Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the three and nine month periods ended July 31, 2019.
Net income applicable to Class A Common and Common stockholders
for the third quarter of fiscal 2019 was $7,270,000 or $0.19 per
diluted Class A Common share and $0.17 per diluted Common share,
compared to $5,579,000 or $0.15 per diluted Class A Common share
and $0.13 per diluted Common share in last year’s third quarter.
Net income attributable to Class A Common and Common stockholders
for the first nine months of fiscal 2019 was $18,922,000 or $0.50
per diluted Class A Common share and $0.44 per diluted Common
share, compared to $20,098,000 or $0.53 per diluted Class A Common
share and $0.47 per diluted Common share in the first nine months
of fiscal 2018.
Funds from operations (“FFO”) for the third quarter of fiscal
2019 was $14,219,000 or $0.37 per diluted Class A Common share and
$0.33 per diluted Common share, compared with $13,410,000 or $0.35
per diluted Class A Common share and $0.32 per diluted Common share
in last year’s third quarter. For the first nine months of fiscal
2019, FFO amounted to $40,958,000 or $1.08 per diluted Class A
Common share and $0.96 per diluted Common share, compared to
$42,610,000 or $1.13 per diluted Class A Common share and $1.01 per
diluted Common share in the corresponding period of fiscal
2018.
Both FFO and net income for the nine month period ended July 31,
2018 include lease termination income in the amount of $3.7
million, or $0.10 per Class A Common share, that the company
received from the grocery store tenant at the company’s Newark, NJ
property when that tenant vacated the property prior to the end of
its lease.
At July 31, 2019, the company’s consolidated properties were
93.0% leased (versus 93.2% at the end of fiscal 2018) and 91.5%
occupied (versus 91.7% at the end of fiscal 2018). The drop in the
company’s leased rate in the first nine months of fiscal 2019
predominantly resulted from the company’s purchase of Lakeview
Plaza Shopping Center, located in Brewster, NY in December 2018.
Lakeview had 49,000 square feet vacant when the company purchased
the property, which, once leased, will provide the company a
significant additional return on its investment. Also at July 31,
2019, the leased percentage treats as leased, and the occupancy
percentage treats as unoccupied, 65,700 square feet of retail space
(1.43% of our consolidated square footage) formerly occupied
pursuant to a long-term ground lease 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 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 net income and FFO were 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.
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 operating
quarter, and continued our strong performance through the first
nine months of our 2019 fiscal year. This quarter our FFO increased
by 6.0% on a dollar value basis and 5.3% on a Class A Common per
share basis when compared with our operating results in last year’s
third quarter. In April 2018, which falls within our second quarter
of fiscal 2018, we received a $3.7 million lease termination
payment from Acme at our Newark, NJ property. We re-leased this
space to Seabra Supermarkets, the preeminent Portuguese supermarket
operator, which opened a beautiful supermarket in the space in June
2019. 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 nine months ended fiscal 2019
FFO increased by 3.9% on a dollar value basis and 2.3% on a Class A
Common per share basis when compared with our operating results in
last year’s first nine 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 for the second straight quarter our FFO payout ratio
is 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……. “Leasing the vacant space in our
portfolio is management’s number one focus at this time. This
quarter, we signed leases for 90,000 square feet of vacant space in
our portfolio. Of the remaining 346,000 square feet vacant in our
portfolio, we have approximately 21,000 square feet in the lease
negotiation stage, and we are negotiating letters of intent with
potential tenants for an additional 138,000 square feet. In the
first quarter of fiscal 2019, we purchased the 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 at
auction as the result of a foreclosure, 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. At the time of purchase, this property had 49,000
square feet of vacancy, and it is our top priority to get as much
of the currently remaining vacant space leased as quickly as
possible. We currently have letters of intent out for 24,000 square
feet of this space, and we are hopeful that we will move shortly to
the lease negotiation and execution. 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
also placed a $12 million mortgage on Lakeview Plaza this quarter
at a very attractive interest rate of 3.6325%, which equaled our
initial equity investment in this property. Also this quarter, we
sold our Monroe, CT property as that property did not meet our
stated investment parameters of owning grocery or pharmacy-anchored
shopping centers in the suburban communities that surround New York
City. We sold the Monroe property for $3.65 million and realized a
tax gain of approximately $700,000. We continue to actively pursue
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
83 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 198 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) NINE MONTHS AND THREE MONTHS ENDED JULY 31,
2019 AND 2018 RESULTS (UNAUDITED) (in thousands, except per
share data)
Nine Months
Ended
Three
Months Ended
July
31,
July
31,
2019
2018
2019
2018
Revenues
Base rents
$74,243
$72,162
$24,537
$24,668
Recoveries from tenants
24,664
23,390
7,839
7,074
Lease termination income
194
3,790
178
36
Other income
4,196
3,467
1,995
1,031
Total Revenues
103,297
102,809
34,549
32,809
Operating Expenses
Property operating
16,670
16,850
4,955
4,804
Property taxes
17,603
15,604
5,885
5,300
Depreciation and amortization
20,926
21,287
7,001
7,370
General and administrative
7,149
7,024
2,230
2,322
Provision for tenant credit losses
719
674
223
302
Directors' fees and expenses
265
267
73
79
Total Operating Expenses
63,332
61,706
20,367
20,177
Operating Income
39,965
41,103
14,182
12,632
Non-Operating Income (Expense):
Interest expense
(10,607)
(10,178)
(3,497)
(3,439)
Equity in net income from unconsolidated
joint ventures
1,007
1,710
289
483
Gain on sale of marketable securities
403
-
-
-
Gain on sale of property
409
-
409
-
Interest, dividends and other investment
income
228
246
44
104
Net Income
31,405
32,881
11,427
9,780
Noncontrolling interests:
Net income attributable to noncontrolling
interests
(3,295)
(3,595)
(1,094)
(1,138)
Net income attributable to Urstadt Biddle
Properties Inc.
28,110
29,286
10,333
8,642
Preferred stock dividends
(9,188)
(9,188)
(3,063)
(3,063)
Net Income Applicable to Common and
Class A Common Stockholders
$18,922
$20,098
$7,270
$5,579
Diluted Earnings Per Share:
Per Common Share:
$0.44
$0.47
$0.17
$0.13
Per Class A Common Share:
$0.50
$0.53
$0.19
$0.15
Weighted Average Number of Shares
Outstanding (Diluted):
Common and Common Equivalent
9,313
9,147
9,398
9,233
Class A Common and Class A Common
Equivalent
29,637
29,538
29,675
29,590
Results of
Operations
The following information summarizes the company's results of
operations for the nine month and three month periods ended July
31, 2019 and 2018 (amounts in thousands):
Nine months ended
July
31,
Change
Attributable to
Revenues
2019
2018
Increase
(Decrease)
%
Change
Property
Acquisitions/Sales
Properties Held In Both Periods
(Note 1)
Base rents
$74,243
$72,162
$2,081
2.9%
$2,275
$(194)
Recoveries from tenants
24,664
23,390
1,274
5.4%
940
334
Lease termination
194
3,790
(3,596)
(94.9)%
-
(3,596)
Other income
4,196
3,467
729
21.0%
58
671
Operating Expenses
Property operating
16,670
16,850
(180)
(1.1)%
906
(1,086)
Property taxes
17,603
15,604
1,999
12.8%
641
1,358
Depreciation and amortization
20,926
21,287
(361)
(1.7)%
348
(709)
General and administrative
7,149
7,024
125
1.8%
n/a
n/a
Non-Operating Income/Expense
Interest expense
10,607
10,178
429
4.2%
95
334
Interest, dividends, and other investment
income
228
246
(18)
(7.3)%
n/a
n/a
Three Months Ended
July
31,
Change
Attributable to
Revenues
2019
2018
Increase (Decrease)
%
Change
Property Acquisitions/Sales
Properties Held In Both Periods (Note 1)
Base rents
$24,537
$24,668
$(131)
(0.5)%
$603
$(734)
Recoveries from tenants
7,839
7,074
765
10.8%
177
588
Lease termination
178
36
142
394.4%
-
142
Other income
1,995
1,031
964
93.5%
17
947
Operating Expenses
Property operating
4,955
4,804
151
3.1%
193
(42)
Property taxes
5,885
5,300
585
11.0%
222
363
Depreciation and amortization
7,001
7,370
(369)
(5.0)%
82
(451)
General and administrative
2,230
2,322
(92)
(4.0)%
n/a
n/a
Non-Operating Income/Expense
Interest expense
3,497
3,439
58
1.7%
23
35
Interest, dividends, and other investment
income
44
104
(60)
(57.7)%
n/a
n/a
Note 1 – Properties held in both periods include only properties
owned for the entire periods of 2019 and 2018. All other properties
are included in the property acquisition/sales column. There are no
properties excluded from the analysis.
Base rents increased by 2.9% to $74.2 million for the nine month
period ended July 31, 2019 as compared with $72.2 million in the
comparable period of 2018. Base rents decreased by 0.5% to $24.5
million for the three month period ended July 31, 2019 as compared
with $24.7 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 nine months of fiscal 2019, we
purchased one property totaling 177,000 square feet and sold one
property totaling 10,100 square feet. These properties accounted
for all of the revenue and expense changes attributable to property
acquisitions and sales in the nine months ended July 31, 2019 when
compared with fiscal 2018.
Properties Held in Both
Periods:
Revenues
Base Rent
The decrease in base rents for the nine month and three month
periods ended July 31, 2019, when compared to the corresponding
prior periods, was predominantly caused by an increase in base rent
in the nine months ended July 31, 2018 as a result of $725,000 in
amortization of a below market rent in accordance with ASC Topic
805 from a lease with a tenant who vacated a shopping center and
whose lease was terminated. This decrease was offset 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 nine months of fiscal 2019, we leased or renewed
approximately 503,000 square feet (or approximately 11.0% of total
consolidated property leasable area). At July 31, 2019, the
Company’s consolidated properties were 93.0% leased (93.2% leased
at October 31, 2018).
Tenant Recoveries
In the nine month and three month periods ended July 31, 2019,
recoveries from tenants (which represent reimbursements from
tenants for operating expenses and property taxes) increased by
$334,000 and $588,000, respectively, when compared with the
corresponding prior periods. This increase was a result of an
increase in property tax expense caused by an increase in property
tax assessments in both periods predominantly related to properties
the company owns in Stamford, CT. This increase was partially
offset by a decrease in property operating expenses mostly related
to a decrease in snow removal costs at our properties owned 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 nine month period
ended July 31, 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 nine month and three month periods ended July 31, 2019,
property operating expenses decreased by $1.1 million and $42,000,
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 nine month and three month periods ended July 31, 2019,
property taxes increased by $1.4 million and $363,000,
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 nine month and three month periods ended July 31, 2019,
interest expense increased by $334,000 and $35,000, respectively,
when compared with the corresponding prior periods as a result of
the company having a larger balance drawn on its Facility for a
large portion of fiscal 2019 when compared with the corresponding
prior periods.
Depreciation and Amortization
In the nine month and three month periods ended July 31, 2019,
depreciation and amortization decreased by $709,000 and $451,000,
respectively when compared with the prior period primarily as a
result of increased ASC Topic 805 amortization expense for lease
intangibles in the nine month and three month periods ended July
31, 2018 for a tenant who vacated the property and whose lease was
terminated.
General and Administrative
Expenses
General and administrative expense was relatively unchanged for
the nine month and three months ended July 31, 2019 when compared
with the corresponding prior periods.
Non-GAAP Financial Measure Funds from
Operations (“FFO”)
The company considers FFO to be an additional measure of the
company’s operating performance. The company reports 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 the company’s 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 the company’s performance.
FFO as defined by the company 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 nine and three month periods
ended July 31, 2019 and 2018:
URSTADT BIDDLE PROPERTIES INC.
(NYSE: UBA AND UBP) NINE MONTHS AND THREE MONTHS ENDED JULY 31,
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:
Nine months
ended
Three
Months Ended
July
31,
July
31,
2019
2018
2019
2018
Net Income Applicable to Common and Class
A Common Stockholders
$ 18,922
$ 20,098
$ 7,270
$ 5,579
Real property depreciation
16,930
16,558
5,597
5,562
Amortization of tenant improvements and
allowances
2,706
3,046
974
967
Amortization of deferred leasing costs
1,223
1,618
411
820
Depreciation and amortization on
unconsolidated joint ventures
1,129
1,290
376
482
(Gain) on sale of property
(409)
0
(409)
0
Loss on sale of property in unconsolidated
joint venture
457
-
-
-
Funds from Operations Applicable to
Common and Class A Common Stockholders
$ 40,958
$ 42,610
$ 14,219
$ 13,410
Funds from Operations (Diluted) Per
Share:
Common
$0.96
$1.01
$0.33
$0.32
Class A Common
$1.08
$1.13
$0.37
$0.35
Urstadt Biddle Properties
Inc.
Balance Sheet
Highlights
(in thousands)
July 31,
October 31,
2019
2018
(Unaudited)
Assets
Cash and Cash Equivalents
$8,600
$10,285
Real Estate investments before
accumulated depreciation
$1,137,957
$1,118,075
Investments in and advances to
unconsolidated joint ventures
$30,068
$37,434
Total Assets
$994,221
$1,008,233
Liabilities
Revolving credit line
$12,595
$28,595
Mortgage notes payable and other
loans
$311,396
$293,801
Total Liabilities
$357,537
$347,834
Redeemable Noncontrolling
Interests
$78,294
$78,258
Preferred Stock
$190,000
$190,000
Total Stockholders’ Equity
$558,390
$582,141
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version on businesswire.com: https://www.businesswire.com/news/home/20190905005873/en/
Willing L. Biddle, CEO or John T. Hayes, CFO Urstadt Biddle
Properties Inc. (203) 863-8200
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