Quarterly Report (10-q)

United States

Securities And Exchange Commission

Washington, DC 20549

Form 10-Q

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

EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number 1-12803

URSTADT BIDDLE PROPERTIES INC.

(Exact Name of Registrant as Specified in its Charter)

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

Registrant's telephone number, including area code:  [phone]

N/A

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.01 per share		UBP		New York Stock Exchange
Class A Common Stock, par value $.01 per share		UBA		New York Stock Exchange
6.25% Series H Cumulative Preferred Stock		UBPPRH		New York Stock Exchange
5.875% Series K Cumulative Preferred Stock		UBPPRK		New York Stock Exchange
Common Stock Rights to Purchase Preferred Shares		N/A		New York Stock Exchange
Class A Common Stock Rights to Purchase Preferred Shares		N/A		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. Yes ☒    No ☐

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).  Yes ☒    No ☐

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

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. ☐

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

As of  March 6, 2023 (latest date practicable), the number of shares of the Registrant's classes of Common Stock and Class A Common Stock outstanding was: 10,357,529 Common Shares, par value $.01 per share, and 28,969,866 Class A Common Shares, par value $.01 per share.

---

Index

Urstadt Biddle Properties Inc.
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets – January 31, 2023 (Unaudited) and October 31, 2022.	1
	Consolidated Statements of Income (Unaudited) – Three months ended January 31, 2023 and 2022.	2
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three months ended January 31, 2023 and 2022.	3
	Consolidated Statements of Cash Flows (Unaudited) –   Three months ended January 31, 2023 and 2022.	4
	Consolidated Statement of Stockholders' Equity (Unaudited) – Three months ended January 31, 2023 and 2022.	5
	Notes to Consolidated Financial Statements.	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	29
Item 4.	Controls and Procedures.	30
Part II. Other Information
Item 1.	Legal Proceedings.	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	32
Item 6.	Exhibits.	33
Signatures		34

---

Index

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

		January 31, 2023				October 31, 2022
		(Unaudited)
Assets
Real Estate Investments:
Real Estate– at cost		$	1,193,552			$	1,190,356
Less: Accumulated depreciation			(309,593	)			(303,488	)
			883,959				886,868
Investments in and advances to unconsolidated joint ventures			28,601				29,586
			912,560				916,454
Cash and cash equivalents			14,094				14,966
Tenant receivables-net			24,228				22,889
Prepaid expenses and other assets			36,254				34,559
Deferred charges, net of accumulated amortization			8,180				8,458
Total Assets		$	995,316			$	997,326
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Revolving credit line		$	37,500			$	30,500
Mortgage notes payable and other loans			300,500				302,316
Accounts payable and accrued expenses			9,633				5,399
Deferred compensation – officers			56				54
Other liabilities			22,551				23,205
Total Liabilities			370,240				361,474
Redeemable Noncontrolling Interests			61,206				61,550
Commitments and Contingencies
Stockholders’ Equity:
6.25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share); 4,600,000 shares issued and outstanding			115,000				115,000
5.875% Series K Cumulative Preferred Stock (liquidation preference of $25 per share); 4,400,000 shares issued and outstanding			110,000				110,000
Excess Stock, par value $0.01 per share; 20,000,000 shares authorized; none issued and outstanding			-				-
Common Stock, par value $0.01 per share; 30,000,000 shares authorized; 10,357,529 and 10,247,072 shares issued and outstanding			105				104
Class A Common Stock, par value $0.01 per share; 100,000,000 shares authorized; 28,970,166 and 28,963,433 shares issued and outstanding			290				290
Additional paid in capital			509,815				511,471
Cumulative distributions in excess of net income			(183,483	)			(179,754	)
Accumulated other comprehensive income (loss)			12,143				17,191
Total Stockholders' Equity			563,870				574,302
Total Liabilities and Stockholders' Equity		$	995,316			$	997,326

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

1

---

Index

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)

		Three Months Ended January 31,
		2023				2022
Revenues
Lease income		$	35,739			$	34,087
Lease termination			1,557				28
Other			1,001				1,440
Total Revenues			38,297				35,555
Expenses
Property operating			6,965				7,002
Property taxes			5,918				5,923
Depreciation and amortization			8,404				7,144
General and administrative			2,726				2,680
Directors' fees and expenses			119				107
Total Operating Expenses			24,132				22,856
Operating Income			14,165				12,699
Non-Operating Income (Expense):
Interest expense			(3,647	)			(3,302	)
Equity in net income from unconsolidated joint ventures			420				267
Gain (loss) on sale of property			(4	)			2
Interest, dividends and other investment income			134				55
Net Income			11,068				9,721
Noncontrolling interests:
Net income attributable to noncontrolling interests			(853	)			(911	)
Net income attributable to Urstadt Biddle Properties Inc.			10,215				8,810
Preferred stock dividends			(3,413	)			(3,413	)
Net Income Applicable to Common and Class A Common Stockholders		$	6,802			$	5,397
Basic Earnings Per Share:
Per Common Share:		$	0.17			$	0.13
Per Class A Common Share:		$	0.18			$	0.14
Diluted Earnings Per Share:
Per Common Share:		$	0.16			$	0.13
Per Class A Common Share:		$	0.18			$	0.14
Dividends Per Share:
Common		$	0.2250			$	0.2145
Class A Common		$	0.2500			$	0.2375

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

2

---

Index

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)

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

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

3

---

Index

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

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

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

4

---

Index

URSTADT BIDDLE PROPERTIES INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended January 31, 2023 and 2022

(In thousands, except share and per share data)

		Series H Preferred Stock Issued				Series H Preferred Stock Amount				Series K Preferred Stock Issued				Series K Preferred Stock Amount				Common Stock Issued				Common Stock Amount				Class A Common Stock Issued				Class A Common Stock Amount				Additional Paid In Capital				Cumulative Distributions In Excess of Net Income				Accumulated Other Comprehensive Income (loss)				Total Stockholders’ Equity
Balances - October 31, 2022			4,600,000			$	115,000				4,400,000			$	110,000				10,247,072			$	104				28,963,433			$	290			$	511,471			$	(179,754	)		$	17,191			$	574,302
Net income applicable to Common and Class A common stockholders			-				-				-				-				-				-				-				-				-				6,802				-				6,802
Change in unrealized gains on interest rate swap			-				-				-				-				-				-				-				-				-				-				(5,048	)			(5,048	)
Cash dividends paid :
Common stock ($0.225 per share)			-				-				-				-				-				-				-				-				-				(2,331	)			-				(2,331	)
Class A common stock ($0.25 per share)			-				-				-				-				-				-				-				-				-				(7,241	)			-				(7,241	)
Issuance of shares under dividend reinvestment plan			-				-				-				-				944				-				2,013				-				54				-				-				54
Shares issued under restricted stock plan			-				-				-				-				109,800				1				151,750				1				(2	)			-				-				-
Shares withheld for employee taxes			-				-				-				-				-				-				(26,014	)			-				(493	)			-				-				(493	)
Forfeiture of restricted stock			-				-				-				-				-				-				(5,000	)			-				-				-				-				-
Repurchase of Common and Class A Common stock			-				-				-				-				(287	)			-				(116,016	)			(1	)			(2,141	)			-				-				(2,142	)
Restricted stock compensation and other adjustments			-				-				-				-				-				-				-				-				926				-				-				926
Adjustments to redeemable noncontrolling interests			-				-				-				-				-				-				-				-				-				(959	)			-				(959	)
Balances - January 31, 2023			4,600,000			$	115,000				4,400,000			$	110,000				10,357,529			$	105				28,970,166			$	290			$	509,815			$	(183,483	)		$	12,143			$	563,870

5

---

Index

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

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

6

---

Index

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Business

Urstadt Biddle Properties Inc. (“Company”), a Maryland corporation, is a real estate investment trust ("REIT"), engaged in the acquisition, ownership and management of commercial real estate, primarily neighborhood and community shopping centers in the metropolitan tri-state area outside of the City of New York.  The Company's major tenants include supermarket chains and other retailers who sell basic necessities.  At January 31, 2023, the Company owned or had equity interests in 77 properties containing a total of 5.3 million square feet of Gross Leasable Area (“GLA”).

COVID-19 Pandemic

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

Principles of Consolidation and Use of Estimates

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

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Results of operations for the three months ended January 31, 2023 are not necessarily indicative of the results that may be expected for the year ending October 31, 2023. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2022.

The preparation of financial statements requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition, fair value estimates, and the collectability of tenant receivables and other assets and liabilities.  Actual results could differ from these estimates.  The consolidated balance sheet at October 31, 2022 has been derived from audited financial statements at that date.

Federal Income Taxes

The Company has elected to be treated as a REIT under Sections 856-860 of the Internal Revenue Code ("Code"). Under those sections, a REIT that, among other things, distributes at least 90% of real estate trust taxable income and meets certain other qualifications prescribed by the Code will not be taxed on that portion of its taxable income that is distributed.  The Company believes it qualifies as a REIT and intends to distribute all of its taxable income for fiscal 2023 in accordance with the provisions of the Code. Accordingly, no provision has been made for Federal income taxes in the accompanying consolidated financial statements.

The Company follows the provisions of ASC Topic 740, “Income Taxes” that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  Based on its evaluation, the Company determined that it has no uncertain tax positions and no unrecognized tax benefits as of January 31, 2023. As of January 31, 2023, the fiscal tax years 2019 through and including 2022 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.

Concentration of Credit Risk

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

Marketable Securities

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

Derivative Financial Instruments

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

As of January 31, 2023, the Company believes it has no significant risk associated with non-performance of the financial institutions that are the counterparties to its derivative contracts.  At January 31, 2023, the Company had approximately $154.8 million in secured mortgage financings subject to interest rate swaps. Such interest rate swaps converted the LIBOR or Secured Overnight Financing Rate (“SOFR”)-based variable rates on the mortgage financings to a fixed annual rate of 3.74% per annum. As of January 31, 2023 and October 31, 2022, the Company had deferred assets of  $11.5 million and $15.9 million, respectively (included in other assets on the consolidated balance sheets), relating to the fair value of the Company’s interest rate swaps applicable to secured mortgages.

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

Comprehensive Income (Loss)

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

Asset Impairment

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

7

---

Index

Acquisitions of Real Estate Investments, Capitalization Policy and Depreciation

Acquisition of Real Estate Investments:

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

•

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

•

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

An acquired process is considered substantive if:

•

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

•

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

•

The process is considered unique or scarce.

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

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

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

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

Capitalization Policy:

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

Depreciation:

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

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

Buildings	30-40 years
Property Improvements	10-20 years
Furniture/Fixtures	3-10 years
Tenant Improvements	Shorter of lease term or their useful life

Sale of Investment Property and Property Held for Sale

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

In September 2021, the Company entered into a purchase and sale agreement to sell its property located in Chester, NJ (the "Chester Property"), to an unrelated third party for a sale price of $1.96 million as that property no longer met its investment objectives.  In accordance with ASC Topic 360-10-45, the property met all the criteria to be classified as held for sale in the fourth quarter of fiscal 2021, and accordingly the Company recorded a loss on property held for sale of $342,000, which loss was included in continuing operations in the consolidated statement of income for the year ended October 31, 2021. The amount of the loss represented the net carrying amount of the property over the fair value of the asset less estimated cost to sell.  The net book value of the Chester Property was insignificant to financial statement presentation and as a result the Company did not include the asset as held for sale on its consolidated balance sheet at October 31, 2021.  In December 2021, the Chester Property sale was completed and the Company realized an additional loss on sale of property of $8,000, which loss is included in operations in the consolidated statement of income for the three months ended January 31, 2022.

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

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

8

---

Index

Lease Income, Revenue Recognition and Tenant Receivables

Lease Income:

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

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

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

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

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

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

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

Revenue Recognition

In those instances in which the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition on operating leases will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin.

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

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

Tenant Receivables

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

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

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

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

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

The Company provides an allowance for doubtful accounts against the portion of tenant receivables that is estimated to be uncollectable. Such allowances are reviewed periodically. At January 31, 2023 and October 31, 2022, tenant receivables in the accompanying consolidated balance sheets are shown net of allowances for doubtful accounts of $6,382,000 and $6,213,600, respectively. Included in the aforementioned allowance for doubtful accounts is an amount for future tenant credit losses of approximately 10% of the deferred straight-line rents receivable, which is estimated to be uncollectable.

9

---

Index

Earnings Per Share

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

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

		Three Months Ended January 31,
		2023				2022
Numerator
Net income applicable to common stockholders – basic		$	1,562			$	1,194
Effect of dilutive securities:
Restricted stock awards			44				34
Net income applicable to common stockholders – diluted		$	1,606			$	1,228
Denominator
Denominator for basic EPS – weighted average common shares			9,413				9,327
Effect of dilutive securities:
Restricted stock awards			385				383
Denominator for diluted EPS – weighted average common equivalent shares			9,798				9,710
Numerator
Net income applicable to Class A common stockholders-basic		$	5,240			$	4,203
Effect of dilutive securities:
Restricted stock awards			(44	)			(34	)
Net income applicable to Class A common stockholders – diluted		$	5,196			$	4,169
Denominator
Denominator for basic EPS – weighted average Class A common shares			28,420				29,659
Effect of dilutive securities:
Restricted stock awards			108				109
Denominator for diluted EPS – weighted average Class A common equivalent shares			28,528				29,768

Segment Reporting

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

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

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

		Three Months Ended January 31,
		2023				2022
Ridgeway Revenues			10.0	%			10.1	%
All Other Property Revenues			90.0	%			89.9	%
Consolidated Revenue			100.0	%			100.0	%

		January 31, 2023				October 31, 2022
Ridgeway Assets			6.4	%			6.5	%
All Other Property Assets			93.6	%			93.5	%
Consolidated Assets (Note 1)			100.0	%			100.0	%

Note 1 - Ridgeway did not have any significant expenditures for additions to long lived assets in the three months ended January 31, 2023 or the year ended October 31, 2022.

		January 31, 2023				October 31, 2022
Ridgeway Percent Leased			98	%			98	%

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

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

Note 3 - Bed Bath and Beyond's lease expired on January 31, 2023 and that tenant has vacated the property. The Company is in the process of negotiating a lease for a large portion of this space with a national retailer.

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

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

10

---

Index

Stock-Based Compensation

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

Reclassifications

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

New Accounting Standards

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848).” ASU No. 2020-04 contains practical expedients for reference rate-reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended April 30, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

The Company has evaluated all other new ASUs issued by FASB, and has concluded that these updates do not have a material effect on the Company's consolidated financial statements as of January 31, 2023.

11

---

Index

(2) UNSECURED REVOLVING CREDIT FACILITY

The Company has a $125 million unsecured revolving credit facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also includes Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents).  The Facility gives the Company the option, under certain conditions, to increase the Facility's borrowing capacity to $175 million (subject to lender approval).  The maturity date of the Facility is March 29, 2024, with a one year extension at the Company's option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at the Company's option of the Secured Overnight Finance Rate ("SOFR") plus 1.55% to 2.30% or The Bank of New York Mellon's prime lending rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  The Company pays a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. The Company's ability to borrow under the Facility is subject to its compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit the Company's level of secured and unsecured indebtedness, including preferred stock, and additionally require the Company to maintain certain debt coverage ratios. The Company was in compliance with such covenants at January 31, 2023. 

12

---

Index

(3) CONSOLIDATED JOINT VENTURES AND REDEEMABLE NONCONTROLLING INTERESTS

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

Orangeburg

The Company is the managing member and owns a 43.8% interest in Orangeburg, which owns a CVS-anchored shopping center. The other member (non-managing) of Orangeburg is the prior owner of the contributed property, which, in exchange for contributing the net assets of the property, received units of Orangeburg equal to the value of the contributed property less the value of the assigned first mortgage payable. The Orangeburg operating agreement provides for the non-managing member to receive a quarterly cash distribution equal to the regular quarterly cash distribution declared by the Company for one share of the Company’s Class A Common stock, which amount is attributable to each unit of Orangeburg ownership. The quarterly cash distribution is paid from available cash, as defined, of Orangeburg. The balance of available cash, if any, is fully distributable to the Company. Upon liquidation, proceeds from the sale of Orangeburg assets are to be distributed in accordance with the operating agreement. The non-managing member is not obligated to make any additional capital contributions to the partnership. Orangeburg has a defined termination date of December 31, 2097.  Since acquiring its initial interest in Orangeburg, the Company has made additional investments in the amount of $6.5 million in Orangeburg, and as a result, as of January 31, 2023 the Company's ownership percentage had increased to 43.8% from approximately 2.92% at inception.

McLean

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

High Ridge

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

Dumont

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

Noncontrolling Interests

The Company accounts for noncontrolling interests in accordance with ASC Topic 810, “Consolidation.” Because the limited partners or noncontrolling members in Orangeburg, McLean, High Ridge and Dumont have the right to require the Company to redeem all or a part of their limited partnership or limited liability company units for cash, or at the option of the Company, shares of its Class A Common stock at prices as defined in the governing agreements, the Company reports the noncontrolling interests in the consolidated joint ventures in the mezzanine section, outside of permanent equity, of the consolidated balance sheets at redemption value which approximates fair value. The value of the Orangeburg, McLean, and a portion of the High Ridge and Dumont redemptions are based solely on the price of the Company’s Class A Common stock on the date of redemption.   For the three months ended January 31, 2023 and 2022, the Company increased/(decreased) the carrying value of the noncontrolling interests by $1.0 million and $536,000, respectively, with the corresponding adjustment recorded in stockholders’ equity.

The following table sets forth the details of the Company's redeemable non-controlling interests for the three months ended January 31, 2023 and the fiscal year ended October 31, 2022 (amounts in thousands):

		January 31, 2023				October 31, 2022
Beginning Balance		$	61,550			$	67,395
Change in Redemption Value			959				(1,948	)
Partial Redemption of High Ridge Noncontrolling Interest			(643	)			(2,681	)
Partial Redemption of Dumont Noncontrolling Interest			(660	)			(168	)
Redemption of UB Rye, LLC Noncontrolling Interest			-				(546	)
Redemption of New City Noncontrolling Interest			-				(502	)
Ending Balance		$	61,206			$	61,550

13

---

Index

(4) INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED JOINT VENTURES

At January 31, 2023 and October 31, 2022 investments in and advances to unconsolidated joint ventures consisted of the following (with the Company’s ownership percentage in parentheses) (amounts in thousands):

		January 31, 2023				October 31, 2022
Chestnut Ridge Shopping Center (50%)		$	11,569			$	11,617
Gateway Plaza (50%)			5,309				5,858
Putnam Plaza Shopping Center (66.67%)			4,609				4,952
Midway Shopping Center, L.P. (11.79%)			3,572				3,647
Applebee's at Riverhead (50%)			2,819				2,789
81 Pondfield Road Company (20%)			723				723
Total		$	28,601			$	29,586

Chestnut Ridge Shopping Center

The Company, through a wholly-owned subsidiary, owns a 50% undivided tenancy-in-common interest in the 76,000 square foot Chestnut Ridge Shopping Center located in Montvale, New Jersey (“Chestnut”), which is anchored by a Fresh Market grocery store.

Gateway Plaza and Applebee's at Riverhead

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

Gateway is subject to a non-recourse first mortgage in the amount of $14.0 million. The mortgage loan matures on July 1, 2032 and requires payments of interest only for the first 7 years at a rate equal to the SOFR plus 1.75% and then requires payments of principal and interest for the duration of the loan.  Concurrent with entering into the mortgage, Gateway entered into an interest rate swap agreement, which converts the variable rate based on SOFR to a fixed interest rate of 4.07% per annum for the term of the mortgage note.

Midway Shopping Center, L.P.

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

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

Midway is subject to a non-recourse first mortgage in the amount of $23.4 million.  The loan requires payments of principal and interest at the rate of 4.80% per annum and will mature in 2027.

Putnam Plaza Shopping Center

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

Putnam Plaza is subject to a non-recourse first mortgage payable in the amount of $17.6 million.  The mortgage requires monthly payments of principal and interest at a fixed rate of 4.81% and will mature in 2028.

81 Pondfield Road Company

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

Equity Method of Accounting

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

14

---

Index

(5) LEASES

Lessor Accounting

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

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

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

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

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

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

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

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

15

---

Index

(6)  STOCKHOLDERS’ EQUITY

Authorized Stock

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

Restricted Stock Plan

The Company has a Restricted Stock Plan, as amended (the "Plan") that provides a form of equity compensation for employees of the Company.  The Plan, which is administered by the Company's compensation committee, authorizes grants of up to an aggregate of 5,500,000 shares of the Company’s common equity consisting of 350,000 Common shares, 350,000 Class A Common shares and 4,800,000 shares, which at the discretion of the compensation committee, may be awarded in any combination of Class A Common shares or Common shares.

During the three months ended January 31, 2023, the Company awarded 109,800 shares of Common Stock and 151,750 shares of Class A Common Stock to participants in the Plan.  The grant date fair value of restricted stock grants awarded to participants in 2023 was approximately $4.9 million.

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

		Common Shares								Class A Common Shares
Non-vested Shares		Shares				Weighted-Average Grant-Date Fair Value				Shares				Weighted-Average Grant-Date Fair Value
Non-vested at October 31, 2022			934,200			$	17.11				547,300			$	19.96
Granted			109,800			$	18.29				151,750			$	18.97
Vested			(102,200	)		$	15.65				(88,150	)		$	22.24
Forfeited			-			$	-				(5,000	)		$	19.84
Non-vested at January 31, 2023			941,800			$	17.40				605,900			$	19.38

As of January 31, 2023, there was $16.2 million of unamortized restricted stock compensation related to non-vested restricted stock grants awarded under the Plan.  The remaining unamortized expense is expected to be recognized over a weighted average period of 4.6 years. For the three months ended January 31, 2023 and 2022, amounts charged to compensation expense totaled $926,000 and $617,000, respectively.

Share Repurchase Program

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

For the three month period ended January 31, 2023, the Company repurchased 116,016 shares of Class A Common Stock at an average price per Class A Common share of $18.39 and 287 shares of Common Stock at an average price per Common Share of $18.40.  The Company has repurchased 602,014 shares of Class A Common Stock and 7,127 shares of Common Stock under the Current Repurchase Program.  From the inception of all repurchase programs, the Company has repurchased 2,268,093 shares of Class A Common Stock and 53,758 shares of Common Stock.

Preferred Stock

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

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

16

---

Index

(7) FAIR VALUE MEASUREMENTS

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

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

•

Level 1- Quoted prices for identical instruments in active markets

•

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

markets that are not active; and model-derived valuations in which significant value drivers are observable

•

Level 3- Valuations derived from valuation techniques in which significant value drivers are unobservable

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

The fair values of interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. The analysis reflects the contractual terms of the swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded, as of October 31, 2022 and January 31, 2023, that the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, the Company has determined that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.

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

						Fair Value Measurements at Reporting Date Using
		Total				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
January 31, 2023
Assets:
Interest Rate Swap Agreement		$	11,500			$	-			$	11,500			$	-
Liabilities:
Redeemable noncontrolling interests		$	61,206			$	18,561			$	42,645			$	-
October 31, 2022
Assets:
Interest Rate Swap Agreement		$	15,856			$	-			$	15,856			$	-
Liabilities:
Redeemable noncontrolling interests		$	61,550			$	11,979			$	49,571			$	-

17

---

Index

(8) COMMITMENTS AND CONTINGENCIES

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

18

---

Index

2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Forward Looking Statements:

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

Important factors that we think could cause our actual results to differ materially from expected results are summarized below.

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

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

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

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

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

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

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

•

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

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

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

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

•

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

•	environmental risk and regulatory requirements;

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

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

•	other risks identified in this Annual Report on Form 10-K under Item 1A. Risk Factors for the fiscal year ended October 31, 2022 and in the other reports filed by the Company with the Securities and Exchange Commission (the “SEC”).

19

---

Index

Executive Summary

Overview

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

At January 31, 2023, we owned or had equity interests in 77 properties containing a total of 5.3 million square feet of Gross Leasable Area (“GLA”), which include equity interests in four consolidated joint ventures and six unconsolidated joint ventures. Of the properties owned by wholly-owned subsidiaries or consolidated joint venture entities, approximately 94.1% of the GLA was leased (93.0% at October 31, 2022).  Of the properties owned by unconsolidated joint ventures, approximately 94.4% of the GLA was leased (94.4% at October 31, 2022).  In addition, we own and operate self-storage facilities at two of our retail properties.  Both self-storage facilities are managed for us by Extra Space Storage, a publicly traded REIT.  One of the self-storage facilities is located in the back of our Yorktown Heights, NY shopping center in below grade space.  As of January 31, 2023, the self-storage facility had 57,389 square feet of available GLA, which was 92.0% leased. As discussed later in this Item 2, we have also developed a second self-storage facility located in Stratford, CT with 90,000 square feet of available GLA.  The Stratford facility has been operational for approximately 21 months and is 91.0% leased.  We are also nearing completion on construction of a third self-storage facility at our Pompton Lakes, NJ property and our anticipated total investment to develop the facility is approximately $8.2 million.

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

We have paid quarterly dividends to our stockholders continuously since our founding in 1969.

Impact of COVID-19

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

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

•	As of January 31, 2023, all of our 71 retail shopping centers, stand-alone restaurants and stand-alone bank branches are open and operating.

•

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

Rent Deferrals, Abatements and Lease Restructurings

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

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

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

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

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

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

20

---

Index

Strategy, Challenges and Outlook

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

Key elements of our growth strategy and operating policies are to:

•

maintain our focus on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, which we believe can provide a more stable revenue flow even during difficult economic times, given the focus on food and other types of staple goods;

•

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

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

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

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

•

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

•	improve and refine the quality of our tenant mix at our shopping centers;

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

•	maintain a conservative capital structure with low debt levels; and

•	control property operating and administrative costs.

We believe our strategy of focusing on community and neighborhood shopping centers, anchored principally by regional supermarkets, pharmacy chains or wholesale clubs, has been validated during the COVID-19 pandemic.  We believe the nature of our properties makes them less susceptible to economic downturns than other retail properties whose anchor tenants do not supply basic necessities.   During normal conditions, we believe that consumers generally prefer to purchase food and other staple goods and services in person, and even during the COVID-19 pandemic our supermarkets, pharmacies and wholesale clubs have been posting strong in-person sales.  Moreover, most of our grocery stores implemented or expanded curbside pick-up or partnered with delivery services to cater to the needs of their customers during the COVID-19 pandemic.

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

We have seen significant improvement in general business conditions, but the public health situation is difficult to predict.  Moreover, challenges presented by inflation, labor shortages, supply chain disruptions and uncertainties in the U.S. economy could present continued or new challenges for our tenants. We will continue to accrue rental revenue during the deferral period, except for tenants for which revenue recognition was converted to cash basis accounting in accordance with ASC Topic 842.

As a REIT, we are susceptible to changes in interest rates, the lending environment, the availability of capital markets and the general economy.  During the past year, the United States, as well as many other parts of the world, has experienced rising interest rates, a tightening lending environment, and a disrupted capital market. While recent indicators point toward an improvement in theses market factors, any future changes are difficult to predict.

Transaction Highlights of Fiscal 2023; Recent Developments

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

•	In December 2022, we redeemed 29,653  units of UB High Ridge, LLC ("High Ridge") from a non-managing member.  The total cash price paid for the redemptions was $643,000. As a result of the redemptions, our ownership percentage of High Ridge increased to 30.3% from 29.2% at October 31, 2022.

•	In January 2023, we redeemed 31,451 units of UB Dumont, LLC ("Dumont") from a non-managing member.  The total cash price paid for the redemption was $660,400. As a result of the redemptions, our ownership percentage of Dumont increased to 43.1% from 37.8% at October 31, 2022.

•

From November 1, 2022 to December 19, 2022, the Company repurchased 116,016 shares of Class A Common Stock at an average per share price of $18.39 and 287 shares of Common Stock at an average per share price of $18.40 under a previously announced stock repurchase program through a Rule 10b5-1(c)(1) agreement entered into between the Company and its broker Deutsche Bank Securities Inc. We believed the repurchase was a good use of our cash and a way to add value to our stockholders.

21

---

Index

Leasing

Overview

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

For the three months ended January 31, 2023, we signed leases for a total of 158,200 square feet of retail space in our consolidated portfolio.  New leases for vacant spaces were signed for 73,800 square feet at an average rental increase of 10.3% on a cash basis.  Renewals for 84,400 square feet of space previously occupied were signed at an average rental increase of 4.6% on a cash basis.

Tenant improvements and leasing commissions averaged $64.69 per square foot for new leases for the three months ended January 31, 2023. We did not pay any significant tenant improvements and leasing commissions on renewal leases for the three months ended January 31, 2023. The average term for new leases was 6 years and the average term for renewal leases was 3 years.

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

The leases signed in 2023 generally become effective over the following one to two years. There is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other reasons.

Impact of Inflation on Leasing

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

22

---

Index

Critical Accounting Estimates

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

•	Valuation of investment properties

•	Determining the amount of our allowance for doubtful accounts

Valuation of Investment Properties

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

Allowance for Doubtful Accounts

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

For a further discussion of our accounting estimates and critical accounting policies, please see Note 1 in our consolidated financial statements included in Item 1 of this Form 10-Q.

23

---

Index

Liquidity and Capital Resources

Overview

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

Our short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service, management and professional fees, cash distributions to certain limited partners and non-managing members of our consolidated joint ventures, and regular dividends paid to our Common and Class A Common stockholders.  Cash dividends paid on Common and Class A Common stock for the three months ended January 31, 2023 and 2022 totaled $9.6 million and $9.3 million, respectively.  Historically, we have met short-term liquidity requirements, which is defined as a rolling twelve month period, primarily by generating net cash from the operation of our properties.

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

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

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

Capital Expenditures

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

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

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

Financing Strategy, Unsecured Revolving Credit Facility and other Financing Transactions

Our strategy is to maintain a conservative capital structure with low leverage levels by commercial real estate standards.  Mortgage notes payable and other loans of $300.5 million consist of $1.7 million in variable rate debt with an interest rate of 4.55% as of January 31, 2023 and $298.8 million in fixed-rate mortgage loans, with a weighted average interest rate of 3.8% at January 31, 2023.  The mortgages are secured by 23 properties with a net book value of $489 million and have fixed rates of interest ranging from 3.1% to 5.6%.  The $1.7 million in variable rate debt is unsecured.  We may refinance our mortgage loans, at or prior to scheduled maturity, through replacement mortgage loans.  The ability to do so, however, is dependent upon various factors, including the income level of the properties, interest rates and credit conditions within the commercial real estate market. Accordingly, there can be no assurance that such re-financings can be achieved.  At January 31, 2023, we had 48 properties in our consolidated portfolio that were unencumbered by mortgages.

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

We currently maintain a ratio of total debt to total assets below 34.0% and a fixed charge coverage ratio of over 3.6 to 1 (excluding preferred stock dividends), which we believe will allow us to obtain additional secured mortgage loans or other types of borrowings, if necessary.  We own 48 properties in our consolidated portfolio that are not encumbered by secured mortgage debt.  At January 31, 2023, we had borrowing capacity of $86.7 million on our Facility (exclusive of the accordion feature discussed in the following paragraph).  Our Facility includes financial covenants that limit, among other things, our ability to incur unsecured and secured indebtedness.  See Note 3 in our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for additional information on these and other restrictions.

We currently have a $125 million unsecured revolving credit facility with a syndicate of three banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also included Wells Fargo Bank N.A. and Bank of Montreal (co-syndication agents).  The Facility gives us the option, under certain conditions, to increase the Facility's borrowing capacity to $175 million (subject to lender approval).  The maturity date of the Facility is March 29, 2024, with a one year extension at our option.  Borrowings under the Facility can be used for general corporate purposes and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at our option of either SOFR plus 1.55% to 2.30%, or The Bank of New York Mellon's prime lending rate plus 0.45% to 1.20% based on consolidated total indebtedness, as defined.  We pay a quarterly commitment fee on the unused commitment amount of 0.15% to 0.25% based on outstanding borrowings during the year. Our ability to borrow under the Facility is subject to our compliance with the covenants and other restrictions on an ongoing basis.  The principal financial covenants limit our level of secured and unsecured indebtedness, including preferred stock, and additionally requires us to maintain certain debt coverage ratios. We were in compliance with such covenants at January 31, 2023. The Facility includes market standard provisions for determining the benchmark replacement rate for LIBOR.

The Facility contains representations and financial and other affirmative and negative covenants usual and customary for this type of agreement.  So long as any amounts remain outstanding or unpaid under the Facility, we must satisfy certain financial covenants: 

•	unsecured indebtedness may not exceed $400 million;

•	secured indebtedness may not exceed 40% of gross asset value, as determined under the Facility;

•	total secured and unsecured indebtedness, excluding preferred stock, may not be more than 60% of gross asset value;

•	total secured and unsecured indebtedness, plus preferred stock, may not be more than 70% of gross asset value;

•	unsecured indebtedness may not exceed 60% of the eligible real asset value of unencumbered properties in the unencumbered asset pool as defined under the Facility;

•	earnings before interest, taxes, depreciation and amortization must be at least 175% of fixed charges, which exclude preferred stock dividends;

•	the net operating income from unencumbered properties must be 200% of unsecured interest expenses;

•	not more than 25% of the gross asset value and unencumbered asset pool may be attributable to the Company's pro rata share of the value of unencumbered properties owned by non-wholly owned subsidiaries or unconsolidated joint ventures; and

•	the number of un-mortgaged properties in the unencumbered asset pool must be at least 10 and at least 10 properties must be owned by the Company or a wholly owned subsidiary.

For purposes of these covenants, eligible real estate value is calculated as the sum of the Company's properties annualized net operating income for the prior four fiscal quarters capitalized at 6.75% and the purchase price of any eligible real estate asset acquired during the prior four fiscal quarters.  Gross asset value is calculated as the sum of eligible real estate value, the Company's pro rata share of eligible real estate value of eligible joint venture assets, cash and cash equivalents, marketable securities, the book value of the Company's construction projects and the Company's pro rata share of the book value of construction projects owned by unconsolidated joint ventures, and eligible mortgages and trade receivables, as defined in the agreement.

At January 31, 2023, we have $37.5 million outstanding on our Facility.

Unconsolidated Joint Venture Debt

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

•

a 66.67% equity interest in Putnam Plaza Shopping Center,

•

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

•

a 50% equity interest in Chestnut Ridge Shopping Center,

•

a 50% equity interest in each of Gateway Plaza Shopping Center and Applebee’s Plaza, and

•

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

These unconsolidated joint ventures are accounted for under the equity method of accounting, as we have the ability to exercise significant influence over, but not control of, the operating and financial decisions of these investments.  Our off-balance sheet arrangements are more fully discussed in Note 4, “Investments in and Advances to Unconsolidated Joint Ventures” in our financial statements in Item 1 of this Quarterly Report on Form 10-Q.  Although we have not guaranteed the debt of these joint ventures, we have agreed to customary environmental indemnifications and nonrecourse carve-outs (e.g. guarantees against fraud, misrepresentation and bankruptcy) on certain loans of the joint ventures.  The below table details information about the outstanding non-recourse mortgage financings on our unconsolidated joint ventures (amounts in thousands):

				Principal Balance						Fixed Interest
Joint Venture Description		Location		Original Balance			At January 31, 2023			Rate Per Annum			Maturity Date
Midway Shopping Center		Scarsdale, NY		$	32,000		$	23,400			4.80%		Dec-2027
Putnam Plaza Shopping Center		Carmel, NY		$	18,900		$	17,600			4.81%		Oct-2028
Gateway Plaza		Riverhead, NY		$	14,000		$	14,000			4.07%		July 2032

24

---

Index

Net Cash Flows from:

Operating Activities

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

Investing Activities

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

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

Financing Activities

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

25

---

Index

Results of Operations

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

		Three Months Ended																Change Attributable to
		January 31,								Increase								Property				Properties Held In
Revenues		2023				2022				(Decrease)				% Change				Acquisitions/Sales				Both Periods (Note 1)
Base rents		$	26,833			$	24,989			$	1,844				7.4	%		$	797			$	1,047
Recoveries from tenants			8,886				9,274				(388	)			(4.2	)%			194				(582	)
Uncollectable amounts in lease income			(104	)			(113	)			9				(8.0	)%			-				9
ASC Topic 842 cash basis lease income reversal (including straight-line rent)			124				(63	)			187				(296.8	)%			-				187
Total lease income			35,739				34,087
Lease termination			1,557				28				1,529				5,460.7	%			-				1,529
Other income			1,001				1,440				(439	)			(30.5	)%			(10	)			(429	)
Operating Expenses
Property operating			6,965				7,002				(37	)			(0.5	)%			158				(195	)
Property taxes			5,918				5,923				(5	)			(0.1	)%			65				(70	)
Depreciation and amortization			8,404				7,144				1,260				17.6	%			282				978
General and administrative			2,726				2,680				46				1.7	%			n/a				n/a
Non-Operating Income/Expense
Interest expense			3,647				3,302				345				10.4	%			-				345
Interest, dividends, and other investment income			134				55				79				143.6	%			n/a				n/a

 

 Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2023 and 2022 and for interest expense the amount also includes parent company interest expense.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

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

Property Acquisitions and Properties Sold:

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

Properties Held in Both Periods:

Revenues

Base Rent

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

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

Tenant Recoveries

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

Lease Termination Income

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

Uncollectable Amounts in Lease Income

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

ASC Topic 842 Cash Basis Lease Income Reversals

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

Expenses

Property Operating

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

Property Taxes

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

Interest

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

Depreciation and Amortization

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

General and Administrative Expenses

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

26

---

Index

Funds from Operations

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

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

•

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

•

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

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

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

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

Increases:

•	A $1.8 million increase in base rent for new leasing in the portfolio after the first quarter of fiscal 2022 predominantly at 10 properties.

•	The net operating income from our Shelton Square acquisition, which closed after the first quarter of fiscal 2022.

•

An increase in lease termination income of $1.5 million when compared with the corresponding prior period, related predominantly to three lease termination settlements reached with three different tenants in the first quarter of fiscal 2023. Those tenants had vacated their premises and reached agreement with the company to settle the remaining obligations under their leases.

Decreases:

•	An increase in interest expense of $345,000 when compared with the corresponding prior period.  The increase was mainly the result of having higher amounts drawn on our Facility coupled with higher interest rates, as interest on the Facility is calculated on a variable rate.

•

A $388,000 net decrease in recoveries from tenants (which represent reimbursements from tenants for operating expenses and property taxes) when compared with the corresponding prior period, predominantly related to the recalculation of one tenant's real estate tax reimbursement calculations, which resulted in additional billings to that tenant in the first quarter of fiscal 2022, which creates negative variance in the first quarter of fiscal 2023.

27

---

Index

Same Property Net Operating Income

We present Same Property Net Operating Income ("Same Property NOI"), which is a non-GAAP financial measure. Same Property NOI excludes from Net Operating Income (“NOI”) properties that have not been owned for the full periods presented. The most directly comparable GAAP financial measure to NOI is operating income.  To  calculate NOI, operating income is adjusted to add back depreciation and amortization, general and administrative expense, interest expense, amortization of above and below-market lease intangibles and to exclude straight-line rent adjustments, interest, dividends and other investment income, equity in net income of unconsolidated joint ventures, and gain/loss on sale of operating properties.

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

		Three Months Ended January 31,
		2023	2022	% Change
Same Property Operating Results:
Number of Properties (Note 1)		72
Revenue (Note 2)
Base Rent (Note 3)		$25,966	$25,245	2.9%
Uncollectable amounts in lease income-same property		(104)	(113)	(8.0)%
ASC Topic 842 cash-basis lease income reversal-same property		124	(87)	(242.5)%
Recoveries from tenants		8,688	9,270	(6.3)%
Other property income		137	336	(59.2)%
		34,811	34,651	0.5%
Expenses
Property operating		4,098	3,906	4.9%
Property taxes		5,893	5,913	(0.3)%
Other non-recoverable operating expenses		647	549	17.9%
		10,638	10,368	2.6%
Same Property Net Operating Income		$24,173	$24,283	(0.5)%
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure:
Other reconciling items:
Other non same-property net operating income		746	30
Other Interest income		180	125
Other Dividend Income		8	8
Consolidated lease termination income		1,557	28
Consolidated amortization of above and below market leases		183	174
Consolidated straight line rent income		372	5
Equity in net income of unconsolidated joint ventures		420	267
Taxable REIT subsidiary income/(loss)		(3)	186
Solar income/(loss)		2	(211)
Unrealized holding gains arising during the periods		-	-
Gain on marketable securities		-	-
Interest expense		(3,647)	(3,302)
General and administrative expenses		(2,726)	(2,680)
Uncollectable amounts in lease income		(104)	(113)
Uncollectable amounts in lease income-same property		104	113
ASC Topic 842 cash-basis lease income reversal		124	(87)
ASC Topic 842 cash-basis lease income reversal-same property		(124)	87
Directors fees and expenses		(119)	(107)
Depreciation and amortization		(8,404)	(7,144)
Adjustment for intercompany expenses and other		(1,670)	(1,943)
Total other -net		(13,101)	(14,564)
Income from continuing operations		11,072	9,719	13.9%
Gain (loss) on sale of real estate		(4)	2
Net income		11,068	9,721	13.9%
Net income attributable to noncontrolling interests		(853)	(911)
Net income attributable to Urstadt Biddle Properties Inc.		$10,215	$8,810	15.9%
Same Property Operating Expense Ratio (Note 4)		87.0%	94.4%	(7.5)%

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

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

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

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

Note 4 -Represents the percentage of property operating expense and real estate tax.

28

---

Index

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

For our fixed-rate debt, there is inherent rollover risk for borrowings as they mature and are renewed at current market rates.  The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

To reduce our exposure to interest rate risk on variable-rate debt, we use interest rate swap agreements to convert some of our variable-rate debt to fixed-rate debt.  As of January 31, 2023, we had nine open derivative financial instruments that relate to promissory notes secured by properties that we consolidate.  These interest rate swaps are cross-collateralized with mortgages on properties in Ossining, NY, Yonkers, NY, Orangeburg, NY, Southeast, NY, Stamford, CT, Greenwich CT, Darien, CT, Stratford, CT. and Dumont, NJ.  The Ossining swap expires in October 2024, the Yonkers swap expires in November 2024, the Orangeburg swap expires in October 2024, the Southeast swap expires in June 2029, the Stamford swap expires in July 2027, the Greenwich swaps expire in October 2026, the Darien swap expires in March 2028, the Stratford swap expires in February 2032, and the Dumont, NJ swap expires in August 2027, in each case concurrent with the maturity of the respective mortgages.  All of the aforementioned derivatives contracts are adjusted to fair market value at each reporting period.  We have concluded that all of the aforementioned derivatives contracts are effective cash flow hedges as defined in ASC Topic 815.  We are required to evaluate the effectiveness at inception and at each reporting date.  As a result of the aforementioned derivatives contracts being effective cash flow hedges, all changes in fair market value are recorded directly to stockholders equity in accumulated comprehensive income and have no effect on our earnings.

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

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

29

---

Index

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls

During the quarter ended January 31, 2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

---

Index

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, the Company is involved in legal proceedings. There are no material legal proceedings presently pending against the Company.

31

---

Index

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

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

On October 3, 2022, our Board of Directors re-approved a new share repurchase program (“Current Repurchase Program”) for the repurchase of up to 2,000,000 shares, in the aggregate, of Common Stock and Class A Common Stock in open market transactions. The Current Repurchase Program was announced on October 3, 2022 and has no set expiration date.  The timing and actual number of shares purchased under the program depend upon marketplace conditions and other factors.  For the three month period ended January 31, 2023, the Company repurchased 116,016 shares of Class A Common stock and 287 shares of Common stock under the Current Repurchase Program through a Rule 10b5-1(c)(1) agreement entered into between the Company and its broker Deutsche Bank Securities Inc.

Table A (Class A Common shares)

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

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

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

Table B (Common shares)

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

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

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

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

32

---

Index

Item 6.  Exhibits

10.1	Amendment No. 1 to Amended and Restated Credit Agreement, dated as of January 26, 2023, by and among Urstadt Biddle Properties Inc., The Bank of New York Mellon, as Administrative Agent, and Wells Fargo Bank, N.A. and Bank of Montreal (as co-syndication agents), (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed on January 27, 2023).
31.1	Certification of the Chief Executive Officer of Urstadt Biddle Properties Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
31.2	Certification of the Chief Financial Officer of Urstadt Biddle Properties Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
32	Certification of the Chief Executive Officer and Chief Financial Officer of Urstadt Biddle Properties Inc. pursuant to Section 906 of Sarbanes-Oxley Act of 2002.**
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.

**	Furnished herewith.

33

---

Index

S I G N A T U R E S

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

	URSTADT BIDDLE PROPERTIES INC.
	(Registrant)
	By: /s/ Willing L. Biddle
	Willing L. Biddle
	Chief Executive Officer
	(Principal Executive Officer)
	By: /s/ John T. Hayes
	John T. Hayes
	Senior Vice President &
	Chief Financial Officer
	(Principal Financial Officer
Dated: March 10, 2023	and Principal Accounting Officer

34