UBRAN EDGE PROPERTIES 2026 Q2 Earnings Call

Thank you, Ariba, good evening, everyone. We had a great second quarter with results that exceeded our internal expectations. We reported record FFO as adjusted of $0.40 per share, a 10% increase over the second quarter of last year and 7% year to date. Same property NOI, including redevelopment, grew 3.2% for the quarter and 3% year to date. Demand for high-quality space across our markets remains strong, and there continues to be limited availability of quality vacancies in our trade areas. Traffic across our centers is up 3% in the second quarter versus the prior year, underscoring the strength of our value and necessity-oriented merchandise mix. Traffic increases were particularly noticeable at properties where we have upgraded our tenancy, including Bergen, Woodbridge, Hudson Mall, and Totowa.

Our SNO pipeline represents $22 million of future annual gross rent, or approximately 7% of current NOI, and remains a meaningful and highly visible contributor to future earnings growth. We are most excited about the improvements we are making at Bruckner Commons in the Bronx with the addition of BJ's Wholesale Club, Ross, Chick-fil-A, and Chipotle. These tenants are all under construction with rent commencement dates beginning throughout 2027 and totaling over $8 million in annual rent. We continued to execute our capital recycling strategy focused on improving both asset quality and long-term growth. In July, we acquired the Shops at West Falls Church, an 85,000 sq ft Safeway-anchored center in Falls Church, Virginia for $40 million.

The center sits in a densely populated and affluent submarket of Washington, D.C., with average annual household income of approximately $200,000 within a 3-mile radius and offers visible growth through lease-up, contractual annual rent increases, and mark-to-market opportunities. We also purchased a ground lease position at Shoppers World in Framingham, Massachusetts for $10.5 million. Cap rate on these two purchases average 6% and should generate an unleveraged IRR of 9%. We are also under contract to sell Briarcliff Commons, a Kohl's-anchored center in New Jersey, for $60.5 million, which we expect to close this month. The market for acquisitions remains highly competitive. We are seeing significant capital, both institutional and private, chasing retail, which has compressed cap rates across the sector. However, given the fragmented nature of the market, we are still finding a handful of deals that meet our return thresholds.

We expect to fund some of that activity by selling lower growth, high credit stabilized assets from our existing portfolio. Based on our strong first half results, we raised our full year FFO as adjusted guidance by $0.02 per share at the midpoint to a new range of $1.50 to $1.54 per share, implying 6% growth over 2025. There are several factors that differentiate Urban Edge from our peers. Our portfolio is concentrated in the D.C. to Boston corridor, the most densely populated supply-constrained region of the country. We own 100% interest in nearly all of our properties, financed with 31 individual non-recourse mortgages with our remaining 44 assets unencumbered. On top of that, we have a differentiated redevelopment platform with an active pipeline of $155 million expected to yield 12%, and our signed but not open pipeline will grow our NOI by 7%.

Finally, our capital recycling program is having a meaningful impact on our portfolio quality and growth rate. Over the past three years, we have acquired approximately $700 million of high-quality shopping centers at a 7% cap rate and have sold approximately $500 million of non-core property at a 5.2% cap rate. Collectively, these differentiating factors give us multiple levers for durable, visible growth. Lastly, our condolences to Jim Taylor's family, colleagues, and friends. He was my favorite advisor as a banker over 20 years ago and a formidable competitor as Chief Executive Officer of Brixmor. Rest in peace, Jim. I will now turn it over to our Chief Operating Officer, Jeff Mooallem.

Thanks, Jeff, and good evening everyone. The demand for high-quality retail space in 2026 has allowed us to become much more strategic in our leasing. In both anchor and shop leasing, we ask our team to be selective, to identify the best long-term tenants for each asset, and to push hard on both the initial rent and capital and the ongoing economics, like rent increases and option terms. We are seeing the results of those efforts. In the second quarter, we executed 26 leases, 13 new and 13 renewal, for a total of 199,000 square feet. New leases generated a same-space cash spread of 13%, with renewals and option exercises generating a same-space cash spread of 10%. The new lease spread was lower than in the first quarter, as this metric fluctuates quarter to quarter based on our size. New lease spreads year to date are nearly 30%.

Based on leases in our pipeline, we are confident cash spreads on new leases will exceed 20% for the year, which would be the fifth consecutive year we attained that level. Same-property leased occupancy ended the quarter at 96.3%, a decrease of 10 basis points versus the prior quarter and down 40 basis points from 2Q 2025. The decrease was mostly the result of the unexpected Wren Kitchens bankruptcy, which occupied two locations within our portfolio. We were able to collect a meaningful settlement on those leases and expect Wren's departure to allow for an improved merchandising mix at healthy spreads over what Wren was paying. More to come later this year on those efforts. Shop occupancy in the quarter declined 70 basis points sequentially to 91.7%, in large part due to the greater emphasis we are placing on tenant quality.

About half of the decrease in shop occupancy was tied to a handful of recapture opportunities where we did not wish to renew or retain the existing tenant. Replacing weaker shop tenants almost always results in stronger assets in the long run. Over the balance of the year, we expect to backfill shop space at average rents in the $45 a square foot range, a mark to market of approximately 20%, and push shop occupancy back to over 93%. On the development front, we stabilized one project at Hudson Mall in Jersey City, New Jersey, with the opening of a new Burlington store in May. Coupled with the addition of HomeGoods, which is under construction and scheduled to open later this year, this marks the beginning of our reinvention of Hudson Mall, a development we are really excited about and will be talking about more in the subsequent quarters.

We also activated a new anchor project at Ledgewood Commons and a new multi-tenant outparcel at Woodmore Town Center. In the last 12 months, we've invested $33 million in completed projects that are now generating an average yield of 25%. Our active development pipeline, comprised exclusively of projects emanating from signed leases, now stands at $155 million with approximately $67 million remaining to fund and remains on track to generate an approximate 12% yield. Even more exciting is our shadow pipeline, projects we have not activated yet but expect to be meaningful contributors to NOI in future years. These include additional multi-tenant pad developments and new stores for some of our most important anchor tenants.

With the current environment of rising rents and virtually no new supply, redevelopments are penciling out stronger than they have in many years, and the capital demanded from landlords to move forward with new stores is on average lower than at any time I recall in the last 15 years. It is indeed a good time to be on this side of the table, and we're using that leverage to make the best deals we can. With that, I'll turn it over to our CFO, Mark Langer.

Thank you, Jeff, and good evening everyone. We were pleased to deliver another strong quarter marked by solid earnings, progress on capital recycling, and continued confidence in our ability to grow occupancy at attractive rents. FFO as adjusted was $0.40 per share, an increase of approximately 10% over the second quarter of last year. Same-property NOI, including redevelopment, increased 3.2% compared to the second quarter of 2025. NOI growth in the quarter exceeded our expectations and was driven by higher percentage rents, higher net recovery revenue, collections on prior period reserves, and lower real estate taxes. FFO, as adjusted, also benefited from some one-time items, including lease termination income received from Wren Kitchens of approximately $0.02 per share and $0.01 a share from accelerated amortization of non-cash revenue and the receipt of a multi-year real estate tax refund that each contributed about $500,000.

Turning to our balance sheet and liquidity position, we remain in excellent shape with total liquidity of approximately $960 million, including $82 million of cash on hand. We ended the quarter with $55 million drawn on our credit facility and no amount drawn on either of our five-year or seven-year delayed draw term loans. Our net debt to adjusted EBITDA was 5.5 times in the second quarter, positioning us well to capitalize on future growth opportunities. Looking ahead to the remainder of 2026, we are increasing our FFO as adjusted guidance by $0.02 per share at the midpoint to a new range of $1.50-$1.54 per share and projecting same-property NOI growth, including redevelopment, to be in the range of 3.25%-3.75%, reflecting a 25 basis point increase to the low end of the range.