Urban Edge Properties NYSE: UE reported third-quarter results that included higher funds from operations, continued same-property net operating income growth and an increased full-year outlook, while outlining a strategy to recycle capital into higher-growth shopping centers and expand selectively into South Florida.
FFO as adjusted totaled $0.38 per share, up 6% from the third quarter of 2025 and also up 6% year to date, Chairman and Chief Executive Officer Jeff Olson said. Same-property NOI, including redevelopment activity, rose 4.6% during the quarter and 3.6% through the first nine months of the year.
The company raised its 2026 FFO as adjusted guidance by $0.01 per share at the midpoint to a range of $1.52 to $1.54 per share. The outlook implies 7% growth from 2025, according to Olson. Urban Edge also increased its full-year same-property NOI growth guidance, including redevelopment, to a 4.1% midpoint from 3.5% previously.
Capital Recycling and Florida Entry
Urban Edge continued its capital-recycling program during the quarter, selling Briarcliff Commons, a Kohl’s-anchored shopping center in Morris Plains, New Jersey, for $60.5 million. Olson said the transaction reduced Kohl’s position among the company’s tenants by annual base rent, moving it from Urban Edge’s third-largest tenant to its seventh-largest.
The sale was structured as an accretive reverse 1031 exchange alongside the company’s acquisition of Village at Bridgewater Commons in New Jersey.
Earlier in October, Urban Edge completed its $90.3 million acquisition of Regency Court, a 140,000-square-foot Publix- and Walgreens-anchored center in Boca Raton, Florida. The transaction marked the company’s entry into Florida, a market Olson described as a natural extension of its existing footprint.
Regency Court is located in an affluent trade area near Woodfield Country Club, with average household income of $194,000 within three miles and more than $280,000 within one mile, according to Olson. The property has no other grocery-anchored center within two miles and attracts 3.3 million annual visitors, with traffic continuing to rise.
Olson said Urban Edge underwrote the acquisition based on rent-growth opportunities rather than the approximately 4% going-in yield. Both anchor tenants pay below-market rents, and their leases, including options, expire in six years. The company expects the asset to generate an 8% to 9% unlevered internal rate of return. Chief Financial Officer Mark Langer said the GAAP yield is expected to be “in the 5s,” although purchase price allocation had not been finalized.
With Regency Court, Village at Bridgewater Commons and The Shops at West Falls Church in Virginia, Urban Edge has acquired $185 million of shopping centers during 2026. Management said it intends to pursue additional Florida opportunities selectively, potentially recycling capital from stabilized, high-credit and lower-growth power centers in New Jersey. Olson said the company may also consider other parts of Florida, depending on individual real estate opportunities.
Leasing Demand Supports Rent Growth
Chief Operating Officer Jeff Mooallem said the company signed 37 leases totaling 463,000 square feet in the third quarter. That activity included 26 renewals covering 406,000 square feet at a 12% spread and 11 new leases totaling 58,000 square feet at a 27% same-space spread.
Same-property leased occupancy reached 96.6%, up 20 basis points from the prior quarter, while shop occupancy was unchanged at 91.7%. New leasing included agreements with Veterinary Emergency Group, Foot Locker, First Watch, McDonald’s, Honeygrow and 7 Brew Coffee.
Management cited a constrained supply of retail space, particularly larger box space, as a source of stronger landlord negotiating leverage. Urban Edge’s same-space new lease cash spreads were 28% year to date. Mooallem said the company is targeting rent spreads of about 50% in the fourth quarter and more than 30% for the full year, with both anchor and shop leasing contributing.
The signed-but-not-open pipeline stood at $21 million, representing 7% of annualized NOI. Langer said $2.6 million of annualized gross rent commenced during the third quarter, with another $700,000 expected in the fourth quarter and almost $13 million expected to be recognized in 2027.
Redevelopment, Costs and Balance Sheet
Urban Edge stabilized two projects during the quarter with a combined $9 million investment and an average 18% yield: Nordstrom Rack and Fidelity at Manalapan Commons, and a new Adidas store at Bergen Town Center. Over the past 12 months, the company completed $40 million of projects at a blended 23% yield.
The company also began a $7 million multi-tenant pad development at Ledgewood Commons for Veterinary Emergency Group and two additional tenants. Its active redevelopment pipeline totaled $152 million, including $57 million still to be funded, with an expected yield of about 12%.
Mooallem said average shop leasing costs declined roughly 15% compared with 2024 through the first three quarters of 2026, while average anchor leasing costs fell by more than 30%. He attributed the change partly to an increase in as-is leasing agreements and reduced tenant demands for specific construction work.
During October, Urban Edge modified and extended its $70 million mortgage on The Outlets at Montehiedra in Puerto Rico, adding $17 million of interest-only B-note proceeds at a fixed 6.95% rate. Langer said Puerto Rico income taxes make the debt’s tax-effective interest rate 3.9%. The mortgage’s term was extended to seven years and now carries a 5.4% current weighted average interest rate.
After accounting for post-quarter borrowing for Regency Court, the company reported more than $875 million in liquidity, including $86 million of cash, $138 million drawn on its credit facility and no borrowings on its five- or seven-year delayed-draw term loans. Net debt to EBITDA was 5.7 times in the third quarter.
Management also said Bruckner Commons is expected to see several tenants—including Chick-fil-A, Chipotle, BJ’s, Ross and dd’s DISCOUNTS—open during the first half of 2027. Mooallem said the center is largely leased and that the new tenants should further support demand as future space becomes available.
About Urban Edge Properties (NYSE:UE)
Urban Edge Properties NYSE: UE is a self-managed real estate investment trust that owns, manages and develops retail and mixed-use properties. Its portfolio is focused primarily on shopping centers anchored by grocery stores and other essential-service retailers, as well as properties serving densely populated communities.
The company's properties are concentrated in the Washington, DC, and New York metropolitan areas, including locations in the surrounding suburbs. Urban Edge typically seeks to enhance the value of its properties through leasing, redevelopment, property improvements and selective acquisitions or dispositions.
Urban Edge was formed as an independent publicly traded company through a spin-off from Vornado Realty Trust in 2015.
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