Urban Edge Properties (UE) 2023 Q2 法說會逐字稿

Greetings and welcome to the Urban Edge Properties Second Quarter of 2023 Earnings Conference Call.

您好，歡迎參加 Urban Edge Properties 2023 年第二季度收益電話會議。

(Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Etan Bluman. Sir, you may begin.

（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹你們的東道主伊坦·布魯曼先生。先生，您可以開始了。

Good morning, and welcome to Urban Edge Properties 2023 Second Quarter Earnings Conference Call. Joining me today are Jeff Olson, Chairman and Chief Executive Officer; Jeff Mooallem, Chief Operating Officer; Mark Langer, Chief Financial Officer; Rob Milton, General Counsel; Scott Auster, Executive Vice President and Head of Leasing; and Andrea Drazin, Chief Accounting Officer.

早上好，歡迎參加 Urban Edge Properties 2023 年第二季度收益電話會議。今天與我一起出席的有董事長兼首席執行官傑夫·奧爾森 (Jeff Olson)； Jeff Mooallem，首席運營官；馬克·蘭格，首席財務官；羅布·米爾頓，總法律顧問； Scott Auster，執行副總裁兼租賃主管；和首席會計官 Andrea Drazin。

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 in 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.

請注意，今天的討論可能包含有關公司對未來事件和財務業績的看法的前瞻性陳述，這些陳述受到許多假設、風險和不確定性的影響，公司不承諾更新這些假設、風險和不確定性。我們未來的實際結果、財務狀況和業務可能存在重大差異。請參閱我們向 SEC 提交的文件，這些文件也可以在我們的網站上獲取有關該公司的更多信息。

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.

在今天的討論中，我們將提及某些非公認會計準則財務指標。這些措施與 GAAP 結果的調節可在我們網站投資者部分的收益發布和補充披露包中找到。此時此刻，我很高興向您介紹我們的董事長兼首席執行官傑夫·奧爾森 (Jeff Olson)。

Great. Thank you, Etan, and good morning. Our results this quarter reflect our continued progress towards achieving our 2023 net operating income growth and FFO goals. Giving us further confidence in attaining our 3-year growth targets, we outlined at our Investor Day in April, including growing net operating income by at least 20% compared to 2022 and achieving FFO of $1.35 per share in 2025.

偉大的。謝謝你，伊坦，早上好。我們本季度的業績反映了我們在實現 2023 年淨營業收入增長和 FFO 目標方面的持續進展。我們在 4 月份的投資者日上概述了實現 3 年增長目標的進一步信心，其中包括與 2022 年相比淨營業收入增長至少 20%，並在 2025 年實現每股 1.35 美元的 FFO。

Our conviction stems from the fact that approximately 80% of our expected NOI growth is derived from executed leases and contractual rent bumps. On that point, we disclosed that $6 million of annualized gross rent commenced during the second quarter on previously signed leases. Our current pipeline of signed but not open leases amounts to $28 million of annual gross rents, representing 11% of current annual NOI, the highest percentage in the shopping center sector. Our strong performance this year has exceeded our plan supporting our decision to raise guidance again this quarter.

我們的信念源於這樣一個事實：我們預期的 NOI 增長中約 80% 來自已執行的租賃和合同租金上漲。在這一點上，我們透露，第二季度之前簽署的租約開始產生 600 萬美元的年化總租金。我們目前已簽署但尚未開放的租賃項目的年總租金達 2,800 萬美元，佔當前年度 NOI 的 11%，是購物中心行業中比例最高的。我們今年的強勁表現超出了我們的計劃，支持我們本季度再次提高指導的決定。

Our new FFO as adjusted range is $1.16 to $1.19 per share, an increase $0.015 at the midpoint. That's follows the $0.02 per share increase we announced in the first quarter. We continue to see strong demand from a variety of retail categories, especially grocers, discounters, quick service restaurants, health and beauty and medical services. This strong demand, combined with limited supply and manageable bankruptcy risk has created a favorable environment for most landlords.

我們新的 FFO 調整後範圍為每股 1.16 美元至 1.19 美元，中點增加 0.015 美元。在此之前，我們在第一季度宣布將每股價格上漲 0.02 美元。我們繼續看到各種零售類別的強勁需求，特別是雜貨店、折扣店、快餐店、健康和美容以及醫療服務。這種強勁的需求，加上有限的供應和可控的破產風險，為大多數房東創造了有利的環境。

According to Cushman & Wakefield, retail shopping center vacancy is currently at an all-time low of 5.4% and new retail construction is significantly constrained by high construction and capital costs, especially in the D.C. to Boston corridor, the most densely populated supply-constrained corridor in the country.

高緯環球的數據顯示，零售購物中心空置率目前處於歷史最低水平，為5.4%，新零售建設受到高昂的建設和資本成本的嚴重製約，尤其是在人口最稠密且供應緊張的華盛頓特區至波士頓走廊。國內的走廊。

Our same-property occupancy rate is now 95.5%, the highest level since 2018, but still well below our 98% 3-year occupancy average from 2016 to 2018. We are pleased to have recaptured 184,000 square feet of the 206,000 square feet of Bed, Bath & Beyond space we had at the beginning of the year as it will allow us to upgrade our tenants at higher rents and increased traffic at these centers.

我們的同物業入住率目前為95.5%，為2018 年以來的最高水平，但仍遠低於2016 年至2018 年98% 的三年平均入住率。我們很高興奪回206,000 平方英尺的Bed 中的184,000平方英尺、Bath & Beyond 空間是我們在年初擁有的，因為這將使我們能夠以更高的租金和增加這些中心的客流量來升級我們的租戶。

We are making great progress on our active redevelopment and anchor repositioning projects. During the quarter, we completed 3 projects, which included a new Walgreens at Montehiedra, Nemours Children's Health at Broomall and Total Wine at Cherry Hill. We have approximately $200 million of active redevelopment projects currently underway that are expected to generate a healthy 12% unleveraged return, of which 98% of the total project GLA has been pre-leased.

我們積極的重建和錨定重新定位項目正在取得重大進展。本季度，我們完成了 3 個項目，其中包括 Montehiedra 的新 Walgreens、Broomall 的 Nemours Children's Health 以及 Cherry Hill 的 Total Wine。我們目前正在進行約 2 億美元的活躍再開發項目，預計將產生 12% 的健康無槓桿回報，其中 GLA 項目總額的 98% 已預租。

We remain confident in our long-term strategy due to the favorable supply and demand dynamics of the shopping center industry, particularly in our markets. Our signed but not open leasing pipeline is the fuel that will help us achieve our goal of increasing net operating income by at least 20% over the next 3 years. This NOI growth, combined with our strong balance sheet, abundant liquidity and well-laddered debt maturities, gives us confidence in reaching our 2025 FFO target of $1.35 per share.

由於購物中心行業（尤其是我們的市場）有利的供需動態，我們對我們的長期戰略仍然充滿信心。我們已簽署但尚未開放的租賃渠道將幫助我們實現未來 3 年內淨營業收入增加至少 20% 的目標。 NOI 的增長，加上我們強勁的資產負債表、充裕的流動性和良好的債務期限，使我們有信心實現 2025 年每股 1.35 美元的 FFO 目標。

We are proud to have been named one of New Jersey's best places to work by NJBIZ magazine for a second consecutive year. We believe this is a direct result of our commitment to creating a collaborative culture that prioritizes the professional growth and well-being of our employees. We recognize our employees are our greatest asset and are proud to have been acknowledged for our dedication to them. I will now turn it over to our Chief Operating Officer, Jeff Mooallem.

我們很榮幸連續第二年被 NJBIZ 雜誌評為新澤西州最佳工作場所之一。我們相信，這是我們致力於創建優先考慮員工職業發展和福祉的協作文化的直接結果。我們認識到員工是我們最大的資產，並為我們對他們的奉獻而得到認可而感到自豪。我現在將把它交給我們的首席運營官 Jeff Mooallem。

Thanks, Jeff, and good morning, everyone. The leasing environment is the best we have seen in the last 15 years. Our portfolio has just 9 vacant spaces that are 20,000 square feet or larger, including 2 that we just got back yesterday from Bed, Bath & Beyond. We are actively negotiating deals on 8 of those 9 vacancies with multiple retailers bidding on 7 of the 8. With more choices, we are able to extract higher rent and better terms.

謝謝杰夫，大家早上好。租賃環境是我們過去15年來見過的最好的。我們的投資組合只有 9 個 20,000 平方英尺或更大的空置空間，其中包括我們昨天剛從 Bed, Bath & Beyond 回來的 2 個。我們正在積極就這9 個空缺職位中的8 個職位與多家零售商就這8 個職位空缺中的7 個出價進行談判。有了更多選擇，我們就能夠獲得更高的租金和更好的條款。

Our focus is on selecting the right tenant for each asset and generating the most attractive capital-adjusted returns. The data coming out of the recent Bed Bath bankruptcy is another indication of the healthy state of the industry. Of a 109 leases that were auctioned off in the first grouping of stores, 71 were awarded to retailers with the backup bidder in many cases, also being a retailer. This exemplifies the strong demand and the limited supply for box space in shopping centers today.

我們的重點是為每項資產選擇合適的租戶，並產生最具吸引力的資本調整回報。最近 Bed Bath 破產案的數據是該行業健康狀況的另一個跡象。在第一組商店拍賣的 109 份租約中，有 71 份租約授予零售商，在許多情況下，後備投標人也是零售商。這體現了當今購物中心包廂空間的強勁需求和有限供應。

The second quarter new leasing activity was light with 11 leases aggregating 28,000 square feet. Spreads were negative compared to prior tenants as most of these spaces were interior mall locations in Puerto Rico that have been vacant for more than 2 years.

第二季度新租賃活動較少，共有 11 項租賃，面積總計 28,000 平方英尺。與之前的租戶相比，價差為負，因為這些空間大部分位於波多黎各的室內購物中心，已空置兩年多。

We expect increased activity in the second half of 2023, as we have about 400,000 square feet of leases in the pipeline at a spread in excess of 40%. On the development side, we delivered 3 projects in the second quarter and continued to work through our sector-leading signed but not open pipeline. As we deliver to tenants, we've seen some construction savings from budgeted numbers as supply chain concerns have eased and material and labor prices have stabilized.

我們預計 2023 年下半年的活動將會增加，因為我們正在醞釀約 400,000 平方英尺的租賃，且租約價差超過 40%。在開發方面，我們在第二季度交付了 3 個項目，並繼續通過我們行業領先的已簽署但尚未公開的項目進行工作。當我們向租戶交付產品時，隨著供應鏈問題的緩解以及材料和勞動力價格的穩定，我們發現預算數量節省了一些建築費用。

We also continue to work on monetizing some of our non-core land parcels, the most notable of which is our residential opportunity at Bergen Town Center. In the second quarter, we received final site plan approvals for 456 multifamily units, a credit to our entire development team who got this approved with a unanimous vote ahead of our projected time line.

我們還繼續致力於將一些非核心地塊貨幣化，其中最引人注目的是我們在卑爾根市中心的住宅機會。第二季度，我們收到了 456 個多戶單元的最終場地規劃批准，這要歸功於我們整個開發團隊，他們在我們預計的時間線之前以一致投票的方式獲得了批准。

We are actively engaged with several residential developers to maximize value, and we hope to announce the deal soon at a valuation on a price per unit basis that we believe will be one of the highest ever for Bergen County.

我們正在積極與幾家住宅開發商合作，以實現價值最大化，我們希望盡快以單位價格的估值宣布這筆交易，我們相信這將是卑爾根縣有史以來最高的估值之一。

Lastly, I want to add a few comments about the transaction market today. The second quarter has seen a real pickup in offerings, and there are probably more assets in the market now than at any time in the last 12 months. With the bid-ask spread narrowing, sellers are prioritizing the certainty of closing to a higher degree than what we have historically seen during other parts of the cycle. As a well-capitalized buyer with deep lending relationships, this provides us with a strong competitive advantage, and we're using that advantage to spend more time looking at deals in our core markets.

最後我想對今天的交易市場補充幾點看法。第二季度的產品供應量確實有所增加，目前市場上的資產可能比過去 12 個月中的任何時候都多。隨著買賣差價縮小，賣家對成交的確定性的重視程度高於我們在周期其他階段歷史上看到的情況。作為一個資本雄厚、擁有深厚貸款關係的買家，這為我們提供了強大的競爭優勢，我們正在利用這一優勢花更多時間在我們的核心市場上尋找交易。

We also believe there is a very attractive cap rate spread right now between potential retail acquisitions and a number of the high-quality, low cap rate assets that we own, including excess land at Bergen, our industrial portfolio and self-storage properties.

我們還認為，目前潛在的零售收購與我們擁有的一些高質量、低資本化率資產之間存在非常有吸引力的資本化率差距，包括卑爾根的多餘土地、我們的工業投資組合和自助倉儲物業。

As a result, we may look to dispose of certain low-cap non-retail assets and recycle proceeds into higher yielding and in our mind, undervalued retail properties in our core markets. This aligns with our strategic plan to simplify our business and grow earnings. I will now turn it over to our Chief Financial Officer, Mark Langer.

因此，我們可能會考慮處置某些低盤非零售資產，並將收益回收到收益更高、在我們看來核心市場被低估的零售物業中。這符合我們簡化業務和增加收入的戰略計劃。我現在將把它交給我們的首席財務官馬克蘭格。

Thanks, Jeff. Good morning. I will discuss drivers of our second quarter results, comment on our balance sheet and liquidity, and we'll close with an update on our 2023 guidance. Starting with our results for the quarter. We reported FFO as adjusted of $0.30 per share and same-property NOI growth, including redevelopment, of 3.5% compared to the second quarter of 2022. The increase was primarily due to rent commencements on new leases and higher net recovery income driven by lower operating expenses.

謝謝，傑夫。早上好。我將討論第二季度業績的驅動因素，評論我們的資產負債表和流動性，最後我們將更新 2023 年指引。從我們本季度的業績開始。我們報告稱，與2022 年第二季度相比，調整後的FFO 為每股0.30 美元，同地產NOI 增長（包括重建）為3.5%。這一增長主要是由於新租約的租金開始以及營業收入下降導致的淨回收收入增加。花費。

Excluding the collection of amounts previously deemed uncollectible in both periods, same property NOI growth would have increased by 6.6%. In terms of our balance sheet, we ended the quarter with $93 million of cash and no amounts drawn on our $800 million line of credit. We have been busy on the financing front. In addition to the successful refinancing we announced on our call last quarter regarding Bergen town Center's new $290 million, 6.3% 7-year mortgage, we closed 3 other mortgage financings in the second quarter.

如果不包括之前在這兩個時期被視為無法收回的款項，相同財產的 NOI 增長將增加 6.6%。就我們的資產負債表而言，本季度結束時我們有 9300 萬美元的現金，並且沒有從我們的 8 億美元信貸額度中提取任何金額。我們在融資方面一直很忙。除了上季度我們在電話會議上宣布的關於卑爾根市中心新的2.9 億美元、利率6.3% 的7 年期抵押貸款的成功再融資之外，我們還在第二季度完成了另外3 項抵押貸款融資。

We refinanced our $9 million mortgage at Shops at Bruckner with a new 6-year, $38 million loan at a fixed rate of 6%. A portion of the proceeds was used to pay off our $29 million variable rate mortgage on the Plaza at Cherry Hill that was bearing interest at 8.75%. We also obtained a new 10-year, $16 million mortgage at a fixed rate of 6% secured by our Newington Commons property. We now have only one remaining maturity in 2023 and limited to a $21 million, 5% mortgage at Hudson Mall.

我們以 6% 的固定利率為 Shops at Bruckner 的 900 萬美元抵押貸款提供了新的 6 年期 3,800 萬美元貸款再融資。部分收益用於償還 Cherry Hill 廣場 2,900 萬美元的可變利率抵押貸款，該抵押貸款利率為 8.75%。我們還以 6% 的固定利率獲得了一項新的 10 年期、價值 1,600 萬美元的抵押貸款，以我們的 Newington Commons 房產為抵押。現在，我們只剩下一份 2023 年到期的貸款，並且僅限於哈德遜購物中心 2100 萬美元、利率 5% 的抵押貸款。

Looking forward, we feel very comfortable with our 6 mortgages maturing in 2024 and 2025 which aggregate only 10% of our total debt, amounting to $173 million at a weighted average in-place rate of 5.3%. These are secured by high-quality assets that we believe are financeable at rates in the 6% to 6.5% range today. Considering the financing activity we have announced this year, less than 5% of our total debt is now unhedged variable rate debt and all of it relates to 2024 maturities. In short, we feel very good about the way our balance sheet is positioned.

展望未來，我們對 2024 年和 2025 年到期的 6 項抵押貸款感到非常滿意，這些抵押貸款總計僅占我們總債務的 10%，總計 1.73 億美元，加權平均到位利率為 5.3%。這些都是由優質資產擔保的，我們認為這些資產目前的融資利率在 6% 至 6.5% 範圍內。考慮到我們今年宣布的融資活動，目前我們總債務中不到 5% 是未對沖的可變利率債務，而且全部都與 2024 年到期有關。簡而言之，我們對資產負債表的定位方式感覺非常好。

Turning to our outlook for 2023. As previously announced, we increased our 2023 FFO as adjusted guidance to a new range of $1.16 to $1.19 per share, which when compared to our prior guidance, increases the lower end of the range by $0.02 a share and increases the upper end by $0.01 a share. The increase reflects our better-than-expected performance year-to-date and our increased guidance for same-property NOI growth, including redevelopment, with a new midpoint of 2%, up from the prior midpoint of 1%.

談到我們對2023 年的展望。正如之前宣布的那樣，我們將2023 年FFO 作為調整後的指引上調至每股1.16 美元至1.19 美元的新範圍，與我們之前的指引相比，該範圍的下限每股增加了0.02 美元，每股上限增加 0.01 美元。這一增長反映了我們今年迄今的業績好於預期，以及我們提高了對同一物業 NOI 增長（包括重建）的指引，新的中點為 2%，高於之前 1% 的中點。

The new midpoint assumes a general credit loss of 100 basis points of gross revenues and incorporates $1 million of lost rent for the remainder of the year on the 2 Bed, Bath & Beyond anchor leases that we recaptured.

新的中點假設總體信用損失為總收入的 100 個基點，並包含我們重新獲得的 2 Bed、Bath & Beyond 錨定租賃在今年剩餘時間內的 100 萬美元租金損失。

In addition, our guidance assumes operating expenses normalized to levels similar to the third quarter of 2022, as this quarter benefited from the timing of certain deferred maintenance projects which will likely start in the third quarter. In terms of collections on past amounts deemed uncollectible, our updated 2023 guidance at the midpoint, assumes we will receive $2.5 million during 2023, an increase of $0.5 million above our prior plan based on some payments that we've received from bankrupt tenants that vacated in 2020.

此外，我們的指導假設運營費用正常化至與 2022 年第三季度類似的水平，因為本季度受益於某些可能在第三季度啟動的推遲維護項目的時間安排。就過去被視為無法收回的金額的收款而言，我們更新的2023 年指南中點假設我們將在2023 年收到250 萬美元，比我們之前的計劃增加了50 萬美元，這是基於我們從搬出的破產租戶那裡收到的一些付款2020年。

We have received about $1.7 million in the first half of 2023 and expect another $800,000 for the remainder of the year. Note that collections on amounts deemed uncollectible during the third and fourth quarter of 2022 were materially higher, as we received about $4.5 million in the second half of last year. This will be a headwind to our NOI growth for the remainder of this year.

我們在 2023 年上半年收到了約 170 萬美元，預計今年剩餘時間將收到 80 萬美元。請注意，2022 年第三和第四季度被視為無法收回的款項收款大幅增加，因為我們在去年下半年收到了約 450 萬美元。這將阻礙我們今年剩餘時間的 NOI 增長。

Recurring G&A this quarter was $8.9 million. This is in line with our G&A guidance, which we did not change from last quarter when we updated and lowered it to reflect our expectation that full year recurring G&A will be between $34.5 million to $36.5 million, a 5% reduction from 2022. We are continuing our efforts to evaluate ways we can extract savings and become more efficient and are pleased with the progress we have made.

本季度經常性一般管理費用為 890 萬美元。這與我們的 G&A 指導一致，我們更新並降低了上季度的 G&A 指導，以反映我們的預期，即全年經常性 G&A 將在 3,450 萬美元至 3,650 萬美元之間，比 2022 年減少 5%。我們繼續努力評估節省開支和提高效率的方法，並對我們取得的進展感到滿意。

In closing, our team is focused on executing the growth plan we outlined in April at our Investor Day. We are grateful for the dedication and execution provided by the entire UE team who has made our success possible. I will now turn the call over to the operator for questions.

最後，我們的團隊專注於執行我們在四月份投資者日概述的增長計劃。我們感謝整個 UE 團隊的奉獻和執行力，他們使我們的成功成為可能。我現在將把電話轉給接線員詢問問題。

We will now be conducting a question-and-answer session.

我們現在將進行問答環節。

(Operator Instructions)

（操作員說明）

Our first question comes from Samir Khanal with Evercore ISI.

我們的第一個問題來自 Evercore ISI 的 Samir Khanal。

Just curious, Jeff, on the leases that you've executed what do these annual rent bumps look like? I mean in the past, you get these 1% annual bumps for boxes. You clearly talked about the strong demand. There's not a lot of supply out there, right? So I guess what does that economics look like at this point?

只是好奇，傑夫，你執行的租約中這些年度租金上漲是什麼樣的？我的意思是，在過去，盒子每年都會有 1% 的漲幅。您明確談到了強勁的需求。那裡的貨源不多吧？所以我猜現在的經濟學是什麼樣子的？

Samir, it's Jeff Mooallem. Yes, so we're -- obviously, that's a focal point of all the new leases we're executing, and we are seeing better increases now than we were historically. Our rent growth in general on the new leases we're signing now is north of 2%. That's a combination of [Shop-and-box] deals. So in the ones that we did this quarter, I think we're about between 2.25% and 2.5%. It was a small quarter for us leasing-wise volume-wise, but our pipeline is pretty extensive, and we expect to be able to extract a lot of new leases in the third quarter.

薩米爾，我是傑夫·穆阿勒姆。是的，所以我們 - 顯然，這是我們正在執行的所有新租賃的焦點，而且我們現在看到比歷史上更好的增長。我們現在簽署的新租約的租金增幅總體超過 2%。這是[商店加盒子]優惠的組合。因此，在我們本季度所做的工作中，我認為我們的比例大約在 2.25% 到 2.5% 之間。對於我們的租賃量而言，這是一個很小的季度，但我們的管道相當廣泛，我們預計能夠在第三季度獲得大量新租賃。

And then you talked about the transaction market that's opening up. I know there was an article yesterday about the industrial property [needs to Hanover]. I don't know how much you can provide a bit more color on that? And maybe just sort of maybe what has been sort of the initial interest?

然後你談到了正在開放的交易市場。我知道昨天有一篇關於工業產權的文章[需要漢諾威]。不知道你能提供多少色彩？也許只是最初的興趣是什麼？

Look, the assets in the market, we can't get into too many details on it, but we're certainly excited about this concept of selling low cap rate assets and redeploying capital more accretively. It's early in the process for that asset, but the interest level is very strong. I want to say there are 100 CAs that have been signed.

看，市場上的資產，我們不能透露太多細節，但我們當然對出售低資本化率資產和更增值地重新部署資本的概念感到興奮。該資產尚處於早期階段，但興趣水平非常高。我想說已經簽署了 100 個 CA。

About 125, yes.

大約125，是的。

Yes. So -- and that's increasing. It was 100 just a couple of days ago. And in addition to the industrial asset, as Jeff mentioned, we also have excess land at Bergen. We have excess land at other assets. We own a couple of self-storage facilities that we developed several years ago that have now been stabilized.

是的。所以——而且這個數字還在增加。幾天前還是100。正如傑夫提到的，除了工業資產之外，我們在卑爾根還擁有多餘的土地。我們在其他資產上有多餘的土地。我們擁有幾個幾年前開發的自助倉儲設施，現在已經穩定下來。

We own a number of single tenant assets anchored by credit retailers that would include Home Depot, who happens to be our largest retailer that could be up for consideration. So we're evaluating our entire pool of assets to see where we might be able to make some trades.

我們擁有許多由信貸零售商支持的單一租戶資產，其中包括家得寶（Home Depot），它恰好是我們可能考慮的最大零售商。因此，我們正在評估整個資產池，看看我們可以在哪裡進行一些交易。

And then my last one is for Mark. Similarly, your expense recoveries were up again in the second quarter. Maybe talk around that and how we should be thinking about that kind of what's that stable number to think about and maybe for the remainder of the year and into '24?

我的最後一篇是給馬克的。同樣，第二季度的費用回收率再次上升。也許圍繞這個問題討論一下，我們應該如何思考這個穩定的數字是什麼，也許在今年剩下的時間裡到 24 年？

Sure. As I think I've messaged previously, we did expect a message that we expected the recovery ratio to improve as we were bringing this SNO pipeline on to income producing. And so recoveries went from 83.5% on a same-property basis to 85.5% this quarter. And while this quarter did benefit from some lower levels of expenses, I would say that because of the continuation of how we see the SNO pipeline, I think our run rate can be around this 85% elevated level and then ticking up next year modestly.

當然。正如我之前所傳達的信息，我們確實期望收到這樣的信息：隨著我們將這條 SNO 管道用於創收，我們預計回收率將會提高。因此，本季度的回收率從相同財產的 83.5% 上升到 85.5%。雖然本季度確實受益於一些較低水平的費用，但我想說，由於我們對 SNO 管道的看法的延續，我認為我們的運行率可以在 85% 的升高水平左右，然後在明年適度上升。

The next question is with Floris Van Dijkum from Compass point.

下一個問題是來自 Compass Point 的 Floris Van Dijkum。

So I think it's actually really interesting this idea of selling low cap rate assets and buying higher-yielding retail assets that presumably had some attractive growth here as well. Maybe if you could -- I know it's a little early, and you've got at least one asset in the market right now.

因此，我認為出售低資本化率資產併購買高收益零售資產的想法實際上非常有趣，這些資產可能也有一些有吸引力的增長。也許如果你可以的話——我知道現在有點早，而且你現在在市場上至少有一項資產。

You've got 2 big New Jersey industrial. And obviously, you've got your potential industrial development in Long Island at Sunrise as well. Maybe if you can touch upon -- does this impact your plans with Sunrise and maybe getting out of that? And also, what kind of spreads on sales versus acquisitions, do you expect to get on some of this recycling?

新澤西州有兩大工業園區。顯然，日出長島也有潛在的工業發展潛力。也許您可以談談——這是否會影響您與 Sunrise 的計劃，甚至可能擺脫這種情況？另外，您希望從這些回收中獲得一些收益，銷售與收購的價差是多少？

Yes. I mean it's a little early to talk about the spreads, but it's sizable. So I mean I think on many of these assets, as it was reported, and it's sub-5% cap rates and you can buy shopping centers at a much larger spread than that. I'll let Jeff answer the Sunrise question.

是的。我的意思是，現在談論利差還為時過早，但其規模相當大。所以我的意思是，我認為許多這些資產，正如報導的那樣，其資本化率低於 5%，你可以以比這大得多的價差購買購物中心。我會讓傑夫回答日出問題。

Yes. I mean, Floris, just like our East Hanover property, where there's just such great demand for space in these real infill metro New York locations. Sunrise shares many of those same qualities, and that obviously makes it a very attractive site for the industrial development community.

是的。我的意思是，弗洛里斯，就像我們東漢諾威的房產一樣，在這些真正的紐約都會區，對空間的需求非常大。 Sunrise 具有許多相同的品質，這顯然使其成為對工業開發社區非常有吸引力的場所。

So the pickup in demand that we see across the area is going to benefit us. Too early to really tell you whether that project gets built as an industrial project, a retail project, a residential, some combination and our role in that. We're actively working through the plan with the town of Oyster Bay. We're actively working through it with our existing retailers, and it's definitely moving in the right direction, both in terms of numbers and in terms of getting clarity on what we're going to do. But I would say that the metrics we're seeing in industrial today that led us to put East Hanover on the market are also going to help us at Sunrise if we move forward with an industrial project there.

因此，我們看到該地區需求的回升將使我們受益。現在真正告訴您該項目是否作為工業項目、零售項目、住宅項目、某種組合以及我們在其中的角色還為時過早。我們正在與牡蠣灣鎮積極合作實施該計劃。我們正在與現有零售商積極合作，無論是在數量方面還是在明確我們要做什麼方面，它都絕對在朝著正確的方向發展。但我想說，如果我們推進東漢諾威工業項目，我們今天在工業領域看到的指標也將幫助我們在日出項目上的發展。

I saw that you bought a -- the ground rents as part of the Sunrise properties, does that just simplifies the ownership and the structure of that?

我看到你買了——地租作為日出房產的一部分，這是否只是簡化了所有權和結構？

Yes. There was a state sale asset, but I declare that's been in the works for a while, and we had to wait for something to pass through probate to get that done. But yes, that's just a way of simplifying and consolidating our holdings into one entity.

是的。有一項國家出售資產，但我聲明這已經進行了一段時間，我們必須等待一些東西通過遺囑認證才能完成。但是，是的，這只是簡化我們的資產並將其整合為一個實體的一種方式。

So Floris, let me just add one thing here because as I thought this morning about some of the unique characteristics of UE, I sort of put them into 3 different buckets. The first is what we've clearly communicated in terms of our NOI trajectory, which leads to FFO growth getting to this $1.35 in 2025. And that's all rooted in this SNO pipeline, which is about $28 million and our $200 million redevelopment pipeline that's yielding around 12%. So that's sort of one.

Floris，讓我在這裡添加一件事，因為當我今天早上想到 UE 的一些獨特特徵時，我將它們分為 3 個不同的桶。第一個是我們在NOI 軌跡方面明確傳達的內容，這將導致FFO 增長在2025 年達到1.35 美元。這一切都植根於這個SNO 管道，該管道約為2800 萬美元，以及我們2 億美元的重建管道，該管道正在產生收益12%左右。這就是其中之一。

Number 2 is this ability of ours to trade out of some low cap rate assets into higher cap rate assets, which we're beginning to test the market. And then the third point really has more to do with the unique structure of our balance sheet, which, as you know, is all centered around nonrecourse mortgage debt. And we do have an ability to remove about $110 million of debt between the DPO at Las Catalinas which is about $40 million and the foreclosure at Kingswood, which is around $70 million. So I think those 3 things are unique to UE.

第二點是我們有能力將一些低資本化率資產交易成更高資本化率資產，我們正在開始測試市場。第三點確實與我們資產負債表的獨特結構有關，正如您所知，資產負債表全部以無追索權抵押貸款債務為中心。我們確實有能力消除拉斯卡塔利納斯 DPO（約 4,000 萬美元）和嘉湖取消抵押品贖回權（約 7,000 萬美元）之間約 1.1 億美元的債務。所以我認為這三件事是 UE 獨有的。

No. And my next question, I guess, the follow-up question on your balance sheet, because I do think that's one of the other things that sets you guys apart, your mortgage structure. I found it unique in some ways that you are actually able to save money by refinancing assets today.

不。我想，我的下一個問題是關於您的資產負債表的後續問題，因為我確實認為這是讓你們與眾不同的其他因素之一，即抵押貸款結構。我發現它在某些方面是獨一無二的，你實際上可以通過今天的資產再融資來省錢。

Obviously, the Bruckner loan was pretty cheap. And maybe, Mark, if you could comment a little bit on the -- what you're seeing in the financing market, 6% appears even for 10-year money in Newington is very attractive. For 6-year money at Bruckner appears attractive and then you're paying down debt actually that's at 8.75%. If you can walk through that a little bit more and give a little more color.

顯然，布魯克納的貸款相當便宜。也許，馬克，如果你能評論一下你在融資市場上看到的情況，即使對於紐因頓的 10 年期資金來說，6% 似乎也非常有吸引力。布魯克納的 6 年期資金看起來很有吸引力，但實際上你要償還的債務是 8.75%。如果你能多講一點，並給予更多的色彩。

Sure, Floris. I think one thing, just as Jeff and you both pointed out, and that is if you just step back and look among our public peers, we are unique in that, this is kind of our sole mortgage -- our sole debt strategy. And so when we go out and talk to lenders, having a well-capitalized public REIT like us, we're kind of differentiated from the get-go because at these times, sponsorship really does matter.

當然，弗洛里斯。我認為有一件事，正如傑夫和你們都指出的那樣，如果你退一步看看我們的公共同行，我們的獨特之處在於，這是我們唯一的抵押貸款——我們唯一的債務策略。因此，當我們出去與貸方交談時，擁有像我們這樣資本充足的公共房地產投資信託基金，我們從一開始就有所不同，因為在這些時候，贊助確實很重要。

And when you look at the 3 primary sources that we go to, starting with CMBS, I would actually say that market has been more volatile recently, and the retail pricing for assets that we have actually has been inefficient. And so when you go to the next prong of the regional banks, clearly, there's been a bifurcation given all the headline noise and some of the restructuring that they've done. They are -- we found many of our regional relationships actually are still open for business. It is a relationship-driven type of transaction.

當你看看我們所訪問的 3 個主要來源時，從 CMBS 開始，我實際上會說市場最近更加波動，而且我們實際上擁有的資產的零售定價效率低下。因此，當你審視地區銀行的下一個分支時，很明顯，鑑於所有的頭條新聞和他們所做的一些重組，出現了分歧。我們發現我們的許多區域關係實際上仍然開放。這是一種關係驅動的交易類型。

They in turn want deposits. They play in smaller tiers of loan size, which is fine for many of our centers. But where we've seen the most traction and where myself and Etan, and others on our team, have really spent time as with the life companies. High-quality product like we have, still highly desired. Grocery still remains of top interest but even outside of grocery, just really well located, well anchored, high credit tenancy that we have has enabled us to get the debt rates you mentioned of 6% with real duration and 60% LTVs and higher.

他們反過來又想要存款。他們的貸款規模較小，這對我們的許多中心來說都很好。但我們看到了最具吸引力的領域，我自己和 Etan 以及我們團隊中的其他人也確實在壽險公司中投入了時間。像我們這樣的高質量產品，仍然非常受歡迎。雜貨仍然是最受關注的，但即使在雜貨之外，我們擁有的地理位置優越、錨定良好、高信用租賃使我們能夠獲得您提到的6% 的實際久期債務率和60% 甚至更高的LTV。

So in terms of the last part of your question, what I would say is the rates that we're seeing today, spreads are probably in the 200 to 225 range, but really asset quality and the type of center matters. So I would tell you that all in those rates are 6% to 6.5%. We're doing everything we can to push to the low end, but we've been very pleased with the appetite among life companies for our product.

因此，就你問題的最後一部分而言，我想說的是我們今天看到的利率，利差可能在 200 到 225 的範圍內，但資產質量和中心類型確實很重要。所以我想告訴你，所有這些利率都是 6% 到 6.5%。我們正在盡一切努力將產品推向低端市場，但我們對壽險公司對我們產品的興趣感到非常滿意。

One final follow-up on the debt side. I know you had an asset in Brooklyn, an office asset that I think you were thinking about handing back the keys on. Can you give us an update on that?

債務方面的最後一個後續行動。我知道您在布魯克林有一項資產，是一項辦公資產，我認為您正在考慮歸還鑰匙。您能給我們介紹一下最新情況嗎？

Sure. We did announce and disclose last quarter and again this quarter, Floris. That asset has been transferred to special servicing, was transferred in May. I think you guys all know the volume of activity that special services are dealing with is quite large.

當然。我們確實在上個季度和本季度宣布並披露了這一消息，弗洛里斯。該資產已轉移至特殊服務部門，於 5 月轉移。我想你們都知道特殊服務處理的活動量相當大。

So having said that, we are making very good progress. We're in very active discussions with the lender and lenders' counsel, going through the foreclosure process, but it is just too early and hard to predict when that would be completed. But we do expect that's where it's headed.

話雖如此，我們正在取得非常好的進展。我們正在與貸款人和貸款人的律師進行非常積極的討論，以完成取消抵押品贖回權的過程，但現在還為時過早，很難預測何時完成。但我們確實預計這就是它的發展方向。

And Floris, when it's done. Again, it should remove about $70 million of debt from our balance sheet, and it should be accretive to earnings by $0.01 to $0.02 a share.

還有弗洛里斯，當一切完成後。同樣，它應該從我們的資產負債表中消除大約 7000 萬美元的債務，並且應該使每股收益增加 0.01 至 0.02 美元。

Our next question is from Ronald Kamdem, Morgan Stanley.

我們的下一個問題來自摩根士丹利的羅納德·卡姆德姆。

Just 2 quick ones. One, going back to Puerto Rico, if you've touched on it already. Just maybe thoughts on what's happening on the ground there and maybe your thinking of potentially selling that asset or getting a sale done there?

就2個快的。第一，回到波多黎各，如果你已經提到過的話。也許只是考慮那裡正在發生的事情，也許您考慮出售該資產或在那裡完成出售？

Ron, it's Jeff Mooallem. Yes. Look, we've said it last quarter and we're reiterating it this quarter, Puerto Rico is hot. The market has really come back. We're seeing it in our leasing. A lot of the spaces that we have down there, that are interior mall spaces that over the last several years, we've just been temping.

羅恩，我是傑夫·穆阿勒姆。是的。看，我們上個季度已經說過了，本季度我們會重申，波多黎各很熱。市場真的回來了。我們在租賃中看到了這一點。我們在那裡擁有的很多空間，都是室內商場空間，在過去的幾年裡，我們一直在嘗試。

We've been gradually converting into permanent leases as tenants are willing to make a longer commitment to the island. One big tenant in particular, who told us they only had 2 stores on the island. And about 6 months ago, we were thinking that they were going to just exit because it was very hard to service only 2 stores in all of Puerto Rico, came back to us in the last month and said they were going to exercise their option and stay longer. And they were going to commit to building more stores on the island, and that's one of the best soft good retailers in the world. So we feel very good about where Puerto Rico sits from a leasing standpoint.

由於租戶願意對島上做出更長期的承諾，我們已逐漸轉變為永久租賃。尤其是一位大租戶，他告訴我們他們在島上只有兩家商店。大約 6 個月前，我們認為他們會退出，因為很難為波多黎各全境的 2 家商店提供服務，上個月回來告訴我們，他們將行使他們的選擇權，待久一點。他們將致力於在島上開設更多商店，這是世界上最好的軟商品零售商之一。因此，從租賃的角度來看，我們對波多黎各的處境非常滿意。

We're opening a good restaurant at our Las Catalinas property next week and then our Sector sixty6 entertainment user should follow within 30 days after that. As far as sales, it's not something that's on the table right now. Mark talked a little bit about the refinancing that we're working through, and we're excited about that. And as values continue to increase there and occupancy continues to go up and we can push rents a little bit more, it's obviously something we'll continue to look at, but not in the short term.

下週我們將在 Las Catalinas 酒店開設一家不錯的餐廳，然後我們的 Sector Sixty6 娛樂用戶應該會在 30 天內關注。就銷售而言，這不是現在擺在桌面上的事情。馬克談到了我們正在進行的再融資，我們對此感到興奮。隨著那裡的價值繼續增加，入住率繼續上升，我們可以進一步提高租金，這顯然是我們將繼續關注的事情，但不是在短期內。

Mark, do you want to talk a little bit about the financing market in Puerto Rico just....

馬克，你想談談波多黎各的融資市場嗎……

Yes, I would just add, Ron, Jeff Olson mentioned the fact that we have this discounted payoff option that's exercisable now for Los Catalinas which would be able -- which would enable us to purchase the existing debt for $72.5 million. So based on that, we are in the market. Puerto Rico, we find is best financed through the local market. We have had great success, as you may remember, in getting permanent financing at Montehiedra.

是的，我想補充一點，羅恩，傑夫·奧爾森提到了這樣一個事實，我們有這個折扣支付選項，現在可以為洛斯卡塔利納斯行使，這將使我們能夠以7250 萬美元購買現有債務。因此，基於此，我們進入了市場。我們發現波多黎各最好通過當地市場融資。您可能還記得，我們在蒙特希德拉獲得永久融資方面取得了巨大成功。

We're talking to the same 3 primary lenders that are in Puerto Rico and trying to negotiate a new mortgage now. So stay tuned. But to Jeff Mooallem's point, I would just say fundamentals and both leasing activity have enabled the financing market to also remain an increasingly more attractive opportunity for us. So we are pursuing that right now.

我們正在與波多黎各的 3 個主要貸款人進行交談，並嘗試協商新的抵押貸款。所以請繼續關注。但就 Jeff Mooallem 的觀點而言，我只想說基本面和租賃活動使融資市場對我們來說仍然是一個越來越有吸引力的機會。所以我們現在正在追求這個目標。

Great, and then just for the guidance, can you remind us how much bad debt is baked into it for this year? And how much have you run through year-to-date, would be one. And then the second part of that question is, as you're sort of thinking about the 2025 target of $1.35 of FFO, I think you've talked about the signed not open pipeline.

太好了，那麼作為指導，您能提醒我們今年的壞賬有多少嗎？今年迄今為止你跑了多少，就是其中之一。然後這個問題的第二部分是，當你在考慮 2025 年 FFO 1.35 美元的目標時，我認為你已經談到了已簽署的未開放管道。

You talked about the $200 million of redevelopment and the 12% yield, maybe can you remind us what are the biggest sort of moving pieces to getting to that number, right? Because those first 2 are pretty clear, but is it bad debt? Is it sales? Just what could make you overshoot or undershoot that $1.35 in your mind right now?

您談到了 2 億美元的重建和 12% 的收益率，也許您能提醒我們達到這個數字的最大推動因素是什麼，對嗎？因為前兩個很清楚，但它是壞賬嗎？是銷售嗎？現在，什麼可能會讓您超出或低於您心目中的 1.35 美元？

Sure. So in terms of the first question on bad debt, we had messaged that right now in guidance, we're assuming 100 basis points of general credit loss reserve for the portfolio overall. We added and commented on the additional $1 million for Bed Bath, but included in our guidance is also the all fallout for Bed Bath that we've had that Jeff mentioned.

當然。因此，就關於壞賬的​​第一個問題而言，我們目前在指導中表示，我們假設整個投資組合的一般信用損失準備金為 100 個基點。我們添加並評論了 Bed Bath 額外的 100 萬美元，但我們的指導中還包括傑夫提到的 Bed Bath 的所有後果。

So we fully provisioned in guidance our Bed Bath exposure. And on top of that, 100 basis points of general credit loss. We've got about [$1.70 million], to answer your question of how much we've deemed uncollectible for the first 6 months. So some of that's lumpy because of one-off tenant situations, but that's the general guidance. In terms of your question on the $1.35 target, I think the biggest components to -- that we're focused on is, while that SNO pipeline is executed, we got to get those RCDs in those tenants opened and not face any fallout or delays.

因此，我們在指導中充分配置了我們的床浴暴露。除此之外，還有 100 個基點的一般信用損失。我們有大約 [170 萬美元] 來回答您的問題，即前 6 個月我們認為有多少金額無法收回。由於一次性租戶的情況，其中一些是不穩定的，但這是一般指導。至於你關於 1.35 美元目標的問題，我認為我們關注的最大組成部分是，在執行 SNO 管道的同時，我們必須讓這些租戶中的 RCD 開放，而不會面臨任何後果或延誤。

There is a small level of normal spec lease-up, so that needs to come to fruition. And then really, because we have very modest expectations on acquisitions and dispositions that's not an element that I would say is moving the needle that much. So it's really just the fundamental pillars to NOI that are going to have, I think, the biggest impact on that.

正常規格的租賃量很小，因此需要實現。事實上，因為我們對收購和處置的期望非常有限，所以我認為這並不是一個能帶來太大影響的因素。因此，我認為，NOI 的基本支柱將對此產生最大的影響。

And Ron, I would add, in addition to the signed not open pipeline, which we -- as Mark said, we're focused on converting into rent commencement dates. There's a different pipeline that sits behind it of deals that we're negotiating. I mentioned we had 400,000 square feet in our pipeline at a roughly 40% spread. About 70% of that square footage is LOI executed.

羅恩，我想補充一點，除了已簽署的未開放管道之外，正如馬克所說，我們還專注於將其轉換為租金開始日期。我們正在談判的交易背後有一條不同的渠道。我提到過我們的管道面積為 400,000 平方英尺，分佈範圍約為 40%。大約 70% 的面積是 LOI 執行的。

So if we just get that 70% that's under LOI executed into signed leases and convert that into the new signed but not open pipeline, that's a big lift combined with the existing signed but not open to getting to that $1.35.

因此，如果我們將意向書下的70% 執行到已簽署的租約中，並將其轉換為新已簽署但未開放的管道，那麼與現有已簽署但未開放的管道相結合，這將是一個巨大的提升，達到1.35 美元。

Our next question is from Paulina Rojas, Green Street.

我們的下一個問題來自 Green Street 的 Paulina Rojas。

It has been mentioned that the (inaudible) that we're on to see more institutional interest, also along retail. Can you provide -- topic based on your conversations?

有人提到（聽不清）我們將看到更多的機構興趣，包括零售業。你能根據你們的對話提供主題嗎？

Yes. I mean clearly, there is more institutional interest around retail. I think, in part because many of these institutional investors have reduced their office allocation and they're looking to put it into other product types. And also, in part, it's one of the few sectors where you can obtain positive leverage. So it's not like you're buying in the 4s and hoping for rent growth that will get you above your financing cost.

是的。我的意思很明確，機構對零售業有更多的興趣。我認為，部分原因是許多機構投資者減少了辦公室配置，並希望將其投入其他產品類型。而且，在某種程度上，它是少數幾個可以獲得積極槓桿作用的行業之一。因此，這並不像您購買 4S 車並希望租金增長能讓您高於融資成本。

Today, you can actually buy properties and finance it with nonrecourse debt and get some type of spread. So, and given the resilience that you've seen in the shopping center space over the last several years, I think institutions have taken interest. So no question about it. There is institutional interest in retail today. And it is proving to be a group of investors that's providing some competition for us as we're going out and looking at assets.

如今，您實際上可以購買房產並通過無追索權債務為其融資並獲得某種類型的利差。因此，考慮到過去幾年購物中心領域的彈性，我認為機構已經對此產生了興趣。所以毫無疑問。如今，機構對零售業產生了興趣。事實證明，當我們出去尋找資產時，一群投資者為我們提供了一些競爭。

And then my last question is have you done the exercise of assessing what's the mark-to-market of rents in your portfolio today?

我的最後一個問題是，您是否已評估過您今天投資組合中租金的市價是多少？

I'm sorry, say that 1 more time Paulina.

對不起，寶琳娜，再說一遍。

Yes. Sorry, I'm saying that given how good demand is -- have you done the exercise of evaluating what's the mark-to-market upside of rents in your portfolio today? -- the releasing spreads that we talk every quarter?

是的。抱歉，我是說，考慮到需求的良好程度，您是否已評估過您今天投資組合中的租金按市價計算的上行空間是多少？ ——我們每個季度談論的釋放利差？

We think it's pretty significant. We have not going lease by lease by lease. We're going through that right now as part of our budgeting exercise. But I think the biggest indicator of what -- of where mark-to-market is just based on what leases are under negotiation and what is that spread? And we have about 400,000 square feet of leases under negotiation and the mark-to-market there is about 40%. Now there's some capital required for that, too. But nonetheless, it's still a very high number. Probably the highest number we've had in years.

我們認為這非常重要。我們沒有一個接一個的租賃。作為預算工作的一部分，我們現在正在經歷這一點。但我認為，按市價計價的最大指標是基於正在談判的租賃內容以及差價是多少？我們還有約 400,000 平方英尺的租賃合同正在談判中，按市價計算的比例約為 40%。現在這也需要一些資本。但儘管如此，這仍然是一個非常高的數字。這可能是我們多年來的最高數字。

(Operator Instructions) There are no further questions at this time. I would like to turn the floor back over to Mr. Jeff Olson for closing comments. Please...

（操作員說明） 目前沒有其他問題。我想請傑夫·奧爾森先生髮表結束評論。請...

We appreciate everyone's interest in UE and please call us if you have any questions. Thank you so much.

我們感謝大家對 UE 的興趣，如果您有任何疑問，請致電我們。太感謝了。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you very much for your participation.

今天的電話會議到此結束。此時您可以斷開線路。非常感謝您的參與。