3 unchanged sentences
CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Report of Independent Registered Public Accounting Firm for Urban Edge Properties 45
−Removed: Report of Independent Registered Public Accounting Firm for Urban Edge Properties LP 47
+Added: Report of Independent Registered Public Accounting Firm for Urban Edge Properties (PCAOB ID No.
+Added: Report of Independent Registered Public Accounting Firm for Urban Edge Properties LP (PCAOB ID No.
Urban Edge Properties Consolidated Balance Sheets as of December 31, 2021 and 2020 42
Urban Edge Properties Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 43
−Removed: Urban Edge Properties Consolidated Statement of Changes in Equity for the years ended December 31, 2020, 2019 and 2018 51
+Added: Urban Edge Properties Consolidated Statements of Changes in Equity for the years ended December 31, 2021, 2020 and 2019 44
Urban Edge Properties Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 45
1 unchanged sentence
Urban Edge Properties LP Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 48
−Removed: Urban Edge Properties LP Consolidated Statement of Changes in Equity for the years ended December 31, 2020, 2019 and 2018 56
+Added: Urban Edge Properties LP Consolidated Statements of Changes in Equity for the years ended December 31, 2021, 2020 and 2019 49
Urban Edge Properties LP Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 50
1 unchanged sentence
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
−Removed: Schedule II – Valuation and Qualifying Accounts 103
Schedule III – Real Estate and Accumulated Depreciation 92
16 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: 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.
−Removed: 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.
+Added: Critical Audit Matter
+Added: 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.
+Added: 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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.
−Removed: 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.
+Added: The Company’s evaluation of the recoverability of real estate assets involves the comparison of the 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.
7 unchanged sentences
◦ 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.
−Removed: ◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.
−Removed: Evaluation of Collectibility of Receivables – Refer to Note 3 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company evaluates the collectibility of amounts due from tenants.
−Removed: 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.
−Removed: 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.
−Removed: The Company recognizes changes in the collectibility assessment of these operating leases as adjustments to rental revenue.
−Removed: 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 of collection.
−Removed: 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.
−Removed: Performing audit procedures to evaluate these assumptions required a high degree of auditor judgment and an increased extent of effort.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to management’s assumptions in evaluating the collectibility of receivables included the following, among others:
−Removed: • We tested the effectiveness of controls over management’s evaluation of collectibility including controls over the assumptions utilized by management.
−Removed: • We evaluated the Company’s estimate of the collectibility of receivables by:
−Removed: ◦ 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.
−Removed: ◦ Inquiring with the Company’s employees in departments outside of accounting to corroborate evidence regarding each of the tenant specific collectibility assessments.
−Removed: ◦ 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.
−Removed: DELOITTE & TOUCHE LLP
+Added: ◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates selected by management.
+Added: /s/ DELOITTE & TOUCHE LLP
New York, New York
4 unchanged sentences
Opinion on the Financial Statements
−Removed: 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”).
+Added: We have audited the accompanying consolidated balance sheets of Urban Edge Properties LP (the "Operating Partnership") as of December 31, 2021 and 2020, 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, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
12 unchanged sentences
Critical Audit Matter
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Real Estate Impairment —Refer to Notes 2, 3 and 9 to the financial statements
1 unchanged sentence
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.
−Removed: 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.
+Added: The Operating Partnership's evaluation of the recoverability of real estate assets involves the comparison of the 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.
7 unchanged sentences
◦ 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.
−Removed: ◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.
−Removed: Evaluation of Collectibility of Receivables – Refer to Note 3 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Operating Partnership evaluates the collectibility of amounts due from tenants.
−Removed: 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.
−Removed: 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.
−Removed: The Operating Partnership recognizes changes in the collectibility assessment of these operating leases as adjustments to rental revenue.
−Removed: 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 of collection.
−Removed: 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.
−Removed: Performing audit procedures to evaluate these assumptions required a high degree of auditor judgment and an increased extent of effort.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to management’s assumptions in evaluating the collectibility of receivables included the following, among others:
−Removed: • We tested the effectiveness of controls over management’s evaluation of collectibility including controls over the assumptions utilized by management.
−Removed: • We evaluated the Operating Partnership’s estimate of the collectibility of receivables by:
−Removed: ◦ 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.
−Removed: ◦ Inquiring with the Operating Partnership’s employees in departments outside of accounting to corroborate evidence regarding each of the tenant specific collectibility assessments.
−Removed: ◦ 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.
+Added: ◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates selected by management.
/s/ DELOITTE & TOUCHE LLP
32 unchanged sentences
Total liabilities 1,937,222 1,943,667
−Removed: Commitments and contingencies
+Added: Commitments and contingencies (Note 10)
Shareholders’ equity:
33 unchanged sentences
Income before income taxes 108,954 58,754 117,484
−Removed: Income tax benefit (expense) 38,996 ( 1,287 ) ( 3,519 )
+Added: Income tax (expense) benefit ( 1,139 ) 38,996 ( 1,287 )
Net income 107,815 97,750 116,197
12 unchanged sentences
URBAN EDGE PROPERTIES
−Removed: CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+Added: CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share and per share amounts)
5 unchanged sentences
Net income attributable to common shareholders — — — 109,523 — — 109,523
−Removed: Net income attributable to noncontrolling interests — — — — 11,768 45 11,813
+Added: Net income (loss) attributable to noncontrolling interests — — — — 6,699 ( 25 ) 6,674
+Added: 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
+Added: Units redeemed for cash — — ( 3,422 ) — ( 2,556 ) — ( 5,978 )
Reallocation of noncontrolling interests — — 4,521 — ( 56,099 ) — ( 51,578 )
8 unchanged sentences
Net income attributable to common shareholders — — — 93,589 — — 93,589
−Removed: Net income (loss) attributable to noncontrolling interests — — — — 6,699 ( 25 ) 6,674
−Removed: Impact of ASC 842 adoption — — — ( 2,918 ) — — ( 2,918 )
+Added: 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
−Removed: Units redeemed for cash — — ( 3,422 ) — ( 2,556 ) — ( 5,978 )
Reallocation of noncontrolling interests — — 8,833 — ( 19,977 ) — ( 11,144 )
Common shares issued 66,588 1 427 ( 30 ) — — 398
+Added: Repurchase of common shares ( 5,873,923 ) ( 59 ) ( 54,082 ) — — — ( 54,141 )
Dividends to common shareholders ($ 0.68 per share)
2 unchanged sentences
— — — — ( 3,386 ) — ( 3,386 )
+Added: Contributions from noncontrolling interests — — — — — 5,447 5,447
Share-based compensation expense — — 5,871 — 11,123 — 16,994
7 unchanged sentences
Common shares issued 46,731 1 509 ( 144 ) — — 366
−Removed: Repurchase of common shares ( 5,873,923 ) ( 59 ) ( 54,082 ) — — — ( 54,141 )
Dividends to common shareholders ($ 0.60 per share)
— — — ( 70,166 ) — — ( 70,166 )
−Removed: Distributions to redeemable NCI ($ 0.68 p er unit)
+Added: Distributions to redeemable NCI ($ 0.60 per unit)
— — — — ( 2,864 ) — ( 2,864 )
21 unchanged sentences
Share-based compensation expense 10,819 16,994 13,549
−Removed: Rental revenue deemed uncollectible 27,890 1,385 4,138
Change in operating assets and liabilities:
38 unchanged sentences
Forgiveness of mortgage debt
−Removed: 30,000 — 11,537
Assumption of debt from the acquisition of real estate
−Removed: Dividend/distribution declared and payable on January 19, 2021 55,905 — —
+Added: Dividend/distribution declared and paid in subsequent period — 55,905 —
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
36 unchanged sentences
Total liabilities 1,937,222 1,943,667
−Removed: Commitments and contingencies
+Added: Commitments and contingencies (Note 10)
Partners’ capital:
34 unchanged sentences
Income before income taxes 108,954 58,754 117,484
−Removed: Income tax benefit (expense) 38,996 ( 1,287 ) ( 3,519 )
+Added: Income tax (expense) benefit ( 1,139 ) 38,996 ( 1,287 )
Net income 107,815 97,750 116,197
10 unchanged sentences
URBAN EDGE PROPERTIES LP
−Removed: CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+Added: CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except unit and per unit amounts)
4 unchanged sentences
Net income attributable to unitholders — — — — 116,222 — 116,222
−Removed: Net income attributable to noncontrolling interests — — — — — 45 45
+Added: Net loss attributable to noncontrolling interests — — — — — ( 25 ) ( 25 )
+Added: 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
+Added: Equity redemption for cash — ( 3,422 ) ( 357,998 ) ( 2,556 ) — — ( 5,978 )
Limited partnership units issued, net — — 450,624 — — — —
6 unchanged sentences
Net income attributable to unitholders — — — — 97,749 — 97,749
−Removed: Net loss attributable to noncontrolling interests — — — — — ( 25 ) ( 25 )
−Removed: Impact of ASC 842 adoption — — — — ( 2,918 ) — ( 2,918 )
+Added: 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
−Removed: Equity redemption for cash — ( 3,422 ) ( 357,998 ) ( 2,556 ) — — ( 5,978 )
−Removed: Limited partnership units issued, net — — 450,624 — — — —
+Added: Repurchase of common shares ( 5,873,923 ) ( 54,141 ) — — — — ( 54,141 )
Reallocation of noncontrolling interests — 8,833 — ( 19,977 ) — — ( 11,144 )
1 unchanged sentence
— — — — ( 83,866 ) — ( 83,866 )
+Added: Contributions from noncontrolling interests — — — — — 5,447 5,447
Share-based compensation expense — 5,871 — 11,123 — — 16,994
5 unchanged sentences
Equity redemption of OP units 100,000 840 ( 100,000 ) ( 6,302 ) — — ( 5,462 )
−Removed: Repurchase of common shares ( 5,873,923 ) ( 54,141 ) — — — — ( 54,141 )
Reallocation of noncontrolling interests — 8,206 — ( 2,744 ) — — 5,462
24 unchanged sentences
Share-based compensation expense 10,819 16,994 13,549
−Removed: Rental revenue deemed uncollectible 27,890 1,385 4,138
Change in operating assets and liabilities:
37 unchanged sentences
Forgiveness of mortgage debt
−Removed: 30,000 — 11,537
Assumption of debt from the acquisition of real estate
−Removed: Dividend/distribution declared and payable on January 19, 2021 55,905 — —
+Added: Dividend/distribution declared and paid in subsequent period — 55,905 —
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
25 unchanged sentences
All intercompany transactions have been eliminated in consolidation.
−Removed: 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.
−Removed: 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”) .
−Removed: Provision for doubtful accounts is included in "Property operating expenses" in the consolidated statements of income for the year ended December 31, 2018.
−Removed: In accordance with ASC 205 , certain prior year balances have been reclassified in order to conform to the current period presentation.
+Added: In accordance with the adoption of ASC 842 Leases (“ASU 2016-02”), 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, 2019, as reflected beginning on Form 10-K for the year ended December 31, 2019 .
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, 2021, 2020 and 2019 as reflected in this Form 10-K.
3 unchanged sentences
The Company’s chief operating decision maker reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment.
−Removed: None of our tenants accounted for more than 10% of our revenue or property operating income.
+Added: None of our tenants accounted for more than 10% of our revenue or property operating income as of December 31, 2021 .
We aggregate all of our properties into one reportable segment due to their similarities with regard to the nature and economics of the properties, tenants and operations, as well as long-term average financial performance.
1 unchanged sentence
Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
−Removed: Actual results could differ from those estimates.
+Added: Actual results
+Added: could differ from those estimates.
+Added: The most critical accounting policies, which involve the use of estimates and assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates include revenue recognition and collectibility of receivables, acquisitions of real estate and valuation of real estate.
+Added: For more information on these estimates and policies refer to Part II, Item 7 Critical Accounting Policies and Estimates of this Annual Report on Form 10-K.
Real Estate — Real estate is carried at cost, net of accumulated depreciation and amortization.
3 unchanged sentences
If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of redeveloped property, the excess is charged to impairment expense.
−Removed: The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete.
+Added: The capitalization period begins when redevelopment activities are under way and ends when the project is substantially complete.
Depreciation is recognized on a straight-line basis over estimated useful lives which range from one to 40 years.
4 unchanged sentences
We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired.
−Removed: Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
+Added: Our properties are individually evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
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.
10 unchanged sentences
Cash and Cash Equivalents — Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value due to their short-term maturities.
−Removed: The majority of our cash and cash equivalents consists of (i) deposits at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) United States Treasury Bills, and (iii) Certificate of Deposits placed through an Account Registry Service (“CDARS”).
+Added: The majority of our cash and cash equivalents consists of (i) deposits at major commercial banks, including money market accounts, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) United States Treasury Bills, and (iii) Certificate of Deposits placed through an Account Registry Service (“CDARS”).
To date we have not experienced any losses on our invested cash.
1 unchanged sentence
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.
−Removed: 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.
−Removed: 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.
−Removed: We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842 Leases .
+Added: 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.
+Added: We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842
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.
−Removed: 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.
+Added: Tenant receivables, and receivables arising from the straight-lining of rents, are written-off directly when management deems the collectibility of substantially all future lease payments from a specific lease is not probable, 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.
−Removed: In addition, future revenue recognition is limited to amounts paid by the lessee.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance, including those arising from the straight-lining of rents.
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.
−Removed: Such costs are capitalized and amortized on a straight-line basis over the term of the related leases.
+Added: Such costs are capitalized and amortized on a straight-line basis over the term of the related leases as depreciation and amortization expense on the consolidated statements of income.
+Added: Deferred leasing costs also includes lease incentives that can be used at the discretion of the tenant.
+Added: Lease incentives are capitalized and amortized over the term of the related leases as a reduction to rental revenue on the consolidated statements of income.
Deferred Financing Costs — Deferred financing costs include fees associated with our revolving credit agreement.
3 unchanged sentences
Revenue Recognition — We have the following revenue sources and revenue recognition policies:
−Removed: • Rental revenue for fiscal periods prior to January 1, 2019:
−Removed: Rental revenue comprises revenue from property rentals and tenant expense reimbursements, as designated within tenant operating leases in accordance with ASC 840 Leases .
−Removed: ◦ Property Rentals:
−Removed: We generate revenue from minimum lease payments from tenant operating leases.
−Removed: These rents are recognized over the noncancelable terms of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements under the leases in accordance with ASC 840.
−Removed: We satisfy our performance obligations over time, under the noncancelable lease term, commencing when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use.
−Removed: In addition, in circumstances where we provide a lease incentive to tenants, we recognize the incentive as a reduction of rental revenue on a straight-line basis over the remaining term of the lease.
−Removed: The underlying leased asset remains on our consolidated balance sheet and continues to depreciate.
−Removed: In addition to minimum lease payments, certain rental income derived from our tenant leases is contingent and dependent on percentage rent.
−Removed: Percentage rents are earned by the Company in the event the tenant's gross sales exceed certain amounts.
−Removed: Terms of percentage rent are agreed upon in the tenant's lease and will vary based on the tenant's sales.
−Removed: ◦ Tenant expense reimbursements:
−Removed: In accordance with ASC 840, revenue arises from tenant leases, which provide for the recovery of all or a portion of the operating expenses, real estate taxes and capital improvements of the respective property.
−Removed: This revenue is accrued in the period the expenses are incurred.
−Removed: • Rental revenue for fiscal periods beginning on or after January 1, 2019:
+Added: • Rental revenue:
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.
22 unchanged sentences
Variable lease payments dependent on percentage rent and the CPI were $ 9.8 million and $ 2.4 million for the years ended December 31, 2021 and 2020, respectively.
−Removed: 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.
−Removed: 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.
−Removed: The Company also has 22 properties in its portfolio either completely or partially on land or a building that are owned by third parties.
−Removed: These properties are leased or subleased to us pursuant to ground leases, building leases or easements, with remaining terms ranging from less than two years to over 80 years and provide us the right to operate each such property.
+Added: 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
+Added: the respective property and amounted to $ 101.3 million and $ 96.7 million for the years ended December 31, 2021 and 2020, respectively.
+Added: The Company accounts for variable lease payments as Rental revenue on the consolidated statements of income in the period in which the changes in facts and circumstances on which the variable lease payments are based occur.
+Added: The Company also has twenty properties in its portfolio either completely or partially on land or in a building that are owned by third parties.
+Added: These properties are leased or subleased to us pursuant to ground leases, building leases or easements, with remaining terms ranging from one to 78 years and provide us the right to operate each such property.
We also lease or sublease real estate for our three corporate offices with remaining terms of less than one year .
11 unchanged sentences
We identify our noncontrolling interests separately within the equity section on the consolidated balance sheets.
−Removed: Noncontrolling interests in Operating Partnership include OP units and limited partnership interests in the Operating Partnership in the form of long-term incentive plan (“LTIP”) unit awards classified as equity.
−Removed: Variable Interest Entities — Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, or which do not have the obligation to absorb expected losses, do not have the right to receive expected residual returns, or do not have the characteristics of a controlling financial interest qualify as VIEs.
+Added: Noncontrolling interests in the Operating Partnership include OP units and limited partnership interests in the Operating Partnership in the form of long-term incentive plan (“LTIP”) unit awards classified as equity.
+Added: Variable Interest Entities — Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, or for which the equity owners as a group lack any one of the following characteristics:
+Added: (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the legal entity, or (iii) the right to receive the expected residual returns of the legal entity, qualify as VIEs.
VIEs are required to be consolidated by their primary beneficiary.
3 unchanged sentences
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.
−Removed: 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.
+Added: 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, 2021 and 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.
−Removed: 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.
−Removed: The majority of the operations of these VIEs are funded with cash flows generated by the property.
−Removed: 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.
−Removed: 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.
+Added: 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, 2021 and 2020.
+Added: The majority of the operations of these VIEs are funded with cash flows generated by the properties and periodic cash contributions.
+Added: As of December 31, 2021 and 2020, excluding the Operating Partnership, the two consolidated VIEs had total assets of $ 48.5 million and $ 43.6 million, respectively and total liabilities of $ 24.7 million and $ 31.5 million, respectively.
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.
37 unchanged sentences
None of our tenants accounted for more than 10% of total revenues in the year ended December 31, 2021.
−Removed: 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.
+Added: As of December 31, 2021, The TJX Companies, Inc.
+Added: was our largest tenant with twenty-two stores which comprised an aggregate of 714,731 sf and accounted for approximately $ 20.6 million, or 4.8 % of our total revenue for the year ended December 31, 2021.
Recently Issued Accounting Literature
−Removed: Effective for the fiscal period beginning January 1, 2019, we adopted (“ASU 2016-02”) ASC 842 Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e.
+Added: Effective for the fiscal period beginning January 1, 2019, we adopted ASC 842 Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e.
lessees and lessors).
13 unchanged sentences
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.
−Removed: From a lessee perspective, the initial adoption on January 1, 2019 resulted in the recognition of operating lease ROU assets and lease liabilities for 24 operating leases with an aggregate balance of $ 98.5 million and $ 93.6 million, respectively.
−Removed: 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.
+Added: From a lessee perspective, the initial adoption on January 1, 2019 resulted in the recognition of operating lease ROU assets and lease liabilities.
+Added: Additionally, we reclassified certain amounts of acquired below-market lease intangibles and accrued rent and adjusted the carrying values of our ROU assets by the corresponding amounts.
As of December 31, 2021, the Company had 24 operating leases and our operating lease ROU assets and lease liabilities were $ 69.4 million and $ 64.6 million, respectively, as presented on our consolidated balance sheet.
−Removed: Subsequent to adoption, the Company recognized a finance lease in connection with the Company acquiring the lessee position of a ground lease in 2019.
−Removed: As of December 31, 2020, our finance lease ROU asset and finance lease liability were $ 2.7 million and $ 3.0 million, respectively.
+Added: As of December 31, 2021, our finance lease ROU asset and finance lease liabilities 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, 2021 and 2020 and the finance lease liability is included within accounts payable, accrued expenses and other liabilities on our consolidated balance sheets as of December 31, 2021 and 2020.
The Company recognizes interest expense on its finance lease liability.
−Removed: 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.
−Removed: Prior to the adoption of ASC 842, related lease and non-lease expense amounts were recognized within lease expense, real estate taxes, property operating expenses and general administrative expenses on the consolidated statement of income.
+Added: The standard's adoption has also impacted the presentation of our consolidated income statements 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 statements of income.
+Added: Prior to the adoption of ASC 842, related lease and non-lease expense amounts were recognized within lease expense, real estate taxes, property operating expenses and general administrative expenses on the consolidated statements of income.
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.
−Removed: 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.
+Added: The standard's adoption has also impacted the presentation of our consolidated income statements due to accounting for lease and non-lease components as a single lease component, presented as rental revenue on the consolidated statements 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 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.
−Removed: 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).
−Removed: Effective for the fiscal period beginning January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326):
−Removed: Measurement of Credit Losses .
−Removed: In connection with the adoption of ASU 2016-03, we also adopted (i) ASU 2018-19 Codification Improvements to ASC 326, Financial Instruments - Credit Losses, (ii) ASU 2019-04, Codification Improvements to ASC 326, Financial Statements - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments , ( iii) ASU 2019-05 Financial Instruments - Credit Losses (ASC 326):
−Removed: Targeted Transition Relief and (iv) ASU 2019-11 Codification Improvements to ASC 326, Financial Instruments - Credit Losses.
−Removed: 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.
−Removed: 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 .
−Removed: 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 .
−Removed: As of December 31, 2020, the Company did not have any material outstanding financial instruments.
−Removed: The adoption of ASU 2016-13 has had no impact to our consolidated financial statements and disclosures.
−Removed: 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 .
−Removed: ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, and/or adding certain disclosures.
−Removed: ASU 2018-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019.
−Removed: We elected to early adopt ASU 2018-13 effective January 1, 2019.
−Removed: The adoption of ASU 2018-13 did not have a material impact on our consolidated financial statements and disclosures.
−Removed: In December 2019, the FASB issued ASU 2019-12 Income Taxes (ASC 740):
−Removed: Simplifying the Accounting for Income Taxes , which enhances and simplifies various aspects of the income tax accounting.
−Removed: ASU 2019-12 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2020.
−Removed: Early adoption is permitted.
−Removed: We adopted ASU 2019-12 effective January 1, 2021.
−Removed: 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):
1 unchanged sentence
ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.
−Removed: We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year,
−Removed: 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.
+Added: 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.
10 unchanged sentences
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”.
−Removed: The Company has evaluated its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.
−Removed: 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.
−Removed: 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.
−Removed: The Company remains in active discussions with its impacted tenants to grant further concessions.
−Removed: 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.
+Added: The Company makes the election to account for rent concessions using the receivable approach or variable approach a on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.
+Added: As of December 31, 2021, the Company has granted rent deferrals accounted under both the receivable approach by electing the Lease Modification Q&A and as modifications due to term extensions of the leases.
+Added: The Company has also granted abatements accounted for under both the variable approach and as modifications due to the executed agreements including other rental term modifications, such as term extensions and substantial changes in cash flows.
Refer to Note 10 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
4 unchanged sentences
(in thousands)
+Added: August 10, 2021 601 Murray Road East Hanover NJ 88,000 $ 18,312
+Added: August 19, 2021 151 Ridgedale Avenue East Hanover NJ 187,000 37,759
+Added: December 23, 2021 Woodmore Towne Centre Glenarden MD 712,000 198,055
+Added: 2021 Total $ 254,126 (1)
February 12, 2020 Kingswood Center Brooklyn NY 130,000 $ 90,212
3 unchanged sentences
2020 Total $ 199,496 (1)
−Removed: November 1, 2019 25 East Spring Valley Ave Maywood NJ 43,800 $ 7,162
−Removed: November 8, 2019 Wonderland Marketplace Revere MA 139,500 24,209
−Removed: December 9, 2019 150 Route 4 East Paramus NJ 12,000 7,118
−Removed: 2019 Total $ 38,489 (1)
−Removed: (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.
−Removed: 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.
+Added: (1) The total purchase price for the properties acquired in the years ended December 31, 2021 and December 31, 2020 include $ 5.2 million and $ 3.1 million, respectively, of transaction costs incurred in relation to the transactions.
+Added: During the year ended December 31, 2021, the Company purchased three assets, at an aggregate purchase price of $ 254.1 million and 987,000 sf, comprising two assets located in East Hanover, NJ, and one asset located in Glenarden, MD.
+Added: In December 2021, the Company closed on the acquisition of Woodmore Towne Centre, a 712,000 sf retail center located in Glenarden, MD, for a purchase price of $ 198.1 million, including transaction costs.
+Added: The property is 97 % leased and sits on 83 acres and includes an additional 22 acres of land adjacent to the main parcel that may be developed for a complementary commercial use in the future.
+Added: To partially fund the acquisition, the Company entered into a 10 -year, $ 117.2 million non-recourse first mortgage secured by the property.
+Added: The mortgage has a fixed interest rate of 3.39 % and is interest-only for the entire loan term.
+Added: The two industrial properties, acquired in August 2021, are adjacent to our existing 943,000 sf warehouse park in East Hanover, NJ.
+Added: The acquisition of 151 Ridgedale Avenue was partially funded via a 1031 exchange using cash proceeds from previous dispositions.
+Added: The Company purchased four assets with a total consideration of $ 199.5 million during the year ended December 31, 2020.
+Added: two of the assets are located in Brooklyn, NY, one asset is located in Massapequa, NY and one asset is located in Maywood, NJ and is 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.
−Removed: 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.
−Removed: 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.
1 unchanged sentence
Additionally, as part of the acquisition of Kingswood Center, the Company assumed a $ 65.5 million mortgage, which matures in 2028.
−Removed: A portion of the acquisition of Kingswood Crossing was completed as a reverse Section 1031 like-kind exchange.
−Removed: 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.
+Added: A portion of the acquisition of Kingswood Crossing was completed as a reverse Section 1031 exchange.
+Added: We entered into a reverse Section 1031 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;
1 unchanged sentence
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.
−Removed: The Company purchased three assets with a total consideration of $ 38.5 million during the year ended December 31, 2019.
−Removed: Wonderland Marketplace is located in the Boston metropolitan area and two assets are adjacent to our existing property, Bergen Town Center.
−Removed: The acquisitions were executed through Internal Revenue Code Section 1031 tax deferred exchange transactions and funded using proceeds from dispositions.
The aggregate purchase price of the above property acquisitions has been allocated as follows:
3 unchanged sentences
(in thousands)
+Added: 601 Murray Road $ 2,075 $ 14,733 $ 1,722 $ ( 218 ) $ — — — 18,312
+Added: 151 Ridgedale Avenue 2,990 35,509 — ( 740 ) — — — 37,759
+Added: Woodmore Towne Centre (3)
+Added: 28,398 144,834 23,128 ( 8,035 ) — — $ 9,730 198,055
+Added: 2021 Total $ 33,463 $ 195,076 $ 24,850 $ ( 8,993 ) $ — $ — $ 9,730 $ 254,126
Kingswood Center $ 15,690 $ 76,766 $ 9,263 $ ( 4,534 ) $ ( 6,973 ) $ — $ — $ 90,212
4 unchanged sentences
2020 Total $ 68,537 $ 144,009 $ 19,526 $ ( 31,029 ) $ ( 6,973 ) $ 5,012 $ 414 $ 199,496
−Removed: 25 East Spring Valley Ave (3)
−Removed: $ — $ 6,824 $ 623 $ ( 31 ) $ — $ ( 254 ) $ — $ 7,162
−Removed: Wonderland Marketplace 6,323 17,130 2,947 ( 2,191 ) — — — 24,209
−Removed: 150 Route 4 East 7,118 — — — — — — 7,118
−Removed: 2019 Total $ 13,441 $ 23,954 $ 3,570 $ ( 2,222 ) $ — $ ( 254 ) $ — $ 38,489
(1) As of December 31, 2021, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2021 were 8.7 years and 14.7 years, respectively and the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2020 were 10.3 years and 27.2 years, respectively.
1 unchanged sentence
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.
−Removed: (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.
+Added: (3) The amount allocated to Other assets, net relates to future reimbursements from the county for development work performed by the previous owner and is included in Prepaid expenses and other assets on our consolidated balance sheets.
+Added: During the year ended December 31, 2021, we disposed of three properties and one property parcel and received proceeds of $ 34.9 million, net of selling costs, resulting in an $ 18.6 million net gain on sale of real estate.
+Added: Of these dispositions completed during the year ended December 31, 2021, two were completed as a 1031 exchange with the acquisition of 151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale for income tax purposes.
+Added: During the year ended December 31, 2021 , the Company also sold its lessee position in its ground lease at Vallejo, CA and received proceeds of $ 2.4 million , net of selling costs, and derecognized the ROU asset and corresponding lease liability related to the lease.
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
Real Estate Held for Sale
2 unchanged sentences
The parcel was sold in January 2021.
−Removed: 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.
−Removed: 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.
−Removed: Both properties were sold during the year ended December 31, 2020.
+Added: There was no real estate held for sale as of December 31, 2021.
IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES
12 unchanged sentences
Amortization of acquired below-market leases, net of acquired above-market leases resulted in rental income of $ 55.2 million , $ 10.6 million , and $ 15.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: 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.
+Added: On September 29, 2021, the Company entered into agreements to terminate our three remaining Kmart and Sears leases effective October 15, 2021.
+Added: The modification of these leases resulted in accelerated amortization of the below-market intangible lease liabilities of $ 45.9 million which is included in rental revenue for the year ended December 31, 2021.
+Added: The intangibles related to these leases were fully amortized and subsequently written-off in 2021.
+Added: Amortization of acquired in-place leases and customer relationships resulted in depreciation and amortization expense of $ 8.6 million , $ 10.2 million , and $ 8.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: During 2021, we recognized $ 0.4 million of accelerated amortization of the in-place lease intangibles related to the Kmart and Sears lease terminations noted above.
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, 2022:
14 unchanged sentences
5/24/2022 1.70 % $ 28,244 $ 28,930
−Removed: Westfield (One Lincoln Plaza) (1)
−Removed: 5/24/2022 1.75 % 4,730 4,730
Woodbridge (Plaza at Woodbridge) (1)
5 unchanged sentences
12/1/2024 2.00 % 24,680 25,172
+Added: Westfield (One Lincoln Plaza) (3)
+Added: — — % — 4,730
Total variable rate debt 161,084 169,371
17 unchanged sentences
Brooklyn (Kingswood Center) 2/6/2028 5.07 % 70,815 71,696
−Removed: 2/6/2028 5.07 % 71,696 —
Hackensack 3/1/2028 4.36 % 66,400 66,400
6 unchanged sentences
Garfield 12/1/2030 4.14 % 40,300 40,300
−Removed: 11/15/2034 6.40 % 12,952 13,488
−Removed: Montehiedra (junior loan) — — % — 30,000
+Added: Woodmore Towne Centre 1/6/2032 3.39 % 117,200 —
+Added: Mt Kisco 11/15/2034 6.40 % 12,377 12,952
Total fixed rate debt 1,534,324 1,428,026
4 unchanged sentences
(2) Bears interest at one month LIBOR plus 190 bps.
−Removed: (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.
−Removed: The effective interest rate including amortization of the debt premium is 3.5 % as of December 31, 2020.
+Added: (3) Loan repaid in July 2021 in connection with the disposition of the property.
The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $ 1.4 billion as of December 31, 2021.
13 unchanged sentences
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.
−Removed: Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to increase if our leverage ratio increases above predefined thresholds.
+Added: Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to change.
The Agreement contains customary financial covenants including a maximum leverage ratio of 60 % and a minimum fixed charge coverage ratio of 1.5 x.
−Removed: In March 2020 we drew $ 250 million on our $ 600 million revolving credit facility and this balance was fully repaid in November 2020.
−Removed: No amounts were drawn or outstanding under the Agreement as of December 31, 2020.
−Removed: 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.
+Added: No amounts were drawn or outstanding under the Agreement as of December 31, 2021 and 2020.
+Added: Financing costs associated with executing the Agreement of $ 2.2 million and $ 3.3 million as of December 31, 2021 and 2020, respectively, are included in the prepaid expenses and other assets line item of the consolidated balance sheets, as deferred financing costs, net.
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.
−Removed: 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.
−Removed: 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.
−Removed: 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 .
−Removed: Mortgage on property in Montclair, NJ
−Removed: 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.
+Added: 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 enables the Company, at its option, to repay the loan at a discounted value of $ 72.5 million, beginning in August 2023 through the extended maturity date of February 2026.
+Added: While it is possible we will be able to repay the loan at the discounted value in the future, it is contingent upon certain factors including the future operating performance of the property as well as the ability to meet all required payments on the loan.
+Added: Therefore, in accordance with ASC 470-60 Troubled Debt Restructurings , the Company did not recognize a gain at the time of the restructuring, as the future cash payments, including contingent payments, are greater than the carrying value of the mortgage payable.
+Added: We have accrued interest of $ 5.4 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets as of December 31, 2021.
+Added: 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.
+Added: Mortgage on Woodmore Towne Centre
+Added: On December 23, 2021, the Company entered into a 10 -year, $ 117.2 million non-recourse first mortgage to partially fund the acquisition of its property in Glenarden, MD.
+Added: The mortgage is secured by the property with a fixed interest rate of 3.39 % and is interest-only for the entire loan term.
Mortgage on The Outlets at Montehiedra
−Removed: In June 2020, we completed the refinancing of our non-recourse mortgage on The Outlets at Montehiedra (“Montehiedra”) in Puerto Rico.
−Removed: 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.
−Removed: 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 %.
−Removed: 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.
−Removed: 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:
−Removed: (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.
−Removed: 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.
−Removed: No triggering events have occurred that would require the release of the guarantee and the tenant has lease obligations through 2023.
−Removed: The guarantee would be released should certain financial metrics at Montehiedra be achieved even if the Kmart box remains vacant.
−Removed: The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately six years based on the scheduled amortization.
+Added: In connection with the refinancing of the loan secured by The Outlets at Montehiedra (“Montehiedra”) in the second quarter of 2020, the Company provided a $ 12.5 million limited corporate guarantee.
+Added: The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately five years.
+Added: As of December 31, 2021, the remaining exposure under the guarantee is $ 9.9 million.
+Added: There was no separate liability recorded related to this guarantee.
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.
2 unchanged sentences
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.
−Removed: 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.
−Removed: During the years ended December 31, 2019 and 2018, the Company declared cash distributions on our common shares of $ 0.88 per share .
−Removed: Th e taxability of such dividends for the years ended December 31, 2020, 2019 and 2018 are as follows:
+Added: The Company satisfied its REIT distribution requiremen t by distributing $ 0.60 per common share in 2021, which comprised a regular quarterly cash dividend of $ 0.15 per common share declared for each quarter of 2021.
+Added: During the year ended December 31, 2020, the Company declared a regular cash dividend of $ 0.22 per common share for the first quarter of 2020 and a special cash dividend of $ 0.46 per common share in December 2020.
+Added: During the year ended December 31, 2019, the Company declared cash distributions on our common shares of $ 0.88 per share.
+Added: The taxability of such dividends for the years ended December 31, 2021, 2020 and 2019 are as follows:
Year Ended December 31,
8 unchanged sentences
As such, the partners are required to report their share of taxable income on their respective tax returns.
−Removed: 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.
+Added: However, the Company maintains certain non-real estate operating activities that could not be performed by the REIT, and occur through the Company’s TRS, which 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.
−Removed: On June 1, 2020, the Company completed a mortgage refinancing of its mall in Puerto Rico, The Outlets at Montehiedra (“Montehiedra”).
+Added: During the year ended December 31, 2021, the REIT was subject to Puerto Rico corporate income taxes on its allocable share of the Company’s Puerto Rico operating activities.
+Added: 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 %.
+Added: In addition, the REIT is subject to a 10 % branch profits 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.
+Added: During the year ended December 31, 2020 the Company also had activities occurring in special partnerships subject to a Puerto Rico 29 % non-resident withholding tax on the net income from operating activities allocated to the Operating Partnership.
+Added: On June 1, 2020, the Company completed a mortgage refinancing of its mall in Puerto Rico, The Outlets at 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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 %.
−Removed: 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.
3 unchanged sentences
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.
+Added: During the year ended December 31, 2021, based on the filing of the 2020 state and local income tax returns, this amount was reduced by $ 1.2 million due to the final taxable amount being lower than what was originally estimated.
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.
3 unchanged sentences
In assessing the realizability of deferred tax assets, management determined it is more likely than not that these deferred tax assets will be realized.
−Removed: 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.
−Removed: federal taxable income because management determined that it is not more likely than not that these deferred tax assets will be realized.
−Removed: 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.
−Removed: This determination was based on the operating TRS’ lack of anticipated future taxable income.
−Removed: 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.
−Removed: As of December 31, 2020, the Company’s total valuation allowance was $ 4.5 million.
−Removed: 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 .
+Added: During the year ended December 31, 2020, the Company recorded a $ 4.5 million valuation allowance against the REIT’s state and local deferred tax asset described above because management determined that it is not more likely than not that these deferred tax assets will be realized.
+Added: As of December 31, 2021, the Company’s total deferred tax asset and valuation allowance attributable to the REIT’s state and local income tax liability decreased by $ 1.5 million to $ 3.0 million.
+Added: The $ 1.5 million decrease is attributed to the $ 1.2 million reduction based on the final taxable amount being lower than what was originally estimated as discussed above and the current year movement in the temporary difference.
+Added: We account for 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, 2021 and 2020 was $ 8.5 million and $ 26.4 million, respectively.
−Removed: 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.
−Removed: 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.
+Added: For the year ended December 31, 2021, the Puerto Rico income tax expense was $ 2.4 million and the REIT’s state and local income tax benefit was $ 1.2 million as compared to a Puerto Rico income tax benefit of $ 43.5 million and a REIT state and local income tax expense of $ 4.5 million for the year ended December 31, 2020.
+Added: Puerto Rico income tax expense of $ 1.2 million was recorded for the year ended December 31, 2019.
Income taxes are accounted for under the asset and liability method.
−Removed: 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.
+Added: 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 and for the tax effect of carried forward tax attributes such as net operating losses and tax credits.
Income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consists of the following:
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Income tax expense (benefit):
−Removed: federal income tax $ — $ — $ 154
state and local income tax ( 1,228 ) 4,525 66
2 unchanged sentences
federal income tax 5 ( 6 ) —
−Removed: state and local income tax — — —
Puerto Rico income tax (1)
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REIT income before income taxes not subject to federal tax provision ( 22,875 ) ( 12,339 ) ( 24,677 )
−Removed: TRS permanent book to tax adjustments — — ( 10,740 )
State and local income tax provision, net of federal benefit 225 11 66
14 unchanged sentences
Deferred tax liabilities:
−Removed: Depreciation — ( 4,416 )
+Added: Mortgage liability ( 1,394 ) —
Straight line rent ( 961 ) ( 738 )
2 unchanged sentences
Total deferred tax liabilities ( 3,339 ) ( 1,079 )
−Removed: Net deferred tax assets (liabilities) $ 39,677 $ ( 5,137 )
+Added: Net deferred tax assets $ 37,420 $ 39,677
Leases as lessor
11 unchanged sentences
Total rental revenue $ 422,467 $ 328,280
−Removed: 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
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Leases as lessee
−Removed: As of December 31, 2020, the Company had 22 properties in its portfolio either completely or partially on land or a building that was owned by third parties.
−Removed: These properties are leased or subleased to us pursuant to ground leases, building leases or easements, with remaining terms ranging from less than two years to over 80 years and provide us the right to operate the property.
+Added: As of December 31, 2021, the Company had twenty properties in its portfolio either completely or partially on land or in a building owned by third parties.
+Added: These properties are leased or subleased to us pursuant to ground leases, building leases or easements, with remaining terms ranging from one to 78 years and provide us the right to operate the property.
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.
−Removed: 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.
−Removed: As a result of this reassessment, the Company remeasured the lease
−Removed: liability by using revised inputs as of the reassessment date and recorded an additional ROU asset and lease liability of $ 5.0 million , respectively.
−Removed: 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.
−Removed: 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.
−Removed: On July 31, 2019, the Company’s lessee position in one of its ground leases expired in accordance with the terms of the lease.
−Removed: 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.
−Removed: 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 components of lease expense for the years ended December 31, 2021 and 2020 were as follows:
6 unchanged sentences
Total lease expense $ 12,872 $ 13,667
−Removed: (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.
+Added: (1) During the years ended December 31, 2021 and 2020, the Company recognized sublease income of $ 19.1 million and $ 17.7 million, respectively, included in rental revenue on the consolidated statements 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.
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Operating leases $ 772 $ 1,740
−Removed: Finance lease — 2,991
Maturity analysis of lease payments as lessee
8 unchanged sentences
2026 6,092 124
−Removed: 2026 6,341 124
Thereafter 51,409 6,299
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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, which is provided by a third-party specialist.
−Removed: 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.
+Added: The fair value of cash and cash equivalents are 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, 2021 and December 31, 2020.
−Removed: As of December 31, 2020 As of December 31, 2019
+Added: As of December 31, 2021 As of As of December 31, 2020
(Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value
−Removed: Cash and cash equivalents $ 384,572 $ 384,572 $ 432,954 $ 432,954
Mortgages payable (1)
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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.
+Added: During the year ended December 31, 2021, the Company recognized impairment charges on two retail properties that the Company was actively marketing.
+Added: The Company recognized an impairment charge of $ 0.4 million on its property in Westfield, NJ which was sold on July 22, 2021.
+Added: Additionally, the Company recognized an impairment charge of $ 0.1 million on its ground lease in Vallejo, CA which was sold on December 21, 2021.
+Added: Prior to these dispositions, the carrying value of these assets exceeded the estimated fair value less costs to sell.
+Added: The aggregated fair values of $ 7.9 million were based on sale agreements under negotiation with third-party buyers.
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 .
−Removed: Prior to the sale of the parcel, the book value of this property exceeded its estimated fair value less costs to sell.
−Removed: The fair value of the property was based on an executed contract of sale with a third-party buyer less costs to sell.
−Removed: During the year ended December 31, 2019, the Company recognized impairment charges on four retail properties that the Company was actively marketing.
+Added: Prior to the sale of the parcel, the carrying value of this property exceeded its estimated fair value less costs to sell of $ 7.2 million .
+Added: The fair value of the parcel was based on a sale agreement under negotiation with a third-party buyer.
+Added: During the year ended December 31, 2019, the Company recognized impairment charges of $ 26.3 million 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.
1 unchanged sentence
The capitalization rates (ranging from 9.9 % to 12.1 %) and discounts rates (ranging from 9.3 % to 10.8 %) utilized in the analyses were based upon unobservable rates that the Company believes to be in a reasonable range of current market rates.
−Removed: During the year ended December 31, 2018, we recognized a $ 3.1 million impairment charge on our property in Salem, NH as a result of the loss of the anchor tenant at the property.
−Removed: The valuation of our property in Salem, NH was based on comparable property transactions in the property’s surrounding area.
−Removed: We also recognized a $ 2.5 million impairment charge on our property in West Babylon, NY.
−Removed: 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.
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.
4 unchanged sentences
In our opinion, after consultation with legal counsel, the outcome of such matters will not have a material adverse effect on our financial condition, results of operations or cash flows.
−Removed: Redevelopment
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Redevelopment and Anchor Repositioning
+Added: The Company has 21 active development, redevelopment or anchor repositioning projects with total estimated costs of $ 218.7 million, of which $ 72.1 million has been incurred and $ 146.6 million remains to be funded as of December 31, 2021.
+Added: We continue to monitor the stabilization dates of these projects as a result of the impact of the COVID-19 pandemic on our tenants, vendors and supply chains.
+Added: We have identified future projects in our development pipeline, but we are under no obligation to execute and fund any of these projects and each of these projects is being further evaluated based on market conditions.
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.
2 unchanged sentences
The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $ 75 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses.
−Removed: On December 23, 2020, the Company initiated litigation in
−Removed: New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus.
+Added: 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.
12 unchanged sentences
Hurricane-Related Charges
−Removed: On September 20, 2017, Hurricane Maria damaged our two properties in Puerto Rico.
−Removed: 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.
−Removed: During the year ended December 31, 2018, the Company recognized $ 0.3 million of business interruption losses, comprised of $ 0.7 million of rent abatements due to tenants that had not reopened since the hurricane, recorded as a reduction of rental revenue, offset by a $ 0.4 million reversal within property operating expenses to provision for doubtful accounts for payments received from tenants on rents previously reserved.
−Removed: 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.
−Removed: 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.
+Added: In June 2019, the Company finalized its insurance recovery related to Hurricane Maria with its carrier in the amount of $ 14.3 million, of which $ 3.3 million was previously received, subject to deductibles of $ 2.3 million.
+Added: 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.
Environmental Matters
1 unchanged sentence
Based on these assessments, we have accrued costs of $ 1.7 million and $ 1.8 million on our consolidated balance sheets as of December 31, 2021 and December 31, 2020, respectively, for remediation costs for environmental contamination at certain properties.
−Removed: 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.
−Removed: 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.
+Added: While this accrual reflects our best estimates of the potential costs of remediation at these properties, there can be no assurance that the actual costs will not exceed these amounts.
+Added: During the year ended December 31, 2019, the Company recognized $ 1.4 million 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.
−Removed: Pandemic-Related Contingencies
−Removed: 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").
−Removed: On March 11, 2020, WHO characterized the COVID-19 outbreak as a pandemic.
−Removed: Since March, the continually evolving COVID-19 pandemic impacted our tenants and business operations.
−Removed: The Company has taken precautions to protect the safety, health and well-being of its employees and tenants.
−Removed: During 2020, many of our tenants faced adverse financial consequences from reduced business operations and social distancing requirements resulting from the COVID-19 pandemic.
−Removed: As of December 31, 2020, substantially all of our portfolio's gross
−Removed: 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.
−Removed: 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.
−Removed: We valuate rent relief requests on a case-by-case basis and not all requests are granted.
−Removed: 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.
−Removed: As of December 31, 2020, the Company executed rent deferrals aggregating $ 5.1 million with a weighted average payback period of approximately eight months.
−Removed: Additionally, as of December 31, 2020, the Company executed rent abatements aggregating $ 3.9 million.
−Removed: 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.
1 unchanged sentence
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.
−Removed: 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.
+Added: Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection since the pandemic was declared.
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.
−Removed: Century 21 filed for Chapter 11 bankruptcy protection on September 10, 2020.
−Removed: 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.
−Removed: 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.
−Removed: Century 21 vacated and terminated its lease in December 2020.
PREPAID EXPENSES AND OTHER ASSETS
6 unchanged sentences
Deferred financing costs, net of accumulated amortization of $ 5,932 and $ 4,819 , respectively
−Removed: Deposits for acquisitions — 10,000
Prepaid expenses:
12 unchanged sentences
Security deposits 6,693 5,884
−Removed: Deferred tax liability, net — 5,137
Accrued payroll expenses 9,134 5,797
9 unchanged sentences
EQUITY AND NONCONTROLLING INTEREST
+Added: At-The-Market Program
+Added: On May 5, 2021 the Company established an at-the-market equity program (the “ATM Program”), pursuant to which the Company may offer and sell common shares, par value $ 0.01 per share, with an aggregate gross sales price of up to $ 250 million.
+Added: Sales under the ATM Program may be made from time to time, as needed, by means of ordinary brokers’ transactions or other transactions that are deemed to be “at the market” offerings, in privately negotiated transactions, which may include block trades, or as otherwise agreed with the sales agents.
+Added: As of December 31, 2021, the Company has not issued any common shares under the ATM Program.
+Added: Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs.
+Added: The Company has no obligation to sell any shares under the ATM Program.
Share Repurchase Program
3 unchanged sentences
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.
−Removed: 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.
+Added: During the year ended December 31, 2021, no shares were repurchased by the Company.
+Added: During the year ended December 31, 2020, the Company repurchased 5.9 million shares at a weighted average share price of $ 9.22 amounting to $ 54.1 million.
Units of the Operating Partnership
−Removed: An equivalent number of common units were issued by the Operating Partnership to the Company in connection with the Company’s issuance of common shares of beneficial interest under the ATM equity program.
The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”).
6 unchanged sentences
Dividends and Distributions
+Added: During the year ended December 31, 2021 the Company declared distributions on our common shares and OP units of $ 0.60 per share/unit which comprised a regular quarterly dividend of $ 0.15 per common share and OP unit declared for each quarter of 2021.
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.
−Removed: 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.
+Added: During the year ended December 31, 2019, 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.
9 unchanged sentences
The Company elected to satisfy the redemption requests by repurchasing the units at a price of $ 16.70 per unit, for total cash consideration of $ 6.0 million.
+Added: During the years ended December 31, 2021, 2020 and 2019, 100,000 , 1,355,836 and 6,995,941 units, respectively, were redeemed for an equivalent amount of common shares of the Company.
In connection with the separation from Vornado Realty L.P.
(“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.
−Removed: On February 28, 2019, the Company issued 5.7 million common shares to VRLP, in exchange for an equal number of
−Removed: OP units after receiving a notice of redemption from VRLP.
+Added: 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.
6 unchanged sentences
Pursuant to the Omnibus Share Plan, stock options, LTIP units, operating partnership units and restricted shares were granted.
−Removed: Outperformance Plans
+Added: Outperformance and Long-Term Incentive Plans
The Compensation Committee of the Board of Trustees of the Company approved the Company’s 2015 Outperformance Plan (“2015 OPP”) on November 3, 2015 and the Company’s 2017 Outperformance Plan (“2017 OPP”) on February 24, 2017.
1 unchanged sentence
The aggregate notional amounts of the 2015 OPP grant and the 2017 OPP grant are $ 10.2 million and $ 12.0 million, respectively.
−Removed: Awards under the 2015 OPP and the 2017 OPP may be earned if we (i) achieve a TSR level greater than 7 % per annum, or 21 % over the three-year performance measurement period, and/or (ii) achieve a TSR equal to or above, that of the 50 th percentile of a retail REIT peer group (“Peer Group”) comprised of our peer companies, over a three-year performance measurement period.
+Added: Awards under the 2015 OPP and the 2017 OPP may be earned if we (i) achieve a TSR level greater than 7 % per annum, or 21 % over the three-year performance measurement period (the “Performance Period”), and/or (ii) achieve a TSR equal to or above, that of the 50 th percentile of a retail REIT peer group (“Peer Group”) comprised of our peer companies, over a three-year Performance Period.
Distributions on awards accrue during the measurement period, except that 10 % of such distributions are paid in cash.
1 unchanged sentence
Awards earned under the 2015 OPP and the 2017 OPP vest 50 % in year three, 25 % in year four and 25 % in year five.
−Removed: The fair values of the 2015 OPP and the 2017 OPP on the dates of grant were $ 3.9 million and $ 4.1 million, respectively.
+Added: On February 22, 2018, the Compensation Committee of the Board of Trustees approved the Company’s 2018 Long-Term Incentive Plan (“2018 LTI Plan”) under the Omnibus Share Plan, a multi-year equity compensation program, comprised of both performance-based and time-based vesting awards.
+Added: Equity awards granted under the 2018 LTI Plan are weighted, in terms of grant date and fair value, 80 % performance-based and 20 % time-based.
+Added: The fair values of the 2015 OPP, the 2017 OPP and the 2018 LTI Plan on the dates of grant were $ 3.9 million, $ 4.1 million and $ 3.6 million, respectively.
A Monte Carlo simulation was used to estimate the fair values based on the probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods.
1 unchanged sentence
For the 2017 OPP, assumptions include historical volatility ( 19.7 %), risk-free interest rates ( 1.5 %), and historical daily return as compared to our Peer Group.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 2018 Long-Term Incentive Plan
−Removed: On February 22, 2018, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2018 Long-Term Incentive Plan ("2018 LTI Plan") under the Omnibus Share Plan, a multi-year equity compensation program, comprised of both performance-based and time-based vesting awards.
−Removed: Equity awards granted under the 2018 LTI Plan are weighted, in terms of grant date and fair value, 80 % performance-based and 20 % time-based.
−Removed: For the performance-based awards under the 2018 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if, and only if, Urban Edge’s absolute and/or relative total shareholder return (“TSR”) meets certain criteria over the three-year performance measurement period (the “Performance Period”) beginning on February 22, 2018 and ending on February 21, 2021.
−Removed: The Company issued 328,107 LTIP Units under the 2018 LTI Plan.
−Removed: 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 %.
−Removed: The Relative TSR component is based on the Company’s performance
−Removed: compared to a peer group comprised of 14 companies.
−Removed: 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.
−Removed: The fair value of the performance-based award portion of the 2018 LTI Plan on the date of grant was $ 3.6 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.
−Removed: 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 .
−Removed: 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.
−Removed: 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.
+Added: For the 2018 LTI Plan, assumptions include historical volatility, risk-free interest rates, and historical daily return as compared to our Peer Group.
+Added: For the 2015 OPP and 2017 OPP, and the performance-based portion of the 2018 LTI Plan 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.
+Added: The 2015 OPP was fully vested as of November 5, 2020 and there is no compensation cost remaining as of December 31, 2021.
+Added: In the years ending December 31, 2021, 2020, and 2019 we recognized $ 0.7 million, $ 1.6 million and $ 2.3 million of compensation expense related to the 2015 OPP, 2017 OPP and 2018 LTI Plan, respectively.
+Added: As of December 31, 2021, there was $ 0.2 million of total unrecognized compensation cost related to the 2017 OPP and 2018 LTI Plan, which will be recognized over a weighted-average period of less than one year.
2018 Inducement Equity Plan
5 unchanged sentences
On April 4, 2019, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2019 Long-Term Incentive Plan (“2019 LTI Plan”).
−Removed: 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-third 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 (two-thirds of the program).
−Removed: For the performance-based awards under the 2019 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if, and only 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 27, 2019 and ending on February 26, 2022.
+Added: 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-third of the program) and performance goals tied to our relative and absolute TSR during the three-year performance period following their grant (two-thirds of the program).
+Added: Performance-based awards
+Added: For the performance-based awards under the 2019 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if, and only if, Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year Performance Period beginning on February 27, 2019 and ending on February 26, 2022.
The Company issued 489,319 LTIP Units under the 2019 LTI Plan.
3 unchanged sentences
The fair value of the performance-based award portion of the 2019 LTI Plan on the date of grant was $ 4.3 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.
+Added: Time-based awards
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.
−Removed: 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.
+Added: During the years ended December 31, 2021, 2020 and 2019, respectively, we recognized $ 1.4 million, $ 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”).
−Removed: 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
−Removed: value of the program).
+Added: 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 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
−Removed: 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.
+Added: 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 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.
3 unchanged sentences
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.
+Added: During the years ended December 31, 2021
+Added: and 2020 we recognized $ 1.3 million and $ 1.1 million, respectively, of compensation expense related to the performance-based awards under the 2020 LTI Plan.
+Added: Time-based awards
+Added: 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 .
+Added: 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.
+Added: During the years ended December 31, 2021 and 2020 we recognized $ 0.7 million and $ 1.1 million, respectively, of compensation expense related to the time-based awards under the 2020 LTI Plan.
+Added: 2021 Long-Term Incentive Plan
+Added: 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”).
+Added: 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 TSR during the three-year Performance Period following their grant (one-half of the program).
+Added: The total grant date fair value under the 2021 LTI Plan was $ 7.8 million, comprising both performance-based and time-based awards.
+Added: Performance-based awards
+Added: For the performance-based awards under the 2021 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 Period beginning on February 10, 2021 and ending on February 9, 2024.
+Added: The Company granted performance-based awards under the 2021 LTI Plan that represent 398,977 LTIP Units.
+Added: The fair value of the performance-based award portion of the 2021 LTI Plan on the date of grant was $ 3.9 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.
+Added: 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 %.
+Added: The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 15 companies.
+Added: 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, 2021, we recognized $ 1.0 million of compensation expense related to the performance-based awards under the 2021 LTI Plan.
5 unchanged sentences
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 .
−Removed: 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 .
−Removed: 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 .
−Removed: 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 .
+Added: In addition, 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 .
+Added: On May 5, 2021, a certain trustee elected to receive a portion of their compensation in deferred share units and an aggregate of 6,476 shares were granted to this trustee based on the weighted average grant date fair value of $ 15.44 .
+Added: In addition, certain trustees elected to receive a portion of their compensation in LTIP units and an aggregate of 39,756 LTIP units were granted to those trustees based on the weighted average grant date fair value of $ 15.09 .
+Added: On July 1, 2021 a certain trustee elected to receive a portion of their compensation in LTIP units and an aggregate of 12,254 LTIP units were granted to this trustee based on the weighted average grant date fair value of $ 15.02 .
+Added: On November 22, 2021, a certain trustee elected to receive a portion of their compensation in LTIP units and an aggregate of 10,208 LTIP units were granted to this trustee based on the weighted average grant date fair value of $ 14.17 .
2022 Long-Term Incentive Plan
−Removed: 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”).
−Removed: 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).
+Added: On February 11, 2022, the Compensation Committee of the Board of Trustees of the Company (the “Compensation Committee”) approved the Company’s 2022 Long-Term Incentive Plan (“2022 LTI Plan”).
+Added: 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-half of the program) and (ii) performance goals tied to our relative total shareholder return (“TSR”), absolute TSR and FFO as Adjusted growth over a three year performance period (one-half of the program).
The total grant date fair value under the 2022 LTI Plan was $8.6 million, comprising both performance-based and time-based awards.
1 unchanged sentence
All stock options granted have ten-year contractual lives, containing vesting terms of three to five years .
−Removed: 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.
−Removed: The following table presents stock option activity for the years ended December 31, 2020, 2019, and 2018:
−Removed: Shares Under Options Weighted Average Exercise Price per Share Weighted Average Remaining Expected Term
+Added: The following table presents stock option activity for the year ended December 31, 2021:
+Added: Shares Under Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term
Outstanding at January 1, 2021 4,930,762 $ 22.89 —
3 unchanged sentences
Outstanding at December 31, 2021 3,930,762 $ 23.19 3.56
−Removed: Granted 180,213 19.53 3.88
−Removed: Exercised — — —
−Removed: Forfeited or expired — — —
−Removed: Outstanding at December 31, 2019 4,930,762 22.89 4.46
−Removed: Granted — — —
−Removed: Exercised — — —
−Removed: Forfeited or expired — — —
−Removed: Outstanding at December 31, 2020 4,930,762 $ 22.89 4.07
Exercisable at December 31, 2021 3,156,449 $ 23.61 —
−Removed: No options were granted during the year ended December 31, 2020.
−Removed: The weighted average grant date fair value of options granted in 2019 and 2018 was $ 3.88 and $ 4.68 , respectively.
−Removed: The options were granted with an exercise price equivalent to the average of the high and low share price on the grant date.
−Removed: No options were exercised during the years ended December 31, 2018, 2019 and 2020.
+Added: No options were granted or exercised during the year ended December 31, 2021.
As of December 31, 2021, there was no intrinsic value for the outstanding and exercisable shares under option.
−Removed: 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:
−Removed: February 22, 2018 September 27, 2018 February 27, 2019
−Removed: Risk-free interest rate 2.73 % 3.00 % 2.54 %
−Removed: Expected option life 6.25 7.00 6.25
−Removed: Expected volatility 32.23 % 30.42 % 30.98 %
Restricted Shares
6 unchanged sentences
Unvested at December 31, 2021 49,347 $ 17.23
−Removed: Granted 34,638 19.15
−Removed: Vested ( 96,378 ) 24.19
−Removed: Forfeited ( 5,672 ) 22.11
−Removed: Unvested at December 31, 2019 95,165 22.16
−Removed: Granted 31,679 17.47
−Removed: Vested ( 51,524 ) 23.88
−Removed: Forfeited ( 2,927 ) 18.79
−Removed: Unvested at December 31, 2020 72,393 $ 19.03
−Removed: 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 .
−Removed: 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.
+Added: During the year ended December 31, 2021, we granted 17,933 restricted shares that are subject to forfeiture and vest over periods ranging from one to three years.
+Added: The total grant date value of the 35,674 restricted shares vested during the year ended December 31, 2021 was $ 0.7 million.
Restricted Units
1 unchanged sentence
During the years ended December 31, 2021, 2020 and 2019, 271,635 , 433,016 , and 131,884 units vested, respectively.
−Removed: 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.
+Added: There were no restricted units converted to common shares during the year ended December 31, 2021.
+Added: During the year ended December 31, 2020, 223,553 restricted units were converted to common shares.
+Added: As of December 31, 2021 the remaining 629,931 units vest over a weighted average period of approximately two years .
Share-Based Compensation Expense
11 unchanged sentences
Total Share-based compensation expense $ 10,819 $ 16,994 $ 13,549
−Removed: (1) LTIP expense includes the time-based portion of the 2020, 2019 and 2018 L TI Plans.
−Removed: (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.
+Added: (1) LTIP expense includes the time-based portion of the 2021, 2020, 2019 and 2018 LTI Plans.
+Added: (2) Performance-based LTI expense includes the 2017 OPP plan and the performance-based portion of the 2021, 2020, 2019 and 2018 LTI Plans.
As of December 31, 2021, we had a total of $ 13.2 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.
6 unchanged sentences
The computation of diluted EPS reflects potential dilution of securities by adding potential common shares, including stock options and unvested restricted shares, to the weighted average number of common shares outstanding for the period.
−Removed: 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.
−Removed: 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.
+Added: For the years ended December 31, 2021, 2020 and 2019 there were options outstanding for 3,930,762 shares that potentially could be exercised for common shares.
+Added: During the years ended December 31, 2021, 2020 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.
In addition, as of December 31, 2021 there were 49,347 unvested restricted shares outstanding that potentially could become unrestricted common shares.
14 unchanged sentences
Effect of dilutive securities:
−Removed: Stock options using the treasury stock method — — —
Restricted share awards 55 77 100
20 unchanged sentences
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.