535)
Net cash used in investing activities								Net cash used in investing activities	(66,512)		(55,996)		(10,516)
Net cash (used in)/provided by financing activities								Net cash (used in)/provided by financing activities	(123,086)		167,027		(290,113)

Operating Activities

Net cash flow provided by operating activities primarily consists of cash inflows from rental revenue and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.

Net cash provided by operating activities of ~~$18.8~~$93.1 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 ~~decreased~~increased by ~~$2.0~~$18.3 million from ~~$20.8~~$74.8 million ~~as of March 31,~~for the nine months ended September 30, 2020, ~~due to the timing of cash receipts and the deferral of payments by tenants impacted~~driven by the ~~COVID-19 pandemic, including the impact~~improved collection rates on property rentals and tenant expense reimbursements in 2021 and collection of ~~recovery income.~~previously billed and deferred amounts from 2020.

Investing Activities

Net cash flow ~~provided by or~~ used in investing activities is impacted by the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.

Net cash ~~provided by~~used in investing activities of ~~$15.4~~$66.5 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021, increased by ~~$59.7~~$10.5 million compared to net cash used in investing activities of ~~$44.3~~$56.0 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 primarily due to (i) ~~$92.1 million decrease in cash used in the acquisition of real estate, partially offset by (ii) $31.2 million decrease in cash provided by the sale of properties and (iii) $1.3~~$28.2 million increase in cash used for real estate development and capital improvements, ~~at existing properties.~~and (ii) $19.9 million decrease in cash provided by the sale of properties, offset by (iii) $37.6 million decrease in cash used for the acquisition of real estate.

Financing Activities

Net cash flow provided by or used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other payments associated with our outstanding indebtedness.

Net cash used in financing activities of ~~$76.6~~$123.1 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021, ~~decreased~~increased by ~~$257.5~~$290.1 million from cash provided by financing activities of ~~$181.0~~$167.0 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 primarily due to (i) $250.0 million of cash borrowings provided under the Company’s revolving credit agreement in March 2020, of which, all amounts were repaid in November 2020, (ii) ~~$46.2~~$90.3 million of proceeds from borrowings under mortgage loans in the second quarter of 2020, (iii) $82.7 million increase in ~~cash~~ distributions to ~~partners,~~shareholders and ~~(iii) $0.7~~unitholders of the Operating Partnership, offset by (iv) $73.2 million ~~increase~~decrease in debt repayments, ~~partially offset by (iv) $38.7~~and (v) $54.1 million of cash paid to repurchase common shares in ~~2020, (v) $0.5 million of cash contributed by noncontrolling interests in 2021, and (vi) $0.1 million decrease in tax withholdings on vested restricted stock.~~2020.

Financing Activities and Contractual Obligations

Below is a summary of our outstanding debt and weighted average interest rates as of ~~March 31,~~September 30, 2021.


(Amounts in thousands)	(Amounts in thousands)	Principal balance at March 31, 2021		Weighted Average Interest Rate at March 31, 2021	(Amounts in thousands)	Principal balance at September 30, 2021		Weighted Average Interest Rate at September 30, 2021
Mortgages payable:	Mortgages payable:				Mortgages payable:
Fixed rate debt	Fixed rate debt	$	1,425,439	4.16%	Fixed rate debt	$	1,419,988	4.15%
Variable rate debt(1)	Variable rate debt(1)	168,981		1.86%	Variable rate debt(1)	162,337		1.83%
Total mortgages payable	Total mortgages payable	1,594,420		3.92%	Total mortgages payable	1,582,325		3.92%
Unamortized debt issuance costs	Unamortized debt issuance costs	(9,442)			Unamortized debt issuance costs	(8,623)
Total mortgages payable, net of unamortized debt issuance costs	Total mortgages payable, net of unamortized debt issuance costs	$	1,584,978		Total mortgages payable, net of unamortized debt issuance costs	$	1,573,702

(1) As of ~~March 31,~~September 30, 2021, ~~$80.0~~$79 million of our variable rate debt bears interest at one month LIBOR plus 190 bps and ~~$89~~$83 million of our variable rate debt bears interest at one month LIBOR plus 160 bps.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of ~~March 31,~~September 30, 2021. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of ~~March 31,~~September 30, 2021, we were in compliance with all debt covenants.

On January 15, 2015, we entered into a $500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions. On March 7, 2017, we amended and extended the Agreement. The amendment increased the credit facility size by $100 million to $600 million and extended the maturity date to March 7, 2021 with two six-month extension options. On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024 with two six-month extension options. Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to ~~increase if our leverage ratio increases above predefined thresholds.~~change. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x. No amounts had been drawn under the Agreement as of ~~March 31,~~September 30, 2021.

On June 3, 2020, we amended the Agreement to, among other things, modify certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized. Under the Agreement, our financial covenants are generally measured using operating results of a trailing four-quarter period from the

prior trailing four-quarter period, including the maximum leverage ratio, which measures our asset value based on net operating income, as defined in the Agreement. Net operating income is defined, in part, based on rents and other revenues received in the ordinary course of business from our properties. We currently believe that with our cash on hand, we will have sufficient resources to finance our operations and fund our debt service requirements and capital expenditures for at least the next twelve months.

~~In the event that~~When LIBOR is discontinued, which is currently anticipated to be during 2023, the interest rates for our debt following such event will be based on either alternate base rates or agreed upon replacement rates. Such an event would not affect our ability to borrow or maintain already outstanding borrowings, although it could result in higher interest rates.

On May 5, 2021 we established an at-the-market equity program (the “ATM Program”), pursuant to which we may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million. Sales under the ATM Program may be made from time to time, as needed, by means of ordinary brokers’ transactions or other transactions that are deemed to be “at the market” offerings, in privately negotiated transactions, which may include block trades, or as otherwise agreed with the sales agents.

As of September 30, 2021, we have not issued any common shares under the ATM Program. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs. The Company has no obligation to sell any shares under the ATM Program.

Capital Expenditures

The following summarizes capital expenditures presented on a cash basis for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020:


		Three Months Ended March 31,					Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2021		2020		(Amounts in thousands)	2021		2020
Capital expenditures:	Capital expenditures:					Capital expenditures:
Development and redevelopment costs	Development and redevelopment costs	$	5,323	$	4,188	Development and redevelopment costs	$	37,441	$	8,984
Capital improvements	Capital improvements	2,205		1,469		Capital improvements	6,781		7,677
Tenant improvements and allowances	Tenant improvements and allowances	272		881		Tenant improvements and allowances	2,215		1,605
Total capital expenditures	Total capital expenditures	$	7,800	$	6,538	Total capital expenditures	$	46,437	$	18,266

As of ~~March 31,~~September 30, 2021, we had approximately ~~$121.1~~$152.4 million of active redevelopment, development and anchor repositioning projects at various stages of completion, ~~a decrease~~an increase of ~~$11.3~~$20.0 million from $132.4 million of projects as of December 31, 2020. We have advanced these projects and incurred ~~$2.5~~$25.1 million of additional spend since December 31, 2020. We anticipate spending an additional ~~$81.7~~$91.1 million to complete these projects, which we expect to occur over the next six to eighteen months depending on any restrictions on construction activity. We expect to fund these projects using cash on hand, proceeds from dispositions, or from secured debt.

Commitments and Contingencies

Insurance

The Company maintains numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber, workers’ compensation and automobile-related liabilities. However, all such policies are subject to terms, conditions, exclusions, deductibles and sub-limits, amount other limiting factors. For example, the Company’s terrorism insurance excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization Act.

New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.

Environmental Matters

Pandemic-Related Contingencies

~~Many of our tenants faced adverse financial consequences from reduced business operations and social distancing requirements resulting from~~On March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. ~~As of~~Since March 31, 2021, substantially all of our portfolio's gross leasable area was open for business and the Company collected approximately 93% of rental revenue for the first quarter of 2021. Since the pandemic was declared in 2020, the Company has granted rent concessions and other lease-related relief, such as rent deferrals, to ~~certain~~tenants impacted ~~tenants. We evaluate rent relief requests on a case-by-case basis and not all requests are granted.~~by the pandemic. Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income. ~~As of April 29, 2021, we have executed or approved an approximate total of 120 rent deferrals~~

Other than adjusting revenue for ~~an aggregate deferral amount of $9.8 million.~~

~~The following table sets forth information as of March 31, 2021 regarding the collection status of quarterly billings from the first quarter of 2021:~~

(in thousands) Three Months Ended March 31, 2021
Tenant Type Tenant Billings % Collected
National $ 66,485 96 %
Regional 8,861 90 %
Mom and pop 6,595 74 %
Local franchise 5,374 82 %
Temporary 1,661 75 %
Total portfolio $ 88,976 93 %

~~The Company is closely monitoring changes in the collectibility assessment of its~~ tenant receivables ~~as a result of certain tenants suffering adverse financial consequences due to~~that may not be collectible, the ~~COVID-19 pandemic. The~~ Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this ~~time, with the exception of abatements already discussed with tenants or deferred rents that may not be collected.~~time.

Bankruptcies

Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration. In the event a tenant with a significant number of leases or square footage in our shopping centers files for bankruptcy and rejects its leases with us, we could experience a reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants in arrears or operating retail formats that are experiencing significant changes in competition, business practice, or store closings in other locations. Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection ~~during~~since the ~~year ended December 31, 2020.~~pandemic was declared. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

Inflation and Economic Condition Considerations

Most of our leases contain provisions designed to partially mitigate the impact of inflation. ~~Although~~Prior to 2021, inflation ~~has~~had been low ~~in recent periods~~ and ~~has~~ had a minimal impact on the operating performance of our shopping centers, ~~it is very possible that~~however, inflation ~~will increase~~has increased in ~~future years.~~2021 and may continue to be elevated in the future. Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation, although some larger tenants have capped the amount of these operating expenses they are responsible for under the lease. A small number of our leases also include percentage rent clauses enabling us to receive additional rent based on tenant sales above a predetermined level, which sales generally increase as prices rise and are typically related to increases in the Consumer Price Index or similar inflation indices.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements as of ~~March 31,~~September 30, 2021 or December 31, 2020.

3739

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. The following table discusses our exposure to hypothetical changes in market rates of interest on interest expense for our variable rate debt and fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. This analysis does not take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure. Our exposure to a change in interest rates is summarized in the table below.


		2021							2020					2021							2020
(Amounts in thousands)	(Amounts in thousands)	March 31, Balance			Weighted Average Interest Rate	Effect of 1% Change in Base Rates			December 31, Balance			Weighted Average Interest Rate	(Amounts in thousands)	September 30, Balance			Weighted Average Interest Rate	Effect of 1% Change in Base Rates			December 31, Balance			Weighted Average Interest Rate

Variable rate mortgages	Variable rate mortgages	168,981			1.86%	1,690			$	169,371		1.90%	Variable rate mortgages	162,337			1.83%	1,623			$	169,371		1.90%
Fixed rate mortgages	Fixed rate mortgages	1,425,439			4.16%	—		(2)	1,428,026			4.16%	Fixed rate mortgages	1,419,988			4.15%	—		(2)	1,428,026			4.16%
		$	1,594,420	(1)		$	1,690		$	1,597,397	(1)			$	1,582,325	(1)		$	1,623		$	1,597,397	(1)

(1) Excludes unamortized debt issuance costs of ~~$9.4~~$8.6 million and $9.9 million as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively.

(2) If the weighted average interest rate of our fixed rate debt increased by 1% (i.e. due to refinancing at higher rates), annualized interest expense would have increased by approximately ~~$14.3~~$14.2 million based on outstanding balances as of ~~March 31,~~September 30, 2021.

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of ~~March 31,~~September 30, 2021, we did not have any material hedging instruments in place.

Fair Value of Debt

The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of ~~March 31,~~September 30, 2021, the estimated fair value of our consolidated debt was $1.6 billion.

Other Market Risks

As of ~~March 31,~~September 30, 2021, we had no material exposure to any other market risks (including foreign currency exchange risk or commodity price risk).

In making this determination and for purposes of the SEC’s market risk disclosure requirements, we have estimated the fair value of our financial instruments at ~~March 31,~~September 30, 2021 based on pertinent information available to management as of that date. Although management is not aware of any factors that would significantly affect the estimated amounts as of ~~March 31,~~September 30, 2021, future estimates of fair value and the amounts which may be paid or realized in the future may differ significantly from amounts presented.

3840

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures (Urban Edge Properties)

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.

There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the three months ended ~~March 31,~~September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures (Urban Edge Properties LP)

The Operating Partnership’s management maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer of our general partner, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

The Operating Partnership’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of our general partner, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of our general partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are party to various legal actions that arise in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

Except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 17, 2021.

3941

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Urban Edge Properties

(a) Recent Sales of Unregistered Securities: Not applicable.

(b) Use of Proceeds from Sales of Registered Securities: Not applicable.

Period (a)
Total Number of Shares Purchased
(b)
Average Price Paid per Share(2)
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Program(1)
January 1, 2021 - January 31, 2021 421 $ 12.61 — $ 145,900,000
February 1, 2021 - February 28, 2021 11,890 16.73 — $ 145,900,000
March 1, 2021 - March 31, 2021 — — — $ 145,900,000
12,311 $ 16.59 —


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share(2)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Program(1)
July 1, 2021 - July 31, 2021	—	$	—	—	$	145,900,000
August 1, 2021 - August 31, 2021	—	—		—	$	145,900,000
September 1, 2021 - September 30, 2021	—	—		—	$	145,900,000
	—	$	—	—

(1) In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s shares. Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion.

(2) Represents common shares surrendered by employees to us to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common shares.

Urban Edge Properties LP

(a) Recent Sales of Unregistered Securities: Not applicable.

(b) Use of Proceeds from Sales of Registered Securities: Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

4042

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits listed below are included in, or incorporated by reference into, this Quarterly Report on Form 10-Q.

INDEX TO EXHIBITS

The following exhibits are included as part of this Quarterly Report on Form 10-Q:


Exhibit Number						Exhibit Description
31.1*						Certification by the Chief Executive Officer for Urban Edge Properties pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification by the Chief Financial Officer for Urban Edge Properties pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*						Certification by the Chief Executive Officer for Urban Edge Properties LP pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4*						Certification by the Chief Financial Officer for Urban Edge Properties LP pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification by the Chief Executive Officer and Chief Financial Officer for Urban Edge Properties pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification by the Chief Executive Officer and Chief Financial Officer for Urban Edge Properties LP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.SCH*						Inline XBRL Taxonomy Extension Schema
101.CAL*						Inline XBRL Extension Calculation Linkbase
101.LAB*						Inline XBRL Extension Labels Linkbase
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase
104*						Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)

* Filed herewith

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

4143

PART IV

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


			URBAN EDGE PROPERTIES
			(Registrant)

			/s/ Mark Langer
			Mark Langer, Chief Financial Officer

			Date: ~~May~~November 3, 2021

			URBAN EDGE PROPERTIES LP
			By: Urban Edge Properties, General Partner

			/s/ Mark Langer
			Mark Langer, Chief Financial Officer

			Date: ~~May~~November 3, 2021

4244


(in thousands)	Three Months Ended March 31, 2021
Tenant Type	Tenant Billings		% Collected
National	$	66,485	96	%
Regional	8,861		90	%
Mom and pop	6,595		74	%
Local franchise	5,374		82	%
Temporary	1,661		75	%
Total portfolio	$	88,976	93	%