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Item 8. Financial Statements and Supplementary Data

2021-02-17 compared with 2020-02-13 · 592 added, 407 removed, 904 unchanged (52% of the section changed)

20 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Urban Edge Properties and subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Urban Edge Properties and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2020, expressed an unqualified opinion on the Company’s internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

4 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Real Estate Impairment —Refer to Notes 2, 3 and 9 to the financial statements

1 unchanged sentence

The Company’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company’s evaluation of the recoverability of real estate assets involves the comparison of undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount.

The Company’s undiscounted future cash flow analyses require management to make significant estimates and assumptions related to capitalization rates.

In the event that a real estate asset is not recoverable, the Company will adjust the real estate asset to its fair value based on discounted future cash flows, third-party appraisals, broker selling estimates, and sale agreements under negotiation, and recognize an impairment loss for the carrying amount in excess of fair value.

The Company’s discounted future cash flow analyses require management to make significant estimates and assumptions related to capitalization rates and discount rates.

The Company’s evaluation of the recoverability of real estate assets involves the comparison of the aggregate projected undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount.

The Company’s undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates.

Total real estate assets as of December 31, 2020 had a net book value of $2.2 billion.

Total impairment losses recorded in 2019 were $26.3 million.

Given the Company’s evaluation of impairment of real estate assets requires management to make significant estimates and assumptions related to capitalization rates and discount rates, performing audit procedures to evaluate the reasonableness of

management’s undiscounted future cash flows analyses and discounted future cash flow analyses required a high degree of auditor judgment and an increased level of effort, including the need to involve our fair value specialists.

Given that the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management, performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flow analyses required a high degree of auditor judgment and an increased level of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of capitalization rates and discount rates included the following, among others:

We tested the design and operating effectiveness of the Company’s internal controls over management’s evaluation of the recoverability of real estate assets and determination of the impairment charge, including internal controls over management’s determination of the reasonableness of the applicable capitalization rates and discount rates.

With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s fair value determination, including estimates of capitalization rates and discount rates by:

Testing the source information underlying the determination of the capitalization rates and discount rates by evaluating the reasonableness of the capitalization rates and discount rates used by management with independent market data, focusing on key factors such as geographical location, tenant composition, and property type.

Developing a range of independent estimates and comparing those to the capitalization rates and discount rates selected by management.

Evaluating the mathematical accuracy of the cash flow analyses.

/s/ DELOITTE & TOUCHE LLP

Our audit procedures related to the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others:

• We tested the effectiveness of the Company’s internal controls over management’s evaluation of the recoverability of real estate, including internal controls over management’s determination of the reasonableness of the applicable capitalization rates.

• Inquired with management regarding the appropriateness of the capitalization rates, including considerations related to the impact of COVID-19 and evaluating the consistency of the capitalization rates used with evidence obtained in other areas of our audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s estimated capitalization rates by:

◦ Testing the source information underlying the determination of the capitalization rates by evaluating the reasonableness of the capitalization rates used by management with independent market data, focusing on key factors, including the impact of the COVID-19 pandemic, geographical location, tenant composition, and property type.

◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.

Evaluation of Collectibility of Receivables – Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Company evaluates the collectibility of amounts due from tenants.

In light of the recent and ongoing COVID-19 pandemic, the Company is closely monitoring changes in the collectibility assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences.

Management exercises judgment in assessing collectibility and considers payment history, current credit status and publicly available information about the financial condition of the tenant, among other factors.

The Company recognizes changes in the collectibility assessment of these operating leases as adjustments to rental revenue.

We identified management’s assumptions utilized in determining whether a tenant’s lease payments are collectible as a critical audit matter because of the significant judgements involved and the material impact to receivables.

Performing audit procedures to evaluate these assumptions required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s assumptions in evaluating the collectibility of receivables included the following, among others:

• We tested the effectiveness of controls over management’s evaluation of collectibility including controls over the assumptions utilized by management.

• We evaluated the Company’s estimate of the collectibility of receivables by:

◦ Testing management’s estimate including reading available information of tenant filings, financial statements, news articles, and analyst reports among other procedures based on the tenant’s payment history, current credit status and publicly available information about the financial condition of the tenant.

◦ Inquiring with the Company’s employees in departments outside of accounting to corroborate evidence regarding each of the tenant specific collectibility assessments.

◦ Evaluating positive and contradictory evidence obtained through the procedures described above, other evidence obtained throughout our audit, and events or changes in facts and circumstances occurring subsequent to year end, but before the date the consolidated financial statements were available to be issued.

DELOITTE & TOUCHE LLP

New York, New York

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Urban Edge Properties LP (the “Operating Partnership”) as of December 31, 2019 and 2018, and the related consolidated statements of income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Urban Edge Properties LP (the “Operating Partnership”) as of December 31, 2020 and 2019, the related consolidated statements of income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership’s internal control over financial reporting as of December 31, 2019, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2020 expressed an unqualified opinion on the Operating Partnership’s internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2021, expressed an unqualified opinion on the Operating Partnership’s internal control over financial reporting.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

4 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

Real Estate Impairment —Refer to Notes 2, 3 and 9 to the financial statements

Critical Audit Matter Description

The Operating Partnership’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Operating Partnership’s evaluation of the recoverability of real estate assets involves the comparison of the aggregate projected undiscounted future cash flows expected to be generated by each real estate asset over the Operating Partnership’s estimated holding period to the respective carrying amount.

The Operating Partnership’s undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates.

Total real estate assets as of December 31, 2020 had a net book value of $2.2 billion.

Given that the Operating Partnership’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management, performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flow analyses required a high degree of auditor judgment and an increased level of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Operating Partnership’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others:

• We tested the effectiveness of the Operating Partnership’s internal controls over management’s evaluation of the recoverability of real estate, including internal controls over management’s determination of the reasonableness of the applicable capitalization rates.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the Operating Partnership’s estimated capitalization rates by:

◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.

Evaluation of Collectibility of Receivables – Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Operating Partnership evaluates the collectibility of amounts due from tenants.

In light of the recent and ongoing COVID-19 pandemic, the Operating Partnership is closely monitoring changes in the collectibility assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences.

The Operating Partnership recognizes changes in the collectibility assessment of these operating leases as adjustments to rental revenue.

Performing audit procedures to evaluate these assumptions required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s assumptions in evaluating the collectibility of receivables included the following, among others:

• We tested the effectiveness of controls over management’s evaluation of collectibility including controls over the assumptions utilized by management.

• We evaluated the Operating Partnership’s estimate of the collectibility of receivables by:

◦ Inquiring with the Operating Partnership’s employees in departments outside of accounting to corroborate evidence regarding each of the tenant specific collectibility assessments.

/s/ DELOITTE & TOUCHE LLP

5 unchanged sentences

(In thousands, except share and per share amounts)

December 31, December 31,

Real estate, at cost:

Land $ 568,662 $ 515,621

Buildings and improvements 2,326,450 2,197,076

1 unchanged sentence

Furniture, fixtures and equipment 7,016 7,566

Total 2,946,817 2,748,785

Accumulated depreciation and amortization ( 730,366 ) ( 671,946 )

3 unchanged sentences

Restricted cash 34,681 52,182

Tenant and other receivables, net of allowance for doubtful accounts of $6,486 as of December 31, 2018

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $134 as of December 31, 2018

Tenant and other receivables 15,673 21,565

Receivables arising from the straight-lining of rents 62,106 73,878

Identified intangible assets, net of accumulated amortization of $ 37,009 and $ 30,942 , respectively

56,184 48,121

Deferred leasing costs, net of accumulated amortization of $ 16,419 and $ 16,560 , respectively

Deferred financing costs, net of accumulated amortization of $3,765 and $2,764, respectively

18,585 21,474

Prepaid expenses and other assets 70,311 37,577

Total assets $ 2,939,560 $ 2,846,358

LIABILITIES AND EQUITY

3 unchanged sentences

Identified intangible liabilities, net of accumulated amortization of $ 71,375 and $ 62,610 , respectively

148,183 128,830

Total liabilities 1,943,667 1,831,582

9 unchanged sentences

Consolidated subsidiaries 5,872 424

Total equity 995,893 1,014,776

Total liabilities and equity $ 2,939,560 $ 2,846,358

4 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental revenue $ 328,280 $ 384,405 $ 411,298

Management and development fees 1,283 1,900 1,469

Income from acquired leasehold interest

Other income 532 1,344 1,393

Total revenue 330,095 387,649 414,160

4 unchanged sentences

Casualty and impairment loss, net (1)

3,055 12,738 4,426

Lease expense 13,667 14,466 11,448

4 unchanged sentences

Interest and debt expense ( 71,015 ) ( 66,639 ) ( 64,868 )

Gain (loss) on extinguishment of debt

Gain on extinguishment of debt 34,908 — 2,524

Income before income taxes 58,754 117,484 120,482

Income tax (expense) benefit

Income tax benefit (expense) 38,996 ( 1,287 ) ( 3,519 )

Net income 97,750 116,197 116,963

Less net (income) loss attributable to noncontrolling interests in:

3 unchanged sentences

Earnings per common share - Basic:

$ 0.79 $ 0.91 $ 0.92

Earnings per common share - Diluted:

$ 0.79 $ 0.91 $ 0.92

Weighted average shares outstanding - Basic 117,722 119,751 113,863

5 unchanged sentences

(In thousands, except share and per share amounts)

Common Shares

Noncontrolling Interests (“NCI”)

Paid-In Capital

Accumulated Earnings

Operating Partnership

Consolidated Subsidiaries

Common Shares Noncontrolling Interests (“NCI”)

Shares Amount Additional

Paid-In Capital Accumulated Earnings

(Deficit) Operating Partnership Consolidated Subsidiaries Total Equity

Balance, January 1, 2018 113,827,529 1,138 946,402 ( 57,621 ) 100,218 404 990,541

1 unchanged sentence

Net income attributable to noncontrolling interests — — — — 11,768 45 11,813

Limited partnership units issued

Limited partnership interests:

Units redeemed for common shares 429,110 4 3,500 — — — 3,504

Reallocation of noncontrolling interests — — 1,263 — ( 4,767 ) — ( 3,504 )

Common shares issued 106,116 2 647 ( 172 ) — — 477

Dividends on common shares ($0.88 per share)

Dividends to common shareholders ($ 0.88 per share)

— — — ( 100,244 ) — — ( 100,244 )

Distributions to redeemable NCI ($ 0.88 per unit)

— — — — ( 11,116 ) — ( 11,116 )

Share-based compensation expense — — 4,992 30 4,719 — 9,741

2 unchanged sentences

Net income attributable to common shareholders — — — 109,523 — — 109,523

Net income attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests — — — — 6,699 ( 25 ) 6,674

Impact of ASC 842 adoption — — — ( 2,918 ) — — ( 2,918 )

Limited partnership interests:

Units redeemed for common shares 6,995,941 69 55,788 — ( 4,279 ) — 51,578

Units redeemed for cash — — ( 3,422 ) — ( 2,556 ) — ( 5,978 )

Reallocation of noncontrolling interests — — 4,521 — ( 56,099 ) — ( 51,578 )

1 unchanged sentence

Dividends to common shareholders ($ 0.88 per share)

— — — ( 106,163 ) — — ( 106,163 )

Distributions to redeemable NCI ($ 0.88 per unit)

— — — — ( 5,694 ) — ( 5,694 )

Share-based compensation expense — — 5,906 — 7,643 — 13,549

2 unchanged sentences

Net income attributable to common shareholders — — — 93,589 — — 93,589

Net income (loss) attributable to noncontrolling interests

Impact of ASC 842 adoption

Net income attributable to noncontrolling interests — — — — 4,160 1 4,161

Limited partnership interests:

Units redeemed for common shares 1,579,389 15 11,129 — — — 11,144

Units redeemed for cash

Reallocation of noncontrolling interests — — 8,833 — ( 19,977 ) — ( 11,144 )

Common shares issued 66,588 1 427 ( 30 ) — — 398

Repurchase of common shares ( 5,873,923 ) ( 59 ) ( 54,082 ) — — — ( 54,141 )

Dividends to common shareholders ($ 0.68 per share)

Distributions to redeemable NCI ($0.88 per unit)

— — — ( 80,480 ) — — ( 80,480 )

Distributions to redeemable NCI ($ 0.68 p er unit)

— — — — ( 3,386 ) — ( 3,386 )

Contributions from noncontrolling interests — — — — — 5,447 5,447

Share-based compensation expense — — 5,871 — 11,123 — 16,994

6 unchanged sentences

Year Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 97,750 $ 116,197 $ 116,963

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 97,751 96,641 102,942

Income from acquired leasehold interest

Casualty and impairment loss, net 3,055 12,738 5,574

1 unchanged sentence

Gain on sale of lease — ( 1,849 ) —

(Gain) loss on extinguishment of debt

Amortization of deferred financing costs

Gain on extinguishment of debt ( 34,908 ) — ( 2,524 )

Amortization of below market leases, net ( 10,624 ) ( 15,940 ) ( 33,975 )

2 unchanged sentences

Share-based compensation expense 16,994 13,549 9,741

Credit losses related to operating lease receivables

Rental revenue deemed uncollectible 27,890 1,385 4,138

Change in operating assets and liabilities:

7 unchanged sentences

Real estate development and capital improvements ( 28,522 ) ( 91,301 ) ( 118,765 )

Acquisition of real estate

Acquisitions of real estate ( 124,340 ) ( 47,356 ) ( 4,931 )

Proceeds from sale of operating properties 54,402 116,510 57,593

4 unchanged sentences

Debt repayments ( 89,302 ) ( 5,587 ) ( 4,288 )

Dividends to common shareholders

Distributions to redeemable noncontrolling interests

Dividends paid to common shareholders ( 26,647 ) ( 106,163 ) ( 100,244 )

Distributions paid to redeemable noncontrolling interests ( 1,314 ) ( 5,694 ) ( 11,116 )

Taxes withheld for vested restricted shares ( 1,465 ) ( 633 ) ( 385 )

2 unchanged sentences

Proceeds related to the issuance of common shares 398 439 477

Payment on extinguishment of debt

Purchase of marketable securities in connection with debt defeasance

Cash paid to repurchase shares ( 54,141 ) — —

Contributions from noncontrolling interests 5,447 — —

Proceeds from borrowings 90,250 — —

Net cash (used in) provided by financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net cash used in financing activities ( 80,245 ) ( 126,265 ) ( 115,556 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 65,883 ) 27,614 ( 43,319 )

Cash and cash equivalents and restricted cash at beginning of year 485,136 457,522 500,841

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for interest net of amounts capitalized of $ 715 , $ 1,425 and $ 3,313 , respectively

$ 68,113 $ 64,751 $ 65,699

Cash payments for income taxes 499 1,601 757

1 unchanged sentence

Accrued capital expenditures included in accounts payable and accrued expenses 5,808 5,056 25,661

Write-off of fully depreciated assets

Mortgage debt forgiven in foreclosure

Acquisition of real estate through issuance of OP units

Acquisition of real estate through assumption of debt

Marketable securities transferred in connection with debt defeasance

Defeasance of mortgages payable

Write-off of fully depreciated and impaired assets 21,447 56,199 24,307

Forgiveness of mortgage debt

30,000 — 11,537

Assumption of debt from the acquisition of real estate

Dividend/distribution declared and payable on January 19, 2021 55,905 — —

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

9 unchanged sentences

(In thousands, except unit and per unit amounts)

December 31, December 31,

Real estate, at cost:

Land $ 568,662 $ 515,621

Buildings and improvements 2,326,450 2,197,076

1 unchanged sentence

Furniture, fixtures and equipment 7,016 7,566

Total 2,946,817 2,748,785

Accumulated depreciation and amortization ( 730,366 ) ( 671,946 )

3 unchanged sentences

Restricted cash 34,681 52,182

Tenant and other receivables, net of allowance for doubtful accounts of $6,486 as of December 31, 2018

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $134 as of December 31, 2018

Tenant and other receivables 15,673 21,565

Receivables arising from the straight-lining of rents 62,106 73,878

Identified intangible assets, net of accumulated amortization of $ 37,009 and $ 30,942 , respectively

56,184 48,121

Deferred leasing costs, net of accumulated amortization of $ 16,419 and $ 16,560 , respectively

Deferred financing costs, net of accumulated amortization of $3,765 and $2,764, respectively

18,585 21,474

Prepaid expenses and other assets 70,311 37,577

Total assets $ 2,939,560 $ 2,846,358

LIABILITIES AND EQUITY

3 unchanged sentences

Identified intangible liabilities, net of accumulated amortization of $ 71,375 and $ 62,610 , respectively

148,183 128,830

Total liabilities 1,943,667 1,831,582

3 unchanged sentences

117,014,317 and 121,370,125 units outstanding, respectively

991,032 1,020,362

Limited partners:

4,729,010 and 5,833,318 units outstanding, respectively

41,302 50,156

Accumulated deficit ( 42,313 ) ( 56,166 )

1 unchanged sentence

Noncontrolling interest in consolidated subsidiaries 5,872 424

Total equity 995,893 1,014,776

Total liabilities and equity $ 2,939,560 $ 2,846,358

4 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental revenue $ 328,280 $ 384,405 $ 411,298

Management and development fees 1,283 1,900 1,469

Income from acquired leasehold interest

Other income 532 1,344 1,393

Total revenue 330,095 387,649 414,160

4 unchanged sentences

Casualty and impairment loss, net (1)

3,055 12,738 4,426

Lease expense 13,667 14,466 11,448

4 unchanged sentences

Interest and debt expense ( 71,015 ) ( 66,639 ) ( 64,868 )

Gain (loss) on extinguishment of debt

Gain on extinguishment of debt 34,908 — 2,524

Income before income taxes 58,754 117,484 120,482

Income tax (expense) benefit

Income tax benefit (expense) 38,996 ( 1,287 ) ( 3,519 )

Net income 97,750 116,197 116,963

net (income) loss attributable to NCI in consolidated subsidiaries ( 1 ) 25 ( 45 )

1 unchanged sentence

Earnings per unit - Basic:

$ 0.80 $ 0.92 $ 0.92

Earnings per unit - Diluted:

$ 0.80 $ 0.92 $ 0.92

Weighted average units outstanding - Basic 121,957 126,333 126,198

5 unchanged sentences

(In thousands, except unit and per unit amounts)

General Partner

Limited Partners (1)

Total Shares General Partner Total Units Limited Partners (1)

Accumulated Earnings

NCI in Consolidated Subsidiaries

(Deficit) NCI in Consolidated Subsidiaries Total Equity

Balance, January 1, 2018 113,827,529 947,540 12,812,954 105,495 ( 62,898 ) 404 990,541

2 unchanged sentences

Common units issued as a result of common shares issued by Urban Edge 106,116 649 — — ( 172 ) — 477

Equity redemption of OP Units 429,110 3,504 ( 429,110 ) — — — 3,504

Limited partnership units issued, net — — 352,789 — — — —

Reallocation of noncontrolling interests — 1,263 — ( 4,767 ) — — ( 3,504 )

Distributions to Partners ($ 0.88 per unit)

— — — — ( 111,360 ) — ( 111,360 )

Share-based compensation expense — 4,992 — 4,719 30 — 9,741

2 unchanged sentences

Net income attributable to unitholders — — — — 116,222 — 116,222

Net income attributable to noncontrolling interests

Net loss attributable to noncontrolling interests — — — — — ( 25 ) ( 25 )

Impact of ASC 842 adoption — — — — ( 2,918 ) — ( 2,918 )

Common units issued as a result of common shares issued by Urban Edge 59,895 570 — — ( 131 ) — 439

Equity redemption of OP Units 6,995,941 55,857 ( 6,995,941 ) ( 4,279 ) — — 51,578

Equity redemption for cash — ( 3,422 ) ( 357,998 ) ( 2,556 ) — — ( 5,978 )

Limited partnership units issued, net — — 450,624 — — — —

1 unchanged sentence

Distributions to Partners ($ 0.88 per unit)

— — — — ( 111,857 ) — ( 111,857 )

Share-based compensation expense — 5,906 — 7,643 — — 13,549

2 unchanged sentences

Net income attributable to unitholders — — — — 97,749 — 97,749

Net loss attributable to noncontrolling interests

Impact of ASC 842 adoption

Net income attributable to noncontrolling interests — — — — — 1 1

Common units issued as a result of common shares issued by Urban Edge 66,588 428 475,081 — ( 30 ) — 398

Equity redemption of OP units 1,579,389 11,144 ( 1,579,389 ) — — — 11,144

Equity redemption for cash

Limited partnership units issued, net

Repurchase of common shares ( 5,873,923 ) ( 54,141 ) — — — — ( 54,141 )

Reallocation of noncontrolling interests — 8,833 — ( 19,977 ) — — ( 11,144 )

Distributions to Partners ($ 0.68 per unit)

— — — — ( 83,866 ) — ( 83,866 )

Contributions from noncontrolling interests — — — — — 5,447 5,447

Share-based compensation expense — 5,871 — 11,123 — — 16,994

7 unchanged sentences

Year Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 97,750 $ 116,197 $ 116,963

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 97,751 96,641 102,942

Income from acquired leasehold interest

Casualty and impairment loss, net 3,055 12,738 5,574

1 unchanged sentence

Gain on sale of lease — ( 1,849 ) —

(Gain) loss on extinguishment of debt

Amortization of deferred financing costs

Gain on extinguishment of debt ( 34,908 ) — ( 2,524 )

Amortization of below market leases, net ( 10,624 ) ( 15,940 ) ( 33,975 )

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Share-based compensation expense 16,994 13,549 9,741

Credit losses related to operating lease receivables

Rental revenue deemed uncollectible 27,890 1,385 4,138

Change in operating assets and liabilities:

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Real estate development and capital improvements ( 28,522 ) ( 91,301 ) ( 118,765 )

Acquisition of real estate

Acquisitions of real estate ( 124,340 ) ( 47,356 ) ( 4,931 )

Proceeds from sale of operating properties 54,402 116,510 57,593

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Debt repayments ( 89,302 ) ( 5,587 ) ( 4,288 )

Distributions to partners

Distributions paid to partners ( 27,961 ) ( 111,857 ) ( 111,360 )

Taxes withheld for vested restricted units ( 1,465 ) ( 633 ) ( 385 )

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Proceeds related to the issuance of common shares 398 439 477

Payment on extinguishment of debt

Purchase of marketable securities in connection with debt defeasance

Cash paid to repurchase shares ( 54,141 ) — —

Contributions from noncontrolling interests 5,447 — —

Proceeds from borrowings 90,250 — —

Net cash (used in) provided by financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Net cash used in financing activities ( 80,245 ) ( 126,265 ) ( 115,556 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 65,883 ) 27,614 ( 43,319 )

Cash and cash equivalents and restricted cash at beginning of year 485,136 457,522 500,841

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Year Ended December 31,

2020 2019 2018

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for interest net of amounts capitalized of $ 715 , $ 1,425 and $ 3,313 , respectively

$ 68,113 $ 64,751 $ 65,699

Cash payments for income taxes 499 1,601 757

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Accrued capital expenditures included in accounts payable and accrued expenses 5,808 5,056 25,661

Write-off of fully depreciated assets

Mortgage debt forgiven in foreclosure

Acquisition of real estate through issuance of OP units

Acquisition of real estate through assumption of debt

Marketable securities transferred in connection with debt defeasance

Defeasance of mortgages payable

Write-off of fully depreciated and impaired assets 21,447 56,199 24,307

Forgiveness of mortgage debt

30,000 — 11,537

Assumption of debt from the acquisition of real estate

Dividend/distribution declared and payable on January 19, 2021 55,905 — —

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

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The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest.

As of December 31, 2019 , our portfolio consisted of 74 shopping centers, four malls and a warehouse park totaling approximately 15.2 million sf.

As of December 31, 2020, our portfolio consisted of 72 shopping centers, five malls and two industrial parks totaling approximately 16.3 million sf, which is inclusive of a 95 % controlling interest in Walnut Creek, CA (Mt.

Diablo), and an 82.5 % controlling interest in Sunrise Mall, in Massapequa, NY.

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

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All intercompany transactions have been eliminated in consolidation.

In accordance with ASC 205 Presentation of Financial Statements, the Company reclassified Property rentals and Tenant reimbursement income to Rental revenue on its consolidated statements of income for the years ended December 31, 2018 and 2017, respectively, as reflected beginning on Form 10-K for the year ended December 31, 2018.

Additionally, the Company includes credit losses related to operating lease receivables as a reduction to rental revenue in "Rental revenue" in the consolidated statements of income for the year ended December 31, 2019 as reflected in this Form 10-K due to the adoption of (“ASU 2016-02”) ASC 842 Leases.

Provision for doubtful accounts are included in "Property operating expenses" in the consolidated statements of income for the years ended December 31, 2018 and 2017, respectively.

In accordance with ASC 205 Presentation of Fin ancial Statements, the Company reclassified Property rentals and Tenant reimbursement income to Rental revenue on its consolidated statements of income for the year ended December 31, 2018, as reflected beginning on Form 10-K for the year ended December 31, 2018.

Additionally, the Company includes rental revenue deemed uncollectible as a reduction to rental revenue in the consolidated statements of income for the year ended December 31, 2020 as reflected in this Form 10-K due to the adoption of ASC 842 Leases (“ASU 2016-02”) .

Provision for doubtful accounts is included in "Property operating expenses" in the consolidated statements of income for the year ended December 31, 2018.

In accordance with ASC 205 , certain prior year balances have been reclassified in order to conform to the current period presentation.

The Company includes real estate impairment charges, and casualty losses (gains) resulting from natural disasters in Casualty and impairment loss, net on its consolidated statements of income for the years ended December 31, 2019 and 2018 as reflected in this Form 10-K.

Refer to Note 9, Fair Value Measurements and Note 10, Commitments and Contingencies in Part II, Item 8.

in this Annual Report on Form 10-K for information regarding real estate impairment charges and casualty losses (gains), respectively.

Refer to Note 9, Fair Value Measurements and Note 10, Commitments and Contingencies in Part II, Item 8 in this Annual Report on Form 10-K for information regarding real estate impairment charges and casualty losses (gains), respectively.

Our primary business is the ownership, management, redevelopment, development and operation of retail shopping centers and malls.

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Depreciation is recognized on a straight-line basis over estimated useful lives which range from one to 40 years.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price based on these assessments on a relative fair value basis.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and assumption of liabilities and we allocate the purchase price based on these assessments on a relative fair value basis.

We assess fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information.

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Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis taking into account the appropriate capitalization rate.

Such events and changes include macroeconomic conditions, including those caused by global pandemics, like the recent COVID-19 pandemic, which resulted in property operational disruption and could indicate that the carrying amount may not be recoverable.

An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value.

Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation.

Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation.

Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared.

If our estimates of the projected future cash flows or market conditions change, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements.

If our estimates of the projected future cash flows change based on uncertain market conditions, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements.

Real Estate Held For Sale — When a real estate asset is identified by management as held for sale, we cease depreciation of the asset and estimate its fair value, net of estimated costs to sell.

If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value.

If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an impairment charge is recorded to reflect the estimated fair value.

The Company classifies properties as held for sale when executed contract contingencies have been satisfied, which signify that the sale is legally binding.

As of December 31, 2019, two properties in Lawnside, NJ and Bethlehem, PA were classified as held for sale and the properties’ assets were included in prepaid expenses and other assets in our consolidated balance sheets as of December 31, 2019 .

Refer to Note 4, Acquisitions and dispositions in Part II, Item 8.

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Restricted Cash — Restricted cash consists of security deposits and cash escrowed under loan agreements for debt service, real estate taxes, property insurance, tenant improvements, leasing commissions, capital expenditures and cash held for potential Internal Revenue Code Section 1031 tax deferred exchange transactions.

Accounts Receivable and Changes in Collectibility Assessment — Accounts receivable includes unpaid amounts billed to tenants, disputed enforceable charges and accrued revenues for future billings to tenants for property expenses.

We periodically evaluate the collectibility of amounts due from tenants and disputed enforceable charges, resulting from the inability of tenants to make required payments under their lease agreements.

We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue.

Management exercises judgment in assessing collectibility and considers payment history and current credit status.

Accounts receivable are written-off directly when they are deemed to be uncollectible.

Tenant and Other Receivables and Changes in Collectibility Assessment — Tenant receivables include unpaid amounts billed to tenants, disputed enforceable charges and accrued revenues for future billings to tenants for property expenses.

the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements.

We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842 Leases .

Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectibility of substantially all future lease payments from a specific lease is not probable for collection, at which point, the Company will begin recognizing revenue from such leases prospectively, based on actual amounts received.

This write-off effectively reduces cumulative non-cash rental income recognized from the straight-lining of rents since lease commencement.

In addition, future revenue recognition is limited to amounts paid by the lessee.

We will generally return to an accrual basis of accounting, if and when, collectability of substantially all the remaining contractual lease payments is reasonably probable.

During the year ended December 31, 2020, rental revenue deemed uncollectible of $ 27.9 million was classified as a reduction to rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants.

Additionally, during the year ended December 31, 2020 we recognized write-offs of $ 12.0 million related to receivables arising from the straight-lining of rents as a result of tenants impacted by the COVID-19 pandemic.

Deferred Leasing Costs — Deferred leasing costs include incremental costs of a lease that would have not been incurred if the lease had not been executed, including broker and sale commissions and contingent legal fees.

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Such fees are amortized on a straight-line basis over the terms of the related revolving credit agreement as a component of interest expense, which approximates the effective interest rate method, in accordance with the terms of the agreement.

No amounts have been drawn to date under the revolving credit agreement.

No amounts were drawn or outstanding under the revolving credit agreement as of December 31, 2020.

Deferred financing costs are included in prepaid expenses and other assets on the consolidated balance sheets.

Revenue Recognition — We have the following revenue sources and revenue recognition policies:

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Rental revenue comprises revenue from fixed and variable lease payments, as designated within tenant operating leases in accordance with ASC 842 Leases, as described further in our Leases accounting policy in Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

Additionally, credit losses related to operating lease receivables are recognized as adjustments to rental revenue in accordance with ASC 842.

Credit losses related to operating lease receivables:

We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue.

Income from acquired leasehold interest:

Income from acquired leasehold interest was revenue generated in connection with the write-off of an unamortized intangible liability balance related to the below-market ground lease as well as the balance of the straight-line receivable balance, upon acquisition of the leasehold interest of the property.

◦ Rental revenue deemed uncollectible:

We evaluate the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements.

We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842.

• Other Income:

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This revenue is recognized as the services are transferred in accordance with ASC 606.

Leases — We have approximately 1,100 operating leases at our retail shopping centers and malls, which generate rental income from tenants and operating cash flows for the Company.

Leases — We have approximately 1,100 operating leases at our properties, which generate rental income from tenants and operating cash flows for the Company.

Our tenant leases are dependent on the Company, as lessor, agreeing to provide our tenants with the right to control the use of our real estate assets, as lessees.

Our real estate assets are comprised of retail shopping centers and malls.

Our real estate assets are comprised of retail shopping centers, malls and industrial parks.

Tenants agree to use and control their agreed upon space for their business purposes.

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The Company assesses lease classification for each new and modified lease.

All new and modified tenant leases commenced in the year ended December 31, 2019 have been assessed and classified as operating leases.

All new and modified leases which commenced in the year ended December 31, 2020 have been assessed and classified as operating leases.

Contractual rent increases of renewal options are often fixed at the time of the initial lease agreement which may result in tenants being able to exercise their renewal options at amounts that are less than the fair value of the rent at the date of renewal.

In addition to fixed base rents, certain rental income derived from our tenant leases is variable and may be dependent on percentage rent or the Consumer Price Index ("CPI").

Variable lease payments from percentage rents are earned by the Company in the event the

tenant's gross sales exceed certain amounts.

Variable lease payments from percentage rents are earned by the Company in the event the tenant's gross sales exceed certain amounts.

Terms of percentage rent are agreed upon in the tenant's lease and will vary based on the tenant's sales.

Variable lease payments dependent on the CPI, will change in accordance with the corresponding increase or decrease in CPI if negotiated and agreed upon in the tenant's lease.

Variable lease payments dependent on percentage rent and the CPI were $ 4.1 million for the year ended December 31, 2019 .

Variable lease payments also arise from tenant expense reimbursements, which provide for the recovery of all or a portion of the operating expenses, common area maintenance expenses, real estate taxes, insurance and capital improvements of the respective property and amounted to $ 105.3 million for the year ended December 31, 2019 .

Variable lease payments dependent on percentage rent and the CPI were $ 2.4 million and $ 4.1 million for the years ended December 31, 2020 and 2019, respectively.

Variable lease payments also arise from tenant expense reimbursements, which provide for the recovery of all or a portion of the operating expenses, common area maintenance expenses, real estate taxes, insurance and capital improvements of the respective property and amounted to $ 96.7 million and $ 105.3 million for the years ended December 31, 2020 and 2019, respectively.

The Company accounts for variable lease payments as "Rental revenue" on the consolidated statement of income in the period in which the changes in facts and circumstances on which the variable lease payments are based occur.

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The consolidated financial statements reflect the consolidation of VIEs in which the Company is the primary beneficiary.

Management uses its judgment when determining if we are the primary beneficiary of, or have a controlling financial interest in, an entity in which we have a variable interest.

Factors considered in determining whether we have the power to direct the activities that most significantly impact the entity’s economic performance include voting rights, involvement in day-to-day capital and operating decisions and the extent of our involvement in the entity.

Excluding the Operating Partnership, the Company had two entities that met the criteria of a VIE in which we held variable interests as of December 31, 2020.

These entities are VIEs primarily because the noncontrolling interests do not have substantive kick-out or participating rights and we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of these entities.

As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for these entities, they were consolidated in our financial statements as of December 31, 2020.

The majority of the operations of these VIEs are funded with cash flows generated by the property.

As of December 31, 2020, excluding the Operating Partnership, we consolidated two VIEs with total assets and liabilities of $ 43.6 million and $ 31.5 million, respectively.

As of December 31, 2019, excluding the Operating Partnership, we consolidated one VIE with total assets of $ 9.8 million and liabilities of $ 3.1 million.

Earnings Per Share and Unit — Basic earnings per common share and unit is computed by dividing net income attributable to common shareholders and unitholders by the weighted average common shares and units outstanding during the period.

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The term of each award is determined by the compensation committee of our Board of Trustees (the “Compensation Committee”), but in no event can such term be longer than ten years from the date of grant.

The vesting schedule of each award is determined by the Compensation Committee, in its sole and absolute

discretion, at the date of grant of the award.

The vesting schedule of each award is determined by the Compensation Committee, in its sole and absolute discretion, at the date of grant of the award.

Dividends are paid on certain shares of unvested restricted stock, which makes the restricted stock a participating security.

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As a result of the issuance of common units to the Company for share-based compensation, the Operating Partnership accounts for share-based compensation in the same manner as the Company.

Income Taxes — Our two Puerto Rico malls are subject to income taxes which are based on estimated taxable income and are included in income tax expense in the consolidated statements of income.

Income Taxes — The Company elected to be taxed as a REIT under sections 856-860 of the Code, commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015.

With the exception of the Company’s TRS, to the extent the Company meets certain requirements under the Code, the Company will not be taxed on its federal taxable income.

If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates (including any alternative minimum tax, which, for corporations, was repealed under the TCJA for tax years beginning after December 31, 2017) and may not be able to qualify as a REIT for the four subsequent taxable years.

In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income.

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which these temporary differences are expected to be recovered or settled.

Earnings and profits, which determine the taxability of dividends to shareholders, differs from net income reported for financial reporting purposes primarily because of differences in depreciable lives and cost bases of the malls, as well as other timing differences.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

The Company applies the FASB’s guidance relating to uncertainty in income taxes recognized in a Company’s financial statements.

Under this guidance the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The guidance on accounting for uncertainty in income taxes also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods.

The Company records interest and penalties relating to unrecognized tax benefits, if any, as income tax expense

Concentration of Credit Risk — A concentration of credit risk arises in our business when a national or regionally-based tenant occupies a substantial amount of space in multiple properties owned by us.

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None of our tenants accounted for more than 10% of total revenues in the year ended December 31, 2020.

As of December 31, 2019 , The Home Depot was our largest tenant with seven stores which comprised an aggregate of 920,000 sf and accounted for approximately $ 23.0 million , or 5.9 % of our total revenue for the year ended December 31, 2019 .

As of December 31, 2020, The Home Depot was our largest tenant with six stores which comprised an aggregate of 809,000 sf and accounted for approximately $ 20.7 million, or 6.3 % of our total revenue for the year ended December 31, 2020.

Recently Issued Accounting Literature

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We initially applied the standard at the beginning of the period of adoption through the transition method issued by ASU 2018-11 and have presented comparative periods under ASC 840 Leases .

Due to the effects of applying ASC 842, the Company recognized a $ 2.9 million cumulative-effect adjustment to its accumulated deficit to adjust r eserves on receivables from straight-line rents .

Due to the effects of applying ASC 842, the Company recognized a $ 2.9 million cumulative-effect adjustment to its accumulated deficit in the year ended December 31, 2019 to adjust r eserves on receivables from straight-line rents .

The new standard requires lessees to apply a two-model approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

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The new standard requires lessors to account for leases using an approach that is substantially equivalent to guidance for sales-type leases, direct financing leases and operating leases under ASC 840.

For purposes of transition, we did not elect the hindsight practical expedient but did elect the land easement practical expedient to not reassess whether existing land easements contain leases and the practical expedient package, which has been applied consistently to all of

As a result of electing the practical expedient package, we did not (i) reassess whether any expired or existing contracts are or contain leases, (ii) reassess the lease classification for any expired or existing leases or (iii) reassess initial direct costs for any existing leases.

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On January 1, 2019, we also reclassified $ 11.9 million of acquired below-market lease intangibles and $ 7.1 million of accrued rent and adjusted the carrying values of our ROU assets by the corresponding amounts.

As of December 31, 2019 , our operating lease ROU assets and lease liabilities were $ 81.8 million and $ 79.9 million , respectively, as presented on our consolidated balance sheet.

Subsequent to adoption, the Company recognized a finance lease ROU asset and finance lease liability of $ 2.7 million and $ 3.0 million , respectively, in connection with the Company’s acquisition of the lessee position of a ground lease on November 1, 2019 .

The Company recognizes interest expense on the finance lease liability.

As of December 31, 2020, the Company had 26 operating leases and our operating lease ROU assets and lease liabilities were $ 81.0 million and $ 75.0 million, respectively, as presented on our consolidated balance sheet.

Subsequent to adoption, the Company recognized a finance lease in connection with the Company acquiring the lessee position of a ground lease in 2019.

As of December 31, 2020, our finance lease ROU asset and finance lease liability were $ 2.7 million and $ 3.0 million, respectively.

The finance lease ROU asset is included within prepaid expenses and other assets on our consolidated balance sheets as of December 31, 2020 and 2019 and the finance lease liability is included within accounts payable, accrued expenses and other liabilities on our consolidated balance sheets as of December 31, 2020 and 2019.

The Company recognizes interest expense on its finance lease liability.

The standard's adoption has also impacted the presentation of our consolidated income statement due to accounting for the lease and non-lease components as a single lease component for all classes of underlying assets, presented as lease expense on the consolidated statement of income.

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From a lessor perspective, the adoption resulted in additional general and administrative expenses, attributable to internal leasing department costs not meeting the definition of initial direct costs under ASC 842.

Capitalized internal leasing costs were $ 0.7 million for the year ended December 31, 2018.

The standard's adoption has also impacted the presentation of our consolidated income statement due to accounting for lease and non-lease components as a single lease component, presented as rental revenue on the consolidated statement of income, however there has been no change in the timing of revenue recognition since adoption.

Additionally, under the amendments issued in ASU 2018-20, the Company has accounted for common area maintenance expenses of $ 2.7 million paid directly by tenants to third-parties as variable rental revenue and has reported the corresponding expense within property operating expenses.

Real estate taxes and insurance expenses paid directly by tenants have not been recognized as rental revenue, real estate taxes and property operating expenses on the consolidated statements of income.

Additionally, under the amendments issued in ASU 2018-20, the Company has accounted for common area maintenance expenses paid directly by tenants to third-parties as variable rental revenue and has reported the corresponding expense within property operating expenses.

Real estate taxes and insurance expenses paid directly by tenants have not been recognized as rental revenue or as expenses on the consolidated statements of income.

The adoption of this standard has also resulted in additional quantitative and qualitative footnote disclosures (refer to Note 8 Leases to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).

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ASU 2016-13 introduces a new model for estimating credit losses for certain types of financial instruments and also modifies the impairment model with new methodology for estimating credits losses.

In November 2018, the FASB issued ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which included amendments to clarify receivables arising from operating leases are within the scope ASC 842.

Due to the adoption of ASC 842, the Company includes credit losses related to operating lease receivables as a reduction to rental revenue in "Rental revenue" in the consolidated statements of income .

The adoption of ASU 2016-13 will not have a material impact to our consolidated financial statements and disclosures.

In November 2018, the FASB issued ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments — Credit Losses , which included amendments to clarify receivables arising from operating leases are within the scope ASC 842 Leases .

Due to the adoption of ASC 842 on January 1, 2019, the Company includes rental revenue deemed uncollectible as a reduction to rental revenue in the consolidated statements of income .

As of December 31, 2020, the Company did not have any material outstanding financial instruments.

The adoption of ASU 2016-13 has had no impact to our consolidated financial statements and disclosures.

In August 2018, the FASB issued ASU 2018-13 Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement to ASC 820, Fair Value Measurement .

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Early adoption is permitted.

We are currently evaluating the impact ASU 2019-12 may have to our consolidated financial statements and disclosures.

We adopted ASU 2019-12 effective January 1, 2021.

The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (ASC 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform.

ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year,

however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04, which allows entities to account for the modification as if the modification was not substantial.

We will disclose the nature of and reason for electing the optional expedient in each interim and annual financial statement period if and when applicable through December 31, 2022.

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19.

Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework).

The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief, that lessors provide to mitigate the economic effects of COVID-19 on lessees, is a lease modification under ASC 842.

Instead, when the cash flows resulting from the lease concession granted for COVID-19 rent relief are substantially the same or less than the cash flows of the original contract, an entity may elect to apply the modification guidance (i.e.

assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract).

The FASB stated that there are multiple ways to account for rent concessions, none of which the FASB believes are more preferable than the others.

Two of those methods are:

(i) account for the concessions as if no changes to the lease contract were made;

under that accounting, a lessor would continue to increase its lease receivable and continue to recognize income, referred to as the “receivable approach”;

or (ii) account for the deferred payments or abatements as variable lease payments;

under that accounting, a lessor would recognize the payment as income in profit or loss in the period in which the changes in facts and circumstances on which the variable lease payments are based occurred, referred to as the “variable approach”.

The Company has evaluated its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.

As of December 31, 2020, the Company granted rent deferrals with an aggregate deferral amount of $ 5.1 million, with $ 4.5 million accounted for under the receivable approach by electing the Lease Modification Q&A and $ 0.6 million accounted for as modifications due to term extensions of the leases.

The Company also granted abatements aggregating $ 3.9 million as of December 31, 2020, with $ 0.4 million accounted for under the variable approach and $ 3.5 million accounted for as modifications due to the executed agreements including other rental term modifications, such as term extensions and substantial changes in cash flows.

The Company remains in active discussions with its impacted tenants to grant further concessions.

The full future impact of the Lease Modification Q&A is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 and the elections made by the Company at the time of entering into such concessions.

Refer to Note 10 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company or the Operating Partnership, or they are not expected to have a material impact on our consolidated financial statements.

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During the years ended December 31, 2020 and December 31, 2019, we closed on the following acquisitions:

Date Purchased

Property Name

Purchase Price

Date Purchased Property Name City State Square Feet Purchase Price

(in thousands)

November 1, 2019

25 East Spring Valley Ave

November 8, 2019

Wonderland Marketplace

December 9, 2019

150 Route 4 East

January 26, 2018

938 Spring Valley Road

February 23, 2018

116 Sunrise Highway

February 28, 2018

197 West Spring Valley Ave

7 Francis Place

(1) The total purchase prices for the properties acquired in the year ended December 31, 2019 and December 31, 2018 , respectively, include $ 0.3 million and $ 0.1 million of transaction costs incurred in relation to the transactions.

February 12, 2020 Kingswood Center Brooklyn NY 130,000 $ 90,212

February 12, 2020 Kingswood Crossing Brooklyn NY 110,000 77,077

December 11, 2020 51 East Spring Valley Ave Maywood NJ 3,000 662

December 31, 2020 Sunrise Mall Massapequa NY 1,211,000 31,545

2020 Total $ 199,496 (1)

November 1, 2019 25 East Spring Valley Ave Maywood NJ 43,800 $ 7,162

November 8, 2019 Wonderland Marketplace Revere MA 139,500 24,209

December 9, 2019 150 Route 4 East Paramus NJ 12,000 7,118

2019 Total $ 38,489 (1)

(1) The total purchase price for the properties acquired in the year ended December 31, 2020 and December 31, 2019 include $ 3.1 million and $ 0.3 million, respectively, of transaction costs incurred in relation to the transactions.

During the year ended December 31, 2020, the Company purchased four assets, at an aggregate purchase price of $ 199.5 million and 1.5 million sf, comprising two assets located in Brooklyn, NY, one asset located in Massapequa, NY and one asset adjacent to our existing property, Bergen Town Center.

The Company acquired Sunrise Mall in Massapequa, NY for $ 31.5 million, including transaction costs on December 31, 2020.

The Company’s acquired ownership interest of the asset is 82.5 % with the remaining 17.5 % held by strategic partners.

As of December 31, 2020, the Company was subject to $ 6.0 million of additional consideration related to the acquisition of Sunrise Mall, the payment of which is contingent on the verdict of a property tax appeal.

As of December 31, 2020, the outcome of this appeal could not be estimated or determined and was therefore not recorded in the financial statements.

The Company acquired Kingswood Center and Kingswood Crossing for $ 167.3 million, including transaction costs on February 12, 2020.

The properties are located along Kings Highway in the Midwood neighborhood of Brooklyn, NY and were funded via 1031 exchanges using cash proceeds from dispositions.

Additionally, as part of the acquisition of Kingswood Center, the Company assumed a $ 65.5 million mortgage, which matures in 2028.

A portion of the acquisition of Kingswood Crossing was completed as a reverse Section 1031 like-kind exchange.

We entered into a reverse Section 1031 like-kind exchange agreement with third-party intermediaries, which, for a maximum of 180 days, allowed us to defer for tax purposes, gains on the sale of other properties identified and sold within the period.

Until the earlier of the termination of the exchange agreements or 180 days after the respective acquisition dates, the third-party intermediaries are the legal owner of the properties;

however, we controlled the activities that most significantly impact each property and retained all of the economic benefits and risks associated with each property.

Therefore, at the date of acquisition, we determined that we were the primary beneficiary of these variable interest entities and consolidated the properties and their operations as of the acquisition date.

The Company purchased three assets with a total consideration of $ 38.5 million during the year ended December 31, 2019.

One asset is located in the Boston metropolitan area and two assets are adjacent to our existing property, Bergen Town Center.

Wonderland Marketplace is located in the Boston metropolitan area and two assets are adjacent to our existing property, Bergen Town Center.

The acquisitions were executed through Internal Revenue Code Section 1031 tax deferred exchange transactions and funded using proceeds from dispositions.

The properties purchased during the year ended December 31, 2018 are all adjacent to centers currently owned by the Company.

Consideration for these purchases consisted of cash.

The aggregate purchase price of the above property acquisitions has been allocated as follows:

Property Name

Buildings and improvements

Identified intangible assets (1)

Property Name Land Buildings and improvements Identified intangible assets (1)

Identified intangible liabilities (1)

ROU asset net of lease liability

Total Purchase Price

Debt Premium ROU assets net of lease liabilities Other assets, net Total Purchase Price

(in thousands)

Kingswood Center $ 15,690 $ 76,766 $ 9,263 $ ( 4,534 ) $ ( 6,973 ) $ — $ — $ 90,212

Kingswood Crossing 8,150 64,159 4,768 — — — — 77,077

51 East Spring Valley Ave 662 — — — — — — 662

Sunrise Mall (2)

44,035 3,084 5,495 ( 26,495 ) — 5,012 414 31,545

2020 Total $ 68,537 $ 144,009 $ 19,526 $ ( 31,029 ) $ ( 6,973 ) $ 5,012 $ 414 $ 199,496

25 East Spring Valley Ave (3)

$ — $ 6,824 $ 623 $ ( 31 ) $ — $ ( 254 ) $ — $ 7,162

Wonderland Marketplace 6,323 17,130 2,947 ( 2,191 ) — — — 24,209

150 Route 4 East 7,118 — — — — — — 7,118

938 Spring Valley Road

116 Sunrise Highway

197 West Spring Valley Ave

7 Francis Place

(1) As of December 31, 2019 , the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2019 were 11.2 years and 23.8 years, respectively.

2019 Total $ 13,441 $ 23,954 $ 3,570 $ ( 2,222 ) $ — $ ( 254 ) $ — $ 38,489

(1) As of December 31, 2020, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2020 were 11.0 years and 32.5 years, respectively and the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2019 were 11.4 years and 23 years, respectively.

(2) In connection with this acquisition, the Company acquired the lessee positions of ground leases and recognized operating lease ROU assets and operating lease liabilities.

Refer to Note 8 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information.

(3) In connection with this acquisition, the Company acquired the lessee position of a ground lease and recognized a finance lease ROU asset and finance lease liability of $ 2.7 million and $ 3.0 million, respectively.

As of December 31, 2019, the Company was under contract to purchase two properties situated in the Midwood section of Brooklyn, NY for $ 165 million .

A $ 10.0 million deposit related to these acquisitions was included in the balance of the Company’s prepaid expenses and other assets in the consolidated balance sheets as of December 31, 2019.

In February 2020 we completed the acquisitions of these properties.

During the year ended December 31, 2020, we disposed of three properties and received proceeds of $ 58.1 million, net of selling costs, resulting in a $ 39.8 million net gain on sale of real estate.

The sale of all three dispositions were completed as 1031 exchanges with Kingswood Crossing as a result of the sales occurring within 180 days of the Company’s acquisition.

During the year ended December 31, 2019, we disposed of eight properties and received proceeds of $ 112.8 million, net of selling costs, resulting in a $ 68.6 million net gain on sale of real estate on our consolidated statements of income d uring the year ended December 31, 2019.

We disposed of two additional properties in January 2020 for net cash proceeds of $ 27.9 million .

During the year ended December 31, 2019 , the Company also sold its lessee position in one of its ground leases and received proceeds of $ 6.9 million, net of selling costs, and derecognized the lease’s ROU asset and corresponding lease liability.

We recognized a gain on sale of lease of $ 1.8 million on our consolidated statements of income d uring the year ended December 31, 2019 as a result of the sale.

On April 26, 2018 , we completed the sale of our property in Allentown, PA, which was previously classified as held for sale, for $ 54.3 million , net of selling costs.

As a result of this transaction, we recognized a $ 50.4 million gain on sale of real estate during the year ended December 31, 2018.

On July 5, 2018 , we completed the sale of land in Cherry Hill, NJ for $ 3.3 million , net of selling costs, resulting in a gain of $ 2.2 million .

Real Estate Held for Sale

As of December 31, 2019 , our two properties in Lawnside, NJ and Bethlehem, PA were classified as held for sale based on executed contracts of sale with third-party buyers.

The Company classifies properties as held for sale when executed contract contingencies have been satisfied, which signify that the sale is legally binding.

The aggregate amount of these properties was $ 3.5 million and $ 3.1 million , respectively, and were included in prepaid expenses and other assets in our consolidated balance sheets as of December 31, 2019 .

As of December 31, 2020, a parcel of one property in Lodi, NJ was classified as held for sale based on an executed contract of sale with a third-party buyer.

The aggregate amount of this parcel was $ 7.1 million and was included in prepaid expenses and other assets in our consolidated balance sheets as of December 31, 2020.

The parcel was sold in January 2021.

As of December 31, 2019, two properties in Lawnside, NJ and Bethlehem, PA were classified as held for sale based on executed contracts of sale with third-party buyers.

The aggregate amounts of the Lawnside, NJ and Bethlehem, PA properties were $ 3.5 million and $ 3.1 million, respectively, and were included in prepaid expenses and other assets in our consolidated balance sheets as of December 31, 2019.

Both properties were sold during the year ended December 31, 2020.

IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES

The following table summarizes our identified intangible assets and liabilities:

(Amounts in thousands)

December 31, 2019

December 31, 2018

(Amounts in thousands) December 31, 2020 December 31, 2019

In-place leases $ 82,303 $ 71,328

Accumulated amortization ( 32,515 ) ( 27,254 )

Below-market ground leases (1)

Accumulated amortization (1)

Above-market leases 9,255 6,100

6 unchanged sentences

Identified intangible liabilities, net of accumulated amortization $ 148,183 $ 128,830

(1) In connection with the adoption of ASC 842 on January 1, 2019, we reclassified acquired below-market lease intangibles and adjusted the carrying values of our ROU assets by the corresponding amount.

Amortization of acquired below-market leases, net of acquired above-market leases resulted in rental income of $ 10.6 million, $ 15.9 million, and $ 34.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Amortization of acquired in-place leases and customer relationships resulted in depreciation and amortization expense of $ 10.2 million, $ 8.8 million, $ 15.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The following table sets forth the estimated annual amortization expense related to intangible assets and liabilities for the five succeeding years commencing January 1, 2020:

(Amounts in thousands)

Operating Lease Amortization

In-Place Leases

The following table sets forth the estimated annual amortization (expense) and income related to intangible assets and liabilities for the five succeeding years commencing January 1, 2021:

(Amounts in thousands) Below-Market Above-Market In-Place Lease

Year Operating Lease Amortization Operating Lease Amortization Amortization

2021 $ 10,543 $ ( 1,170 ) $ ( 7,596 )

2022 10,466 ( 803 ) ( 5,998 )

2023 10,421 ( 695 ) ( 4,857 )

2024 10,185 ( 631 ) ( 4,371 )

2025 10,012 ( 452 ) ( 3,733 )

MORTGAGES PAYABLE

The following is a summary of mortgages payable as of December 31, 2020 and December 31, 2019.

Interest Rate at

(Amounts in thousands)

December 31, 2019

Interest Rate at December 31, December 31,

(Amounts in thousands) Maturity December 31, 2020 2020 2019

First mortgages secured by:

1 unchanged sentence

Cherry Hill (Plaza at Cherry Hill) (1)

5/24/2022 1.75 % $ 28,930 $ 28,930

Westfield (One Lincoln Plaza) (1)

5/24/2022 1.75 % 4,730 4,730

Woodbridge (Plaza at Woodbridge) (1)

5/25/2022 1.75 % 55,340 55,340

Jersey City (Hudson Commons) (2)

11/15/2024 2.05 % 28,586 29,000

11/15/2024 2.05 % 26,613 27,000

Bronx (1750-1780 Gun Hill Road) (2)

12/1/2024 2.05 % 25,172 24,500

Total variable rate debt 169,371 169,500

Montehiedra (senior loan)

Montehiedra (junior loan)

Bergen Town Center - West, Paramus

Paramus (Bergen Town Center - West) 4/8/2023 3.56 % 300,000 300,000

Bronx (Shops at Bruckner) 5/1/2023 3.90 % 10,351 10,978

1 unchanged sentence

Yonkers Gateway Center 4/6/2024 4.16 % 28,482 30,122

Las Catalinas

Brick 12/10/2024 3.87 % 50,000 50,000

North Plainfield 12/10/2025 3.99 % 25,100 25,100

Las Catalinas 2/1/2026 4.43 % 127,669 129,335

Middletown 12/1/2026 3.78 % 31,400 31,400

Rockaway 12/1/2026 3.78 % 27,800 27,800

East Hanover (200 - 240 Route 10 West) 12/10/2026 4.03 % 63,000 63,000

North Bergen (Tonnelle Ave) 4/1/2027 4.18 % 100,000 100,000

Manchester 6/1/2027 4.32 % 12,500 12,500

Millburn 6/1/2027 3.97 % 23,381 23,798

Totowa 12/1/2027 4.33 % 50,800 50,800

Woodbridge (Woodbridge Commons) 12/1/2027 4.36 % 22,100 22,100

1 unchanged sentence

East Rutherford 1/6/2028 4.49 % 23,000 23,000

Brooklyn (Kingswood Center) (3)

2/6/2028 5.07 % 71,696 —

Hackensack 3/1/2028 4.36 % 66,400 66,400

Marlton 12/1/2028 3.86 % 37,400 37,400

East Hanover Warehouses 12/1/2028 4.09 % 40,700 40,700

1 unchanged sentence

Freeport (Freeport Commons) 12/10/2029 4.07 % 43,100 43,100

Montehiedra 6/1/2030 5.00 % 81,141 83,202

Montclair 8/15/2030 3.15 % 7,250 —

Garfield 12/1/2030 4.14 % 40,300 40,300

11/15/2034 6.40 % 12,952 13,488

Montehiedra (junior loan) — — % — 30,000

Total fixed rate debt 1,428,026 1,386,748

4 unchanged sentences

(2) Bears interest at one month LIBOR plus 190 bps.

The mortgage payable balance on the loan secured by Mt Kisco includes $ 0.9 million and $ 1.0 million of unamortized debt discount as of December 31, 2019 and December 31, 2018 , respectively.

The effective interest rate including amortization of the debt discount is 7.37 % as of December 31, 2019 .

On March 29, 2017, we refinanced the $ 74 million , 4.59 % mortgage loan secured by our Tonnelle Commons property in North Bergen, NJ, increasing the principal balance to $ 100 million with a 10 -year fixed rate mortgage, at 4.18 % .

As a result, we recognized a loss on

extinguishment of debt of $ 1.3 million during the year ended December 31, 2017, comprised of a $ 1.1 million prepayment penalty and write-off of $ 0.2 million of unamortized deferred financing fees on the original loan.

The mortgage payable balance on the loan secured by Hudson Mall includes $ 1.0 million and $ 1.2 million of unamortized debt premium as of December 31, 2019 and December 31, 2018 , respectively.

The effective interest rate including amortization of the debt premium is 3.90 % as of December 31, 2019 .

The mortgage payable balance on the loan secured by Yonkers Gateway Center includes $ 0.6 million and $ 0.7 million of unamortized debt premium as of both December 31, 2019 and December 31, 2018 , respectively.

(3) The mortgage payable balance on the loan secured by Kingswood Center includes $ 6.2 million of unamortized debt premium as of December 31, 2020.

The effective interest rate including amortization of the debt premium is 3.5 % as of December 31, 2020.

2 unchanged sentences

As of December 31, 2020, we were in compliance with all debt covenants.

During 2017, our property in Englewood, NJ was transferred to a receiver.

On January 31, 2018 , our property in Englewood, NJ was sold at a foreclosure sale and on February 23, 2018 , the court order was received approving the sale and discharging the receiver of all assets and liabilities related to the property.

We recognized a gain on extinguishment of debt of $ 2.5 million as a result of the forgiveness of outstanding mortgage debt of $ 11.5 million , which is included in the consolidated statement of income for the year ended December 31, 2018.

As of December 31, 2020, the principal repayments for the next five years and thereafter are as follows:

1 unchanged sentence

Year Ending December 31,

2021 $ 14,460

Thereafter 694,121

Revolving Credit Agreement

On January 15, 2015, we entered into a $ 500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions.

2 unchanged sentences

On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024 with two six-month extension options.

On June 3, 2020, we entered into a third amendment to the Agreement, which among other things, modifies certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized.

Company borrowings under the Agreement are subject to interest at LIBOR plus 1.05 % to 1.50 % and an annual facility fee of 15 to 30 basis points.

1 unchanged sentence

The Agreement contains customary financial covenants including a maximum leverage ratio of 60 % and a minimum fixed charge coverage ratio of 1.5 x.

No amounts have been drawn to date under the Agreement.

In March 2020 we drew $ 250 million on our $ 600 million revolving credit facility and this balance was fully repaid in November 2020.

No amounts were drawn or outstanding under the Agreement as of December 31, 2020.

Financing fees associated with the Agreement of $ 3.3 million and $ 3.9 million as of December 31, 2020 and December 31, 2019, respectively, are included in deferred financing fees, net in the consolidated balance sheets.

The Company elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015.

With exception to the Company’s taxable REIT subsidiary (“TRS”), to the extent the Company meets certain requirements under the Code, the Company will not be taxed on its federal taxable income.

If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates (including any alternative minimum tax, which, for corporations, was repealed under the Tax Cuts and Jobs Act (“TCJA”) for tax years beginning after December 31, 2017) and may not be able to qualify as a REIT for the four subsequent taxable years.

In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, including a 29 % non-resident withholding tax on its two Puerto Rico malls, which are included in income tax expense in the consolidated statements of income.

The Company is also subject to certain other taxes, including state and local franchise taxes which are included in general and administrative expenses in the consolidated statements of income.

On December 22, 2017, the TCJA was signed into law.

The TCJA amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

Effective January 1, 2018, for businesses, the TCJA reduces the corporate tax rate from a maximum of 35% to a flat 21% rate.

Since UE has elected to qualify as a REIT under sections 856-860 of the Internal Revenue Code with intent to distribute 100 % of its taxable income and did not have any activities in a Taxable REIT Subsidiary (“TRS”) prior to January 1, 2018, there was no impact from the provisions of the TCJA to the Company’s financial statements.

The Company satisfied its REIT distribution requirement by distributing $ 0.88 per common share in 2019.

The taxability of such dividends are as follows:

Mortgage on Las Catalinas Mall

In April 2020, we notified the servicer of the $ 129 million non-recourse mortgage loan on Las Catalinas Mall in Puerto Rico that cash flow would be insufficient to service the debt and that we were unwilling to fund the shortfalls.

In December 2020, the non-recourse mortgage loan on Las Catalinas Mall was modified to convert the mortgage from an amortizing 4.43 % loan to interest only payments, starting at 3.00 % in 2021 and increasing 50 basis points annually until returning to 4.43 % in 2024 and thereafter, and to include the ability for the Company to repay the loan at a discounted value of $ 72.5 million, beginning in August 2023 through the extended maturity date of February 2026.

We have accrued interest of $ 6.5 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of December 31, 2020.

We incurred $ 1.2 million of lender fees in connection with the loan modification which are treated as a reduction of the mortgage payable balance and amortized over the term of the loan in accordance with the provisions under ASC 470-60 Troubled Debt Restructurings .

Mortgage on property in Montclair, NJ

On August 6, 2020, the Company obtained a 10-year non-recourse mortgage loan of $ 7.3 million at a rate of 3.15 % on its property in Montclair, NJ.

Mortgage on The Outlets at Montehiedra

In June 2020, we completed the refinancing of our non-recourse mortgage on The Outlets at Montehiedra (“Montehiedra”) in Puerto Rico.

Prior to the refinancing, the mortgage was comprised of an $ 83 million senior loan bearing interest at 5.33 % and a $ 30 million junior loan bearing interest at 3.00 %, plus total accrued interest of $ 5.7 million.

Under the payoff provisions of the prior mortgage, the $ 30 million junior loan plus accrued interest of $ 5.4 million on the junior loan was forgiven and the senior loan was replaced by a new $ 82 million 10-year fixed rate mortgage, bearing interest at 5.00 %.

As a result of the transaction, we recognized a net gain on extinguishment of debt of $ 34.9 million during the year ended December 31, 2020, comprised of the forgiven $ 30 million junior loan plus accrued interest of $ 5.4 million, offset by the write-off of $ 0.4 million of unamortized deferred financing fees and $ 0.1 million of transaction costs incurred.

The Company has provided a $ 12.5 million limited corporate guarantee of the mortgage secured by Montehiedra that is triggered only if any of the following events occur:

(1) certain reserve accounts were not funded as of a specified date (which funding did occur in full at closing), (2) the lease to Sears Holding Corporation (“Kmart”) at Montehiedra is terminated for any reason or (3) the Kmart lease is materially amended and a debt service coverage ratio falls below a specified threshold.

In February 2021, Kmart announced that it would be closing the store related to such lease, but it is not yet evident whether the lease will be terminated or amended.

No triggering events have occurred that would require the release of the guarantee and the tenant has lease obligations through 2023.

The guarantee would be released should certain financial metrics at Montehiedra be achieved even if the Kmart box remains vacant.

The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately six years based on the scheduled amortization.

The Company elected to be taxed as a REIT under sections 856-860 of the Code, commencing with the filing of its 2015 tax return for its tax year ended December 31, 2015.

With the exception of the Company’s TRS, to the extent the Company meets certain requirements under the Code, the Company will not be taxed on its federal taxable income.

The Company satisfied its REIT distribution requiremen t by distributing $ 0.68 per common share in 2020, which comprised a regular quarterly cash dividend of $ 0.22 per common share declared for the first quarter of 2020 and a special cash dividend of $ 0.46 per common share declared in December 2020.

During the years ended December 31, 2019 and 2018, the Company declared cash distributions on our common shares of $ 0.88 per share .

Th e taxability of such dividends for the years ended December 31, 2020, 2019 and 2018 are as follows:

Year Ended December 31,

2020 2019 2018

Dividend paid per share (1)

$ 0.68 $ 0.88 $ 0.88

Ordinary income 100 % 83 % 100 %

1 unchanged sentence

Capital gains — % 17 % — %

The REIT and the other minority members are partners in the Operating Partnership.

As such, the partners are required to report their share of taxable income on their tax returns.

On December 31, 2017, the Company elected, for tax purposes, to treat the wholly-owned limited partnership that held its Allentown property as a taxable REIT subsidiary (“TRS”).

A TRS is a corporation, other than a REIT, in which we directly or indirectly hold stock, which has made a joint election with us to be treated as a TRS under Section 856(l) of the Code.

A TRS is required to pay regular U.S.

federal income tax, and state and local income tax where applicable, as a non-REIT “C” corporation.

The Allentown legal entity restructuring resulted in a capital gain recognized for tax purposes in 2017 and a step up in tax basis to the Allentown property resulting in no capital gains recognized for tax purposes in 2018 upon the property’s sale on April 26, 2018 .

The Company’s consolidated financial statements for the year ended December 31, 2018 reflect the TRS’ federal and state corporate income taxes associated with the operating activities at the TRS.

The tax expense recorded in association with the operating activities of the TRS was $ 0.2 million for the year ended December 31, 2018.

As of December 31, 2018, the Allentown TRS has been dissolved and as such, the Company’s consolidated financial statements for the year ended December 31, 2019 do not reflect any corporate income taxes associated with such TRS.

During the year ended December 31, 2019, certain non-real estate operating activities, non-qualifying for REIT purposes, commenced through the Company’s operating TRS and are subject to federal, state and local income taxes.

(1) The special cash dividend of $ 0.46 per common share declared in December 2020, and paid in January 2021, was fully allocable to the 2020 tax year.

federal income tax purposes, the REIT and other minority members are partners in the Operating Partnership.

As such, the partners are required to report their share of taxable income on their respective tax returns.

However, during the years ended December 31, 2020 and 2019, certain non-real estate operating activities that could not be performed by the REIT, occurred through the Company’s TRS, and the Company’s TRS is subject to federal, state and local income taxes.

These income taxes are included in the income tax expense in the consolidated statements of income.

Our two Puerto Rico malls are subject to a 29 % non-resident withholding tax which is included in income tax expense in the consolidated statements of income.

Income before income taxes at our two Puerto Rico malls during the year ended December 31, 2019 was $ 9.4 million .

On June 1, 2020, the Company completed a mortgage refinancing of its mall in Puerto Rico, The Outlets at Montehiedra (“Montehiedra”).

The debt forgiven as a part of this refinancing resulted in a write-down to our Puerto Rico tax basis in the mall equal to such amount of debt forgiven and the recognition of a deferred tax liability on the Company’s consolidated balance sheet, which amounted to $ 10.3 million.

On June 5, 2020 and December 11, 2020, the Company completed a legal entity restructuring of Montehiedra and Las Catalinas Mall, respectively.

Prior to the legal entity restructuring, both malls were held in a special partnership for Puerto Rico tax purposes (the general partner being a qualified REIT subsidiary or “QRS”) and subject to a 29 % non-resident withholding tax which is included in income tax benefit (expense) in the consolidated statements of income.

The legal entity restructurings resulted in a step up in our Puerto Rico tax basis in each mall and the recognition of a deferred tax asset on the Company’s consolidated balance sheet, which amounted to $ 23.7 million for Montehiedra and $ 29.5 million for Las Catalinas Mall.

As a result of the legal entity restructurings, the Operating Partnership, and therefore, the REIT and the other minority partners, are now deemed to be engaged in a trade or business for each mall with respect to their allocable share of Puerto Rico taxable income and, as such, required to file Puerto Rico income tax returns.

The REIT is subject to regular Puerto Rico corporate income taxes on its allocable share of the Company’s Puerto Rico operating activities as opposed to the former 29 % non-resident withholding tax on the net income from such Puerto Rico operating activities allocated to the Operating Partnership.

The Puerto Rico corporate income tax consists of a flat 18.5 % tax rate plus a graduated income surcharge tax for a maximum corporate income tax rate of 37.5 %.

In addition, the REIT is subject to a 10 % branch profit tax on the earnings and profits generated from its allocable share of the Company’s Puerto Rico operating activities and such tax is included in income tax expense in the consolidated statements of income.

Together, the refinancing and legal entity restructuring transactions resulted in a net deferred tax asset of $ 42.9 million, which is included in prepaid expenses and other assets on the consolidated balance sheets as of December 31, 2020, and the Company recognized an accompanying Puerto Rico income tax benefit on the consolidated statements of income during the year ended December 31, 2020.

As a result of the Montehiedra refinancing and the Las Catalinas Mall troubled debt restructuring, the Company recognized a gain on extinguishment of debt for U.S.

federal income tax purposes and implemented various tax planning strategies to limit its impact on the Company’s overall U.S.

federal taxable income.

The strategies implemented resulted in the recognition of a state and local income tax liability and corresponding deferred tax asset for the REIT of $ 4.5 million during the year ended December 31, 2020.

Refer to Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information on the Montehiedra refinancing and the Las Catalinas Mall troubled debt restructuring.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized.

Management’s determination of the ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the underlying temporary differences become deductible.

As of December 31, 2020, no valuation allowance has been recorded against the deferred tax assets that resulted from the legal entity restructurings of the Puerto Rico malls.

In assessing the realizability of deferred tax assets, management determined it is more likely than not that these deferred tax assets will be realized.

During the year ended December 31, 2020, the Company recorded a $ 4.5 million valuation allowance against the deferred tax asset attributable to the REIT’s state and local income tax liability incurred from strategies implemented to limit the impact of the Montehiedra refinancing and the Las Catalinas troubled debt restructuring on the Company’s U.S.

federal taxable income because management determined that it is not more likely than not that these deferred tax assets will be realized.

For the year ended December 31, 2019, the Company recorded a valuation allowance against the deferred tax asset related to a federal net operating loss generated at the Company’s operating TRS.

This determination was based on the operating TRS’ lack of anticipated future taxable income.

As a result of a change in circumstances in 2020 related to anticipated future profitability of the Company’s operating TRS, such valuation allowance was released.

As of December 31, 2020, the Company’s total valuation allowance was $ 4.5 million.

We record uncertain tax positions in accordance with ASC 740 Income Taxes on the basis of a two-step process whereby (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority .

Income before income taxes from the Company’s operating activities in Puerto Rico during the years ended December 31, 2020 and 2019 was $ 26.4 million and $ 9.4 million, respectively.

For the year ended December 31, 2020, the REIT’s state and local income tax expense was $ 4.5 million and the Puerto Rico income tax benefit was $ 43.5 million.

The Puerto Rico tax expense recorded was $ 1.2 million and $ 3.3 million for the years ended December 31, 2019 and December 31, 2018, respectively.

For the year ended December 31, 2017, the Puerto Rico tax benefit recorded was $ 0.3 million .

Both properties are held in a special partnership for Puerto Rico tax reporting purposes (the general partner being a qualified REIT subsidiary or “QRS”).

Income taxes are accounted for under the asset and liability method.

Deferred income taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities.

Deferred income taxes are recognized for the tax effect of temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities.

Income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 consists of the following:

6 unchanged sentences

Total current 5,818 917 815

federal income tax ( 6 ) — —

state and local income tax — — —

Puerto Rico income tax (1)

( 44,808 ) 370 2,704

Total deferred ( 44,814 ) 370 2,704

Total income tax expense (benefit) $ ( 38,996 ) $ 1,287 $ 3,519

(1) Due to the effects of applying ASC 842 on January 1, 2019, deferred tax benefit of $ 0.8 million was recognized within a cumulative-effect adjustment to accumulated deficit to adjust r eserves on receivables from straight-line rents.

(1) Due to the effects of applying ASC 842 on January 1, 2019, a deferred tax benefit of $ 0.8 million was recognized within a cumulative-effect adjustment to accumulated deficit to adjust r eserves on receivables from straight-line rents during the year ended December 31, 2019.

Refer to Note 3 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

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Federal provision at statutory tax rate (1)

Income before income taxes not subject to federal tax provision

$ 12,338 $ 24,672 $ 25,301

REIT income before income taxes not subject to federal tax provision ( 12,339 ) ( 24,677 ) ( 14,390 )

TRS permanent book to tax adjustments — — ( 10,740 )

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Total income tax expense (benefit) $ ( 38,996 ) $ 1,287 $ 3,519

(1) Federal statutory tax rate of 21 % for the years ended December 31, 2019 and 2018 and federal statutory tax rate of 35 % for the year ended December 31, 2017.

(1) Federal statutory tax rate of 21% for the years ended December 31, 2020, 2019 and 2018.

Below is a table summarizing the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019:

(Amounts in thousands)

December 31, 2019

December 31, 2018

(Amounts in thousands) December 31, 2020 December 31, 2019

Deferred tax assets:

Depreciation $ 41,942 $ —

Amortization of deferred financing costs 1,105 69

Credit losses related to operating lease receivables

Hurricane insurance claims receivable

Rental revenue deemed uncollectible 2,109 461

Charitable contribution 7 5

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Deferred tax liabilities:

Depreciation — ( 4,416 )

Straight line rent ( 738 ) ( 1,051 )

Amortization of acquired leases ( 228 ) ( 205 )

Accrued interest expense ( 113 ) —

Total deferred tax liabilities ( 1,079 ) ( 5,672 )

Net deferred tax liabilities

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if based on the evidence available, it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized.

For the year ended December 31, 2019, the Company reduced the carrying amount of the deferred tax asset established from a net operating loss generated at the Company’s operating TRS.

This determination is based on the operating TRS’ anticipated future taxable income and the reversal of the deferred tax asset.

The Company has not recorded any uncertain tax positions for tax year 2019.

The Operating Partnership is organized as a limited partnership and is generally not subject to federal income tax.

Accordingly, no provision for federal income taxes has been reflected in the accompanying consolidated financial statements outside of the Company’s TRS activities.

Net deferred tax assets (liabilities) $ 39,677 $ ( 5,137 )

Leases as lessor

We have approximately 1,100 operating leases at our retail shopping centers and malls, which generate rental income from tenants and operating cash flows for the Company.

We have approximately 1,100 operating leases at our retail shopping centers, malls and industrial properties which generate rental income from tenants and operating cash flows for the Company.

Our tenant base comprises a diverse group of merchants including department stores, supermarkets, discounters, entertainment offerings, health clubs, DIY stores, in-line specialty shops, restaurants and other food and beverage vendors and service providers.

Tenant leases for under 10,000 sf generally have lease terms of 5 years or less.

Tenant leases for 10,000 sf or more are considered anchor leases and generally have lease terms of 10 to 25 years , with one or more renewal options available upon expiration of the initial lease term.

Tenant leases under 10,000 sf generally have lease terms of 5 years or less.

Tenant leases 10,000 sf or more are considered anchor leases and generally have lease terms of 10 to 25 years, with one or more renewal options available upon expiration of the initial lease term.

Contractual rent increases for the renewal options are often fixed at the time of the initial lease agreement which may result in tenants being able to exercise their renewal options at amounts that are less than the fair value of the rent at the date of renewal.

The components of rental revenue for the year ended December 31, 2019 were as follows:

(Amounts in thousands)

The components of rental revenue for the years ended December 31, 2020 and 2019 were as follows:

Year Ended December 31,

(Amounts in thousands)

Rental Revenue

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Total rental revenue $ 328,280 $ 384,405

As lessor under ASC 840, rental revenue from percentage rent was $ 2.0 million and rental revenue from tenant expense reimbursements was $ 108.7 million for the year ended December 31, 2018.

Property, plant and equipment under operating leases as lessor

As of December 31, 2019 , substantially all of the Company’s real estate assets are subject to operating leases.

As of December 31, 2020 and 2019 , substantially all of the Company’s real estate assets are subject to operating leases.

Maturity analysis of lease payments as lessor

The Company’s operating leases are disclosed in the aggregate due to their consistent nature as real estate leases.

The Company’s operating leases, including those with revenue recognized on a cash basis, are disclosed in the aggregate due to their consistent nature as real estate leases.

As of December 31, 2020 , the undiscounted cash flows to be received from lease payments of our operating leases on an annual basis for the next five years and thereafter are as follows:

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Year Ending December 31,

2021 $ 252,690

Thereafter 703,522

Total undiscounted cash flows

As of December 31, 2018, future base rental revenue under non-cancelable operating leases, under ASC 840 as lessor, was as follows:

(Amounts in thousands)

Year Ending December 31,

These future minimum amounts do not include additional rents based on a percentage of tenants’ sales and tenant expense reimbursements.

For the years ended December 31, 2018 and 2017, rental revenue from percentage rent was $ 2.0 million and $ 1.2 million , respectively.

For the years ended December 31, 2018 and 2017, rental revenue from tenant expense reimbursements was $ 108.7 million and $ 99.1 million , respectively.

Leases as lessee

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We also lease or sublease real estate for our three corporate offices with remaining terms of less than one year .

On December 31, 2020, the Company recognized $ 5.7 million of operating lease ROU assets and $ 0.7 million of corresponding operating lease liabilities in connection with the Company’s acquisition of Sunrise Mall, which included the acquisition of the lessee positions of ground leases.

During the year ended December 31, 2019 , the Company reassessed the lease term of one of its ground leases due to a change in circumstances in our election to renew the ground lease.

As a result of this reassessment, the Company remeasured the lease liability by using revised inputs as of the reassessment date and recorded an additional ROU asset and lease liability of $ 5.0 million , respectively.

As a result of this reassessment, the Company remeasured the lease

liability by using revised inputs as of the reassessment date and recorded an additional ROU asset and lease liability of $ 5.0 million , respectively.

During the year ended December 31, 2019 , the Company sold its lessee position in one of its operating ground leases for $ 6.9 million, net of selling costs, and derecognized the lease’s ROU asset and corresponding lease liability.

We recognized a gain on sale of lease of $ 1.8 million on our consolidated statements of income during the year ended December 31, 2019 as a result of the sale.

Additionally, on July 31, 2019, the Company’s lessee position in one of its ground leases expired in accordance with the terms of the lease.

Additionally, on November 1, 2019 the Company recognized a finance lease ROU asset and finance lease liability of $ 2.7 million and $ 3.0 million , respectively, in connection with the Company’s acquisition of the lessee position of a ground lease.

On July 31, 2019, the Company’s lessee position in one of its ground leases expired in accordance with the terms of the lease.

Additionally, on November 1, 2019 the Company recognized a finance lease ROU asset and finance lease liability of $ 2.7 million and $ 3.0 million, respectively, in connection with the Company’s acquisition of the lessee position of a ground lease at 25 East Spring Valley Ave in Maywood, NJ.

The Company assessed the lease classification as a finance lease due to the Company’s reasonably certain likelihood of exercising its option to purchase the lease.

The finance lease ROU asset is included within prepaid expenses and other assets on our consolidated balance sheets as of December 31, 2019 and the finance lease liability is included within accounts payable, accrued expenses and other liabilities on our consolidated balance sheets as of December 31, 2019 .

The components of lease expense for the year ended December 31, 2019 were as follows:

(Amounts in thousands)

The components of lease expense for the years ended December 31, 2020 and 2019 were as follows:

Year Ended December 31,

(Amounts in thousands)

Lease expense

Operating lease cost (1)

$ 10,875 $ 11,730

Variable lease cost 2,792 2,736

Total lease expense $ 13,667 $ 14,466

(1) During the year ended December 31, 2019 , the Company recognized sublease income of $ 19.7 million , included in rental revenue on the consolidated statement of income in relation to certain ground and building lease arrangements.

(1) During the years ended December 31, 2020 and 2019, the Company recognized sublease income of $ 17.7 million and $ 19.7 million, respectively, included in rental revenue on the consolidated statement of income in relation to certain ground and building lease arrangements.

Operating lease cost includes amortization of below-market ground lease intangibles and straight-line lease expense.

In addition, the Company recognized finance lease cost of under $ 0.1 million during the year ended December 31, 2019, included in interest and debt expense on the consolidated statements of income.

Supplemental balance sheet information related to leases as of December 31, 2019 was as follows:

December 31, 2019

Supplemental noncash information

Operating leases

Finance lease

Weighted-average remaining lease term

Supplemental balance sheet information related to leases as of December 31, 2020 and December 31, 2019 was as follows:

December 31, 2020 December 31, 2019

Supplemental noncash information Operating leases Finance lease Operating leases Finance lease

Weighted-average remaining lease term 15.7 years 35.2 years 15.3 years 36.2 years

Weighted-average discount rates 3.99 % 4.01 % 4.03 % 4.01 %

Supplemental cash information related to leases for the year ended December 31, 2019 was as follows:

Supplemental cash information related to leases for the years ended December 31, 2020 and 2019 was as follows:

(Amounts in thousands)

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The total amount of lease payments, on an undiscounted basis, are reconciled to the lease liability on the consolidated balance sheet by considering the present value discount.

(Amounts in thousands)

Year Ending December 31,

(Amounts in thousands) Operating Finance

Year Ending December 31, leases lease

2021 $ 9,363 $ 109

2022 8,598 109

2023 8,486 109

2024 8,500 109

2025 6,599 109

2026 6,341 124

Thereafter 57,541 6,299

Total undiscounted cash flows 105,428 6,968

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Discounted cash flows $ 74,972 $ 2,993

As of December 31, 2018, future lease payments under operating lease agreements, including extension options if reasonably assured of being exercised, under ASC 840 as lessee, were as follows:

(Amounts in thousands)

Year Ending December 31,

FAIR VALUE MEASUREMENTS

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Cash and cash equivalents are carried at cost, which approximates fair value.

The fair value of mortgages payable is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt.

The fair value of cash and cash equivalents is classified as Level 1 and the fair value of mortgages payable is classified as Level 2.

The table below summarizes the carrying amounts and fair value of these financial instruments as of December 31, 2020 and December 31, 2019.

As of December 31, 2019

As of December 31, 2018

(Amounts in thousands)

Carrying Amount

As of December 31, 2020 As of December 31, 2019

(Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value

Cash and cash equivalents $ 384,572 $ 384,572 $ 432,954 $ 432,954

Mortgages payable (1)

$ 1,597,397 $ 1,611,868 $ 1,556,248 $ 1,590,503

(1) Carrying amounts exclude unamortized debt issuance costs of $ 9.9 million and $ 10.1 million as of December 31, 2020 and December 31, 2019, respectively.

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We assess the carrying value of our properties for impairment, when events or changes in circumstances indicate that the carrying value may not be recoverable.

During the year ended December 31, 2019, the Company recognized impairment charges of $ 26.3 million on four retail properties that the Company is actively marketing.

Such events and changes include macroeconomic conditions, including those caused by global pandemics, such as COVID-19, which may result in property operational disruption and indicate that the carrying amount may not be recoverable.

During the year ended December 31, 2020, the Company recognized an impairment charge of $ 3.1 million on a parcel of our property in Lodi, NJ, which was sold on January 8, 2021 .

Prior to the sale of the parcel, the book value of this property exceeded its estimated fair value less costs to sell.

The fair value of the property was based on an executed contract of sale with a third-party buyer less costs to sell.

During the year ended December 31, 2019, the Company recognized impairment charges on four retail properties that the Company was actively marketing.

The impairment loss was calculated as the difference between the assets’ individual carrying values and the estimated aggregated fair values of $ 38.5 million, less estimated selling costs.

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The fair value for our property in West Babylon, NY was based on an executed letter of intent with a third-party buyer less costs to sell.

During the year ended December 31, 2017, we recognized a $ 3.5 million impairment charge on our property in Eatontown, NJ.

Our determination of fair value was based on the executed contract of sale with the third-party buyer.

The Company believes the inputs utilized to measure these fair values were reasonable in the context of applicable market conditions, however due to the significance of the unobservable inputs in the overall fair value measures, including market conditions and expectations for growth, the Company determined that such fair value measurements are classified as Level 3.

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COMMITMENTS AND CONTINGENCIES

Legal Matters

There are various legal actions against us in the ordinary course of business.

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As of December 31, 2020, we had approximately $ 132.4 million of active development, redevelopment and anchor repositioning projects underway, of which $ 86.6 million remains to be funded.

Based on current plans and estimates, we anticipate the remaining amounts will be expended over the next two years .

The Company maintains (i) general liability insurance with limits of $ 200 million for properties in the U.S.

and Puerto Rico and (ii) all-risk property insurance with limits of $ 500 million per occurrence and in the aggregate for properties in the U.S.

and $ 139 million for properties in Puerto Rico, subject to the terms, conditions, exclusions, deductibles and sub-limits when applicable for certain perils such as floods and earthquakes and (iii) numerous other insurance policies including trustees’ and officers’ insurance, workers’ compensation and automobile-related liabilities insurance.

The Company’s insurance includes coverage for acts of terrorism but excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2020.

In addition, the Company maintains coverage for certain cybersecurity losses providing first and third-party coverage including network interruption, event management, cyber extortion and claims for media content, security and privacy liability.

Insurance premiums are typically charged directly to each of the retail properties and warehouses but not all of the cost of such premiums are recovered.

Further, while we have identified future projects in our development pipeline, we are under no obligation to execute and fund any of these projects and each of these projects is being reevaluated considering market conditions.

The Company has updated many of its active project stabilization dates to reflect the impact of the COVID-19 pandemic on its contractors, tenants and vendors.

The Company maintains numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber, workers’ compensation and automobile-related liabilities.

However, all such policies are subject to terms, conditions, exclusions, deductibles and sub-limits, amount other limiting factors.

For example, the Company’s terrorism insurance excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization Act.

The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $ 50 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses.

On December 23, 2020, the Company initiated litigation in

New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.

Insurance premiums are typically charged directly to each of the properties but not all of the cost of such premiums are recovered.

The Company is responsible for deductibles, losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material.

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Hurricane-Related Charges

On September 20, 2017, Hurricane Maria made landfall, damaging our two properties in Puerto Rico.

During the year ended December 31, 2017, the Company incurred a $ 2.2 million charge reflecting the net book value of assets damaged and incurred $ 1.7 million of hurricane-related expenses, included in casualty and impairment loss, net on the accompanying consolidated statements of income.

During the year ended December 31, 2017, the Company recognized $ 2.2 million of business interruption losses, net of $ 1.8 million in cash advances received from its insurance carrier.

Losses of $ 0.9 million pertained to rent abatements when the malls were closed or inoperable as a result of the hurricane, recorded as a reduction of rental revenue, and $ 1.3 million was recorded within property operating expenses to provision for doubtful accounts for unpaid rents.

On September 20, 2017, Hurricane Maria damaged our two properties in Puerto Rico.

During the year ended December 31, 2018, the Company received $ 1.5 million in casualty insurance proceeds, which were partially offset by $ 0.3 million of hurricane-related costs, resulting in net casualty gains of $ 1.2 million included in casualty and impairment loss, net on the accompanying consolidated statements of income.

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In June 2019, the Company finalized its insurance recovery related to Hurricane Maria with its carrier at $ 14.3 million, of which $ 3.3 million was previously received, subject to deductibles of $ 2.3 million.

We recognized an $ 8.7 million casualty gain during the year ended December 31, 2019 as a result of the remaining insurance proceeds from the settlement agreement for our two malls in Puerto Rico.

We recognized a $ 8.7 million casualty gain during the year ended December 31, 2019 based on i nsurance proceeds received from the settlement agreement on our two malls in Puerto Rico.

Environmental Matters

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While this accrual reflects third-party estimates of the potential costs of remediation at these properties, there can be no assurance that the actual costs will not exceed these amounts.

During the year ended December 31, 2019 and December 31, 2018 , the Company recognized $ 1.4 million and $ 0.6 million , respectively, of environmental remediation costs included in property operating expenses on the consolidated statements of income.

During the years ended December 31, 2019 and 2018, the Company recognized $ 1.4 million and $ 0.6 million, respectively, of environmental remediation costs included in property operating expenses on the consolidated statements of income.

Although we are not aware of any other material environmental contamination, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us.

Pandemic-Related Contingencies

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization ("WHO").

On March 11, 2020, WHO characterized the COVID-19 outbreak as a pandemic.

Since March, the continually evolving COVID-19 pandemic impacted our tenants and business operations.

The Company has taken precautions to protect the safety, health and well-being of its employees and tenants.

During 2020, many of our tenants faced adverse financial consequences from reduced business operations and social distancing requirements resulting from the COVID-19 pandemic.

As of December 31, 2020, substantially all of our portfolio's gross

leasable area was open for business and the Company collected approximately 91 % of rental revenue for the fourth quarter, 87 % for the third quarter and 79 % for the second quarter.

Throughout 2020, the Company granted rent concessions and other lease-related relief, such as rent deferrals, to certain impacted tenants, and anticipates granting further rent concessions or other relief going forward.

We valuate rent relief requests on a case-by-case basis and not all requests are granted.

Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income.

As of December 31, 2020, the Company executed rent deferrals aggregating $ 5.1 million with a weighted average payback period of approximately eight months.

Additionally, as of December 31, 2020, the Company executed rent abatements aggregating $ 3.9 million.

The Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this time, with the exception of abatements already discussed with tenants or deferrals that may not be collected.

Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration.

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We monitor the operating performance and rent collections of all tenants in our shopping centers, especially those tenants in arrears or operating retail formats that are experiencing significant changes in competition, business practice, or store closings in other locations.

During the year ended December 31, 2018, Toys “R” Us, Sears, Fallas, and National Wholesale Liquidators filed for Chapter 11 bankruptcy protection.

During September 2017, Toys “R” Us filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code and announced an orderly wind-down of its U.S.

business and liquidation of all U.S.

stores on March 15, 2018.

Prior to the liquidation, the Company had leases with Toys “R” Us at nine locations with annual rental revenue of $ 7.6 million .

In connection with the Toys “R” Us bankruptcy, the Company recognized a write-off of $ 21.6 million of below-market intangible liabilities (classified within rental revenue), $ 15.5 million of lease termination payments (classified within property operating expense) and a $ 1.0 million write-off of reserves on receivables from straight-line rents in the year ended December 31, 2018.

During the year ended December 31, 2019 , the Company received $ 1.2 million of bankruptcy settlement income in connection with the bankruptcy proceedings of Toys "R" Us.

The settlement proceeds were used to offset outstanding credit losses and the remaining proceeds were recorded to other income.

No determination has been made as to the amount or timing of additional bankruptcy settlement proceeds, if any, that may be received.

Fallas filed for Chapter 11 bankruptcy protection on August 6, 2018.

Prior to the tenant vacating, the Company had one lease with Fallas at the Shops at Bruckner in the Bronx, NY comprising approximately 38,000 sf which generated $ 1.4 million in annual rental revenue.

In connection with the bankruptcy, the Company recognized a write-off of $ 0.8 million of below-market intangible liabilities (classified within rental revenue) in the year ended December 31, 2018.

As of December 31, 2019, the Company executed a lease with LA Fitness for this space.

Sears filed for Chapter 11 bankruptcy protection on October 15, 2018.

The Company had four Kmart leases with Sears comprising approximately 547,000 sf, which generated $ 8.5 million in annual rental revenue.

Property rents were paid on all four Kmart locations through April 2019.

In April 2019, our Kmart leases at Las Catalinas and Huntington, NY were rejected and we recognized a $ 7.4 million write-off of the below-market intangible liability connected with the lease in Huntington, NY (classified within rental revenues).

ESL assumed the Company’s remaining two Kmart leases at Montehiedra and at Bruckner Commons.

In January 2020 the Company executed a lease with ShopRite for its former Kmart space in Huntington, NY.

National Wholesale Liquidators filed for Chapter 11 bankruptcy protection on October 24, 2018.

The Company had one lease with National Wholesale Liquidators in Lodi, NJ comprising approximately 171,000 sf, which generated $ 3.1 million in annual rental revenue.

This lease was rejected and returned to us on November 30, 2018.

In connection with the bankruptcy, the Company recorded a $ 0.8 million write-off of reserves on receivables from straight-line rents in the year ended December 31, 2018.

The Company is in active negotiations to lease this property.

Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection during the year ended December 31, 2020.

Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

Century 21 filed for Chapter 11 bankruptcy protection on September 10, 2020.

Prior to bankruptcy, the Company had one lease with Century 21 in Paramus, NJ comprising approximately 157,000 sf, which generated $ 4.4 million in annual rental revenue.

In connection with the bankruptcy, the Company recognized a write-off of $ 2.5 million in receivables arising from the straight-lining of rents, and r ecognized $ 2.1 million as rental revenue deemed uncollectible (classified within rental revenue) for the year ended December 31, 2020.

Century 21 vacated and terminated its lease in December 2020.

PREPAID EXPENSES AND OTHER ASSETS

The following is a summary of the composition of the prepaid expenses and other assets in the consolidated balance sheets:

(Amounts in thousands)

December 31, 2019

December 31, 2018

(Amounts in thousands) December 31, 2020 December 31, 2019

Other assets $ 5,953 $ 4,723

Deferred tax asset, net 39,677 —

Real estate held for sale 7,056 6,574

Finance lease right-of-use asset 2,724 2,737

Deferred financing costs, net of accumulated amortization of $ 4,819 and $ 3,765 , respectively

Deposits for acquisitions — 10,000

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Real estate taxes 8,093 6,491

Insurance 1,583 1,520

Rent, licenses/fees 1,878 1,655

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The following is a summary of the composition of accounts payable, accrued expenses and other liabilities in the consolidated balance sheets:

(Amounts in thousands)

December 31, 2019

December 31, 2018

(Amounts in thousands) December 31, 2020 December 31, 2019

Dividend payable $ 55,905 $ —

Deferred tenant revenue 26,594 26,224

Accrued capital expenditures and leasing costs 7,797 7,893

Finance lease liability 2,993 2,982

Accrued interest payable 11,095 9,729

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EQUITY AND NONCONTROLLING INTEREST

At-The-Market Program

In 2016, the Company established an at-the-market (“ATM”) equity program, pursuant to which the Company could offer and sell from time to time its common shares, par value $ 0.01 per share, with an aggregate gross sales price of up to $ 250.0 million through a consortium of broker dealers acting as sales agents.

During the years ended December 31, 2019 , 2018 and 2017, respectively, no common shares were issued under the ATM equity program.

The Company’s ATM program expired in August 2019.

We had no obligation to sell the remaining shares available under the ATM equity program.

Share Repurchase Program

In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $ 200 million of the Company’s common shares.

Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18.

The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company’s shares, trading volume and general market conditions.

The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion.

Cumulative total purchases during the year ended December 31, 2020 amounted to 5.9 million shares at a weighted average share price of $ 9.22 amounting to $ 54.1 million.

Units of the Operating Partnership

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Dividends and Distributions

During the years ended December 31, 2019 and 2018 , the Company declared common stock dividends and OP unit distributions of $ 0.88 per share/unit in the aggregate.

During the year ended December 31, 2020 the Company declared distributions on our common shares and OP units of $ 0.68 per share/unit in the aggregate, which comprised a regular quarterly dividend of $ 0.22 per common share and OP unit declared for the first quarter of 2020 and a special cash dividend of $ 0.46 per common share and OP unit declared in December 2020 and paid on January 19, 2021.

As a result of COVID-19 and the uncertainties it generated, the Company temporarily suspended quarterly dividend distributions for the second and third quarters of 2020.

During the years ended December 31, 2019 and 2018, the Company declared distributions on our common shares and OP units of $0.88 per share/unit in the aggregate.

We have a Dividend Reinvestment Plan (the “DRIP”), whereby shareholders may use their dividends to purchase shares.

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(“VRLP”), the Company issued 5.7 million OP units, which represented a 5.4 % interest in the Operating Partnership, to VRLP in exchange for interests in VRLP properties contributed by VRLP.

On February 28, 2019, the Company issued 5.7 million common shares to VRLP, in exchange for an equal number of OP units after receiving a notice of redemption from VRLP.

On February 28, 2019, the Company issued 5.7 million common shares to VRLP, in exchange for an equal number of

OP units after receiving a notice of redemption from VRLP.

The issuance is exempt from registration in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended, on the basis that no public offering was made.

Noncontrolling Interest in Consolidated Subsidiaries

The noncontrolling interest relates to the 5 % interest held by others in our property in Walnut Creek, CA (Mount Diablo).

The net income attributable to noncontrolling interest is presented separately in our consolidated statements of income.

Noncontrolling Interests in Consolidated Subsidiaries

The Company’s noncontrolling interests relate to the 5 % interest held by others in our property in Walnut Creek, CA (Mount Diablo) and 17.5 % held by others in our property in Massapequa, NY.

T he net income attributable to noncontrolling interests is presented separately in our consolidated statements of income.

SHARE-BASED COMPENSATION

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For both plans, such amounts are being amortized into share-based compensation expense over a five-year period from the dates of grant, using graded vesting attribution models.

The 2015 OPP was fully vested as of November 5, 2020 and there is no compensation cost remaining under the 2015 OPP as of December 31, 2020.

In the years ending December 31, 2020, 2019, and 2018 we recognized $ 0.6 million, $ 1.4 million and $ 1.7 million of compensation expense related to the 2015 and 2017 OPPs’ LTIP Units, respectively.

As of December 31, 2019 , there was $ 0.8 million of total unrecognized compensation cost related to the 2015 and 2017 OPPs’ LTIP Units, which will be recognized over a weighted-average period of 0.8 years.

As of December 31, 2020, there was $ 0.2 million of total unrecognized compensation cost related to the 2017 OPP LTIP Units, which will be recognized over a weighted-average period of 0.5 years.

2018 Long-Term Incentive Plan

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Under the Absolute TSR component ( 25 % of the performance-based awards), 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 18 %, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27 %, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36 %.

The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 14 companies.

The Relative TSR component is based on the Company’s performance

compared to a peer group comprised of 14 companies.

Under the Relative TSR Component ( 75 % of the performance-based awards), 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35 th percentile of the peer group, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55 th percentile of the peer group, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75 th percentile of the peer group, with earning determined using linear interpolation if between such relative TSR thresholds.

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The time-based awards under the 2018 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years .

The Company granted time-based awards under the 2018 LTI Plan that represent

33,172 LTIP units with a grant date fair value of $ 0.7 million .

During the years ended December 31, 2019 and 2018, respectively, we recognized $ 0.9 million and $ 1.0 million of compensation expense related to the 2018 LTI Plan.

The Company granted time-based awards under the 2018 LTI Plan that represent 33,172 LTIP units with a grant date fair value of $ 0.7 million.

During the years ended December 31, 2020, 2019 and 2018, respectively, we recognized $ 1.0 million, $ 0.9 million and $ 1.0 million of compensation expense related to the 2018 LTI Plan.

2018 Inducement Equity Plan

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The terms and conditions of the Inducement Plan and any awards thereunder granted are substantially similar to those under the 2015 Omnibus Share Plan.

The Company has granted an aggregate of 352,890 restricted LTIP Units and 2,000,000 stock options under the Inducement Plan with grant date fair values of $ 7.2 million and $ 9.3 million , respectively, which were granted in connection with inducing the Company’s new Chief Operating Officer and new President of Development to join the Company.

2019 Long-Term Incentive Plan

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The time-based awards under the 2019 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years .

The Company granted time-based awards under the 2019 LTI Plan that represent 112,910 LTIP units with a grant date fair value of $ 2.0 million.

During the years ended December 31, 2020 and 2019, respectively we recognized $ 1.9 million and $ 1.4 million of compensation expense related to the 2019 LTI Plan.

2020 Long-Term Incentive Plan

On February 20, 2020, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2020 Long-Term Incentive Plan (“2020 LTI Plan”).

The Plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on (i) the passage of time (one-third of the fair value of the program) and (ii) performance goals tied to our relative and absolute total shareholder return (“TSR”) during the three-year performance period following their grant (two-thirds of the fair

value of the program).

The total grant date fair value under the 2020 LTI Plan was $ 8.8 million comprising performance-based and time-based awards as described further below:

Performance-based awards

For the performance-based awards under the 2020 LTI Plan, participants, have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year performance measurement period (the “Performance Period”) beginning on February 20, 2020 and ending on February 19, 2023.

The Company granted performance-based awards under the 2020 LTI Plan that represent 630,774 LTIP Units.

The fair value of the performance-based award portion of the 2020 LTI Plan on the date of grant was $ 5.9 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.

Under the Absolute TSR component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 18 %, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27 %, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36 %.

The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 14 companies.

Under the Relative TSR Component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35 th percentile of the peer group, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55 th percentile of the peer group, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75 th percentile of the peer group, with earning determined using linear interpolation if in between such relative and absolute TSR thresholds.

During the year ended December 31, 2020 we recognized $ 1.1 million of compensation expense related to the performance-based awards under the 2020 LTI Plan.

Time-based awards

The time-based awards granted under the 2020 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years .

As of December 31, 2020, the Company granted time-based awards under the 2020 LTI Plan that represent 169,004 LTIP units with a grant date fair value of $ 2.9 million.

During the year ended December 31, 2019 , we recognized $ 1.4 million of compensation expense related to the 2019 LTI Plan.

During the year ended December 31, 2020 we recognized $ 1.1 million of compensation expense related to the time-based awards under the 2020 LTI Plan.

Units and Deferred Share Units Granted to Trustees

On May 6, 2020, certain trustees elected to receive a portion of their compensation in deferred share units and an aggregate of 12,121 shares were granted to those trustees based on the weighted average grant date fair value of $ 8.25 .

During both the years ended December 31, 2019 and December 31, 2018, respectively, the Company incurred expenses of $ 0.2 million related to deferred share units granted to trustees.

On May 9, 2019, certain trustees elected to receive a portion of their compensation in deferred share units and an aggregate of 5,608 shares were granted to those trustees based on the weighted average grant date fair value of $ 15.60 .

On May 6, 2020 certain trustees elected to receive a portion of their compensation in LTIP units and an aggregate of 87,117 LTIP units, were granted to those trustees based on the weighted average grant date fair value of $ 8.03 .

In addition, On May 9, 2019, certain trustees elected to receive a portion of their compensation in LTIP units and an aggregate of 28,040 LTIP units, were granted to those trustees based on the weighted average grant date fair value of $ 14.98 .

2021 Long-Term Incentive Plan

On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”).

The Plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-half of the program) and performance goals tied to our relative and absolute total shareholder return (“TSR”) during the three-year performance period following their grant (one-half of the program).

The total grant date fair value under the 2021 LTI Plan was $ 7.8 million, comprising both performance-based and time-based awards.

Shares Under Option

All stock options granted have ten-year contractual lives, containing vesting terms of three to five years .

As of December 31, 2019 , the weighted average contractual term of shares under option outstanding at the end of the period is 7.6 years.

As of December 31, 2020, the weighted average contractual term of shares under options outstanding at the end of the period is 7.7 years.

The following table presents stock option activity for the years ended December 31, 2020, 2019, and 2018:

Shares Under Options

Weighted Average Exercise Price per Share

Weighted Average Remaining Expected Term

Shares Under Options Weighted Average Exercise Price per Share Weighted Average Remaining Expected Term

Outstanding at January 1, 2018 2,603,664 $ 24.09 4.40

Granted 2,146,885 21.71 4.58

Exercised — — —

Forfeited or expired — — —

Outstanding at December 31, 2018 4,750,549 23.02 4.48

Granted 180,213 19.53 3.88

Exercised — — —

Forfeited or expired — — —

Outstanding at December 31, 2019 4,930,762 22.89 4.46

Granted — — —

Exercised — — —

Forfeited or expired — — —

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Exercisable at December 31, 2020 3,709,097 $ 23.31 —

No options were granted during the year ended December 31, 2020.

The weighted average grant date fair value of options granted in 2019 and 2018 was $ 3.88 and $ 4.68 , respectively.

The options were granted with an exercise price equivalent to the average of the high and low share price on the grant date.

No options were exercised during the years ended December 31, 2018, 2019 and 2020.

As of December 31, 2020, there was no intrinsic value for the outstanding and exercisable shares under option.

During the years ended December 31, 2019 , 2018 and 2017 , the fair value of the options granted was estimated on the grant date using the Black-Scholes pricing model with the following assumptions:

February 24, 2017

February 22, 2018

September 27, 2018

February 27, 2019

D uring the years ended December 31, 2019 and 2018, the fair value of the options granted was estimated on the grant date using the Black-Scholes pricing model with the following assumptions:

February 22, 2018 September 27, 2018 February 27, 2019

Risk-free interest rate 2.73 % 3.00 % 2.54 %

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Expected volatility 32.23 % 30.42 % 30.98 %

The options were granted with an exercise price equivalent to the average of the high and low share price on the grant date.

Restricted Shares

The following table presents information regarding restricted share activity during the years ended December 31, 2020, 2019, and 2018:

Weighted Average Grant Date Fair Value per Share

Shares Weighted Average Grant Date Fair Value per Share

Unvested at January 1, 2018 175,430 $ 26.05

Granted 103,814 21.65

Vested ( 84,185 ) 25.67

Forfeited ( 32,482 ) 23.32

Unvested at December 31, 2018 162,577 23.99

Granted 34,638 19.15

Vested ( 96,378 ) 24.19

Forfeited ( 5,672 ) 22.11

Unvested at December 31, 2019 95,165 22.16

Granted 31,679 17.47

Vested ( 51,524 ) 23.88

Forfeited ( 2,927 ) 18.79

Unvested at December 31, 2020 72,393 $ 19.03

During the years ended December 31, 2019 , 2018 and 2017 , we granted 34,638 , 103,814 , and 104,698 restricted shares, respectively, that are subject to forfeiture and vest over periods ranging from one to four years .

During the years ended December 31, 2020, 2019 and 2018, we granted 31,679 , 34,638 , and 103,814 restricted shares, respectively, that are subject to forfeiture and vest over periods ranging from one to three years .

The total grant date value of the 51,524 , 96,378 , and 84,185 restricted shares vested during the years ended December 31, 2020, 2019 and 2018 was $ 1.2 million, $ 2.3 million and $ 2.2 million, respectively.

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During the years ended December 31, 2020, 2019 and 2018, 433,016 , 131,884 , and 24,722 units vested, respectively.

The remaining 727,040 units vest over a weighted average period of 2.8 years.

During the year ended December 31, 2020, 223,553 restricted units were converted to common shares The remaining 568,619 units vest over a weighted average period of 2.4 years.

Share-Based Compensation Expense

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LTIP expense (1)

7,331 4,477 2,218

Performance-based LTI expense (2)

3,792 3,164 2,530

DSU expense 48 156 164

Total Share-based compensation expense $ 16,994 $ 13,549 $ 9,741

(1) LTIP expense includes the time-based portion of the 2018 and 2019 LTI Plans.

(2) Performance-based LTI expense includes the 2015 and 2017 OPP plans and the performance-based portion of the 2018 and 2019 LTI Plans.

(1) LTIP expense includes the time-based portion of the 2020, 2019 and 2018 L TI Plans.

(2) Performance-based LTI expense include s the 2017 and 2015 OPP p lans and the performance-based portion of the 2020, 2019 and 2018 L TI Plans.

As of December 31, 2020, we had a total of $ 15.1 million of unrecognized compensation expense related to unvested and restricted share-based payment arrangements including unvested stock options, LTIP units, deferred share units, and restricted share awards which were granted under our Omnibus Share Plan as well as OPP awards.

This expense is expected to be recognized over a weighted average period of 2.7 years.

This expense is expected to be recognized over a weighted average period of two years .

EARNINGS PER SHARE AND UNIT

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For the years ended December 31, 2020, 2019 and 2018, there were options outstanding for 4,930,762 , 4,930,762 , and 4,750,549 shares, respectively, that potentially could be exercised for common shares.

During the year ended December 31, 2017 , 167,933 options with exercise prices ranging from $ 22.83 to $ 28.36 , were included in the diluted EPS calculation as their option prices were lower than the average market prices of our common shares.

During the years ended December 31, 2018 and 2019, no options were included in the diluted EPS calculation as their exercise prices were higher than the average market prices of our common shares.

During the years ended December 31, 2020, 2019 and 2018, no o ptions were included in the diluted EPS calculation as their exercise prices were higher than the average market prices of our common shares.

In addition, as of December 31, 2020 there were 72,393 unvested restricted shares outstanding that potentially could become unrestricted common shares.

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Earnings per unit - Diluted $ 0.80 $ 0.92 $ 0.92

QUARTERLY FINANCIAL DATA (unaudited)

The following tables summarize the quarterly results of operations of Urban Edge Properties and Urban Edge Properties LP for the years ended December 31, 2019 and 2018 :

Three Months Ended,

(Amounts in thousands, except per share/unit amounts)

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

Total revenue

Total expenses

Net income attributable to noncontrolling interests in operating partnership

Net loss attributable to noncontrolling interests in consolidated subsidiaries

Net income attributable to common shareholders

Net income attributable to unitholders

Earnings per common share - Basic

Earnings per common share - Diluted

Earnings per common unit - Basic

Earnings per common unit - Diluted

Three Months Ended,

(Amounts in thousands, except per share/unit amounts)

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

Total revenue

Total expenses

Net income attributable to noncontrolling interests in operating partnership

Net income attributable to noncontrolling interests in consolidated subsidiaries

Net income attributable to common shareholders

Net income attributable to unitholders

Earnings per common share - Basic

Earnings per common share - Diluted

Earnings per common unit - Basic

Earnings per common unit - Diluted

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data