Urban Edge Properties (UE) Q4 2025 Earnings Call Highlights: Record Leasing and Strategic ...

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FFO as Adjusted: $1.43 per share for 2025, representing 6% growth. Same-Property NOI Growth: 5% for the full year 2025. New Leases: 58 new leases with a same-space cash rent spread of 32%. Shop Occupancy: Record high of 92.6%. Annualized Gross Rent from New Openings: Over $16 million commenced in 2025. Redevelopment Projects: 14 projects completed totaling $55 million, generating unlevered yields of 19%. Net Debt to Annualized EBITDA: 5.8 times at the end of 2025. Total Liquidity: $849 million with no amounts drawn on the line of credit. Dividend Increase: 11% increase to an annualized rate of $0.84 per share. 2026 FFO Guidance: $1.47 to $1.52 per share, reflecting 4.5% growth at the midpoint. 2026 Same-Property NOI Growth Guidance: 2.75% to 3.75%.

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Release Date: February 11, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Urban Edge Properties (NYSE:UE) achieved a 6% growth in FFO as adjusted, reaching $1.43 per share in 2025. The company set new leasing records with 58 new leases at a record same-space cash rent spread of 32% and achieved record shop occupancy of 92.6%. UE's signed-but-not-open pipeline is expected to generate an additional $22 million of annual gross rent, representing 8% of current NOI. The development and construction teams completed 14 projects totaling $55 million, generating unlevered yields of 19%. UE's balance sheet remains strong with total liquidity of $849 million and no amounts drawn on their line of credit.

Negative Points

Anchor occupancy declined by 50 basis points to 97.5% due to taking back space from At Home at Ledgewood Commons. Higher snow removal expenses negatively impacted same-property NOI growth by 110 basis points in the fourth quarter. The acquisition market is highly competitive, making it challenging to find properties at attractive valuations. UE's same-property NOI growth guidance for 2026 is lower than 2025, with a midpoint of 3.25% compared to 5% in 2025. The company faces challenges in securing new development opportunities due to supply constraints and high construction costs in their markets.

Q & A Highlights

Q: Can you provide insights on the future expectations for shop occupancy given the strong performance in 2025? A: Jeff Mooallem, COO, stated that they aim for a steady state of around 94% occupancy. Beyond this, they focus on strategic leasing, including replacing existing tenants with higher-spread opportunities. The target for 2026 is around 93% to 94%.

Story Continues

Q: Could you elaborate on the acquisition pipeline and capital recycling strategy for 2026? A: Jeff Olson, CEO, noted that the acquisition market is competitive, with cap rates decreasing. They are excited about a property in Bridgewater with a cap rate over 7.5%. They plan to use proceeds from this acquisition for a 1031 exchange, potentially reducing exposure to Kohl's.

Q: What factors contribute to the projected same-property NOI growth path from 2025 to 2027? A: Mark Langer, CFO, explained that the deceleration in 2026 is due to tenant fallout and one-time benefits in 2025. The reacceleration in 2027 is driven by the signed-but-not-open (SNO) pipeline, with 80% of growth from executed leases.

Q: How does the current environment affect bad debt guidance for 2026 compared to 2025? A: Mark Langer mentioned that the 2026 bad debt guidance is lower due to a more favorable tenant environment. The guidance reflects a cleaner portfolio with reduced risk compared to the previous year.

Q: Can you discuss the redevelopment pipeline and potential new projects? A: Jeff Mooallem highlighted two redevelopment strategies: ongoing projects with double-digit yields and larger, complex projects like Bruckner. They focus on enhancing existing properties rather than new ground-up developments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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