Urban Edge Properties (UE) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Urban Edge Properties second-quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Areeba Ahmed, Investor Relations Associate. Thank you. You may begin.

您好，歡迎參加 Urban Edge Properties 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係助理阿瑞巴·艾哈邁德 (Areeba Ahmed)。謝謝。你可以開始了。

Good morning, and welcome to Urban Edge Properties second-quarter 2024 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, EVP and Head of Leasing; and Andrea Drazin, Chief Accounting Officer. 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 results, financial condition and business may differ.

早安，歡迎參加 Urban Edge Properties 2024 年第二季財報電話會議。今天與我一起出席的還有董事長兼執行長 Jeff Olson； Jeff Mooallem，營運長；馬克‧蘭格，財務長；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。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，這些陳述受到眾多假設、風險和不確定性的影響，並且公司不承諾更新這些陳述。我們的實際結果、財務狀況和業務可能有所不同。

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, including reference to our 2025 FFO as adjusted target. Reconciliations of these measures to GAAP results are available in our earnings release, supplemental disclosure package and our April 2023 investor presentation in the Investors section of our website. At this time, it is my pleasure to introduce our Chairman and Chief Executive Officer, Jeff Olson.

請參閱我們向 SEC 提交的文件，這些文件也可在我們的網站上取得有關該公司的更多資訊。在今天的討論中，我們將提及某些非 GAAP 財務指標，包括 2025 年 FFO 作為調整後的目標。這些措施與 GAAP 結果的對帳可在我們的收益發布、補充揭露包以及我們網站投資者部分的 2023 年 4 月投資者介紹中找到。此時此刻，我很高興向您介紹我們的董事長兼執行長 Jeff Olson。

Great. Thank you, Areeba, and good morning, everyone. Our second quarter results reflect our continued progress towards achieving the goals we outlined at our April 2023 Investor Day. We generated 7% earnings growth for the quarter and raised our 2024 FFO as adjusted guidance by $0.05 per share at the midpoint, reflecting 5% expected growth for the year. We continue to believe that we will reach the high end of our 2025 FFO target of $1.31 to $1.39 per share, implying 5% to 6% growth over 2024.

偉大的。謝謝你，Areeba，大家早安。我們第二季的業績反映了我們在實現 2023 年 4 月投資者日概述的目標方面不斷取得的進展。我們本季的獲利成長了 7%，並將調整後的 2024 年 FFO 指引中位數每股上調了 0.05 美元，反映了今年 5% 的預期成長。我們仍然相信，我們將達到 2025 年 FFO 目標的上限，即每股 1.31 美元至 1.39 美元，這意味著比 2024 年增長 5% 至 6%。

The two biggest drivers of our growth are strong operating fundamentals and accretive acquisitions. Starting with operations, occupancy increased to 96.5%, up 150 basis points over last year and up 30 basis points sequentially. We executed 23 new leases during the quarter, a record high for the company. Notably, our shop occupancy increased by 520 basis points compared to the second quarter of 2023 and by 140 basis points sequentially.

我們成長的兩個最大驅動力是強勁的營運基礎和增值性收購。從營運開始，入住率增至 96.5%，比去年增長 150 個基點，比上一季增長 30 個基點。本季我們執行了 23 份新租賃，創公司歷史新高。值得注意的是，與 2023 年第二季相比，我們的店鋪入住率增加了 520 個基點，較上季增加了 140 個基點。

This shop growth is a direct result of the anchor repositioning efforts we have completed over the last several years and the ongoing demand for high-quality retail space. Net operating income should continue to grow at higher than historical averages as we deliver spaces to tenants with signed leases and execute our redevelopment pipeline. Our signed but not open pipeline amounts to $29 million of gross rent, which should add another 11% to net operating income. Also, our $170 million redevelopment pipeline is expected to yield an impressive 15% return.

商店的成長是我們過去幾年完成的錨定重新定位工作以及對高品質零售空間的持續需求的直接結果。隨著我們向簽訂租約的租戶提供空間並執行我們的重建計劃，淨營業收入應繼續以高於歷史平均的速度成長。我們已簽署但尚未開放的管道總租金達 2,900 萬美元，這將使營業淨收入再增加 11%。此外，我們 1.7 億美元的重建項目預計將產生 15% 的令人印象深刻的回報。

Turning to acquisitions, we have acquired $426 million of shopping centers since October 2023 at a 7.2% cap rate, primarily funded with $356 million of asset sales at a 5.2% cap rate. We are in late-stage negotiations to acquire several high-quality shopping centers in the DC to Boston corridor, which will likely be funded with a mix of capital sources, including low cap rate, single-tenant asset dispositions, mortgage debt and equity. Our balance sheet is in great shape with only 11% of our total debt maturing through 2026. We are very pleased with our results and the growth opportunities we see ahead. I will now turn it over to our Chief Operating Officer, Jeff Mooallem.

在收購方面，自 2023 年 10 月以來，我們以 7.2% 的上限收購了價值 4.26 億美元的購物中心，主要資金來自 3.56 億美元的資產出售，上限為 5.2%。我們正在進行後期談判，以收購華盛頓至波士頓走廊的幾個優質購物中心，這些購物中心可能會透過多種資本來源提供資金，包括低上限利率、單一租戶資產處置、抵押貸款債務和股權。我們的資產負債表狀況良好，到 2026 年只有 11% 的債務到期。我們對我們的成果和未來的成長機會感到非常滿意。我現在將把它交給我們的營運長 Jeff Mooallem。

Thanks, Jeff, and good morning, everyone. Let's start with some of our leasing and development activity from this past quarter and then get into more of the details on what we're seeing with acquisitions and dispositions. We executed 47 deals in the second quarter for a total of 506,000 square feet. And of those 47 deals, 41 were shop deals, 22 new leases and 19 renewals.

謝謝傑夫，大家早安。讓我們從上個季度的一些租賃和開發活動開始，然後詳細了解我們在收購和處置方面看到的情況。我們在第二季執行了 47 筆交易，總面積為 506,000 平方英尺。在這 47 筆交易中，41 筆是店鋪交易、22 筆新租約和 19 筆續約。

The 22 new leases represent an all-time quarter high at Urban Edge and are a direct result of the heavy lifting we've done with anchor vacancies over the past several years. Anchor tenant leasing remains both the best leading indicator of and the best tool for effective shop leasing. Our shop average new lease cash spread of 19% would not have been possible without some of the anchors we've brought to our properties, including Shoprite, TJ Maxx, and Aldi. Shop occupancy has now reached 90%.

這 22 個新租約代表了 Urban Edge 的季度歷史新高，也是我們過去幾年在主力空缺方面所做的大量工作的直接結果。主力租戶租賃仍然是有效商舖租賃的最佳領先指標和最佳工具。如果沒有我們為我們的物業帶來的一些支柱，包括 Shoprite、TJ Maxx 和 Aldi，我們的商店平均新租賃現金利差不可能達到 19%。目前店鋪出租率已達90%。

And with a third quarter pipeline that looks just as robust as second quarter, we remain on track to surpass 91% shop occupancy by the end of the year. The 140 basis point gain in shop leasing from last quarter and 520 basis point gain in shop leasing from last year has helped push our overall same-property lease occupancy rate up by another 30 basis points to 96.5%. Vacancy remains at historic lows and it's moving lower and foot traffic at our properties is up almost 7% in the second quarter compared to the prior year. A good example of the current demand landscape is Stop & Shop's recent announcement that they will be closing 32 stores.

由於第三季的銷售管道看起來與第二季一樣強勁，我們仍有望在年底前實現超過 91% 的店鋪入住率。商舖租賃較上季成長 140 個基點，較去年成長 520 個基點，協助推動我們的整體同物業租賃入住率再成長 30 個基點至 96.5%。空置率仍處於歷史低位，並且正在下降，第二季度我們物業的人流量與去年同期相比增長了近 7%。當前需求情勢的一個很好的例子是 Stop & Shop 最近宣布將關閉 32 家商店。

Of the four Stop & Shops in our portfolio, two are exceptional performers. One is a very strong store with term through 2029. The only one in our portfolio on the closure list is a lower-tier store in need of renovation with an expiring lease. We received multiple inbound inquiries on that space.

在我們投資組合中的四家 Stop & Shops 中，有兩家表現出色。其中一個是一家非常強大的商店，期限到 2029 年。我們的投資組合中唯一一家列入關閉名單的商店是一家租約到期、需要翻新的低層商店。我們收到了多個有關該空間的入站詢問。

When Stop & Shop, let us know they'd be closing that store, we quickly identified the best replacement grocer and we negotiated a deal with no capital and no downtime. We hope to have a lease executed in the next 30 days, well before the Stop & Shop lease expiration early next year. The one new anchor lease signed in the quarter is with BJ's Wholesale Club at Bruckner Commons. That lease was signed in June and at the same time, we entered into a lease termination agreement with Target at the same property.

當 Stop & Shop 告訴我們他們將關閉該商店時，我們很快就找到了最好的替代雜貨店，並在沒有資金和沒有停機時間的情況下協商達成了一項協議。我們希望在未來 30 天內執行租約，早在明年初 Stop & Shop 租約到期之前。本季度簽署的一項新的主力租約是與位於布魯克納公共區 (Bruckner Commons) 的 BJ's Wholesale Club 簽訂的。該租約於 6 月簽署，同時，我們與塔吉特就同一房產簽訂了租賃終止協議。

We cannot get into any of the specifics of the Target termination agreement, the terms of which are confidential. But what we can say is that while there are changes in timing and differences in square footage, rents and capital for each of those new leases, the overall initial return on cost for each one is comparable, and the BJ's contractual lease term is 20 years, twice as long as Target's. The simultaneous execution speaks volumes to the excellence of our UE team and to the demand for our real estate. We believe BJ's is a great addition to the Bruckner community and we look forward to building on our leasing momentum at this dominant retail destination.

我們無法了解 Target 終止協議的任何細節，該協議的條款是保密的。但我們可以說的是，雖然每項新租約的時間安排有所變化，面積、租金和資本也有所不同，但每項新租約的總體初始成本回報率是相當的，而且BJ 的合約租期為20 年，是 Target 的兩倍。同時執行充分說明了我們 UE 團隊的卓越性以及對我們房地產的需求。我們相信 BJ's 是布魯克納社區的一個重要補充，我們期待在這個主導的零售目的地鞏固我們的租賃勢頭。

We also continued to execute our low-risk business plan of building out space for signed leases at other properties. In June, we completed the second phase of our Huntington Commons project on Long Island, which included adding a Burlington and repositioning many of the shop tenants with necessity-based uses like urgent care, salon, and fitness. We also activated two development projects, a First Watch restaurant at Bergen Town Center and a Ground Lease bank pad at Woodmore Towne Centre. Both of these projects are a perfect example of the state of the market today, as we leased a raw shelf space that had been vacant for nearly a decade and an unused pad that had sat empty since the property was built to credit tenants at double-digit development yields.

我們也繼續執行我們的低風險業務計劃，為其他物業簽署的租約建造空間。六月，我們完成了長島 Huntington Commons 計畫的第二階段，其中包括增加伯靈頓，並重新定位許多商店租戶，以提供緊急護理、沙龍和健身等基於必需品的用途。我們還啟動了兩個開發項目，即卑爾根鎮中心的 First Watch 餐廳和伍德莫爾鎮中心的地面租賃銀行墊。這兩個項目都是當今市場狀況的完美例子，因為我們租用了一個空置了近十年的原始貨架空間，以及一個自該房產建成以來一直閒置的未使用的墊子，以雙倍的價格向租戶提供信貸。

Again, our overall $170 million development pipeline is expected to generate a 15% yield on cost and it is 90% comprised of projects tied to signed leases. Jeff touched a little on the state of the acquisition market, so let me just add a little more color there. The REITs have been active buyers in 2024, and we are no exception, having already bought $426 million of assets since October of last year, at what in hindsight looks like very attractive returns. Prices have gone up since those deals, but we still see value in the types of assets we want to acquire, large dominant surface parked retail with a mix of power and grocer tenancy in our core markets.

同樣，我們總共 1.7 億美元的開發案預計將產生 15% 的成本收益率，其中 90% 由與已簽署租賃相關的項目組成。傑夫談到了收購市場的狀況，所以讓我在這裡添加一些更多的色彩。REITs 在 2024 年一直是活躍的買家，我們也不例外，自去年 10 月以來已經購買了 4.26 億美元的資產，事後看來回報非常誘人。自從這些交易以來，價格已經上漲，但我們仍然看到我們想要收購的資產類型的價值，即在我們的核心市場中佔據主導地位的大型地面停放零售業，其中包括電力和雜貨店租賃。

We have four assets totaling about $350 million with those characteristics under heavy diligence at the moment. On the flip side, as interest rates and cap rates continue to move down, our high credit, stable cash flow, single-tenant assets are attracting more attention from triple net and 1031 buyers. We're in the market with three of those assets right now as potential capital sources. Our team is extremely busy. And while it is early on both the buys and the sells, we believe we can close out 2024 with more of what we did in 2023 and the first half of 2024, selling in the 5s and acquiring in the sevens while enhancing portfolio quality. I will now turn it over to our Chief Financial Officer, Mark Langer.

我們擁有四項總價值約 3.5 億美元的資產，目前正在認真調查中，這些資產具有這些特徵。另一方面，隨著利率和上限利率持續下行，我們的高信用、穩定的現金流量、單租戶資產正吸引更多三網和1031買家的注意。我們目前在市場上擁有其中三項資產作為潛在的資本來源。我們的團隊非常忙碌。雖然買入和賣出都還處於早期階段，但我們相信我們可以在2023 年和2024 年上半年所做的更多事情的基礎上，以5 美元的價格出售並在7 美元的價格收購，同時提高投資組合質量，以結束2024 年。我現在將把它交給我們的財務長馬克蘭格。

Thanks, Jeff. Good morning. I will comment on our second quarter results, our balance sheet and liquidity and conclude with comments on our outlook. Starting with our results, we reported FFO as adjusted of $0.32 per share in the second quarter. Same-property NOI growth, including redevelopment was up 4% compared to the second quarter of 2023.

謝謝，傑夫。早安.我將評論我們的第二季業績、資產負債表和流動性，並最後評論我們的前景。從我們的業績開始，我們報告第二季的 FFO 調整後為每股 0.32 美元。與 2023 年第二季相比，包括重建在內的同物業 NOI 成長了 4%。

The increase was primarily attributed to new rent commencements, contractual rent bumps and lower bad debt. NOI this year has benefited from our retention rate, which was almost 100% in the first six months. On the financing front, we closed on a new five-year $50 million non-recourse mortgage for our recently acquired property, Ledgewood Commons, at a fixed rate of 6%, executed at a spread of 180 basis points, resulting in a leverage cash return on that purchase in excess of 10%. We continue to see debt spreads compress, as demand for retail paper remains strong across most major lending sources, especially life companies and CMBS as well as select regional banks.

成長的主要原因是新的租金開始、合約租金上漲和壞帳減少。今年的 NOI 受益於我們的保留率，前六個月的保留率幾乎為 100%。在融資方面，我們為最近收購的 Ledgewood Commons 房產完成了一項新的 5 年期 5000 萬美元無追索權抵押貸款，固定利率為 6%，利差為 180 個基點，從而產生了槓桿現金該次購買的回報率超過10%。我們繼續看到債務利差縮小，因為大多數主要貸款來源對零售票據的需求仍然強勁，尤其是壽險公司和 CMBS 以及部分區域銀行。

We are currently negotiating mortgages that reflect spreads of 155 basis points to 180 basis points as the appetite for high-quality retail centers remain strong. Given our recent purchase of Ledgewood and our anticipated progress on the acquisition front, we issued about 2.5 million shares of common stock under our ATM, raising approximately $45 million of net proceeds. We had $150 million drawn on our line of credit at the end of the quarter and have since reduced the balance by $45 million. We were pleased to announce that on June 27, the Kingswood Center property foreclosure was completed and the lender took possession of the property, resulting in a $22 million gain on debt extinguishment and the elimination of the $69 million mortgage we had on our books.

由於對高品質零售中心的需求仍然強勁，我們目前正在談判反映 155 個基點至 180 個基點利差的抵押貸款。鑑於我們最近收購了 Ledgewood 以及我們在收購方面的預期進展，我們在 ATM 下發行了約 250 萬股普通股，籌集了約 4500 萬美元的淨收益。截至本季末，我們已提取了 1.5 億美元的信用額度，此後已將餘額減少了 4,500 萬美元。我們很高興地宣布，6 月27 日，嘉湖中心的財產取消抵押品贖回權已完成，貸方接管了該財產，從而因債務清償而獲得2200 萬美元的收益，並消除了我們賬上6900萬美元的抵押貸款。

This is another example of the benefit of our secured debt strategy. With the elimination of this mortgage, our net debt to annualized EBITDA is now 6.4 times and already below the 2025 target of 6.5x we mentioned at our Investor Day last year. We expect to see further improvement in this metric as EBITDA grows from future rent commencements within our S&O pipeline and future CapEx requirements decline. Turning to our outlook for 2024, we increased the low end of our FFO as adjusted per share guidance by $0.02 a share, primarily due to our better-than-expected performance year-to-date and our expectations that same-property NOI growth, including redevelopment, will be at our new midpoint of 5.25%, up from the prior midpoint of 5%.

這是我們擔保債務策略的另一個好處的例子。隨著這項抵押貸款的取消，我們的淨債務與年化 EBITDA 的比值現在是 6.4 倍，已經低於我們在去年投資者日提到的 2025 年目標 6.5 倍。我們預計這項指標將進一步改善，因為 EBITDA 將因我們 S&O 管道內未來租金的開始而成長，並且未來資本支出要求將下降。談到我們對 2024 年的展望，我們將調整後每股指引的 FFO 下限上調了 0.02 美元，這主要是由於我們今年迄今的業績優於預期，以及我們對同一房產 NOI 增長的預期，包括重建在內，將達到新的中點5.25%，高於先前的中點5%。

NOI expectations have increased based on the strength of market fundamentals and lower levels of bad debt and tenant fallout. In terms of some of the at-risk names in the headlines, we have less than $2.5 million of gross rent exposure from Red Lobster, Express and Sticky's. These tenants operate in highly desirable locations and have historically performed well at our centers. None of these operators have closed at our properties. Overall, losses for uncollected rents across our portfolio have been lower than anticipated as we have not suffered from any sizable tenant fallout.

基於市場基本面的強勁以及壞帳和租戶影響水準的降低，NOI 預期有所提高。就頭條新聞中的一些高風險名稱而言，我們從 Red Lobster、Express 和 Sticky's 獲得的總租金敞口不到 250 萬美元。這些租戶在非常理想的地點運營，並且在我們的中心歷來表現良好。這些運營商都沒有關閉我們的酒店。總體而言，我們的投資組合中未收租金的損失低於預期，因為我們沒有遭受任何大規模的租戶影響。

Given the strength in market fundamentals, we often view tenant fallout from weak operators as a long-term opportunity rather than a risk. We continue to make progress on our S&O pipeline with another $3.6 million of annualized gross rent commencing in the second quarter and an additional $3 million expected to be recognized in the second half of this year, of which 80% is weighted to the fourth quarter. Moving to transactions, our guidance reflects $117 million of acquisitions related to Heritage Square and Ledgewood Commons and the non-core dispositions that have closed to date. Guidance does not assume any additional acquisitions or dispositions this year.

鑑於市場基本面強勁，我們通常將弱勢業者帶來的租戶影響視為長期機會而不是風險。我們的 S&O 管道持續取得進展，從第二季開始，年化總租金將再增加 360 萬美元，預計今年下半年將再確認 300 萬美元，其中 80% 加權至第四季。談到交易，我們的指引反映了與 Heritage Square 和 Ledgewood Commons 相關的 1.17 億美元收購以及迄今為止已完成的非核心處置。指南並未假設今年有任何額外的收購或處置。

Should we make progress and close on new transactions, we will provide updates at the appropriate time. We updated our guidance assumptions related to interest expense to reflect the elimination of the Kingswood Center mortgage and for financing activity we expect for the remainder of the year. The only variable rate exposure we have is related to our line of credit, which currently bears interest at SOFR plus 103 basis points. We continue to carefully manage G&A expenses and updated our guidance this quarter to bring the high end of the expected G&A range down from $37.5 million to $37 million.

如果我們取得進展並完成新交易，我們將在適當的時間提供更新。我們更新了與利息支出相關的指導假設，以反映嘉湖中心抵押貸款的取消以及我們預計今年剩餘時間的融資活動。我們唯一的可變利率風險與我們的信用額度有關，目前該信用額度的利息為 SOFR 加 103 個基點。我們繼續謹慎管理 G&A 費用，並更新了本季的指導，將預期 G&A 範圍的上限從 3,750 萬美元下調至 3,700 萬美元。

In closing, I would like to thank the UE team for their continuous focus, executing our business plan, simplifying our portfolio while showing prudent capital allocation from capital recycling and other accretive acquisitions has helped ensure we can deliver on our goal to provide sustainable earnings and cash flow growth. The strength of our cash flow has been greatly enhanced by the anchor repositioning efforts we have completed and we expect further improvement as new tenants open and shop leasing follows. We have a very strong balance sheet, abundant liquidity and a team excited to grow the enterprise. We look forward to continuing our track record of generating consistent earnings growth in the future. I will now turn the call over to the operator for questions.

最後，我要感謝 UE 團隊的持續關注，執行我們的業務計劃，簡化我們的投資組合，同時透過資本回收和其他增值收購進行審慎的資本配置，這有助於確保我們能夠實現提供可持續收益和現金流增長。我們已完成的錨定重新定位工作大大增強了我們的現金流實力，隨著新租戶的開業和商店租賃的跟進，我們預計將進一步改善。我們擁有非常強大的資產負債表、充裕的流動性和一支熱衷於發展企業的團隊。我們期待未來繼續保持獲利持續成長的記錄。我現在將把電話轉給接線員詢問問題。

(Operator Instructions) Steve Sakwa, Evercore ISI.

（操作員說明）Steve Sakwa，Evercore ISI。

Yes. I was just hoping that you guys could talk a little bit more about the leasing pipeline. And I guess there's been some issues around the lower end consumer and the spending. And I'm just wondering how the retailers are thinking about store opening plans in light of a softer economy.

是的。我只是希望你們能多談談租賃管道。我猜想低端消費者和支出存在一些問題。我只是想知道在經濟疲軟的情況下零售商如何考慮開店計劃。

Steve, it's Jeff Mooallem. We've heard the same thing and we've heard that noise for a few months now, but we have not seen it. If that message has been delivered to the retailers, it hasn't made its way to the real estate directors who run the Northeast. There's still the priority issue for them is a shortage of space.

史蒂夫，我是傑夫·穆阿勒姆。我們也聽過同樣的事情，而且我們已經聽到這種噪音幾個月了，但我們還沒有看到它。如果這一訊息已經傳達給零售商，那麼它還沒有傳達給管理東北地區的房地產董事。對他們來說，首要問題仍然是空間短缺。

And when we talk to them, there's still an appetite to grow more stores. Certainly, a lot of our centers are recession proof in the sense that they're anchored by tenants like Home Depot, Walmart that are generally going to generate traffic in any economic cycle. And in the centers where we have grocery stores and other things, we're still seeing a lot of QSR demand. Urgent care is a big thing, salon.

當我們與他們交談時，他們仍然有開設更多商店的興趣。當然，我們的許多購物中心都能夠抵禦經濟衰退，因為它們以家得寶 (Home Depot)、沃爾瑪 (Walmart) 等租戶為基礎，這些租戶通常會在任何經濟週期中產生客流量。在設有雜貨店和其他設施的中心，我們仍然看到大量快餐需求。緊急護理是一件大事，沙龍。

We recently opened all those concepts out of our Huntington property. We're not seeing a slowdown. And in fact, our third quarter pipeline for shop leasing looks very similar to what we executed in the second quarter.

我們最近在亨廷頓地產中開放了所有這些概念。我們沒有看到經濟放緩。事實上，我們第三季的商鋪租賃管道看起來與我們在第二季執行的非常相似。

Great. And then maybe for either you or Jeff Olson, just on the transaction side, how are you thinking about kind of underwriting deals? How are you sort of altering your return hurdles? And I guess, how do you compare those acquisition returns to kind of redevelopment and, I guess, ground-up development is less of an option or a priority. But how are you sort of weighing the return hurdles between kind of both capital deployment options?

偉大的。然後，也許對於您或傑夫奧爾森來說，就交易而言，您如何考慮承銷交易的類型？你是如何改變你的回報障礙的？我想，你如何將這些收購回報與重建進行比較，我想，從頭開始的開發並不是一種選擇或優先事項。但是，您如何權衡兩種資本部署選項之間的回報障礙？

Steve, I mean, we're really looking for accretive transactions. I mean clearly, redevelopment at a 15% return would be in the highest order of capital allocation. But I do think we're limited in terms of the volume of redevelopment we can do, so I mean, we're going full throttle on it. I don't think there's a whole lot more that's there, certainly not at a 15% return.

史蒂夫，我的意思是，我們確實在尋找增值交易。我的意思很明確，15% 回報率的重建將是資本配置的最高順序。但我確實認為我們能夠進行的重建工作量是有限的，所以我的意思是，我們將全力以赴。我不認為還有更多的東西，尤其是 15% 的回報率。

So on the acquisition front, I mean, what we're looking for are assets that overall would increase the quality of our portfolio, increase credit, increase growth profile. We are finding stuff in the DC to Boston corridor, so we like that because we know the markets very well and many of these assets are in very close proximity to existing assets that we control. And then, the next key is the funding behind it. And as I said in my opening comments, we're looking at a blend of funding that includes selling some single-tenant assets.

因此，在收購方面，我的意思是，我們正在尋找的是整體上能夠提高我們投資組合品質、增加信貸、提高成長前景的資產。我們正在華盛頓到波士頓的走廊上找到東西，所以我們喜歡這樣，因為我們非常了解市場，而且其中許多資產與我們控制的現有資產非常接近。然後，下一個關鍵是背後的資金。正如我在開場白中所說，我們正在考慮混合融資，其中包括出售一些單一租戶資產。

Mortgage financing, as Mark explained, has become very price efficient at spreads of 155 basis points to 180 basis points over treasuries. And as you know, treasuries have come down, too. And then we potentially could use equity if we found it to be an accretive transaction.

正如 Mark 所解釋的那樣，抵押貸款融資的價格效率非常高，其利差比國債高出 155 個基點至 180 個基點。如你所知，國債也下跌了。如果我們發現股權是一項增值交易，我們可能會使用股權。

Samir Khanal, Evercore ISI.

薩米爾·卡納爾，Evercore ISI。

Mark, just one for me here. When I look at your guidance assumption, you have G&A and interest and debt expense, I think, went down, I think, in total about $3 million at the midpoint. And you also raised NOI, but I'm just trying to understand why FFO didn't go up more from a guidance perspective. I guess what am I missing there?

馬克，這裡只給我一個。當我查看您的指導假設時，我認為您的一般管理費用、利息和債務費用在中點總共下降了約 300 萬美元。你也提出了 NOI，但我只是想從指導的角度理解為什麼 FFO 沒有上漲更多。我想我在那裡錯過了什麼？

The only piece you're missing is the interest, as I explained in my comment was really related to Kingswood. And recall, Samir, all of the Kingswood results from an FFO as adjusted standpoint, where our guidance was, was excluding the impact at Kingswood already. So the real tweaks that impacted the midpoint were the NOI change that we highlighted.

你唯一缺少的是興趣，正如我在評論中解釋的那樣，興趣確實與嘉湖有關。薩米爾，回想一下，所有嘉湖的結果都是從 FFO 作為調整後的角度來看的，我們的指導方針已經排除了嘉湖的影響。因此，影響中點的真正調整是我們強調的 NOI 變更。

It's a good question, Samir.

這是一個很好的問題，薩米爾。

Floris van Dijkum, Compass Point.

弗洛里斯·範迪庫姆，羅盤角。

Jeff, I'd be curious to get your thoughts on the news that came out yesterday on Blackstone potentially being in talks with ROIC. What kind of implications do you think that brings to for the shopping center sector?

Jeff，我很想知道您對昨天發布的有關 Blackstone 可能與 ROIC 進行談判的消息有何看法。您認為這會對購物中心產業帶來什麼樣的影響？

Yes. So look, I mean, I can see the case for large institutions investing more in open air retail because a lot has happened. I mean, first, we talked about lower debt costs, again, both in terms of spreads and rates. Second is the fundamentals of the space continued to strengthen and we're seeing it across the board in our portfolio in terms of lower vacancy and in terms of our leasing pipeline, and then valuations are relatively attractive. If you look at the assets that we bought to date since October of last year, we're getting leverage returns that are really close to the double-digits, which is hard to get in other property sectors.

是的。所以，我的意思是，我可以看到大型機構更多地投資露天零售的情況，因為已經發生了很多事情。我的意思是，首先，我們再次討論了降低債務成本，無論是利差還是利率。其次，該領域的基本面持續走強，我們在投資組合中看到空置率下降和租賃管道全面下降，估值相對有吸引力。如果你看看我們自去年 10 月以來購買的資產，你會發現我們獲得的槓桿回報非常接近兩位數，這在其他房地產行業很難獲得。

And then lastly, we're starting to see more capital formation around open air retail. So it's not surprising to see that there are maybe some potential privatizations out there, Floris.

最後，我們開始看到更多圍繞露天零售的資本形成。因此，弗洛里斯，看到可能存在一些潛在的私有化也就不足為奇了。

And maybe one follow-up, and maybe this is for Mooallem. Obviously, one of the key drivers to NOI growth is higher shop occupancy and shop rents are doubled the anchor rents typically. Can you talk a little bit about the pipeline that you have, the S&O pipeline? I believe a lot of it is anchor driven. But what percentage of that S&O pipeline is shop space?

也許還有一個後續行動，也許這是為 Mooallem 準備的。顯然，NOI 成長的關鍵驅動力之一是更高的店舖入住率，而店舖租金通常是主力租金的兩倍。您能談談您擁有的管道（S&O 管道）嗎？我相信其中很多都是錨驅動的。但商店空間佔 S&O 管道的比例是多少？

And how much incremental shop occupancy do you think you could push once anchors open? What has been the experience over the last couple of years?

您認為一旦錨點打開，您可以增加多少商店入住率？過去幾年有什麼經驗？

Floris, happy to handle it. I'll defer to Mark to give you the exact percentage of shop versus anchor. But what I would say is that we identified 2024 at Urban Edge as sort of the year of the shop leasing and we've made tremendous progress in that. We had a goal to get to between 91% and 92% by the end of the year.

弗洛里斯，很樂意處理這件事。我會聽從馬克的意見，告訴你商店與主播的確切百分比。但我想說的是，我們將 Urban Edge 的 2024 年確定為商店租賃年，並且我們在這方面取得了巨大進展。我們的目標是到今年年底達到 91% 到 92% 之間。

We're tracking at about 90% right now. We expect to be at 91%. And although the starting rents are better than where the prior leases are and we've reported a healthy 19% spread for this past quarter, just as notable, we're doing better on other negotiations of other terms. So for example, I think in this past quarter, our average annual increases coming from the shop leases was about 3%, whereas in past quarters, maybe we had a lot more leases that were 10% every five years or something like that.

我們現在追蹤的進度約為 90%。我們預計該比例為 91%。儘管起始租金比之前的租約要好，而且我們報告上個季度的租金價差為 19%，但同樣值得注意的是，我們在其他條款的其他談判中做得更好。舉例來說，我認為在過去的這個季度，我們來自商店租賃的平均年增長率約為3%，而在過去的幾個季度，也許我們的租賃量增加了很多，每五年增加10% 或類似的情況。

So it's not just the starting rent, it's also doing better on increases, protected areas. We're getting a lot more tenants to take space as is with no build-out requirements, giving less in allowance, things like that. So the shop leasing is definitely the stronger performer. The exact percentage of our S&O pipeline that's coming from shop versus anchor, Mark, might be able to better answer that. But certainly, shop is where we're focused on for the rest of this year.

因此，這不僅僅是起始租金，在增加租金和保護區方面也做得更好。我們讓更多的租戶按原樣佔用空間，沒有擴建要求，給予更少的津貼，諸如此類。所以商店租賃絕對是表現最強的。我們的 S&O 頻道中來自商店與主播馬克的確切百分比可能能夠更好地回答這個問題。但可以肯定的是，商店是我們今年剩餘時間的重點。

Floris, it's about almost 40% of the dollars in the S&O pipeline are from shop.

Floris，S&O 通路中約 40% 的美元來自商店。

(Operator Instructions) Ronald Kamdem, Morgan Stanley.

（操作員指令）Ronald Kamdem，摩根士丹利。

Two quick ones for me. Just starting with the acquisition pipeline. I think I heard you say $350 million in the pipeline. Maybe can you talk a little bit more about sort of cap rate sort of format, anything sort of any color on that pipeline?

對我來說兩個快點。剛從收購管道開始。我想我聽到你說 3.5 億美元正在籌備中。也許你能多談談上限率、格式、管道上的任何顏色嗎？

And also if you could touch on the funding. I see you did some equity in the quarter. How are you thinking about funding that fee for this?

另外您是否可以談談資金問題。我看到您在本季做了一些股權投資。您如何考慮為此提供資金？

Yes, first of all, were negotiations, so until we advance those negotiations, we're limited in terms of what we can provide in terms of information. But most of what we're looking at is off market, number one. Number 2, it's typically, larger format assets that include a grocer and then also some power components mostly like discounters and off-price retailer. And again, these assets are in our trade area that you see the Boston corridor.

是的，首先是談判，所以在我們推進這些談判之前，我們所能提供的資訊是有限的。但我們看到的大部分都是市場外的，第一。第二，通常是較大型的資產，包括雜貨店以及一些電力組件，主要是折扣店和折扣零售商。再說一遍，這些資產位於我們的貿易區，您可以看到波士頓走廊。

So once the transaction progress to a point where we can disclose more, we'd be happy to do so. But in general, we are looking for accretive transactions day one and then also year three, four, and five.

因此，一旦交易進展到我們可以披露更多資訊的程度，我們將很樂意這樣做。但總的來說，我們正在尋找第一天的增值交易，然後是第三年、第四年和第五年。

And Ron, one of the things I'd add to that is what makes us somewhat unique as a buyer in the market today is that our track record over the last nine months to 12 months, we've probably been the largest acquirer of single assets. So we get a lot of first calls and more importantly, we get a lot of last calls when deals are out there even if they're off market. Often, these deals come with financing that's attractive and assumable for a qualified borrower. And because of our size and balance sheet and credibility, we're usually one of the more qualified borrowers. So we're an appealing target for sellers and appealing SME for lenders. That helps us get deals as well.

羅恩，我要補充的一件事是，作為當今市場上的買家，我們的獨特之處在於我們在過去 9 個月到 12 個月的業績記錄，我們可能是最大的單一收購方資產。因此，我們接到了很多第一次的電話，更重要的是，當交易出現時，我們接到了很多最後的電話，即使它們不在市場上。通常，這些交易附帶的融資對於合格的借款人來說是有吸引力且可負擔的。由於我們的規模、資產負債表和信譽，我們通常是更合格的借款人之一。因此，我們對於賣家來說是一個有吸引力的目標，對於貸方來說，我們是一個有吸引力的中小企業。這也有助於我們獲得交易。

Ron, on the funding side, in addition to potentially assuming debt, on the funding side, we also mentioned potentially disposing of low cap rate, single-tenant assets and then also equity to the extent it makes sense and it's accretive.

羅恩，在融資方面，除了可能承擔債務之外，在融資方面，我們還提到了可能處置低上限利率、單一租戶資產，然後在有意義且具有增值性的情況下處置股權。

Okay. Makes a lot of sense. The second one was just going to be on Puerto Rico. Maybe just a quick update on how those assets have been performing. I know they've been doing well and what you're up thinking of potentially monetizing some of those assets as the backdrop gets better?

好的。很有道理。第二個是在波多黎各。也許只是快速更新這些資產的表現。我知道他們一直做得很好，隨著背景變得更好，您對將其中一些資產貨幣化有何想法？

Jeff?

傑夫？

Well, on the operational side, everything is going very well. We've delivered some of our anchor spaces that are slated to open in the next few months with TJ Maxx and with Ralph's grocery store, very excited. We brought those projects at or above budget, both in terms of time and cost and we generated a tremendous amount of leasing activity around it. The assets are effectively 100% occupied, Ron including temp tenants, but we've been slowly converting a lot of those temp tenants to perm tenants, including, in some cases, changing them out for better names, better credit.

嗯，在營運方面，一切進展順利。我們已經交付了一些主力空間，預計在接下來的幾個月內與 TJ Maxx 和 Ralph's 雜貨店一起開業，非常興奮。我們使這些項目在時間和成本方面都達到或超過預算，並且圍繞它產生了大量的租賃活動。這些資產實際上已100% 被佔用，羅恩包括臨時租戶，但我們一直在慢慢地將許多臨時租戶轉變為永久租戶，包括在某些情況下將其更換為更好的名稱和更好的信用。

We have a couple of deals there that we'd be super excited to announce hopefully in the third quarter call as those leases should get signed in the next month or so, but big national names coming over from the Mainland that we think will add a lot of value to those shopping centers. So we're very happy with how Puerto Rico is performing right now from an operating standpoint. As far as the long-term strategy for potential disposition, I'll defer to Jeff on that, but we talk about everything.

我們在那裡有幾項交易，我們非常高興能在第三季度的電話會議上宣布，因為這些租約應該在下個月左右簽署，但來自大陸的大牌國家隊我們認為將增加對這些購物中心來說很有價值。因此，從營運角度來看，我們對波多黎各目前的表現非常滿意。至於潛在處置的長期策略，我會聽從傑夫的意見，但我們會討論一切。

Yes. I mean, Ron, our focus is increasing NOI. There's a significant lift that we expect over the next 12 to 24 months and then I think we'll revisit it then.

是的。我的意思是，Ron，我們的重點是增加 NOI。我們預計在接下來的 12 到 24 個月內會有顯著的提升，然後我想我們會重新審視它。

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

（操作員說明） 目前沒有其他問題。我想請傑夫·奧爾森 (Jeff Olson) 發表結束評論。

Great. We appreciate your interest in UE and look forward to seeing you in the fall. Thank you very much.

偉大的。我們感謝您對 UE 的興趣，並期待在秋季見到您。非常感謝。

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

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。