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, 2019.
Net income applicable to Class A Common and Common stockholders
for the second quarter of fiscal 2019 was $5,798,000 or $0.15 per
diluted Class A Common share and $0.14 per diluted Common share,
compared to $9,598,000 or $0.25 per diluted Class A Common share
and $0.23 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 2019 was $11,652,000 or $0.31
per diluted Class A Common share and $0.27 per diluted Common
share, compared to $14,519,000 or $0.39 per diluted Class A Common
share and $0.34 per diluted Common share in the first six months of
fiscal 2018. Net income in the three and six months ended April 30,
2018 included lease termination income in the amount of $3.7
million.
Funds from operations (“FFO”) for the second quarter of fiscal
2019 was $13,202,000 or $0.35 per diluted Class A Common share and
$0.31 per diluted Common share, compared with $16,950,000 or $0.45
per diluted Class A Common share and $0.40 per diluted Common share
in last year’s second quarter. For the first six months of fiscal
2019, FFO amounted to $26,739,000 or $0.71 per diluted Class A
Common share and $0.63 per diluted Common share, compared to
$29,200,000 or $0.78 per diluted Class A Common share and $0.69 per
diluted Common share in the corresponding period of fiscal 2018.
FFO in the three and six months ended April 30, 2018 also included
lease termination income in the amount of $3.7 million, or $0.10
per Class A Common share.
At April 30, 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 half of fiscal 2019
predominantly resulted from the company’s purchase of Lakeview
Plaza Shopping Center, located in Brewster, NY in December 2018.
Lakeview has 49,000 square feet vacant, which, once leased, will
provide the company a significant additional return on its
investment. Also at April 30, 2019 the leased percentage treats as
leased, and the April 30, 2019 occupancy percentage treats as
unoccupied, 65,700 square feet of retail space (1.4% of our
consolidated square footage) formerly occupied by Toys R’ Us and
Babies R’ Us at the company’s Danbury Square shopping center in
Danbury, CT pursuant to a long-term ground lease. Toys R’ Us and
Babies R’ Us went bankrupt in fiscal 2017, and this ground lease
was purchased in August 2018 from Toys R’ Us and Babies R’ Us and
assumed by a real estate investor unrelated to the company. The
lease rate for the 65,700 square foot space was and remains at $0
for the duration of the ground lease, and the company did not have
any other leases with Toys R’ Us or Babies R’ Us. Accordingly, 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
investor has not leased 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 April 30, 2019, the
company had equity interests in seven unconsolidated joint ventures
(751,000 square feet), which were 96.0% 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, and we are
continuing our strong performance through the first half of our
2019 fiscal year. In last year’s second quarter, we received a $3.7
million lease termination payment from Acme at our Newark, NJ
property. Acme had purchased its lease from A&P and was unable
to properly merchandise the store to meet the needs of the
surrounding community, which is predominantly Portuguese and Latin
American. Accordingly, Acme and the company negotiated an early
termination of its lease. We re-leased this space to Seabra
Supermarkets, the preeminent Portuguese supermarket operator in the
area, and Seabra is scheduled to open its store this summer. In
addition, in last year’s second quarter we received a one-time
$288,000 payment from the grocery store operator at our Emerson, NJ
property. With these two large one-time transactions removed from
last year’s results, our FFO increased by 1.9% on a dollar value
basis and 1.0% on a Class A Common share basis when compared with
our operating results in last year’s second quarter. For the six
months ended April 30, 2019, our FFO increased 6.1% on a dollar
value basis and 5.3% on a Class A Common share basis when compared
with our operating results in last year’s first six months. 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 the first quarter of fiscal 2019, which
resulted in a gain of $403,000. We are very pleased that our FFO
payout ratio has dropped below 80%, as we know our investors
greatly value the safety and consistent growth of our dividend
through all types of economic cycles. In addition, this quarter we
continued pruning our portfolio of a few properties that don’t meet
our investment objectives of primarily owning grocery or
pharmacy-anchored outdoor shopping centers in the affluent suburban
communities that surround New York City. In March, we sold an
unanchored retail property located in Spring Valley, NY in which we
owned a 50% interest. We purchased our interest in that property in
2012 as part of a package that included a grocery-anchored shopping
center. We generated $5 million from the sale of the Spring Valley
property and intend to invest the proceeds back into properties
that are more closely aligned with our investment objectives.”
Mr. Biddle continued……. “Leasing the vacant space in our
portfolio is management’s number one focus at this time. Of the
352,000 square feet vacant in our consolidated portfolio, we have
approximately 33,000 square feet in the lease negotiation stage and
we are negotiating letters of intent with potential tenants for an
additional 70,000 square feet. 49,000 square feet of the 352,000
square feet of vacant space was added in the first quarter when we
closed on the acquisition of Lakeview Plaza Shopping Center located
in Brewster, NY. Lakeview Plaza is a 177,000 square foot shopping
center that is anchored by a 45,000 square foot Acme Supermarket.
This property, which we purchased from a lender who had foreclosed,
consists of five buildings on a 23-acre site. We purchased this
property at an attractive going-in yield based on our purchase
price and the existing net operating income. It is our top priority
to get as much of this vacant space leased as quickly as possible.
We currently have letters of intent out for 19,000 square feet of
space, and we are hopeful that we will move shortly to the lease
negotiation stage. If we are able to lease all of the vacant 49,000
square feet at Lakeview, we could add another $1-1.3 million to
this property’s net operating income, which would improve our
investment return for this property to over 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
84 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 197 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)SIX MONTHS AND THREE MONTHS ENDED APRIL 30, 2019
AND 2018 RESULTS (UNAUDITED)(in thousands, except per share
data)
Six Months
Ended
Three Months
Ended
April 30,
April 30,
2019
2018
2019
2018
Revenues Base rents
$49,706 $47,494
$24,928 $23,910 Recoveries from tenants
16,825 16,316
8,373 8,109 Lease termination income
17 3,754
- 3,754 Other income
2,200
2,436 992 1,232 Total
Revenues
68,748 70,000
34,293 37,005 Operating
Expenses Property operating
11,715 12,046
5,851
5,740 Property taxes
11,718 10,304
5,805 5,157
Depreciation and amortization
13,925 13,917
6,985
6,968 General and administrative
4,919 4,702
2,265
2,283 Provision for tenant credit losses
496 372
242
162 Directors' fees and expenses
192
188 84 86 Total
Operating Expenses
42,965 41,529
21,232 20,396 Operating
Income 25,783 28,471
13,061 16,609
Non-Operating Income (Expense): Interest expense
(7,110) (6,739)
(3,532) (3,316) Equity in net income
from unconsolidated joint ventures
718 1,227
376 667
Gain on sale of marketable securities
403 -
- -
Interest, dividends and other investment income
184 142 55
62 Net Income 19,978 23,101
9,960 14,022
Noncontrolling interests: Net
income attributable to noncontrolling interests
(2,201) (2,457)
(1,100) (1,362) Net income
attributable to Urstadt Biddle Properties Inc.
17,777 20,644
8,860 12,660 Preferred stock dividends
(6,125) (6,125)
(3,062) (3,062) Net
Income Applicable to Common and Class A Common Stockholders
$11,652 $14,519
$5,798 $9,598 Diluted
Earnings Per Share: Per Common Share:
$0.27
$0.34 $0.14 $0.23 Per
Class A Common Share:
$0.31 $0.39
$0.15 $0.25 Weighted
Average Number of Shares Outstanding (Diluted): Common and
Common Equivalent
9,271 9,104
9,342 9,150 Class A Common and
Class A Common Equivalent
29,604
29,512 29,649 29,531
Results of Operations
The following information summarizes our results of operations
for the six months and three months ended April 30, 2019 and 2018
(amounts in thousands):
Six months ended April 30, Change
Attributable to
Revenues 2019
2018
Increase(Decrease)
% Change
PropertyAcquisitions/Sales
Properties Held InBoth Periods (Note
1)
Base rents
$ 49,706 $47,494 $2,212 4.7% $1,672
$540 Recoveries from tenants
16,825 16,316 509 3.1% 763
(254) Lease termination
17 3,754 (3,737) -99.5% - (3,737)
Other income
2,200 2,436 (236) -9.7% 42 (278)
Operating Expenses Property operating
11,715 12,046
(331) -2.7% 713 (1,044) Property taxes
11,718 10,304 1,414
13.7% 419 995 Depreciation and amortization
13,925 13,917 8
0.1% 266 (258) General and administrative
4,919 4,702 217
4.6% n/a n/a
Non-Operating Income/Expense Interest
expense
7,110 6,739 371 5.5% 72 299 Interest, dividends, and
other investment income
184 142 42 29.6% n/a n/a
Three Months Ended April 30, Change
Attributable to
Revenues 2019
2018
Increase(Decrease)
% Change
PropertyAcquisitions/Sales
Properties Held InBoth Periods (Note
1)
Base rents
$24,928 $23,910 $1,018 4.3% $841
$177 Recoveries from tenants
8,373 8,109 264 3.3% 367 (103)
Lease termination
- 3,754 (3,754) -100.0% - (3,754) Other
income
992 1,232 (240) -19.5% 5 (245)
Operating
Expenses Property operating
5,851 5,740 111 1.9% 371
(260) Property taxes
5,805 5,157 648 12.6% 222 426
Depreciation and amortization
6,985 6,968 17 0.2% 126 (109)
General and administrative
2,265 2,283 (18) -0.8% n/a n/a
Non-Operating Income/Expense Interest expense
3,532 3,316 216 6.5% 32 184 Interest, dividends, and other
investment income
55 62 (7) -11.3% 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 4.7% to $49.7 million for the six month
period ended April 30, 2019 as compared with $47.5 million in the
comparable period of 2018. Base rents increased by 4.3% to $24.9
million for the three month period ended April 30, 2019 as compared
with $23.9 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 six 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 six months
ended April 30, 2019 when compared with fiscal 2018.
Properties Held in Both
Periods:
Revenues
Base Rent
The increase in base rents for the six month and three month
periods ended April 30, 2019, when compared to the corresponding
prior periods, 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 than the
expiring period rent, both of which created a positive variance in
base rent.
In the first six months of fiscal 2019, we leased or renewed
approximately 335,000 square feet (or approximately 7.3% of total
consolidated property leasable area). At April 30, 2019, the
Company’s consolidated properties were 92.3% leased (93.2% leased
at October 31, 2018).
Tenant Recoveries
In the six month and three month periods ended April 30, 2019,
recoveries from tenants (which represent reimbursements from
tenants for operating expenses and property taxes) decreased by
$254,000 and $103,000, respectively, when compared with the
corresponding prior periods. 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 in both
periods.
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 month and
three month periods ended April 30, 2018. Also in March 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
Property Operating
In the six month and three month periods ended April 30, 2019,
property operating expenses decreased by $1.0 million and $260,000,
respectively, when compared with the corresponding prior periods,
predominantly as a result of a decrease in snow removal costs at
our properties owned in both periods.
Property Taxes
In the six month and three month periods ended April 30, 2019,
property taxes increased by $995,000 and $426,000, respectively
when compared with the corresponding prior periods, as a result of
an increase in property tax assessments for a number of our
properties owned in both periods, specifically in the City of
Stamford, CT.
Interest
In the six month and three month periods ended April 30, 2019,
interest expense increased by $299,000 and $184,000, respectively
when compared with the corresponding prior periods as a result of
the company having a larger balance drawn on its Facility in both
the six month and three month periods ended April 30, 2019 when
compared with the corresponding prior periods.
Depreciation and Amortization
Depreciation and amortization was relatively unchanged in the
six month and three month periods ended April 30, 2019, when
compared with the corresponding prior periods.
General and Administrative
Expenses
General and administrative expense increased by $217,000 in the
six month period ended April 30, 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. General and administrative expense was relatively
unchanged in the three month period ended April 30, 2019 when
compared with the corresponding 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 six month and three month
periods ended April 30, 2019 and 2018 (amounts in thousands):
(Table Follows)
URSTADT BIDDLE PROPERTIES INC. (NYSE:
UBA AND UBP)SIX MONTHS AND THREE MONTHS ENDED APRIL 30, 2019
AND 2018(in thousands, except per share data)
Reconciliation of Net Income Available
to Common and Class A Common Stockholders To Funds From
Operations:
Six Months EndedApril 30,
Three Months EndedApril 30,
2019
2018
2019
2018
Net Income Applicable to Common and Class A Common Stockholders
$11,652 $14,519
$5,798 $9,598 Real property
depreciation
11,333 10,996
5,669 5,538 Amortization
of tenant improvements and allowances
1,732 2,079
849
1,037 Amortization of deferred leasing costs
812 798
419 372 Depreciation and amortization on unconsolidated
joint ventures
753 808
373 405 Loss on sale of
property in unconsolidated joint venture
457
- 94 - Funds
from Operations Applicable to Common and Class A Common
Stockholders
$26,739 $29,200
$13,202 $16,950 Funds
from Operations (Diluted) Per Share: Common
$0.63 $0.69
$0.31 $0.40 Class A Common
$0.71 $0.78
$0.35 $0.45
Urstadt Biddle Properties Inc. Balance Sheet
Highlights (in thousands)
April 30, October 31,
2019
2018
(Unaudited)
Assets Cash and Cash Equivalents
$8,782 $10,285 Real
Estate investments before accumulated depreciation
$1,138,740 $1,118,075
Investments in and advances to unconsolidated joint ventures
$31,244 $37,434 Total
Assets $1,001,538 $1,008,233
Liabilities Revolving credit line
$26,345 $28,595 Mortgage
notes payable and other loans $301,316
$293,801 Total Liabilities
$356,577 $347,834
Redeemable Noncontrolling Interests
$79,008 $78,258
Preferred Stock $190,000
$190,000 Total Stockholders’ Equity
$565,953 $582,141
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version on businesswire.com: https://www.businesswire.com/news/home/20190607005462/en/
Willing L. Biddle, CEO orJohn T. Hayes, CFOUrstadt Biddle
Properties Inc.(203) 863-8200
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