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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 quarter ended January 31, 2022 and provided information regarding financial and operational activities considering the ongoing COVID-19 pandemic.
FINANCIAL HIGHLIGHTS FOR FIRST QUARTER FISCAL 2022
(1) A reconciliation of GAAP net income to FFO is provided at the end of this press release. (2) A reconciliation of income from continuing operations to same property net operating income is provided at the end of this press release.
The following is a discussion of our current dividend levels and statistics about our portfolio that are useful in assessing the impact of COVID-19 on our business:
Dividend Declarations
COVID-19 UPDATE (as of January 31, 2022)
RENTAL COLLECTIONS UPDATE (as of March 1, 2022)
Commenting on the operating results, Willing L. Biddle, President and CEO of Urstadt Biddle Properties Inc., said “After two years of the Covid-19 pandemic’s disruption to the shopping center business, we are encouraged to see a continued rebound in our tenants’ businesses and demand for vacant space at our properties. This quarter, we renewed 185,000 square feet of existing tenant leases and signed 46,000 square feet of new leases in our portfolio, increasing the percentage of our consolidated portfolio leased by 0.7% to 92.6%. The demand is leading to increased rents, and this quarter renewal rents increased by 2.6%, our third consecutive quarterly increase. Rental rates on new leases decreased by 4.9%, but this is largely compared to pre-pandemic rents. We believe the increasing demand for space will continue, especially as supply becomes more constrained. Our leasing and management teams are very busy working to deliver space for our new leases and have a strong pipeline of new leasing deals in process. We currently have 41,000 square feet of new leases in the negotiation stage as well as letters of intent for over 200,000 square feet. We are grateful for the tremendous efforts and perseverance of our tenants and our team, who have worked together to get through the last two years. Our thoughts and prayers continue to go out to all of those impacted by the pandemic, along with great appreciation and respect for those who have led, and continue to lead, the fight against the virus on the front lines.”
Mr. Biddle continued…. “Although public health and business conditions are improving, certain categories of our tenants continue to be impacted. The work from home trend is negatively affecting dry cleaners and day care providers. A general cautionary environment about viruses also continues to decrease business for some health and fitness providers, as well as certain personal service tenants. The list is decreasing monthly, however, and we continue to work with those of our tenants with good business plans that we feel will eventually rebound. Thankfully, due to our long-term strategy, 86% of our properties, measured by square footage, are anchored by grocery stores, wholesale clubs or pharmacies, and these businesses have remained solid throughout the pandemic. Although our earnings and FFO have bounced back close to pre-pandemic levels, there is still room to grow the income of our existing portfolio, as our properties have an average vacancy rate of 7% and demand for space is growing. This quarter, we collected 96.3% of our rents billed, and our allowance for doubtful accounts continues to decline from pandemic levels. Requests for rent abatements or deferrals have mostly stopped. As a result, our same property operating income continues to improve from pandemic levels and increased 6% from our first quarter of fiscal 2021. Our strong balance sheet and liquidity are the underpinnings of our company’s success, and well-located, grocery-anchored community and neighborhood shopping centers have proven to be solid investments in good times and bad. During our first quarter, we continued to strengthen our balance sheet by refinancing our Boonton, NJ property mortgage, increasing the principal from $6.5 million to $11 million while reducing the fixed interest rate from 4.2% to 3.45%. After quarter-end, we refinanced the mortgage on the Dock Shopping Center, increasing the principal from $23 million to $35 million while reducing the fixed interest rate from 4.85% to 3.0525%. Also, after quarter-end, we purchased Shelton Square Shopping Center, a 186,000 square foot supermarket-anchored community shopping center located in Shelton, CT. The 20+ acre property is 96.5% leased, is anchored by a 67,000 square foot Stop & Shop, and includes other well known tenants such as Edge Fitness, Hawley Lane Shoes, People’s United Bank, St. Vincent’s/Hartford Health, Burger King and Sports Clips, along with other local tenants. The purchase of Shelton Square continues our strategy of concentrating our portfolio in grocery, pharmacy and wholesale club-anchored properties.”
Net income applicable to Class A Common and Common stockholders for the first quarter of fiscal 2022 was $5,397,000 or $0.14 per diluted Class A Common share and $0.13 per diluted Common share, compared to net income of $4,479,000 or $0.12 per diluted Class A Common share and $0.11 per diluted Common share in last year’s first quarter.
FFO for the first quarter of fiscal 2022 was $12,896,000 or $0.33 per diluted Class A Common share and $0.30 per diluted Common share, compared with $12,375,000 or $0.33 per diluted Class A Common share and $0.29 per diluted Common share in last year’s first quarter.
Urstadt Biddle Properties Inc. is a self-administered equity real estate investment trust which owns or has equity interests in 78 properties containing approximately 5.3 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 208 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, 2022 and 2021 Results (Unaudited) (in thousands, except per share data)
Three Months Ended
January 31,
2022
2021
Revenues
Lease income
$34,087
$32,483
Lease termination
28
705
Other
1,440
1,089
Total Revenues
35,555
34,277
Expenses
Property operating
7,002
6,314
Property taxes
5,923
5,861
Depreciation and amortization
7,144
7,518
General and administrative
2,680
2,644
Directors' fees and expenses
107
109
Total Operating Expenses
22,856
22,446
Operating Income
12,699
11,831
Non-Operating Income (Expense):
Interest expense
(3,302)
(3,392)
Equity in net income from unconsolidated joint ventures
267
350
Gain (loss) on sale of property
2
(28)
Interest, dividends and other investment income
55
43
Net Income
9,721
8,804
Noncontrolling interests:
Net income attributable to noncontrolling interests
(911)
(912)
Net income attributable to Urstadt Biddle Properties Inc.
8,810
7,892
Preferred stock dividends
(3,413)
(3,413)
Net Income Applicable to Common and Class A Common Stockholders
$5,397
$4,479
Basic Earnings Per Share:
Per Common Share:
$0.13
$ 0.11
Per Class A Common Share:
$0.14
$ 0.12
Diluted Earnings Per Share:
Per Common Share:
$0.13
$ 0.11
Per Class A Common Share:
$0.14
$ 0.12
Weighted Average Number of Shares Outstanding – (Diluted):
Class A Common and Class A Common Equivalent
29,768
29,590
Common and Common Equivalent
9,710
9,393
Results of Operations
The following information summarizes our results of operations for the three months ended January 31, 2022 and 2021 (amounts in thousands):
Three Months Ended
Change Attributable to
January 31,
Increase
Property
Properties Held In
Revenues
2022
2021
(Decrease)
% Change
Acquisitions/Sales
Both Periods (Note 1)
Base rents
$25,014
$24,159
$855
3.5%
$(341)
$1,196
Recoveries from tenants
9,274
9,978
(704)
(7.1)%
(127)
(577)
Uncollectable amounts in lease income
(114)
(655)
541
(82.6)%
-
541
ASC Topic 842 cash basis lease income reversal (including straight-line rent)
(87)
(999)
912
(91.3)%
-
912
Total lease income
34,087
32,483
Lease termination
28
705
(677)
(96.0)%
-
(677)
Other income
1,440
1,089
351
32.2%
(7)
358
Operating Expenses
Property operating
7,002
6,314
688
10.9%
(84)
772
Property taxes
5,923
5,861
62
1.1%
(25)
87
Depreciation and amortization
7,144
7,519
(375)
(5.0)%
(34)
(341)
General and administrative
2,680
2,644
36
1.4%
n/a
n/a
Non-Operating Income/Expense
Interest expense
3,302
3,392
(90)
(2.7)%
-
(90)
Interest, dividends, and other investment income
55
43
12
27.9%
n/a
n/a
Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2022 and 2021 and for interest expense the amount also includes parent company interest expense. All other properties are included in the property acquisition/sales column. There are no properties excluded from the analysis.
Base rents increased by 3.5% to $25.0 million for the three months ended January 31, 2022, as compared with $24.2 million in the corresponding period of 2021. 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 2022, we sold one property totaling 9,100 square feet. In fiscal 2021, we sold two properties totaling 105,000 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, 2022, when compared with the corresponding period in fiscal 2021.
Properties Held in Both Periods:
Revenues
Base Rent
For properties held in both periods, base rent for the three month period ended January 31, 2022 increased by $1.2 million, when compared with the corresponding prior period. This increase was primarily a result of new leasing completed after the first quarter of fiscal 2021 predominantly at three properties.
In the first three months of fiscal 2022, we leased or renewed approximately 231,000 square feet (or approximately 5.2% of total GLA). At January 31, 2022, the company’s consolidated properties were 92.6% leased (91.9% leased at October 31, 2021).
Tenant Recoveries
In the three month period ended January 31, 2022, recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) decreased by a net $577,000, when compared with the corresponding prior period.
The decrease in tenant recoveries was the result of an under accrual adjustment in the first quarter of fiscal 2021. 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. This increased tenant reimbursement income in the first quarter of fiscal 2021, and caused a negative variance in the first quarter of fiscal 2022.
Uncollectable Amounts in Lease Income
In the three month period ended January 31, 2022, uncollectable amounts in lease income decreased by $541,000. In the second quarter of fiscal 2020, we significantly increased our uncollectable amounts in lease income based on our assessment of the collectability of existing non-credit small shop tenants' receivables given the onset of the COVID-19 pandemic in March 2020. A number of non-credit small shop tenants' businesses were deemed non-essential by the states in which they operate and forced to close for a portion of the second and third quarters of fiscal 2020. This placed stress on our small shop tenants and made it difficult for many of them to pay their rents when due. This stress continued through our first quarter of fiscal 2021. Our assessment was that any billed but unpaid rents would likely be uncollectable. During the three months ended January 31, 2022, many of our tenants continued to see signs of business improvement as regulatory restrictions continued to relax and individuals continued to return to pre-pandemic activities. As a result, the uncollectable amounts in lease income declined during such period when compared with the corresponding period of the prior year.
ASC Topic 842 Cash Basis Lease Income Reversals
We adopted ASC Topic 842 "Leases" at the beginning of fiscal 2020. ASC Topic 842 requires, among other things, that if the collectability of a specific tenant’s future lease payments as contracted are not probable of collection, revenue recognition for that tenant must be converted to cash-basis accounting and be limited to the lesser of the amount billed or collected from that tenant. In addition, any straight-line rental receivables would need to be reversed in the period that the collectability assessment changed to not probable. As a result of continuing to analyze our entire tenant base, we determined that as a result of the COVID-19 pandemic, 89 tenants' future lease payments were no longer probable of collection. All such tenants were converted to cash basis after our second quarter of fiscal 2020 and prior to our third quarter of fiscal 2021. As of January 31, 2022, 28 of these 89 tenants are no longer tenants in the Company's properties. During the fourth quarter of fiscal 2021, we restored 13 of the original 89 tenants to accrual-basis revenue recognition, and we restored an additional 3 tenants to accrual-basis accounting in the three months ended January 31, 2022. The tenants that were restored to accrual-basis accounting had paid all of their billed rents for six consecutive months and had no significant unpaid billings outstanding when restored to accrual-basis accounting. As a result of the restoration of the 3 tenants, we recorded $24,000 in straight-line rent in the three months ended January 31, 2022. As of January 31, 2022, 45 tenants continue to be accounted for on a cash basis, or approximately 5.6% of our tenants. Many of our cash-basis tenants are now paying a larger portion of their billed rents, which results in an increase in revenue recognition for those tenants accounted for on a cash basis when compared with the corresponding period of the prior year.
Expenses
Property Operating
In the three month period ended January 31, 2022, property operating expenses increased by $772,000. This was primarily a result of having higher common area maintenance expenses in the three months of fiscal 2022 when compared with the corresponding prior period related to snow removal, environmental remediation costs and management costs.
Property Taxes
In the three month period ended January 31, 2022, property tax expenses were relatively unchanged when compared with the corresponding prior period.
Interest
In the three month period ended January 31, 2022, interest expenses were relatively unchanged when compared with the corresponding prior period.
Depreciation and Amortization
In the three month period ended January 31, 2022, depreciation and amortization decreased by $341,000 when compared with the corresponding prior period. This decrease was the result of a write-off of tenant improvements related to a tenant that vacated six locations in our portfolio in the first quarter of fiscal 2021.
General and Administrative Expenses
In the three month period ended January 31, 2022, general and administrative expenses were relatively unchanged when compared with the corresponding prior period.
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 FFO as a performance measure. FFO is presented to assist investors in analyzing the performance of the company. It is helpful as it excludes various items included in net income that are not indicative of our operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, FFO:
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, 2022 and 2021. (Amounts in thousands)
(Table Follows)
Urstadt Biddle Properties Inc. (NYSE: UBA and UBP) Three Months Ended January 31, 2022 and 2021 (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,
2022
2021
Net Income Applicable to Common and Class A Common Stockholders
$5,397
$4,479
Real property depreciation
5,738
5,702
Amortization of tenant improvements and allowances
991
1,315
Amortization of deferred leasing costs
397
476
Depreciation and amortization on unconsolidated joint ventures
375
375
(Gain)/loss on sale of property
(2)
28
Funds from Operations Applicable to Common and Class A Common Stockholders
$12,896
$12,375
FFO amounted to $12.9 million in the three months ended January 31, 2022, compared to $12.4 million in the corresponding period of fiscal 2021. The net increase in FFO is attributable, among other things to:
Increases:
Decreases:
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 we believe Same Property NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Our management also uses Same Property NOI to evaluate property level performance and to make decisions about resource allocations. Further, we believe Same Property NOI is useful to investors as a performance measure because, when compared across periods, Same Property NOI reflects the impact on operations from trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from income from continuing operations. Same Property NOI excludes certain components from net income attributable to Urstadt Biddle Properties Inc. in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Same Property NOI presented by us may not be comparable to Same Property NOI reported by other REITs that define Same Property NOI differently.
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,
2022
2021
% Change
Same Property Operating Results:
Number of Properties (Note 1)
74
Revenue (Note 2)
Base Rent (Note 3)
$ 24,583
$ 24,210
1.5%
Uncollectable amounts in lease income
(113)
(654)
(82.7)%
ASC Topic 842 cash-basis lease income reversal-same property
(59)
(999)
(94.1)%
Recoveries from tenants
9,274
9,851
(5.9)%
Other property income
336
48
600.0%
34,021
32,456
4.8%
Expenses
Property operating
3,806
3,801
0.1%
Property taxes
5,913
5,830
1.4%
Other non-recoverable operating expenses
497
399
24.6%
10,216
10,030
1.9%
Same Property Net Operating Income
$ 23,805
$ 22,426
6.1%
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure:
Other reconciling items:
Other non same-property net operating income
(4)
399
Other Interest income
125
108
Other Dividend Income
-
-
Consolidated lease termination income
28
704
Consolidated amortization of above and below market leases
174
110
Consolidated straight line rent income
5
(568)
Equity in net income of unconsolidated joint ventures
267
350
Taxable REIT subsidiary income/(loss)
186
380
Solar income/(loss)
(211)
(154)
Storage income/(loss)
526
253
Unrealized holding gains arising during the periods
-
-
Gain on sale of marketable securities
-
-
Interest expense
(3,302)
(3,392)
General and administrative expenses
(2,680)
(2,644)
Uncollectable amounts in lease income
(113)
(654)
Uncollectable amounts in lease income - same property
113
654
ASC Topic 842 cash-basis lease income reversal
(87)
(999)
ASC Topic 842 cash-basis lease income reversal-same property
59
999
Directors fees and expenses
(107)
(109)
Depreciation and amortization
(7,144)
(7,518)
Adjustment for intercompany expenses and other
(1,921)
(1,513)
Total other -net
(14,086)
(13,594)
Income from continuing operations
9,719
8,832
10.0%
Gain (loss) on sale of real estate
2
(28)
Net income
9,721
8,804
10.4%
Net income attributable to noncontrolling interests
(911)
(912)
Net income attributable to Urstadt Biddle Properties Inc.
$8,810
$7,892
11.6%
Same Property Operating Expense Ratio (Note 4)
95.4%
102.3%
(6.9)%
Note 1 - Includes only properties owned for the entire period of both periods presented.
Note 2 - Excludes straight line rent, above/below market lease rent, lease termination income.
Note 3 - Base rents for the three months ended January 31, 2022 and 2021 are reduced by approximately $51,000 and $400,000, respectively, in rents that were deferred and approximately $23,000 and $1.0 million, respectively, in rents that were abated because of COVID-19. Base rents for the three months ended January 31, 2022 and 2021, are increased by approximately $287,000 and $695,000, respectively, in COVID-19 deferred rents that were billed and collected in those periods.
Note 4 -Represents the percentage of property operating expense and real estate tax.
Urstadt Biddle Properties Inc.
Balance Sheet Highlights
(in thousands)
January 31,
October 31,
2022
2021
(Unaudited)
Assets
Cash and Cash Equivalents
$24,579
$24,057
Real Estate investments before accumulated depreciation
$1,148,522
$1,148,382
Investments in and advances to unconsolidated joint ventures
$28,159
$29,027
Total Assets
$974,779
$973,852
Liabilities
Revolving credit line
$0
$0
Mortgage notes payable and other loans
$299,006
$296,449
Total Liabilities
$332,830
$330,553
Redeemable Noncontrolling Interests
$66,573
$67,395
Preferred Stock
$225,000
$225,000
Total Stockholders’ Equity
$575,376
$575,904
View source version on businesswire.com: https://www.businesswire.com/news/home/20220311005434/en/
Willing L. Biddle, CEO or John T. Hayes, CFO Urstadt Biddle Properties Inc. (203) 863-8200
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