Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the three and six months ended April 30, 2018.
Net income applicable to Class A Common and Common stockholders
for the second quarter of fiscal 2018 was $9,598,000 or $0.25 per
diluted Class A Common share and $0.23 per diluted Common share,
compared to $24,101,000 or $0.64 per diluted Class A Common share
and $0.57 per diluted Common share in last year’s second quarter.
Net income attributable to Class A Common and Common stockholders
for the first six months of fiscal 2018 was $14,519,000 or $0.39
per diluted Class A Common share and $0.34 per diluted Common
share, compared to $27,513,000 or $0.74 per diluted Class A Common
share and $0.65 per diluted Common share in the first six months of
fiscal 2017. Net income in the three and six months ended April 30,
2017 includes a gain on sale of property in the amount of $19.5
million. Net income in the three and six months ended April 30,
2018 includes lease termination income in the amount of $3.7
million.
Funds from operations (“FFO”) for the second quarter of fiscal
2018 was $16,950,000 or $0.45 per diluted Class A Common share and
$0.40 per diluted Common share, compared with $11,204,000 or $0.30
per diluted Class A Common share and $0.26 per diluted Common share
in last year’s second quarter. For the first six months of fiscal
2018, FFO amounted to $29,200,000 or $0.78 per diluted Class A
Common share and $0.69 per diluted Common share, compared to
$21,569,000 or $0.58 per diluted Class A Common share and $0.51 per
diluted Common share in the corresponding period of fiscal 2017.
FFO in the three and six months ended April 30, 2018 includes lease
termination income in the amount of $3.7 million.
At April 30, 2018, the company’s consolidated properties were
92.5% leased (versus 92.7% at the end of fiscal 2017) and 91.6%
occupied (versus 91.0% at the end of fiscal 2017). The small drop
in the company’s leased rate in the first half of the year was
predominantly related to the company absorbing 6,800 square feet of
vacancies when the company purchased 470 Main Street in Ridgefield,
CT. The company is marketing this space for lease.
Both the percentage of property leased and the percentage of
property occupied referenced in the preceding paragraph exclude the
company’s unconsolidated joint ventures. At April 30, 2018, the
company had equity interests in seven unconsolidated joint ventures
(751,000 square feet), which were 97.7% leased, unchanged from the
end of fiscal 2017.
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of Urstadt Biddle Properties Inc., said,
“We are pleased to report that we had a very good quarter. Our FFO
increased by 51.3% on a dollar value basis and 51.0% on a Class A
Common per share basis, inclusive of the $3.7 million lease
termination revenue recorded this quarter relating to a tenant
space at our Ferry Plaza property discussed below, when compared
with our operating results in last year’s second quarter. This
increase was the result of a number of positive transactions
completed by the company in fiscal 2017 as well as positive events
this quarter. We completed the sale of our vacant Westchester
Pavilion property in March of fiscal 2017 for $57 million and
re-invested those proceeds in several new properties and other
investments, and we are continuing to see earnings improvement in
our operating results as that capital is now fully deployed. In
addition, we were able to complete two accretive financing
transactions in fiscal 2017, which increased our operating results
this quarter, and will continue to have a positive impact going
forward. In July 2017, the company refinanced its largest mortgage,
reducing the interest rate from 5.52% to 3.398%, which is now
saving the company over $1 million in interest expense per annum.
Also, in October 2017, we redeemed all $129 million of our 7.125%
Series F Cumulative Preferred Stock using proceeds from the sale of
the Pavilion and the issuance of $115 million of 6.25% Series H
Cumulative Preferred Stock. This reduced preferred stock
outstanding, along with the lower coupon, is now saving the company
over $2 million per annum in preferred stock dividends. This
quarter, we reached an agreement with Acme, at our Ferry Plaza
property located in Newark, NJ, to terminate its lease several
years early, for which we received a $3.7 million lease termination
payment. We are very pleased our FFO payout ratio continues to
improve as we know our investors greatly value the safety and
consistent growth of our dividend through all types of economic
cycles.”
Mr. Biddle continued……“This quarter we completed the purchase of
the Tanglewood Shopping Center, located in Yonkers, NY. Tanglewood
is a 27,000 square foot shopping center consisting of two retail
buildings. The primary building, which fronts Central Park Avenue,
one of the premier retail corridors in Westchester County, NY,
consists of approximately 22,300 square feet, is anchored by an
AutoZone and contains other national and regional service and food
tenants. The secondary building consists of approximately 4,700 SF
and is leased to CKO Kickboxing (a 70+ unit chain), a nail salon
and a market. The property is currently 100% leased. On the leasing
front, we are pleased to report that this quarter we signed leases
for two vacant grocery stores in our portfolio. The first was a
lease with Whole Foods Market for a 40,000 square foot store,
formerly occupied by A&P at our Valley Ridge Shopping Center in
Wayne, NJ. This twenty-year lease is contingent upon our ability to
obtain a small expansion of our property to accommodate Whole Foods
space requirements, and we have started this process with the town.
Assuming the approvals are obtained, we expect to deliver the space
to Whole Foods in January 2019 with the store to be open and paying
rent later in 2019. We will not include this lease in our new
leasing metrics until municipal approval is obtained. We are also
planning to upgrade the façade of the property to be complementary
with the Whole Foods store and to enable us to attract the kind of
co-tenants that a Whole Foods anchored-center traditionally has
been able to attract. This is one of the first leases Whole Foods
has signed since its acquisition by Amazon, and it will be Whole
Foods first store in Passaic County, NJ. The second major lease is
with Seabra Foods, the premier Portuguese/Spanish specialty
supermarket, for a 62,000 square foot store at our Ferry Plaza
Shopping Center in the Ironbound area of Newark, NJ. Seabra is
replacing Acme, which closed its store in this location in 2017.
Acme struggled to merchandise the store in a manner that met the
preferences of the local community, so we reached an agreement with
Acme for an early termination of its lease and re-leased the store
to Seabra. Seabra intends to open a flagship supermarket and
wholesale club at this location which is within a half mile of
Seabra’s corporate headquarters. Seabra operates 12 supermarkets in
New Jersey, Massachusetts, Rhode Island and Florida. Seabra also
has a substantial business importing specialty foods from Portugal,
Spain and Brazil and has a very loyal customer base. The Ironbound
area of Newark where our shopping center is located is populated by
a very high concentration of people of Portuguese and Brazilian
descent, and we can think of no better supermarket to anchor our
shopping center. Seabra took occupancy of the store in May and
expects to be open for business by year-end. These are our first
leases with Whole Foods and Seabra, and we consider each to be a
substantial improvement for the properties they will occupy.”
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
83 properties containing approximately 5.1 million square feet of
space. Listed on the New York Stock Exchange since 1970, it
provides investors with a means of participating in ownership of
income-producing properties. It has paid 193 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 24
consecutive years.
Certain statements contained herein may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other
things, risks associated with the timing of and costs associated
with property improvements, financing commitments and general
competitive factors.
(Table Follows)
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
SIX MONTHS AND THREE MONTHS ENDED APRIL
30, 2018 AND 2017 RESULTS (UNAUDITED)
(in thousands, except per share data)
Six Months
Ended
Three Months
Ended
April 30,
April 30,
2018
2017
2018
2017
Revenues Base rents
$47,494 $42,789 $23,910
$21,677 Recoveries from tenants
16,316 14,226 8,109 7,153
Lease termination income
3,754 283 3,754 259 Other income
2,436 1,661 1,232
903 Total Revenues
70,000
58,959 37,005 29,992
Operating Expenses Property operating
12,046 10,646
5,740 5,498 Property taxes
10,304 9,585 5,157 4,737
Depreciation and amortization
13,917 12,764 6,968 6,183
General and administrative
4,702 4,667 2,283 2,212 Provision
for tenant credit losses
372 360 162 282 Directors' fees and
expenses
188 166 86
83 Total Operating Expenses
41,529
38,188 20,396 18,995
Operating Income 28,471 20,771 16,609 10,997
Non-Operating Income (Expense): Interest expense
(6,739) (6,516) (3,316) (3,259) Equity in net income from
unconsolidated joint ventures
1,227 1,039 667 525 Interest,
dividends and other investment income
142
369 62 196 Income Before
Gain on Sale of Properties 23,101 15,663 14,022 8,459
Gain on sale of properties
-
19,460 - 19,460 Net
Income 23,101 35,123 14,022 27,919
Noncontrolling interests: Net income attributable to
noncontrolling interests
(2,457)
(469) (1,362) (247) Net
income attributable to Urstadt Biddle Properties Inc.
20,644
34,654 12,660 27,672 Preferred stock dividends
(6,125) (7,141)
(3,062) (3,571) Net Income
Applicable to Common and Class A Common Stockholders
$14,519 $27,513
$9,598 $24,101 Diluted Earnings
Per Share: Per Common Share:
$0.34
$0.65 $0.23 $0.57 Per Class
A Common Share:
$0.39 $0.74
$0.25 $0.64 Weighted Average
Number of Shares Outstanding (Diluted): Common and Common
Equivalent
9,104 8,966
9,150 9,019 Class A Common and Class A
Common Equivalent
29,512 29,473
29,531 29,507
Results of Operations
The following information summarizes our results of operations
for the six months and three months ended April 30, 2018 and 2017
(amounts in thousands):
Six Months Ended
April
30,
Change Attributable
to:
Revenues
2018
2017
Increase(decrease)
%Change
PropertyAcquisitions/Sales
Properties Held
In Both Periods(Note
1)
Base rents
$47,494 $42,789 $4,705 11.0% $3,669 $1,036
Recoveries from tenants
16,316 14,226 2,090 14.7% 1,025
1,065 Lease termination income
3,754 283 3,471 1,226.5% -
3,471 Mortgage interest and other income
2,436 1,661 775
46.7% (77) 852
Operating Expenses Property operating
expenses
12,046 10,646 1,400 13.2% 635 765 Property taxes
10,304 9,585 719 7.5% 484 235 Depreciation and amortization
13,917 12,764 1,153 9.0% 1,293 (140) General and
administrative expenses
4,702 4,667 35 0.7% n/a n/a
Other Income/Expenses Interest expense
6,739 6,516
223 3.4% 459 (236) Interest, dividends and other investment income
142 369 (227) -61.5% n/a n/a
Three Months Ended
April 30,
Change Attributable
to:
Revenues
2018
2017
Increase(decrease)
%Change
PropertyAcquisitions/Sales
Properties HeldIn Both Periods(Note 1)
Base rents
$23,910 $21,677 $2,233 10.3% $1,637 $596
Recoveries from tenants
8,109 7,153 956 13.4% 420 536 Lease
termination income
3,754 259 3,495 1,349.4% - 3,495 Mortgage
interest and other income
1,232 903 329 36.4% (66) 395
Operating Expenses Property operating expenses
5,740 5,498 242 4.4% 360 (118) Property taxes
5,157
4,737 420 8.9% 325 95 Depreciation and amortization
6,968
6,183 785 12.7% 558 227 General and administrative expenses
2,283 2,212 71 3.2% n/a n/a
Other
Income/Expenses Interest expense
3,316 3,259 57 1.7% 212
(155) Interest, dividends and other investment income
62 196
(134) -68.4% n/a n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2018 and 2017. All other
properties are included in the property acquisition/sales column.
There are no properties excluded from the analysis.
Revenues
Base rents increased by 11.0% to $47.5 million for the six month
period ended April 30, 2018 as compared with $42.8 million in the
comparable period of 2017. Base rents increased by 10.3% to $23.9
million for the three month period ended April 30, 2018 as compared
with $21.7 million in the comparable period of 2017. The change in
base rent and the changes in other income statement line items
analyzed in the tables above were attributable to:
Property Acquisitions and Properties
Sold:
In fiscal 2017, the Company purchased four properties totaling
114,700 square feet of GLA, invested in two joint ventures that own
four properties totaling 173,600 square feet, whose operations we
consolidate, and sold two properties totaling 203,800 square feet.
In the first six months of fiscal 2018, the Company purchased two
properties totaling 51,100 square feet. These properties accounted
for all of the revenue and expense changes attributable to property
acquisitions and sales in the six months ended April 30, 2018 when
compared with fiscal 2017.
Properties Held in Both
Periods:
Revenues
Base Rent
The increase in base rents for both the six month and three
month periods ended April 30, 2018 when compared to the
corresponding prior periods, was predominantly caused by new
leasing activity at several properties held in both periods that
created a positive variance in base rent. This increase was
partially offset by a reduction in base rent relating to our 36,000
square foot grocery space at our Valley Ridge property which was
occupied in the first quarter of fiscal 2017 but not in the first
quarter of fiscal 2018 (see “Significant Events with Impact on
Leasing” earlier in this Item 2).
In fiscal 2018, the Company leased or renewed approximately
314,400 square feet (or approximately 7.2% of total consolidated
property leasable area). At April 30, 2018, the Company’s
consolidated properties were 92.5% leased (92.7% leased at October
31, 2017).
Tenant Recoveries
In the six month and three month periods ended April 30, 2018,
recoveries from tenants (which represent reimbursements from
tenants for operating expenses and property taxes) increased by
$1.1 million and $536,000, respectively, when compared with the
corresponding prior periods. These increases were the result of an
increase in both property operating expenses and property tax
expense in the consolidated portfolio for properties owned in both
the three months and six months of fiscal 2018 when compared with
the corresponding prior periods. The increases in property
operating expenses were related to an increase in snow removal
costs at our properties and the increase in property tax expenses
were related to an increase in property tax assessments.
Lease Termination Income
In April 2018, we reached agreement with the grocery tenant at
our Newark, NJ property to terminate its 63,000 square foot lease
in exchange for a one-time $3.7 million lease termination payment,
which we received and recorded as revenue in the six and three
months ended April 30, 2018. Also in April 2018, we leased that
same space to a new grocery store operator who took possession in
May 2018. While the rental rate on the new lease is 30% less than
the rental rate on the terminated lease, we hope that part of this
decreased rental rate will be recaptured with the receipt of
percentage rent in subsequent years as the store matures and its
sales increase. The new lease required no tenant improvement
allowance.
Expenses
Operating Expenses
In the six month period ended April 30, 2018, property operating
expenses increased by $765,000 when compared with the corresponding
prior period, predominantly as a result of an increase in snow
removal costs at our properties. Property operating expenses for
the three month period ended April 30, 2018 was relatively
unchanged when compared with the corresponding prior period.
Real Estate Tax
In the six month and three month periods ended April 30, 2018,
property taxes increased by $235,000 and $95,000, respectively,
when compared with the corresponding prior periods, as a result of
an increase in property tax assessments for properties owned in
both periods.
Interest
In the six month and three month periods ended April 30, 2018,
interest expense decreased by $236,000 and $155,000, respectively,
when compared with the corresponding prior periods as a result of
the refinancing of our largest mortgage secured by our Ridgeway
property after the second quarter of fiscal 2017 and the reduction
of mortgage principal from normal amortization. The Ridgeway
mortgage interest rate was reduced from 5.52% to 3.398% on a
principal balance of approximately $45 million. This decrease was
partially offset by an increase in the mortgage principal on the
Ridgeway mortgage from $45 million to $50 million as a result of
the refinancing.
Depreciation and Amortization
In the six month period ended April 30, 2018, depreciation and
amortization expense decreased by $140,000 when compared with the
corresponding prior period as a result of additional depreciation
for the write-off of tenant improvements in the first half of
fiscal 2017 at two properties where tenants had vacated their
spaces prior to the original term of their leases. In the three
month period ended April 30, 2018, depreciation and amortization
expense increased by $227,000 when compared with the corresponding
prior period as a result of increased depreciation for facade
improvements at two properties in the second quarter of fiscal 2018
which improvement were not in place in the second quarter of fiscal
2017.
General and Administrative
Expenses
General and administrative expense was relatively unchanged in
the six month and three month periods ended April 30, 2018 when
compared to the corresponding prior periods, predominantly as a
result of a small reduction in state and local taxes paid in the
periods when compared to the prior year offset by normal salary
increases for employees of the Company.
Non-GAAP Financial MeasureFunds from Operations (“FFO”)
We consider Funds from Operations (“FFO”) to be an additional
measure of our operating performance. We report FFO in addition to
net income applicable to common stockholders and net cash provided
by operating activities. Management has adopted the definition
suggested by The National Association of Real Estate Investment
Trusts (“NAREIT”) and defines FFO to mean net income (computed in
accordance with GAAP) excluding gains or losses from sales of
property, plus real estate-related depreciation and amortization
and after adjustments for unconsolidated joint ventures.
Management considers FFO a meaningful, additional measure of
operating performance because it primarily excludes the assumption
that the value of the Company’s real estate assets diminishes
predictably over time and industry analysts have accepted it as a
performance measure. FFO is presented to assist investors in
analyzing the performance of the Company. It is helpful as it
excludes various items included in net income that are not
indicative of our operating performance, such as gains (or losses)
from sales of property and depreciation and amortization. However,
FFO:
- does not represent cash flows from
operating activities in accordance with GAAP (which, unlike FFO,
generally reflects all cash effects of transactions and other
events in the determination of net income); and
- should not be considered an alternative
to net income as an indication of our performance.
FFO as defined by us may not be comparable to similarly titled
items reported by other real estate investment trusts due to
possible differences in the application of the NAREIT definition
used by such REITs. The table below provides a reconciliation of
net income applicable to Common and Class A Common Stockholders in
accordance with GAAP to FFO for the six month and three month
periods ended April 30, 2018 and 2017 (amounts in thousands):
(Table Follows)
URSTADT BIDDLE
PROPERTIES INC. (NYSE: UBA AND UBP) SIX MONTHS AND THREE
MONTHS ENDED APRIL 30, 2018 AND 2017
(in thousands, except per share data)
Reconciliation of Net Income Available
to Common and Class A Common Stockholders To Funds From
Operations:
Six Months Ended
April 30,
Three Months Ended
April 30,
2018
2017
2018
2017
Net Income Applicable to Common and Class A Common Stockholders
$14,519 $27,513
$9,598 $24,101 Real property
depreciation
10,996 9,867
5,538 4,903 Amortization of
tenant improvements and allowances
2,079 2,244
1,037
918 Amortization of deferred leasing costs
798 605
372 338 Depreciation and amortization on unconsolidated
joint ventures
808 800
405 404 (Gain) on sale of
asset
- (19,460)
- (19,460) Funds from Operations
Applicable to Common and Class A Common Stockholders
$29,200 $21,569
$16,950 $11,204 Funds
from Operations (Diluted) Per Share: Common
$0.69 $0.51
$0.40 $0.26 Class A Common
$0.78 $0.58
$0.45 $0.30
Urstadt Biddle Properties Inc. (NYSE: UBA AND UBP)
Balance Sheet Highlights (in thousands)
April 30, October 31,
2018
2017
(Unaudited)
Assets Cash and Cash Equivalents
$16,438 $8,674 Real
Estate investments before accumulated depreciation
$1,112,269 $1,090,402
Investments in and advances to unconsolidated joint ventures
$38,083 $38,049 Total
Assets $1,021,563 $996,713
Liabilities Revolving credit line
$22,735 $4,000 Mortgage
notes payable and other loans $304,867
$297,071 Total Liabilities
$354,170 $328,122
Redeemable Noncontrolling Interests
$78,259 $81,361
Preferred Stock $190,000
$190,000 Total Stockholders’ Equity
$589,134 $587,230
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180608005753/en/
Urstadt Biddle Properties Inc.Willing L. Biddle, CEOorJohn T.
Hayes, CFO203-863-8200
Urstadt Biddle Properties (NYSE:UBA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Urstadt Biddle Properties (NYSE:UBA)
Historical Stock Chart
From Jul 2023 to Jul 2024