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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Urstadt Biddle Properties | NYSE:UBA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.14 | 0 | 01:00:00 |
Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real estate investment trust, today reported its operating results for the first quarter ended January 31, 2021 and provided information regarding financial and operational activities considering the ongoing COVID-19 pandemic.
The following are statistics about our portfolio that are useful in assessing the impact of COVID-19 on our business:
COVID-19 UPDATE (as of January 31, 2021)
RENTAL COLLECTIONS UPDATE (as of February 28, 2021)
FIRST QUARTER 2021
(1) A reconciliation of GAAP net income to FFO is provided at the end of this press release.
Dividend Declarations
“Our thoughts and prayers continue to go out to all of those impacted by the COVID-19 pandemic, along with great appreciation and respect for those operating every day on the front lines”, said Willing L. Biddle, President and Chief Executive Officer. Mr. Biddle continued…. “This quarter was relatively quiet as the acquisitions market is essentially frozen, and we continued to focus on assisting our tenants with the difficulties they are experiencing with decreased sales due to operating restrictions and public uneasiness regarding the virus. All our shopping centers are open, functioning and generally bustling with customers who are acting in a socially-responsible manner by wearing masks and socially-distancing. Thankfully, due to our long-term strategy, 84% of our properties, measured by square footage, are anchored by grocery stores, wholesale clubs or pharmacies, and these businesses have remained open throughout the pandemic. We find encouraging an apparent increase in public confidence, evidenced by consumers returning to their usual activities, spurred in our area by falling virus infection rates and the increasing number of vaccinations. Our nation is fortunate to have superior biotech companies, which, in partnership with the government, so quickly developed multiple effective vaccines. Like nearly all our retail REIT peers, our earnings have been negatively impacted as a result of pandemic-induced reductions in tenant collections, but this pandemic will end. In fact, rent collections were relatively solid in the first quarter of fiscal 2021, averaging 90.3% versus 89.8% in the fourth quarter of fiscal 2020. Our anchor grocery stores, drug stores, and wholesale clubs continue to experience strong sales, but weakness continues in those categories of tenants most impacted by restrictions, namely, fitness, dry cleaners, nail and hair salons, certain restaurants and daycare. While there has been some government assistance for these categories via the Paycheck Protection Program and other programs, the assistance has been insufficient in many cases, and it has been largely left to landlords and the owners of businesses in these categories to finance the losses. Nevertheless, we are seeing increasing green shoots of leasing activity in our portfolio. We renewed 171,000 square feet of space and signed 18,000 square feet of new leases in the first quarter of fiscal 2021. Also noteworthy is that the ground lease for the former Toys “R” Us/ Babies “R” Us space at one of our Danbury, CT shopping centers has been sold to Ocean State Job Lot, which plans to open a 45,000 sf store this summer. In addition, a new Lidl supermarket is under construction at our Pompton Lakes NJ property, with a projected fall 2021 opening. We also completed the development of a 130,000 square foot self-storage facility adjacent to our Stratford, CT shopping center, and our manager, Extra Space Storage, is encouraged by the early leasing activity. In summary, we are very much looking forward to this coming summer, when we expect to see an increase in business for our tenants and similarly increased leasing activity. While we are unsure when we will have the ability to increase rents, we do see increasing demand for space. Finally, while the acquisitions market is currently near-frozen, we think the effects of the last year will cause some properties in our area to trade during 2021, and the few recent sales of grocery-anchored centers in other parts of the country indicate that capitalization rates on sales of quality properties in good locations remain strong.”
Net income applicable to Class A Common and Common stockholders for the first quarter of fiscal 2021 was $4,479,000 or $0.12 per diluted Class A Common share and $0.11 per diluted Common share, compared to net income of $5,071,000 or $0.13 per diluted Class A Common share and $0.12 per diluted Common share in last year’s first quarter.
FFO for the first quarter of fiscal 2021 was $12,375,000 or $0.33 per diluted Class A Common share and $0.29 per diluted Common share, compared with $12,897,000 or $0.34 per diluted Class A Common share and $0.30 per diluted Common share in last year’s first quarter.
Both net income applicable to Class A Common and Common stockholders and FFO for the three months ended January 31, 2021 were reduced by $2.1 million (approximately $0.06 per Class A Common share) primarily due to COVID-19 related collectability adjustments to accounts receivable and straight-line rent receivable.
At January 31, 2021, the company’s consolidated properties were 89.8% leased (versus 90.4% at the end of fiscal 2020) and 88.0% occupied (versus 88.5% at the end of fiscal 2020). The company currently has 461,400 square feet of vacancy in its consolidated portfolio, 79,000 square feet of which is in the lease negotiation stage. In addition, the company is negotiating letters of intent with potential tenants on another 62,000 square feet of vacant space. Also, as previously discussed, at January 31, 2021, the leased percentage treats as leased, and the January 31, 2021 occupancy percentage treats as unoccupied, 65,700 square feet of retail space (1.5% of our consolidated square footage) formerly ground leased by Toys “R” Us and Babies “R” Us for $0 at the company’s Danbury Square shopping center in Danbury, CT. The new owner of this ground lease, which acquired the lease out of the Toys “R” Us bankruptcy process, has sold the lease to a national retailer, Ocean State Job Lot, who have not taken occupancy of the space as of today. This vacancy has no cash flow impact on the company.
Both the percentage of property leased, and the percentage of property occupied referenced in the preceding paragraph exclude the company’s unconsolidated joint ventures. At January 31, 2021, the company had equity interests in six unconsolidated joint ventures (719,000 square feet), which were 91.1% leased, unchanged from October 31, 2020.
Urstadt Biddle Properties Inc. is a self-administered equity real estate investment trust which owns or has equity interests in 81 properties containing approximately 5.2 million square feet of space. Listed on the New York Stock Exchange since 1970, it provides investors with a means of participating in ownership of income-producing properties. It has paid 204 consecutive quarters of uninterrupted dividends to its shareholders since its inception.
Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.
(Table Follows)
Urstadt Biddle Properties Inc. (NYSE: UBA and UBP)
Three Months Ended January 31, 2021 and 2020 Results (Unaudited)
(in thousands, except per share data)
Three Months Ended January 31,
2021
2020
Revenues
Lease income
$32,483
$32,945
Lease termination
705
209
Other
1,089
1,194
Total Revenues
34,277
34,348
Expenses
Property operating
6,314
5,929
Property taxes
5,861
5,810
Depreciation and amortization
7,518
7,135
General and administrative
2,644
2,777
Directors' fees and expenses
109
105
Total Operating Expenses
22,446
21,756
Operating Income
11,831
12,592
Non-Operating Income (Expense):
Interest expense
(3,392)
(3,339)
Equity in net income from unconsolidated joint ventures
350
513
Gain (loss) on sale of property
(28)
(339)
Interest, dividends and other investment income
43
94
Net Income
8,804
9,521
Noncontrolling interests:
Net income attributable to noncontrolling interests
(912)
(1,038)
Net income attributable to Urstadt Biddle Properties Inc.
7,892
8,483
Preferred stock dividends
(3,413)
(3,412)
Net Income Applicable to Common and Class A Common Stockholders
$4,479
$5,071
Basic Earnings Per Share:
Per Common Share:
$ 0.11
$ 0.12
Per Class A Common Share:
$ 0.12
$ 0.14
Diluted Earnings Per Share:
Per Common Share:
$ 0.11
$ 0.12
Per Class A Common Share:
$ 0.12
$ 0.13
Weighted Average Number of Shares Outstanding – (Diluted):
Class A Common and Class A Common Equivalent
29,590
29,648
Common and Common Equivalent
9,393
9,447
Results of Operations
The following information summarizes our results of operations for the three months ended January 31, 2021 and 2020 (amounts in thousands):
Three Months Ended
Change Attributable to
January 31,
Increase
Property
Properties Held In
Revenues
2021
2020
(Decrease)
% Change
Acquisitions/Sales
Both Periods (Note 1)
Base rents
$24,159
$25,292
$(1,133)
(4.5) %
$66
$(1,199)
Recoveries from tenants
9,978
7,995
1,983
24.8%
-
1,983
Uncollectable amounts in lease income
(655)
(342)
(313)
91.5%
-
(313)
ASC Topic 842 cash basis lease income reversal
(999)
-
(999)
100.0%
-
(999)
Lease termination
705
209
496
237.3%
-
496
Other income
1,089
1,194
(105)
(8.8)%
(24)
(81)
Operating Expenses
Property operating
6,314
5,929
385
6.5%
(7)
392
Property taxes
5,861
5,810
51
0.9%
-
51
Depreciation and amortization
7,518
7,135
383
5.4%
76
307
General and administrative
2,644
2,777
(133)
(4.8)%
n/a
n/a
Non-Operating Income/Expense
Interest expense
3,392
3,339
53
1.6%
0
53
Interest, dividends, and other investment income
43
94
(51)
(54.3)%
n/a
n/a
Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2021 and 2020 and for interest expense the amount also includes parent company interest expense. All other properties are included in the property acquisition/sales column. There are no properties excluded from the analysis.
Base rents decreased by 4.5% to $24.2 million for the three month period ended January 31, 2021 as compared with $25.3 million in the comparable period of 2020. The change in base rent and the changes in other income statement line items analyzed in the table above were attributable to:
Property Acquisitions and Properties Sold:
In the first three months of fiscal 2020, we sold two properties totaling 18,100 square feet. These properties accounted for all of the revenue and expense changes attributable to property acquisitions and sales in the three months ended January 31, 2021 when compared with fiscal 2020.
Properties Held in Both Periods:
Revenues
Base Rent
The net decrease in base rents for the three month period ended January 31, 2021, when compared to the corresponding prior period, was predominantly caused by a reduction of $441,000 in the first three months of fiscal 2021 for a reversal of straight-line rents for tenants whose revenue recognition was switched to cash-basis accounting in accordance with ASC Topic 842. There was no such reversal in the first three months of fiscal 2020. In addition, the reduction of base rents was caused by a decrease in occupancy rates in the first quarter of fiscal 2021 when compared with the corresponding prior period, predominantly related to the vacancies at nine properties.
In the first three months of fiscal 2021, we leased or renewed approximately 189,000 square feet (or approximately 4.2% of total GLA). At January 31, 2021, the Company’s consolidated properties were 89.8% leased (90.4% leased at October 31, 2020).
Tenant Recoveries
In the three month period ended January 31, 2021, recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) increased by a net $2.0 million when compared with the corresponding prior period.
The increase in tenant recoveries for the three month period ended January 31, 2021 when compared to the corresponding prior period was the result of having higher common area maintenance expenses in the three month period of fiscal 2021 when compared with the three month period of fiscal 2020 related to roof repairs, canopy repairs, and parking lot repairs. In addition, we completed the 2020 annual reconciliations for both common area maintenance and real estate taxes in the first quarter of fiscal 2021 and those reconciliations resulted in us billing our tenants more than we had anticipated and accrued for in the prior period, which increased tenant reimbursement income in the current quarter.
Uncollectable Amounts in Lease Income
In the three month period ended January 31, 2021, uncollectable amounts in lease income increased by $313,000. This increase was predominantly the result of our assessment of the collectability of existing non-credit small shop tenants' receivables given the on-going COVID-19 pandemic. A number of non-credit small shop tenants' businesses were deemed non-essential by the states where they operate and were forced to close for a portion of fiscal 2020. Our assessment was based on the premise that as we emerge from the COVID-19 pandemic, our non-credit small shop tenants will need to use most of their resources to re-establish their business footing and any existing accounts receivable attributable to these tenants would most likely be uncollectable.
ASC Topic 842 Cash Basis Lease Income Reversals
The Company adopted ASC Topic 842 "Leases" at the beginning of fiscal 2020. ASC Topic 842 requires amongst other things, that if the collectability of a specific tenant’s future lease payments as contracted are not probable of collection, revenue recognition for that tenant must be converted to cash-basis accounting and be limited to the lesser of the amount billed or collected from that tenant, and in addition, any straight-line rental receivables would need to be reversed in the period that the collectability assessment changed to not probable. As a result of continuing to analyze our entire tenant base, we have determined that as a result of the COVID-19 pandemic, 80 tenants' future lease payments were no longer probable of collection (9.2% of our approximate 870 tenants), this included 16 tenants who were converted to cash-basis accounting in this first quarter of fiscal 2021. As a result of this assessment in three months ended January 31, 2021, we reversed $999,000 of lease income, consisting of billed lease income for all 80 tenants, and prior billed but uncollected accounts receivable related to the 16 tenants converted to cash-basis accounting the first quarter of fiscal 2021, which represented 1.0% of our ABR. This reduction is a direct reduction of lease income in the consolidated statement of income for the three months ended January 31, 2021.
Expenses
Property Operating
In the three month period ended January 31, 2021, property operating expenses increased by $392,000 as a result of having higher common area maintenance expenses in the three month period of fiscal 2021 when compared with the three month period of fiscal 2020 related to roof repairs, canopy repairs, and parking lot repairs.
Property Taxes
In the three month period ended January 31, 2021, property tax expense was relatively unchanged when compared with the corresponding prior period.
Interest
In the three month period ended January 31, 2021, interest expense was relatively unchanged when compared with the corresponding prior period.
Depreciation and Amortization
In the three month period ended January 31, 2021, depreciation and amortization increased by $307,000 when compared with the prior period, primarily as a result of a write-off of tenant improvements related to a tenant that vacated six locations in our portfolio in fiscal 2021 and increased depreciation for tenant improvements for two large grocery store re-tenanting projects at our Eastchester, NY and Wayne, NJ properties after the first quarter of fiscal 2020.
General and Administrative Expenses
In the three month period ended January 31, 2021, general and administrative expenses decreased by $133,000 when compared with the corresponding prior period, primarily as a result of a decrease in restricted stock compensation amortization expense caused by a lower grant date stock price in January 2021 and a decrease in costs for business travel as many industry conventions were cancelled due to the COVID-19 pandemic.
Non-GAAP Financial Measure
Funds from Operations (“FFO”)
We consider FFO to be an additional measure of our operating performance. We report FFO in addition to net income applicable to common stockholders and net cash provided by operating activities. Management has adopted the definition suggested by The National Association of Real Estate Investment Trusts (“NAREIT”) and defines FFO to mean net income (computed in accordance with GAAP) excluding gains or losses from sales of property, plus real estate-related depreciation and amortization and after adjustments for unconsolidated joint ventures.
Management considers FFO to be a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of the company’s real estate assets diminishes predictably over time and industry analysts have accepted it as a performance measure. FFO is presented to assist investors in analyzing the performance of the company. It is helpful as it excludes various items included in net income that are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, FFO:
FFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs. The table below provides a reconciliation of net income applicable to Common and Class A Common stockholders in accordance with GAAP to FFO for the three month period ended January 31, 2021 and 2020. (Amounts in thousands)
(Table Follows)
Urstadt Biddle Properties Inc. (NYSE: UBA and UBP)
Three Months Ended January 31, 2021 and 2020
(in thousands, except per share data)
Reconciliation of Net Income Available to Common and Class A Common Stockholders To Funds From Operations:
Three Months Ended
January 31,
2021
2020
Net Income Applicable to Common and Class A Common Stockholders
$4,479
$5,071
Real property depreciation
5,702
5,671
Amortization of tenant improvements and allowances
1,315
1,036
Amortization of deferred leasing costs
476
407
Depreciation and amortization on unconsolidated joint ventures
375
373
(Gain)/loss on sale of property
28
339
Funds from Operations Applicable to Common and Class A Common Stockholders
$12,375
$12,897
Weighted Average Number of Shares Outstanding (Diluted):
Class A Common and Class A Common Equivalent
29,590
29,648
Common and Common Equivalent
9,393
9,447
FFO amounted to $12.4 million in the three months ended January 31, 2021 compared to $12.9 million in the comparable period of fiscal 2020. The net decrease in FFO is attributable, among other things to:
Decreases:
Increases:
Non-GAAP Financial Measure
Same Property Net Operating Income
We present Same Property Net Operating Income ("Same Property NOI"), which is a non-GAAP financial measure. Same Property NOI excludes from Net Operating Income (“NOI”) properties that have not been owned for the full periods presented. The most directly comparable GAAP financial measure to NOI is operating income. To calculate NOI, operating income is adjusted to add back depreciation and amortization, general and administrative expense, interest expense, amortization of above and below-market lease intangibles and to exclude straight-line rent adjustments, interest, dividends and other investment income, equity in net income of unconsolidated joint ventures, and gain/loss on sale of operating properties.
We use Same Property NOI internally as a performance measure and believe Same Property NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Our management also uses Same Property NOI to evaluate property level performance and to make decisions about resource allocations. Further, we believe Same Property NOI is useful to investors as a performance measure because, when compared across periods, Same Property NOI reflects the impact on operations from trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from income from continuing operations. Same Property NOI excludes certain components from net income attributable to Urstadt Biddle Properties Inc. in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Same Property NOI presented by us may not be comparable to Same Property NOI reported by other REITs that define Same Property NOI differently.
Table Follows:
Urstadt Biddle Properties Inc.
Same Property Net Operating Income
(In thousands, except for number of properties and percentages)
Three Months Ended January 31,
2021
2020
% Change
Same Property Operating Results:
Number of Properties (Note 4)
76
Revenue (Note 2)
Base Rent
$24,553
$25,016
-1.9%
Uncollectable amounts in lease income-same property
(654)
(343)
90.7%
ASC Topic 842 cash-basis
lease income reversal-same property
(999)
-
100%
Recoveries from tenants
9,972
7,991
24.8%
Other property income
44
132
-66.7%
32,916
32,796
0.4%
Expenses
Property operating
3,903
3,383
15.4%
Property taxes
5,854
5,802
0.9%
Other non-recoverable operating expenses
364
427
-14.8%
10,121
9,612
5.3%
Same Property Net Operating Income
$22,795
$23,184
-1.7%
Other reconciling items:
Other non same-property net operating income
30
42
Other Interest income
108
141
Consolidated lease termination income
704
209
Consolidated amortization of above and below market leases
110
177
Consolidated straight line rent income
(568)
62
Equity in net income of unconsolidated joint ventures
350
513
Taxable REIT subsidiary income/(loss)
380
131
Solar income/(loss)
(154)
(112)
Storage income/(loss)
253
236
Interest expense
(3,392)
(3,339)
General and administrative expenses
(2,644)
(2,777)
Provision for tenant credit losses
(654)
(343)
Provision for tenant credit losses-same property
654
343
ASC Topic 842 cash-basis lease income reversal
(999)
-
ASC Topic 842 cash-basis lease income reversal-same property
999
-
Directors fees and expenses
(109)
(105)
Depreciation and amortization
(7,518)
(7,135)
Adjustment for intercompany expenses and other
(1,513)
(1,367)
Total other-net
(13,963)
(13,324)
Income from continuing operations
8,832
9,860
-10.4%
Gain (loss) on sale of real estate
(28)
(339)
Net income
8,804
9,521
-7.5%
Net income attributable to noncontrolling interests
(912)
(1,038)
Net income attributable to Urstadt Biddle Properties Inc.
$7,892
8,483
-7.0%
Same Property Operating Expense Ratio (Note 1)
102.2%
87.0%
15.2%
Note 1 - Represents the percentage of property operating expense and real estate tax expense recovered from tenants under operating leases. Note 2 - Excludes straight-line rent, above/below market lease rent, lease termination income, and bad debt expense. Note 3 - Base rents for the three months ended January 31, 2021 are reduced by approximately $399,000 in rents that were deferred and approximately $1.0 million, in rents that were abated because of COVID-19. Note 4 - Includes only properties owned for the entire period of both periods presented
Urstadt Biddle Properties Inc.
Balance Sheet Highlights
(in thousands)
January 31,
October 31,
2021
2020
(Unaudited)
Assets
Cash and Cash Equivalents
$37,115
$40,795
Real Estate investments before accumulated depreciation
$1,151,423
$1,149,182
Investments in and advances to unconsolidated joint ventures
$29,050
$28,679
Total Assets
$1,009,002
$1,010,179
Liabilities
Revolving credit line
$35,000
$35,000
Mortgage notes payable and other loans
$297,519
$299,434
Total Liabilities
$374,778
$377,037
Redeemable Noncontrolling Interests
$66,592
$62,071
Preferred Stock
$225,000
$225,000
Total Stockholders’ Equity
$567,632
$571,071
View source version on businesswire.com: https://www.businesswire.com/news/home/20210311006014/en/
Willing L. Biddle, CEO or John T. Hayes, CFO Urstadt Biddle Properties Inc. (203) 863-8200
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