Urstadt Biddle Properties Inc. (NYSE: UBA and UBP), a real
estate investment trust, today reported its operating results for
the quarter ended January 31, 2022 and provided information
regarding financial and operational activities considering the
ongoing COVID-19 pandemic.
FINANCIAL HIGHLIGHTS
FOR FIRST QUARTER FISCAL 2022
- $5.4 million net income attributable to common stockholders
($0.14 per diluted Class A Common share).
- $12.9 million of FFO ($0.33 per diluted Class A Common
share).(1)
- $1.4 million or a 6.1% increase in same property net operating
income in the first quarter of fiscal 2022, when compared with the
first quarter of fiscal 2021.(2)
- 92.6% of our consolidated portfolio Gross Leasable Area (“GLA”)
was leased at January 31, 2022, an increase of 0.7% from the end of
fiscal 2021.
- 4.9% average decrease in base rental rates on new leases signed
in our first quarter of fiscal 2022.
- 2.6% average increase in base rental rates on lease renewals
signed in our first quarter of fiscal 2022.
- On January 14, 2022, we paid a $0.2375 per share quarterly cash
dividend on our Class A Common Stock and a $0.2145 per share
quarterly cash dividend on our Common Stock.
(1) A reconciliation of GAAP net income to FFO is provided at
the end of this press release. (2) A reconciliation of income from
continuing operations to same property net operating income is
provided at the end of this press release.
The following is a discussion of our current dividend levels and
statistics about our portfolio that are useful in assessing the
impact of COVID-19 on our business:
Dividend
Declarations
- On December 15, 2021, the company’s Board of Directors declared
a quarterly dividend of $0.2375 per Class A Common share and
$0.2145 per Common share that was paid on January 14, 2022 to
holders of record on January 5, 2022. This represented an increase
of $0.03 per share per annum on both the Class A Common and Common
stock. The Board determined that this level of dividend was
appropriate, after taking into account the improved liquidity and
financial position of the company and the signs of general business
improvement in our markets, including our tenants’ businesses.
Also, as a REIT, the company is required to distribute at least 90%
of the company’s taxable income to its stockholders. Based on the
company’s estimates, this level of common stock dividend, when
combined with the company’s preferred stock dividends, will satisfy
that requirement (excluding any gains on sales of property). The
Board will continue to monitor the ongoing COVID-19 situation and
its impact on the company, and make future dividend decisions,
including at our next scheduled meeting on March 17, 2022, based on
this and other information available to it.
- In addition, in December 2021, the Board declared the regular
contractual quarterly dividend with respect to each of the
company’s Series H and Series K cumulative redeemable preferred
stock that was paid on January 31, 2022 to shareholders of record
on January 14, 2022.
COVID-19 UPDATE (as of
January 31, 2022)
- Of our 78 properties, 66 are shopping centers, 3 are
free-standing, net-leased retail bank branches and 3 are
free-standing, net-leased restaurant properties. The remaining
properties are 6 small suburban office buildings in Greenwich, CT
and Bronxville, NY.
- All 72 of our shopping centers, as well as all of our
free-standing, net-leased retail bank branches and restaurant
properties, are open and operating, with 99.6% of our total tenants
based on Annualized Base Rent (“ABR”) open and operating.
- All of our shopping centers include necessity-based tenants,
with approximately 70.3% of our tenants, based on ABR, either
designated “essential businesses” during the early stay-at-home
period of the pandemic in the tri-state area or otherwise permitted
to operate through curbside pick-up and other modified operating
procedures in accordance with state guidelines. These businesses
are 99.8% open.
- Similar to other retail landlords across the United States, we
received a number of requests for rent relief from tenants, with
most requests received during the early days of the pandemic when
stay-at-home orders were in place and many businesses were required
to close. We continued to receive a smaller number of new requests
even after businesses began to re-open, and, in some cases,
follow-on requests from tenants to which we had already provided
rent relief. These requests have tapered off, and we received no
new requests in the first quarter of fiscal 2022 from tenants that
had not previously requested rent relief.
- As of January 31, 2022, we have received 402 rent relief
requests from the approximately 836 tenants in our consolidated
portfolio. 117 of the 402 tenants withdrew their requests for rent
relief or paid their rent in full. From the beginning of COVID-19
through January 31, 2022, we completed 288 lease modifications
consisting of base rent deferrals totaling $4.0 million, or 4.1% of
our annualized ABR, and rent abatements totaling $4.5 million, or
4.7% of our ABR. Included in the aforementioned amounts are the
rent deferrals and abatements completed in the three months ended
January 31, 2022, which deferred $51,000 of base rents and abated
$124,000 of base rents from tenants to whom we had previously
granted rent relief. We have collected approximately 94.6% of
deferred tenant billings that were scheduled to be repaid through
the first quarter of fiscal 2022.
RENTAL COLLECTIONS
UPDATE (as of March 1, 2022)
- 94.8% of the total base rent, common area maintenance charges
(“CAM”) and real estate taxes payable for the period of April 2020
through January 2022 has been paid. This percentage is based on
collections of pre-pandemic contractual lease amounts billed,
exclusive of the application of any security deposits.
- 96.3% of the total base rent, CAM and real estate taxes payable
for the first quarter of fiscal 2022 has been paid. This percentage
is based on collections of pre-pandemic contractual lease amounts
billed, exclusive of the application of any security deposits.
- From the beginning of the COVID-19 pandemic through the end of
the second quarter of fiscal 2021, we converted 89 tenants to cash
basis accounting in accordance with ASC Topic 842. We did not
convert any additional tenants to cash basis accounting in the
second half of fiscal 2021 or in our first quarter ended January
31, 2022. As of January 31, 2022, 28 of these 89 tenants are no
longer tenants in the company's properties. When one of the
company’s tenants is converted to cash basis accounting in
accordance with ASC Topic 842, all previously recorded
straight-line rent receivables need to be reversed in the period
that such tenant is converted to cash basis revenue recognition.
During the fourth quarter of fiscal 2021, we restored 13 of the
original 89 tenants to accrual-basis revenue recognition, and we
restored an additional 3 tenants to accrual-basis accounting in our
first quarter ended January 31, 2022. The tenants that were
restored to accrual-basis accounting had paid all of their billed
rents for six consecutive months and had no significant unpaid
billings outstanding when restored to accrual-basis accounting.
This leaves 45 tenants on cash-basis accounting. When a tenant is
restored to accrual-basis revenue recognition, the company records
revenue on a straight-line basis in the period that such tenant is
restored to accrual-basis revenue recognition. Accordingly, the
company recorded straight-line rent revenue in the amount of
$24,000 in the quarter ended January 31, 2022 for the 3 tenants
restored to accrual-basis accounting in that quarter.
- During the three month periods ended January 31, 2022 and
January 31, 2021, we recognized collectability adjustments totaling
$200,000 or $0.005 per Class A Common share and $2.1 million or
$0.05 per Class A Common share, respectively. As of January 31,
2022, the revenue from 45 of our tenants, or approximately 5.6% of
our tenants (based on total number of commercial leases), is being
recognized on a cash basis. These figures represent a financial
reporting charge to earnings and FFO, but the company intends to
collect all unpaid rents from its tenants to the extent
feasible.
- We have $24.6 million of cash and cash equivalents currently on
our balance sheet.
- We have $124 million currently available on our unsecured
revolving credit facility.
- We have no material mortgage debt maturing until 2024.
Commenting on the operating results, Willing L. Biddle,
President and CEO of Urstadt Biddle Properties Inc., said “After
two years of the Covid-19 pandemic’s disruption to the shopping
center business, we are encouraged to see a continued rebound in
our tenants’ businesses and demand for vacant space at our
properties. This quarter, we renewed 185,000 square feet of
existing tenant leases and signed 46,000 square feet of new leases
in our portfolio, increasing the percentage of our consolidated
portfolio leased by 0.7% to 92.6%. The demand is leading to
increased rents, and this quarter renewal rents increased by 2.6%,
our third consecutive quarterly increase. Rental rates on new
leases decreased by 4.9%, but this is largely compared to
pre-pandemic rents. We believe the increasing demand for space will
continue, especially as supply becomes more constrained. Our
leasing and management teams are very busy working to deliver space
for our new leases and have a strong pipeline of new leasing deals
in process. We currently have 41,000 square feet of new leases in
the negotiation stage as well as letters of intent for over 200,000
square feet. We are grateful for the tremendous efforts and
perseverance of our tenants and our team, who have worked together
to get through the last two years. Our thoughts and prayers
continue to go out to all of those impacted by the pandemic, along
with great appreciation and respect for those who have led, and
continue to lead, the fight against the virus on the front
lines.”
Mr. Biddle continued…. “Although public health and business
conditions are improving, certain categories of our tenants
continue to be impacted. The work from home trend is negatively
affecting dry cleaners and day care providers. A general cautionary
environment about viruses also continues to decrease business for
some health and fitness providers, as well as certain personal
service tenants. The list is decreasing monthly, however, and we
continue to work with those of our tenants with good business plans
that we feel will eventually rebound. Thankfully, due to our
long-term strategy, 86% of our properties, measured by square
footage, are anchored by grocery stores, wholesale clubs or
pharmacies, and these businesses have remained solid throughout the
pandemic. Although our earnings and FFO have bounced back close to
pre-pandemic levels, there is still room to grow the income of our
existing portfolio, as our properties have an average vacancy rate
of 7% and demand for space is growing. This quarter, we collected
96.3% of our rents billed, and our allowance for doubtful accounts
continues to decline from pandemic levels. Requests for rent
abatements or deferrals have mostly stopped. As a result, our same
property operating income continues to improve from pandemic levels
and increased 6% from our first quarter of fiscal 2021. Our strong
balance sheet and liquidity are the underpinnings of our company’s
success, and well-located, grocery-anchored community and
neighborhood shopping centers have proven to be solid investments
in good times and bad. During our first quarter, we continued to
strengthen our balance sheet by refinancing our Boonton, NJ
property mortgage, increasing the principal from $6.5 million to
$11 million while reducing the fixed interest rate from 4.2% to
3.45%. After quarter-end, we refinanced the mortgage on the Dock
Shopping Center, increasing the principal from $23 million to $35
million while reducing the fixed interest rate from 4.85% to
3.0525%. Also, after quarter-end, we purchased Shelton Square
Shopping Center, a 186,000 square foot supermarket-anchored
community shopping center located in Shelton, CT. The 20+ acre
property is 96.5% leased, is anchored by a 67,000 square foot Stop
& Shop, and includes other well known tenants such as Edge
Fitness, Hawley Lane Shoes, People’s United Bank, St.
Vincent’s/Hartford Health, Burger King and Sports Clips, along with
other local tenants. The purchase of Shelton Square continues our
strategy of concentrating our portfolio in grocery, pharmacy and
wholesale club-anchored properties.”
Net income applicable to Class A Common and Common stockholders
for the first quarter of fiscal 2022 was $5,397,000 or $0.14 per
diluted Class A Common share and $0.13 per diluted Common share,
compared to net income of $4,479,000 or $0.12 per diluted Class A
Common share and $0.11 per diluted Common share in last year’s
first quarter.
FFO for the first quarter of fiscal 2022 was $12,896,000 or
$0.33 per diluted Class A Common share and $0.30 per diluted Common
share, compared with $12,375,000 or $0.33 per diluted Class A
Common share and $0.29 per diluted Common share in last year’s
first quarter.
Urstadt Biddle Properties Inc. is a self-administered equity
real estate investment trust which owns or has equity interests in
78 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 208 consecutive quarters
of uninterrupted dividends to its shareholders since its
inception.
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) Three Months Ended January 31, 2022 and 2021
Results (Unaudited) (in thousands, except per share data)
Three Months Ended
January 31,
2022
2021
Revenues
Lease income
$34,087
$32,483
Lease termination
28
705
Other
1,440
1,089
Total Revenues
35,555
34,277
Expenses
Property operating
7,002
6,314
Property taxes
5,923
5,861
Depreciation and amortization
7,144
7,518
General and administrative
2,680
2,644
Directors' fees and expenses
107
109
Total Operating Expenses
22,856
22,446
Operating Income
12,699
11,831
Non-Operating Income (Expense):
Interest expense
(3,302)
(3,392)
Equity in net income from unconsolidated
joint ventures
267
350
Gain (loss) on sale of property
2
(28)
Interest, dividends and other investment
income
55
43
Net Income
9,721
8,804
Noncontrolling interests:
Net income attributable to noncontrolling
interests
(911)
(912)
Net income attributable to Urstadt Biddle
Properties Inc.
8,810
7,892
Preferred stock dividends
(3,413)
(3,413)
Net Income Applicable to Common and
Class A Common Stockholders
$5,397
$4,479
Basic Earnings Per Share:
Per Common Share:
$0.13
$ 0.11
Per Class A Common Share:
$0.14
$ 0.12
Diluted Earnings Per Share:
Per Common Share:
$0.13
$ 0.11
Per Class A Common Share:
$0.14
$ 0.12
Weighted Average Number of Shares
Outstanding – (Diluted):
Class A Common and Class A Common
Equivalent
29,768
29,590
Common and Common Equivalent
9,710
9,393
Results of Operations
The following information summarizes our results of operations
for the three months ended January 31, 2022 and 2021 (amounts in
thousands):
Three Months Ended
Change Attributable to
January 31,
Increase
Property
Properties Held In
Revenues
2022
2021
(Decrease)
% Change
Acquisitions/Sales
Both Periods (Note 1)
Base rents
$25,014
$24,159
$855
3.5%
$(341)
$1,196
Recoveries from tenants
9,274
9,978
(704)
(7.1)%
(127)
(577)
Uncollectable amounts in lease income
(114)
(655)
541
(82.6)%
-
541
ASC Topic 842 cash basis lease income
reversal (including straight-line rent)
(87)
(999)
912
(91.3)%
-
912
Total lease income
34,087
32,483
Lease termination
28
705
(677)
(96.0)%
-
(677)
Other income
1,440
1,089
351
32.2%
(7)
358
Operating Expenses
Property operating
7,002
6,314
688
10.9%
(84)
772
Property taxes
5,923
5,861
62
1.1%
(25)
87
Depreciation and amortization
7,144
7,519
(375)
(5.0)%
(34)
(341)
General and administrative
2,680
2,644
36
1.4%
n/a
n/a
Non-Operating Income/Expense
Interest expense
3,302
3,392
(90)
(2.7)%
-
(90)
Interest, dividends, and other investment
income
55
43
12
27.9%
n/a
n/a
Note 1 – Properties held in both periods includes only
properties owned for the entire periods of 2022 and 2021 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 3.5% to $25.0 million for the three
months ended January 31, 2022, as compared with $24.2 million in
the corresponding period of 2021. 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 the first three months of fiscal 2022, we sold one property
totaling 9,100 square feet. In fiscal 2021, we sold two properties
totaling 105,000 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, 2022,
when compared with the corresponding period in fiscal 2021.
Properties Held in Both
Periods:
Revenues
Base Rent
For properties held in both periods, base rent for the three
month period ended January 31, 2022 increased by $1.2 million, when
compared with the corresponding prior period. This increase was
primarily a result of new leasing completed after the first quarter
of fiscal 2021 predominantly at three properties.
In the first three months of fiscal 2022, we leased or renewed
approximately 231,000 square feet (or approximately 5.2% of total
GLA). At January 31, 2022, the company’s consolidated properties
were 92.6% leased (91.9% leased at October 31, 2021).
Tenant Recoveries
In the three month period ended January 31, 2022, recoveries
from tenants (which represent reimbursements from tenants for
operating expenses and property taxes) decreased by a net $577,000,
when compared with the corresponding prior period.
The decrease in tenant recoveries was the result of an under
accrual adjustment in the first quarter of fiscal 2021. We
completed the 2020 annual reconciliations for both common area
maintenance and real estate taxes in the first quarter of fiscal
2021, and those reconciliations resulted in us billing our tenants
more than we had anticipated and accrued for in the prior period.
This increased tenant reimbursement income in the first quarter of
fiscal 2021, and caused a negative variance in the first quarter of
fiscal 2022.
Uncollectable Amounts in Lease
Income
In the three month period ended January 31, 2022, uncollectable
amounts in lease income decreased by $541,000. In the second
quarter of fiscal 2020, we significantly increased our
uncollectable amounts in lease income based on our assessment of
the collectability of existing non-credit small shop tenants'
receivables given the onset of the COVID-19 pandemic in March 2020.
A number of non-credit small shop tenants' businesses were deemed
non-essential by the states in which they operate and forced to
close for a portion of the second and third quarters of fiscal
2020. This placed stress on our small shop tenants and made it
difficult for many of them to pay their rents when due. This stress
continued through our first quarter of fiscal 2021. Our assessment
was that any billed but unpaid rents would likely be uncollectable.
During the three months ended January 31, 2022, many of our tenants
continued to see signs of business improvement as regulatory
restrictions continued to relax and individuals continued to return
to pre-pandemic activities. As a result, the uncollectable amounts
in lease income declined during such period when compared with the
corresponding period of the prior year.
ASC Topic 842 Cash Basis Lease Income
Reversals
We adopted ASC Topic 842 "Leases" at the beginning of fiscal
2020. ASC Topic 842 requires, among other things, that if the
collectability of a specific tenant’s future lease payments as
contracted are not probable of collection, revenue recognition for
that tenant must be converted to cash-basis accounting and be
limited to the lesser of the amount billed or collected from that
tenant. In addition, any straight-line rental receivables would
need to be reversed in the period that the collectability
assessment changed to not probable. As a result of continuing to
analyze our entire tenant base, we determined that as a result of
the COVID-19 pandemic, 89 tenants' future lease payments were no
longer probable of collection. All such tenants were converted to
cash basis after our second quarter of fiscal 2020 and prior to our
third quarter of fiscal 2021. As of January 31, 2022, 28 of these
89 tenants are no longer tenants in the Company's properties.
During the fourth quarter of fiscal 2021, we restored 13 of the
original 89 tenants to accrual-basis revenue recognition, and we
restored an additional 3 tenants to accrual-basis accounting in the
three months ended January 31, 2022. The tenants that were restored
to accrual-basis accounting had paid all of their billed rents for
six consecutive months and had no significant unpaid billings
outstanding when restored to accrual-basis accounting. As a result
of the restoration of the 3 tenants, we recorded $24,000 in
straight-line rent in the three months ended January 31, 2022. As
of January 31, 2022, 45 tenants continue to be accounted for on a
cash basis, or approximately 5.6% of our tenants. Many of our
cash-basis tenants are now paying a larger portion of their billed
rents, which results in an increase in revenue recognition for
those tenants accounted for on a cash basis when compared with the
corresponding period of the prior year.
Expenses
Property Operating
In the three month period ended January 31, 2022, property
operating expenses increased by $772,000. This was primarily a
result of having higher common area maintenance expenses in the
three months of fiscal 2022 when compared with the corresponding
prior period related to snow removal, environmental remediation
costs and management costs.
Property Taxes
In the three month period ended January 31, 2022, property tax
expenses were relatively unchanged when compared with the
corresponding prior period.
Interest
In the three month period ended January 31, 2022, interest
expenses were relatively unchanged when compared with the
corresponding prior period.
Depreciation and Amortization
In the three month period ended January 31, 2022, depreciation
and amortization decreased by $341,000 when compared with the
corresponding prior period. This decrease was the result of a
write-off of tenant improvements related to a tenant that vacated
six locations in our portfolio in the first quarter of fiscal
2021.
General and Administrative
Expenses
In the three month period ended January 31, 2022, general and
administrative expenses were relatively unchanged when compared
with the corresponding prior period.
Non-GAAP Financial Measure Funds from Operations
(“FFO”)
We consider 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 to be 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 FFO 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 period ended
January 31, 2022 and 2021. (Amounts in thousands)
(Table Follows)
Urstadt Biddle Properties Inc.
(NYSE: UBA and UBP) Three Months Ended January 31, 2022 and
2021 (in thousands, except per share data)
Reconciliation of Net Income Available to
Common and Class A Common Stockholders To Funds From
Operations:
Three Months Ended
January 31,
2022
2021
Net Income Applicable to Common and Class
A Common Stockholders
$5,397
$4,479
Real property depreciation
5,738
5,702
Amortization of tenant improvements and
allowances
991
1,315
Amortization of deferred leasing costs
397
476
Depreciation and amortization on
unconsolidated joint ventures
375
375
(Gain)/loss on sale of property
(2)
28
Funds from Operations Applicable to Common
and Class A Common Stockholders
$12,896
$12,375
FFO amounted to $12.9 million in the three months ended January
31, 2022, compared to $12.4 million in the corresponding period of
fiscal 2021. The net increase in FFO is attributable, among other
things to:
Increases:
- An increase in base rent for new leasing in the portfolio after
the first quarter of fiscal 2021, predominantly at three
properties.
- A decrease in uncollectable amounts in lease income of $542,000
in the three months ended January 31, 2022 , when compared with the
corresponding prior period. We significantly increased our
uncollectable amounts in lease income based on our assessment of
the collectability of existing non-credit small shop tenants'
receivables given the onset of the COVID-19 pandemic in March 2020.
A number of non-credit small shop tenants' businesses were deemed
non-essential by the states in which they operate and forced to
close for a portion of the second and third quarters of fiscal
2020. This placed stress on our small shop tenants and made it
difficult for many of them to pay their rents when due. This stress
continued through our first quarter of fiscal 2021. Our assessment
was that any billed but unpaid rents would likely be uncollectable.
During the three months ended January 31, 2022 , many of our
tenants continued to see signs of business improvement as
regulatory restrictions continued to relax and individuals
continued to return to pre-pandemic activities. As a result, the
uncollectable amounts in lease income declined during such period
when compared with the corresponding period of the prior year.
- We adopted ASC Topic 842 "Leases" at the beginning of fiscal
2020. ASC Topic 842 requires, among other things, that if the
collectability of a specific tenant’s future lease payments as
contracted are not probable of collection, revenue recognition for
that tenant must be converted to cash-basis accounting and be
limited to the lesser of the amount billed or collected from that
tenant. In addition, any straight-line rental receivables would
need to be reversed in the period that the collectability
assessment changed to not probable. As a result of continuing to
analyze our entire tenant base, we determined that as a result of
the COVID-19 pandemic, 89 tenants' future lease payments were no
longer probable of collection. All such tenants were converted to
cash basis after our second quarter of fiscal 2020 and prior to our
third quarter of fiscal 2021. As of January 31, 2022 , 28 of these
89 tenants are no longer tenants in the Company's properties.
During the fourth quarter of fiscal 2021, we restored 13 of the
original 89 tenants to accrual-basis revenue recognition, and we
restored an additional 3 tenants to accrual-basis accounting in the
three months ended January 31, 2022. The tenants that were restored
to accrual-basis accounting had paid all of their billed rents for
six consecutive months and had no significant unpaid billings
outstanding when restored to accrual-basis accounting. As a result
of the restoration of the 3 tenants, we recorded $24,000 in
straight-line rent in the three months ended January 31, 2022 . As
of January 31, 2022 , 45 tenants continue to be accounted for on a
cash basis, or approximately 5.6% of our tenants. Many of our
cash-basis tenants are now paying a larger portion of their billed
rents, which results in an increase in revenue recognition for
those tenants accounted for on a cash basis when compared with the
corresponding period of the prior year.
Decreases:
- A $677,000 decrease in lease termination income in the first
quarter of fiscal 2022, when compared with the corresponding prior
period, primarily as a result of a multi-site lease buyout in the
first quarter of fiscal 2021 from one tenant that had occupied
multiple spaces in our portfolio.
- A decrease in variable lease income (cost recovery income)
related to an under-accrual adjustment in recoveries from tenants
for real estate taxes and common area maintenance in the first
quarter of fiscal 2021, which increased revenue in the first
quarter of fiscal 2021 and caused a negative variance in the first
quarter of fiscal 2022.
- A $474,000 increase in management costs related to additional
staff bonus and compensation in the first quarter of fiscal 2022,
when compared to the corresponding prior period.
Non-GAAP Financial Measure Same Property Net Operating
Income
We present Same Property Net Operating Income ("Same Property
NOI"), which is a non-GAAP financial measure. Same Property NOI
excludes from Net Operating Income (“NOI”) properties that have not
been owned for the full periods presented. The most directly
comparable GAAP financial measure to NOI is operating income. To
calculate NOI, operating income is adjusted to add back
depreciation and amortization, general and administrative expense,
interest expense, amortization of above and below-market lease
intangibles and to exclude straight-line rent adjustments,
interest, dividends and other investment income, equity in net
income of unconsolidated joint ventures, and gain/loss on sale of
operating properties.
We use Same Property NOI internally as a performance measure,
and we believe Same Property NOI provides useful information to
investors regarding our financial condition and results of
operations because it reflects only those income and expense items
that are incurred at the property level. Our management also uses
Same Property NOI to evaluate property level performance and to
make decisions about resource allocations. Further, we believe Same
Property NOI is useful to investors as a performance measure
because, when compared across periods, Same Property NOI reflects
the impact on operations from trends in occupancy rates, rental
rates and operating costs on an unleveraged basis, providing
perspective not immediately apparent from income from continuing
operations. Same Property NOI excludes certain components from net
income attributable to Urstadt Biddle Properties Inc. in order to
provide results that are more closely related to a property’s
results of operations. For example, interest expense is not
necessarily linked to the operating performance of a real estate
asset and is often incurred at the corporate level as opposed to
the property level. In addition, depreciation and amortization,
because of historical cost accounting and useful life estimates,
may distort operating performance at the property level. Same
Property NOI presented by us may not be comparable to Same Property
NOI reported by other REITs that define Same Property NOI
differently.
Table Follows:
Urstadt Biddle Properties Inc. Same
Property Net Operating Income (In thousands, except for number of
properties and percentages)
Three Months Ended January
31,
2022
2021
% Change
Same Property Operating Results:
Number of Properties (Note 1)
74
Revenue (Note 2)
Base Rent (Note 3)
$ 24,583
$ 24,210
1.5%
Uncollectable amounts in lease income
(113)
(654)
(82.7)%
ASC Topic 842 cash-basis lease income
reversal-same property
(59)
(999)
(94.1)%
Recoveries from tenants
9,274
9,851
(5.9)%
Other property income
336
48
600.0%
34,021
32,456
4.8%
Expenses
Property operating
3,806
3,801
0.1%
Property taxes
5,913
5,830
1.4%
Other non-recoverable operating
expenses
497
399
24.6%
10,216
10,030
1.9%
Same Property Net Operating Income
$ 23,805
$ 22,426
6.1%
Reconciliation of Same Property NOI to
Most Directly Comparable GAAP Measure:
Other reconciling
items:
Other non same-property net operating
income
(4)
399
Other Interest income
125
108
Other Dividend Income
-
-
Consolidated lease termination income
28
704
Consolidated amortization of above and
below market leases
174
110
Consolidated straight line rent income
5
(568)
Equity in net income of unconsolidated
joint ventures
267
350
Taxable REIT subsidiary income/(loss)
186
380
Solar income/(loss)
(211)
(154)
Storage income/(loss)
526
253
Unrealized holding gains arising during
the periods
-
-
Gain on sale of marketable securities
-
-
Interest expense
(3,302)
(3,392)
General and administrative expenses
(2,680)
(2,644)
Uncollectable amounts in lease income
(113)
(654)
Uncollectable amounts in lease income -
same property
113
654
ASC Topic 842 cash-basis lease income
reversal
(87)
(999)
ASC Topic 842 cash-basis lease income
reversal-same property
59
999
Directors fees and expenses
(107)
(109)
Depreciation and amortization
(7,144)
(7,518)
Adjustment for intercompany expenses and
other
(1,921)
(1,513)
Total other -net
(14,086)
(13,594)
Income from continuing operations
9,719
8,832
10.0%
Gain (loss) on sale of real estate
2
(28)
Net income
9,721
8,804
10.4%
Net income attributable to noncontrolling
interests
(911)
(912)
Net income attributable to Urstadt Biddle
Properties Inc.
$8,810
$7,892
11.6%
Same Property Operating Expense Ratio
(Note 4)
95.4%
102.3%
(6.9)%
Note 1 - Includes only properties owned for the entire period of
both periods presented.
Note 2 - Excludes straight line rent, above/below market lease
rent, lease termination income.
Note 3 - Base rents for the three months ended January 31, 2022
and 2021 are reduced by approximately $51,000 and $400,000,
respectively, in rents that were deferred and approximately $23,000
and $1.0 million, respectively, in rents that were abated because
of COVID-19. Base rents for the three months ended January 31, 2022
and 2021, are increased by approximately $287,000 and $695,000,
respectively, in COVID-19 deferred rents that were billed and
collected in those periods.
Note 4 -Represents the percentage of property operating expense
and real estate tax.
Urstadt Biddle Properties
Inc.
Balance Sheet
Highlights
(in thousands)
January 31,
October 31,
2022
2021
(Unaudited)
Assets
Cash and Cash Equivalents
$24,579
$24,057
Real Estate investments before
accumulated depreciation
$1,148,522
$1,148,382
Investments in and advances to
unconsolidated joint ventures
$28,159
$29,027
Total Assets
$974,779
$973,852
Liabilities
Revolving credit line
$0
$0
Mortgage notes payable and other
loans
$299,006
$296,449
Total Liabilities
$332,830
$330,553
Redeemable Noncontrolling
Interests
$66,573
$67,395
Preferred Stock
$225,000
$225,000
Total Stockholders’ Equity
$575,376
$575,904
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version on businesswire.com: https://www.businesswire.com/news/home/20220311005434/en/
Willing L. Biddle, CEO or John T. Hayes, CFO Urstadt Biddle
Properties Inc. (203) 863-8200
Grafico Azioni Urstadt Biddle Properties (NYSE:UBA)
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