Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the first quarter ended January 31, 2019.
Net income applicable to Class A Common and Common stockholders
for its first quarter of fiscal 2019 was $5,854,000 or $0.16 per
diluted Class A Common share and $0.14 per diluted Common share
compared to $4,921,000 or $0.13 per diluted Class A Common share
and $0.12 per diluted Common share in last year’s first
quarter.
Funds from operations (“FFO”) for the first quarter of fiscal
2019 was $13,537,000 or $0.36 per diluted Class A Common share and
$0.32 per diluted Common share compared with $12,250,000 or $0.33
per diluted Class A Common share and $0.29 per diluted Common share
in last year’s first quarter.
At January 31, 2019, the company’s consolidated properties were
92.3% leased (versus 93.2% at the end of fiscal 2018) and 90.7%
occupied (versus 91.7% at the end of fiscal 2018). The drop in the
company’s leased rate in the first quarter predominantly resulted
from the company’s purchase of the Lakeview Plaza Shopping Center
in December 2018. Lakeview was purchased at a very good price from
a lender which had foreclosed on the property. Lakeview has 49,000
square feet vacant, which once leased, will provide the company a
significant additional return on its investment. The company
currently has 352,000 square feet of vacancy in its consolidated
portfolio, 65,000 square feet of which is in the lease negotiation
stage. In addition, the company is negotiating letters of intent
with potential tenants on another 121,000 square feet of vacant
space. Also at January 31, 2019 the leased percentage treats as
leased, and the January 31, 2019 occupancy percentage treats as
unoccupied, 65,700 square feet of retail space (1.4% of our
consolidated square footage) formerly ground leased by Toys R’ Us
and Babies R’ Us at the company’s Danbury Square shopping center in
Danbury, CT. Toys R’ Us and Babies R’ Us went bankrupt in fiscal
2017, and this ground lease was purchased from Toys R’ Us and
Babies R’ Us and assumed by a real estate investor in August 2018.
The lease rate for the 65,700 square foot space was and remains at
$0 for the duration of the lease, and the company did not have any
other leases with Toys R’ Us or Babies R’ Us, so the company’s cash
flow was not impacted by the bankruptcy of Toys R’ Us and Babies R’
Us. As of the date of this press release, the company has not been
informed by the new owner of the lease which operator will occupy
the space.
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 January 31, 2019, the
company had equity interests in seven unconsolidated joint ventures
(751,000 square feet), which were 96.6% leased (96.3% at October
31, 2018).
Commenting on the quarter’s operating results, Willing L.
Biddle, President and CEO of the company, said “We are pleased to
report that we had a very good operating quarter. Our FFO increased
by 10.5% on a dollar value basis and 9.9% on a Class A Common share
basis when compared with our operating results in last year’s first
quarter. This increase was the result of net operating income
generated from property acquisitions in fiscal 2018 and the first
quarter of fiscal 2019, as well as organic net operating income
growth in our existing portfolio of investment properties. In
addition, this increase was bolstered by the sale of our small
marketable securities portfolio in this first quarter of fiscal
2019, which resulted in a gain of $403,000. We are very pleased
that our FFO payout ratio improved again this quarter, dipping
below 80%, as we know our investors greatly value the safety and
consistent growth of our dividend through all types of economic
cycles.”
Mr. Biddle continued……. “In the first quarter, we closed on the
acquisition of Lakeview Plaza Shopping Center located in Brewster,
NY. Lakeview Plaza is a 177,000 square feet shopping center that is
anchored by a 45,000 square foot Acme Supermarket. The property
consists of five buildings on a 23-acre site. The property is
currently 73% leased to a diverse group of local, regional, and
national tenants. Notable tenants at the property include Acme
Market, Rite-Aid, Supercuts, M&T Bank, KeyBank and Burger King.
We were able to acquire the property at a significant discount to
replacement cost from a lender which had obtained the property via
foreclosure. We anticipate having to invest approximately $6 to $8
million over our initial purchase price to complete the rebuilding
of a retaining wall that runs the length of the back of the
property and also to lease the vacancies in the property. Our
purchase price, plus the additional capital we will need to invest
for improvements and re-tenanting, represents an approximate 8%
yield on the existing cash flow of the shopping center. If we are
able to lease the vacant 49,000 square feet, we could add another
$1-1.3 million to the cash flow, which would improve our investment
return to above 13%. We continue to actively look to acquire
investment properties meeting our geographic and financial
parameters.”
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
85 properties containing approximately 5.3 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 196 consecutive quarters
of uninterrupted dividends to its shareholders since its inception
and has raised total dividends to its shareholders for the last 25
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)
FIRST QUARTER 2019 RESULTS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended
January
31,
2019
2018
Revenues Base rents
$24,778 $23,584
Recoveries from tenants
8,452 8,207 Other income
1,225
1,204
Total Revenues
34,455
32,995
Operating Expenses
Property operating
5,864 6,306 Property taxes
5,913 5,147 Depreciation and amortization
6,940 6,949 General and administrative
2,654
2,419 Provision for tenant credit losses
254
210 Directors' fees and expenses
108
102
Total Operating Expenses
21,733
21,133
Operating Income 12,722 11,862
Non-Operating Income (Expense): Interest expense
(3,578) (3,423) Equity in net income from
unconsolidated joint ventures
342 560 Gain on sale of
marketable securities
403 - Interest, dividends and
other investment income
129
80
Net Income 10,018 9,079
Noncontrolling interests: Net income attributable to
noncontrolling interests
(1,101)
(1,095)
Net income attributable to Urstadt Biddle Properties Inc.
8,917 7,984 Preferred stock dividends
(3,063)
(3,063)
Net Income Applicable to Common and Class A Common
Stockholders
$5,854
$4,921
Diluted Earnings Per Share: Per Class A Common
Share:
$0.16
$0.13
Per Common Share:
$0.14
$0.12
Weighted Average Number of Shares Outstanding
(Diluted): Class A Common and Class A Common Equivalent
29,547
29,492
Common and Common Equivalent
9,199
9,058
Results of Operations
The following information summarizes our results of operations
for the three months ended January 31, 2019 and 2018 (amounts in
thousands):
Three MonthsEnded
January
31,
Change Attributable
to
Revenues
2019
2018
Increase(Decrease)
%Change
PropertyAcquisitions/Sales
Properties Held InBoth Periods
(Note 1)
Base rents
$24,778 $23,584 $1,194 5.1% $831 $363 Recoveries
from tenants
8,452 8,207 245 3.0% 396 (151) Other income
1,208 1,204 4 0.3% 37 (33)
Operating Expenses
Property operating
5,864 6,306 (442) (7.0)% 342 (784)
Property taxes
5,913 5,147 766 14.9% 197 569 Depreciation
and amortization
6,940 6,949 (9) (0.1)% 139 (148) General
and administrative
2,654 2,419 235 9.7% n/a n/a
Non-Operating Income/Expense Interest expense
3,578
3,423 155 4.5% 40 115 Interest, dividends, and other investment
income
129 80 49 61.3% n/a n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2019 and 2018 and for
interest expense the amount also includes parent company interest
expense. All other properties are included in the property
acquisition/sales column. There are no properties excluded from the
analysis.
Base rents increased by 5.1% to $24.8 million for the three
month period ended January 31, 2019 as compared with $23.6 million
in the comparable period of 2018. The change in base rent and the
changes in other income statement line items analyzed in the table
above were attributable to:
Property Acquisitions and Properties
Sold:
In fiscal 2018, we purchased three properties totaling 53,700
square feet of GLA. In the first three months of fiscal 2019, we
purchased one property totaling 177,000 square feet. These
properties accounted for all of the revenue and expense changes
attributable to property acquisitions and sales in the three months
ended January 31, 2019 when compared with fiscal 2018.
Properties Held in Both
Periods:
Revenues
Base Rent
The increase in base rents for the three month period ended
January 31, 2019, when compared to the corresponding prior period,
was predominantly caused by new leasing activity at several
properties held in both periods and a lease renewal with a
grocery-store tenant at a significantly higher rent then the
expiring period rent, both of which created a positive variance in
base rent.
In the first three months of fiscal 2019, we leased or renewed
approximately 170,000 square feet (or approximately 3.7% of total
consolidated property leasable area). At January 31, 2019, the
Company’s consolidated properties were 92.3% leased (93.2% leased
at October 31, 2018).
Tenant Recoveries
In the three month period ended January 31, 2019, recoveries
from tenants (which represent reimbursements from tenants for
operating expenses and property taxes) decreased by $151,000 when
compared with the corresponding prior period. This decrease was a
result of a decrease in property operating expenses predominantly
related to a decrease in snow removal costs at our properties owned
in both periods partially offset by an increase in property tax
expense as a result of an increase in property tax assessments.
Expenses
Property Operating
In the three month period ended January 31, 2019, property
operating expenses decreased by $784,000 when compared with the
corresponding prior period, predominantly as a result of a decrease
in snow removal costs at our properties owned in both periods.
Property Taxes
In the three month period ended January 31, 2019, property taxes
increased by $569,000 when compared with the corresponding prior
period, as a result of an increase in property tax assessments for
a number of our properties owned in both periods.
Interest
In the three month period ended January 31, 2019, interest
expense increased by $115,000, when compared with the corresponding
prior period as a result of the Company having a larger balance
drawn on its Facility in the first three months of fiscal 2019 when
compared with the corresponding prior period.
Depreciation and Amortization
Depreciation and amortization was relatively unchanged in the
three month period ended January 31, 2019, when compared with the
corresponding prior period.
General and Administrative
Expenses
General and administrative expense increased by $235,000 in the
three month period ended January 31, 2019 when compared with the
corresponding prior period predominantly as a result of normal
salary increases and bonuses for our employees being larger than
the prior period.
Non-GAAP Financial Measure
Funds 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 three month periods ended
January 31, 2019 and 2018 (amounts in thousands):
(Table Follows)
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)
FIRST QUARTER ENDED 2019
RESULTS
(in thousands, except per share data)
Reconciliation of Net Income Available
toCommon and Class A CommonStockholders To Funds From
Operations:
Three Months Ended
January
31,
2019
2018
Net Income Applicable to Common andClass A
Common Stockholders
$ 5,854 $ 4,921 Real property depreciation
5,664 5,458
Amortization of tenant improvements
andallowances
883 1,042 Amortization of deferred leasing costs
393
426
Depreciation and amortization
onunconsolidated joint ventures
380 403
Loss on sale of property in
unconsolidatedjoint venture
363
-
Funds from Operations Applicable toCommon
and Class A Common Stockholders
$
13,537
$ 12,250
Urstadt Biddle Properties Inc. Balance Sheet
Highlights (in thousands)
January 31, October 31,
2019
2018
(Unaudited)
Assets Cash and Cash Equivalents
$13,142
$10,285
Real Estate investments before accumulated
depreciation
$1,134,678
$1,118,075
Investments in and advances to unconsolidated joint
ventures
$36,194
$37,434
Total Assets
$1,018,458
$1,008,233
Liabilities Revolving credit line
$44,595
$28,595
Mortgage notes payable and other loans
$292,129
$293,801
Total Liabilities
$367,355
$347,834
Redeemable Noncontrolling Interests
$78,405
$78,258
Preferred Stock
$190,000
$190,000
Total Stockholders’ Equity
$572,698
$582,141
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version on businesswire.com: https://www.businesswire.com/news/home/20190308005495/en/
Willing L. Biddle, CEO orJohn T. Hayes, CFOUrstadt Biddle
Properties Inc.(203) 863-8200
Urstadt Biddle Properties (NYSE:UBA)
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