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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Urban Edge Properties | NYSE:UE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.03 | -0.17% | 17.27 | 17.435 | 17.21 | 17.22 | 580,700 | 21:04:05 |
-- Raises Outlook for Full-Year 2024 FFO as Adjusted --
Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended March 31, 2024 and updated its outlook for full-year 2024.
“We had an excellent start to 2024, exceeding our plan and delivering FFO as Adjusted of $0.33 per share in the first quarter primarily due to higher NOI growth,” said Jeff Olson, Chairman and CEO. “In addition, we acquired two shopping centers in New Jersey - Heritage Square and Ledgewood Commons - strengthening our presence in this core market and providing attractive growth and redevelopment opportunities. These acquisitions, totaling $117 million at an approximate capitalization rate of 8%, were financed through a combination of 6.1% mortgage debt, asset sales at a blended 5% cap rate and equity issued under our ATM program. Looking ahead, based on our better-than-expected results and our recent accretive acquisitions, we have increased our 2024 FFO as Adjusted guidance by $0.03 per share at the midpoint to $1.30 per share, and we expect 2025 FFO as Adjusted will be towards the high end of the range that we outlined at our April 2023 Investor Day.”
Financial Results(1)(2)
(in thousands, except per share amounts)
1Q24
1Q23
Net income (loss) attributable to common shareholders
$
2,603
$
(19,118
)
Net income (loss) per diluted share
0.02
(0.16
)
Funds from Operations ("FFO")
39,050
38,602
FFO per diluted share
0.32
0.32
FFO as Adjusted
40,818
38,973
FFO as Adjusted per diluted share
0.33
0.32
Net income for the three months ended March 31, 2024 included a $1.9 million, or $0.02 per diluted share, gain on sale of real estate, primarily related to the disposition of a single tenant property in Hazlet, NJ. FFO and FFO as Adjusted for the three months ended March 31, 2024 benefited from rent commencements on new leases and growth from our capital recycling activities.
Same-Property Operating Results Compared to the Prior Year Period(3)
1Q24
Same-property Net Operating Income ("NOI") growth
2.2
%
Same-property NOI growth, including properties in redevelopment
3.7
%
Increases in same-property NOI metrics for the three months ended March 31, 2024 were primarily driven by rent commencements on new leases from our signed but not open pipeline.
Operating Results(1)
Financing Activity
On January 2, 2024, the Company paid off three variable rate mortgage loans aggregating $75.7 million that were due to mature in the fourth quarter of 2024 at interest rates of 7.34%, on the date of repayment. The mortgages were secured by the following properties: Hudson Commons, Greenbrook Commons, and Gun Hill Commons.
On March 28, 2024, the Company refinanced the mortgage secured by its property, Yonkers Gateway Center, with a new 5-year, $50 million loan with a fixed interest rate of 6.30%. The proceeds from the refinancing were used to pay off the previous mortgage on the property, which had an outstanding balance of $22.7 million.
As of March 31, 2024, the Company has limited debt maturities coming due through December 31, 2026, aggregating $189.3 million, which represents approximately 11% of outstanding debt.
During the three months ended March 31, 2024, the Company issued 1,082,945 common shares at a weighted average price of $17.31 per share under its ATM Program, generating net cash proceeds of $18.5 million, used to partially fund the acquisition of Ledgewood Commons.
Acquisition and Disposition Activity
Since October 2023, the Company has acquired four properties for a total of $426 million, at a weighted average capitalization rate of 7.2%, while disposing of non-core and industrial assets of $356 million at a weighted average capitalization rate of 5.2%. The Company continues to prioritize these efforts, focusing on additional accretive transactions.
On February 8, 2024, the Company acquired Heritage Square, an unencumbered 87,000 sf shopping center located in Watchung, NJ, for a purchase price of $34 million. The property is anchored by Ulta, HomeSense and Sierra Trading, and includes three outparcels with a fourth currently under construction. The initial capitalization rate on this transaction was 7.8% and was funded using cash on hand.
On March 14, 2024, the Company closed on the sale of its 95,000 sf property located in Hazlet, NJ for a price of $8.7 million, representing a 3.7% capitalization rate.
On April 5, 2024, the Company closed on the $83 million acquisition of Ledgewood Commons, a 448,000 sf grocery anchored shopping center located in Roxbury Township, NJ. The shopping center has a strong and diverse tenant mix including national brands Walmart Supercenter, Marshalls, Burlington, Ulta, Starbucks, and Chipotle. The initial capitalization rate on the transaction was 7.9%. Future growth is expected to be achieved from two pre-approved but undeveloped outparcels totaling 20,000 sf and lease up of small shop vacancies. On May 3, 2024, a new 5-year, $50 million mortgage loan secured by the property was obtained bearing interest at a fixed rate of 6.03%. We expect the first-year cash yield on this investment to exceed 10%.
On April 26, 2024, the Company closed on the sale of its 127,000 sf industrial property located in Lodi, NJ for a price of $29.2 million, reflecting a 5.4% capitalization rate. This transaction was structured as part of a Section 1031 exchange with the acquisition of Heritage Square, allowing for the deferral of capital gains resulting from the sale for income tax purposes.
Leasing, Development and Redevelopment
The Company has $166.4 million of active redevelopment projects underway, with estimated remaining costs to complete of $99.7 million. The active redevelopment projects are expected to generate an approximate 15% unleveraged yield. During the quarter, we stabilized one project aggregating $1.7 million with the rent commencement of Wren Kitchens at Yonkers Gateway Center in January 2024.
During the quarter, the Company executed 70,000 sf of new leases, including leases with a national discount department store at Amherst Commons, Dollar Tree at West Branch Commons, Mattress Warehouse at Plaza at Woodbridge, and Foot Locker at Shops at Caguas.
As of March 31, 2024, the Company has signed leases that have not yet rent commenced that are expected to generate an additional $27.4 million of future annual gross rent, representing approximately 10% of current annualized NOI. Approximately $4.2 million of this amount is expected to be recognized in the remainder of 2024.
Balance Sheet and Liquidity(1)(4)
Balance sheet highlights as of March 31, 2024 include:
2024 Outlook
The Company has updated its 2024 full-year outlook, estimating net income of $0.12 to $0.17 per diluted share, FFO of $1.22 to $1.27 per diluted share, and FFO as Adjusted of $1.27 to $1.32 per diluted share. A reconciliation of the range of estimated earnings, FFO and FFO as Adjusted, as well as the assumptions used in our guidance can be found on page 4 of this release.
Earnings Conference Call Information
The Company will host an earnings conference call and audio webcast on May 7, 2024 at 8:30am ET. All interested parties can access the earnings call by dialing 1-877-407-9716 (Toll Free) or 1-201-493-6779 (Toll/International) using conference ID 13744877. The call will also be webcast and available in listen-only mode on the investors page of our website: www.uedge.com. A replay will be available at the webcast link on the investors page for one year following the conclusion of the call. A telephonic replay of the call will also be available starting May 7, 2024 at 11:30am ET through May 21, 2024 at 11:59pm ET by dialing 1-844-512-2921 (Toll Free) or 1-412-317-6671 (Toll/International) using conference ID 13744877.
(1)
Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.
(2)
Refer to page 11 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended March 31, 2024.
(3)
Refer to page 12 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended March 31, 2024.
(4)
Net debt as of March 31, 2024 is calculated as total consolidated debt of $1.7 billion less total cash and cash equivalents, including restricted cash, of $95 million.
2024 Earnings Guidance
The Company has increased its 2024 full-year guidance ranges, estimating net income of $0.12 to $0.17 per diluted share, FFO of $1.22 to $1.27 per diluted share, and FFO as Adjusted of $1.27 to $1.32 per diluted share. Below is a summary of the Company's 2024 outlook, assumptions used in our forecasting, and a reconciliation of the range of estimated earnings, FFO, and FFO as Adjusted per diluted share.
Previous Guidance
Revised Guidance
Net income per diluted share
$0.12 - $0.17
$0.12 - $0.17
Net income attributable to common shareholders per diluted share
$0.11 - $0.16
$0.11 - $0.16
FFO per diluted share
$1.20 - $1.25
$1.22 - $1.27
FFO as Adjusted per diluted share
$1.24 - $1.29
$1.27 - $1.32
The Company's 2024 full year FFO outlook is based on the following assumptions:
Guidance 2024E
Per Diluted Share(1)
(in thousands, except per share amounts)
Low
High
Low
High
Net income
$
14,700
$
20,700
$
0.12
$
0.17
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership
(1,400
)
(1,400
)
(0.01
)
(0.01
)
Consolidated subsidiaries
700
700
0.01
0.01
Net income attributable to common shareholders
14,000
20,000
0.11
0.16
Adjustments:
Rental property depreciation and amortization
137,300
137,300
1.11
1.11
Gain on sale of real estate
(1,900
)
(1,900
)
(0.02
)
(0.02
)
Limited partnership interests in operating partnership
1,400
1,400
0.01
0.01
FFO Applicable to diluted common shareholders
150,800
156,800
1.22
1.27
Adjustments to FFO:
Impact of property in foreclosure
4,700
4,700
0.04
0.04
Write-off of receivables arising from the straight-lining of rents
600
600
—
—
Transaction, severance, litigation and other expenses
400
400
—
—
Loss on extinguishment of debt
300
300
—
—
FFO as Adjusted applicable to diluted common shareholders
$
156,800
$
162,800
$
1.27
$
1.32
The following table is a reconciliation bridging our 2023 FFO per diluted share to the Company's estimated 2024 FFO per diluted share:
Per Diluted Share(1)
Low
High
2023 FFO applicable to diluted common shareholders
$
1.51
$
1.51
2023 Items impacting FFO comparability(2)
(0.26
)
(0.26
)
2024 Items impacting FFO comparability(2)
(0.01
)
(0.01
)
2024 impact of property in foreclosure
(0.04
)
(0.04
)
Same-property NOI growth, including redevelopment
0.07
0.10
Acquisitions net of dispositions NOI growth
0.08
0.08
Interest and debt expense(3)
(0.10
)
(0.08
)
Recurring general and administrative
(0.01
)
—
Straight-line rent and non-cash items
(0.01
)
(0.01
)
Lease termination and other income
(0.01
)
(0.01
)
2024 FFO applicable to diluted common shareholders
$
1.22
$
1.27
(1)
Amounts may not foot due to rounding.
(2)
Includes adjustments to FFO for fiscal year 2023 and expected adjustments for fiscal year 2024 which impact comparability. See "Reconciliation of net income to FFO and FFO as Adjusted" on page 11 for more information.
(3)
Excludes the impact of Kingswood Center, a property in the process of foreclosure.
The Company is providing a projection of anticipated net income solely to satisfy the disclosure requirements of the Securities and Exchange Commission ("SEC"). The Company's projections are based on management’s current beliefs and assumptions about the Company's business, and the industry and the markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2024 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the “Forward-Looking Statements” disclosures on page 8 of this document and “Risk Factors” disclosed in the Company's annual and quarterly reports filed with the SEC for more information.
Non-GAAP Financial Measures
The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:
The Company believes net income is the most directly comparable GAAP financial measure to the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables accompanying this press release.
Operating Metrics
The Company presents certain operating metrics related to our properties, including occupancy, leasing activity and rental rates. Operating metrics are used by the Company and are useful to investors in facilitating an understanding of the operational performance for our properties.
Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio leased occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 66 properties for the three months ended March 31, 2024 and 2023. Occupancy metrics presented for the Company's same-property portfolio exclude properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold, and properties that are in the foreclosure process during the periods being compared.
Executed new leases, renewals and exercised options are presented on a same-space basis. Same-space leases represent those leases signed on spaces for which there was a previous lease.
The Company occasionally provides disclosures by tenant categories which include anchors, shops and industrial/self-storage. Anchors and shops are further broken down by local, regional and national tenants. We define anchor tenants as those who have a leased area of >10,000 sf. Local tenants are defined as those with less than five locations. Regional tenants are those with five or more locations in a single region. National tenants are defined as those with five or more locations and operate in two or more regions.
ADDITIONAL INFORMATION
For a copy of the Company’s supplemental disclosure package, please access the "Investors" section of our website at www.uedge.com. Our website also includes other financial information, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports.
The Company uses, and intends to continue to use, the “Investors” page of its website, which can be found at www.uedge.com as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the “Investors” page, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
ABOUT URBAN EDGE
Urban Edge Properties is a NYSE listed real estate investment trust focused on owning, managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. Urban Edge owns 76 properties totaling 17.4 million square feet of gross leasable area.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) macroeconomic conditions, including geopolitical conditions and instability, which may lead to rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company’s share price; (ii) the economic, political and social impact of, and uncertainty relating to, epidemics and pandemics; (iii) the loss or bankruptcy of major tenants; (iv) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (v) the impact of e-commerce on our tenants’ business; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates, rising inflation, and other factors; (ix) the Company’s ability to pay down, refinance, hedge, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for any forward-looking statements included in this Press Release. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Press Release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Press Release.
URBAN EDGE PROPERTIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
March 31,
December 31,
2024
2023
ASSETS
Real estate, at cost:
Land
$
645,435
$
635,905
Buildings and improvements
2,692,470
2,678,076
Construction in progress
254,525
262,275
Furniture, fixtures and equipment
10,200
9,923
Total
3,602,630
3,586,179
Accumulated depreciation and amortization
(837,790
)
(819,243
)
Real estate, net
2,764,840
2,766,936
Operating lease right-of-use assets
50,711
56,988
Cash and cash equivalents
67,303
101,123
Restricted cash
27,748
73,125
Tenant and other receivables
16,373
14,712
Receivable arising from the straight-lining of rents
60,062
60,775
Identified intangible assets, net of accumulated amortization of $55,976 and $51,399, respectively
110,486
113,897
Deferred leasing costs, net of accumulated amortization of $21,074 and $21,428, respectively
27,333
27,698
Prepaid expenses and other assets
89,209
64,555
Total assets
$
3,214,065
$
3,279,809
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net
$
1,525,345
$
1,578,110
Unsecured credit facility
153,000
153,000
Operating lease liabilities
47,639
53,863
Accounts payable, accrued expenses and other liabilities
97,385
102,997
Identified intangible liabilities, net of accumulated amortization of $46,397 and $46,610, respectively
168,313
170,411
Total liabilities
1,991,682
2,058,381
Commitments and contingencies
Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 118,815,093 and 117,652,656 shares issued and outstanding, respectively
1,186
1,175
Additional paid-in capital
1,022,710
1,011,942
Accumulated other comprehensive income
739
460
Accumulated earnings
119,513
137,113
Noncontrolling interests:
Operating partnership
63,128
55,355
Consolidated subsidiaries
15,107
15,383
Total equity
1,222,383
1,221,428
Total liabilities and equity
$
3,214,065
$
3,279,809
URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended March 31,
2024
2023
REVENUE
Rental revenue
$
109,547
$
99,354
Other income
79
87
Total revenue
109,626
99,441
EXPENSES
Depreciation and amortization
38,574
25,084
Real estate taxes
17,003
15,677
Property operating
20,506
17,426
General and administrative
9,046
9,058
Real estate impairment loss
—
34,055
Lease expense
3,128
3,155
Total expenses
88,257
104,455
Gain on sale of real estate
1,902
356
Interest income
688
511
Interest and debt expense
(20,577
)
(15,293
)
Loss on extinguishment of debt
(272
)
—
Income (loss) before income taxes
3,110
(19,440
)
Income tax expense
(665
)
(706
)
Net income (loss)
2,445
(20,146
)
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership
(118
)
788
Consolidated subsidiaries
276
240
Net income (loss) attributable to common shareholders
$
2,603
$
(19,118
)
Earnings (loss) per common share - Basic:
$
0.02
$
(0.16
)
Earnings (loss) per common share - Diluted:
$
0.02
$
(0.16
)
Weighted average shares outstanding - Basic
118,072
117,450
Weighted average shares outstanding - Diluted
122,814
117,450
Reconciliation of Net Income to FFO and FFO as Adjusted
The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the three months ended March 31, 2024 and 2023. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of FFO and FFO as Adjusted.
Three Months Ended March 31,
(in thousands, except per share amounts)
2024
2023
Net income (loss)
$
2,445
$
(20,146
)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated subsidiaries
276
240
Operating partnership
(118
)
788
Net income (loss) attributable to common shareholders
2,603
(19,118
)
Adjustments:
Rental property depreciation and amortization
38,231
24,809
Limited partnership interests in operating partnership
118
(788
)
Gain on sale of real estate
(1,902
)
(356
)
Real estate impairment loss(2)
—
34,055
FFO Applicable to diluted common shareholders
39,050
38,602
FFO per diluted common share(1)
0.32
0.32
Adjustments to FFO:
Impact of property in foreclosure(3)
821
—
Non-cash adjustments(4)
576
(36
)
Loss on extinguishment of debt(5)
272
—
Transaction, severance and litigation expenses
109
407
Tenant bankruptcy settlement income
(10
)
—
FFO as Adjusted applicable to diluted common shareholders
$
40,818
$
38,973
FFO as Adjusted per diluted common share(1)
$
0.33
$
0.32
Weighted Average diluted common shares(1)
122,814
122,447
(1)
Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three months ended March 31, 2023, are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.
(2)
During the three months ended March 31, 2023, the Company recognized an impairment charge reducing the carrying value of Kingswood Center, an office and retail property located in Brooklyn, NY.
(3)
In April 2023, the Company notified the lender of its mortgage secured by Kingswood Center that the cash flows generated by the property are insufficient to cover the debt service and that the Company is unwilling to fund future shortfalls. As such, the Company defaulted on the loan and adjusted for the default interest incurred for the second quarter of 2023. The Company determined it is appropriate to exclude the operating results of Kingswood Center from FFO as Adjusted as the property is in the foreclosure process.
(4)
Includes the acceleration and write-off of lease intangibles related to tenant terminations, and write-offs and reinstatements of receivables arising from the straight-lining of rents for tenants moved to and from the cash basis of accounting.
(5)
The loss on extinguishment of debt relates to the prepayment of three variable rate mortgage loans that were due to mature in the fourth quarter of 2024 and had interest rates of 7.34% on the pay off date.
Reconciliation of Net Income to NOI and Same-Property NOI
The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three months ended March 31, 2024 and 2023. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of NOI and same-property NOI.
Three Months Ended March 31,
(in thousands)
2024
2023
Net income (loss)
$
2,445
$
(20,146
)
Depreciation and amortization
38,574
25,084
Interest and debt expense
20,577
15,293
General and administrative expense
9,046
9,058
Loss on extinguishment of debt
272
—
Other expense
225
226
Income tax expense
665
706
Gain on sale of real estate
(1,902
)
(356
)
Real estate impairment loss
—
34,055
Interest income
(688
)
(511
)
Non-cash revenue and expenses
(2,522
)
(2,263
)
NOI
66,692
61,146
Adjustments:
Sunrise Mall net operating loss
522
1,014
Tenant bankruptcy settlement income and lease termination income
(47
)
(8
)
Non-same property NOI and other(1)
(12,494
)
(8,654
)
Same-property NOI
$
54,673
$
53,498
NOI related to properties being redeveloped
5,813
4,803
Same-property NOI including properties in redevelopment
$
60,486
$
58,301
(1)
Non-same property NOI includes NOI related to properties being redeveloped and properties acquired, disposed, or that are in the foreclosure process during the periods being compared.
Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
The following table reflects the reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three months ended March 31, 2024 and 2023. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 5 for a description of EBITDAre and Adjusted EBITDAre.
Three Months Ended March 31,
(in thousands)
2024
2023
Net income (loss)
$
2,445
$
(20,146
)
Depreciation and amortization
38,574
25,084
Interest and debt expense
20,577
15,293
Income tax expense
665
706
Gain on sale of real estate
(1,902
)
(356
)
Real estate impairment loss
—
34,055
EBITDAre
60,359
54,636
Adjustments for Adjusted EBITDAre:
Non-cash adjustments(2)
698
(36
)
Transaction, severance and litigation expenses
109
407
Loss on extinguishment of debt
272
—
Tenant bankruptcy settlement income
(10
)
—
Impact of property in foreclosure(1)
(625
)
—
Adjusted EBITDAre
$
60,803
$
55,007
(1)
Adjustment reflects the operating income for Kingswood Center, excluding $1.4 million of interest and debt expense and $0.4 million of depreciation and amortization expense that is already adjusted for the purposes of calculating EBITDAre. See footnote 3 on page 11 for additional information.
(2)
Includes the acceleration and write-off of lease intangibles related to tenant terminations, and write-offs and reinstatements of receivables arising from the straight-lining of rents for tenants moved to and from the cash basis of accounting. The adjustment to EBITDAre in calculating Adjusted EBITDAre is inclusive of the portion attributable to the noncontrolling interest in Sunrise Mall.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507863391/en/
Mark Langer, EVP and Chief Financial Officer 212-956-2556
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