Urban Edge Properties (UE) Reports 7% Earnings Growth in Q3 2023
Urban Edge Properties (NYSE:UE) reported a strong Q3 2023 with earnings growth of 7% compared to last year.
The company raised its outlook for full-year FFO as Adjusted and announced the acquisition of two shopping centers and the sale of an industrial portfolio.
Net income attributable to common shareholders for Q3 2023 was $36.1 million, a significant increase from $11.4 million in Q3 2022.
UE also increased its 2023 full-year guidance ranges for FFO and FFO as Adjusted.
Urban Edge Properties (NYSE:UE) released its earnings report for the quarter ended September 30, 2023, on October 31, 2023. The company reported one of its best quarters in its history, with a 7% earnings growth compared to the same period last year. This growth was driven by higher rent, lower operating costs, and lower G&A.
Financial Performance and Highlights
UE reported a net income attributable to common shareholders of $36.1 million for Q3 2023, a significant increase from $11.4 million in Q3 2022. The company's FFO for the nine months ended September 30, 2023, was $138.8 million, up from $106.3 million in the same period in 2022. The increase in FFO was attributed to rent commencements on new leases, lease termination income, higher net recovery income, and lower operating and general and administrative expenses.
Acquisitions and Dispositions
Post the quarter end, UE acquired two prominent shopping centers in Boston for $309 million and sold its East Hanover Warehouse portfolio for $218 million. The company is also negotiating the sale of over $100 million of non-core assets. These capital recycling transactions are expected to increase 2024 FFO as Adjusted by $5 million annually, or $0.04 per share.
Same-Property Operating Results
UE reported a same-property Net Operating Income (NOI) growth of 1.5% for Q3 2023 and 3.0% for the year to date. The increases in same-property NOI metrics were primarily driven by rent commencements on new leases, higher net recovery income, and lower operating expenses.
2023 Earnings Guidance
Based on the strong Q3 results and recent capital recycling activity, UE has increased its 2023 full-year guidance ranges for FFO and FFO as Adjusted, raising both the low and high end of the range by $0.06 per share. The new guidance ranges reflect FFO of $1.39 to $1.43 per diluted share, and FFO as Adjusted of $1.22 to $1.25 per diluted share.
Balance Sheet and Liquidity
As of September 30, 2023, UE reported $77.9 million of cash and cash equivalents, including restricted cash, and no amounts drawn under its $800 million revolving credit agreement. The company's total market capitalization was approximately $3.5 billion, comprised of 122.9 million fully-diluted common shares valued at $1.9 billion and $1.7 billion of debt.
Explore the complete 8-K earnings release (here) from Urban Edge Properties for further details.
This article first appeared on GuruFocus.
