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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number: 001-36523 (Urban Edge Properties)
Commission File Number: 333-212951-01 (Urban Edge Properties LP)
URBAN EDGE PROPERTIES
URBAN EDGE PROPERTIES LP
(Exact name of Registrant as specified in its charter)
Maryland(Urban Edge Properties)47-6311266
Delaware(Urban Edge Properties LP)36-4791544
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
888 Seventh AvenueNew YorkNew York10019
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number including area code:(212)956-2556
Securities registered pursuant to Section 12(b) of the Act:
Title of class of registered securitiesTrading symbolName of exchange on which registered
Common shares of beneficial interest, par value $0.01 per shareUEThe New York Stock Exchange
_______________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
        Urban Edge Properties    Yes x   NO o         Urban Edge Properties LP     Yes x   NO o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  
        Urban Edge Properties    Yes  x   NO o         Urban Edge Properties LP     Yes x   NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Urban Edge Properties:
Large Accelerated FilerxAccelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
Urban Edge Properties LP:
Large Accelerated Filer
Accelerated Filer
Non-Accelerated FilerxSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.
        Urban Edge Properties o                   Urban Edge Properties LP o   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
        Urban Edge Properties    YES  NO x         Urban Edge Properties LP     YES   NO x
As of July 30, 2021, Urban Edge Properties had 117,136,695 common shares outstanding.



URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED JUNE 30, 2021

TABLE OF CONTENTS
Item 1.
Financial Statements
Consolidated Financial Statements of Urban Edge Properties:
Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (unaudited)
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)
Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)
Consolidated Financial Statements of Urban Edge Properties LP:
Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (unaudited)
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)
Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)
Urban Edge Properties and Urban Edge Properties LP
Notes to Consolidated Financial Statements (unaudited)
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4.Controls and Procedures
PART II
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
Signatures






EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2021 of Urban Edge Properties and Urban Edge Properties LP. Unless stated otherwise or the context otherwise requires, references to “UE” and “Urban Edge” mean Urban Edge Properties, a Maryland real estate investment trust (“REIT”), and references to “UELP” and the “Operating Partnership” mean Urban Edge Properties LP, a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively UE, UELP and those entities/subsidiaries consolidated by UE.
UELP is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. UE is the sole general partner and also a limited partner of UELP. As the sole general partner of UELP, UE has exclusive control of UELP’s day-to-day management.
As of June 30, 2021, UE owned an approximate 95.6% ownership interest in UELP. The remaining approximate 4.4% interest is owned by limited partners. The other limited partners of UELP are members of management, our Board of Trustees and contributors of property interests acquired. Under the limited partnership agreement of UELP, unitholders may present their common units of UELP for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Upon presentation of a common unit for redemption, UELP must redeem the unit for cash equal to the then value of a share of UE’s common shares, as defined by the limited partnership agreement. In lieu of cash redemption by UELP, however, UE may elect to acquire any common units so tendered by issuing common shares of UE in exchange for the common units. If UE so elects, its common shares will be exchanged for common units on a one-for-one basis. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. UE generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having UELP pay cash. With each such exchange or redemption, UE’s percentage ownership in UELP will increase. In addition, whenever UE issues common shares other than to acquire common units of UELP, UE must contribute any net proceeds it receives to UELP and UELP must issue to UE an equivalent number of common units of UELP. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.
The Company believes that combining the quarterly reports on Form 10-Q of UE and UELP into this single report provides the following benefits:
enhances investors’ understanding of UE and UELP by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both UE and UELP; and
creates time and cost efficiencies throughout the preparation of one combined report instead of two separate reports.
The Company believes it is important to understand the few differences between UE and UELP in the context of how UE and UELP operate as a consolidated company. The financial results of UELP are consolidated into the financial statements of UE. UE does not have any other significant assets, liabilities or operations, other than its investment in UELP, nor does it have employees of its own. UELP, not UE, generally executes all significant business relationships other than transactions involving the securities of UE. UELP holds substantially all of the assets of UE and retains the ownership interests in the Company's joint ventures. UELP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by UE, which are contributed to the capital of UELP in exchange for units of limited partnership in UELP, as applicable, UELP generates all remaining capital required by the Company’s business. These sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit agreement, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.
Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of UE and UELP. The limited partners of UELP are accounted for as partners’ capital in UELP’s financial statements and as noncontrolling interests in UE’s financial statements. The noncontrolling interests in UELP’s financial statements include the interests of unaffiliated partners in consolidated entities. The noncontrolling interests in UE’s financial statements include the same noncontrolling interests at UELP’s level and limited partners of UELP. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at UE and UELP levels.
To help investors better understand the key differences between UE and UELP, certain information for UE and UELP in this report has been separated, as set forth below: Item 1. Financial Statements (unaudited), which includes specific disclosures for UE and UELP, Note 14, Equity and Noncontrolling Interest and Note 16, Earnings Per Share and Unit.
This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of UE and UELP in order to establish that the requisite certifications have been made and that UE and UELP are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.



PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
URBAN EDGE PROPERTIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
 June 30,December 31,
 20212020
ASSETS 
Real estate, at cost:  
Land$556,850 $568,662 
Buildings and improvements2,325,577 2,326,450 
Construction in progress55,461 44,689 
Furniture, fixtures and equipment7,432 7,016 
Total2,945,320 2,946,817 
Accumulated depreciation and amortization(755,833)(730,366)
Real estate, net2,189,487 2,216,451 
Operating lease right-of-use assets77,428 80,997 
Cash and cash equivalents321,200 384,572 
Restricted cash57,833 34,681 
Tenant and other receivables15,823 15,673 
Receivable arising from the straight-lining of rents61,240 62,106 
Identified intangible assets, net of accumulated amortization of $35,995 and $37,009, respectively
51,536 56,184 
Deferred leasing costs, net of accumulated amortization of $16,512 and $16,419, respectively
18,203 18,585 
Prepaid expenses and other assets73,184 70,311 
Total assets$2,865,934 $2,939,560 
LIABILITIES AND EQUITY  
Liabilities:
Mortgages payable, net $1,577,413 $1,587,532 
Operating lease liabilities71,708 74,972 
Accounts payable, accrued expenses and other liabilities74,993 132,980 
Identified intangible liabilities, net of accumulated amortization of $76,513 and $71,375, respectively
142,830 148,183 
Total liabilities1,866,944 1,943,667 
Commitments and contingencies
Shareholders’ equity:
Common shares: $0.01 par value; 500,000,000 shares authorized and 117,137,337 and 117,014,317 shares issued and outstanding, respectively
1,170 1,169 
Additional paid-in capital 990,255 989,863 
Accumulated deficit(42,157)(39,467)
Noncontrolling interests:
Operating partnership43,568 38,456 
Consolidated subsidiaries6,154 5,872 
Total equity998,990 995,893 
Total liabilities and equity$2,865,934 $2,939,560 

 
See notes to consolidated financial statements (unaudited).
1


URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
REVENUE
Rental revenue$93,653 $73,265 $188,272 $166,265 
Management and development fees266 285 631 599 
Other income87 69 764 115 
Total revenue94,006 73,619 189,667 166,979 
EXPENSES
Depreciation and amortization22,488 23,299 45,363 46,770 
Real estate taxes15,363 14,896 31,964 29,862 
Property operating15,891 11,894 36,182 26,431 
General and administrative9,484 18,053 18,152 27,900 
Lease expense3,195 3,351 6,501 6,785 
Total expenses66,421 71,493 138,162 137,748 
Gain on sale of real estate  11,722 39,775 
Interest income90 422 226 2,105 
Interest and debt expense(14,728)(18,573)(29,555)(35,748)
Gain on extinguishment of debt 34,908  34,908 
Income before income taxes12,947 18,883 33,898 70,271 
Income tax benefit (expense)34 13,662 (201)13,562 
Net income12,981 32,545 33,697 83,833 
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership(584)(1,290)(1,459)(3,598)
Consolidated subsidiaries150  229  
Net income attributable to common shareholders$12,547 $31,255 $32,467 $80,235 
Earnings per common share - Basic: $0.11 $0.27 $0.28 $0.68 
Earnings per common share - Diluted: $0.11 $0.27 $0.28 $0.67 
Weighted average shares outstanding - Basic116,981 116,522 116,969 118,744 
Weighted average shares outstanding - Diluted117,034 116,595 122,327 119,607 


See notes to consolidated financial statements (unaudited).

2


URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
(In thousands, except share and per share amounts)
Common SharesNoncontrolling Interests (“NCI”)
 SharesAmountAdditional
Paid-In Capital
Accumulated Earnings
(Deficit)
Operating PartnershipConsolidated SubsidiariesTotal Equity
Balance, March 31, 2020117,956,031$1,179 $986,489 $(30,243)$40,374 $424 $998,223 
Net income attributable to common shareholders— — — 31,255 — — 31,255 
Net income attributable to noncontrolling interests— — — — 1,290 — 1,290 
Limited partnership interests:
Units redeemed for common shares253,553 1 281 — — — 282 
Reallocation of noncontrolling interests— — 6,951 — (7,233)— (282)
Common shares issued22,901 — 204 — — — 204 
Repurchase of common shares(1,421,700)(14)(11,326)— — — (11,340)
Share-based compensation expense— — 3,467 — 5,144 — 8,611 
Share-based awards retained for taxes(109,474)— (1,133)— — — (1,133)
Balance, June 30, 2020116,701,311$1,166$984,933 $1,012 $39,575 $424 $1,027,110 


Common SharesNoncontrolling Interests (“NCI”)
 SharesAmountAdditional
Paid-In Capital
Accumulated Earnings
(Deficit)
Operating PartnershipConsolidated SubsidiariesTotal Equity
Balance, March 31, 2021117,026,289$1,170 $987,518 $(37,145)$43,523 $6,304 $1,001,370 
Net income attributable to common shareholders— — — 12,547 — — 12,547 
Net income (loss) attributable to noncontrolling interests— — — — 584 (150)434 
Limited partnership interests:
Units redeemed for common shares100,000 — 840 — — — 840 
Reallocation of noncontrolling interests— — 1,129 — (1,969)— (840)
Common shares issued11,799 — 204 (21)— — 183 
Dividends to common shareholders ($0.15 per share)
— — — (17,538)— — (17,538)
Distributions to redeemable NCI ($0.15 per unit)
— — — — (730)— (730)
Share-based compensation expense— — 566 — 2,160 — 2,726 
Share-based awards retained for taxes(751)— (2)— — — (2)
Balance, June 30, 2021117,137,337$1,170 $990,255 $(42,157)$43,568 $6,154 $998,990 

See notes to consolidated financial statements (unaudited).






3



Common SharesNoncontrolling Interests (“NCI”)
 SharesAmountAdditional
Paid-In Capital
Accumulated Earnings
(Deficit)
Operating PartnershipConsolidated SubsidiariesTotal Equity
Balance, December 31, 2019121,370,125 $1,213 $1,019,149 $(52,546)$46,536 $424 $1,014,776 
Net income attributable to common shareholders— — — 80,235 — — 80,235 
Net income attributable to noncontrolling interests— — — — 3,598 — 3,598 
Limited partnership interests:
Units redeemed for common shares1,279,389 11 8,617 — — — 8,628 
Reallocation of noncontrolling interests— — 7,858 — (16,486)— (8,628)
Common shares issued53,193 1 234 (30)— — 205 
Repurchase of common shares(5,873,923)(59)(54,082)— — — (54,141)
Dividends to common shareholders ($0.22 per share)
— — — (26,647)— — (26,647)
Distributions to redeemable NCI ($0.22 per unit)
— — — — (1,314)— (1,314)
Share-based compensation expense— — 4,618 — 7,241 — 11,859 
Share-based awards retained for taxes(127,473)— (1,461)— — — (1,461)
Balance, June 30, 2020116,701,311 $1,166 $984,933 $1,012 $39,575 $424 $1,027,110 


Common SharesNoncontrolling Interests (“NCI”)
 SharesAmountAdditional
Paid-In Capital
Accumulated Earnings
(Deficit)
Operating PartnershipConsolidated SubsidiariesTotal Equity
Balance, December 31, 2020117,014,317 $1,169 $989,863 $(39,467)$38,456 $5,872 $995,893 
Net income attributable to common shareholders— — — 32,467 — — 32,467 
Net income (loss) attributable to noncontrolling interests— — — — 1,459 (229)1,230 
Limited partnership interests:
Units redeemed for common shares100,000 — 840 — — — 840 
Reallocation of noncontrolling interests— — (1,688)— 848 — (840)
Common shares issued36,082 1 287 (104)— — 184 
Dividends to common shareholders ($0.30 per share)
— — — (35,053)— — (35,053)
Distributions to redeemable NCI ($0.30 per unit)
— — — — (1,441)— (1,441)
Contributions from noncontrolling interests— — — — — 511 511 
Share-based compensation expense— — 1,163 — 4,246 — 5,409 
Share-based awards retained for taxes(13,062)— (210)— — — (210)
Balance, June 30, 2021117,137,337$1,170 $990,255 $(42,157)$43,568 $6,154 $998,990 

See notes to consolidated financial statements (unaudited).

4


URBAN EDGE PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
 Six Months Ended June 30,
 20212020
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$33,697 $83,833 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization46,259 47,677 
Gain on sale of real estate(11,722)(39,775)
Gain on extinguishment of debt (34,908)
Amortization of below market leases, net(4,754)(4,454)
Noncash lease expense3,569 3,817 
Straight-lining of rent690 5,264 
Share-based compensation expense5,409 11,859 
Change in operating assets and liabilities:  
Tenant and other receivables(151)(6,845)
Deferred leasing costs(1,410)(759)
Prepaid expenses and other assets(4,677)(9,983)
Lease liabilities(3,264)(3,385)
Accounts payable, accrued expenses and other liabilities(10,061)(10,364)
Net cash provided by operating activities53,585 41,977 
CASH FLOWS FROM INVESTING ACTIVITIES  
Real estate development and capital improvements(19,361)(11,170)
Acquisitions of real estate (92,132)
Proceeds from sale of operating properties23,208 54,402 
Net cash provided by (used in) investing activities3,847 (48,900)
CASH FLOWS FROM FINANCING ACTIVITIES  
Debt repayments(5,738)(85,978)
Dividends to common shareholders(88,885)(26,647)
Distributions to redeemable noncontrolling interests(3,514)(1,314)
Taxes withheld for vested restricted shares(210)(1,461)
Contributions from noncontrolling interests511  
Borrowings under unsecured credit facility 250,000 
Proceeds from mortgage loan borrowings 83,000 
Repurchase of common shares (54,141)
Debt issuance costs (2,042)
Proceeds related to the issuance of common shares184 205 
Net cash (used in) provided by financing activities(97,652)161,622 
Net (decrease) increase in cash and cash equivalents and restricted cash(40,220)154,699 
Cash and cash equivalents and restricted cash at beginning of period419,253 485,136 
Cash and cash equivalents and restricted cash at end of period$379,033 $639,835 

See notes to consolidated financial statements (unaudited).
5


Six Months Ended June 30,
20212020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Cash payments for interest, net of amounts capitalized of $348 and $281, respectively
$30,300 $37,268 
Cash payments for income taxes3,724 448 
NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures included in accounts payable and accrued expenses10,677 4,045 
Write-off of fully depreciated assets1,688 10,353 
Mortgage debt forgiven in refinancing 30,000 
Assumption of debt through the acquisition of real estate 72,473 
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period$384,572 $432,954 
Restricted cash at beginning of period 34,681 52,182 
Cash and cash equivalents and restricted cash at beginning of period $419,253 $485,136 
Cash and cash equivalents at end of period$321,200 $615,579 
Restricted cash at end of period57,833 24,256 
Cash and cash equivalents and restricted cash at end of period$379,033 $639,835 

 See notes to consolidated financial statements (unaudited).
6


URBAN EDGE PROPERTIES LP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except unit and per unit amounts)
 June 30,December 31,
 20212020
ASSETS 
Real estate, at cost:  
Land$556,850 $568,662 
Buildings and improvements2,325,577 2,326,450 
Construction in progress55,461 44,689 
Furniture, fixtures and equipment7,432 7,016 
Total2,945,320 2,946,817 
Accumulated depreciation and amortization(755,833)(730,366)
Real estate, net2,189,487 2,216,451 
Operating lease right-of-use assets77,428 80,997 
Cash and cash equivalents321,200 384,572 
Restricted cash57,833 34,681 
Tenant and other receivables15,823 15,673 
Receivable arising from the straight-lining of rents61,240 62,106 
Identified intangible assets, net of accumulated amortization of $35,995 and $37,009, respectively
51,536 56,184 
Deferred leasing costs, net of accumulated amortization of $16,512 and $16,419, respectively
18,203 18,585 
Prepaid expenses and other assets73,184 70,311 
Total assets$2,865,934 $2,939,560 
LIABILITIES AND EQUITY  
Liabilities:
Mortgages payable, net$1,577,413 $1,587,532 
Operating lease liabilities71,708 74,972 
Accounts payable, accrued expenses and other liabilities74,993 132,980 
Identified intangible liabilities, net of accumulated amortization of $76,513 and $71,375, respectively
142,830 148,183 
Total liabilities1,866,944 1,943,667 
Commitments and contingencies
Equity:
Partners’ capital:
General partner: 117,137,337 and 117,014,317 units outstanding, respectively
991,426 991,032 
Limited partners: 5,376,145 and 4,729,010 units outstanding, respectively
46,395 41,302 
Accumulated deficit(44,985)(42,313)
Total partners’ capital 992,836 990,021 
Noncontrolling interest in consolidated subsidiaries6,154 5,872 
Total equity998,990 995,893 
Total liabilities and equity$2,865,934 $2,939,560 

 
See notes to consolidated financial statements (unaudited).

7


URBAN EDGE PROPERTIES LP
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except unit and per unit amounts)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
REVENUE
Rental revenue$93,653 $73,265 $188,272 $166,265 
Management and development fees266 285 631 599 
Other income87 69 764 115 
Total revenue94,006 73,619 189,667 166,979 
EXPENSES
Depreciation and amortization22,488 23,299 45,363 46,770 
Real estate taxes15,363 14,896 31,964 29,862 
Property operating15,891 11,894 36,182 26,431 
General and administrative9,484 18,053 18,152 27,900 
Lease expense3,195 3,351 6,501 6,785 
Total expenses66,421 71,493 138,162 137,748 
Gain on sale of real estate  11,722 39,775 
Interest income90 422 226 2,105 
Interest and debt expense(14,728)(18,573)(29,555)(35,748)
Gain on extinguishment of debt 34,908  34,908 
Income before income taxes12,947 18,883 33,898 70,271 
Income tax benefit (expense)34 13,662 (201)13,562 
Net income12,981 32,545 33,697 83,833 
Less net loss attributable to NCI in consolidated subsidiaries150  229  
Net income attributable to unitholders$13,131 $32,545 $33,926 $83,833 
Earnings per unit - Basic: $0.11 $0.27 $0.28 $0.68 
Earnings per unit - Diluted: $0.11 $0.27 $0.28 $0.68 
Weighted average units outstanding - Basic120,849 120,535 120,806 123,190 
Weighted average units outstanding - Diluted122,485 121,407 122,327 124,082 


See notes to consolidated financial statements (unaudited).


8


URBAN EDGE PROPERTIES LP
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
(In thousands, except unit and per unit amounts)
 Total SharesGeneral Partner Total Units
Limited Partners(1)
Accumulated Earnings
(Deficit)
NCI in Consolidated SubsidiariesTotal Equity
Balance, March 31, 2020117,956,031 $987,668 4,971,944 $43,000 $(32,869)$424 $998,223 
Net income attributable to unitholders— — — — 32,545 — 32,545 
Common units issued as a result of common shares issued by Urban Edge22,901 204 (41,604)—  — 204 
Equity redemption of OP units253,553 282 (253,553) — — 282 
Repurchase of common shares(1,421,700)(11,340)— — — — (11,340)
Reallocation of noncontrolling interests— 6,951 — (7,233)— — (282)
Share-based compensation expense— 3,467 — 5,144 — — 8,611 
Share-based awards retained for taxes(109,474)(1,133)— — — — (1,133)
Balance, June 30, 2020116,701,311 $986,099 4,676,787 $40,911 $(324)$424 $1,027,110 
(1) Limited partners have a 3.9% common limited partnership interest in the Operating Partnership as of June 30, 2020 in the form of units of interest in the OP Units and LTIP units.



 Total SharesGeneral Partner Total Units
Limited Partners(2)
Accumulated
Deficit
NCI in Consolidated SubsidiariesTotal Equity
Balance, March 31, 2021117,026,289 $988,688 5,352,644 $46,205 $(39,827)$6,304 $1,001,370 
Net income attributable to unitholders— — — — 13,131 — 13,131 
Net loss attributable to noncontrolling interests— — — — — (150)(150)
Common units issued as a result of common shares issued by Urban Edge11,799 204 123,501 — (21)— 183 
Equity redemption of OP units100,000 840 (100,000)— — — 840 
Limited partnership units issued, net— —  — — —  
Reallocation of noncontrolling interests— 1,129 — (1,969)— — (840)
Distributions to Partners ($0.15 per unit)
— — — — (18,268)— (18,268)
Share-based compensation expense— 566 — 2,160 — — 2,726 
Share-based awards retained for taxes(751)(2)— — — — (2)
Balance, June 30, 2021117,137,337 $991,425 5,376,145 $46,396 $(44,985)$6,154 $998,990 
(2) Limited partners have a 4.4% common limited partnership interest in the Operating Partnership as of June 30, 2021 in the form of units of interest in the OP Units and LTIP units.

See notes to consolidated financial statements (unaudited).




9


 Total SharesGeneral Partner Total Units
Limited Partners(1)
Accumulated Earnings
(Deficit)
NCI in Consolidated SubsidiariesTotal Equity
Balance, December 31, 2019121,370,125 $1,020,362 5,833,318 $50,156 $(56,166)$424 $1,014,776 
Net income attributable to unitholders— — — — 83,833 — 83,833 
Common units issued as a result of common shares issued by Urban Edge53,193 235 122,858 — (30)— 205 
Equity redemption of OP units1,279,389 8,628 (1,279,389)—  — 8,628 
Repurchase of common shares(5,873,923)(54,141)  — — (54,141)
Reallocation of noncontrolling interests— 7,858 — (16,486)— — (8,628)
Distributions to Partners ($0.22 per unit)
— — — — (27,961)— (27,961)
Share-based compensation expense— 4,618 — 7,241  — 11,859 
Share-based awards retained for taxes(127,473)(1,461)— — — — (1,461)
Balance, June 30, 2020116,701,311 $986,099 4,676,787 $40,911 $(324)$424 $1,027,110 
(1) Limited partners have a 3.9% common limited partnership interest in the Operating Partnership as of June 30, 2020 in the form of units of interest in the OP Units and LTIP units.


 Total SharesGeneral Partner Total Units
Limited Partners(2)
Accumulated
Deficit
NCI in Consolidated SubsidiariesTotal Equity
Balance, December 31, 2020117,014,317 $991,032 4,729,010 $41,302 $(42,313)$5,872 $995,893 
Net income attributable to unitholders— — — — 33,926 — 33,926 
Net loss attributable to noncontrolling interests— — — — — (229)(229)
Common units issued as a result of common shares issued by Urban Edge36,082 288 747,135 — (104)— 184 
Equity redemption of OP units100,000 840 (100,000)840 
Limited partnership units issued, net— — — — — —  
Reallocation of noncontrolling interests— (1,688)— 848 — — (840)
Distributions to Partners ($0.30 per unit)
— — — — (36,494)— (36,494)
Contributions from noncontrolling interests— — — — — 511 511 
Share-based compensation expense— 1,163 — 4,246 — — 5,409 
Share-based awards retained for taxes(13,062)(210)— — — — (210)
Balance, June 30, 2021117,137,337 $991,425 5,376,145 $46,396 $(44,985)$6,154 $998,990 
(2) Limited partners have a 4.4% common limited partnership interest in the Operating Partnership as of June 30, 2021 in the form of units of interest in the OP Units and LTIP units.

See notes to consolidated financial statements (unaudited).
10


URBAN EDGE PROPERTIES LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
 Six Months Ended June 30,
 20212020
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$33,697 $83,833 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization46,259 47,677 
Gain on sale of real estate(11,722)(39,775)
Gain on extinguishment of debt (34,908)
Amortization of below market leases, net(4,754)(4,454)
Noncash lease expense3,569 3,817 
Straight-lining of rent690 5,264 
Share-based compensation expense5,409 11,859 
Change in operating assets and liabilities:  
Tenant and other receivables(151)(6,845)
Deferred leasing costs(1,410)(759)
Prepaid expenses and other assets(4,677)(9,983)
Lease liabilities(3,264)(3,385)
Accounts payable, accrued expenses and other liabilities(10,061)(10,364)
Net cash provided by operating activities53,585 41,977 
CASH FLOWS FROM INVESTING ACTIVITIES  
Real estate development and capital improvements(19,361)(11,170)
Acquisitions of real estate (92,132)
Proceeds from sale of operating properties23,208 54,402 
Net cash provided by (used in) investing activities3,847 (48,900)
CASH FLOWS FROM FINANCING ACTIVITIES  
Debt repayments(5,738)(85,978)
Distributions to partners(92,399)(27,961)
Taxes withheld for vested restricted units(210)(1,461)
Borrowings under unsecured credit facility 250,000 
Proceeds from mortgage loan borrowings 83,000 
Repurchase of common shares (54,141)
Debt issuance costs (2,042)
Proceeds related to the issuance of common shares184 205 
Contributions from noncontrolling interests511  
Net cash (used in) provided by financing activities(97,652)161,622 
Net (decrease) increase in cash and cash equivalents and restricted cash(40,220)154,699 
Cash and cash equivalents and restricted cash at beginning of period419,253 485,136 
Cash and cash equivalents and restricted cash at end of period$379,033 $639,835 

See notes to consolidated financial statements (unaudited).
11


Six Months Ended June 30,
20212020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Cash payments for interest, net of amounts capitalized of $348 and $281, respectively
$30,300 $37,268 
Cash payments for income taxes3,724 448 
NON-CASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures included in accounts payable and accrued expenses10,677 4,045 
Write-off of fully depreciated assets1,688 10,353 
Mortgage debt forgiven in refinancing 30,000 
Assumption of debt through the acquisition of real estate 72,473 
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period$384,572 $432,954 
Restricted cash at beginning of period 34,681 52,182 
Cash and cash equivalents and restricted cash at beginning of period $419,253 $485,136 
Cash and cash equivalents at end of period$321,200 $615,579 
Restricted cash at end of period57,833 24,256 
Cash and cash equivalents and restricted cash at end of period$379,033 $639,835 

 See notes to consolidated financial statements (unaudited).

12


URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.ORGANIZATION

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust focused on managing, developing, redeveloping, and acquiring retail real estate in urban communities, primarily in the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of the Company’s real estate properties and other assets. Unless the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries.
The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of June 30, 2021, Urban Edge owned approximately 95.6% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired. Urban Edge serves as the sole general partner of the Operating Partnership. The third-party unitholders have limited rights over the Operating Partnership such that they do not have characteristics of a controlling financial interest. As such, the Operating Partnership is considered a variable interest entity (“VIE”), and the Company is the primary beneficiary which consolidates it. The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest.
As of June 30, 2021, our portfolio consisted of 70 shopping centers, five malls and two industrial parks totaling approximately 16.2 million square feet (“sf”), which is inclusive of a 95% controlling interest in Walnut Creek, CA (Mt. Diablo), and an 82.5% controlling interest in Sunrise Mall, in Massapequa, NY.
2.BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
 
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions of Form 10-Q. Certain information and footnote disclosures included in our annual financial statements have been condensed or omitted. In the opinion of management, the consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and the Operating Partnership and the results of operations and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. Accordingly, these consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities Exchange Commission (“SEC”).
The consolidated balance sheets as of June 30, 2021 and December 31, 2020 reflect the consolidation of wholly-owned subsidiaries and those entities in which we have a controlling financial interest. As of June 30, 2021 and December 31, 2020, excluding the Operating Partnership, we consolidated two VIEs with total assets of $43.1 million and $43.6 million, respectively and total liabilities of $31.8 million and $31.5 million, respectively. The consolidated statements of income for the three and six months ended June 30, 2021 and 2020 include the consolidated accounts of the Company and the Operating Partnership. All intercompany transactions have been eliminated in consolidation.
In accordance with ASC 205 Presentation of Financial Statements, certain prior year balances have been reclassified in order to conform to the current period presentation.
Our primary business is the ownership, management, redevelopment, development and operation of retail shopping centers and malls. We do not distinguish from our primary business or group our operations on a geographical basis for purposes of measuring performance. The Company’s chief operating decision maker reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. None of our tenants accounted for more than 10% of our revenue or property operating income as of June 30, 2021. We aggregate all of our properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operations, as well as long-term average financial performance.
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3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Real Estate Real estate is carried at cost, net of accumulated depreciation and amortization. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant renovations that improve or extend the useful lives of assets are capitalized. As real estate is undergoing redevelopment activities, all property operating expenses directly associated with and attributable to the redevelopment, including interest, are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the property when completed. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of redeveloped property, the excess is charged to impairment expense. The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete. Depreciation is recognized on a straight-line basis over estimated useful lives which range from one to 40 years.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price based on these assessments on a relative fair value basis. We assess fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. We record acquired intangible assets (including acquired above-market leases, acquired in-place leases and tenant relationships) and acquired intangible liabilities (including below-market leases) at their estimated fair value. We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired.

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events and changes include macroeconomic conditions, including those caused by global pandemics, like the recent coronavirus disease pandemic (“COVID-19” or the “COVID-19 pandemic”), which resulted in property operational disruption and indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis taking into account the appropriate capitalization rate in determining a future terminal value. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the projected future cash flows change based on uncertain market conditions, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements.

Tenant and Other Receivables and Changes in Collectibility Assessment — Tenant receivables include unpaid amounts billed to tenants, disputed enforceable charges and accrued revenues for future billings to tenants for property expenses. We evaluate the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements. We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842 Leases. Management exercises judgment in assessing collectibility and considers payment history, current credit status and publicly available information about the financial condition of the tenant, among other factors. Tenant receivables, and receivables arising from the straight-lining of rents, are written-off directly when management deems the collectibility of substantially all future lease payments from a specific lease is not probable of collection, at which point, the Company will begin recognizing revenue from such leases prospectively, based on actual amounts received. This write-off effectively reduces cumulative non-cash rental income recognized from the straight-lining of rents since lease commencement. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables arising from the straight-lining of rents balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.

Recently Issued Accounting Literature — Effective for the fiscal period beginning January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses. In connection with the adoption of ASU 2016-03, we also adopted (i) ASU 2018-19 Codification Improvements to ASC 326, Financial Instruments - Credit Losses, (ii) ASU 2019-04, Codification Improvements to ASC 326, Financial Statements - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments, (iii) ASU 2019-05 Financial Instruments - Credit Losses (ASC 326): Targeted Transition Relief and (iv) ASU 2019-11 Codification Improvements to ASC 326, Financial Instruments - Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses for certain types of financial instruments and also modifies the impairment model with new methodology for estimating credits losses. In November 2018, the FASB issued ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which included amendments to clarify receivables arising from operating leases are within the scope ASC 842 Leases. Due to the adoption of ASC 842 on January 1,
14


2019, the Company includes rental revenue deemed uncollectible as a reduction to rental revenue in "Rental revenue" in the consolidated statements of income. As of June 30, 2021, the Company did not have any material outstanding financial instruments. The adoption of ASU 2016-13 did not have a material impact to our consolidated financial statements and disclosures.

In December 2019, the FASB issued ASU 2019-12 Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of the income tax accounting. ASU 2019-12 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2020. Early adoption is permitted. We adopted ASU 2019-12 effective January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements and disclosures.

In March 2020 and January 2021, the FASB issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04 and ASU 2021-01, which allows entities to account for the modification as if the modification was not substantial. We will disclose the nature of and reason for electing the optional expedient in each interim and annual financial statement period if and when applicable through December 31, 2022.

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief, that lessors provide to mitigate the economic effects of COVID-19 on lessees, is a lease modification under ASC 842. Instead, when the cash flows resulting from the lease concession granted for COVID-19 rent relief are substantially the same or less than the cash flows of the original contract, an entity may elect to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract).

The FASB stated that there are multiple ways to account for rent concessions, none of which the FASB believes are more preferable than the others. Two of those methods are: (i) account for the concessions as if no changes to the lease contract were made; under that accounting, a lessor would continue to increase its lease receivable and continue to recognize income, referred to as the “receivable approach”; or (ii) account for the deferred payments or abatements as variable lease payments; under that accounting, a lessor would recognize the payment as income in profit or loss in the period in which the changes in facts and circumstances on which the variable lease payments are based occurred, referred to as the “variable approach”.

The Company makes this election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances. As of June 30, 2021, the Company has granted rent deferrals accounted under both the receivable approach by electing the Lease Modification Q&A and as modifications due to term extensions of the leases. The Company has also granted abatements accounted under both the variable approach and as modifications due to the executed agreements including other rental term modifications, such as term extensions and substantial changes in cash flows. The Company remains in active discussions with its impacted tenants to grant further concessions. The full future impact of the Lease Modification Q&A is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 and the elections made by the Company at the time of entering into such concessions. Refer to Note 10 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q.

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company or the Operating Partnership, or they are not expected to have a material impact on our consolidated financial statements.

15





4.     ACQUISITIONS AND DISPOSITIONS

Acquisitions
During the six months ended June 30, 2021, no acquisitions were completed by the Company. During the six months ended June 30, 2020, we closed on the following acquisitions:
Date PurchasedProperty NameCityStateSquare FeetPurchase Price
(in thousands)
February 12, 2020Kingswood CenterBrooklynNY130,000 $90,212 
February 12, 2020Kingswood CrossingBrooklynNY110,000 77,077 
2020 Total$167,289 
(1)
(1) The total purchase price for the properties acquired during the six months ended June 30, 2020 includes $2.5 million of transaction costs incurred related to the acquisitions.

On February 12, 2020, the Company acquired Kingswood Center and Kingswood Crossing for $167.3 million, including transaction costs. The properties are located along Kings Highway in the Midwood neighborhood of Brooklyn, NY and were funded via 1031 exchanges using cash proceeds from dispositions. Additionally, as part of the acquisition of Kingswood Center, the Company assumed a $65.5 million mortgage, which matures in 2028.

The aggregate purchase price of the above property acquisitions has been allocated as follows:
Property NameLandBuildings and improvements
Identified intangible assets(1)
Identified intangible liabilities(1)
Debt premiumTotal Purchase Price
(in thousands)
Kingswood Center$15,690 $76,766 $9,263 $(4,534)$(6,973)$90,212 
Kingswood Crossing8,150 64,159 4,768   77,077 
2020 Total$23,840 $140,925 $14,031 $(4,534)$(6,973)$167,289 
(1) As of June 30, 2021, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired were 8.1 years and 9.3 years, respectively.

As of June 30, 2021, we are under contract to acquire two industrial properties totaling 275,000 sf for $55.5 million, that are located near our existing 943,000 sf warehouse park in East Hanover, NJ.

Dispositions
During the six months ended June 30, 2021, we disposed of one property and one property parcel and received proceeds of $23.6 million, net of selling costs, resulting in a $11.7 million net gain on sale of real estate.
During the six months ended June 30, 2020, we disposed of three properties and received proceeds of $58.1 million, net of selling costs, resulting in a $39.8 million net gain on sale of real estate. The sale of all three dispositions were completed as 1031 exchanges with Kingswood Crossing as a result of the sales occurring within 180 days of the Company’s acquisition.
Real Estate Held for Sale
As of June 30, 2021, one property in Westfield, NJ was classified as held for sale based on an executed contract of sale with a third-party buyer. The aggregate carrying amount of this property was $5.5 million and is included in prepaid expenses and other assets in our consolidated balance sheets as of June 30, 2021. The mortgage debt at the property was $4.7 million and is included in the accounts payable, accrued expenses and other liabilities line item on our consolidated balance sheets as of June 30, 2021. The property was sold in July 2021.



16


5.     IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES
 
Our identified intangible assets (acquired in-place and above-market leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $51.5 million and $142.8 million, respectively, as of June 30, 2021 and $56.2 million and $148.2 million, respectively, as of December 31, 2020.

Amortization of acquired below-market leases, net of acquired above-market leases resulted, in additional rental income of $2.3 million and $4.8 million for the three and six months ended June 30, 2021 and $2.2 million and $4.5 million for the same periods in 2020.
 
Amortization of acquired in-place leases inclusive of customer relationships resulted in additional depreciation and amortization expense of $1.8 million and $3.9 million for the three and six months ended June 30, 2021, and $2.2 million and $4.2 million for the same periods in 2020.

The following table sets forth the estimated annual amortization income and expense related to intangible assets and liabilities for the remainder of 2021 and the five succeeding years:
(Amounts in thousands)Below-MarketAbove-MarketIn-Place Lease
YearOperating Lease AmortizationOperating Lease AmortizationAmortization
2021(1)
$5,259 $(571)$(3,687)
202210,449 (803)(5,962)
202310,404 (695)(4,822)
202410,168 (631)(4,335)
20259,995 (452)(3,702)
20269,660 (434)(3,466)
(1) Remainder of 2021.

17


6.     MORTGAGES PAYABLE
 
The following is a summary of mortgages payable as of June 30, 2021 and December 31, 2020.
 Interest Rate atJune 30,December 31,
(Amounts in thousands)MaturityJune 30, 202120212020
First mortgages secured by: 
Variable rate
Cherry Hill (Plaza at Cherry Hill)(1)
5/24/20221.69%$28,834 $28,930 
Westfield (One Lincoln Plaza)(1)
5/24/20221.69%4,714 4,730 
Woodbridge (Plaza at Woodbridge)(1)
5/25/20221.69%55,180 55,340 
Jersey City (Hudson Commons)(2)
11/15/20241.99%28,310 28,586 
Watchung(2)
11/15/20241.99%26,355 26,613 
Bronx (1750-1780 Gun Hill Road)(2)
12/1/20241.99%24,926 25,172 
Total variable rate debt168,319 169,371 
Fixed rate
Bergen Town Center - West, Paramus4/8/20233.56%300,000 300,000 
Bronx (Shops at Bruckner)5/1/20233.90%10,027 10,351 
Jersey City (Hudson Mall)12/1/20235.07%22,531 22,904 
Yonkers Gateway Center4/6/20244.16%27,634 28,482 
Brick12/10/20243.87%50,000 50,000 
North Plainfield12/10/20253.99%25,100 25,100 
Las Catalinas2/1/20264.43%125,828 127,669 
Middletown12/1/20263.78%31,400 31,400 
Rockaway12/1/20263.78%27,800 27,800 
East Hanover (200 - 240 Route 10 West)12/10/20264.03%63,000 63,000 
North Bergen (Tonnelle Ave)4/1/20274.18%100,000 100,000 
Manchester6/1/20274.32%12,500 12,500 
Millburn6/1/20273.97%23,163 23,381 
Totowa12/1/20274.33%50,800 50,800 
Woodbridge (Woodbridge Commons)12/1/20274.36%22,100 22,100 
East Brunswick12/6/20274.38%63,000 63,000 
East Rutherford1/6/20284.49%23,000 23,000 
Brooklyn (Kingswood Center)2/6/20285.07%71,255 71,696 
Hackensack3/1/20284.36%66,400 66,400 
Marlton12/1/20283.86%37,400 37,400 
East Hanover Warehouses12/1/20284.09%40,700 40,700 
Union (2445 Springfield Ave)12/10/20284.01%45,600 45,600 
Freeport (Freeport Commons)12/10/20294.07%43,100 43,100 
Montehiedra6/1/20305.00%80,282 81,141 
Montclair8/15/20303.15%7,250 7,250 
Garfield12/1/20304.14%40,300 40,300 
Mt Kisco11/15/20346.40%12,671 12,952 
Total fixed rate debt1,422,841 1,428,026 
Total mortgages payable1,591,160 1,597,397 
Westfield (One Lincoln Plaza - held for sale)(1)
5/24/20221.69%(4,714) 
Unamortized debt issuance costs(9,033)(9,865)
Total mortgages payable, net1,577,413 1,587,532 
(1)Bears interest at one month LIBOR plus 160 bps.
(2)Bears interest at one month LIBOR plus 190 bps.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of June 30, 2021. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of June 30, 2021, we were in compliance with all debt covenants.

18


As of June 30, 2021, the principal repayments of the Company’s total outstanding debt for the next five years and thereafter are as follows:
(Amounts in thousands) 
Year Ending December 31,
2021(1)
$8,235 
202298,915 
2023349,814 
2024163,720 
202540,946 
2026230,694 
Thereafter694,122 
(1) Remainder of 2021.

Revolving Credit Agreement
On January 15, 2015, we entered into a $500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions. On March 7, 2017, we amended and extended the Agreement to increase the credit facility size by $100 million to $600 million and extended the maturity date to March 7, 2021, with two six-month extension options. On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024, with two six-month extension options.

On June 3, 2020, we entered into a third amendment to the Agreement, which among other things, modifies certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter annualized. Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to increase if our leverage ratio increases above predefined thresholds. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x.

No amounts were drawn or outstanding under the Agreement as of June 30, 2021 or December 31, 2020, respectively. Financing costs associated with executing the Agreement of $2.8 million and $3.3 million as of June 30, 2021 and December 31, 2020, respectively, are included in the prepaid expenses and other assets line item of the consolidated balance sheets, as deferred financing costs, net.

Mortgage on Las Catalinas Mall
In April 2020, we notified the servicer of the $129 million non-recourse mortgage loan on Las Catalinas Mall in Puerto Rico that cash flow would be insufficient to service the debt and that we were unwilling to fund the shortfalls. In December 2020, the non-recourse mortgage loan on Las Catalinas Mall was modified to convert the mortgage from an amortizing 4.43% loan to interest only payments, starting at 3.00% in 2021 and increasing 50 basis points annually until returning to 4.43% in 2024 and thereafter, and to include the ability for the Company to repay the loan at a discounted value of $72.5 million, beginning in August 2023 through the extended maturity date of February 2026. We have accrued interest of $5.4 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of June 30, 2021. We incurred $1.2 million of lender fees in connection with the loan modification which are treated as a reduction of the mortgage payable balance and amortized over the term of the loan in accordance with the provisions under ASC 470-60 Troubled Debt Restructurings.

Mortgage on The Outlets at Montehiedra
The Company has provided a $12.5 million limited corporate guarantee of the mortgage secured by Montehiedra that is triggered only if any of the following events occur: (1) certain reserve accounts were not funded as of a specified date (which funding did occur in full at closing), (2) the lease to Sears Holding Corporation (“Kmart”) at Montehiedra is terminated for any reason or (3) the Kmart lease is materially amended and a debt service coverage ratio falls below a specified threshold. In February 2021, Kmart announced that it would be closing the store related to such lease, but the lease has not been terminated or amended and the tenant continues to pay rent. No triggering events have occurred that would require the release of the guarantee and the tenant has lease obligations through 2023. The guarantee would be released should certain financial metrics at Montehiedra be achieved even if the Kmart box remains vacant. The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately six years based on the scheduled amortization. As of June 30, 2021, the remaining amount of potential guarantee is approximately $10.8 million.
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7.     INCOME TAXES

The Company elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015. With the exception of the Company’s taxable REIT subsidiary (“TRS”), to the extent the Company meets certain requirements under the Code, the Company will not be taxed on its federal taxable income. If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates, including any alternative minimum tax, which, for corporations, was repealed under the Tax Cuts and Jobs Act (“TCJA”) and may not be able to qualify as a REIT for the four subsequent taxable years. In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income.

For U.S. federal income tax purposes, the REIT and other minority members are partners in the Operating Partnership. As such, the partners are required to report their share of taxable income on their respective tax returns. However, during the six months ended June 30, 2021 and 2020, certain non-real estate operating activities that could not be performed by the REIT, occurred through the Company’s taxable REIT subsidiary (“TRS”), and the Company’s TRS is subject to federal, state and local income taxes. These income taxes are included in the income tax expense in the consolidated statements of income.
During the six months ended June 30, 2021, the REIT was subject to Puerto Rico corporate income taxes on its allocable share of the Company’s Puerto Rico operating activities. The Puerto Rico corporate income tax consists of a flat 18.5% tax rate plus a graduated income surcharge tax for a maximum corporate income tax rate of 37.5%. In addition, the REIT is subject to a 10% branch profit tax on the earnings and profits generated from its allocable share of the Company’s Puerto Rico operating activities and such tax is included in income tax expense in the consolidated statements of income. During the six months ended June 30, 2020 the Company also had activities occurring in special partnerships subject to a Puerto Rico 29% non-resident withholding tax on the net income from operating activities allocated to the Operating Partnership.

During the three and six months ended June 30, 2020, the Company completed a refinancing and legal entity restructuring transaction at The Outlets at Montehiedra in San Juan, PR, which resulted in a deferred tax asset, net of $13.4 million and recognized an accompanying income tax benefit on the its consolidated statements of income. As a result, for the three and six months ended June 30, 2020 the Company recorded an income tax benefit of $13.7 million and $13.6 million, respectively, which is included in income tax benefit (expense) in the consolidated statements of income.

For the tax year ended December 31, 2020, the Company recognized a gain on extinguishment of debt for U.S. federal income tax purposes and implemented various tax planning strategies to limit its impact on the Company’s overall U.S. federal taxable income. The strategies implemented resulted in the recognition of an estimated state and local income tax expense of $4.5 million for the REIT during the year ended December 31, 2020. During the three months ended June 30, 2021, the Company refined the estimated state and local income tax accrued in 2020 and recognized an income tax benefit of $0.5 million.

For the three and six months ended June 30, 2021, the Puerto Rico income tax expense was $0.5 million and $0.7 million, respectively, and the REIT’s state and local income tax benefit was $0.5 million and $0.5 million, respectively. All amounts for the three and six months ended June 30, 2021 and 2020 are included in income tax expense on the consolidated statements of income.
8.     LEASES

All rental revenue was generated from operating leases for the three and six months ended June 30, 2021 and June 30, 2020, respectively. The components of rental revenue for the three and six months ended June 30, 2021 and 2020 were as follows:
Three Months Ended June 30,Six Months Ended June 30,
 (Amounts in thousands)
2021202020212020
Rental Revenue
Fixed lease revenue$69,585 $51,648 $135,239 $120,745 
Variable lease revenue24,068 21,617 53,033 45,520 
Total rental revenue$93,653 $73,265 $188,272 $166,265 




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9.     FAIR VALUE MEASUREMENTS
 
ASC 820, Fair Value Measurement and Disclosures defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.
Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis
There were no financial assets or liabilities measured at fair value on a recurring or non-recurring basis as of June 30, 2021 and December 31, 2020.

Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash and cash equivalents and mortgages payable. Cash and cash equivalents are carried at cost, which approximates fair value. The fair value of mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist. The fair value of cash and cash equivalents is classified as Level 1 and the fair values of mortgages payable is classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments as of June 30, 2021 and December 31, 2020.
 As of June 30, 2021As of December 31, 2020
(Amounts in thousands)Carrying AmountFair ValueCarrying AmountFair Value
Assets:    
Cash and cash equivalents$321,200 $321,200 $384,572 $384,572 
Liabilities:    
Mortgages payable(1)
$1,586,446 $1,592,638 $1,597,397 $1,611,868 
Other liabilities(2)
$4,714 $4,660 $ $ 
(1) Carrying amounts exclude unamortized debt issuance costs of $9.0 million and $9.9 million as of June 30, 2021 and December 31, 2020, respectively.
(2) Includes mortgage debt on properties held for sale as of June 30, 2021.

Nonfinancial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We assess the carrying value of our properties for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Such events and changes include macroeconomic conditions, including those caused by global pandemics, such as COVID-19, which may result in property operational disruption and indicate that the carrying amount may not be recoverable.
No impairment charges were recognized during the three and six months ended June 30, 2021 or June 30, 2020.

10.     COMMITMENTS AND CONTINGENCIES
There are various legal actions against us in the ordinary course of business. After consultation with legal counsel, we have concluded that the outcome of such matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

Redevelopment
As of June 30, 2021, we had approximately $134.1 million of active development, redevelopment and anchor repositioning projects under way, of which $89.7 million remains to be funded. Further, while we have identified future projects in our development pipeline, we are under no obligation to execute and fund any of these projects and each of these projects is being reevaluated considering market conditions.
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Insurance 
The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $50 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses. On December 23, 2020, the Company initiated litigation in New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.
Insurance premiums are typically charged directly to each of the properties but not all of the cost of such premiums are recovered. The Company is responsible for deductibles, losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material.
We continue to monitor the state of the insurance market and the scope and costs of available coverage. We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.
Certain of our loans and other agreements contain customary covenants requiring the maintenance of insurance coverage. Although we believe that we currently have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders or other counterparties insist on greater coverage than we are able to obtain, such requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

Environmental Matters
Each of our properties has been subjected to varying degrees of environmental assessment at various times. Based on these assessments, we have accrued costs of $1.8 million on our consolidated balance sheets as of both June 30, 2021 and December 31, 2020, for remediation costs for environmental contamination at certain properties. While this accrual reflects our best estimates of the potential costs of remediation at these properties, there can be no assurance that the actual costs will not exceed these amounts. Although we are not aware of any other material environmental contamination, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us.

Pandemic-Related Contingencies
On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization ("WHO"). On March 11, 2020, WHO characterized the COVID-19 outbreak as a pandemic. Since March, the continually evolving COVID-19 pandemic impacted our tenants and business operations. The Company has taken precautions to protect the safety, health and well-being of its employees and tenants.
Many of our tenants have faced adverse financial consequences from reduced business operations and social distancing requirements resulting from the COVID-19 pandemic. As of June 30, 2021, substantially all of our portfolio's gross leasable area was open for business and the Company collected approximately 96% of rental revenue for the second quarter of 2021. Since the pandemic was declared in 2020, the Company has granted rent concessions and other lease-related relief, such as rent deferrals, to certain impacted tenants. Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income. As of June 30, 2021, the Company has executed rent deferrals and abatements in connection with tenant rent relief from the pandemic.
The Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this time, with the exception of tenant receivables that may not be collected.

Bankruptcies
Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration. In the event a tenant with a significant number of leases or square footage in our shopping centers files for bankruptcy and rejects its leases with us, we could experience a reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants in arrears or operating retail formats that are experiencing significant changes in competition, business practice, or store closings in other locations. Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection since the pandemic was declared. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

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11.     PREPAID EXPENSES AND OTHER ASSETS

The following is a summary of the composition of the prepaid expenses and other assets in the consolidated balance sheets:
Balance at
(Amounts in thousands)June 30, 2021December 31, 2020
Other assets$9,028 $5,953 
Deferred tax asset, net39,035 39,677 
Deferred financing costs, net of accumulated amortization of $5,375 and $4,819, respectively
2,790 3,347 
Finance lease right-of-use asset2,724 2,724 
Real estate held for sale5,483 7,056 
Prepaid expenses:
Real estate taxes6,669 8,093 
Insurance5,533 1,583 
Licenses/fees1,922 1,878 
Total Prepaid expenses and other assets$73,184 $70,311 

12.     ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES

The following is a summary of the composition of accounts payable, accrued expenses and other liabilities in the consolidated balance sheets:
Balance at
(Amounts in thousands)June 30, 2021December 31, 2020
Dividend payable$ $55,905 
Deferred tenant revenue24,480 26,594 
Accrued interest payable9,395 11,095 
Accrued capital expenditures and leasing costs11,628 7,797 
Security deposits6,719 5,884 
Finance lease liability2,999 2,993 
Accrued payroll expenses4,365 5,797 
Other liabilities and accrued expenses10,693 16,915 
Liabilities held for sale4,714  
Total accounts payable, accrued expenses and other liabilities$74,993 $132,980 


13.     INTEREST AND DEBT EXPENSE
 
The following table sets forth the details of interest and debt expense in the consolidated statements of income:
 Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands)2021202020212020
Interest expense$13,983 $17,869 $28,053 $34,338 
Amortization of deferred financing costs745 704 1,502 1,410 
Total Interest and debt expense$14,728 $18,573 $29,555 $35,748 



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14.     EQUITY AND NONCONTROLLING INTEREST

At-The-Market Program
On May 5, 2021 the Company established an at-the-market equity program (the “ATM Program”), pursuant to which the Company may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million. Sales under the ATM Program may be made from time to time, as needed, by means of ordinary brokers’ transactions or other transactions that are deemed to be “at the market” offerings, in privately negotiated transactions, which may include block trades, or as otherwise agreed with the sales agents.
As of June 30, 2021, the Company has not issued any common shares under the ATM Program. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs. The Company has no obligation to sell any shares under the ATM Program.
Share Repurchase Program
In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s common shares. Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company’s shares, trading volume and general market conditions. The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion.
During the six months ended June 30, 2021, no shares were repurchased by the Company. During the six months ended June 30, 2020, the Company repurchased 5.9 million common shares at a weighted average share price of $9.22 under this program, for a total of $54.1 million.

Dividends and Distributions
During the three months ended June 30, 2021, the Company declared distributions on common shares and OP units of $0.15 per share/unit. During the three months ended June 30, 2020, the Company temporarily suspended dividends as a result of the COVID-19 pandemic and resulting uncertainty, and as such, no dividends were declared on our common shares or OP units. During the six months ended June 30, 2021 and 2020, respectively, the Company declared distributions on our common shares and OP units of $0.30 and $0.22 per share/unit in the aggregate.
Noncontrolling Interests in Operating Partnership
Noncontrolling interests in the Operating Partnership reflected on the consolidated balance sheets of the Company are comprised of OP units and limited partnership interests in the Operating Partnership in the form of LTIP unit awards. LTIP unit awards were granted to certain executives pursuant to our 2015 Omnibus Share Plan (the “Omnibus Share Plan”) and our 2018 Inducement Equity Plan (the “Inducement Plan”). OP units were issued to contributors in exchange for their property interests in connection with the Company’s property acquisitions in 2017.
The total of the OP units and LTIP units represent a 4.5% and 4.3% weighted-average interest in the Operating Partnership for the three and six months ended June 30, 2021, respectively. Holders of outstanding vested LTIP units may, from and after two years from the date of issuance, redeem their LTIP units for cash, or for the Company’s common shares on a one-for-one basis, solely at our election. Holders of outstanding OP units may redeem their units for cash or the Company’s common shares on a one-for-one basis, solely at our election.
Noncontrolling Interests in Consolidated Subsidiaries
The Company’s noncontrolling interests relate to the 5% interest held by others in our property in Walnut Creek, CA (Mount Diablo) and 17.5% held by others in our property in Massapequa, NY. The net income attributable to noncontrolling interests is presented separately in our consolidated statements of income.









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15.     SHARE-BASED COMPENSATION

Share-Based Compensation Expense
Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income, is summarized as follows:
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands)2021202020212020
Share-based compensation expense components:
Restricted share expense$89 $194 $267 $454 
Stock option expense384 3,259 797 4,127 
LTIP expense(1)
1,203 4,117 2,333 5,300 
Performance-based LTI expense(2)
957 1,027 1,913 1,942 
Deferred share unit (“DSU”) expense93 14 99 36 
Total Share-based compensation expense$2,726 $8,611 $5,409 $11,859 
(1) LTIP expense includes the time-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.
(2) Performance-based LTI expense includes the 2017 OPP plan and the performance-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.

Equity award activity during the six months ended June 30, 2021 included: (i) 313,371 LTIP units granted, (ii) 100,456 LTIP units vested, (iii) 2,886 LTIP units terminated, (iv) 34,532 restricted shares vested, (v) 17,933 restricted shares granted, and (vi) 5,303 restricted shares forfeited.

2021 Long-Term Incentive Plan
On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”). The Plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-half of the program) and performance goals tied to our relative and absolute total shareholder return (“TSR”) during the three-year performance period following their grant (one-half of the program). The total grant date fair value under the 2021 LTI Plan was $7.8 million comprising both performance-based and time-based awards as described further below:

Performance-based awards
For the performance-based awards under the 2021 LTI Plan, participants, have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year performance measurement period (the “Performance Period”) beginning on February 10, 2021 and ending on February 9, 2024. The Company granted performance-based awards under the 2021 LTI Plan that represent 398,977 LTIP Units. The fair value of the performance-based award portion of the 2021 LTI Plan on the date of grant was $3.9 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.
Under the Absolute TSR component, 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period
is equal to 18%, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27%, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36%. The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 16 companies. Under the Relative TSR Component, 40% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35th percentile of the peer group, 100% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55th percentile of the peer group, and 165% of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75th percentile of the peer group, with earning determined using linear interpolation if in between such relative and absolute TSR thresholds.

Time-based awards
The time-based awards granted under the 2021 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years. As of June 30, 2021, the Company granted time-based awards under the 2021 LTI Plan that represent 273,615 LTIP units with a grant date fair value of $3.9 million.
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16.     EARNINGS PER SHARE AND UNIT

Urban Edge Earnings per Share
We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of Urban Edge common shares and participating securities is calculated according to dividends declared and participating rights in undistributed earnings. Restricted shares issued pursuant to our share-based compensation program are considered participating securities, and as such have non-forfeitable rights to receive dividends.
The following table sets forth the computation of our basic and diluted earnings per share:
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands, except per share amounts)2021202020212020
Numerator:
Net income attributable to common shareholders$12,547 $31,255 $32,467 $80,235 
Less: Earnings allocated to unvested participating securities(6)(19)(17)(54)
Net income available for common shareholders - basic$12,541 $31,236 $32,450 $80,181 
Impact of assumed conversions:
OP and LTIP units  1,460 525 
Net income available for common shareholders - dilutive$12,541 $31,236 $33,910 $80,706 
Denominator:
Weighted average common shares outstanding - basic116,981 116,522 116,969 118,744 
Effect of dilutive securities(1):
Restricted share awards53 73 60 79 
Assumed conversion of OP and LTIP units  5,298 784 
Weighted average common shares outstanding - diluted117,034 116,595 122,327 119,607 
Earnings per share available to common shareholders:
Earnings per common share - Basic$0.11 $0.27 $0.28 $0.68 
Earnings per common share - Diluted$0.11 $0.27 $0.28 $0.67 
(1) For the three months ended June 30, 2021 and 2020, the effect of the redemption of OP and LTIP units for Urban Edge common shares would have an anti-dilutive effect on the calculation of diluted EPS. Accordingly, the impact of such redemption has not been included in the determination of diluted EPS for these periods.













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Operating Partnership Earnings per Unit
The following table sets forth the computation of basic and diluted earnings per unit:
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands, except per unit amounts)2021202020212020
Numerator:
Net income attributable to unitholders$13,131 $32,545 $33,926 $83,833 
Less: net income attributable to participating securities(6)(19)(17)(54)
Net income available for unitholders$13,125 $32,526 $33,909 $83,779 
Denominator:
Weighted average units outstanding - basic120,849 120,535 120,806 123,190 
Effect of dilutive securities issued by Urban Edge53 72 60 79 
Unvested LTIP units1,583 800 1,461 813 
Weighted average units outstanding - diluted122,485 121,407 122,327 124,082 
Earnings per unit available to unitholders:
Earnings per unit - Basic$0.11 $0.27 $0.28 $0.68 
Earnings per unit - Diluted$0.11 $0.27 $0.28 $0.68 

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to individuals adversely impacted by the COVID-19 pandemic, and to large and small businesses, particularly our retail tenants, that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, (b) the duration of any such orders or other formal recommendations for social distancing, and the speed and extent to which revenues of our retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments under existing leases, (d) the rate and efficacy of COVID-19 vaccines; (e) the potential adverse impact on returns from redevelopment projects, and (f) the broader impact of the economic contraction and increase in unemployment that has occurred in the short term, and negative consequences that will occur if these trends are not reversed; (ii) the loss or bankruptcy of major tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant, particularly, in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and under which conditions potential tenants will be able to operate physical retail locations in the future; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as potential volatility in the Company’s share price as compared to prices prior to the spread of the COVID-19 pandemic; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR; (ix) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; and (xv) the loss of key executives. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the other documents filed by the Company with the SEC, including the information contained in this Quarterly Report on Form 10-Q.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part I of this Quarterly Report on Form 10-Q.
Overview
Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that manages, develops, redevelops, and acquires retail real estate, primarily in the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of the Company’s real estate properties and other assets. Unless
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the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries.
The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of June 30, 2021, Urban Edge owned approximately 95.6% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired. Urban Edge serves as the sole general partner of the Operating Partnership.
As of June 30, 2021, our portfolio consisted of 70 shopping centers, five malls and two industrial parks totaling approximately 16.2 million square feet.
Critical Accounting Policies and Estimates
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 contains a description of our critical accounting policies, including accounting for real estate, leases and revenue recognition. For the six months ended June 30, 2021, there were no material changes to these policies.

Recent Accounting Pronouncements
Refer to Note 3 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that may affect us.
Results of Operations
We derive substantially all of our revenue from rents received from tenants under existing leases on each of our properties. This revenue includes fixed base rents, recoveries of expenses that we have incurred and that we pass through to the individual tenants and percentage rents that are based on specified percentages of tenants’ revenue, in each case as provided in the respective leases.
Our primary cash expenditures consist of our property operating and capital costs, general and administrative expenses, and interest and debt expense. Property operating expenses include: real estate taxes, repairs and maintenance, management expenses, insurance and utilities; general and administrative expenses include payroll, professional fees, information technology, office expenses and other administrative expenses; and interest and debt expense primarily consists of interest on our mortgage debt. In addition, we incur substantial non-cash charges for depreciation and amortization on our properties. We also capitalize certain expenses, such as taxes, interest and salaries related to properties under development or redevelopment until the property is ready for its intended use.
Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions, dispositions, developments, redevelopments and changes in accounting policies. The results of operations of any acquired properties are included in our financial statements as of the date of acquisition. Our results of operations are affected by national, regional and local economic conditions, as well as macroeconomic conditions, which are at times subject to volatility and uncertainty. The current COVID-19 pandemic has increased volatility and uncertainty and has created significant economic disruption in many markets. Vaccinations for the COVID-19 virus have begun to be widely distributed among the general U.S. population, which has loosened restrictions previously mandated on our tenants identified as nonessential; however the potential emergence of vaccine-resistant variants of COVID-19 may trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. The long-term consequences of the various restrictions taken during the pandemic on consumer behavior is currently unknown. Specifically, the revenue and sales volume for certain tenants identified as nonessential may decline significantly as demand for their services and products declines potentially longer term. We are actively managing our business to respond to the ongoing economic and social impact and uncertainty relating to the COVID-19 pandemic; however, our future near term and potentially longer term results of operations may be significantly adversely affected. See “Pandemic-Related Contingencies” under Liquidity and Capital Resources and “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.







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The following provides an overview of our key financial metrics based on our consolidated results of operations (refer to Net Operating Income (“NOI”), same-property NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section):
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands)2021202020212020
Net income$12,981 $32,545 $33,697 $83,833 
FFO applicable to diluted common shareholders(1)
35,403 55,656 67,162 90,450 
NOI(2)
57,236 47,332 110,815 105,001 
Same-property NOI(2)
56,422 45,204 106,196 97,889 
(1) Refer to page 35 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.
(2) Refer to page 34 for a reconciliation to the nearest GAAP measure.

Development/Redevelopment Activity
The Company has thirteen active development, redevelopment or anchor repositioning projects with total estimated costs of $134.1 million, of which $44.4 million (or 33%) have been incurred and $89.7 million remains to be funded as of June 30, 2021. We plan on generating additional income from our existing assets by redeveloping underutilized existing space, developing new space and pad sites, repositioning anchors, and incorporating non-retail uses such as industrial, self-storage, office and other uses. We continue to monitor the stabilization dates of these projects as a result of the impact of the COVID-19 pandemic on our tenants and vendors. We have identified future projects in our development pipeline, but we are under no obligation to execute and fund any of these projects and each of these projects is being reevaluated considering market conditions.

Acquisition/Disposition Activity
During the six months ended June 30, 2021, we disposed of one property and one property parcel and received proceeds of $23.6 million, net of selling costs, resulting in $11.7 million net gain on sale of real estate.
No properties were acquired during the six months ended June 30, 2021. However, we continue to monitor the market for potential acquisitions that meet our investment criteria.
Real Estate Held for Sale
As of June 30, 2021, one property in Westfield, NJ was classified as held for sale based on an executed contract of sale with a third-party buyer. The aggregate carrying amount of this property was $5.5 million and is included in prepaid expenses and other assets in our consolidated balance sheets as of June 30, 2021. The mortgage debt at the property was reclassified from mortgages payable, net to the accounts payable, accrued expenses and other liabilities line item on our consolidated balance sheets as of June 30, 2021. The property was sold in July 2021.
Acquisitions Under Contract
As of June 30, 2021, we are under contract to acquire two industrial properties totaling 275,000 sf for $55.5 million, that are located near our existing 943,000 sf warehouse park in East Hanover, NJ.
Equity Activity
Equity award activity during the six months ended June 30, 2021 included: (i) 313,371 LTIP units granted, (ii) 100,456 LTIP units vested, (iii) 2,886 LTIP units terminated, (iv) 34,532 restricted shares vested, (v) 17,933 restricted shares granted, and (vi) 5,303 restricted shares forfeited. Refer to Note 15 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for more information regarding the Company’s equity award activity.
On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”). The Plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-half of the program) and performance goals tied to our relative and absolute total shareholder return (“TSR”) during the three-year performance period following their grant (one-half of the program). The total grant date fair value under the 2021 LTI Plan was $7.8 million comprising both performance-based and time-based awards. During the six months ended June 30, 2021, the Company issued 398,977 performance-based LTIP units and 273,615 time-based LTIP units, respectively, in connection with the 2021 LTI Plan.

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Comparison of the Three Months Ended June 30, 2021 to June 30, 2020
Net income for the three months ended June 30, 2021 was $13.0 million, compared to net income of $32.5 million for the three months ended June 30, 2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended June 30, 2021 as compared to the same period of 2020:
Three Months Ended June 30,
(Amounts in thousands)20212020$ Change
Total revenue$94,006 $73,619 $20,387 
Property operating expenses15,891 11,894 3,997 
General and administrative expenses9,484 18,053 (8,569)
Interest and debt expense14,728 18,573 (3,845)
Gain on extinguishment of debt— 34,908 (34,908)
Income tax benefit(34)(13,662)13,628 
Total revenue increased by $20.4 million to $94.0 million in the second quarter of 2021 from $73.6 million in the second quarter of 2020. The increase is primarily attributable to:
$14.7 million decrease in rental revenue deemed uncollectible;
$5.8 million increase in non-cash revenue arising from write-offs, net of reinstatement, of straight-lining of rent in connection with tenants put on a cash basis;
$1.9 million increase as a result of property acquisitions net of dispositions; and
$0.2 million increase in tenant reimbursement income due to higher common area maintenance expenses; offset by
$1.5 million net decrease in property rentals due to lease modifications in conjunction with COVID agreements, tenant closures and natural lease expirations; and
$0.5 million decrease in lease termination income.
Property operating expenses increased by $4.0 million to $15.9 million in the second quarter of 2021 from $11.9 million in the second quarter of 2020. The increase is primarily attributable to:
$2.2 million increase in common area maintenance expenses primarily related to security, repairs, landscaping and temporary tenant closures in conjunction with COVID-19 during the second quarter of 2020; and
$1.8 million increase as a result of property acquisitions net of dispositions.
General and administrative expenses decreased by $8.6 million to $9.5 million in the second quarter of 2021 from $18.1 million in the second quarter of 2020. The decrease is primarily attributable to:
$7.2 million of executive transition costs incurred in the second quarter of 2020 including $5.6 million of accelerated amortizations of unvested equity awards; and
$1.4 million decrease in transaction, severance and other expenses primarily related to the debt restructuring of the Montehiedra mortgage loan.
Interest and debt expense decreased by $3.8 million to $14.7 million in the second quarter of 2021 from $18.6 million in the second quarter of 2020. The decrease is primarily attributable to:
$2.4 million decrease as a result of the troubled debt restructuring of the mortgage secured by Las Catalinas Mall in Puerto Rico in December 2020;
$0.9 million of interest incurred in the second quarter of 2020 resulting from the $250 million draw on our revolving credit agreement in March 2020. All borrowings were repaid in November 2020;
$0.3 million decrease on variable-rate debt due to lower interest rates; and
$0.2 million higher capitalized interest in connection with redevelopment projects.
A gain on extinguishment of debt of $34.9 million in the second quarter of 2020 was recognized as a result of the refinancing of the mortgage secured by The Outlets at Montehiedra, consisting of the forgiveness of the $30 million junior loan plus accrued interest of $5.4 million, offset by the write-off of $0.4 million of unamortized deferred financing fees and $0.1 million of transaction costs.
Income tax benefit decreased by $13.6 million due to the income tax benefit recognized in the second quarter of 2020 attributable to the tax impact of the mortgage refinancing and legal entity restructuring transactions related to our mall in Puerto Rico, The Outlets at Montehiedra.
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Comparison of the Six Months Ended June 30, 2021 to June 30, 2020
Net income for the six months ended June 30, 2021 was $33.7 million, compared to net income of $83.8 million for the six months ended June 30, 2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the six months ended June 30, 2021 as compared to the same period of 2020:
Six Months Ended June 30,
(Amounts in thousands)20212020$ Change
Total revenue$189,667 $166,979 $22,688 
Property operating expenses36,182 26,431 9,751 
General and administrative expenses18,152 27,900 (9,748)
Interest income226 2,105 (1,879)
Gain on sale of real estate11,722 39,775 (28,053)
Interest and debt expense(29,555)(35,748)6,193 
Gain on extinguishment of debt— 34,908 (34,908)
Income tax (benefit)/expense(201)13,562 (13,763)
Total revenue increased by $22.7 million to $189.7 million in the six months ended June 30, 2021 from $167.0 million in the six months ended June 30, 2020. The increase is primarily attributable to:
$14.2 million decrease in rental revenue deemed uncollectible;
$4.5 million increase as a result of property acquisitions net of dispositions;
$4.3 million increase in non-cash revenue arising from write-offs of straight-lining of rent in connection with tenants put on a cash basis during the six months ended June 30, 2020;
$2.3 million increase in tenant reimbursement income due to higher common area maintenance expenses; and
$0.6 million net increase in lease termination income and other income, partially offset by
$3.2 million net decrease in property rentals due to lease terminations and modifications, offset by rent commencements and contractual rent increases.
Property operating expenses increased by $9.8 million to $36.2 million in the six months ended June 30, 2021 from $26.4 million in the six months ended June 30, 2020. The increase is primarily attributable to:
$6.4 million increase in common area maintenance expenses primarily related to higher snow removal and lower costs incurred during temporary tenant closures in connection with COVID-19 during 2020; and
$3.4 million increase as a result of property acquisitions net of dispositions.
General and administrative expenses decreased by $9.7 million to $18.2 million in the six months ended June 30, 2021 from $27.9 million in the six months ended June 30, 2020. The decrease is primarily attributable to:
$7.2 million of executive transition costs incurred in the second quarter of 2020 including $5.6 million of accelerated amortizations of unvested equity awards; and
$2.5 million net decrease in transaction, severance and other expenses.
Interest income decreased by $1.9 million to $0.2 million in the six months ended June 30, 2021 from $2.1 million in the six months ended June 30, 2020. The decrease is primarily attributed to lower interest rates.
We recognized a gain on sale of real estate of $11.7 million in the six months ended June 30, 2021 due to the sale of one property in East Hanover, NJ and a portion of a property in Lodi, NJ. We recognized a gain on sale of real estate of $39.8 million in the six months ended June 30, 2020 due to the sale of three operating properties.
Interest and debt expense decreased by $6.2 million to $29.6 million in the six months ended June 30, 2021 from $35.7 million in the six months ended June 30, 2020. The decrease is primarily attributable to:
$3.8 million decrease as a result of the troubled debt restructuring of the mortgage secured by Las Catalinas Mall in Puerto Rico in December 2020;
$1.0 million of interest incurred in the six months ended June 30, 2020 resulting from the $250 million draw on our revolving credit agreement in March 2020. All borrowings were repaid in November 2020;
$0.7 million decrease due to the refinancing of the mortgage secured by The Outlets at Montehiedra; and
$0.7 million decrease on variable-rate debt due to lower interest rates.
A gain on extinguishment of debt of $34.9 million in the second quarter of 2020 was recognized as a result of the refinancing of the mortgage secured by The Outlets at Montehiedra, consisting of the forgiveness of the $30 million junior loan plus accrued interest of $5.4 million, offset by the write-off of $0.4 million of unamortized deferred financing fees and $0.1 million of transaction costs.
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Income tax decreased from a $13.6 million benefit for the six months ended June 30, 2020 to an expense of $0.2 million for the six months ended June 30, 2021, primarily attributable to the tax impact of the mortgage refinancing and legal entity restructuring transactions related to our mall in Puerto Rico, The Outlets at Montehiedra during the six months ended June 30, 2020.

Non-GAAP Financial Measures

We use NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The most directly comparable GAAP financial measure to NOI is net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. We calculate NOI by adjusting net income to add back depreciation and amortization expense, general and administrative expenses, casualty and real estate impairment losses, interest and debt expense, income tax expense and non-cash lease expense, and deduct management and development fee income from non-owned properties, gains on sale of real estate, interest income, non-cash rental income resulting from the straight-lining of rents and amortization of acquired below market leases net of above market leases. NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "Cash NOI." There have been no changes to the calculation of this metric. However, the Company has decided to refer to this metric as "NOI" instead of "Cash NOI" to further clarify that, consistent with the definition of this metric, the revenue and expenses reflected in this metric include some accrued amounts and are not limited to amounts for which the Company actually received or made cash payment during the applicable period.

We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excludes properties acquired or sold during the periods being compared. We also exclude for the following items in calculating same-property NOI: lease termination fees, bankruptcy settlement income, and income and expenses that we do not believe are representative of ongoing operating results, if any. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors. Same-property NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "same-property Cash NOI." There have been no changes to the calculation of this metric.

Throughout this section, we have provided certain information on a “same-property” basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, which total 72 and 70 properties for the three and six months ended June 30, 2021 and 2020, respectively. Information provided on a same-property basis excludes properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired or sold during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.









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Same-property NOI increased by $11.2 million, or 24.8%, for the three months ended June 30, 2021, compared to the three months ended June 30, 2020 and increased by $8.3 million, or 8.5%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

The following table reconciles net income to NOI and same-property NOI for the three and six months ended June 30, 2021 and 2020, respectively.
Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands)2021202020212020
Net income $12,981 $32,545 $33,697 $83,833 
Management and development fee income from non-owned properties(266)(285)(631)(599)
Other expense427 201 181 456 
Depreciation and amortization22,488 23,299 45,363 46,770 
General and administrative expense9,484 18,053 18,152 27,900 
Gain on sale of real estate— — (11,722)(39,775)
Interest income(90)(422)(226)(2,105)
Interest and debt expense14,728 18,573 29,555 35,748 
Gain on extinguishment of debt— (34,908)— (34,908)
Income tax (benefit) expense(34)(13,662)201 (13,562)
Non-cash revenue and expenses(2,482)3,938 (3,755)1,243 
NOI(1)
57,236 47,332 110,815 105,001 
Adjustments:
Non-same property NOI(2)
(528)(1,624)(3,857)(6,605)
Tenant bankruptcy settlement income and lease termination income(286)(504)(762)(507)
Same-property NOI$56,422 $45,204 $106,196 $97,889 
NOI related to properties being redeveloped889 1,062 1,758 2,340 
Same-property NOI including properties in redevelopment$57,311 $46,266 $107,954 $100,229 
(1) We have historically defined this metric as “Cash NOI.” There have been no changes to the calculation.
(2) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.


















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Funds From Operations
FFO was $35.4 million for the three months ended June 30, 2021 compared to $55.7 million for the three June 30, 2020. FFO was $67.2 million for the six months ended June 30, 2021 compared to $90.5 million for the six months ended June 30, 2020.
We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ (“Nareit”) definition. Nareit defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business, and rental property depreciation and amortization expense. We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period to period both internally and among our peers because this non-GAAP measure excludes net gains on sales of depreciable real estate, real estate impairment losses, rental property depreciation and amortization expense which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. We believe the presentation of comparable period operating results generated from FFO provides useful information to investors because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT and impairments on depreciable real estate or land related to a REIT's main business. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions. FFO may not be comparable to similarly titled measures employed by others.

Three Months Ended June 30,Six Months Ended June 30,
(Amounts in thousands)2021202020212020
Net income$12,981 $32,545 $33,697 $83,833 
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership(584)(1,290)(1,459)(3,598)
Consolidated subsidiaries150 — 229 — 
Net income attributable to common shareholders12,547 31,255 32,467 80,235 
Adjustments:
Rental property depreciation and amortization22,272 23,111 44,958 46,392 
Gain on sale of real estate— — (11,722)(39,775)
Limited partnership interests in operating partnership(1)
584 1,290 1,459 3,598 
FFO applicable to diluted common shareholders$35,403 $55,656 $67,162 $90,450 
(1) Represents earnings allocated to LTIP and OP unitholders for unissued common shares which have been excluded for purposes of calculating earnings per diluted share for the periods presented.




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Liquidity and Capital Resources

Due to the nature of our business, the cash generated from operations is primarily paid to our shareholders and unitholders of the Operating Partnership in the form of distributions. Our status as a REIT requires that we generally distribute at least 90% of our REIT’s ordinary taxable income each year. Our Board of Trustees declared a quarterly dividend of $0.15 per common share and OP unit for the first quarter of 2021, or an annual rate of $0.60. Historically, we have paid regular cash dividends; however, the timing, declaration, amount and payment of distributions to shareholders and unitholders of the Operating Partnership fall within the discretion of our Board of Trustees. Our Board of Trustees’ decisions regarding the payment of dividends depends on many factors, such as maintaining our REIT status, our financial condition, earnings, capital requirements, debt service obligations, limitations under our financing arrangements, industry practice, legal requirements, regulatory constraints, uncertainties related to the COVID-19 pandemic and other factors.

Property rental income is our primary source of cash flow and is dependent on a number of factors, including our occupancy level and rental rates, as well as our tenants’ ability to pay rent. Our properties have historically provided us with a relatively consistent stream of cash flow that enables us to pay operating expenses, debt service and recurring capital expenditures. The COVID-19 pandemic had an adverse impact on our short-term cash flow by negatively impacting our tenants’ ability to pay rent. As of June 30, 2020, we had collected 66% of property rentals and tenant expense reimbursements billed in the quarter. Throughout the pandemic, we have worked with our tenants to evaluate the need for and offer rent relief, including in the form of rent concessions and rent deferrals. As of July 30, 2021, we have collected 84% of amounts billed during the second quarter of 2020, and the collection rate has substantially improved each subsequent quarter. We have collected 97% of rents and tenant expense reimbursements billed during the six months ended June 30, 2021. Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales.
Our short-term cash requirements consist of normal recurring operating expenses, lease obligations, regular debt service requirements, recurring expenditures (general & administrative expenses), expenditures related to leasing activity and distributions to shareholders and unitholders of the Operating Partnership. Our long-term capital requirements consist primarily of maturities under our long-term debt agreements, development and redevelopment costs and potential acquisitions.
At June 30, 2021, we had cash and cash equivalents, including restricted cash, of $379 million and no amounts drawn on our $600 million revolving credit agreement, which matures on January 29, 2024.

The Company continues to monitor the COVID-19 pandemic and its impact on our overall liquidity position and outlook. The ultimate impact that COVID-19 may have on our operational and financial performance over the next 12 months is currently uncertain and will depend on many factors, including without limitation, its magnitude and duration and the adverse financial impact on our tenants from reduced business operations and social distancing requirements, which may impact tenants’ ability to generate sales at sufficient levels to cover operating costs such as rent. Our ability to utilize amounts available under our revolving credit facility in the future will depend on our continued compliance with the applicable financial covenants and other terms of our revolving credit agreement, which may be impacted by failure of tenants to pay rent. We have no debt scheduled to mature until the second quarter of 2022. We currently believe that cash on hand, available revolving credit and general ability to access the capital markets, should be sufficient to finance our operations and fund our debt service requirements and capital expenditures over the next 12 months.

Summary of Cash Flows
Cash and cash equivalents, including restricted cash, was $379.0 million at June 30, 2021, compared to $419.3 million at December 31, 2020 and $639.8 million at June 30, 2020, a decrease of $40.2 million and $260.8 million, respectively. Our cash flow activities are summarized as follows:
Six Months Ended June 30,
(Amounts in thousands)20212020$ Change
Net cash provided by operating activities$53,585 $41,977 $11,608 
Net cash provided by/(used in) investing activities3,847 (48,900)52,747 
Net cash (used in)/provided by financing activities(97,652)161,622 (259,274)
Operating Activities
Net cash flow provided by operating activities primarily consists of cash inflows from rental revenue and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.
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Net cash provided by operating activities of $53.6 million for the six months ended June 30, 2021 increased by $11.6 million from $42.0 million for the six months ended June 30, 2020, driven by the improved collection rates on property rentals and tenant expense reimbursements.
Investing Activities
Net cash flow provided by or used in investing activities is impacted by the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.
Net cash provided by investing activities of $3.8 million for the six months ended June 30, 2021, increased by $52.7 million compared to net cash used in investing activities of $48.9 million for the six months ended June 30, 2020 primarily due to (i) $92.1 million decrease in cash used for the acquisition of real estate, offset by (ii) $8.2 million increase in cash used for real estate development and capital improvements, and (iii) $31.2 million decrease in cash provided by the sale of properties.
Financing Activities
Net cash flow provided by or used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other payments associated with our outstanding indebtedness.
Net cash used in financing activities of $97.7 million for the six months ended June 30, 2021, decreased by $259.3 million from cash provided by financing activities of $161.6 million for the six months ended June 30, 2020 primarily due to (i) $250.0 million of cash borrowings provided under the Company’s revolving credit agreement in March 2020, (ii) $83.0 million of proceeds from borrowings under mortgage loans in the second quarter of 2020, (iii) $64.4 million increase in distributions to shareholders and unitholders of the Operating Partnership, offset by (iv) $80.2 million decrease in debt repayments, and (v) $54.1 million of cash paid to repurchase common shares in 2020.
Financing Activities and Contractual Obligations
Below is a summary of our outstanding debt and weighted average interest rates as of June 30, 2021.
(Amounts in thousands)Principal balance at June 30, 2021Weighted Average Interest Rate at June 30, 2021
Mortgages payable:
Fixed rate debt$1,422,841 4.16%
Variable rate debt(1)
168,319 1.83%
Total mortgages payable1,591,160 3.91%
Westfield (One Lincoln Plaza)(2)
(4,714)
Unamortized debt issuance costs(9,033)
Total mortgages payable, net of unamortized debt issuance costs$1,577,413 
(1) As of June 30, 2021, $80 million of our variable rate debt bears interest at one month LIBOR plus 190 bps and $89 million of our variable rate debt bears interest at one month LIBOR plus 160 bps.
(2) Loan repaid in July in connection with the disposition of the property.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of June 30, 2021. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of June 30, 2021, we were in compliance with all debt covenants.

On January 15, 2015, we entered into a $500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions. On March 7, 2017, we amended and extended the Agreement. The amendment increased the credit facility size by $100 million to $600 million and extended the maturity date to March 7, 2021 with two six-month extension options. On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024 with two six-month extension options. Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05% to 1.50% and an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to increase if our leverage ratio increases above predefined thresholds. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x. No amounts had been drawn under the Agreement as of June 30, 2021.

On June 3, 2020, we amended the Agreement to, among other things, modify certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized. Under the
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Agreement, our financial covenants are generally measured using operating results of a trailing four-quarter period from the prior trailing four-quarter period, including the maximum leverage ratio, which measures our asset value based on net operating income, as defined in the Agreement. Net operating income is defined, in part, based on rents and other revenues received in the ordinary course of business from our properties. We currently believe that with our cash on hand, we will have sufficient resources to finance our operations and fund our debt service requirements and capital expenditures for at least the next twelve months.

When LIBOR is discontinued, which is currently anticipated to be during 2023, the interest rates for our debt following such event will be based on either alternate base rates or agreed upon replacement rates. Such an event would not affect our ability to borrow or maintain already outstanding borrowings, although it could result in higher interest rates.

On May 5, 2021 we established an at-the-market equity program (the “ATM Program”), pursuant to which we may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million. Sales under the ATM Program may be made from time to time, as needed, by means of ordinary brokers’ transactions or other transactions that are deemed to be “at the market” offerings, in privately negotiated transactions, which may include block trades, or as otherwise agreed with the sales agents.

As of June 30, 2021, we have not issued any common shares under the ATM Program. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs. The Company has no obligation to sell any shares under the ATM Program.

Capital Expenditures
The following summarizes capital expenditures presented on a cash basis for the six months ended June 30, 2021 and 2020:
Six Months Ended June 30,
(Amounts in thousands)20212020
Capital expenditures:
Development and redevelopment costs$13,729 $6,289 
Capital improvements3,831 3,651 
Tenant improvements and allowances1,791 1,230 
Total capital expenditures$19,351 $11,170 

As of June 30, 2021, we had approximately $134.1 million of active redevelopment, development and anchor repositioning projects at various stages of completion, an increase of $1.7 million from $132.4 million of projects as of December 31, 2020. We have advanced these projects and incurred $16.3 million of additional spend since December 31, 2020. We anticipate spending an additional $89.7 million to complete these projects, which we expect to occur over the next six to eighteen months depending on any restrictions on construction activity. We expect to fund these projects using cash on hand, proceeds from dispositions, or from secured debt.

Commitments and Contingencies
Insurance
The Company maintains numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber, workers’ compensation and automobile-related liabilities. However, all such policies are subject to terms, conditions, exclusions, deductibles and sub-limits, amount other limiting factors. For example, the Company’s terrorism insurance excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization Act.
The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $50 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses. On December 23, 2020, the Company initiated litigation in New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.
Insurance premiums are typically charged directly to each of the properties but not all of the cost of such premiums are recovered. The Company is responsible for deductibles, losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material.
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We continue to monitor the state of the insurance market and the scope and costs of available coverage. We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.
Certain of our loans and other agreements contain customary covenants requiring the maintenance of insurance coverage. Although we believe that we currently have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders or other counterparties insist on greater coverage than we are able to obtain, such requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

Environmental Matters
Each of our properties has been subjected to varying degrees of environmental assessment at various times. Based on these assessments, we have accrued costs of $1.8 million on our consolidated balance sheets as of both June 30, 2021 and December 31, 2020, respectively, for remediation costs for environmental contamination at certain properties. While this accrual reflects our best estimates of the potential costs of remediation at these properties, there can be no assurance that the actual costs will not exceed these amounts. Although we are not aware of any other material environmental contamination, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us.

Pandemic-Related Contingencies
Many of our tenants faced adverse financial consequences from reduced business operations and social distancing requirements resulting from the COVID-19 pandemic. As of June 30, 2021, substantially all of our portfolio's gross leasable area was open for business and the Company collected approximately 96% of rental revenue for the second quarter of 2021. Since the pandemic was declared in 2020, the Company has granted rent concessions and other lease-related relief, such as rent deferrals, to certain impacted tenants. We evaluate rent relief requests on a case-by-case basis and not all requests are granted. Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income. As of June 30, 2021, we have executed rent deferrals and abatements in connection with tenant relief from the pandemic.
The Company is closely monitoring changes in the collectibility assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences due to the COVID-19 pandemic. The Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this time, with the exception of abatements already discussed with tenants or deferred rents that may not be collected.

Bankruptcies
Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration. In the event a tenant with a significant number of leases or square footage in our shopping centers files for bankruptcy and rejects its leases with us, we could experience a reduction in our revenues. We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants in arrears or operating retail formats that are experiencing significant changes in competition, business practice, or store closings in other locations. Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection during the year ended December 31, 2020. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

Inflation and Economic Condition Considerations
Most of our leases contain provisions designed to partially mitigate the impact of inflation. Although inflation has been low in recent periods and has had a minimal impact on the performance of our shopping centers, it is very possible that inflation will increase in future years. Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation, although some larger tenants have capped the amount of these operating expenses they are responsible for under the lease. A small number of our leases also include percentage rent clauses enabling us to receive additional rent based on tenant sales above a predetermined level, which sales generally increase as prices rise and are typically related to increases in the Consumer Price Index or similar inflation indices.

Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements as of June 30, 2021 or December 31, 2020.
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. The following table discusses our exposure to hypothetical changes in market rates of interest on interest expense for our variable rate debt and fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. This analysis does not take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure. Our exposure to a change in interest rates is summarized in the table below.
20212020
(Amounts in thousands)June 30, BalanceWeighted Average Interest RateEffect of 1% Change in Base RatesDecember 31, BalanceWeighted Average Interest Rate
Variable rate mortgages168,319 1.83%1,683 $169,371 1.90%
Fixed rate mortgages1,422,841 4.16%— 
(2)
1,428,026 4.16%
$1,591,160 
(1)
$1,683 $1,597,397 
(1)
(1) Excludes unamortized debt issuance costs of $9.0 million and $9.9 million as of June 30, 2021 and December 31, 2020, respectively.
(2) If the weighted average interest rate of our fixed rate debt increased by 1% (i.e. due to refinancing at higher rates), annualized interest expense would have increased by approximately $14.2 million based on outstanding balances as of June 30, 2021.

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of June 30, 2021, we did not have any material hedging instruments in place.

Fair Value of Debt

The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of June 30, 2021, the estimated fair value of our consolidated debt was $1.6 billion.

Other Market Risks

As of June 30, 2021, we had no material exposure to any other market risks (including foreign currency exchange risk or commodity price risk).

In making this determination and for purposes of the SEC’s market risk disclosure requirements, we have estimated the fair value of our financial instruments at June 30, 2021 based on pertinent information available to management as of that date. Although management is not aware of any factors that would significantly affect the estimated amounts as of June 30, 2021, future estimates of fair value and the amounts which may be paid or realized in the future may differ significantly from amounts presented.

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ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures (Urban Edge Properties)
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.
There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the three months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures (Urban Edge Properties LP)
The Operating Partnership’s management maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer of our general partner, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.
The Operating Partnership’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of our general partner, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of our general partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.
There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the three months ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
We are party to various legal actions that arise in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A.    RISK FACTORS
Except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 17, 2021.
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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Urban Edge Properties
(a) Recent Sales of Unregistered Securities: Not applicable.
(b) Use of Proceeds from Sales of Registered Securities: Not applicable.
(c) Issuer Purchases of Equity Securities:
Period(a)
Total Number of Shares Purchased
(b)
Average Price Paid per Share(2)
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Program(1)
April 1, 2021 - April 30, 2021— $— — $145,900,000 
May 1, 2021 - May 31, 2021— — — $145,900,000 
June 1, 2021 - June 30, 2021751 19.58 — $145,900,000 
751 $19.58 — 
(1) In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s shares. Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion.
(2) Represents common shares surrendered by employees to us to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common shares.

Urban Edge Properties LP
(a) Recent Sales of Unregistered Securities: Not applicable.
(b) Use of Proceeds from Sales of Registered Securities: Not applicable.
(c) Issuer Purchases of Equity Securities: Not applicable.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5.     OTHER INFORMATION
None.

ITEM 6.    EXHIBITS

The exhibits listed below are included in, or incorporated by reference into, this Quarterly Report on Form 10-Q.

INDEX TO EXHIBITS

The following exhibits are included as part of this Quarterly Report on Form 10-Q:
Exhibit NumberExhibit Description
101.SCH*Inline XBRL Taxonomy Extension Schema
101.CAL*Inline XBRL Extension Calculation Linkbase
101.LAB*Inline XBRL Extension Labels Linkbase
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase
104*Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)
* Filed herewith
** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
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PART IV

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

URBAN EDGE PROPERTIES
(Registrant)
/s/ Mark Langer
Mark Langer, Chief Financial Officer
Date: August 4, 2021
URBAN EDGE PROPERTIES LP
By: Urban Edge Properties, General Partner
/s/ Mark Langer
Mark Langer, Chief Financial Officer
Date: August 4, 2021




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