Urban Edge Raises Outlook as Property Income Growth Accelerates
Second-quarter revenue increased 7.6% to $122.8 million.
Urban Edge Properties (UE), a shopping-center real-estate investment trust, raised its full-year outlook after adjusted funds from operations reached a quarterly record and same-property income growth accelerated.
The quarter extended an improvement that began early in the year. Same-property net operating income rose 3.2%, up from 2.4% growth in each of the previous two quarters, while consolidated leased occupancy rebounded 20 basis points sequentially to 96.6%.
Rental revenue rose 7.7% from a year earlier to $122.6 million. Net income attributable to common shareholders fell 69% to $17.9 million, or $0.14 a share, because the year-earlier quarter included a $49.5 million gain from a real-estate sale.
FFO increased 22% to $53.4 million, or $0.41 a share, from $0.34 a share a year earlier. Adjusted FFO rose 11% to $52.3 million, or $0.40 a share, accelerating from $0.36 a share in each of the previous two quarters. Unadjusted FFO eased from $0.42 a share in the first quarter, which benefited from an $8.4 million environmental-remediation reimbursement.
Leasing activity moderated even as the broader portfolio occupancy improved. Urban Edge completed 199,000 square feet of leases across 26 transactions, down from 419,000 square feet across 45 transactions in the first quarter. Same-property leased occupancy slipped 10 basis points sequentially to 96.3%, and the blended same-space cash spread narrowed to 10.7% from 14.6%. The signed-but-not-open rent pipeline held near $22 million, though rent expected to commence during the rest of 2026 declined to $1.7 million from $3.3 million at the end of March.
Urban Edge now expects 2026 adjusted FFO of $1.50 to $1.54 a share, up from its previous range of $1.48 to $1.52. Its FFO forecast increased to $1.57 to $1.60 a share, and the lower bound of its same-property NOI growth assumption, including redevelopment, rose 25 basis points to 3.25%.
The company continued to recycle capital, adding two properties or leasehold interests totaling $51.1 million in and after the quarter and placing a New Jersey center under contract for a $60.5 million sale. Its active development and redevelopment pipeline stood at $155 million, with an expected yield of about 12%, leaving project execution and delayed rent commencements as the next tests of the stronger outlook.