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 September 30, ~~2022~~2023


☐						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 No.)

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	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 provided 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 October ~~28, 2022,~~27, 2023, Urban Edge Properties had ~~117,438,141~~ 117,642,482 common shares outstanding.

URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED SEPTEMBER 30, ~~2022~~2023

TABLE OF CONTENTS

PART I

Item 1.

Financial Statements

Consolidated Financial Statements of Urban Edge Properties:

Consolidated Balance Sheets as of September 30, ~~2022~~2023 (unaudited) and December 31, ~~2021 (unaudited)~~2022

Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Consolidated Financial Statements of Urban Edge Properties LP:

Consolidated Balance Sheets as of September 30, ~~2022~~2023 (unaudited) and December 31, ~~2021 (unaudited)~~2022

Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)

Urban Edge Properties and Urban Edge Properties LP

Notes to Consolidated Financial Statements (unaudited)

Item 2.

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

2829

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, and Issuer Purchases of Equity Securities

4042

Item 3.

Defaults Upon Senior Securities

4042

Item 4.

Mine Safety Disclosures

4042

Item 5.

Other Information

4142

Item 6.

Exhibits

4143

Signatures

4244

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, ~~2022~~2023 of Urban Edge Properties and Urban Edge Properties LP. Unless stated otherwise or the context otherwise requires, references to “UE”, “Urban Edge” and ~~“Urban Edge”~~“the REIT” 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 September 30, ~~2022,~~2023, UE owned an approximate ~~95.9% ownership~~95.8% interest in UELP. The remaining approximate ~~4.1%~~4.2% 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.

Management operates Urban Edge Properties and the Operating Partnership as one business. The management of Urban Edge Properties consists of the same individuals as the management of the Operating Partnership. These individuals are officers of Urban Edge Properties and employees of the Operating Partnership.

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,~~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)


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022
ASSETS	ASSETS					ASSETS
Real estate, at cost:	Real estate, at cost:					Real estate, at cost:
Land	Land	$	544,358	$	543,827	Land	$	541,961	$	535,770
Buildings and improvements	Buildings and improvements	2,464,901		2,441,797		Buildings and improvements	2,517,038		2,468,385
Construction in progress	Construction in progress	271,898		212,296		Construction in progress	280,341		314,190
Furniture, fixtures and equipment	Furniture, fixtures and equipment	8,303		7,530		Furniture, fixtures and equipment	9,472		8,539
Total	Total	3,289,460		3,205,450		Total	3,348,812		3,326,884
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(790,414)		(753,947)		Accumulated depreciation and amortization	(842,328)		(791,485)
Real estate, net	Real estate, net	2,499,046		2,451,503		Real estate, net	2,506,484		2,535,399
Operating lease right-of-use assets	Operating lease right-of-use assets	64,078		69,361		Operating lease right-of-use assets	57,377		64,161
Cash and cash equivalents	Cash and cash equivalents	108,437		164,478		Cash and cash equivalents	50,793		85,518
Restricted cash	Restricted cash	43,954		55,358		Restricted cash	27,131		43,256
Tenant and other receivables	Tenant and other receivables	16,398		15,812		Tenant and other receivables	15,823		17,523
Receivable arising from the straight-lining of rents	Receivable arising from the straight-lining of rents	64,214		62,692		Receivable arising from the straight-lining of rents	67,499		64,713
Identified intangible assets, net of accumulated amortization of $39,307 and $37,361, respectively		65,974		71,107
Deferred leasing costs, net of accumulated amortization of $19,621 and $17,641, respectively		21,742		20,694
Identified intangible assets, net of accumulated amortization of $46,448 and $40,983, respectively						Identified intangible assets, net of accumulated amortization of $46,448 and $40,983, respectively	54,823		62,856
Deferred leasing costs, net of accumulated amortization of $21,928 and $20,107, respectively						Deferred leasing costs, net of accumulated amortization of $21,928 and $20,107, respectively	27,945		26,799
Prepaid expenses and other assets	Prepaid expenses and other assets	77,649		74,111		Prepaid expenses and other assets	73,969		77,207
Total assets	Total assets	$	2,961,492	$	2,985,116	Total assets	$	2,881,844	$	2,977,432

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net	Mortgages payable, net	$	1,695,776	$	1,687,190	Mortgages payable, net	$	1,643,333	$	1,691,690
Operating lease liabilities	Operating lease liabilities	59,581		64,578		Operating lease liabilities	54,197		59,789
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	78,710		84,829		Accounts payable, accrued expenses and other liabilities	90,017		102,519
Identified intangible liabilities, net of accumulated amortization of $39,040 and $35,029, respectively		95,371		100,625
Identified intangible liabilities, net of accumulated amortization of $45,929 and $40,816, respectively						Identified intangible liabilities, net of accumulated amortization of $45,929 and $40,816, respectively	87,000		93,328
Total liabilities	Total liabilities	1,929,438		1,937,222		Total liabilities	1,874,547		1,947,326
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,440,748 and 117,147,986 shares issued and outstanding, respectively		1,173		1,170
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,639,177 and 117,450,951 shares issued and outstanding, respectively						Common shares: $0.01 par value; 500,000,000 shares authorized and 117,639,177 and 117,450,951 shares issued and outstanding, respectively	1,175		1,173
Additional paid-in capital	Additional paid-in capital	1,006,348		1,001,253		Additional paid-in capital	1,013,306		1,011,293
Accumulated other comprehensive income	Accumulated other comprehensive income	554		—		Accumulated other comprehensive income	1,334		629
Accumulated deficit	Accumulated deficit	(30,982)		(7,091)		Accumulated deficit	(65,295)		(36,104)
Noncontrolling interests:	Noncontrolling interests:					Noncontrolling interests:
Operating partnership	Operating partnership	41,387		39,616		Operating partnership	42,166		39,209
Consolidated subsidiaries	Consolidated subsidiaries	13,574		12,946		Consolidated subsidiaries	14,611		13,906
Total equity	Total equity	1,032,054		1,047,894		Total equity	1,007,297		1,030,106
Total liabilities and equity	Total liabilities and equity	$	2,961,492	$	2,985,116	Total liabilities and equity	$	2,881,844	$	2,977,432

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
REVENUE	REVENUE									REVENUE
Rental revenue	Rental revenue	$	98,175	$	105,985	$	295,045	$	294,257	Rental revenue	$	101,732	$	98,175	$	299,859	$	295,045
Other income	Other income	115		854		1,300		2,249		Other income	102		115		481		1,300
Total revenue	Total revenue	98,290		106,839		296,345		296,506		Total revenue	101,834		98,290		300,340		296,345
EXPENSES	EXPENSES									EXPENSES
Depreciation and amortization	Depreciation and amortization	24,343		23,171		73,561		68,534		Depreciation and amortization	26,922		24,343		77,519		73,561
Real estate taxes	Real estate taxes	16,231		15,862		47,662		47,826		Real estate taxes	16,182		16,231		47,980		47,662
Property operating	Property operating	17,672		15,692		56,473		51,874		Property operating	16,618		17,672		49,752		56,473
General and administrative	General and administrative	9,852		10,134		31,607		28,286		General and administrative	8,938		9,852		27,903		31,607
Casualty and impairment loss		—		372		—		372
Real estate impairment loss										Real estate impairment loss	—		—		34,055		—
Lease expense	Lease expense	3,109		3,164		9,327		9,665		Lease expense	3,159		3,109		9,470		9,327
Total expenses	Total expenses	71,207		68,395		218,630		206,557		Total expenses	71,819		71,207		246,679		218,630
Gain on sale of real estate	Gain on sale of real estate	—		6,926		353		18,648		Gain on sale of real estate	—		—		356		353
Interest income	Interest income	294		77		713		303		Interest income	565		294		1,640		713
Interest and debt expense	Interest and debt expense	(15,266)		(14,638)		(43,511)		(44,193)		Interest and debt expense	(19,006)		(15,266)		(52,430)		(43,511)

Gain on extinguishment of debt, net										Gain on extinguishment of debt, net	43,029		—		42,540		—
Income before income taxes	Income before income taxes	12,111		30,809		35,270		64,707		Income before income taxes	54,603		12,111		45,767		35,270
Income tax expense	Income tax expense	(646)		(704)		(2,262)		(905)		Income tax expense	(17,063)		(646)		(17,810)		(2,262)
Net income	Net income	11,465		30,105		33,008		63,802		Net income	37,540		11,465		27,957		33,008
Less net (income) loss attributable to NCI in:	Less net (income) loss attributable to NCI in:									Less net (income) loss attributable to NCI in:
Operating partnership	Operating partnership	(455)		(1,149)		(1,348)		(2,608)		Operating partnership	(1,555)		(455)		(1,211)		(1,348)
Consolidated subsidiaries	Consolidated subsidiaries	373		(1,190)		835		(961)		Consolidated subsidiaries	133		373		516		835
Net income attributable to common shareholders	Net income attributable to common shareholders	$	11,383	$	27,766	$	32,495	$	60,233	Net income attributable to common shareholders	$	36,118	$	11,383	$	27,262	$	32,495

Earnings per common share - Basic:	Earnings per common share - Basic:	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per common share - Basic:	$	0.31	$	0.10	$	0.23	$	0.28
Earnings per common share - Diluted:	Earnings per common share - Diluted:	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per common share - Diluted:	$	0.31	$	0.10	$	0.23	$	0.28
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	117,382		117,087		117,359		117,009		Weighted average shares outstanding - Basic	117,543		117,382		117,492		117,359
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	121,683		117,137		121,472		122,212		Weighted average shares outstanding - Diluted	122,205		121,683		117,627		121,472

Net income	Net income	$	11,465	$	30,105	$	33,008	$	63,802	Net income	$	37,540	$	11,465	$	27,957	$	33,008
Effective portion of change in fair value of derivatives	Effective portion of change in fair value of derivatives	632		—		578		—		Effective portion of change in fair value of derivatives	1,058		632		737		578
Comprehensive income	Comprehensive income	12,097		30,105		33,586		63,802		Comprehensive income	38,598		12,097		28,694		33,586
Less comprehensive income attributable to NCI in:	Less comprehensive income attributable to NCI in:									Less comprehensive income attributable to NCI in:
Operating partnership	Operating partnership	(26)		—		(24)		—		Operating partnership	(45)		(26)		(32)		(24)
Less net (income) loss attributable to NCI in:	Less net (income) loss attributable to NCI in:									Less net (income) loss attributable to NCI in:
Operating partnership	Operating partnership	(455)		(1,149)		(1,348)		(2,608)		Operating partnership	(1,555)		(455)		(1,211)		(1,348)
Consolidated subsidiaries	Consolidated subsidiaries	373		(1,190)		835		(961)		Consolidated subsidiaries	133		373		516		835
Comprehensive income attributable to common shareholders	Comprehensive income attributable to common shareholders	$	11,989	$	27,766	$	33,049	$	60,233	Comprehensive income attributable to common shareholders	$	37,131	$	11,989	$	27,967	$	33,049

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, 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 attributable to NCI — — — — 1,149 1,190 2,339
Limited partnership interests:
Units redeemed for common shares — — — — (6,302) — (6,302)
Reallocation of NCI — — 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


	Common Shares									Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated (Deficit) Earnings		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2022	117,442,769	$	1,173	$	1,002,679	$	(52)	$	(23,568)	$	42,771	$	13,947	$	1,036,950
Net income attributable to common shareholders	—	—		—		—		11,383		—		—		11,383
Net income (loss) attributable to NCI	—	—		—		—		—		455		(373)		82
Other comprehensive income	—	—		—		606		—		26		—		632
Limited partnership interests:


Reallocation of NCI	—	—		3,325		—		—		(3,325)		—		—
Common shares forfeited	(1,064)	—		21		—		(21)		—		—		—

Dividends to common shareholders ($0.16 per share)	—	—		—		—		(18,776)		—		—		(18,776)
Distributions to redeemable NCI ($0.16 per unit)	—	—		—		—		—		(782)		—		(782)

Share-based compensation expense	—	—		338		—		—		2,242		—		2,580
Share-based awards retained for taxes	(957)	—		(15)		—		—		—		—		(15)
Balance, September 30, 2022	117,440,748	$	1,173	$	1,006,348	$	554	$	(30,982)	$	41,387	$	13,574	$	1,032,054


		Common Shares									Noncontrolling Interests (“NCI”)							Common Shares									Noncontrolling Interests (“NCI”)
		Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity			Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2022		117,442,769	$	1,173	$	1,002,679	$	(52)	$	(23,568)	$	42,771	$	13,947	$	1,036,950
Balance, June 30, 2023																	Balance, June 30, 2023	117,639,602	$	1,175	$	1,012,825	$	321	$	(82,588)	$	40,021	$	14,744	$	986,498
Net income attributable to common shareholders	Net income attributable to common shareholders	—	—		—		—		11,383		—		—		11,383		Net income attributable to common shareholders	—	—		—		—		36,118		—		—		36,118
Net income (loss) attributable to NCI	Net income (loss) attributable to NCI	—	—		—		—		—		455		(373)		82		Net income (loss) attributable to NCI	—	—		—		—		—		1,555		(133)		1,422
Other comprehensive income	Other comprehensive income	—	—		—		606		—		26		—		632		Other comprehensive income	—	—		—		1,013		—		45		—		1,058
Limited partnership interests:	Limited partnership interests:																Limited partnership interests:

Reallocation of NCI	Reallocation of NCI	—	—		3,325		—		—		(3,325)		—		—		Reallocation of NCI	—	—		265		—		—		(265)		—		—
Common shares issued		(1,064)	—		21		—		(21)		—		—		—
Common shares forfeited																	Common shares forfeited	(425)	—		22		—		(22)		—		—		—
Dividends to common shareholders ($0.16 per share)	Dividends to common shareholders ($0.16 per share)	—	—		—		—		(18,776)		—		—		(18,776)		Dividends to common shareholders ($0.16 per share)	—	—		—		—		(18,803)		—		—		(18,803)
Distributions to redeemable NCI ($0.16 per unit)	Distributions to redeemable NCI ($0.16 per unit)	—	—		—		—		—		(782)		—		(782)		Distributions to redeemable NCI ($0.16 per unit)	—	—		—		—		—		(810)		—		(810)

Share-based compensation expense	Share-based compensation expense	—	—		338		—		—		2,242		—		2,580		Share-based compensation expense	—	—		194		—		—		1,620		—		1,814
Share-based awards retained for taxes		(957)	—		(15)		—		—		—		—		(15)
Balance, September 30, 2022		117,440,748	$	1,173	$	1,006,348	$	554	$	(30,982)	$	41,387	$	13,574	$	1,032,054

Balance, September 30, 2023																	Balance, September 30, 2023	117,639,177	$	1,175	$	1,013,306	$	1,334	$	(65,295)	$	42,166	$	14,611	$	1,007,297

See notes to consolidated financial statements (unaudited).


	Common Shares									Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, December 31, 2021	117,147,986	$	1,170	$	1,001,253	$	—	$	(7,091)	$	39,616	$	12,946	$	1,047,894
Net income attributable to common shareholders	—	—		—		—		32,495		—		—		32,495
Net income (loss) attributable to NCI	—	—		—		—		—		1,348		(835)		513
Other comprehensive income						554				24				578
Limited partnership interests:
Units redeemed for common shares	250,000	3		2,121		—		—		2,124		—		4,248
Reallocation of NCI	—	—		1,820		—		—		(6,068)		—		(4,248)
Common shares issued	49,990	—		286		—		(63)		—		—		223
Dividends to common shareholders ($0.48 per share)	—	—		—		—		(56,323)		—		—		(56,323)
Distributions to redeemable NCI ($0.48 per unit)	—	—		—		—		—		(2,337)		—		(2,337)
Contributions from NCI	—	—		—		—		—		—		1,463		1,463
Share-based compensation expense	—	—		997		—		—		6,680		—		7,677
Share-based awards retained for taxes	(7,228)	—		(129)		—		—		—		—		(129)
Balance, September 30, 2022	117,440,748	$	1,173	$	1,006,348	$	554	$	(30,982)	$	41,387	$	13,574	$	1,032,054

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 NCI — — — — 2,608 961 3,569
Limited partnership interests:
Units redeemed for common shares 100,000 — 840 — (6,302) — (5,462)
Reallocation of NCI — — 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 NCI — — — — — 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


		Common Shares									Noncontrolling Interests (“NCI”)							Common Shares									Noncontrolling Interests (“NCI”)
		Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity			Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, December 31, 2021		117,147,986	$	1,170	$	1,001,253	$	—	$	(7,091)	$	39,616	$	12,946	$	1,047,894
Balance, December 31, 2022																	Balance, December 31, 2022	117,450,951	$	1,173	$	1,011,293	$	629	$	(36,104)	$	39,209	$	13,906	$	1,030,106
Net income attributable to common shareholders	Net income attributable to common shareholders	—	—		—		—		32,495		—		—		32,495		Net income attributable to common shareholders	—	—		—		—		27,262		—		—		27,262
Net income (loss) attributable to NCI	Net income (loss) attributable to NCI	—	—		—		—		—		1,348		(835)		513		Net income (loss) attributable to NCI	—	—		—		—		—		1,211		(516)		695
Other comprehensive income	Other comprehensive income	—	—		—		554		—		24		—		578		Other comprehensive income	—	—		—		705		—		32		—		737
Limited partnership interests:	Limited partnership interests:																Limited partnership interests:
Units redeemed for common shares	Units redeemed for common shares	250,000	3		2,121		—		—		2,124		—		4,248		Units redeemed for common shares	70,000	1		572		—		—		572		—		1,145
Reallocation of NCI	Reallocation of NCI	—	—		1,820		—		—		(6,068)		—		(4,248)		Reallocation of NCI	—	—		610		—		—		(1,755)		—		(1,145)
Common shares issued	Common shares issued	49,990	—		286		—		(63)		—		—		223		Common shares issued	125,863	1		260		—		(66)		—		—		195
Dividends to common shareholders ($0.48 per share)	Dividends to common shareholders ($0.48 per share)	—	—		—		—		(56,323)		—		—		(56,323)		Dividends to common shareholders ($0.48 per share)	—	—		—		—		(56,387)		—		—		(56,387)
Distributions to redeemable NCI ($0.48 per unit)	Distributions to redeemable NCI ($0.48 per unit)	—	—		—		—		—		(2,337)		—		(2,337)		Distributions to redeemable NCI ($0.48 per unit)	—	—		—		—		—		(2,436)		—		(2,436)
Contributions from NCI	Contributions from NCI	—	—		—		—		—		—		1,463		1,463		Contributions from NCI	—	—		—		—		—		—		1,221		1,221
Share-based compensation expense	Share-based compensation expense	—	—		997		—		—		6,680		—		7,677		Share-based compensation expense	—	—		690		—		—		5,333		—		6,023
Share-based awards retained for taxes	Share-based awards retained for taxes	(7,228)	—		(129)		—		—		—		—		(129)		Share-based awards retained for taxes	(7,637)	—		(119)		—		—		—		—		(119)
Balance, September 30, 2022		117,440,748	$	1,173	$	1,006,348	$	554	$	(30,982)	$	41,387	$	13,574	$	1,032,054
Balance, September 30, 2023																	Balance, September 30, 2023	117,639,177	$	1,175	$	1,013,306	$	1,334	$	(65,295)	$	42,166	$	14,611	$	1,007,297

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	33,008	$	63,802	Net income	$	27,957	$	33,008
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	75,176		69,872		Depreciation and amortization	79,985		75,176
Gain on sale of real estate	Gain on sale of real estate	(353)		(18,648)		Gain on sale of real estate	(356)		(353)
Casualty and impairment loss		—		372

Real estate impairment loss						Real estate impairment loss	34,055		—
Gain on extinguishment of debt, net						Gain on extinguishment of debt, net	(42,540)		—

Amortization of below market leases, net	Amortization of below market leases, net	(5,062)		(19,775)		Amortization of below market leases, net	(5,184)		(5,062)
Noncash lease expense	Noncash lease expense	5,282		5,343		Noncash lease expense	5,390		5,282
Straight-lining of rent	Straight-lining of rent	(1,522)		338		Straight-lining of rent	(2,786)		(1,522)
Share-based compensation expense	Share-based compensation expense	7,677		8,218		Share-based compensation expense	6,023		7,677

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	(586)		(2,505)		Tenant and other receivables	1,700		(586)
Deferred leasing costs	Deferred leasing costs	(3,493)		(1,735)		Deferred leasing costs	(5,004)		(3,493)
Prepaid expenses and other assets	Prepaid expenses and other assets	795		512		Prepaid expenses and other assets	2,458		795
Lease liabilities	Lease liabilities	(4,997)		(4,901)		Lease liabilities	(5,186)		(4,997)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(7,253)		(7,756)		Accounts payable, accrued expenses and other liabilities	6,340		(7,253)
Net cash provided by operating activities	Net cash provided by operating activities	98,672		93,137		Net cash provided by operating activities	102,852		98,672
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	(74,990)		(46,447)		Real estate development and capital improvements	(84,760)		(74,990)
Proceeds from sale of operating properties						Proceeds from sale of operating properties	356		353
Acquisitions of real estate	Acquisitions of real estate	(36,222)		(54,547)		Acquisitions of real estate	(2,071)		(36,222)
Proceeds from sale of operating properties		353		34,482
Net cash used in investing activities	Net cash used in investing activities	(110,859)		(66,512)		Net cash used in investing activities	(86,475)		(110,859)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	Debt repayments	(93,999)		(14,324)		Debt repayments	(428,948)		(93,999)
Dividends to common shareholders	Dividends to common shareholders	(56,323)		(106,441)		Dividends to common shareholders	(56,387)		(56,323)

Distributions to redeemable noncontrolling interests	Distributions to redeemable noncontrolling interests	(2,337)		(4,225)		Distributions to redeemable noncontrolling interests	(2,436)		(2,337)
Taxes withheld for vested restricted shares	Taxes withheld for vested restricted shares	(129)		(210)		Taxes withheld for vested restricted shares	(119)		(129)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	1,463		1,929		Contributions from noncontrolling interests	1,221		1,463

Purchase of interest rate cap	Purchase of interest rate cap	(285)		—		Purchase of interest rate cap	—		(285)
Proceeds from mortgage loan borrowings	Proceeds from mortgage loan borrowings	103,413		—		Proceeds from mortgage loan borrowings	426,000		103,413

Debt issuance costs	Debt issuance costs	(7,284)		—		Debt issuance costs	(6,753)		(7,284)
Proceeds related to the issuance of common shares	Proceeds related to the issuance of common shares	223		185		Proceeds related to the issuance of common shares	195		223
Net cash used in financing activities	Net cash used in financing activities	(55,258)		(123,086)		Net cash used in financing activities	(67,227)		(55,258)
Net decrease in cash and cash equivalents and restricted cash	Net decrease in cash and cash equivalents and restricted cash	(67,445)		(96,461)		Net decrease in cash and cash equivalents and restricted cash	(50,850)		(67,445)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	219,836		419,253		Cash and cash equivalents and restricted cash at beginning of period	128,774		219,836
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	152,391	$	322,792	Cash and cash equivalents and restricted cash at end of period	$	77,924	$	152,391

See notes to consolidated financial statements (unaudited).


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
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 $5,922 and $734, respectively		$	41,274	$	44,424
Cash payments for interest, net of amounts capitalized of $8,379 and $5,922, respectively						Cash payments for interest, net of amounts capitalized of $8,379 and $5,922, respectively	$	50,266	$	41,274
Cash payments for income taxes	Cash payments for income taxes	967		5,077		Cash payments for income taxes	41		967
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	17,031		32,600		Accrued capital expenditures included in accounts payable and accrued expenses	18,306		17,031
Write-off of fully depreciated assets		7,765		5,336
Write-off of fully depreciated and impaired assets						Write-off of fully depreciated and impaired assets	38,311		7,765

Mortgage debt forgiven						Mortgage debt forgiven	44,105		—

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	$	164,478	$	384,572	Cash and cash equivalents at beginning of period	$	85,518	$	164,478
Restricted cash at beginning of period	Restricted cash at beginning of period	55,358		34,681		Restricted cash at beginning of period	43,256		55,358
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	$	219,836	$	419,253	Cash and cash equivalents and restricted cash at beginning of period	$	128,774	$	219,836

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	108,437	$	268,952	Cash and cash equivalents at end of period	$	50,793	$	108,437
Restricted cash at end of period	Restricted cash at end of period	43,954		53,840		Restricted cash at end of period	27,131		43,954
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	152,391	$	322,792	Cash and cash equivalents and restricted cash at end of period	$	77,924	$	152,391

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except unit amounts)


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022
ASSETS	ASSETS					ASSETS
Real estate, at cost:	Real estate, at cost:					Real estate, at cost:
Land	Land	$	544,358	$	543,827	Land	$	541,961	$	535,770
Buildings and improvements	Buildings and improvements	2,464,901		2,441,797		Buildings and improvements	2,517,038		2,468,385
Construction in progress	Construction in progress	271,898		212,296		Construction in progress	280,341		314,190
Furniture, fixtures and equipment	Furniture, fixtures and equipment	8,303		7,530		Furniture, fixtures and equipment	9,472		8,539
Total	Total	3,289,460		3,205,450		Total	3,348,812		3,326,884
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(790,414)		(753,947)		Accumulated depreciation and amortization	(842,328)		(791,485)
Real estate, net	Real estate, net	2,499,046		2,451,503		Real estate, net	2,506,484		2,535,399
Operating lease right-of-use assets	Operating lease right-of-use assets	64,078		69,361		Operating lease right-of-use assets	57,377		64,161
Cash and cash equivalents	Cash and cash equivalents	108,437		164,478		Cash and cash equivalents	50,793		85,518
Restricted cash	Restricted cash	43,954		55,358		Restricted cash	27,131		43,256
Tenant and other receivables	Tenant and other receivables	16,398		15,812		Tenant and other receivables	15,823		17,523
Receivable arising from the straight-lining of rents	Receivable arising from the straight-lining of rents	64,214		62,692		Receivable arising from the straight-lining of rents	67,499		64,713
Identified intangible assets, net of accumulated amortization of $39,307 and $37,361, respectively		65,974		71,107
Deferred leasing costs, net of accumulated amortization of $19,621 and $17,641, respectively		21,742		20,694
Identified intangible assets, net of accumulated amortization of $46,448 and $40,983, respectively						Identified intangible assets, net of accumulated amortization of $46,448 and $40,983, respectively	54,823		62,856
Deferred leasing costs, net of accumulated amortization of $21,928 and $20,107, respectively						Deferred leasing costs, net of accumulated amortization of $21,928 and $20,107, respectively	27,945		26,799
Prepaid expenses and other assets	Prepaid expenses and other assets	77,649		74,111		Prepaid expenses and other assets	73,969		77,207
Total assets	Total assets	$	2,961,492	$	2,985,116	Total assets	$	2,881,844	$	2,977,432

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net	Mortgages payable, net	$	1,695,776	$	1,687,190	Mortgages payable, net	$	1,643,333	$	1,691,690
Operating lease liabilities	Operating lease liabilities	59,581		64,578		Operating lease liabilities	54,197		59,789
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	78,710		84,829		Accounts payable, accrued expenses and other liabilities	90,017		102,519
Identified intangible liabilities, net of accumulated amortization of $39,040 and $35,029, respectively		95,371		100,625
Identified intangible liabilities, net of accumulated amortization of $45,929 and $40,816, respectively						Identified intangible liabilities, net of accumulated amortization of $45,929 and $40,816, respectively	87,000		93,328
Total liabilities	Total liabilities	1,929,438		1,937,222		Total liabilities	1,874,547		1,947,326
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)
Equity:	Equity:					Equity:
Partners’ capital:	Partners’ capital:					Partners’ capital:
General partner: 117,440,748 and 117,147,986 units outstanding, respectively		1,007,521		1,002,423
Limited partners: 4,974,470 and 4,662,654 units outstanding, respectively		43,766		41,030
General partner: 117,639,177 and 117,450,951 units outstanding, respectively						General partner: 117,639,177 and 117,450,951 units outstanding, respectively	1,014,481		1,012,466
Limited partners: 5,218,642 and 4,713,558 units outstanding, respectively						Limited partners: 5,218,642 and 4,713,558 units outstanding, respectively	45,960		41,810
Accumulated other comprehensive income	Accumulated other comprehensive income	554		—		Accumulated other comprehensive income	1,334		629
Accumulated deficit	Accumulated deficit	(33,361)		(8,505)		Accumulated deficit	(69,089)		(38,705)
Total partners’ capital	Total partners’ capital	1,018,480		1,034,948		Total partners’ capital	992,686		1,016,200
Noncontrolling interest in consolidated subsidiaries	Noncontrolling interest in consolidated subsidiaries	13,574		12,946		Noncontrolling interest in consolidated subsidiaries	14,611		13,906
Total equity	Total equity	1,032,054		1,047,894		Total equity	1,007,297		1,030,106
Total liabilities and equity	Total liabilities and equity	$	2,961,492	$	2,985,116	Total liabilities and equity	$	2,881,844	$	2,977,432

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per unit amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
REVENUE	REVENUE									REVENUE
Rental revenue	Rental revenue	$	98,175	$	105,985	$	295,045	$	294,257	Rental revenue	$	101,732	$	98,175	$	299,859	$	295,045
Other income	Other income	115		854		1,300		2,249		Other income	102		115		481		1,300
Total revenue	Total revenue	98,290		106,839		296,345		296,506		Total revenue	101,834		98,290		300,340		296,345
EXPENSES	EXPENSES									EXPENSES
Depreciation and amortization	Depreciation and amortization	24,343		23,171		73,561		68,534		Depreciation and amortization	26,922		24,343		77,519		73,561
Real estate taxes	Real estate taxes	16,231		15,862		47,662		47,826		Real estate taxes	16,182		16,231		47,980		47,662
Property operating	Property operating	17,672		15,692		56,473		51,874		Property operating	16,618		17,672		49,752		56,473
General and administrative	General and administrative	9,852		10,134		31,607		28,286		General and administrative	8,938		9,852		27,903		31,607
Casualty and impairment loss		—		372		—		372
Real estate impairment loss										Real estate impairment loss	—		—		34,055		—
Lease expense	Lease expense	3,109		3,164		9,327		9,665		Lease expense	3,159		3,109		9,470		9,327
Total expenses	Total expenses	71,207		68,395		218,630		206,557		Total expenses	71,819		71,207		246,679		218,630
Gain on sale of real estate	Gain on sale of real estate	—		6,926		353		18,648		Gain on sale of real estate	—		—		356		353
Interest income	Interest income	294		77		713		303		Interest income	565		294		1,640		713
Interest and debt expense	Interest and debt expense	(15,266)		(14,638)		(43,511)		(44,193)		Interest and debt expense	(19,006)		(15,266)		(52,430)		(43,511)

Gain on extinguishment of debt, net										Gain on extinguishment of debt, net	43,029		—		42,540		—
Income before income taxes	Income before income taxes	12,111		30,809		35,270		64,707		Income before income taxes	54,603		12,111		45,767		35,270
Income tax expense	Income tax expense	(646)		(704)		(2,262)		(905)		Income tax expense	(17,063)		(646)		(17,810)		(2,262)
Net income	Net income	11,465		30,105		33,008		63,802		Net income	37,540		11,465		27,957		33,008
Less net loss (income) attributable to NCI in consolidated subsidiaries		373		(1,190)		835		(961)
Less net loss attributable to NCI in consolidated subsidiaries										Less net loss attributable to NCI in consolidated subsidiaries	133		373		516		835
Net income attributable to unitholders	Net income attributable to unitholders	$	11,838	$	28,915	$	33,843	$	62,841	Net income attributable to unitholders	$	37,673	$	11,838	$	28,473	$	33,843

Earnings per unit - Basic:	Earnings per unit - Basic:	$	0.10	$	0.24	$	0.28	$	0.52	Earnings per unit - Basic:	$	0.31	$	0.10	$	0.23	$	0.28
Earnings per unit - Diluted:	Earnings per unit - Diluted:	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per unit - Diluted:	$	0.31	$	0.10	$	0.23	$	0.28
Weighted average units outstanding - Basic	Weighted average units outstanding - Basic	121,405		120,903		121,320		120,839		Weighted average units outstanding - Basic	121,964		121,405		121,879		121,320
Weighted average units outstanding - Diluted	Weighted average units outstanding - Diluted	121,683		121,987		121,657		122,212		Weighted average units outstanding - Diluted	122,205		121,683		122,014		121,657

Net income	Net income	$	11,465	$	30,105	$	33,008	$	63,802	Net income	$	37,540	$	11,465	$	27,957	$	33,008
Effective portion of change in fair value of derivatives	Effective portion of change in fair value of derivatives	632		—		578		—		Effective portion of change in fair value of derivatives	1,058		632		737		578
Comprehensive income	Comprehensive income	12,097		30,105		33,586		63,802		Comprehensive income	38,598		12,097		28,694		33,586

Less net loss (income) attributable to NCI in consolidated subsidiaries		373		(1,190)		835		(961)
Less net loss attributable to NCI in consolidated subsidiaries										Less net loss attributable to NCI in consolidated subsidiaries	133		373		516		835
Comprehensive income attributable to unitholders	Comprehensive income attributable to unitholders	$	12,470	$	28,915	$	34,421	$	62,841	Comprehensive income attributable to unitholders	$	38,731	$	12,470	$	29,210	$	34,421

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, 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 NCI — — — — — 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 NCI — 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


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Other Comprehensive (Income) Loss		Accumulated (Deficit) Earnings		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2022	117,442,769	$	1,003,852	5,124,493	$	44,849	$	(52)	$	(25,646)	$	13,947	$	1,036,950
Net income attributable to unitholders	—	—		—	—		—		11,838		—		11,838
Net loss attributable to NCI	—	—		—	—		—		—		(373)		(373)
Other comprehensive income	—	—		—	—		606		26		—		632
Common units issued as a result of common shares issued by Urban Edge	(1,064)	21		(150,023)	—		—		(21)		—		—
Equity redemption of OP units	—	3,325		—	(3,325)		—		—		—		—



Distributions to Partners ($0.16 per unit)	—	—		—	—		—		(19,558)		—		(19,558)

Share-based compensation expense	—	338		—	2,242		—		—		—		2,580
Share-based awards retained for taxes	(957)	(15)		—	—		—		—		—		(15)
Balance, September 30, 2022	117,440,748	$	1,007,521	4,974,470	$	43,766	$	554	$	(33,361)	$	13,574	$	1,032,054

(1) Limited partners have a ~~4.0%~~4.1% common limited partnership interest in the Operating Partnership as of September 30, ~~2021~~2022 in the form of Operating Partnership Units (“OP Units”) and Long-Term Incentive Plan Units (“LTIP Units”).


		Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Other Comprehensive Income (Loss)		Accumulated Earnings (Deficit)		NCI in Consolidated Subsidiaries		Total Equity			Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2022		117,442,769	$	1,003,852	5,124,493	$	44,849	$	(52)	$	(25,646)	$	13,947	$	1,036,950
Balance, June 30, 2023																Balance, June 30, 2023	117,639,602	$	1,014,000	5,053,057	$	44,605	$	321	$	(87,172)	$	14,744	$	986,498
Net income attributable to unitholders	Net income attributable to unitholders	—	—		—	—		—		11,838		—		11,838		Net income attributable to unitholders	—	—		—	—		—		37,673		—		37,673
Net loss attributable to NCI	Net loss attributable to NCI	—	—		—	—		—		—		(373)		(373)		Net loss attributable to NCI	—	—		—	—		—		—		(133)		(133)
Other comprehensive income	Other comprehensive income	—	—		—	—		606		26		—		632		Other comprehensive income	—	—		—	—		1,013		45		—		1,058
Common units issued as a result of common shares issued by Urban Edge	Common units issued as a result of common shares issued by Urban Edge	(1,064)	21		(150,023)	—		—		(21)		—		—		Common units issued as a result of common shares issued by Urban Edge	(425)	22		165,585	—		—		(22)		—		—

Equity redemption of OP units																Equity redemption of OP units	—	—		—	—		—		—		—		—

Reallocation of noncontrolling interests	Reallocation of noncontrolling interests	—	3,325		—	(3,325)		—		—		—		—		Reallocation of noncontrolling interests	—	265		—	(265)		—		—		—		—
Distributions to Partners ($0.16 per unit)	Distributions to Partners ($0.16 per unit)	—	—		—	—		—		(19,558)		—		(19,558)		Distributions to Partners ($0.16 per unit)	—	—		—	—		—		(19,613)		—		(19,613)

Share-based compensation expense	Share-based compensation expense	—	338		—	2,242		—		—		—		2,580		Share-based compensation expense	—	194		—	1,620		—		—		—		1,814
Share-based awards retained for taxes		(957)	(15)		—	—		—		—		—		(15)
Balance, September 30, 2022		117,440,748	$	1,007,521	4,974,470	$	43,766	$	554	$	(33,361)	$	13,574	$	1,032,054

Balance, September 30, 2023																Balance, September 30, 2023	117,639,177	$	1,014,481	5,218,642	$	45,960	$	1,334	$	(69,089)	$	14,611	$	1,007,297

(2) Limited partners have a 4.2% common limited partnership interest in the Operating Partnership as of September 30, 2023 in the form of OP and LTIP Units.

See notes to consolidated financial statements (unaudited).


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2021	117,147,986	$	1,002,423	4,662,654	$	41,030	$	—	$	(8,505)	$	12,946	$	1,047,894
Net income attributable to unitholders	—	—		—	—		—		33,843		—		33,843
Net loss attributable to NCI	—	—		—	—		—		—		(835)		(835)
Other comprehensive income	—	—		—	—		554		24		—		578
Common units issued as a result of common shares issued by Urban Edge	49,990	286		561,816	—		—		(63)		—		223
Equity redemption of OP units	250,000	2,124		(250,000)	2,124		—		—		—		4,248


Reallocation of NCI	—	1,820		—	(6,068)		—		—		—		(4,248)
Distributions to Partners ($0.48 per unit)	—	—		—	—		—		(58,660)		—		(58,660)
Contributions from NCI	—	—		—	—		—		—		1,463		1,463
Share-based compensation expense	—	997		—	6,680		—		—		—		7,677
Share-based awards retained for taxes	(7,228)	(129)		—	—		—		—		—		(129)
Balance, September 30, 2022	117,440,748	$	1,007,521	4,974,470	$	43,766	$	554	$	(33,361)	$	13,574	$	1,032,054

(1) Limited partners have a 4.1% common limited partnership interest in the Operating Partnership as of September 30, 2022 in the form of OP Units and LTIP Units.

~~See notes to consolidated financial statements (unaudited).~~


	Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Other Comprehensive Income		Accumulated (Deficit) Earnings		NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2022	117,450,951	$	1,012,466	4,713,558	$	41,810	$	629	$	(38,705)	$	13,906	$	1,030,106
Net income attributable to unitholders	—	—		—	—		—		28,473		—		28,473
Net loss attributable to NCI	—	—		—	—		—		—		(516)		(516)
Other comprehensive income	—	—		—	—		705		32		—		737
Common units issued as a result of common shares issued by Urban Edge	125,863	261		575,084	—		—		(66)		—		195
Equity redemption of OP units	70,000	573		(70,000)	572		—		—		—		1,145


Reallocation of NCI	—	610		—	(1,755)		—		—		—		(1,145)
Distributions to Partners ($0.48 per unit)	—	—		—	—		—		(58,823)		—		(58,823)
Contributions from NCI	—	—		—	—		—		—		1,221		1,221
Share-based compensation expense	—	690		—	5,333		—		—		—		6,023
Share-based awards retained for taxes	(7,637)	(119)		—	—		—		—		—		(119)
Balance, September 30, 2023	117,639,177	$	1,014,481	5,218,642	$	45,960	$	1,334	$	(69,089)	$	14,611	$	1,007,297

Total Shares General Partner Total Units
Limited Partners(1)
Accumulated Earnings
(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 NCI — — — — — 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 NCI — 4,614 — 848 — — 5,462
Distributions to Partners ($0.45 per unit) — — — — (54,762) — (54,762)
Contributions from NCI — — — — — 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

~~(1)~~(2) Limited partners have a ~~4.0%~~4.2% common limited partnership interest in the Operating Partnership as of September 30, ~~2021 in the form of Operating Partnership Units (“OP Units”) and Long-Term Incentive Plan Units (“LTIP Units”).~~

Total Shares General Partner Total Units
Limited Partners(2)
Accumulated Other Comprehensive Income Accumulated Earnings
(Deficit) NCI in Consolidated Subsidiaries Total Equity
Balance, December 31, 2021 117,147,986 $ 1,002,423 4,662,654 $ 41,030 $ — $ (8,505) $ 12,946 $ 1,047,894
Net income attributable to unitholders — — — — — 33,843 — 33,843
Net loss attributable to NCI — — — — — — (835) (835)
Other comprehensive income — — — — 554 24 — 578
Common units issued as a result of common shares issued by Urban Edge 49,990 286 561,816 — — (63) — 223
Equity redemption of OP units 250,000 2,124 (250,000) 2,124 — — — 4,248
Reallocation of NCI — 1,820 — (6,068) — — — (4,248)
Distributions to Partners ($0.48 per unit) — — — — — (58,660) — (58,660)
Contributions from NCI — — — — — — 1,463 1,463
Share-based compensation expense — 997 — 6,680 — — — 7,677
Share-based awards retained for taxes (7,228) (129) — — — — — (129)
Balance, September 30, 2022 117,440,748 $ 1,007,521 4,974,470 $ 43,766 $ 554 $ (33,361) $ 13,574 $ 1,032,054

~~(2)~~ ~~Limited partners have a 4.1% common limited partnership interest in the Operating Partnership as of September 30, 2022~~2023 in the form of OP and LTIP Units.

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	33,008	$	63,802	Net income	$	27,957	$	33,008
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	75,176		69,872		Depreciation and amortization	79,985		75,176
Gain on sale of real estate	Gain on sale of real estate	(353)		(18,648)		Gain on sale of real estate	(356)		(353)
Casualty and impairment loss		—		372

Real estate impairment loss						Real estate impairment loss	34,055		—
Gain on extinguishment of debt, net						Gain on extinguishment of debt, net	(42,540)		—

Amortization of below market leases, net	Amortization of below market leases, net	(5,062)		(19,775)		Amortization of below market leases, net	(5,184)		(5,062)
Noncash lease expense	Noncash lease expense	5,282		5,343		Noncash lease expense	5,390		5,282
Straight-lining of rent	Straight-lining of rent	(1,522)		338		Straight-lining of rent	(2,786)		(1,522)
Share-based compensation expense	Share-based compensation expense	7,677		8,218		Share-based compensation expense	6,023		7,677

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	(586)		(2,505)		Tenant and other receivables	1,700		(586)
Deferred leasing costs	Deferred leasing costs	(3,493)		(1,735)		Deferred leasing costs	(5,004)		(3,493)
Prepaid expenses and other assets	Prepaid expenses and other assets	795		512		Prepaid expenses and other assets	2,458		795
Lease liabilities	Lease liabilities	(4,997)		(4,901)		Lease liabilities	(5,186)		(4,997)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(7,253)		(7,756)		Accounts payable, accrued expenses and other liabilities	6,340		(7,253)
Net cash provided by operating activities	Net cash provided by operating activities	98,672		93,137		Net cash provided by operating activities	102,852		98,672
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	(74,990)		(46,447)		Real estate development and capital improvements	(84,760)		(74,990)
Proceeds from sale of operating properties						Proceeds from sale of operating properties	356		353
Acquisitions of real estate	Acquisitions of real estate	(36,222)		(54,547)		Acquisitions of real estate	(2,071)		(36,222)
Proceeds from sale of operating properties		353		34,482
Net cash used in investing activities	Net cash used in investing activities	(110,859)		(66,512)		Net cash used in investing activities	(86,475)		(110,859)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	Debt repayments	(93,999)		(14,324)		Debt repayments	(428,948)		(93,999)
Distributions to partners	Distributions to partners	(58,660)		(110,666)		Distributions to partners	(58,823)		(58,660)

Taxes withheld for vested restricted units	Taxes withheld for vested restricted units	(129)		(210)		Taxes withheld for vested restricted units	(119)		(129)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	1,463		1,929		Contributions from noncontrolling interests	1,221		1,463
Purchase of interest rate cap	Purchase of interest rate cap	(285)		—		Purchase of interest rate cap	—		(285)

Proceeds from mortgage loan borrowings	Proceeds from mortgage loan borrowings	103,413		—		Proceeds from mortgage loan borrowings	426,000		103,413

Debt issuance costs	Debt issuance costs	(7,284)		—		Debt issuance costs	(6,753)		(7,284)

Proceeds related to the issuance of common shares	Proceeds related to the issuance of common shares	223		185		Proceeds related to the issuance of common shares	195		223
Net cash used in financing activities	Net cash used in financing activities	(55,258)		(123,086)		Net cash used in financing activities	(67,227)		(55,258)
Net decrease in cash and cash equivalents and restricted cash	Net decrease in cash and cash equivalents and restricted cash	(67,445)		(96,461)		Net decrease in cash and cash equivalents and restricted cash	(50,850)		(67,445)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	219,836		419,253		Cash and cash equivalents and restricted cash at beginning of period	128,774		219,836
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	152,391	$	322,792	Cash and cash equivalents and restricted cash at end of period	$	77,924	$	152,391

See notes to consolidated financial statements (unaudited).


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
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 $5,922 and $734, respectively		$	41,274	$	44,424
Cash payments for interest, net of amounts capitalized of $8,379 and $5,922, respectively						Cash payments for interest, net of amounts capitalized of $8,379 and $5,922, respectively	$	50,266	$	41,274
Cash payments for income taxes	Cash payments for income taxes	967		5,077		Cash payments for income taxes	41		967
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	17,031		32,600		Accrued capital expenditures included in accounts payable and accrued expenses	18,306		17,031
Write-off of fully depreciated assets		7,765		5,336
Write-off of fully depreciated and impaired assets						Write-off of fully depreciated and impaired assets	38,311		7,765

Mortgage debt forgiven						Mortgage debt forgiven	44,105		—

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	$	164,478	$	384,572	Cash and cash equivalents at beginning of period	$	85,518	$	164,478
Restricted cash at beginning of period	Restricted cash at beginning of period	55,358		34,681		Restricted cash at beginning of period	43,256		55,358
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	$	219,836	$	419,253	Cash and cash equivalents and restricted cash at beginning of period	$	128,774	$	219,836

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	108,437	$	268,952	Cash and cash equivalents at end of period	$	50,793	$	108,437
Restricted cash at end of period	Restricted cash at end of period	43,954		53,840		Restricted cash at end of period	27,131		43,954
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	152,391	$	322,792	Cash and cash equivalents and restricted cash at end of period	$	77,924	$	152,391

See notes to consolidated financial statements (unaudited).

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 owning, managing, acquiring, developing, ~~redeveloping,~~ and ~~acquiring~~redeveloping retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. 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 September 30, ~~2022,~~2023, Urban Edge owned approximately ~~95.9%~~95.8% of the outstanding common OP Units with the remaining limited OP Units held by members of management, ~~and the~~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 September 30, ~~2022,~~2023, our portfolio consisted of 6970 shopping centers, ~~five~~two outlet centers, two malls and two industrial parks totaling approximately 17.2 million square feet (“sf”), which is inclusive of a 95% controlling interest in our property 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 September 30, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2022.~~2023. 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, ~~2021,~~2022, as filed with the Securities and Exchange Commission (“SEC”).

The consolidated balance sheets as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 reflect the consolidation of wholly-owned subsidiaries and those entities in which we have a controlling financial interest. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, excluding the Operating Partnership, we consolidated two VIEs with total assets of ~~$47.7~~$46.8 million and ~~$48.5~~$47.6 million, respectively, and total liabilities of ~~$24.5~~$21.5 million and ~~$24.7~~$23.2 million, respectively. The consolidated statements of income and comprehensive income for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, include the consolidated accounts of the Company, the Operating Partnership and the two VIEs. All intercompany transactions have been eliminated in consolidation.

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

Our primary business is the ownership, management, acquisition, ~~management,~~ development, and redevelopment 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~~at the individual operating segment. ~~None of our tenants accounted for more than 10% of our revenue or property operating income as of September 30, 2022.~~ We aggregate all of our properties into one 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.

None of our tenants accounted for more than 10% of our revenue or property operating income as of September 30, 2023.

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 under way and ends when the project is substantially complete and ready for its intended use. 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 assumption of 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 and development projects are individually evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events and changes include macroeconomic conditions, operating performance, and environmental and regulatory changes, which may result in property operational disruption and could 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. 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 ~~basis~~ and ~~at the~~a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements. 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 and receivables arising from the straight-lining of rents are written-off directly when management deems the collectibility of substantially all future lease payments from a specific lease is not probable, 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. If the Company subsequently determines that it is probable it will collect substantially all of the 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.

~~Derivative Financial Instruments and Hedging~~ —At times, the Company may use derivative financial instruments to manage and mitigate exposure to fluctuations in interest rates on our variable rate debt. These derivatives are measured at fair value and are recognized as assets or liabilities on the Company’s consolidated balance sheets, depending on the Company’s rights or obligations under the respective derivative contracts. The accounting for changes in the fair value of a derivative varies based on eligibility and Company elections, including the intended use of the derivative, whether the Company has elected to designate the derivative in a hedging relationship and apply hedge accounting, and whether the hedge relationship has satisfied certain criteria to be deemed an effective hedge. Effectiveness of the hedging relationship is assessed on a quarterly basis by a third-party to determine if the relationship still meets the criteria to be considered an effective hedge. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

In a cash flow hedge, hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the earnings effect of the hedged transaction. A derivative instrument designated as

a cash flow hedge is adjusted to fair value on the Company’s consolidated balance sheets. The change in fair value, net of the amortization of the purchase price of the instrument, is deemed to be the effective portion of change and is recognized in Other Comprehensive Income (“OCI”) in the Company’s consolidated statements of income and comprehensive income, with the amortization of the purchase price included in interest and debt expense. Cash flows from the derivative are included in the prepaid expenses and other assets, or accounts payable, accrued expenses and other liabilities line item in the statement of cash flows, depending on whether the hedged item is recognized as an asset or a liability. For further information on the Company’s derivative instruments and hedge designations, refer to ~~Note 9~~.

Recently Issued Accounting Literature — In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which ~~provides~~provide 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 (“LIBOR”) 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~~were effective for all entities as of March 12, 2020 through December 31, 2022. ~~We currently do not anticipate~~In December 2022, FASB issued ASU 2022-06 Reference Rate Reform (ASC 848): Deferral of the ~~need~~Sunset Date of Topic 848, which extended the final sunset date from December 31, 2022 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,~~December 31, 2024. During June 2023, the Company ~~will elect~~entered into loan amendments to transition its four LIBOR-based loans to the ~~optional expedient available under~~Secured Overnight Financing Rate (“SOFR”). The amendments went into effect in July 2023 and did not have a material impact on the loans affected.

In August 2023, FASB issued ASU ~~2020-04~~2023-05 Business Combinations - Joint Venture Formation (Subtopic 805-60): Recognition and ~~ASU 2021-01,~~Initial Measurement, which ~~allows entities~~provides an update to ~~account~~the accounting treatment of joint ventures upon formation. This update requires companies to measure assets and liabilities contributed to joint ventures at fair value at the time of formation and has an effective date of January 1, 2025. The update is to be applied prospectively, with a retrospective option for previously formed joint ventures and has no current impact on 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.

Company.

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.~~statements or disclosures.

4. ACQUISITIONS AND DISPOSITIONS

Acquisitions

During the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, we closed on the following acquisitions:

Date Purchased

Property Name

City

State

Square Feet

Purchase Price(1)

Date Purchased

Property Name

City

State

Square Feet

Purchase Price(1)

(in thousands)

June 21, 2023

Sunrise Mall (Ground Lease)(2)

Massapequa

—

2,071

2023 Total

2,071

(in thousands)

February 24, 2022

40 Carmans Road(2)

Massapequa

12,000

4,260

February 24, 2022

40 Carmans Road(3)

Massapequa

12,000

4,260

June 8, 2022

The Shops at Riverwood

Hyde Park

78,000

33,343

June 8, 2022

The Shops at Riverwood

Hyde Park

78,000

33,343

2022 Total

37,603

2022 Total

37,603

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

(1) The total purchase price for the properties acquired during the nine months ended September 30, 2023 and 2022 includes $0.1 million and ~~2021 includes~~ $0.6 million of transaction costs, ~~incurred in each of the periods.~~respectively.

(2) ~~The~~Pertains to the buyout and termination of a ground lease for certain land parcels at our Sunrise Mall property in which the Company previously held a lessee position.

(3) This outparcel is included with Sunrise Mall in our total property count and for the purpose of calculating our non-GAAP metrics. The Company has an 82.5% controlling interest in the property with the remaining 17.5% owned by others.

In connection with the acquisition of Sunrise Mall, located in Massapequa, NY, in December 2020, the Company acquired a lessee position in a ground lease with Arzillo Trust comprising two outparcels of approximately 2.25 acres. On June 21, 2023, the Company purchased the underlying assets from Arzillo Trust for a purchase price of $2.1 million, including transaction costs, which was allocated to land. As a result of this transaction, the existing ground lease was terminated and the remaining balance of the right-of-use asset of $1.0 million was reclassed to land.

The 12,000 sf outparcel acquired in February 2022, located at 40 Carmans Road, is adjacent to the entrance of our ~~mall~~Sunrise Mall property in Massapequa, NY. ~~This acquisition supports the overall plans we currently have under way to redevelop Sunrise Mall.~~

On June 8, 2022, the Company closed on the acquisition of The Shops at Riverwood, a ~~78,000 sf grocery-anchored~~grocery anchored shopping center ~~for a purchase price of $33.3 million, including transaction costs. The center is~~ located in the greater Boston area and is fully leased. In conjunction with the acquisition, the Company entered into a reverse like-kind exchange under Section 1031 of the Internal Revenue Code with a third-party intermediary, which allows us, for tax purposes, to defer gains on the sale of other properties sold within 180 days after the acquisition date. In addition to the VIEs mentioned in ~~Note 2~~, pursuant to the exchange agreement, the property is in possession of an Exchange Accommodation Titleholder (“EAT”) and is classified as a VIE until the earlier of the termination of the agreement or 180 days after the acquisition date. The EAT is the legal owner of the property, however, we control the activities that most significantly impact the entity and retain all of the economic benefits and risks associated with the entity. Therefore, since the title of the property will be transferred back to the Company and we have determined that we are the primary beneficiary of the VIE, we have consolidated the VIE and its operations as of the acquisition date.

The two 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 using cash proceeds from previous dispositions.area.

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


Property Name	Property Name	Land		Buildings and improvements		Identified intangible assets(1)		Identified intangible liabilities(1)		Total Purchase Price		Property Name	Land		Buildings and Improvements		Identified Intangible Assets(1)		Identified Intangible Liabilities(1)		Total Purchase Price (in thousands)
(in thousands)
Sunrise Mall (Ground Lease)												Sunrise Mall (Ground Lease)	$	2,071	$	—	$	—	$	—	$	2,071
2023 Total												2023 Total	$	2,071	$	—	$	—	$	—	$	2,071

40 Carmans Road	40 Carmans Road	$	1,118	$	3,142	$	—	$	—	$	4,260	40 Carmans Road	$	1,118	$	3,142	$	—	$	—	$	4,260
The Shops at Riverwood	The Shops at Riverwood	10,866		19,441		4,024		(988)		33,343		The Shops at Riverwood	10,866		19,441		4,024		(988)		33,343
2022 Total	2022 Total	$	11,984	$	22,583	$	4,024	$	(988)	$	37,603	2022 Total	$	11,984	$	22,583	$	4,024	$	(988)	$	37,603

601 Murray Road		$	2,075	$	14,733	$	1,722	$	(218)	$	18,312
151 Ridgedale Avenue		2,990		35,509		—		(740)		37,759
2021 Total		$	5,065	$	50,242	$	1,722	$	(958)	$	56,071

(1) As of September 30, ~~2022,~~2023, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2022 were ~~8.7~~8.5 years and ~~16.4~~15.6 years, respectively.

On October 23, 2023, the Company closed on the acquisition of two shopping centers, Shoppers World and Gateway Center, for a purchase price of $309 million. Both centers, located in the greater Boston area, aggregate approximately 1.4 million sf. The ~~remaining weighted average amortization periods~~acquisitions were funded using proceeds from the disposition of the East Hanover Warehouse portfolio in a forward Section 1031 exchange (a “1031 exchange”) agreement, with the balance being financed by drawing on the Company’s

unsecured line of credit. We entered into a reverse 1031 exchange agreement with third-party intermediaries for the portion financed by the Company’s unsecured line of credit, which, for a maximum of 180 days allows us to defer, for tax purposes, gains on the sale of other properties identified ~~intangible assets~~ and ~~identified intangible liabilities acquired in 2021 were 6.8 years and 3.1 years, respectively.~~sold within the period.

Dispositions

During the nine months ended September 30, 2023 and 2022, no dispositions were completed by the Company. WeDuring the nine months ended September 30, 2023 and 2022, we recognized a gain on sale of real estate of $0.4 million in both periods, in connection with the release of escrow funds related to ~~a property~~properties that were disposed of in prior periods.

On October 20, 2023, the Company completed the sale of its East Hanover Warehouse portfolio for a ~~prior period.~~

~~During~~price of $217.5 million. In connection with the ~~nine months ended September 30, 2021,~~sale we ~~disposed of three properties and one property parcel and received proceeds of $34.9 million, net of selling costs, resulting in an $18.6 million net~~entered into a forward 1031 exchange agreement with third-party intermediaries which allows us to defer, for tax purposes, the gain on sale of ~~real estate. Of~~ the ~~dispositions completed during~~property until the ~~nine months ended September 30, 2021, two were completed as~~earlier of the satisfaction of the 1031 ~~exchanges with~~exchange requirements or 180 days after the ~~acquisition~~date of ~~151 Ridgedale Avenue, allowing for~~ the ~~deferral of capital gains~~disposition. The proceeds from the ~~sale for income tax purposes.~~disposition were used to pay off the $40 million loan secured by the property at closing and to partially fund the purchase of two properties, Shoppers World and Gateway Center, in the greater Boston area that were acquired on October 23, 2023. The East Hanover Warehouses are comprised of seven buildings, totaling 1.2 million sf.

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 ~~$66.0~~$54.8 million and ~~$95.4~~$87.0 million, respectively, as of September 30, ~~2022~~2023 and ~~$71.1~~$62.9 million and ~~$100.6~~$93.3 million, respectively, as of December 31, ~~2021.~~2022.

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of ~~$1.6~~$1.7 million and ~~$5.1~~$5.2 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, and ~~$15.0~~$1.6 million and ~~$19.8~~$5.1 million for the same periods in ~~2021.~~2022.

Amortization of acquired in-place leases inclusive of customer relationships resulted in additional depreciation and amortization expense of ~~$2.6~~$2.3 million and ~~$8.1~~$7.2 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, and ~~$2.2~~$2.6 million and ~~$6.1~~$8.1 million for the same periods in ~~2021.~~2022.

The following table sets forth the estimated annual amortization income and expense related to intangible assets and liabilities for the remainder of ~~2022~~2023 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
2022(1)		$	1,945	$	(360)	$	(2,432)
2023		7,772		(1,081)		(9,097)
2023(1)								2023(1)	$	1,916	$	(248)	$	(2,240)
2024	2024	7,536		(920)		(7,870)		2024	7,416		(918)		(7,751)
2025	2025	7,355		(725)		(6,454)		2025	7,250		(725)		(6,283)
2026	2026	6,977		(606)		(5,706)		2026	6,916		(606)		(5,593)
2027	2027	6,683		(458)		(5,119)		2027	6,638		(458)		(5,065)
2028								2028	5,991		(441)		(4,530)

(1) Remainder of ~~2022.~~2023.

6. MORTGAGES PAYABLE

The following is a summary of mortgages payable as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.


(Amounts in thousands)	(Amounts in thousands)	Maturity	Interest Rate at September 30, 2022	September 30, 2022		December 31, 2021		(Amounts in thousands)	Maturity	Interest Rate at September 30, 2023	September 30, 2023		December 31, 2022
Mortgages secured by:	Mortgages secured by:							Mortgages secured by:
Variable rate	Variable rate							Variable rate
Hudson Commons(1)	Hudson Commons(1)	11/15/2024	4.42%	$	27,620	$	28,034	Hudson Commons(1)	11/15/2024	7.33%	$	27,068	$	27,482
Greenbrook Commons(1)	Greenbrook Commons(1)	11/15/2024	4.42%	25,710		26,097		Greenbrook Commons(1)	11/15/2024	7.33%	25,194		25,581
Gun Hill Commons(1)	Gun Hill Commons(1)	12/1/2024	4.42%	24,311		24,680		Gun Hill Commons(1)	12/1/2024	7.33%	23,819		24,188
Plaza at Cherry Hill(2)	Plaza at Cherry Hill(2)	6/3/2025	6.75%	29,000		28,244		Plaza at Cherry Hill(2)	6/15/2025	—%	—		29,000
Plaza at Woodbridge(3)	Plaza at Woodbridge(3)	6/8/2027	4.66%	52,947		54,029		Plaza at Woodbridge(3)	6/8/2027	5.26%	52,614		52,947
Total variable rate debt	Total variable rate debt			159,588		161,084		Total variable rate debt			128,695		159,198
Fixed rate	Fixed rate							Fixed rate
Bergen Town Center		4/8/2023	3.56%	300,000		300,000
Shops at Bruckner		5/1/2023	3.90%	9,192		9,698
Hudson Mall	Hudson Mall	12/1/2023	5.07%	21,577		22,154		Hudson Mall	12/1/2023	5.07%	20,797		21,380
Yonkers Gateway Center	Yonkers Gateway Center	4/6/2024	4.16%	25,447		26,774		Yonkers Gateway Center	4/6/2024	4.16%	23,617		24,996
Brick Commons	Brick Commons	12/10/2024	3.87%	48,869		49,554		Brick Commons	12/10/2024	3.87%	47,924		48,636
West End Commons	West End Commons	12/10/2025	3.99%	24,770		25,100		West End Commons	12/10/2025	3.99%	24,314		24,658
Las Catalinas Mall		2/1/2026	4.43%	120,715		123,977
Town Brook Commons	Town Brook Commons	12/1/2026	3.78%	30,971		31,400		Town Brook Commons	12/1/2026	3.78%	30,380		30,825
Rockaway River Commons	Rockaway River Commons	12/1/2026	3.78%	27,420		27,800		Rockaway River Commons	12/1/2026	3.78%	26,897		27,291
Hanover Commons	Hanover Commons	12/10/2026	4.03%	62,728		63,000		Hanover Commons	12/10/2026	4.03%	61,613		62,453
Tonnelle Commons	Tonnelle Commons	4/1/2027	4.18%	99,298		100,000		Tonnelle Commons	4/1/2027	4.18%	97,561		98,870
Manchester Plaza	Manchester Plaza	6/1/2027	4.32%	12,500		12,500		Manchester Plaza	6/1/2027	4.32%	12,500		12,500
Millburn Gateway Center	Millburn Gateway Center	6/1/2027	3.97%	22,605		22,944		Millburn Gateway Center	6/1/2027	3.97%	22,137		22,489
Totowa Commons	Totowa Commons	12/1/2027	4.33%	50,800		50,800		Totowa Commons	12/1/2027	4.33%	50,800		50,800
Woodbridge Commons	Woodbridge Commons	12/1/2027	4.36%	22,100		22,100		Woodbridge Commons	12/1/2027	4.36%	22,100		22,100
Brunswick Commons	Brunswick Commons	12/6/2027	4.38%	63,000		63,000		Brunswick Commons	12/6/2027	4.38%	63,000		63,000
Rutherford Commons	Rutherford Commons	1/6/2028	4.49%	23,000		23,000		Rutherford Commons	1/6/2028	4.49%	23,000		23,000
Kingswood Center		2/6/2028	5.07%	70,154		70,815
Kingswood Center(5)								Kingswood Center(5)	2/6/2028	5.07%	69,274		69,935
Hackensack Commons	Hackensack Commons	3/1/2028	4.36%	66,400		66,400		Hackensack Commons	3/1/2028	4.36%	66,400		66,400
Marlton Commons	Marlton Commons	12/1/2028	3.86%	37,400		37,400		Marlton Commons	12/1/2028	3.86%	36,896		37,400
East Hanover Warehouses		12/1/2028	4.09%	40,700		40,700
East Hanover Warehouses(8)								East Hanover Warehouses(8)	12/1/2028	4.09%	40,174		40,700
Union (Vauxhall)	Union (Vauxhall)	12/10/2028	4.01%	45,600		45,600		Union (Vauxhall)	12/10/2028	4.01%	45,403		45,600
The Shops at Riverwood	The Shops at Riverwood	6/24/2029	4.25%	21,466		—		The Shops at Riverwood	6/24/2029	4.25%	21,410		21,466
Shops at Bruckner(6)								Shops at Bruckner(6)	7/1/2029	6.00%	37,892		9,020
Freeport Commons	Freeport Commons	12/10/2029	4.07%	43,100		43,100		Freeport Commons	12/10/2029	4.07%	43,100		43,100
Bergen Town Center								Bergen Town Center	4/10/2030	6.30%	290,000		300,000
The Outlets at Montehiedra	The Outlets at Montehiedra	6/1/2030	5.00%	78,004		79,381		The Outlets at Montehiedra	6/1/2030	5.00%	76,087		77,531
Montclair(4)	Montclair(4)	8/15/2030	3.15%	7,250		7,250		Montclair(4)	8/15/2030	3.15%	7,250		7,250
Garfield Commons	Garfield Commons	12/1/2030	4.14%	40,300		40,300		Garfield Commons	12/1/2030	4.14%	39,783		40,300
Woodmore Towne Centre	Woodmore Towne Centre	1/6/2032	3.39%	117,200		117,200		Woodmore Towne Centre	1/6/2032	3.39%	117,200		117,200
Newington Commons								Newington Commons	7/1/2033	6.00%	15,968		—
Las Catalinas Mall(7)								Las Catalinas Mall(7)	8/1/2033	6.60%	82,000		119,633
Mount Kisco Commons	Mount Kisco Commons	11/15/2034	6.40%	11,920		12,377		Mount Kisco Commons	11/15/2034	6.40%	11,268		11,760
Total fixed rate debt	Total fixed rate debt			1,544,486		1,534,324		Total fixed rate debt			1,526,745		1,540,293
Total mortgages payable	Total mortgages payable			1,704,074		1,695,408		Total mortgages payable			1,655,440		1,699,491
		Unamortized debt issuance costs		(8,298)		(8,218)			Unamortized debt issuance costs		(12,107)		(7,801)
Total mortgages payable, net	Total mortgages payable, net			$	1,695,776	$	1,687,190	Total mortgages payable, net			$	1,643,333	$	1,691,690

(1)Bears interest at one month ~~London Interbank Offered Rate (“LIBOR”)~~SOFR plus ~~190~~200 bps.

(2)~~Bears interest at~~The Company paid off the ~~Prime Rate plus 50 bps with a minimum rate of 4.25%.~~loan prior to maturity on June 23, 2023.

(3)Bears interest at one month ~~Secured Overnight Financing Rate (“SOFR”)~~SOFR plus 226 bps. The variable component of the debt is hedged with an interest rate cap agreement to limit SOFR to a maximum of 3%.

(4)~~This property is encumbered by a~~Bears interest at SOFR plus 257 bps. The fixed and variable ~~rate loan that has been fixed at a rate~~components of ~~3.15%~~the debt are hedged with an interest rate swap agreement, ~~that~~fixing the rate at 3.15%, which expires at the maturity of the loan.

(5)In April 2023, the Company notified the servicer that the cash flows generated by the property are insufficient to cover the debt service and that it is unwilling to fund future shortfalls. In May 2023, the mortgage was transferred to special servicing at the Company’s request.

(6)On June 23, 2023, the Company refinanced the mortgage on our Shops at Bruckner property with a new 6-year, $38 million loan.

(7)On August 30, 2023, the Company refinanced the mortgage on our Las Catalinas Mall property with a new 10-year, $82 million loan.

(8)On October 20, 2023, the Company completed the sale of East Hanover Warehouses for $217.5 million and used the proceeds to pay off the loan secured by the property at closing.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately ~~$1.5~~$1.4 billion as of September 30, ~~2022.~~2023. 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 September 30, ~~2022,~~2023, we were in compliance with all debt ~~covenants.~~covenants with the exception of those related to our mortgage on Kingswood Center which has been in default since May 2023. Additional information regarding the status of this loan can be found on the following page.

As of September 30, ~~2022,~~2023, the principal repayments of the Company’s total outstanding debt for the remainder of ~~2022~~2023 and the five succeeding 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,
2022(1)		$	4,576
2023		351,500
2023(1)				2023(1)	$	25,446
2024	2024	166,383		2024	161,885
2025	2025	72,686		2025	40,282
2026	2026	229,556		2026	128,374
2027	2027	316,774		2027	319,473
2028				2028	275,632
Thereafter	Thereafter	562,599		Thereafter	704,348

(1) Remainder of ~~2022.~~2023.

Revolving Credit Agreement

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 to increase~~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.

On June 3, 2020, we entered into a third amendment to the Agreement which, among other things, 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.

On August 9, 2022, we ~~restated~~amended and ~~amended~~restated the Agreement, ~~which increased~~in order to, among other things, increase the credit facility size by $200 million to $800 million and ~~extended~~extend the maturity date to February 9, 2027, with two six-month extension options. Borrowings under the amended and restated Agreement are subject to interest at SOFR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over SOFR and the facility fee are based on our current leverage ratio and are subject to change. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x.

On April 5, 2023, the Company obtained two letters of credit issued under the Agreement, aggregating $14.5 million. On June 22, 2023, the Company obtained an additional letter of credit for $9.8 million. The letters of credit that were issued were provided to mortgage lenders to secure the Company’s obligations in relation to certain reserves and capital requirements per the loan agreements and have reduced the available balance of the facility to approximately $775.7 million. No amounts were drawn or outstanding under the Agreement as of September 30, ~~2022~~2023 or December 31, ~~2021.~~ 2022, and no separate liability has been recorded in connection with the undrawn letters of credit.

Financing costs associated with executing the Agreement of ~~$7.2~~$5.5 million and ~~$2.2~~$6.7 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, are included in the prepaid expenses and other assets line item of the consolidated balance sheets, as deferred financing costs, net.

On October 6, 2023, the Company obtained a letter of credit under the Agreement for $2 million and provided it to a mortgage lender to secure its obligations for certain capital requirements. On October 23, 2023, the Company used its line of credit to partially finance the acquisition of two properties, Shoppers World and Gateway Center, located in the greater Boston area. As

of the date of this filing, the Company has approximately $194 million drawn under the Agreement in conjunction with these acquisitions. These transactions have further reduced the available balance of the facility to approximately $579.7 million.

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. The terms of the modification enable the Company, at its option, 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~~On August 30, 2023, the Company refinanced the mortgage secured by its property, Las Catalinas Mall, with a new 10-year, $82 million loan bearing interest at a fixed rate of 6.6%. The proceeds from the new loan were used to ~~repay~~pay off the Company’s previous mortgage on the property. As a result of exercising the discounted payoff option, the Company recognized a gain on extinguishment of debt of $43 million for the three months ended September 30, 2023.

In connection with the refinancing, the Company incurred $0.9 million of financing costs which are amortized over the term of the loan ~~at the discounted value~~and are included in the ~~future, such repayment is contingent upon certain factors including~~mortgages payable line item on the ~~future operating performance~~consolidated balance sheets as of September 30, 2023.

Mortgage on Shops at Bruckner

On June 23, 2023, the Company refinanced the mortgage secured by its property, the Shops at Bruckner, with a new 6-year, $38 million loan bearing interest at a fixed rate of 6.0%. The proceeds from the new loan were used to pay off the Company’s previous mortgage on the property ~~as well as~~which had an outstanding balance of approximately $8.7 million. In connection with the ~~ability to meet all required payments on the loan. Therefore, in accordance with ASC 470-60~~ ~~Troubled Debt Restructurings,~~ refinancing, the Company ~~did~~obtained a letter of credit issued under our Revolving Credit Agreement for $9.8 million to serve as collateral to secure the Company’s obligation to the lenders in relation to certain reserves and capital expenditures required per the loan agreement. We have not ~~recognize a gain~~recorded any liabilities associated with the letter of credit.

Mortgage on Plaza at Cherry Hill

On June 23, 2023, the ~~time of~~Company paid off the ~~restructuring, as the future cash payments, including contingent payments, are greater than the carrying value~~outstanding principal balance of the mortgage ~~payable.~~loan secured by its property, the Plaza at Cherry Hill, using proceeds from the refinancing of the Shops at Bruckner mortgage. Prior to the payoff, the $29 million loan had an interest rate of 8.75% and a maturity date of June 15, 2025.

~~We have~~Mortgage on Newington Commons

On June 7, 2023, the Company obtained a 10-year, $16 million non-recourse mortgage secured by its property Newington Commons, located in Newington, CT. The loan bears interest at a fixed rate of 6.0%.

Mortgage on Kingswood Center

In March 2023, a tenant representing 50,000 sf informed us that they intend to vacate early next year, and a tenant representing 17,000 sf terminated their lease effective April 17, 2023. As a result of these events, the Company notified the servicer that the projected 2023 cash flows generated by the property will be insufficient to cover debt service and that we were unwilling to fund the shortfalls. In May 2023, the loan was transferred to special servicing at the Company’s request, and per the terms of the loan agreement, we began to accrue default interest at a rate of 5% on the outstanding principal balance. In August 2023, the property was transferred to receivership and the Company's management agreement was terminated. As of September 30, 2023, the loan is in the foreclosure process and the Company has accrued default interest of ~~$5.4~~$1.6 million ~~related to this mortgage,~~ which is included in the accounts payable, accrued expenses and other liabilities online item of the consolidated balance ~~sheet as~~sheets.

Mortgage on Bergen Town Center

On April 6, 2023, the Company refinanced the mortgage loan secured by Bergen Town Center with a 7-year, $290 million loan at a fixed interest rate of ~~September 30, 2022. We incurred $1.2~~6.3%. The proceeds from the loan were used to pay down the Company’s previous mortgage on the property, which had an outstanding balance of $300 million, ~~of lender fees in~~with the remainder paid using cash on hand. In connection with the ~~loan modification, which are treated~~refinancing, the Company obtained two letters of credit issued under our Revolving Credit Agreement aggregating $14.5 million to serve as ~~a reduction of~~collateral to secure the ~~mortgage payable balance~~Company’s obligation to the lenders in relation to certain leasing and ~~amortized over the term of~~capital expenditure reserves required per the loan ~~in accordance~~agreement. We have not recorded any liabilities associated with ~~the provisions under ASC 470-60.~~these letters of credit.

1819

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 provided a $12.5 million limited corporate guarantee. The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately 4three years. As of September 30, ~~2022,~~2023, the remaining exposure under the guarantee is ~~$8.5~~$6.6 million. There was no separate liability recorded related to this guarantee.

Mortgage on ~~Plaza at Cherry Hill~~East Hanover Warehouses

On ~~June 3, 2022,~~October 20, 2023, the Company ~~refinanced~~completed the ~~mortgage~~sale of the East Hanover Warehouse portfolio for a sales price of $217.5 million. The proceeds from the sale were used to pay off the $40 million balance of the loan secured by ~~its property, Plaza at Cherry Hill, located in Cherry Hill, NJ, with a new $29~~the property. The East Hanover Warehouses are comprised of seven buildings, totaling 1.2 million ~~3-year, floating rate mortgage. The floating rate is calculated as the Prime Rate plus 50 basis points with a floor of 4.25% and is interest-only for the entire loan term.~~

~~Mortgage on Plaza at Woodbridge~~

On June 8, 2022, the Company refinanced the mortgage loan secured by its property, Plaza at Woodbridge, located in Woodbridge, NJ, and entered into a new 5-year loan agreement for $52.9 million. The terms of the loan require payment of interest at a floating rate equal to 2.26% plus one-month SOFR. Additionally, the agreement with the lender requires the Company to enter into an interest rate cap agreement to limit the maximum SOFR to 3% if the current rate is greater than 2% for five consecutive business days. On June 23, 2022, the Company purchased a one-year interest rate cap for $0.3 million which has been designated as a hedging instrument.

~~Mortgage on The Shops at Riverwood~~

~~On June 24, 2022, the Company obtained a 7-year non-recourse mortgage loan of $21.5 million at a fixed interest rate of 4.25% to partially fund the acquisition of The Shops at Riverwood.~~sf.

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~~So long as the Company ~~meets certain requirements~~qualifies as a REIT under the Code, the Company will not be ~~taxed~~subject to U.S. federal income tax on net taxable income that it distributes annually to its ~~federal taxable income.~~shareholders. 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”) for tax years beginning after December 31, 2017)~~ and may not be able to qualify as a REIT for the four subsequent taxable years. ~~In addition to its TRS, the~~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 on the consolidated statements of income and comprehensive income. In addition, the Company’s taxable REIT subsidiary (“TRS”) is subject to income tax at regular corporate rates.

For U.S. federal income tax purposes, the ~~Company~~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 nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, certain non-real estate operating activities that could not be performed by the ~~Company,~~REIT, occurred through the Company’s TRS, which is subject to federal, state and local income taxes. These income taxes are included in income tax expense on the consolidated statements of income and comprehensive income.

During the nine months ended September 30, ~~2022,~~2023, the ~~Company~~REIT was subject to Puerto Rico corporate income taxes on its allocable share of Puerto Rico operating activities. 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 ~~Company~~REIT is subject to a 10% branch profits tax on the earnings and profits generated from its allocable share of Puerto Rico operating activities and such tax is included in income tax expense on the consolidated statements of income and comprehensive income.

For the three and nine months ended September 30, ~~2022,~~2023, the Puerto Rico income tax expense was $17.1 million and $18.5 million, respectively, and $0.6 million and ~~$2.3 million, respectively, and $0.7 million and $1.4~~$2.2 million for the same periods in ~~2021.~~2022. The REIT was not subject to any material state and local income tax expense ~~or benefit~~ for the three and nine months ended September 30, ~~2022. For the nine months ended September 30, 2021, the REIT’s state~~2023 and ~~local income tax benefit was $0.5 million.~~2022. All amounts for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 are included in income tax expense on the consolidated statements of income and comprehensive income.

The change in tax expense for the three and nine months ended September 30, 2023 when compared to the same periods in 2022 was driven by the mortgage refinancing of Las Catalinas Mall completed on August 30, 2023. As a result of the refinancing and the cancellation of indebtedness for tax purposes, the Company recognized a Puerto Rico income tax expense of $16.3 million, consisting of a current tax liability of $4.7 million and a deferred tax expense of $11.6 million. The deferred tax expense is attributable to a write-down of our Puerto Rico tax basis in Las Catalinas Mall for a portion of the debt forgiven. Refer to
Note 6 for further information on the refinancing.

8. LEASES

All rental revenue was generated from operating leases for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022. The components of rental revenue for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Rental Revenue	Rental Revenue									Rental Revenue
Fixed lease revenue	Fixed lease revenue	$	73,111	$	80,961	$	216,356	$	216,200	Fixed lease revenue	$	75,956	$	73,111	$	223,878	$	216,356
Variable lease revenue(1)	Variable lease revenue(1)	25,064		25,024		78,689		78,057		Variable lease revenue(1)	25,776		25,064		75,981		78,689
Total rental revenue	Total rental revenue	$	98,175	$	105,985	$	295,045	$	294,257	Total rental revenue	$	101,732	$	98,175	$	299,859	$	295,045

(1) Percentage rents for the three and nine months ended September 30, ~~2022~~2023 were $1.3 million and $2.4 million respectively, and $1.0 million and $2.6 ~~million, respectively, and $0.8 million and $1.5~~ million for the same periods in ~~2021.~~2022.

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 Basis

Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of one interest rate cap and one interest rate swap. We rely on third-party valuations that use market observable inputs, such as credit spreads, yield curves and discount rates, to assess the fair value of these instruments. In accordance with the fair value hierarchy established by ASC 820, these financial instruments have been classified as Level 2 as quoted market prices are not readily available for valuing the assets. The ~~table~~tables below ~~summarizes~~summarize the recorded amount of assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022:


		As of September 30, 2022									As of September 30, 2023
(Amounts in thousands)	(Amounts in thousands)	Level 1		Level 2		Level 3		Total		(Amounts in thousands)	Level 1		Level 2		Level 3		Total
Interest rate cap and swap(1)	Interest rate cap and swap(1)	$	—	$	1,966	$	—	$	1,966	Interest rate cap and swap(1)	$	—	$	3,573	$	—	$	3,573


	As of December 31, 2022
(Amounts in thousands)	Level 1		Level 2		Level 3		Total
Interest rate cap and swap(1)	$	—	$	1,976	$	—	$	1,976

(1) Included in Prepaid expenses and other assets on the consolidated balance sheets.

~~There were no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2021.~~

Derivatives and Hedging

When we designate a derivative as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument will be recognized in ~~OCI~~Other Comprehensive Income (“OCI”) until the gains or losses are reclassified to earnings. Derivatives that are not designated as hedges are adjusted to fair value through earnings. As of September 30, ~~2022,~~2023, the Company was a counterparty to two interest rate derivative agreements which have been designated as cash flow hedges.

On June 23, 2022, in conjunction with the refinancing of the mortgage loan encumbering our property Plaza at Woodbridge, we entered into an interest rate cap agreement (the “Cap Agreement”) with a third-party to limit the maximum SOFR of our floating rate debt to 3%. On the date of the Cap Agreement, we elected to designate cash flow hedge accounting for this derivative instrument.

The ~~table~~tables below ~~summarizes~~summarize our derivative instruments, which are used to hedge the corresponding variable rate debt, as of September 30, 2023 and December 31, 2022:

(Amounts in thousands)

As of September 30, 2023

Hedged Instrument

Fair Value

Notional Amount

Spread

Interest Rate

Effective Interest Rate

Expiration

Hedged Instrument

Fair Value

Notional Amount

Spread

Interest Rate

Effective Interest Rate

Expiration

Plaza at Woodbridge interest rate cap

444

52,947

SOFR + 2.26%

4.66%

7/1/2023

Plaza at Woodbridge interest rate cap

1,978

52,614

SOFR + 2.26%

7.31%

5.26%

7/1/2025

Montclair interest rate swap

1,522

7,250

LIBOR + 2.57%

5.39%

3.15%

8/15/2030

Montclair interest rate swap

1,595

7,250

SOFR + 2.57%

7.76%

3.15%

8/15/2030


(Amounts in thousands)	As of December 31, 2022
Hedged Instrument	Fair Value		Notional Amount		Spread	Interest Rate	Effective Interest Rate	Expiration
Plaza at Woodbridge interest rate cap	$	509	$	52,947	SOFR + 2.26%	6.27%	5.26%	7/1/2023
Montclair interest rate swap	1,467		7,250		LIBOR + 2.57%	6.89%	3.15%	8/15/2030

The table below summarizes the effect of our derivative instruments on our consolidated statements of income and comprehensive income for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


		Unrealized Gain Recognized in OCI on Derivatives									Unrealized Gain (Loss) Recognized in OCI on Derivatives
(Amounts in thousands)	(Amounts in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(Amounts in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Hedged Instrument	Hedged Instrument	2022		2021		2022		2021		Hedged Instrument	2023		2022		2023		2022
Plaza at Woodbridge interest rate cap	Plaza at Woodbridge interest rate cap	$	290	$	—	$	236	$	—	Plaza at Woodbridge interest rate cap	$	875	$	290	$	607	$	236
Montclair interest rate swap	Montclair interest rate swap	342		—		342		—		Montclair interest rate swap	183		342		130		342
Total	Total	$	632	$	—	$	578	$	—	Total	$	1,058	$	632	$	737	$	578

In May 2023, the Company entered into a new two-year interest rate cap agreement with a third-party to limit the maximum SOFR of our Plaza at Woodbridge floating rate debt to 3%. This agreement replaces the previous cap which expired on July 1, 2023. The new cap went into effect July 3, 2023 and expires on July 1, 2025. The purchase price of the new interest rate cap was $1.1 million and is included in the prepaid expenses and other assets line item of the consolidated balance sheets.

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

There were no financial assets or liabilities measured at fair value on a non-recurring basis as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

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 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, which is provided by a third-party specialist. The fair value of cash and cash equivalents is classified as Level 1 and the fair value of mortgages payable is classified as Level 2. The table below summarizes the carrying amounts and fair value of our Level 2 financial instruments as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		As of September 30, 2022				As of December 31, 2021					As of September 30, 2023				As of December 31, 2022
(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
Mortgages payable(1)	Mortgages payable(1)	$	1,704,074	$	1,545,402	$	1,695,408	$	1,692,674	Mortgages payable(1)	$	1,655,440	$	1,504,859	$	1,699,491	$	1,542,869

(1) Carrying amounts exclude unamortized debt issuance costs of ~~$8.3~~$12.1 million and ~~$8.2~~$7.8 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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, operating performance, and environmental and regulatory changes, which may result in property operational disruption and could indicate that the carrying amount may not be recoverable.

During the three months ended March 31, 2023, as a result of our quarterly impairment evaluation, we recognized a non-cash impairment charge of $34.1 million on our property, Kingswood Center. The property, an office and retail center acquired in February 2020, is located in Brooklyn, NY. In March of 2023, a tenant representing 50,000 sf informed us that they intend to vacate early next year, and a tenant representing 17,000 sf terminated their lease effective April 17, 2023. As a result of these events and the uncertainty of the office market, we determined that the undiscounted future cash flows and future terminal value were less than the carrying value of the property. The mortgage on the property was transferred to special servicing in May 2023 at the Company's request considering the 2023 projected NOI will not cover debt service.

The impairment charge of $34.1 million was calculated as the difference between the asset's individual carrying value and the estimated fair value of $49 million less estimated selling costs, which was based on the discounted future cash flows and future terminal value. The discounted cash flows and terminal value utilized a discount rate of 8% and capitalization rates of 6% for retail and 7% for office, which were corroborated by third-party valuations and market data. The Company believes the inputs utilized to measure the fair value were reasonable in the context of applicable market conditions, however, due to the significance of the unobservable inputs in the overall fair value measures, the Company determined that such fair value measurements are classified as Level 3. The impairment charge is recorded within the real estate impairment loss line item on our consolidated statements of income and comprehensive income. No ~~material~~ impairment charges were recognized during the three months ended September 30, 2023 or the three and nine months ended September 30, ~~2022 or 2021.~~2022.

10. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, we are a party to various legal proceedings, claims or regulatory inquiries and investigations arising out of, or incident to, our ordinary course of business. While we are unable to predict with certainty the outcome of any particular matter, management does not currently expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our results of operations or consolidated financial position.

Subsequent to quarter end, the Company settled an ongoing litigation matter pursuant to which it expects to receive $10 million later in the year, the receipt of which would result in a corresponding gain in the fourth quarter. The terms of the settlement are subject to a confidentiality agreement.

Redevelopment and Anchor Repositioning

The Company has 23 active development, redevelopment or anchor repositioning projects with total estimated costs of ~~$260.9~~$168.5 million, of which ~~$174.9~~$93.8 million remains to be funded as of September 30, ~~2022.~~2023. We continue to monitor the stabilization dates of these projects, which can be impacted from economic conditions affecting our tenants, vendors and supply chains. 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 further evaluated based on market conditions.

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, amongst 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.

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 consolidated financial position.

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 ~~$1.6~~$1.4 million and ~~$1.7~~$1.6 million on our consolidated balance sheets as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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.

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. As

On April 23, 2023, Bed Bath & Beyond filed for Chapter 11 bankruptcy protection. Bed Bath & Beyond had a total of ~~September 30, 2022, there are no~~six leases with us, including those with wholly-owned store concepts buybuy Baby and Harmon Face Values. Our three leases with Harmon Face Values, totaling 18,000 sf and which generated $0.5 million in annual rental revenue, were rejected effective April 2023 and the tenant ~~bankruptcies that we believe~~has vacated the premises at all three locations. On July 19, 2023, an auction was held for the remaining three leases with Bed Bath & Beyond, resulting in the rejection of two of the leases which generated $2.5 million in annual rental revenue. The third lease, which generates $0.6 million in annual rental revenue, was bid on and assumed by a new operator who will ~~have~~continue to operate the store as a ~~material adverse effect on our results of operations or consolidated financial position.~~buybuy Baby.

11. PREPAID EXPENSES AND OTHER ASSETS

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


		Balance at					Balance at
(Amounts in thousands)	(Amounts in thousands)	September 30, 2022		December 31, 2021		(Amounts in thousands)	September 30, 2023		December 31, 2022
Deferred tax asset, net	Deferred tax asset, net	$	35,252	$	37,420	Deferred tax asset, net	$	20,962	$	34,616
Other assets	Other assets	19,111		19,712		Other assets	29,379		18,386
Deferred financing costs, net of accumulated amortization of $6,856 and $5,932, respectively		7,154		2,234
Deferred financing costs, net of accumulated amortization of $8,507 and $7,269, respectively						Deferred financing costs, net of accumulated amortization of $8,507 and $7,269, respectively	5,511		6,749
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

Prepaid expenses:	Prepaid expenses:					Prepaid expenses:
Real estate taxes	Real estate taxes	8,591		9,982		Real estate taxes	9,684		12,080
Insurance	Insurance	3,536		1,088		Insurance	4,288		1,391
Licenses/fees	Licenses/fees	1,281		951		Licenses/fees	1,421		1,261
Total prepaid expenses and other assets	Total prepaid expenses and other assets	$	77,649	$	74,111	Total prepaid expenses and other assets	$	73,969	$	77,207

12. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

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


		Balance at					Balance at
(Amounts in thousands)	(Amounts in thousands)	September 30, 2022		December 31, 2021		(Amounts in thousands)	September 30, 2023		December 31, 2022
Accrued capital expenditures and leasing costs						Accrued capital expenditures and leasing costs	$	19,555	$	35,732
Deferred tenant revenue	Deferred tenant revenue	$	25,273	$	28,898	Deferred tenant revenue	30,329		28,468
Accrued capital expenditures and leasing costs		18,066		19,164
Accrued interest payable	Accrued interest payable	10,481		9,879		Accrued interest payable	9,065		10,789
Security deposits						Security deposits	8,305		8,048
Other liabilities and accrued expenses	Other liabilities and accrued expenses	8,085		8,057		Other liabilities and accrued expenses	12,481		6,939
Security deposits		7,246		6,693
Finance lease liability						Finance lease liability	3,025		3,016
Accrued payroll expenses	Accrued payroll expenses	6,546		9,134		Accrued payroll expenses	7,257		9,527
Finance lease liability		3,013		3,004
Total accounts payable, accrued expenses and other liabilities	Total accounts payable, accrued expenses and other liabilities	$	78,710	$	84,829	Total accounts payable, accrued expenses and other liabilities	$	90,017	$	102,519

13. INTEREST AND DEBT EXPENSE

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Interest expense	Interest expense	$	14,344	$	13,893	$	41,056	$	41,946	Interest expense	$	17,932	$	14,344	$	49,351	$	41,056
Amortization of deferred financing costs	Amortization of deferred financing costs	922		745		2,455		2,247		Amortization of deferred financing costs	1,074		922		3,079		2,455
Total interest and debt expense	Total interest and debt expense	$	15,266	$	14,638	$	43,511	$	44,193	Total interest and debt expense	$	19,006	$	15,266	$	52,430	$	43,511

14. EQUITY AND NONCONTROLLING INTEREST

At-The-Market Program

On August 15, 2022 the Company and the Operating Partnership entered into an equity distribution agreement (the “Equity Distribution Agreement”) with various financial institutions acting as agents, forward sellers, and forward purchasers. Pursuant to the Equity Distribution Agreement, the Company may from time to time offer and sell, through the agents and forward sellers, the Company’s common shares, par value $0.01 per share, having an aggregate offering price of up to $250 million (the “ATM Program”). Concurrently with the Equity Distribution Agreement, the Company entered into separate master forward confirmations (collectively, the “Master Confirmations”) with each of the forward purchasers. 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. The ATM Program ~~replaces~~replaced the Company’s previous at-the-market program established on June 7, 2021.

The Equity Distribution Agreement provides that the Company may also enter into forward sale agreements pursuant to any Master Confirmation and related supplemental confirmations with the forward purchasers. In connection with any forward sale agreement, a forward purchaser will, at the Company’s request, borrow from third parties, through its forward seller, and sell a number of shares equal to the amount provided in such agreement.

As of September 30, ~~2022,~~2023, 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

The Company has a share repurchase program for up to $200 million, under which 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~~SEC 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 nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, no shares were repurchased by the Company. As of September 30, ~~2022,~~2023, the Company ~~has~~ repurchased 5.9 million common shares at a weighted average share price of $9.22, for a total of $54.1 million. All share repurchases by the Company were completed between March and April of 2020. There is approximately $145.9 million remaining for share repurchases under this program.

Units of the Operating Partnership

The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership. As of September 30, ~~2022,~~2023, Urban Edge owned approximately ~~95.9%~~95.8% of the outstanding common OP ~~Units~~units with the remaining limited OP ~~Units~~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 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.

Dividends and Distributions

During the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company declared distributions on common shares and OP ~~Units~~units of $0.16 ~~and $0.15~~ per share/~~unit, respectively.~~unit. During the nine months ended September 30, ~~2022~~2023 and ~~2021, respectively,~~2022, the Company declared distributions on common shares and OP ~~Units~~units of $0.48 ~~and $0.45~~ per share/unit 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~~units and limited partnership interests in the Operating Partnership in the form of LTIP ~~Unit~~unit awards. LTIP ~~Unit~~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”).~~Plan. OP ~~Units~~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~~units and LTIP ~~Units~~units represent a ~~4.1%~~4.3% and ~~4.0%~~4.1% weighted-average interest in the Operating Partnership for the three and nine months ended September 30, ~~2022, respectively.~~2023. Holders of outstanding vested LTIP ~~Units~~units may, from and after two years from the date of issuance, redeem their LTIP ~~Units~~units for cash, or for the Company’s common shares on a one-for-one basis, solely at our election. Holders of outstanding OP ~~Units~~units may redeem their units for cash or the Company’s common shares on a one-for-one basis, solely at our election. During the nine months ended September 30, 2023, 70,000 units were redeemed for an equivalent amount of common shares of the Company.

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 on our consolidated statements of income and comprehensive 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 and comprehensive income, is summarized as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Share-based compensation expense components:	Share-based compensation expense components:									Share-based compensation expense components:
Time-based LTIP expense(1)	Time-based LTIP expense(1)	$	1,357	$	1,326	$	3,820	$	3,659	Time-based LTIP expense(1)	$	909	$	1,357	$	3,158	$	3,820
Performance-based LTIP expense(2)	Performance-based LTIP expense(2)	885		976		2,862		2,889		Performance-based LTIP expense(2)	710		885		2,173		2,862
Stock option expense		206		384		647		1,181
Restricted share expense	Restricted share expense	98		98		272		365		Restricted share expense	165		98		578		272
Deferred share unit (“DSU”) expense	Deferred share unit (“DSU”) expense	34		25		76		124		Deferred share unit (“DSU”) expense	30		34		94		76
Stock option expense										Stock option expense	—		206		20		647
Total Share-based compensation expense	Total Share-based compensation expense	$	2,580	$	2,809	$	7,677	$	8,218	Total Share-based compensation expense	$	1,814	$	2,580	$	6,023	$	7,677

(1) Expense for the three and nine months ended September 30, ~~2022~~2023 includes the 2023, 2022, 2021, 2020 and 2019 LTI Plans.

(2) Expense for the three and nine months ended September 30, ~~2022~~2023 includes the 2017 OPP plan and the 2023, 2022, 2021, 2020, 2019, and 2018 LTI Plans.

Equity award activity during the nine months ended September 30, ~~2022~~2023 included: (i) ~~408,845~~314,117 LTIP units granted, (ii) 264,342 LTIP units vested, (iii) 80,520 restricted shares granted, (iv) 32,134 stock options vested, ~~(ii) 341,789 LTIP Units vested, (iii) 332,458 LTIP Units granted, (iv) 44,214 restricted shares granted,~~ (v) ~~23,652~~31,118 restricted shares vested, and (vi) ~~19,974 LTIP Units forfeited, and (vii) 13,924~~7,917 restricted shares forfeited.

~~2022~~2023 Long-Term Incentive Plan

On February ~~11, 2022,~~10, 2023, the ~~grant date,~~Company established the ~~Compensation Committee of the Board of Trustees approved the 2022~~2023 Long-Term Incentive Plan (“~~2022~~2023 LTI Plan”). under the Omnibus Share Plan. The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, receive awards in the form of LTIP ~~Units~~units that, with respect to one half of the program, vest based solely on the passage of ~~time, and with~~time. With respect to the other half of the program, the awards are earned and vest if certain relative and absolute total shareholder return (“TSR”) and/or funds from operations (“FFO”) and same-property net operating income (“SP NOI”)

growth targets are achieved by the Company over a three-year performance period. The total grant date fair value under the ~~2022~~2023 LTI Plan was ~~$8.6~~$7.4 million, comprising both performance-based and time-based awards as described further below:

Performance-based awards

For the performance-based awards under the ~~2022~~2023 LTI plan, participants have the opportunity to earn awards in the form of LTIP ~~Units~~units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year performance measurement period ~~(the “TSR Performance Period”)~~ beginning on February ~~11, 2022~~10, 2023 and ending on February ~~10, 2025.~~9, 2026. Participants also have the opportunity to earn awards in the form of LTIP ~~Units~~units if Urban Edge’s FFO growth component and SP NOI growth component meets certain criteria over the three-year performance measurement period ~~(the “FFO Performance Period”)~~ beginning January 1, ~~2022~~2023 and ending on December 31, ~~2024.~~2025. The Company granted performance-based awards under the ~~2022~~2023 LTI Plan representing ~~349,438 Units.~~309,611 units. The fair value of the performance-based award portion of the ~~2022~~2023 LTI Plan on the grant date was ~~$4.3~~$3.7 million using a Monte Carlo simulation to estimate the fair value of the Absolute and Relative components through a risk-neutral premise.

~~Under the absolute TSR component, 50% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to 18%~~ Assumptions include historical volatility (53.3%), ~~100% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to 27%~~risk-free interest rates (4.2%), and ~~200% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to or greater than 36%. The relative TSR component is based on the Company’s performance~~historical daily return as compared to acertain peer ~~group comprised of 14~~ companies. ~~Under the relative TSR Component, 50% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to the 35~~th ~~percentile of the peer group, 100% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to the 55~~th ~~percentile of the peer group, and 200% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to or above the 75~~th percentile of the peer group. Under the FFO growth component, 50% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to 3%, 100% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to 5%, and 200% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to or greater than 7%. If the Company’s performance-based awards are between such thresholds, earnings will be determined using linear interpolation.

Time-based awards

The time-based awards granted under the ~~2022~~2023 LTI Plan, also granted in the form of LTIP ~~Units,~~units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratable over four years. As of September 30, ~~2022,~~2023, the Company granted time-based awards under the ~~2022~~2023 LTI Plan that represent ~~266,766~~257,561 LTIP ~~Units~~units with a grant date fair value of ~~$4.3~~$3.7 million.

16. EARNINGS PER SHARE AND UNIT

Urban Edge Earnings per Share

We calculate 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 September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per share amounts)	(Amounts in thousands, except per share amounts)	2022		2021		2022		2021		(Amounts in thousands, except per share amounts)	2023		2022		2023		2022
Numerator:	Numerator:									Numerator:
Net income attributable to common shareholders	Net income attributable to common shareholders	$	11,383	$	27,766	$	32,495	$	60,233	Net income attributable to common shareholders	$	36,118	$	11,383	$	27,262	$	32,495
Less: Earnings allocated to unvested participating securities		(6)		(12)		(17)		(29)
Less: earnings allocated to unvested participating securities										Less: earnings allocated to unvested participating securities	(30)		(6)		(25)		(17)
Net income available for common shareholders - basic	Net income available for common shareholders - basic	$	11,377	$	27,754	$	32,478	$	60,204	Net income available for common shareholders - basic	$	36,088	$	11,377	$	27,237	$	32,478
Impact of assumed conversions:	Impact of assumed conversions:									Impact of assumed conversions:
OP and LTIP Units	OP and LTIP Units	388		—		1,103		2,608		OP and LTIP Units	1,375		388		10		1,103
Net income available for common shareholders - dilutive	Net income available for common shareholders - dilutive	$	11,765	$	27,754	$	33,581	$	62,812	Net income available for common shareholders - dilutive	$	37,463	$	11,765	$	27,247	$	33,581

Denominator:	Denominator:									Denominator:
Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	117,382		117,087		117,359		117,009		Weighted average common shares outstanding - basic	117,543		117,382		117,492		117,359
Effect of dilutive securities(1):	Effect of dilutive securities(1):									Effect of dilutive securities(1):

Restricted share awards	Restricted share awards	58		50		61		56		Restricted share awards	96		58		90		61
Assumed conversion of OP and LTIP Units	Assumed conversion of OP and LTIP Units	4,243		—		4,052		5,147		Assumed conversion of OP and LTIP Units	4,566		4,243		45		4,052
Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	121,683		117,137		121,472		122,212		Weighted average common shares outstanding - diluted	122,205		121,683		117,627		121,472

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	Earnings per common share - Basic	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per common share - Basic	$	0.31	$	0.10	$	0.23	$	0.28
Earnings per common share - Diluted	Earnings per common share - Diluted	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per common share - Diluted	$	0.31	$	0.10	$	0.23	$	0.28

(1) For the three and nine months ended September 30, 2023 and 2022, the effect of the redemption of certain 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.

2627

Operating Partnership Earnings per Unit

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per unit amounts)	(Amounts in thousands, except per unit amounts)	2022		2021		2022		2021		(Amounts in thousands, except per unit amounts)	2023		2022		2023		2022
Numerator:	Numerator:									Numerator:
Net income attributable to unitholders	Net income attributable to unitholders	$	11,838	$	28,915	$	33,843	$	62,841	Net income attributable to unitholders	$	37,673	$	11,838	$	28,473	$	33,843
Less: net income attributable to participating securities	Less: net income attributable to participating securities	(6)		(12)		(17)		(29)		Less: net income attributable to participating securities	(30)		(6)		(25)		(17)
Net income available for unitholders	Net income available for unitholders	$	11,832	$	28,903	$	33,826	$	62,812	Net income available for unitholders	$	37,643	$	11,832	$	28,448	$	33,826

Denominator:	Denominator:									Denominator:
Weighted average units outstanding - basic	Weighted average units outstanding - basic	121,405		120,903		121,320		120,839		Weighted average units outstanding - basic	121,964		121,405		121,879		121,320
Effect of dilutive securities issued by Urban Edge	Effect of dilutive securities issued by Urban Edge	58		50		61		56		Effect of dilutive securities issued by Urban Edge	96		58		90		61
Unvested LTIP Units	Unvested LTIP Units	220		1,034		276		1,317		Unvested LTIP Units	145		220		45		276
Weighted average units outstanding - diluted	Weighted average units outstanding - diluted	121,683		121,987		121,657		122,212		Weighted average units outstanding - diluted	122,205		121,683		122,014		121,657

Earnings per unit available to unitholders:	Earnings per unit available to unitholders:									Earnings per unit available to unitholders:
Earnings per unit - Basic	Earnings per unit - Basic	$	0.10	$	0.24	$	0.28	$	0.52	Earnings per unit - Basic	$	0.31	$	0.10	$	0.23	$	0.28
Earnings per unit - Diluted	Earnings per unit - Diluted	$	0.10	$	0.24	$	0.28	$	0.51	Earnings per unit - Diluted	$	0.31	$	0.10	$	0.23	$	0.28

2728

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, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by 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 and related COVID-19 ~~variants, including its potential impact on our retail tenants and their ability to make rent and other payments or honor their commitments under existing leases;~~variants; (ii) the loss or bankruptcy of major tenants; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and 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; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company’s share 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, rising inflation, and other factors, including the discontinuation of USD LIBOR, which ~~is currently anticipated to occur in~~was replaced by SOFR after June 30, 2023; (ix) the Company’s ability to pay down, refinance, hedge, 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; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. 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, ~~2021~~2022 and the other documents filed by the Company with the SEC, including the information contained in this Quarterly Report on Form 10-Q.

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for any forward-looking statements included in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on 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 owns, manages, acquires, develops, ~~redevelops,~~ and ~~acquires~~redevelops retail real estate, primarily in the Washington, D.C. to Boston corridor. 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 (“OP Units”). As of September 30, ~~2022,~~2023, Urban Edge owned approximately ~~95.9%~~95.8% of the outstanding common OP Units with the remaining limited OP Units held by members of management and the Board of Trustees, and contributors of property interests acquired. Urban Edge serves as the sole general partner of the Operating Partnership.

2829

As of September 30, ~~2022,~~2023, our portfolio consisted of 6970 shopping centers, ~~five~~two outlet centers, two malls and two industrial parks totaling approximately 17.2 million square feet.

Critical Accounting Estimates

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 contains a description of our critical accounting estimates, including collectibility, valuing acquired assets and liabilities and impairments. For the nine months ended September 30, ~~2022,~~2023, there were no material changes to these estimates.

Recent Accounting Pronouncements

Refer to Note 3 to the unaudited consolidated financial statements in Part I, Item 1 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 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~~In the five years preceding 2021, inflation levels remained relatively low compared to historical averages. However, in recent years there has been a rise in inflation due in part to the current ~~global~~economic climate ~~has increased~~and volatility in the ~~market and has caused a surge in already increasing inflation. The Federal Reserve has taken measures to suppress inflation by way of benchmark rate hikes, resulting in an increase in interest rates.~~financial markets. 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 their lease. The Federal Reserve has taken measures to suppress inflation by way of benchmark interest rate hikes, resulting in an increase in interest rates. As of September 30, ~~2022,~~2023, approximately ~~91%~~92% of our outstanding debt is fixed rate, with the remaining 9%8% indexed to ~~LIBOR,~~ SOFR ~~or the Prime Rate,~~ plus an applicable margin per the loan ~~agreement.~~agreements. We ~~occasionally~~ utilize interest rate derivative agreements to hedge the effect of rising interest rates on our variable rate debt. As of September 30, ~~2022,~~2023, we were counter-party to one interest rate swap agreement and one interest rate cap agreement, both of which qualify for, and are designated as, hedging instruments. While we have not experienced any material ~~negative impacts at this time,~~adverse effects from such events, we are actively managing our business to respond to the ongoing economic and social ~~impact from such events.~~impacts. See “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~

2022.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Net income	Net income	$	11,465	$	30,105	$	33,008	$	63,802	Net income	$	37,540	$	11,465	$	27,957	$	33,008
FFO applicable to diluted common shareholders(1)	FFO applicable to diluted common shareholders(1)	35,938		45,302		106,345		112,463		FFO applicable to diluted common shareholders(1)	64,242		35,938		138,762		106,345
NOI(1)	NOI(1)	59,586		56,809		176,296		167,625		NOI(1)	63,360		59,586		186,043		176,296
Same-property NOI(1)	Same-property NOI(1)	52,750		51,026		155,840		150,849		Same-property NOI(1)	57,248		56,389		166,726		161,800

(1) Refer to pages ~~33-34~~34-35 for a reconciliation to the ~~nearest~~most directly comparable generally accepted accounting principles (“GAAP”) measure.

2930

Comparison of the Three Months Ended September 30, ~~2022~~2023 to the Three Months Ended September 30, ~~2021~~2022

Net income for the three months ended September 30, ~~2022~~2023 was ~~$11.5~~$37.5 million, compared to net income of ~~$30.1~~$11.5 million for the three months ended September 30, ~~2021.~~2022. The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items that significantly changed in the three months ended September 30, ~~2022~~2023 as compared to the same period in ~~2021:~~2022:


		Three Months Ended September 30,							Three Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		$ Change		(Amounts in thousands)	2023		2022		$ Change
Total revenue	Total revenue	$	98,290	$	106,839	$	(8,549)	Total revenue	$	101,834	$	98,290	$	3,544
Depreciation and amortization	Depreciation and amortization	24,343		23,171		1,172		Depreciation and amortization	26,922		24,343		2,579
Real estate taxes		16,231		15,862		369

Property operating expenses	Property operating expenses	17,672		15,692		1,980		Property operating expenses	16,618		17,672		(1,054)
General and administrative expenses	General and administrative expenses	9,852		10,134		(282)		General and administrative expenses	8,938		9,852		(914)

Gain on sale of real estate		—		6,926		(6,926)

Interest and debt expense	Interest and debt expense	15,266		14,638		628		Interest and debt expense	19,006		15,266		3,740

Gain on extinguishment of debt, net								Gain on extinguishment of debt, net	43,029		—		43,029
Income tax expense								Income tax expense	17,063		646		16,417

Total revenue ~~decreased~~increased by ~~$8.5~~$3.5 million to $101.8 million in the third quarter of 2023 from $98.3 million in the third quarter of ~~2022 from $106.8 million in the third quarter of 2021. The decrease is primarily attributable to:~~

•$13.3 million decrease in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in connection with the termination of our Kmart and Sears leases in the third quarter of 2021; and

•~~$0.8 million decrease in lease termination income and management and development fee income; offset by~~

•~~$4.5 million increase as a result of property acquisitions net of dispositions; and~~

•$1.1 million net increase in property rentals and tenant reimbursement income due to rent commencements, contractual rent increases and the impact of lease modifications executed in the third quarter of 2021.

~~Depreciation and amortization increased by $1.2 million to $24.3 million in the third quarter of 2022 from $23.2 million in the third quarter of 2021.~~2022. The increase is primarily attributable to:

•$~~2.5~~2.8 million increase ~~as a result~~in property rentals and tenant reimbursements due to rent commencements and contractual rent increases;

•$1.0 million of ~~property acquisitions net~~lease termination income in the third quarter of ~~dispositions;~~2023; and

•$0.7 million increase in non-cash revenues driven by straight-line rental income for rent commencements since the third quarter of 2022; offset by

•$~~1.3~~1.0 million ~~decrease due to write-offs~~increase in rental revenue deemed uncollectible driven by the recovery of ~~fully depreciated assets~~amounts previously deemed uncollectible in the third quarter of 2022.

Depreciation and ~~lease intangibles as a result of lease terminations and recurring depreciation.~~

~~Real estate taxes~~amortization increased by ~~$0.4~~$2.6 million to ~~$16.2~~$26.9 million in the third quarter of 2023 from $24.3 million in the third quarter of 2022 ~~from $15.9~~driven by a $2.6 million increase due to assets placed in service for completion of redevelopment projects since the third quarter of 2022.

Property operating expenses decreased by $1.1 million to $16.6 million in the third quarter of ~~2021.~~2023 from $17.7 million in the third quarter of 2022. The decrease is primarily attributable to lower expenses incurred for utilities and repairs and maintenance as compared to the third quarter of 2022.

General and administrative expenses decreased by $0.9 million to $8.9 million in the third quarter of 2023 from $9.9 million in the third quarter of 2022. The decrease is primarily attributable to lower employment expenses and professional fees.

Interest and debt expense increased by $3.7 million to $19.0 million in the third quarter of 2023 from $15.3 million in the third quarter of 2022. The increase is primarily attributable to:

•$~~0.7 million increase as a result of property acquisitions net of dispositions; and~~

•~~$0.4 million increase due to higher property assessments, net of successful appeals; offset by~~

•~~$0.7~~3.3 million increase in ~~capitalized real estate taxes~~interest expense due to ~~commencement~~new debt and loan refinancings, net of ~~development, redevelopment and anchor repositioning projects.~~

~~Property operating expenses increased by $2.0 million to $17.7 million in the third quarter of 2022 from $15.7 million in the third quarter of 2021. The increase is primarily attributable to:~~

•~~$1.2 million higher common area maintenance expenses across the portfolio as a result of increased repairs and maintenance, cleaning, security, landscaping and utility usage at our properties in~~loan repayments, since the third quarter of 2022; ~~and~~

•$0.8 ~~million increase as a result of property acquisitions net of dispositions.~~

General and administrative expenses decreased by $0.3 million to $9.9 million in the third quarter of 2022 from $10.1 million in the third quarter of 2021. This is primarily attributable to a decrease in stock compensation expense due to the vesting of equity awards in third quarter of 2021.

~~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 increased by $0.6 million to $15.3 million in the third quarter of 2022 from $14.6 million in the third quarter of 2021. The increase is primarily attributable to:~~

•~~$1.3 million increase in interest expense in connection with the mortgage loans obtained for the acquisition of Woodmore Towne Centre in December 2021 and The Shops at Riverwood in June 2022; and~~

•~~$1.2~~ million increase in interest expense due to higher rates on our variable rate ~~loans~~loans; and ~~the refinancing of our mortgage loans at Plaza at Woodbridge~~

•$0.2 million increase in deferred financing costs and ~~Plaza at Cherry Hill in the second quarter of 2022;~~credit facility fees; offset by

•$~~1.9~~0.6 million increase in capitalized interest expense due to commencement of development, redevelopment and anchor repositioning ~~projects.~~projects; partially offset by project completions.

In August 2023, we recognized a $43 million gain on the extinguishment of debt as a result of the refinancing of the mortgage loan secured by Las Catalinas Mall. We recognized an income tax expense of $17.1 million for the third quarter of 2023, an increase of $16.4 million from the third quarter of 2022. The increase is primarily a result of the Las Catalinas Mall loan refinancing noted above.

3031

Comparison of the Nine Months Ended September 30, ~~2022~~2023 to the Nine Months Ended September 30, ~~2021~~2022

Net income for the nine months ended September 30, ~~2022~~2023 was ~~$33.0~~$28.0 million, compared to net income of ~~$63.8~~$33.0 million for the nine months ended September 30, ~~2021.~~2022. The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items that significantly changed in the nine months ended September 30, ~~2022~~2023 as compared to the same period in ~~2021:~~2022:


		Nine Months Ended September 30,							Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		$ Change		(Amounts in thousands)	2023		2022		$ Change
Total revenue	Total revenue	$	296,345	$	296,506	$	(161)	Total revenue	$	300,340	$	296,345	$	3,995
Depreciation and amortization	Depreciation and amortization	73,561		68,534		5,027		Depreciation and amortization	77,519		73,561		3,958
Real estate taxes	Real estate taxes	47,662		47,826		(164)		Real estate taxes	47,980		47,662		318
Property operating expenses	Property operating expenses	56,473		51,874		4,599		Property operating expenses	49,752		56,473		(6,721)
General and administrative expenses	General and administrative expenses	31,607		28,286		3,321		General and administrative expenses	27,903		31,607		(3,704)
Real estate impairment loss								Real estate impairment loss	34,055		—		34,055

Gain on sale of real estate		353		18,648		(18,295)
Interest and debt expense	Interest and debt expense	43,511		44,193		(682)		Interest and debt expense	52,430		43,511		8,919

Gain on extinguishment of debt, net								Gain on extinguishment of debt, net	42,540		—		42,540
Income tax expense	Income tax expense	2,262		905		1,357		Income tax expense	17,810		2,262		15,548

Total revenue ~~decreased~~increased by ~~$0.2~~$4.0 million to $300.3 million in the nine months ended September 30, 2023 from $296.3 million in the nine months ended September 30, ~~2022 from $296.5 million in the nine months ended September 30, 2021.~~2022. The ~~decrease~~increase is primarily attributable to:

•$~~13.3~~3.4 million ~~decrease~~increase in property rentals and tenant reimbursements due to rent commencements and contractual rent increases;

•$1.8 million increase as a result of a property acquisition in the second quarter of 2022;

•$1.3 million increase in non-cash revenues driven by ~~accelerated amortization~~higher straight-line rental income for rent commencements since the first nine months of ~~below-market intangible liabilities~~2022; and

•$0.2 million increase in ~~connection with the~~other income driven by lease termination ~~of our Kmart and Sears leases~~income in the third quarter of ~~2021; and~~

•~~$1.4 million decrease in lease termination income and~~2023, partially offset by lower management and development fee income; offset by

•$~~12.0~~2.7 million increase ~~as a result of property acquisitions net of dispositions; and~~

•~~$2.5 million net increase~~ in property rentals and tenant reimbursements income due to higher tenant sales, rent commencements and contractual rent increases, partially offset by lease terminations and lease modifications executed in 2021.rental revenue deemed uncollectible.

Depreciation and amortization increased by ~~$5.0~~$4.0 million to $77.5 million in the nine months ended September 30, 2023 from $73.6 million in the nine months ended September 30, ~~2022 from $68.5 million in the nine months ended September 30, 2021.~~2022. The increase is primarily attributable to:

•$~~8.0~~3.4 million increase due to assets placed in service for completion of redevelopment projects since the first nine months of 2022; and

•$0.6 million increase as a result of a property ~~acquisitions net~~acquisition in the second quarter of ~~dispositions; offset by~~

•~~$3.0 million decrease due to write-offs of fully depreciated assets and lease intangibles as a result of lease terminations and recurring depreciation.~~2022.

Real estate taxes ~~decreased~~increased by ~~$0.2~~$0.3 million to $48.0 million in the nine months ended September 30, 2023 from $47.7 million in the nine months ended September 30, ~~2022 from $47.8~~2022. The increase is primarily attributable to:

•$0.4 million increase as a result of higher tax assessments, net of successful appeals; and

•$0.2 million increase as a result of a property acquisition in the second quarter of 2022; offset by

•$0.3 million increase in capitalized real estate taxes due to the commencement of development, redevelopment, and anchor repositioning projects, offset by project completions.

Property operating expenses decreased by $6.7 million to $49.8 million in the nine months ended September 30, ~~2021.~~2023 from $56.5 million in the nine months ended September 30, 2022. The decrease is primarily attributable to:

•$~~2.2~~7.2 million ~~increase in capitalized real estate taxes due to an increase in active development, redevelopment and anchor repositioning projects; offset by~~

•~~$1.9 million increase as a result of property acquisitions net of dispositions; and~~

•~~$0.1 million increase due to higher property assessments, net of successful appeals.~~

Property operating expenses increased by $4.6 million to $56.5 million in the nine months ended September 30, 2022 from $51.9 million in the nine months ended September 30, 2021. The increase is primarily attributable to:

•~~$2.6 million higher~~lower common area maintenance expenses across the portfolio as a result of ~~increased~~lower snow removal, utilities, and repairs and maintenance ~~utility usage, cleaning, and landscaping at our properties in 2022 and spend reductions in 2021; and~~as compared to the first nine months of 2022; offset by

•$~~2.0~~0.5 million increase as a result of a property ~~acquisitions net~~acquisition in the second quarter of ~~dispositions.~~2022.

General and administrative expenses ~~increased~~decreased by ~~$3.3~~$3.7 million to $27.9 million in the nine months ended September 30, 2023 from $31.6 million in the nine months ended September 30, ~~2022 from $28.3~~2022. The decrease is primarily attributable to lower employment expenses, professional fees, and transaction costs.

We recognized a real estate impairment loss of $34.1 million in the first quarter of 2023, reducing the carrying value of an office and retail property located in Brooklyn, NY.

Interest and debt expense increased by $8.9 million to $52.4 million in the nine months ended September 30, ~~2021. This is primarily attributable to an increase in salary, bonus, professional fees, transaction costs and other expenses.~~

A gain on the sale of real estate of $0.4 million was recognized in 2022 in connection with the release of escrow funds related to a property disposed of in a prior period. We recognized a gain on sale of real estate of $18.6 million in 2021 related to the sale of three properties and one property parcel.

~~Interest and debt expense decreased by $0.7 million to~~2023 from $43.5 million in the nine months ended September 30, ~~2022 from $44.2 million in the nine months ended September 30, 2021.~~2022. The ~~decrease~~increase is primarily attributable to:

•$~~5.2 million increase in capitalized interest expense due to an increase in active development, redevelopment and anchor repositioning projects; offset by~~

•~~$3.2~~6.6 million increase in interest expense ~~in connection with~~due to new debt and loan refinancings since the ~~mortgage loans obtained for the acquisitions~~first nine months of ~~Woodmore Towne Centre in December 2021 and The Shops at Riverwood in June~~ 2022; ~~and~~

•$~~1.3~~3.8 million increase in interest expense due to higher rates on our variable rate ~~loans~~loans; and

•$1.0 million increase in amortization of deferred financing costs for loan refinancings and credit facility fees related to the line of credit recast in 3Q22; offset by

•$2.5 million increase in capitalized interest expense due to commencement of development, redevelopment and anchor repositioning projects; partially offset by project completions.

We recognized a $42.5 million gain on the extinguishment of debt for the nine months ended September 30, 2023 attributable to the refinancing of ~~our mortgage loans at Plaza at Cherry Hill and Plaza at Woodbridge~~the Las Catalinas Mall loan in August 2023, partially offset by the $0.5 million loss on extinguishment recognized in the second quarter of ~~2021.~~2023 related to the early payoff of the Plaza at Cherry Hill loan.

Income tax expense increased by ~~$1.4~~$15.5 million to $17.8 million in the nine months ended September 30, 2023 from $2.3 million in the nine months ended September 30, ~~2022 from $0.9 million~~2022. The increase was driven by an income tax expense recognized in the ~~nine months ended September 30, 2021. The increase is primarily attributed~~third quarter of 2023 related to the ~~performance of our properties~~Las Catalinas loan refinancing in ~~Puerto Rico.~~August 2023.

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 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.

We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excluding properties acquired, sold, or ~~sold~~that are in the foreclosure process 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, disposition or ~~disposition~~foreclosure of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors. Same-property NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others.

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 69~~totaling 70 and 68 properties for the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, 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, sold, or ~~sold~~that are in the foreclosure process 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.

3233

Same-property NOI increased by ~~$1.7~~$0.9 million, or ~~3.4%~~1.5%, for the three months ended September 30, ~~2022,~~2023, compared to the three months ended September 30, ~~2021~~2022 and increased by ~~$5.0~~$4.9 million, or ~~3.3%~~3.0%, for the nine months ended September 30, ~~2022, as~~2023, compared to the nine months ended September 30, ~~2021.~~2022. Same-property NOI, including properties in redevelopment, increased by $2.0 million, or 3.3%, for the three months ended September 30, 2023, compared to the three months ended September 30, 2022 and increased by $7.9 million, or 4.5%, for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

The following table reconciles net income to NOI and same-property NOI for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Net income	Net income	$	11,465	$	30,105	$	33,008	$	63,802	Net income	$	37,540	$	11,465	$	27,957	$	33,008

Other (income) expense		230		(75)		(300)		(524)
Other expense (income)										Other expense (income)	208		230		678		(300)
Depreciation and amortization	Depreciation and amortization	24,343		23,171		73,561		68,534		Depreciation and amortization	26,922		24,343		77,519		73,561
General and administrative expense	General and administrative expense	9,852		10,134		31,607		28,286		General and administrative expense	8,938		9,852		27,903		31,607
Gain on sale of real estate	Gain on sale of real estate	—		(6,926)		(353)		(18,648)		Gain on sale of real estate	—		—		(356)		(353)
Interest income	Interest income	(294)		(77)		(713)		(303)		Interest income	(565)		(294)		(1,640)		(713)
Interest and debt expense	Interest and debt expense	15,266		14,638		43,511		44,193		Interest and debt expense	19,006		15,266		52,430		43,511

Gain on extinguishment of debt, net										Gain on extinguishment of debt, net	(43,029)		—		(42,540)		—
Income tax expense	Income tax expense	646		704		2,262		905		Income tax expense	17,063		646		17,810		2,262
Real estate impairment loss	Real estate impairment loss	—		372		—		372		Real estate impairment loss	—		—		34,055		—
Non-cash revenue and expenses	Non-cash revenue and expenses	(1,922)		(15,237)		(6,287)		(18,992)		Non-cash revenue and expenses	(2,723)		(1,922)		(7,773)		(6,287)
NOI	NOI	59,586		56,809		176,296		167,625		NOI	63,360		59,586		186,043		176,296
Adjustments:	Adjustments:									Adjustments:
Non-same property NOI(1)		(8,466)		(6,273)		(23,677)		(18,143)
Non-same property NOI and other(1)										Non-same property NOI and other(1)	(5,583)		(4,827)		(19,999)		(17,717)
Sunrise Mall net operating loss	Sunrise Mall net operating loss	1,637		1,023		3,338		2,661		Sunrise Mall net operating loss	458		1,637		1,926		3,338
Tenant bankruptcy settlement income and lease termination income	Tenant bankruptcy settlement income and lease termination income	(7)		(533)		(117)		(1,294)		Tenant bankruptcy settlement income and lease termination income	(987)		(7)		(1,244)		(117)
Same-property NOI	Same-property NOI	$	52,750	$	51,026	$	155,840	$	150,849	Same-property NOI	$	57,248	$	56,389	$	166,726	$	161,800
NOI related to properties being redeveloped	NOI related to properties being redeveloped	4,964		5,829		13,930		16,083		NOI related to properties being redeveloped	5,497		4,347		17,841		14,852
Same-property NOI including properties in redevelopment	Same-property NOI including properties in redevelopment	$	57,714	$	56,855	$	169,770	$	166,932	Same-property NOI including properties in redevelopment	$	62,745	$	60,736	$	184,567	$	176,652

(1) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired, disposed, or ~~disposed~~that are in the ~~period.~~foreclosure process in the periods being compared.

3334

Funds From Operations

FFO applicable to diluted common shareholders was $64.2 million for the three months ended September 30, 2023 compared to $35.9 million for the three months ended September 30, 2022, ~~compared to $45.3~~and $138.8 million for the ~~three~~nine months ended September 30, ~~2021. FFO was~~2023 compared to $106.3 million for the nine months ended September 30, ~~2022 compared to $112.5 million for the nine months ended September 30, 2021.~~2022.

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, earnings from consolidated partially owned entities, 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.

The following table reflects the reconciliation of net income to FFO for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		2022		2021		(Amounts in thousands)	2023		2022		2023		2022
Net income	Net income	$	11,465	$	30,105	$	33,008	$	63,802	Net income	$	37,540	$	11,465	$	27,957	$	33,008
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	(455)		(1,149)		(1,348)		(2,608)		Operating partnership	(1,555)		(455)		(1,211)		(1,348)
Consolidated subsidiaries	Consolidated subsidiaries	373		(1,190)		835		(961)		Consolidated subsidiaries	133		373		516		835
Net income attributable to common shareholders	Net income attributable to common shareholders	11,383		27,766		32,495		60,233		Net income attributable to common shareholders	36,118		11,383		27,262		32,495
Adjustments:	Adjustments:									Adjustments:
Rental property depreciation and amortization	Rental property depreciation and amortization	24,100		22,941		72,855		67,898		Rental property depreciation and amortization	26,569		24,100		76,590		72,855
Limited partnership interests in operating partnership(1)	Limited partnership interests in operating partnership(1)	455		1,149		1,348		2,608		Limited partnership interests in operating partnership(1)	1,555		455		1,211		1,348
Gain on sale of real estate(2)	Gain on sale of real estate(2)	—		(6,926)		(353)		(18,648)		Gain on sale of real estate(2)	—		—		(356)		(353)
Real estate impairment loss(3)	Real estate impairment loss(3)	—		372		—		372		Real estate impairment loss(3)	—		—		34,055		—
FFO applicable to diluted common shareholders	FFO applicable to diluted common shareholders	$	35,938	$	45,302	$	106,345	$	112,463	FFO applicable to diluted common shareholders	$	64,242	$	35,938	$	138,762	$	106,345

(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 because they are anti-dilutive.

(2) The gain on sale of real estate for the nine months ended September 30, 2023 relates to the release of escrow funds from a property disposed of in a prior period.

(3)

During the first quarter of 2023, the Company recognized a non-cash impairment charge reducing the carrying value of Kingswood Center, an office and retail property located in Brooklyn, NY.

3435

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 $0.16 per common share and OP unit for the first three quarters of ~~2022,~~2023, or an annual rate of $0.64. 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 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, 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. Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales. Additionally, we have an $800 million ~~revolving credit agreement~~Revolving Credit Agreement with certain financial institutions which has a maturity date of February 9, 2027 and includes two six-month extension options. During the nine months ended September 30, 2023, the Company obtained three letters of credit issued under the Agreement reducing the available balance of the facility to approximately $775.7 million. No amounts were drawn or outstanding under the Agreement as of September 30, 2023, and no separate liability has been recorded in connection with the undrawn letters of credit. On October 6, 2023, the Company obtained a letter of credit under the Agreement for $2 million and provided it to a mortgage lender to secure its obligations for certain capital requirements. On October 23, 2023, the Company used its line of credit to partially finance the acquisition of two properties located in the greater Boston area and, as of the date of this filing, has approximately $194 million drawn under the Agreement in conjunction with these acquisitions. These transactions have further reduced the available balance of the facility to approximately $579.7 million. See Note 6 to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding our ~~revolving credit agreement.~~Revolving Credit Agreement.

Our short-term cash requirements consist of normal recurring operating expenses, lease obligations, regular debt service requirements, general and 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. We have approximately $~~309~~44 million of debt maturing within the next 12 months related to mortgage loans encumbering two of our ~~properties and are actively exploring our options to refinance.~~properties.

At September 30, ~~2022,~~2023, we had cash and cash equivalents, including restricted cash, of ~~$152.4~~$77.9 million and approximately $775.7 million available under our undrawn Revolving Credit Agreement. The available balance under our Revolving Credit Agreement and ~~no amounts drawn~~cash on ~~our~~ ~~$800 million~~ ~~revolving credit agreement. These amounts~~hand are readily available to fund the debt obligations discussed above which are coming due within the next year.

Summary of Cash Flows

Cash and cash equivalents, including restricted cash, was $77.9 million at September 30, 2023, compared to $128.8 million at December 31, 2022 and $152.4 million at September 30, 2022, ~~compared to $219.8 million at December 31, 2021 and $322.8 million at September 30, 2021,~~ a decrease of ~~$67.4~~$50.9 million and ~~$170.4~~$74.5 million, respectively. Our cash flow activities are summarized as follows:


		Nine Months Ended September 30,							Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		$ Change		(Amounts in thousands)	2023		2022		$ Change
Net cash provided by operating activities	Net cash provided by operating activities	$	98,672	$	93,137	$	5,535	Net cash provided by operating activities	$	102,852	$	98,672	$	4,180
Net cash used in investing activities	Net cash used in investing activities	(110,859)		(66,512)		(44,347)		Net cash used in investing activities	(86,475)		(110,859)		24,384
Net cash used in financing activities	Net cash used in financing activities	(55,258)		(123,086)		67,828		Net cash used in financing activities	(67,227)		(55,258)		(11,969)

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 $102.9 million for the nine months ended September 30, 2023 increased by $4.2 million from $98.7 million for the nine months ended September 30, ~~2022 increased by $5.5 million from $93.1 million for the nine months ended September 30, 2021.~~2022. The increase is ~~driven by operating income generated from property acquisitions completed,~~due to higher rental revenue for new tenant rent commencements and ~~collection~~timing of ~~previously billed~~cash receipts and ~~deferred amounts from lease modifications.~~payments related to tenant collections and operating expenses.

Investing Activities

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

Net cash used in investing activities of ~~$110.9~~$86.5 million for the nine months ended September 30, ~~2022 increased~~2023 decreased by ~~$44.3~~$24.4 million compared to net cash used in investing activities of ~~$66.5~~$110.9 million for the nine months ended September 30, ~~2021.~~2022. The ~~increase~~decrease is primarily due to (i) ~~$34.1~~$34.2 million decrease in cash ~~provided~~used for the acquisition of real estate, offset by ~~the sale of properties, and~~ (ii) ~~$28.5~~$9.8 million increase in cash used for real estate development and capital ~~improvements, offset by (iii) $18.3 million decrease in cash used for the acquisition of real estate.~~

improvements.

The Company has 23 active development, redevelopment or anchor repositioning projects with total estimated costs of ~~$260.9~~$168.5 million, of which ~~$86.0~~$74.7 million has been incurred and ~~$174.9~~$93.8 million remains to be funded as of September 30, ~~2022.~~2023.

The following summarizes capital expenditures presented on a cash basis for the nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


		Nine Months Ended September 30,					Nine Months Ended September 30,
(Amounts in thousands)	(Amounts in thousands)	2022		2021		(Amounts in thousands)	2023		2022
Capital expenditures:	Capital expenditures:					Capital expenditures:
Development and redevelopment costs	Development and redevelopment costs	$	57,515	$	37,441	Development and redevelopment costs	$	63,860	$	57,515
Capital improvements	Capital improvements	15,636		6,781		Capital improvements	17,230		15,636
Tenant improvements and allowances	Tenant improvements and allowances	1,839		2,215		Tenant improvements and allowances	3,464		1,839
Total capital expenditures	Total capital expenditures	$	74,990	$	46,437	Total capital expenditures	$	84,554	$	74,990

Financing Activities

Net cash flow 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 $67.2 million for the nine months ended September 30, 2023 increased by $12.0 million from cash used in financing activities of $55.3 million for the nine months ended September 30, ~~2022 decreased by $67.8 million from cash used in financing activities of $123.1 million for the nine months ended September 30, 2021.~~2022. The ~~decrease~~increase is primarily due to (i) ~~$52.0~~$12.4 million increase in cash used for debt repayments, net of proceeds received from financings and refinancings related to our mortgage loans, and (ii) $0.5 million decrease in ~~distributions to shareholders and unitholders of~~debt issuance costs driven by the Operating Partnership for declaration of a special dividend in the fourth quarter of 2020, paid in January 2021, and (ii) $23.7 million of proceeds from borrowings under mortgage loans, net of repayments, offset by (iii) $7.3 million of deferred financing fees paid in 2022 for the increase and extensionrecast of our line of credit ~~under our revolving credit agreement and~~in the third quarter of 2022.

On August 30, 2023, the Company refinanced its mortgage secured by Las Catalinas Mall with a new 10-year, $82 million loan at a fixed interest rate of 6.6%. The proceeds from the new loan were used to pay off the Company’s previous loan, at a discounted amount of $72.5 million, resulting in a gain on extinguishment of debt of $43 million for the three months ended September 30, 2023. On June 23, 2023, the Company refinanced its mortgage secured by the Shops at Bruckner with a new 6-year, $38 million loan at a fixed interest rate of 6.0%. The proceeds from the refinancing were used to pay off the outstanding principal balance on the previous loan of ~~our loans at~~approximately $8.7 million. The remaining funds were used to pay off the $29 million mortgage secured by the Plaza at Cherry Hill ~~and Plaza at Woodbridge.~~

on June 23, 2023, which had a maturity date of June 15, 2025. On June ~~23, 2022, in conjunction with~~7, 2023, the ~~refinancing~~Company obtained a 10-year, $16 million non-recourse mortgage at fixed interest rate of 6.0% that is secured by its property, Newington Commons. On April 6, 2023, the Company refinanced the mortgage secured by its property, Bergen Town Center, with a 7-year fixed rate, $290 million loan. The proceeds from the loan ~~encumbering our~~were used to pay off the Company’s previous mortgage on the property ~~Plaza at Woodbridge, we~~which had an outstanding balance of $300 million.

In May 2023, the Company entered into ana two-year interest rate cap agreement ~~(the “Cap Agreement”)~~ with a third-party to limit the maximum SOFR of our Plaza at Woodbridge floating rate debt to 3%. ~~On the~~The new cap has an effective date of July 3, 2023 and replaces the ~~Cap Agreement, we elected to designate cash flow hedge accounting for this derivative instrument. Refer to~~ ~~Note 3~~previous interest rate cap which expired on July 1, 2023. The purchase price of the new interest rate cap was $1.1 million and ~~Note 9~~is included in ~~Part I, Item 1~~the prepaid expenses and other assets line item of ~~this Quarterly Report on Form 10-Q for more information related to derivatives and hedging.~~the consolidated balance sheets.

On August 9, 2022, we amended and restated our ~~revolving credit agreement~~Revolving Credit Agreement (as amended, the “Agreement”) to, among other things, increase the available amount under the facility by $200 million to $800 million and extend the maturity date to February 9, 2027, with two six-month extension options. Borrowings under the credit facility may be used to finance pre-development costs, development costs, acquisitions, working capital, equity investments, debt investments, capital expenditures and repayment of indebtedness, to pay fees and expenses incurred in connection with the amended and restated ~~revolving credit agreement~~Agreement and for other general corporate purposes. ~~As of~~ During the nine months ended September 30, ~~2022, there~~2023, the Company obtained three letters of credit issued under the Agreement, in the aggregate amount of $24.3 million. The letters of credit were provided to mortgage lenders to secure the Company’s obligations in relation to certain reserves and capital requirements per the loan agreements and have reduced the available balance of the facility to approximately $775.7 million. No amounts were drawn or outstanding

under the Agreement as of September 30, 2023, and no ~~amounts~~separate liability has been recorded in connection with the undrawn letters of credit. On October 6, 2023, the Company obtained a letter of credit issued under the Agreement for $2 million and provided it to a mortgage lender to secure its obligations for certain capital requirements. On October 23, 2023, the Company used its line of credit to partially finance the acquisition of two properties located in the greater Boston area and, as of the date of this filing, has approximately $194 million drawn onunder the ~~facility.~~Agreement in conjunction with these acquisitions. These transactions have further reduced the available balance of the facility to approximately $579.7 million.

On August 15, 2022, we entered into an equity distribution agreement with various financial institutions, pursuant to which we may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million (the “ATM Program”). The ATM Program ~~replaces~~replaced the Company’s previous at-the-market program established in June 2021. As of September 30, ~~2022~~2023 we have not issued any common shares under the ATM Program. Refer to Note 14, Equity and Noncontrolling Interest, in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information related to this program.

Contractual Obligations

We have contractual obligations related to our mortgage loans that are both fixed and variable. ~~Our~~As of September 30, 2023, our variable rate loans bear interest at a floating rate based on ~~LIBOR,~~ SOFR ~~and the Prime Rate~~ plus an applicable margin of ~~0.5%~~2.00% to 2.26%. ~~When~~In connection with reference rate reform and the discontinuation of LIBOR, ~~is discontinued, the interest rates~~all of our LIBOR-indexed debt ~~following such event will be based on either alternate base rates, such as~~has been transitioned to SOFR effective July 2023. We do not anticipate that the transition to SOFR or ~~agreed upon replacement rates. While such an event would not affect~~the discontinuation of LIBOR will have a material impact on our results, our ability to borrow, or maintain already outstanding ~~borrowings, it could result in higher interest rates.~~borrowings. Further information on our mortgage loans can be found in Note 6 to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. In addition, we have contractual obligations for certain properties that are subject to long-term ground and building leases where a third party owns and has leased the underlying land to us. We also have non-cancelable operating leases pertaining to office space from which we conduct our business.

Additional contractual obligations that are not considered to be long-term, fixed in amount or easily determinable include:

•Obligations related to construction and development contracts. Such contracts or obligations will generally be due over the next two years;

•Obligations related to maintenance contracts, which can typically be canceled upon 30 to 60 days’ notice without penalty;

•Obligations related to employment contracts with certain executive officers and subject to cancellation by either the Company or the executive without cause upon notice; and

•Recorded debt premiums or discounts.

We believe that cash flows from our current operations, cash on hand, the line of credit under our ~~revolving credit agreement,~~Revolving Credit Agreement, the potential to refinance our loans and our general ability to access the capital markets will be sufficient to finance our operations and fund our obligations in both the short-term and long-term.

Cybersecurity

Cybersecurity is an integral part of the Board of Trustees’, Audit Committee’s and the ~~Audit~~Corporate Governance and Nominating Committee’s risk analysis and discussions with management. In February 2023, the Board of Trustees assigned cybersecurity oversight responsibility to the Corporate Governance and Nominating Committee via an amendment to the Committee’s Charter. As we see increased reliance on information technology in the workplace and our business operations, and a ~~continued~~ shift to remote and hybrid work schedules, Urban Edge has employed several measures to mitigate cyber risks.

In addition to a dedicated information technology and cybersecurity team ~~handling~~ monitoring ~~and~~our daily operations, the Company engages an independent third-party cybersecurity team for advisory services and ~~penetration testing.~~cybersecurity assessments such as risk and disaster recovery. We also have a Cyber Risk Committee which works in conjunction with the Computer Incident Response Team ~~(CIRT)~~ to develop strategies to mitigate risks and to address any cyber issues that may arise. The Cyber Risk Committee meets quarterly to review emerging threats, controls, and ~~procedures.~~procedures and will meet at least annually with the Corporate Governance and Nominating Committee to discuss trends in cyber risks and our strategy to defend our information against cybersecurity incidents.

We utilize a risk-based approach ~~following~~that aligns with the National Institute of Standards and Technology ~~(“NIST”)~~ Cybersecurity Framework, ~~(CSF),~~ and Microsoft best practices. Our policies and procedures are reviewed and updated annually by the Cyber Risk Committee and incorporate third-party assessments to benchmark ourselves against industry standards. Our cybersecurity preparedness includes, but is not limited to, vulnerability management programs, penetration testing, simulations, and tabletop exercises. The Company utilizes advanced endpoint protection, firewalls, intrusion detection and prevention, threat intelligence, security event logging and correlation, and backup and redundancy systems. ~~The Company~~We also ~~has cybersecurity coverage incorporated in its insurance policies.~~have a Disaster Recovery and Business Continuity

Committee that meets biannually to review and update our plan, policies, and procedures. In addition, our Information Technology team conducts disaster recovery tests annually and reports results to the Cyber Risk Committee.

We ~~circulate communications pieces alerting users~~endeavor to ~~new~~apprise employees of emerging risks and require ~~all employees~~them to ~~complete periodic~~undergo quarterly security awareness trainings. Additionally, we conduct internal phishing and other exercises to gauge the effectiveness of the trainings and ~~record response rates for these tests to~~ assess the need for additional training.

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. As of September 30, ~~2022,~~2023, our variable rate debt outstanding had rates indexed to ~~LIBOR, SOFR and the Prime Rate.~~SOFR.


		2022							2021					2023							2022
(Amounts in thousands)	(Amounts in thousands)	September 30, 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	$	159,588		4.93%	$	1,596		$	161,084		1.85%	Variable rate mortgages	$	128,695		6.49%	$	1,287		$	159,198		6.11%
Fixed rate mortgages	Fixed rate mortgages	1,544,486			4.10%	—		(2)	1,534,324			4.10%	Fixed rate mortgages	1,526,745			4.79%	—		(2)	1,540,293			4.09%
		$	1,704,074	(1)		$	1,596		$	1,695,408	(1)			$	1,655,440	(1)		$	1,287		$	1,699,491	(1)

(1) Excludes unamortized debt issuance costs of ~~$8.3~~$12.1 million and ~~$8.2~~$7.8 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 ~~$15.4~~$15.3 million based on outstanding balances as of September 30, ~~2022.~~2023.

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. We do not enter into any financial instrument agreements, such as derivative agreements, for speculation or trading purposes. As of September 30, ~~2022,~~2023, the Company was a counterparty to two interest rate derivative agreements which have been designated as cash flow hedges.

On June 23, 2022, in connection with the refinancing of one of our variable rate loans, we entered into a one-year interest rate cap agreement for a purchase price of approximately $0.3 million. The cap agreement has an expiration date of July 1, 2023 and limits the maximum SOFR of the variable loan it is hedged with to 3%. This These derivative ~~instrument is~~instruments are assessed quarterly and as of September 30, ~~2022 meets~~2023, both meet the criteria of an effective hedge.

Discontinuation of LIBOR

The LIBOR benchmark has been the subject of national, international and other regulatory guidance and proposals for reform and replacement, with LIBOR settings relevant to the Company no longer being published after June 30, 2023. As a result, we have entered into loan amendments with our lenders to transition all of our LIBOR-indexed debt to SOFR effective July 2023. The transitions did not have a material impact on the loans affected and the Company was able to maintain rates comparable to the rates in place prior to the SOFR transition, however, it is not yet possible to predict with certainty the effect of LIBOR’s discontinuation on the Company's future borrowing potential.

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 September 30, ~~2022,~~2023, the estimated fair value of our consolidated debt was $1.5 billion.

Other Market Risks

As of September 30, ~~2022,~~2023, 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 September 30, ~~2022~~2023 based on pertinent information available to management as of that date. Although management is not aware of any factors that would significantly affect the estimated amounts as of September 30, ~~2022,~~2023, 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 September 30, ~~2022~~2023 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, ~~2021~~2022 filed with the SEC on February ~~16, 2022.~~14, 2023.

3941

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

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 (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 be Purchased Under the Plans or Programs(1)
July 1, 2022 - July 31, 2022 — $ — — $ 145,900,000
August 1, 2022 - August 31, 2022 957 (2) 15.81 — $ 145,900,000
September 1, 2022 - September 30, 2022 — — — $ 145,900,000
Total 957 $ 15.81 —

~~(1)~~ In March 2020, the 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 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.~~ Not applicable

Urban Edge Properties LP

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

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

Period (a)
Total Number of Units Purchased (b)
Average Price Paid per Unit (c)
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (d)
Maximum Number (or Approximate Dollar Value) of Units that May Yet be Purchased Under the Plans or Programs
July 1, 2022 - July 31, 2022 — $ — — $ —
August 1, 2022 - August 31, 2022 957 (1) 15.81 — $ —
September 1, 2022 - September 30, 2022 — — — $ —
Total 957 $ 15.81 —
Not applicable

~~(1)~~ Represents OP Units previously held by the Company that were redeemed in connection with the surrender of restricted common shares by employees to the Company to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common shares.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~None.~~During the three months ended September 30, 2023, none of the Company’s trustees or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

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
10.1*						First Amended and Restated Revolving Credit Agreement, by and among Urban Edge Properties LP, as Borrower, the Banks party thereto, and Wells Fargo Bank, National Association, as Administrative Agent, dated as of August 9, 2022
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 of 1933, as amended, 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: ~~November 3, 2022~~October 31, 2023

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

			/s/ Mark Langer
			Mark Langer, Chief Financial Officer

			Date: ~~November 3, 2022~~October 31, 2023

4244


Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(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 be Purchased Under the Plans or Programs(1)
July 1, 2022 - July 31, 2022	—		$	—	—	$	145,900,000
August 1, 2022 - August 31, 2022	957	(2)	15.81		—	$	145,900,000
September 1, 2022 - September 30, 2022	—		—		—	$	145,900,000
Total	957		$	15.81	—


Period	(a) Total Number of Units Purchased		(b) Average Price Paid per Unit		(c) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Units that May Yet be Purchased Under the Plans or Programs
July 1, 2022 - July 31, 2022	—		$	—	—	$	—
August 1, 2022 - August 31, 2022	957	(1)	15.81		—	$	—
September 1, 2022 - September 30, 2022	—		—		—	$	—
Total	957		$	15.81	—