Greetings, and welcome to the Urban Edge Properties second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. Jen Holmes, Chief Accounting Officer. Thank you, ma'am. You may begin your presentation at this time. Good morning, welcome to Urban Edge Properties second quarter earnings conference call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer, Mark Langer, Chief Financial Officer, Chris Weilminster, Chief Operating Officer, Danielle De Vita, EVP of Development, Herb Eilberg, Chief Investment Officer, and Rob Milton, General Counsel. Please note, today's discussion may contain forward-looking statements about the company's views of future events and financial performance, which are subject to numerous assumptions, risks, and uncertainties, and which the company does not undertake to update. Our actual future results, financial condition, and business may differ materially. Please refer to our filings with the SEC, which are also available on our website for more information about the company. In our discussion today, we will refer to certain non-GAAP financial measures. Reconciliations of these measures to GAAP results are available in our earnings release and supplemental disclosure package in the Investors section of our website. At this time, it is my pleasure to introduce our Chairman and Chief Executive Officer, Jeff Olson. Great. Thank you, Jen, and good morning, everyone. We had a great second quarter with FFO, as adjusted of $0.30 per share, up 7% compared to prior year, and also up 7% year- to- date. Our results were driven by positive same property NOI growth and approximately $285 million of acquisitions completed over the past year. Our NOI performance is notable considering we are comping off a 25% increase in the second quarter of last year. Our properties are predominantly situated throughout the densely populated first ring suburbs of the D.C. to Boston corridor and benefit from the continued work from home trend. In fact, total visits to our centers increased 7% during the second quarter of 2022 as compared to the second quarter of 2019. Our grocery store sales are up 13% compared to 2019, and average approximately $900 a foot, the highest reported number in the REIT sector. Approximately 65% of our asset value is anchored by a grocer. We expect traffic and sales trends will continue to grow as we realize the benefits from upgrading our centers with better tenants through our redevelopment program. We had our most productive leasing quarter in over six years, with approximately 290,000 sq ft of new leases executed at a blended spread of 7%. This brought future rents from signed but not open tenants to $23 million, representing 10% of our annualized NOI, one of the best indicators of future NOI growth. We believe it is the highest percentage amongst our peers. Our same property leased occupancy increased to 94.9%, up nearly 300 basis points compared to prior year, and up 100 basis points compared to prior quarter. Think about that. Growing occupancy by almost 300 basis points over 12 months is an incredible accomplishment, and is a testament to the quality of our real estate and our entire team. We remain optimistic that we can continue to drive occupancy and rents. Our leasing pipeline remains strong with approximately 1 million sq ft of leases under negotiation with spreads exceeding 20%. We remain on track to reach our occupancy goal of 96% by year-end. Recall, our occupancy rate averaged 98% in 2017 and 2018. We have $206 million of active redevelopment projects underway, expected to generate a 10% unleveraged yield. Over 90% of this redevelopment pipeline has executed leases, and most of the costs are locked in through fixed construction contracts. Turning to acquisitions, we completed the $33 million purchase of The Shops at Riverwood, a 78,000 sq ft grocery-anchored shopping center in Boston. This asset is located in a dense infill area with 181,000 people within 3 miles, with average household incomes of $113,000. We financed the asset with a seven year, $21.5 million non-recourse mortgage with fixed interest at 4.25%, providing an attractive 9% in-place cash-on-cash return. This was a great opportunity to expand our footprint in the Boston MSA. It will likely be more challenging to find acquisitions that meet our current return thresholds considering higher debt and equity costs. We expect cap rates will increase modestly, but there is limited deal activity to validate pricing. History tells us that market cycles create opportunities, and we will be ready to act at the appropriate time if we can source deals at attractive returns. We are hosting an investor day on November 9 and look forward to seeing many of you there. Finally, we are honored to have been awarded one of the best places to work in New Jersey by NJBIZ Magazine. We have worked tirelessly over the years to build a culture that invests in our people, and I applaud our management team and all of our employees for this well-deserved recognition. I will now turn it over to our Chief Operating Officer, Chris Weilminster. Thank you, Jeff, and good morning, everyone. The leasing volume during the second quarter was robust. We executed 37 new leases, renewals and options totaling over 700,000 sq ft at an average cash rent spread of 10%. These transactions increased same-property leased occupancy to 94.9% and set the stage for us to achieve our goal of 96% by year-end. The work completed by the team was certainly impressive and reflects the manner in which everybody is hitting their stride. Some of the significant transactions we completed this quarter include at Montehiedra, we leased 81,000 sq ft of the 107,000 sq ft Kmart box to two retailers. Ralph's Food Warehouse, an island-based full-service grocery store, and Urology Hub, a medical user that will provide a great use occupying the back portion of the former Kmart space. At Burnside Commons, located in Inwood, New York, which serves the affluent five towns of Southwest Nassau County and the dense Queens neighborhoods of Far Rockaway and Bayswater, we have leased 62,000 sq ft to Bingo Wholesale, a regional kosher grocer. Securing Bingo Wholesale is a great example of attracting an operator that caters to the local community. We have seen meaningful media buzz over this operator coming to Inwood, and we are confident Bingo Wholesale will be a catalyst to rebranding the center that will drive the lease up of the remaining small shop vacancy. At Broomall Commons outside of Philadelphia, we leased 19,300 sq ft to Nemours Children's Health, a highly regarded medical service provider, which continues the positive leasing momentum at the strategic redevelopment that includes our first Amazon Fresh in the portfolio. We signed a deal with Aldi Grocery Stores to take over 23,000 sq ft currently operated by a thrift store at Greenbrook Commons in Watchung, New Jersey. Aldi is a solid upgrade to the center's mix and will be a strong daily draw co-tenant for the existing shop retailers. We executed our second lease with REEF Kitchens to take the 11,000-sq-ft Pier 1 vacancy at Yonkers Gateway Center. REEF Kitchens is the perfect use to serve the affluent, dense customer base, shopping the highly productive Central Avenue corridor in Lower Westchester County. Finally, we completed a 15,100 sq ft lease with Lot-Less, a regional value price retailer offering a wide selection of apparel, electronics, housewares and more. With this deal, The Shops at Bruckner is now 100% leased. We also had significant rent commencements in the second quarter, including the 127,000 sq ft AAA Wholesale industrial conversion in Lodi, New Jersey, the 45,000 sq ft Amazon Fresh at Broomall Commons, and a 9,500 sq ft Five Below and 7,100 sq ft Skechers at Tonnelle Commons, bringing that asset back to 100% physical occupancy. We have not seen a slowdown in demand for new sites from retailers, although we are mindful of rising inflation and pressures on consumer spending. Our leasing pipeline is near an all-time high, with approximately 1 million sq ft of leases in active negotiation with average rent spreads exceeding 20%. This pipeline includes important anchor retenanting deals at Bruckner Commons, Hudson Mall, and Montehiedra, which we expect to execute during the third and fourth quarters of 2022. Anchor retailer demand continues to be driven by grocers, general merchandisers, wholesale clubs, discount off-price retailers and home improvement operators. Shop leasing momentum continues with restaurants, medical tenants and health and beauty service providers. Overall, retailers continue to express the importance of bricks and mortar stores and well-located and relevant projects as being an integral piece to their operating platform that increasingly uses the store to fulfill online orders. Just returned from Puerto Rico touring the island and our properties with our team. There is no question the island has rebounded significantly. Comp store sales are up 25% at Las Catalinas and 15% at Montehiedra over the past year compared to 2019, which is no surprise when seeing the customers and full shopping bags in person. This is even more impressive when you consider the current anchor vacancies at both malls. The Fed recently noted in its comments that total employment in Puerto Rico is up 5% from pre-pandemic levels and is at a nine-year high, and the unemployment rate is at a record low. They also noted that tourism is up, with hotel occupancy rates reaching 75%+. The increased economic activity has attracted national tenants to expand on the island, especially from the discount retailers, including TJX and Burlington and others. With two Kmart vacancies now leased to highly relevant and exciting retailers, we are laser-focused on increasing occupancy from 84% to the high 90s while pushing rents on new deals and renewals at both assets. We look forward to providing further updates on our leasing progress at our upcoming Investor Day. Mark. Thank you, Chris. Good morning. I will comment on our second quarter results, including an update on business fundamentals, and we'll close with comments on our balance sheet and liquidity. Starting with our results for the quarter. We reported FFO as adjusted of $0.30 a share, which was better than our expectations, primarily due to higher NOI growth driven by collections on amounts previously reserved and better rental income across a number of properties, including new rent commencements for leases that started during the quarter. Headline same property NOI growth of 1.2% or 0% when including development properties was tempered by year-over-year changes in reversals of uncollectible receivables. Same-property NOI growth in the second quarter of last year was 25%, which benefited from approximately $4.7 million of bad debt reversals compared to $2.3 million in the second quarter of this year. Excluding the impact of reversals in each quarter, same-property NOI growth would have been 6%, and same-property NOI growth, including properties and redevelopment, would have been 4.2%. Based on collection trends this year, we currently estimate that we could recover another $0.5 million-$1.5 million per quarter in the second half of this year. Overall collection trends remain strong as we collected 99% of second quarter rents and have collected close to 100% of all rents subject to deferral agreements. In terms of future NOI growth, our signed but not open pipeline now includes $23 million of gross rents. On page 22 of our supplement, we have updated the table showing the expected timing of when this revenue should come online over the next four years. We have also added disclosure noting that more than 70% of this revenue is coming from national and regional tenants. On that point, we are increasingly receiving investor inquiries about our local tenant exposure as these tenants tend to be the most vulnerable during economic downturns. Our local tenant exposure is only 13% of our total annualized base rents, likely among the lowest in the sector. Our updated disclosure on page 20 of the supplement includes the breakdown of local, regional, and national tenants on both an ABR and GLA basis. We know the retail sector will always be volatile and the risk of some fallout seems to be increasing. As we look at the chart on page 20, as well as the ABR generated from our top 25 tenants, we feel good about the strength and stability of our tenancy. Turning to our balance sheet and liquidity, we refinanced our two mortgages that matured during this year. Our next notable maturity is not until April of 2023, when the $300 million mortgage on Bergen Town Center matures. We are exploring potential refinancing sources for this debt, including a term loan and other mortgage financings. In an effort to enhance our overall liquidity, we are in the market now expecting to increase the size of our line of credit from $600 million- $800 million while extending its maturity to the first quarter of 2027. This will provide us significant flexibility, increased liquidity, and very attractively priced capital. Our cash position at the end of the quarter was $170 million, which we expect to use to fund our redevelopment projects and for any opportunistic acquisition opportunities should they arise. Our commitment to ESG continues to grow. We published our most recent annual ESG report during the second quarter. The report highlights the significant reductions in scope one and two carbon emissions that we have achieved, as well as our success at expanding partnerships with the communities we serve, where Urban Edge employees give generously of their time and financial resources. The wellness, development, and success of our employees remains a top priority, and we couldn't be more proud of the collaboration and teamwork that made Urban Edge one of the best places to work in New Jersey. I will now turn the call over to the operator for questions. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Samir Khanal with Evercore ISI. You may proceed with your question. Good morning, everyone. Hey, Chris or Jeff. You talked about the 1 million of leases under negotiation. Maybe just digging a little bit further on that, I guess what changes have you seen during the negotiation process versus, let's say, three to six months ago? Are deals taking longer to get done? Are opening dates, you know, getting pushed out? It seems like you're still getting the rent spreads there, but trying to understand with sort of what's going on, you know, sort of in the macro world and higher costs, what changes have you seen? Yeah, let me start off, Samir, and then I'll turn it over to Chris. I think what's important on our leasing pipeline is first of all, the spreads at 20% are higher than the spreads that we've been achieving previously. What that demonstrates is that rents are increasing across the portfolio. I think they're increasing for several reasons. One is just market rents are getting higher. Two is as we went from 91% up to 95%, we have less space available, so we're asking more for that space. Three, I mean, really, for the first time, we have multiple tenants bidding on our vacant space. When we can auction it off and they know they might lose it, rent starts to increase. Lastly, this wasn't exactly related to your question, but if I became an analyst again, this is the question I would ask, which is on that 1 million sq ft, sort of what's the incremental revenue that should be produced from it? Because we do have an SNO pipeline, which we talk about, and I believe that number is $23 million, which gives us another 10% on top of our existing NOI. But the net value of the leases that are under negotiation, that amounts to $35 million annually. That's net of existing tenants in place. I would simply take the $23 million, and then I'd add to it the $35 million, and we've got visibility for another $58 million of incremental NOI, which is more than a 25% increase. Chris, what would you add? I would just add that, Samir, regarding your question about what tenants are looking for, I think it's more time on build out just because of the supply factors of getting the necessary materials to build out their spaces. We are seeing some tenants push hard for COVID or pandemic-related protection if that occurrence should arise again. Aside from that, it's pretty much business as usual. We are seeing you know, interest from the categories that I mentioned in my remarks at a pretty robust level. Then the other thing that I would just mention, which we are seeing, is on the term factor, tenants are pushing for shorter terms to control their ability to manage their pipeline of stores over a long period of time. I remember back in the old days, Gap had a real long average of five year leases so that they could control 20% of their fleet every year. You see that happening more with tenants across the board, and that's more on the anchor side. Aside from that, I don't see much of a difference. People are still trying to get quality real estate in great locations. As the supply fills up, there continues to be more pressure on these retailers, as Jeff mentioned, to fight for those spaces and pay more. I guess the sort of a second question here is on maybe any color you can provide, sort of what you're seeing on the transaction market. I mean, clearly you've seen, you know, bond yields move higher here. I mean, what have you seen with cap rates? Any color you can provide would be great. I mean, I'd say volumes have moved lower. Basically what we're seeing is higher quality assets are still trading, but a number of assets that were taken to market are being dropped over pricing because debt is hard to get, specifically in the CMBS market. I'd say, you know, I mean, if you ask the major brokerage firms what's happened to asset pricing, I think most of them would tell you that pricing is down about 10%-20% since the beginning of the year. I'd say less so for the highest quality assets. Herb, would you add anything to that? No, I think you nailed it. I think, that's right. Velocity has certainly slowed down in the market. We expect less trades in the short term. The things that were tied up in the first quarter generally traded without major discounts. What we're hearing is that pricing is down, sort of in that range that Jeff discussed. Great. Thanks, everybody. Thank you. Our next question comes from the line of Floris van Dijkum with Compass Point. You may proceed with your questions. Thanks, guys. Jeff, I'm surprised you didn't actually put this in your press release with the additional, you know, 1 million sq ft of under negotiation. That's a pretty heady number, the additional 35 million. It's a big number, right? It's a huge number. Presumably, this is further out in the future, I would imagine. Yeah, it is. It is further out. I'd say 2023, 2024 and 2025. That's a massive number. You know, one of the things I guess. I mean, you know. Why don't you put a chart together for all the strip center REITs and do the percentages, Floris. I think I've done that in the past as well. I can certainly update that. I mean, one of the concerns that the investors tend to have is, well, geez, you know, demand is really strong right now. You know, you're commenced rent was $5.1. Your executed new leases was $6.5. You keep filling, you know, backfilling the pipeline and keep expanding it. You know, I guess at some point when you're at 97%-98% occupancy, you know, that will stop. Is that sort of where you think, you know, you're gonna go back to the 98% occupancy? I know your official, you know, target is 96%, but it seems like with all of this. Yeah leasing in the pipeline, I mean, you could get there perhaps quicker than, certainly in terms of the leased occupancy, quicker than what people were expecting. Well, I mean, what we've guided is 96% by year-end, and we're reiterating that guidance this morning. We've also referenced that, I mean, we averaged 98% occupancy before, and so, yeah, I expect that we'll be back in that 97%-98% range at some point in the future. Hopefully it's the near future. Maybe if you can give, you know, the, you know, us a little bit of an update on what's happening at Sunrise Mall as well as Bruckner. Those are two of your bigger projects that Sure potentially can create some significant value. Maybe if you can give us a little bit of an update on what the leasing status is and in Sunrise, what the status is on the zoning and entitlements, etc. Let me just start with Sunrise. We don't have any specific comments 'cause we're in active negotiations right now with the remaining tenants and also in discussions with the municipality. We will provide more details when it's appropriate. We're very excited about what's happening there. I just can't give any specific comments at this time. As it relates to Bruckner, Chris, I'll let you handle that. Yeah. We're well along the way at Bruckner with regard to backfilling a significant portion of the vacant Kmart box. Tenant that will occupy approximately 150,000 sq ft of that space. Hopefully, within the next 30-45 days, we'll be able to put something out to market about what we've got going on. We've got I think it's the best possible tenant you could possibly imagine for that center. Correct. We're very excited about it. We're excited about what that will do with regard to our future ability to turn over leases and backfill with stronger tenants. We have lots of interest on the remaining space, which gives us about 30,000 sq ft, 35,000 sq ft remaining in the Kmart box, and then the vacant Toys R Us box, we are in negotiation with a handful of tenants on that as well. Lots of good news, lots of interest in that very unique location. As far as our other property across the street, as I mentioned, with Lot-Less being done, we are now 100% leased across the street, and that was a combination with Aldi, Lot Less, and we've got Five Below coming in. You'll see that asset fully leased. Very excited about the future for Bruckner. In terms of Bruckner, if I can just follow up. Just so one tenant is gonna take the bulk of the space, the other 35,000 sq ft, or basically it was 115,000 or something like that and the other 35,000. Is that gonna be split up into small shops, or is that gonna be one tenant or maybe two tenants that take the rest of it? Presumably, what does that mean in terms of rents? Because you know, there should be a massive. I don't know whether you include that in your spreads 'cause it might not be comparable space, but it's significantly more NOI that would come off of that space, I would imagine. You will see. Yeah. Your thoughts are on point. You will see a significant rent spread with regard to the backfill. The box is actually closer to 180+ thousand sq ft. So when you've got the large tenant taking the entire second floor and half of the ground floor, we've got some shallow space that we're considering small shop tenants for, but there probably will be some form of an anchor tenant that's anywhere from, call it 15-25 thousand sq ft, depending on how the box breaks up. Then the Toys R Us box is 42,000 sq ft, and we think that we're just gonna draft off of the announcement of the large anchor tenant to get that push. We're being patient on that Toys R Us box backfill to make sure we can drive rents to its maximum potential. When you think about just Bruckner and you drive by that asset, it has surface parking, which just does not exist in the boroughs. Everything else is structured parking. It's very unique to have a traditional shopping center in such a densely populated area, and that's what's attracting these retailers' interest. Again, as Jeff noted, we're thrilled about the tenant that we're close to completing a transaction with, and we think they will be transformational to that asset for the foreseeable future. Thanks, guys. Thank you, Floris. Our next question comes from the line of Paulina Rojas Schmidt with Green Street. You may proceed with your question. Good morning. Good morning. When you think about the breakdown of your tenants by type, the pie charts you have on page 20, I know the norm is to think that small shop local tenants represent the highest risk. Based on your knowledge of the portfolio, do you agree there is where the highest risk resides? I'm thinking about the anchor group, how that cohort sometimes includes large tenants, national tenants, but that still have faltering businesses and that may not go bankrupt, but close doors in a very negative scenario, of course. Yeah, I mean, it all depends, of course, on what the economic scenario is. I mean, I remember during the Great Recession when we owned a large portfolio of grocery anchored strips that had a lot of shop exposure. We were more exposed on the shop side than we were on the anchor side. And my sense is, I mean, when you look at the credit behind our existing tenants and compare that to the credit behind just local shops in general and then ours specifically, I'd say, you know, if there's a recession, there's likely more risk on the shop side than there is on the anchor side, with a couple exceptions. Mm-hmm. On that point, Paulina, this is Mark. I would just add that's why, I mean, I think the premise of your question is fair, that it isn't just, you know, binary, that shops, you know, have, you know, disproportionate risk. It's why I highlighted also our top 25 tenant exposure, which gets maybe to the other side you're saying on some of the anchor. When we look at the risk of our tenancy today, especially compared to a few years ago, we feel much better. It isn't that we're immune. There's a few names that, you know, would jump out at you that all strip owners have. But as a percentage, you know, we just feel better about that risk. I would just, you know, say that the flip side is kind of highlighted in our top 25 exposure. Got it. You have talked about the signed but not open pipeline. Yes, it's one of the largest in this sector. I think what's more notable is the percent that it's represented by rents coming online in 2023. Whereas for your peers, it's closer, and most of it is coming online in 2022. Thinking about that, how likely do you see today that your same property NOI growth next year is strong and even stronger than this year, despite the slowdown in the economy? Yeah, I mean, we're not providing specific guidance at this point. I would hope that we would be able to do, you know, better next year than this year. Thank you. Thank you. Our next question comes from the line of Chris Lucas with Capital One Securities. You may proceed with your question. Hey, good morning, guys. Thanks for a lot of the detail in the update on sort of your pipeline. I guess I just wanted one clarification. The 20% spread that you're quoting, is that a cash or a straight line spread? Cash spread. Cash. Cash spread. Yes, sir. Fantastic. As it relates to the 1 million sq ft of pipeline, is that mostly anchor space or is the shop space leasing starting to catch up or is it still heavily weighted to the anchor side? It mostly anchor space. Okay. Just as it relates to the tenant fallout you're seeing first half of the year, how was it and how does that compare to sort of, Jeff, your sort of, you know, previous experience both at Urban Edge and prior operators? It was pretty light. We did have a couple anchors fall out, which we have, you know, replacement tenants identified. But overall it was pretty light. Where we had fallout, again, there's good demand on those boxes. Okay. Last question from me. Just as it relates to the balance sheet leverage, I think we've talked about this on prior calls, but just sort of maybe update us on how you're thinking about the leverage levels, where they are and how you're expecting them to trend over the you know next couple of years and what your goals are in terms of you know sort of stabilized leverage levels. Yeah, I think, as we have mentioned in the past, Chris, the levels that we're at now in the seven are elevated, as a function of having the fallout that is now being rebuilt through that SNO pipeline. We really do see us trending back to seven and below as that income, as you just referred to the chart, you know, showing all of that EBITDA and income coming online over the next few years. In addition, Sunrise, which is currently a drag today, we expect will ultimately monetize, you know, that's a $4 million-$5 million headwind. As we get this lease up to start commencing, you know, we do see this getting back below to our target levels of seven and under. It's just a function of time. Great. Thank you. That's all I had this morning. Thank you, Chris. Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Jeff Olson for closing comments. Great. Well, please call us if you have any further questions, and we look forward to seeing everybody in New York at our Investor Day on November 9. Thank you very much. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.