Greetings. Welcome to the Urban Edge Properties third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Areeba Ahmed, Investor and Relations Associate. Thank you, Areeba. You may begin.

Good morning and welcome to Urban Edge Properties third 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 and Head of Leasing, and Andrea Drazin, Chief Accounting Officer. Please note today's discussion 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. 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 Executive Officer, Jeff Olson.

Thank you, Areva, and good morning. We delivered another strong quarter. FFO, as adjusted, was $0.38 per share, up 6% from last year's third quarter and 6% year-to-date. Same property NOI, including redevelopment, grew 4.6% for the quarter and 3.6% year-to-date. We raised FFO as adjusted guidance by a penny per share at the midpoint to $1.52 to $1.54, which implies 7% growth over 2025. We continue to improve the quality and long-term growth rates of the portfolio through capital recycling. In September, we sold Briarcliff Commons, a Kohl's-anchored center in Morris Plains, New Jersey, for $60.5 million. That sale moves Kohl's from our third-largest tenant by EBR to our seventh. We structured it as an accretive reverse 1031 exchange paired with our acquisition of the Village at Bridgewater Commons. Earlier this month, we closed on the $90.3 million acquisition of Regency Court in Boca Raton, marking our entry into Florida. As we've stated in the past, moving south is a natural extension of our footprint. Several of us on the leadership team spent years owning, living in, and operating shopping centers in South Florida. So we know these communities well. We expect to keep growing in this market, mostly through selling some of our more stabilized, high credit power centers in New Jersey. Regency Court is a 140,000 square foot center anchored by Publix and Walgreens. Thank you. Thank you. It draws 3.3 million visitors a year with traffic still increasing. We underwrote this acquisition on growth embedded in the rent roll, not on the going-in yield, which was approximately 4%. Both anchors pay a fraction of market, and both leases expire, including all options, in six years. Beyond the anchors, we see opportunities to add value through upgrading the tenant mix, improving access and parking, and potentially adding GLA. We expect to earn an 8% to 9% unlevered IRR. With Regency Court, the shops at West Falls Church in Virginia, and the Village at Bridgewater Commons in New Jersey, we've acquired $185 million of high-quality centers this year, further diversifying our geographic footprint and increasing our long-term growth rate. We are encouraged by the strength and depth of the leasing environment. Nationally, retail vacancy is 4.3%, near record lows. Big box tenants are competing for a well-located space and scarcity is pushing rents higher. Our same space new lease cash spreads are 28% year-to-date and our signed but not open pipeline is $21 million. representing 7% of annualized net operating income, one of the largest pipelines in the sector. We're very well positioned for continued, steady growth. With that, I'll turn it over to our Chief Operating Officer, Jeff Mooallem.

Thank you, Jeff. In the third quarter, we signed 37 leases totaling 463,000 square feet. That included 26 renewals totaling 406,000 square feet at a 12% spread and 11 new leases totaling 58,000 square feet at a 27% same space spread. The new leases were with a good mix of retailers new to our portfolio as well as names we've worked with before. Examples include Veterinary Emergency Group, Foot Locker, First Watch, McDonald's, Honey Grow, and Seven Brew Coffee. Same property leased occupancy is now 96.6% up 20 basis points from last quarter and shop occupancy is 91.7% unchanged. With every new lease, we try to achieve three things. Enhanced quality and credit, higher starting rent and increases, and a lower level of landlord investment. In that regard, the fourth quarter is shaping up to be one of our best. We are in active negotiations with over 30 tenants, a mix of both anchor and shop leases with a noticeable uptick in quality over the leases we were negotiating just a couple of years ago. Replacing outdated or lower credit concepts with stronger operators will keep adding value to these centers for years. Rent spreads are stronger too. With about two months left in the year, we are targeting rent spreads around 50% for the fourth quarter and over 30% for the year. Notably, those spreads are coming as much from anchors as shops, as the scarcity of box space in our markets creates additional leverage in our favor. And finally, while we don't discuss it on these calls as much as we discuss rents, the reduction in leasing costs over the last few years is as impactful to our business as the increase in rents. The average shop deal leasing costs, defined as landlord work, tenant allowance, and commissions has declined about 15% from 2024 compared to the first three quarters of 2026. For anchors, it is even more meaningful, a little over a 30% decline in average leasing costs. Many of our anchor deals now are as is, reducing both overall cost and time to rent commencement. Tenants who previously insisted on their exact construction specs have had to adjust to a new reality. Two projects stabilized in the third quarter at a total investment of $9 million and an average yield of 18%. Nordstrom Rack and Fidelity at Manalapan Commons and a new Adidas store at Bergen Town Center. In both cases, we brought in better quality tenants than what was previously there at solid returns. Over the last 12 months, we've completed $40 million of these projects at a blended 23% yield. In this quarter, we started another. a $7 million multi-tenant PAD development at Ledgewood Commons for Veterinary Emergency Group and two additional tenants. Our active redevelopment pipeline now stands at $152 million with $57 million left to fund and an expected yield of about 12%. Most of that work is in assets we've owned for several years, but our three 2026 acquisitions will add to it. since each has some mix of vacancy, dated tenancy, and below market leases that provide an opportunity to create even more value. With that, I'll turn it over to our CFO, Mark Langer.

Thank you, Jeff, and good morning. We delivered another strong quarter. FFO as adjusted was $0.38 per share, up 6% from the third quarter of last year, and same property NOI, including redevelopment, grew 4.6%. The growth came from higher rental revenue from rent commencements and contractual rent increases along with the benefit of our earlier capital recycling. Results this quarter were slightly ahead of our expectations. NOI growth came in stronger because uncollectible revenue was better than budgeted at 45 basis points of gross rental income That reflects the health of our tenant base. Our bankruptcy watch list is smaller than at this time in prior years, consistent with a broader market. In October, we modified and extended our existing $70 million mortgage secured by the outlets at Monahedra, adding $17 million of additional proceeds through an interest-only B note at a fixed rate of 6.95%. reflecting the growth in NOI and favorable outlook for the property. Given income taxes paid in Puerto Rico, the tax-effective interest rate of this BNO debt is 3.9%. The modification extended the term on the entire mortgage to seven years, which now has a current weighted average interest rate of 5.4%. We ended the quarter with $75 million drawn on our credit facility. After the quarter, we drew another $63 million for Regency Court. With that activity included, our liquidity remains very strong at over $875 million. That consists of $86 million in cash, $138 million drawn on the credit facility, and nothing drawn on either our five-year or seven-year delayed draw term loans. Net debt to EBITDA was 5.7 times for the third quarter. Looking ahead, we are raising our 2026 FFO as adjusted guidance by a penny per share at the midpoint. That implies fourth quarter FFO of 39 cents per share and $1.53 for the full year. We have also raised our full year same property NOI growth guidance, including redevelopment, to a midpoint of 4.1%, up from 3.5%. Our $21 million signed but not open pipeline continues to give us good visibility into future growth. In the third quarter, $2.6 million of annualized gross rent commenced, and we expect another $700,000 to be recognized in the fourth quarter and almost $13 million to be recognized in 2027. In closing, we are pleased with our third quarter results encouraged by the strength of our leasing pipeline and excited about our progress on the capital recycling front. With that, I'll turn the call over to the operator for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is with Michael Goldsmith with UBS. Please proceed with your question.

Good morning. Thanks a lot for taking my question. First question, let's just talk a little bit about Florida. It feels like the name of the game across REITs has been Thank you so much for joining us today. you know, whether you'd continue to maybe dilutively buy in that market as you cap our cycle. Thanks. Good morning, Michael.

It's Jeff. I'll take part of it and then I'll also have Jeff Mooallem take part of it. I mean, Regency Court was pretty darn special. I think it may be one of the best shopping centers in Florida that's traded like in the last decade. So properties like this don't come to market very often. It actually reminds me of when we bought Westlake Shopping Center in Daly City many years ago at Kimco, and then also Aventura Square at Equity One, which is near Aventura Mall. And when I look at the common denominator behind those two as I compare it to Regency Court, one is the location is just exceptional, beyond exceptional, in a severely supply-constrained market. Number two is that there are older properties with anchor leases that run out of term, which is hard to find. Three is the land values are super high. So there will be opportunities to take that land value and monetize it at some point. And four, which is an important one, is all of these assets had been under the same ownership for decades and decades. So we think bringing a fresh perspective is going to be unique. and in our experience, these types of assets are just gifts that keep on giving almost in perpetuity. But Jeff, why don't I turn it over to you in terms of like adding scale and ironically, you know, I used to live in South Florida, Langer lived in South Florida, Jeff lived in South Florida. So, I mean, this is a market that we know very well.

Yeah. Hey, good morning, Michael. I'd echo everything Jeff said about South Florida as a market and the unique specialty of Regency Court. and in terms of what the growth strategy would be, I think what's the most instructive thing is just look at what we've done in the New England and the Boston market over the last five years. That was a market that we had barely any presence in five years ago and it's now roughly 10% of our company, roughly half a billion dollars of value there. And that's a byproduct of slow and steady targeting the right kind of assets, being visible in the market, being present in the market and buying you know, buying selectively and strategically. It's really hard to do that when you don't already have a foot in the door. Regency Court is a very special foot in the door. It's a foundational asset that immediately is, you know, an asset that we're excited to get to work on and it will open the door for other opportunities for us in South Florida.

Thanks for that. And just as a follow-up, the same-store guide, same-store underlying guidance moved higher and it implies a material acceleration in the fourth quarter. Mark, do you mind just kind of Talking about the building blocks there, I think you talked a little bit about the snow pipeline and recognizing some revenue coming up. Maybe you can just provide a little bit more detail in the building blocks there. Thanks.

Yeah. Hi, Michael. The biggest building blocks are what you said, really the full stabilization of rents that commence in Q3 that will roll over, as well as what I mentioned for the incremental rents from the S&O pipeline in Q4. in addition fourth quarters we're expecting that's when we get our largest percentage rent and some ancillary income and then on the recovery side it's hard to imagine but a year ago we actually had three and a half million dollars of snow removal expense we got hit with some storms late in December last year that could in order to our benefit we don't model that level for this year as well so a little bit on recovery so it's really a blend of all of that but the biggest propellant is really the new rents coming online.

Now we know why you like South Florida so much. Thanks so much.

I don't have three and a half million snow in South Florida. I can tell you that.

Amen. Thank you.

Our next question is from Ronald Camden with Morgan Stanley. Please proceed with your question.

Hey, great. Just staying with the South Florida. I guess it sounds like you envision this could be 10% of the company. if I'm understanding correctly. Over time, obviously, just more color around are you only buying? Would you consider developing in the market? Are there other markets considered? Would you go beyond South Florida? Just trying to get a sense of the scope of what checks the box and what we could see on the acquisition and potential capital deployment front. Thanks.

I mean, we'd love to find more regency courts, candidly, but again, they don't come up very often. I think we would extend to other portions of the state because we are very familiar with the state overall, but it's going to be opportunistic and it really is dependent upon the overall real estate.

Yeah, and Ron, I would add, you know, on the question of development, I mean, our forte is not necessarily always ground-up development, but we are really, really good at repurposing older products. So as South Florida as a community ages, as Tampa as a community ages, other markets like that age, there's lots and lots of shopping centers that will be sort of in need of what we do. And it is a skill set that not a lot of people do anymore because there hasn't been a whole lot of retail redevelopment over the last 15 years. So we are definitely hoping for more opportunities to do meaningful redevelopment as deals come forward.

Got it. That's helpful. and then maybe on the just staying on the on the theme of same store but on expenses just looking at the year-over-year growth maybe can you talk to that are they more elevated than they should be are they in line just would love to hear some comments on the expense line items this quarter and going forward thanks are you referring to the expense side of things Ron yep

Okay, yeah, I mean, when you look at the in the supplement, the you may have noticed on the real estate taxes, year over year, you saw the decline. And that's really just a reflection in this quarter, we had a few properties where we settled pending tax appeals, which required a true up for the year to date number. Because the recovery ratio on real estate taxes is so high, you had an offsetting impact on recovery revenues, so the net impact to an OI was negligible. In terms of other expense categories, Ron, I think on a go-forward basis, it's fair to assume we've been renegotiating, looking hard at those, but I think a 3% escalation in general for property op-ex is a reasonable assumption.

Great. That's perfect. Thank you so much.

Yep.

Our next question is from Michael Griffin with Evercore ISI. Please proceed with your question.

Great, thanks. Not to belabor the point on Regency Court, but Jeff, I know you gave the going in cap rate. Curious if you can give any commentary on what your expectations of stabilized yields are for that project and how quickly you can realize those below market rents and then Given Walgreen's tenancy there, how do you underwrite a renewal versus a potential vacancy? And just any kind of thoughts there on the tenancy at the center. Thank you.

Yeah. I mean, I won't give specific numbers because it's a little bit speculative. But we know that those two leases expire in six years. Rarely do anchor leases, by the way, go to full term. So our expectation is that there probably will be some type of deal between now and six years. But, you know, I mean, you can sort of do the back of the envelope math looking at our 8% to 9%, you know, unlevered expected yield. And that sort of gives you, you know, I think enough guidance for you to put into your model.

Great. That's super helpful. And then, Jeff Mooallem, I appreciated your comments around more favorable capital costs and I think having greater leverage just in the supply-constrained environment. As you look out into the near and medium term, does this capital cost as a percent of NOI? Are we just in a different paradigm and you expect a more favorable environment here? Just curious how we think about this relating to the ultimate opportunity set within growing internal cash flow if you have less capital outlays to get the tenants into the properties.

Yeah, hey, good morning, Griff. You know, I do think we see it as a trend that shows no sign of abating, and we are expecting it to continue. There's sort of two buckets of capital, right? There's the leasing costs, and then there's the stuff that we have to do to maintain our shopping centers, whether that's, you know, renovation stuff the customer can see or deferred maintenance the customer can't see. And all those categories are going down. I talked about the leasing capital in my remarks and how we've just been able to negotiate better deals, more as-is deals. A lot of it around sort of you have to take the HVAC we have or you got to put the demising wall up kind of conversations that our leasing team is doing a really good job of delivering lower capital deals. But even on the other side, in terms of what we spend on deferred maintenance and renovation, Mark has messaged consistently over the last few quarters that we spent a lot of money. I think we improved probably 70% of the portfolio or something like that. over the last five to 10 years. And we don't expect that to be the run rate going forward. And if you looked at our 2027 budget numbers, it would bear that out. So no reason to believe that the trend of, you know, keeping capital lower on a go-forward basis will stop anytime soon.

Great. Thanks so much.

Our next question is from Floris Van Dijkom with Leidenberg Thalmann. Please proceed with your question.

Hey, guys. A couple of follow-ups on Regency Court seems to be a topic du jour. What is the gap yield versus the cash? I presume the 4% is a cash cap rate. Where are you marking it today, given the below market leases, and what can you get away with?

Well, we haven't finalized the purchase price allocation floors, but I expect the gap yield to be in the fives.

And then, you know, apparently Publix was bidding on that property as well. I mean, could you consider doing something where you sell the grocery box to Publix to lower your basis and increase the yield? Or would you want to Mark the rent for Publix to market, partly because of the upside potential, or is that still an ongoing negotiation potentially?

Ongoing, sort of all depends on price, as you would expect.

Great. Sorry, the second question I have is on Bruckner, because that's going to be a major part of your S&O pipeline, presumably. How is that progressing? When is that going to be stabilized? And Any other developments there or are you seeing more momentum for that center? Because I think that's going to be 15 million of NOI once it's stabilized, if I'm not mistaken.

Yeah, that's right, Floris. It's Jeff Mooallem. Good morning. Well, first of all, I'll take the stabilization question. I mean, you can see in our supplemental, we're targeting the four or five new tenants that are going to be opening there, which is Chick-fil-A, Chipotle, BJ's, Ross, and Dee Dee's to all open in the first half of 2027, some in 1Q and some in 2Q. Right now, we feel very good about those dates. We're hopeful that we'll beat them, you know, on average by 30 to 90 days, but we feel very good about where they are in the first half of the year. And then as far as more momentum, I got to get more space. You know, we're pretty much fully leased there. Scott and his team have done a very good job of increasing rents and improving tenancy. We just signed Foot Locker tenants like that, but we really don't have a lot of vacancy at Bruckner Commons. So as space becomes available, these new tenants will only increase the level of demand.

Thanks, Jeff.

Our next question is from Michael Gorman with U.S. Bancorp BTIG. Please proceed with your question.

Yeah, thanks. Good morning. I was wondering if you could just talk about the three acquisitions done this year have a significantly higher shop component than kind of the in-place portfolio. And I'm just curious, is that just a function of the deals that you're seeing in the marketplace right now? Is this a specific strategy that you're trying to increase the percentage of shop components in the portfolio? Any color there would be helpful.

Yeah. Look, I mean, what we're trying to do is through capital recycling sell more of our high credit sort of lower growth properties that might generate, I don't know, 1% to 2% growth each year that we can get pretty low cap rates for and redeploy that into assets that are two and a half, three and a half, four and a half percent growth and Regency's case much, much higher than that actually. So it's less about format and it's more about long-term NOI growth prospects over the next five to seven years.

Okay, great. That's helpful. And then just maybe one quick one. Any updates that you can provide on the parcel sale at Sunrise? I think that's still pending. Is that just going through normal channels or anything to keep an eye on there?

Yeah, good morning, Michael. It's Jeff. We have a hearing in two weeks, which is a publicly noticed hearing to move forward with the site plan approval for the parcel sale there. We've been working diligently behind the scenes to get ready for that hearing. And once that is completed and that goes through the process, and with these things it's impossible to say if it's going to take one hearing or two or three, but we feel very confident that we're prepared and ready for it. Once that goes through the process, we can start targeting things like closing timelines and planning out the rest of the project. So in terms of new developments, I would tell you in two weeks from, I think, tomorrow is when our hearing is, and that will be the next critical day in the process.

Great. And maybe just one last quick one. The Publix at Regency Court, has that been redeveloped or refreshed as a store at any time in recent years? It has not.

Great. Thank you very much.

Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Paulina Rojas with Green Street. Please proceed with your question.

Good morning.

Hi, Paulina.

I am interested in the demographics of acquisitions. How would you define your buy box in general? Your recent acquisition in Florida has really outstanding demographics. And per your comments, also very high barriers to entry, what I imagine it's very hard to replicate. Should we assume you're targeting similar demographics going forward in this market or are you open to something slightly different?

Look, I mean, you know, we favor densely populated markets, first-ring suburbs, highly affluent areas where supply is severely constrained and where we can do something with a shopping center that makes it unique. So I would expect that we would continue to deploy capital in areas where those demographic trends are all in line. So I would not expect us to, and remember, we named the company Urban Edge because we're on the edge of these urban markets in these first-rank suburbs. I would not expect us to go away from that strategy.

Thank you.

We love infill, and the tenants are paying the rent that's required in many cases for us to invest significant amounts of capital into these properties to bring them to current standards.

Yeah, and Paulina, I would just add in the case of Regency Court in Boca, like Jeff mentioned in his comments that there's no other grocery anchored center within two miles, but if you If you looked at our competition map and zoomed out even further, the other shopping centers that are competitive are owned by names like Regency, Edens, Simon has them all. And then most notably, Publix is the big owner of these kinds of properties. So that does a couple of things. Number one, it makes it very difficult to ever buy in these kinds of markets, which is why we wanted to pounce on this opportunity. And number two, you're surrounded by owners who, like us, know how to push rents and don't give space away. that generally kind of lifts all boats. So Regency Court is a very unique property for that reason.

Thank you for the caller. My second question is, so the vast majority of your portfolio is in the DC Boston corridor, but you own very few assets outside. The two centers in Puerto Rico, and I think there is an asset in San Luis, a couple in California. What are your updated thoughts on them? Are they short-term or mid-term holds or candidates for recycling as you build in your new regions?

I think those could likely be candidates for recycling, Paulina, all price dependent, and we'll weigh that against other possible sale candidates that we have, again, referencing to some of the much higher, you know, very high credit and lower growth power centers that we have in New Jersey that trade very well. So we'll weigh it all.

Can I add one more question?

Of course.

So what about the topic of scale? Do you need certain scale in South Florida to be efficient or you can You know, live for a while with one, two, or three centers.

I think we can live for a while with one, two, or three centers. I mean, don't forget, we have a lot of operating expertise in this market. I think between the three of us, you know, Mark, Jeff, and I, we probably have over 20 years of living there and working there. So we know a lot of the key players. We have a good management strategy for the asset. And while we may use a local broker to help us with some of the more local leasing, The national relationships that want to be in Boca Raton are the same national relationships that want to be in Bridgewater, New Jersey and Framingham, Massachusetts. So we have lots of different ways that we can reach the right tenants and manage the property effectively. Having said that, scale is always nice. And if we could add two or three or four more centers in the area and spread out our management a little bit, we certainly are going to try to do that.

Thank you.

We have reached the end of the question and answer session. I would like to turn the floor back over to Jeff Olson for closing comments.

Great. Thank you for joining us. We appreciate your interest in UE and we look forward to seeing you guys soon. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.