What changed in this filing

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Item 1. Business

2023-02-14 compared with 2022-02-16 · 96 added, 31 removed, 85 unchanged (60% of the section changed)

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UE) is a Maryland REIT that manages, develops, redevelops, and acquires retail real estate, primarily in the Washington, D.C.

to Boston corridor with a concentration on the New York metropolitan area.

to Boston corridor.

Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of our real estate and other assets.

Our portfolio is currently comprised of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million square feet (“sf”) with a consolidated occupancy rate of 90.3%.

For additional information on recent business developments, see Item 7.

For additional information on recent business developments, see Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report on Form 10-K.

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Our existing portfolio presents considerable opportunity to generate additional income at attractive returns by redeveloping underutilized existing space, developing new space through expanding our properties and developing pad sites, and incorporating non-retail uses such as industrial, multifamily, office, self-storage and other uses.

As of December 31, 2021, we have $218.7 million of active redevelopment projects, of which $146.6 million remains to be funded.

As of December 31, 2022, we have $216 million of active development, redevelopment, and anchor repositioning projects, of which $159.7 million remains to be funded.

These projects are expected to generate an approximate 12% unleveraged yield.

Active redevelopment projects include $102.2 million of projects related to anchor leases executed during the year.

We will continue to explore opportunities throughout our portfolio to achieve similar upgrades in tenancy, to densify sites where feasible and to repurpose certain retail space to non-retail uses.

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We seek assets in underserved, high barrier-to-entry markets in densely populated, affluent trade areas.

We believe that properties located in such markets present more attractive risk-return profile relative to other markets.

We believe that properties located in such markets present a more attractive risk-return profile relative to other markets.

• Geography :

We focus primarily on the Washington, D.C.

to Boston corridor with a concentration on the New York metropolitan area.

to Boston corridor.

We intend to invest in our existing core markets, and, over time, may expand into new markets that have similar characteristics.

• Environmental :

We consider asset sustainability and characteristics that are consistent with our environmental, social and governance (“ESG”) plans and strategy for the future.

Our due diligence process includes a full assessment of potential environmental risks associated with acquisitions.

We generally seek large properties that provide scale relative to the competition and optionality for redevelopment to meet the changing demands of the local community.

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We expect to generate increasing levels of cash flow from internally generated funds and to have substantial borrowing capacity under our existing revolving credit agreement, general access to equity markets and from potential secured debt financing on our existing assets.

Environmental, Social and Governance (“ESG”) Achievements, Initiatives, and Objectives

Environmental, Social and Governance Achievements, Initiatives, and Objectives

We seek to drive financial performance while engaging in environmentally and socially responsible business practices grounded in sound corporate governance.

We believe that disclosure around our ESG practices allows our stakeholders to see our company holistically and understand its trajectory beyond fundamentals and financial metrics.

In addition to a dedicated team of professionals, we have a robust suite of environmental, social, and governance policies that inform and guide our ESG approach and drive our ESG goals forward.

We believe that disclosure of our ESG practices allows our stakeholders to see our company holistically and understand its trajectory beyond fundamentals and financial metrics.

We have an ESG Steering Committee (the “Steering Committee”) comprised of executives, senior leadership and other personnel of the Company.

The Steering Committee meets periodically and is focused on setting, implementing, tracking, measuring, and communicating our progress related to ESG initiatives.

The Steering Committee has developed a comprehensive suite of environmental, social, and governance policies that inform and guide our ESG approach and drive our ESG goals forward.

We have aligned our sustainability practices in accordance with the Global Reporting Initiative (“GRI”) standards and commensurate with the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-Related Financial Disclosures (“TCFD”) frameworks.

In line with our corporate transparency, we have completed our first Global Real Estate Sustainability Benchmarks (“GRESB”) submission and will continue to benchmark our progress against our peers.

On an annual basis, we publish an ESG Report and complete a Global Real Estate Sustainability Benchmarks (“GRESB”) submission to continue to measure our progress against peers.

We routinely reassess our plans and policies to evaluate compliance with regional and national requirements as well as industry best practices.

Environmental

From an environmental perspective, we have implemented and plan to continue to implement policies and practices with the goal of supporting the continued reduction of energy (thereby reducing greenhouse gas emissions), water, and waste production across the portfolio.

Initiatives we have taken include the installation of energy-efficient roofing, LED lighting retrofits, electric vehicle charging stations and waste recycling and management.

Additionally, we are continuing to research solar and alternative energy options to further reduce our consumption and carbon footprint.

Initiatives we have taken include the installation of energy-efficient roofing, LED lighting retrofits, high efficiency HVAC systems, electric vehicle charging stations and waste recycling and management.

Additionally, we continue to explore solar and alternative energy opportunities to further reduce our consumption and carbon footprint.

We are committed to maintaining sustainable operations and believe that our long-term sustainability goals will provide positive financial and environmental outcomes for shareholders, tenants, employees and the communities in which we invest.

We believe that through our business, we are able to provide the communities in which we operate a welcoming and safe environment for our tenants and customers to connect and engage with one another.

We consciously choose to add retailers that we believe are needed to neighborhoods lacking vital resources and reposition spaces with uses that appeal to the respective communities where the properties are located.

Our community involvement also includes donations to various charitable organizations, hospitals and COVID-19 relief funds as well as food, coat and clothing drives.

Our community involvement includes donations to various charitable organizations, hospitals, and relief funds as well as food and clothing drives.

Many of these organizations and drives directly benefit the people and neighborhoods in which our properties are located.

During 2022, the Company joined the NCSY Relief Missions, a Northern New Jersey based youth organization, in an immersive community engagement effort to help those affected by recent hurricane damage in Puerto Rico, near our property The Outlets at Montehiedra.

In addition, we continue to partner with organizations like Relief Access Program for the Bronx (“RAP4Bronx”), a non-profit organization responsible for delivering meals to those suffering from food insecurity in the Bronx.

Our contributions towards RAP4Bronx include the donation of vacant space that serves as a warehouse and distribution hub for the organization, as well as monetary donations from the Company and our employees.

We believe that through our business, we are able to provide the communities in which we operate a welcoming and safe environment for our tenants and customers to connect and engage with one another.

We are committed to providing a better shopping experience for our customers by spending capital to redevelop our centers, which also results in the creation of new jobs in construction and retail.

Additionally, we are deliberate in our leasing approach by adding necessary retailers to neighborhoods lacking vital resources and those that appeal to the respective communities where the properties are located.

Our corporate governance standards and policies aim to promote ethical conduct, fair dealing, transparency and accountability.

The Company is governed by a ten-member board comprised primarily of independent trustees.

The Board of Trustees is focused on independence, diversity of thought and experience, and ethical leadership and is critical in the oversight of our risk-management processes.

Additionally, we have three board committees made up of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, each of which addresses risks specific to their respective functional responsibilities and works closely with the Board of Trustees.

The Company is governed by a nine-member board comprised primarily of independent trustees.

The Board of Trustees is focused on independence, diversity of thought, experience and ethical leadership, and is critical in the oversight of our risk-management processes.

functional responsibilities and works closely with the Board of Trustees.

Our Corporate Governance Guidelines are re-evaluated annually, taking into account changing circumstances to ensure that the best interests of the Company and our shareholders are met.

We maintain additional policies including our Code of Ethics, Conflict of Interest Policy, and Whistleblower Policy, on which all employees are trained.

Further information on our ESG practices can be found on our website in the Investors section.

The information on our website is not incorporated by reference in this Annual Report on Form 10-K.

We are subject to federal, state and local regulations, including environmental regulations.

Each of our properties has been subjected to varying degrees of environmental assessment at various times.

Based on these assessments, we have accrued costs for remediation for environmental contamination at certain properties.

As of the date of this Report on Form 10-K, we are not aware of any material costs of complying with government regulations, including environmental regulations, that would have a material adverse effect on our overall business, financial condition or results of operations.

See “Risks Related to Environmental Liability and Regulatory Compliance” in Part 1, Item 1A "Risk Factors" for further information regarding our risks related to government regulations.

Human Capital

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We provide professional training and development workshops and aim to provide a workplace environment where employees are informed, engaged, feel empowered, and can succeed.

As part of our employee development, we have launched an employee-performance tracking

platform which serves as a year-round benchmark tool and allows employees and managers to take notes, set goals and track progress.

Additionally, the Company launched a mentorship program designed to provide members of the team an opportunity to expand their knowledge and experience through one-on-one mentorship with an employee from another department.

The goal of this initiative is to promote a culture of learning while providing opportunities for professional and personal growth.

Our employees enjoy subsidized health and wellness benefits, professional training and development workshops, ergonomic office equipment, telecommuting opportunities and policies encouraging work/life balance.

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The areas of focus for this program include financial, emotional, physical, social and community wellness.

Each month there is a theme with associated activities and employee incentives including the ability to earn additional money for health savings accounts and raffles for prizes.

Each month there is a theme with associated activities and employee incentives including the ability to earn additional money for health savings accounts.

We understand the importance of work/life balance and allow employees the flexibility to maintain a hybrid in-office and remote working schedule.

We provide all employees with the equipment and resources necessary to work and perform their duties in a remote setting.

In response to the COVID-19 pandemic, we have implemented enhanced cleaning protocols within our offices and our properties to promote employee health and safety, which include cleaning and disinfecting high-touch surfaces daily, providing hand sanitizer and personal protective equipment such as face masks.

Diversity, equity and inclusion (“DE&I”) are an integral part of our culture.

We have implemented enhanced cleaning protocols within our offices and our properties to promote employee health and safety, which include cleaning and disinfecting high-touch surfaces daily, providing hand sanitizer and personal protective equipment such as face masks.

Diversity, equity and inclusion (“DE&I”) initiatives are an integral part of our culture.

We believe that a diverse workforce and an inclusive culture promotes growth, both personally and professionally, and is an important aspect in our ability to attract and retain talented employees.

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We aim to create an equitable workplace for all, and our CEO has signed the CEO Diversity and Inclusion Action Pledge on behalf of our Company, joining thousands of other CEOs and peers across the country to cultivate a trusting environment where our employees feel comfortable and are empowered to have discussions about diversity and inclusion.

Through our Wellness program, health and safety protocols and quarterly town hall meetings with all employees, among other initiatives, we continually strive to provide a workplace environment where employees are informed, engaged, feel empowered and can succeed.

As a part of this pledge, the Company has created a Days of Understanding initiative which provides different platforms such as a book club or a movie screening as a way to encourage our team to have open discussions on issues of diversity, equity and inclusion.

This program is designed to allow employees to not only gain a better understanding of culture issues tied to race, gender, and sexual orientation, but also drive engagement, build camaraderie, and learn from different perspectives.

Our efforts, like those mentioned above, are some of the many reasons Urban Edge Properties was named one of the best places to work in New Jersey by NJBIZ Magazine in 2022.

The annual program identifies and recognizes the best employers in the state of New Jersey.

Through our wellness and DE&I programs, health and safety protocols and town hall meetings with all employees, among other initiatives, we continually strive to provide a workplace environment where employees are informed, engaged, feel empowered and can succeed.

Further information on our corporate responsibility practices can be found on our website in the ESG section.

The information on our website is not incorporated by reference in this Annual Report on Form 10-K.

Our headquarters are located at 888 Seventh Avenue, New York, NY 10019.

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None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2022, 2021 and 2020.

The TJX Companies, Inc.

The Home Depot, Inc.

is our largest tenant and accounted for approximately $21.4 million, or 5.4%, of our total revenue for the year ended December 31, 2022.

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

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

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

In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, 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.

So long as the Company qualifies as a REIT under the Code, the Company will not be subject to U.S.

federal income tax on net taxable income that it distributes annually to its shareholders.

If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years.

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 and comprehensive income.

In addition, the Company’s taxable REIT subsidiary (“TRS”) is subject to income tax at regular corporate rates.

Supplemental U.S.

Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under “Certain United States Federal Income Tax Considerations” in the prospectus dated August 15, 2022, contained in our Registration Statement on Form S-3 (File No.

333-266885) filed with the SEC on August 15, 2022.

Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in such disclosures (as supplemented).

On December 29, 2022, the Internal Revenue Service promulgated final Treasury Regulations under Sections 897, 1441, 1445, and 1446 of the Code that were, in part, intended to coordinate various withholding regimes for non-U.S.

shareholders.

The new Treasury Regulations provide that:

The withholding rules applicable to ordinary REIT dividends paid to a non-U.S.

shareholder (generally, a 30% rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-U.S.

shareholder’s trade or business within the United States and proper certifications are provided) will apply to (a) that portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S.

shareholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain attributable to the sale or exchange of a U.S.

real property interest by reason of the recipient not owning more than 10% of a class of our stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.

The withholding rules under FIRPTA will apply to a distribution paid by us in excess of a non-U.S.

shareholder’s adjusted basis in our stock, unless the interest in our stock is not a U.S.

real property interest (for example, because we are a domestically controlled qualified investment entity) or the distribution is paid to a “withholding qualified holder.” A “withholding qualified holder” means a qualified holder (as defined below) and a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships.

The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S.

shareholder that is attributable to the sale or exchange of a U.S.

real property interest, unless it is paid to a withholding qualified holder.

In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of FIRPTA withholding under clause (iii) above the withholding rate is currently 21%.

For purposes of FIRPTA withholding under clause (iii), whether a capital gain dividend is attributable to the sale or exchange of a U.S.

real property interest is determined taking into account the general exception from FIRPTA distribution treatment for distributions paid to certain non-U.S.

shareholders under which any distribution by us to a non-U.S.

shareholder with respect to any class of stock which is regularly traded on an established securities market located in the United States is not treated as gain recognized from the sale or exchange of a U.S.

real property interest if such non-U.S.

shareholder did not own more than 10% of such class of stock at any time during the 1-year period ending on the date of such distribution.

To the extent inconsistent, these Treasury Regulations supersede the discussion on withholding contained in the above-referenced disclosures (as supplemented) under the heading “ Certain United States Federal Income Tax Considerations—Taxation of Non-U.S.

Shareholders .” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S.

federal withholding rate that we determine could apply.

The new Treasury Regulations also provide new guidance regarding qualified foreign pension funds.

Accordingly, the last two sentences of the first paragraph under the heading “ Certain United States Federal Income Tax Considerations—Taxation of Non-U.S.

Shareholders—Qualified Foreign Pension Funds ” are hereby deleted and replaced with the following:

Under Treasury Regulations, subject to the discussion below regarding “qualified holders,” a “qualified controlled entity” also is not generally treated as a foreign person for purposes of FIRPTA.

A qualified controlled entity generally includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities.

Additionally, the following two paragraphs are added after the first paragraph under the heading “ Certain United States Federal Income Tax Considerations—Taxation of Shareholders and Potential Tax Considerations Relating to Their Investment in Common Shares or Preferred Shares—Taxation of Non-U.S.

Shareholders—Qualified Foreign Pension Funds ”:

Treasury Regulations further require that a qualified foreign pension fund or qualified controlled entity will not be exempt from FIRPTA with respect to dispositions of U.S.

real property interests or REIT distributions attributable to the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests at the time of the disposition of the U.S.

real property interest or the REIT distribution.

Under the first test, a qualified foreign pension fund or qualified controlled entity is a qualified holder if it owned no U.S.

real property interests as of the earliest date during an uninterrupted period ending on the date of the disposition or distribution during which it qualified as a qualified foreign pension fund or qualified controlled entity.

Alternatively, if a qualified foreign pension fund or qualified controlled entity held U.S.

real property interests as of the earliest date during the period described in the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements.

Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships, may certify its status as such and will not be treated as a foreign person for purposes of withholding under Code Section 1445 (and Code Section 1446, as applicable).

Available Information

Copies of our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners of us, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website (www.uedge.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.

Copies of our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, including exhibits, and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners of us, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website (www.uedge.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).

Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics and Corporate Governance Guidelines.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business