Q2 2026 Urban Edge Properties Earnings Call Transcript
Key Points
- Record FFO as adjusted of $0.40 per share, a 10% increase year-over-year, with full-year guidance raised to $1.50-$1.54 per share.
- Same-property NOI growth of 3.2% in Q2 and 3% year-to-date, driven by higher percentage rents and lower real estate taxes.
- Strong leasing momentum with new lease cash spreads of 13% in Q2 and nearly 30% year-to-date, expected to exceed 20% for the year.
- Active redevelopment pipeline of $155 million yielding 12%, with a shadow pipeline of future projects, and completed projects generating 25% yields.
- Capital recycling strategy is enhancing portfolio quality, with acquisitions at 6% cap rates and dispositions at 5.2%, targeting higher-growth assets.
- Solid balance sheet with $960 million in liquidity and net debt to EBITDA of 5.5 times, providing flexibility for future growth.
- High demand for retail space in the D.C.-to-Boston corridor, with limited supply and rising rents, positioning the company for continued growth.
- Same-property leased occupancy declined 40 basis points year-over-year to 96.3%, partly due to the unexpected Wren Kitchens bankruptcy.
- Shop occupancy fell 70 basis points sequentially to 91.7%, with about half of the decline from intentional recaptures of weaker tenants.
- New lease spreads in Q2 were lower than Q1, highlighting quarterly volatility in leasing metrics.
- The acquisition market is highly competitive, with cap rates compressing across the sector, making it harder to find deals meeting return thresholds.
- Credit loss assumptions for Q3 and Q4 are elevated at 60-75 basis points of gross rent, reflecting ongoing tenant risk.
- The company is exploring expansion into the Southeast, but that market is also highly competitive, potentially limiting near-term opportunities.
Good evening, and welcome to Urban Edge Propertiesâ second-quarter 2026 earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer; Jeff Mooallem, Chief Operating Officer; Mark Langer, Chief Financial Officer; Heather Ohlberg, General Counsel; Scott Auster, EVP & Head of Leasing; and Andrea Drazin, Chief Accounting Officer.
Please note, todayâs discussion may contain forward-looking statements about the companyâs 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.
In our discussion today, we will refer to certain non-GAAP financial measures. Reconciliations of these measures to GAAP results are available in our earnings release and our supplemental disclosure package.
At this time, it is my pleasure to introduce our chairman and chief
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