Q4 2024 Urban Edge Properties Earnings Call Transcript
Key Points
- Urban Edge Properties (UE) achieved an 8% increase in FFO as Adjusted for 2024, reaching $1.35 per share, surpassing their three-year earnings target a year ahead of schedule.
- The company executed a record 79 new leases totaling 485,000 square feet with a same space cash rent spread of 26%, and achieved a new record for shop occupancy at 91%.
- UE's portfolio is now 80% grocery anchored, with grocers generating average sales of $900 per square foot, believed to be the highest in the sector.
- The company completed $30 million of redevelopment projects expected to generate a 16% unlevered return, and has $163 million of anchor repositioning and redevelopment projects expected to generate a 15% unlevered return.
- UE increased its dividend by 12% due to higher earnings and taxable income, reflecting confidence in future growth.
- Tenant bankruptcies remain a challenge, with expected rent loss from tenants like Party City, Big Lots, and Blink Fitness impacting financials.
- The acquisition market is competitive, with cap rates for high-quality assets compressing below 6%, making it challenging to find attractive deals.
- Rising construction costs could potentially erode returns on redevelopment projects, despite strong demand and leasing interest.
- The company faces potential credit losses of 75 to 100 basis points of gross rents, which could impact NOI growth.
- UE's guidance for 2025 includes assumptions of non-recurring items from the previous year, which may not be realized again, affecting year-over-year comparisons.
Greetings. Welcome to Urban Edge Properties. Fourth quarter 2024 earnings call. (operator instructions) It is now my pleasure to introduce Areeba Ahmed from Investor Relations.
Thank you. You may begin.
Good morning and welcome to Urban Edge Property 2024 year-end earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer, Jeff Mooallem, Chief Operating Officer, Mark Langer, Chief Financial Officer, Rob Milton, general counsel, Scott Auster, EVP and head of leasing, and Andrea Drazin, Chief Accounting Officer. Please note today's. May contain forward-looking statements about the company's views of future events and financial performance, which are subject to numerous assumptions, risks, and uncertainties, and which the company does not undertake to update. Our actual results, financial condition, and business may differ. Please refer to our filings with the SEC, which are also available on our website for more information about the company.
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