What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-14 compared with 2022-02-16 · 358 added, 361 removed, 1012 unchanged (42% of the section changed)

6 unchanged sentences

Urban Edge Properties Consolidated Balance Sheets as of December 31, 2022 and 2021

Urban Edge Properties Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 43

Urban Edge Properties Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

Urban Edge Properties Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020

1 unchanged sentence

Urban Edge Properties LP Consolidated Balance Sheets as of December 31, 2022 and 2021

Urban Edge Properties LP Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 48

Urban Edge Properties LP Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

Urban Edge Properties LP Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020

6 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Urban Edge Properties and subsidiaries (the "Company") as of December 31, 2021 and 2020, 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").

We have audited the accompanying consolidated balance sheets of Urban Edge Properties and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

20 unchanged sentences

Total real estate assets as of December 31, 2022 had a net book value of $2.5 billion.

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

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

How the Critical Audit Matter Was Addressed in the Audit

1 unchanged sentence

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

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

• We inquired with management regarding their determination of the capitalization rates and evaluated the consistency of the capitalization rates used with evidence obtained in other areas of our audit.

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

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

◦ 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 geographical location, tenant composition, and property type.

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

6 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Urban Edge Properties LP (the "Operating Partnership") as of December 31, 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").

We have audited the accompanying consolidated balance sheets of Urban Edge Properties LP and subsidiaries (the "Operating Partnership") as of December 31, 2022 and 2021, the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

20 unchanged sentences

Total real estate assets as of December 31, 2022 had a net book value of $2.5 billion.

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

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

How the Critical Audit Matter Was Addressed in the Audit

1 unchanged sentence

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

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

◦ 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 geographical location, tenant composition, and property type.

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

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Additional paid-in capital 1,011,293 1,001,253

Accumulated other comprehensive income 629 —

Accumulated deficit ( 36,104 ) ( 7,091 )

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URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share and per share amounts)

2 unchanged sentences

Rental revenue $ 396,376 $ 422,467 $ 328,280

Management and development fees 1,169 1,283 1,900

Other income 1,562 2,615 1,815

4 unchanged sentences

General and administrative 43,087 39,152 48,682

Casualty and impairment loss, net (1)

468 3,055 12,738

Casualty and impairment loss — 468 3,055

Lease expense 12,460 12,872 13,667

1 unchanged sentence

Gain on sale of real estate 353 18,648 39,775

Gain on sale of lease — — 1,849

Interest income 1,107 360 2,599

4 unchanged sentences

Net income 47,339 107,815 97,750

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

Less net (income) loss attributable to NCI in:

Operating partnership ( 1,895 ) ( 4,296 ) ( 4,160 )

7 unchanged sentences

Weighted average shares outstanding - Diluted 121,640 121,447 117,902

(1) Refer to Note 2 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Net Income $ 47,339 $ 107,815 $ 97,750

Effective portion of change in fair value of derivatives 656 — —

Comprehensive income 47,995 107,815 97,750

Less comprehensive income attributable to NCI in:

Operating partnership ( 27 ) — —

Less net (income) loss attributable to NCI in:

Operating partnership ( 1,895 ) ( 4,296 ) ( 4,160 )

Consolidated subsidiaries 726 ( 833 ) ( 1 )

Comprehensive income attributable to common shareholders $ 46,799 $ 102,686 $ 93,589

See notes to consolidated financial statements.

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Shares Amount Additional

Paid-In Capital Accumulated Earnings

(Deficit) Operating Partnership Consolidated Subsidiaries Total Equity

Paid-In Capital Accumulated Other Comprehensive Income Accumulated

(Deficit) Earnings Operating Partnership Consolidated Subsidiaries Total Equity

Balance, January 1, 2020 121,370,125 $ 1,213 $ 1,019,149 $ — $ ( 52,546 ) $ 46,536 $ 424 $ 1,014,776

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

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

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

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

Limited partnership interests:

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

Units redeemed for cash — — ( 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

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 )

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

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

Dividends to common shareholders ($ 0.60 per share)

7 unchanged sentences

Net income attributable to common shareholders — — — — 46,170 — — 46,170

Net income attributable to noncontrolling interests — — — — 4,296 833 5,129

Net income (loss) attributable to noncontrolling interests — — — — — 1,895 ( 726 ) 1,169

Other comprehensive income — — — 629 — 27 — 656

Limited partnership interests:

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Depreciation and amortization 100,787 94,135 97,751

Casualty and impairment loss, net 468 3,055 12,738

Gain on sale of real estate ( 353 ) ( 18,648 ) ( 39,775 )

Gain on sale of lease — — ( 1,849 )

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

Amortization of below market leases, net ( 6,660 ) ( 55,173 ) ( 10,624 )

2 unchanged sentences

Share-based compensation expense 10,486 10,819 16,994

Casualty and impairment loss — 468 3,055

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

Change in operating assets and liabilities:

10 unchanged sentences

Proceeds from sale of operating lease — 2,367 —

Insurance proceeds — — 12,677

Net cash used in investing activities ( 151,913 ) ( 311,160 ) ( 98,460 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 103,413 117,200 90,250

Debt repayments ( 98,334 ) ( 18,192 ) ( 89,302 )

3 unchanged sentences

Debt issuance costs ( 7,292 ) — ( 3,471 )

Payment for redemption of units — — ( 5,978 )

Purchase of interest rate cap ( 285 ) — —

Proceeds related to the issuance of common shares 382 366 398

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

Contributions from noncontrolling interests 1,686 6,241 5,447

Proceeds from borrowings 117,200 90,250 —

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

Net cash used in financing activities ( 78,767 ) ( 23,530 ) ( 80,245 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 199,417 ) ( 65,883 ) 27,614

Net decrease in cash and cash equivalents and restricted cash ( 91,062 ) ( 199,417 ) ( 65,883 )

Cash and cash equivalents and restricted cash at beginning of year 219,836 419,253 485,136

59 unchanged sentences

41,810 41,030

Accumulated other comprehensive income 629 —

Accumulated deficit ( 38,705 ) ( 8,505 )

5 unchanged sentences

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except unit and per unit amounts)

2 unchanged sentences

Rental revenue $ 396,376 $ 422,467 $ 328,280

Management and development fees 1,169 1,283 1,900

Other income 1,562 2,615 1,815

4 unchanged sentences

General and administrative 43,087 39,152 48,682

Casualty and impairment loss, net (1)

468 3,055 12,738

Casualty and impairment loss — 468 3,055

Lease expense 12,460 12,872 13,667

1 unchanged sentence

Gain on sale of real estate 353 18,648 39,775

Gain on sale of lease — — 1,849

Interest income 1,107 360 2,599

12 unchanged sentences

Weighted average units outstanding - Diluted 121,640 122,107 122,811

(1) Refer to Note 2 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Net Income $ 47,339 $ 107,815 $ 97,750

Effective portion of change in fair value of derivatives 656 — —

Comprehensive income 47,995 107,815 97,750

Less net loss (income) attributable to NCI in consolidated subsidiaries 726 ( 833 ) ( 1 )

Comprehensive income attributable to unitholders $ 48,721 $ 106,982 $ 97,749

See notes to consolidated financial statements.

3 unchanged sentences

Total Shares General Partner Total Units Limited Partners (1)

Accumulated Earnings

(Deficit) NCI in Consolidated Subsidiaries Total Equity

Accumulated Other Comprehensive Income Accumulated

(Deficit) Earnings NCI in Consolidated Subsidiaries Total Equity

Balance, January 1, 2020 121,370,125 $ 1,020,362 5,833,318 $ 50,156 $ — $ ( 56,166 ) $ 424 $ 1,014,776

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

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

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

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

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

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

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

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

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 )

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 )

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

Reallocation of noncontrolling interests — 8,206 — ( 2,744 ) — — — 5,462

6 unchanged sentences

Net income attributable to unitholders — — — — — 48,065 — 48,065

Net income attributable to noncontrolling interests — — — — — 833 833

Net loss attributable to noncontrolling interests — — — — — — ( 726 ) ( 726 )

Other comprehensive income — — — — 629 27 — 656

Common units issued as a result of common shares issued by Urban Edge 60,193 466 300,904 — — ( 84 ) — 382

18 unchanged sentences

Depreciation and amortization 100,787 94,135 97,751

Casualty and impairment loss, net 468 3,055 12,738

Gain on sale of real estate ( 353 ) ( 18,648 ) ( 39,775 )

Gain on sale of lease — — ( 1,849 )

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

Amortization of below market leases, net ( 6,660 ) ( 55,173 ) ( 10,624 )

2 unchanged sentences

Share-based compensation expense 10,486 10,819 16,994

Casualty and impairment loss — 468 3,055

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

Change in operating assets and liabilities:

10 unchanged sentences

Proceeds from sale of operating lease — 2,367 —

Insurance proceeds — — 12,677

Net cash used in investing activities ( 151,913 ) ( 311,160 ) ( 98,460 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 103,413 117,200 90,250

Debt repayments ( 98,334 ) ( 18,192 ) ( 89,302 )

2 unchanged sentences

Debt issuance costs ( 7,292 ) — ( 3,471 )

Payment for redemption of units — — ( 5,978 )

Purchase of interest rate cap ( 285 ) — —

Proceeds related to the issuance of common shares 382 366 398

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

Contributions from noncontrolling interests 1,686 6,241 5,447

Proceeds from borrowings 117,200 90,250 —

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

Net cash used in financing activities ( 78,767 ) ( 23,530 ) ( 80,245 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 199,417 ) ( 65,883 ) 27,614

Net decrease in cash and cash equivalents and restricted cash ( 91,062 ) ( 199,417 ) ( 65,883 )

Cash and cash equivalents and restricted cash at beginning of year 219,836 419,253 485,136

24 unchanged sentences

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE:

UE) is a Maryland real estate investment trust focused on managing, developing, redeveloping, and acquiring retail real estate in urban communities, primarily in the New York metropolitan area.

UE) is a Maryland real estate investment trust focused on managing, developing, redeveloping, and acquiring retail real estate in urban communities, primarily in the Washington, D.C.

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 the Company’s real estate properties and other assets.

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All intercompany transactions have been eliminated in consolidation.

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.

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

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

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

We do not distinguish our primary business or group our operations on a geographical basis for purposes of measuring performance.

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.

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.

The Company’s chief operating decision maker reviews operating and financial information at the individual operating segment.

W e 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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Actual results

could differ from those estimates.

Actual results could differ from those estimates.

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.

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.

For more information on these estimates and policies refer to Part II, Item 7 “Critical Accounting 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.

The capitalization period begins when redevelopment activities are under way and ends when the project is substantially complete.

The capitalization period begins when redevelopment activities are under way and ends when the project is substantially complete and ready for its intended use.

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

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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.

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.

Our properties and development projects 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, operating performance, and environmental and regulatory changes, which may result in property operational disruption and could indicate that the carrying amount may not be recoverable.

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

3 unchanged sentences

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

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

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

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

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

in this Annual Report on Form 10-K.

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.

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”).

The majority of our cash and cash equivalents consist 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.

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

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

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

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.

3 unchanged sentences

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.

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.

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 and comprehensive income.

Deferred leasing costs also includes lease incentives that can be used at the discretion of the tenant.

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.

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

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 and comprehensive income.

Deferred Financing Costs — Deferred financing costs and debt issuance costs include fees associated with the issuance of our mortgage loans and our revolving credit agreement.

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

No amounts were drawn or outstanding under the revolving credit agreement as of December 31, 2022.

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

Deferred financing costs associated with the revolving credit agreement are included in prepaid expenses and other assets on the

consolidated balance sheets.

Deferred financing costs associated with our mortgage loans are included in Mortgages payable, net on the consolidated balance sheets.

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

5 unchanged sentences

• Other Income:

Other income is generated in connection with certain services provided to tenants for which we earn a fee.

Other income is generated in connection with certain services provided to tenants for which we earn a fee as well as management and development fee income from contractual property management agreements with third parties.

This revenue is recognized as the services are transferred in accordance with ASC 606 Revenue from Contracts with Customers .

• Management and development fees:

We generate management and development fee income from contractual property management agreements with third parties.

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

Leases — We have approximately 900 operating leases at our properties, which generate rental income from tenants and operating cash flows for the Company.

12 unchanged sentences

Variable lease payments dependent on percentage rent and the CPI were $ 9.2 million and $ 9.8 million for the years ended December 31, 2022 and 2021, respectively.

the respective property and amounted to $ 101.3 million and $ 96.7 million for the years ended December 31, 2021 and 2020, respectively.

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.

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 $ 103.3 million and $ 101.3 million for the years ended December 31, 2022 and 2021, respectively.

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

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.

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 .

These properties are leased or subleased to us pursuant to ground leases, building leases or easements, with remaining terms ranging from two to 77 years and provide us the right to operate each such property.

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

Right-of-use ("ROU") assets are recorded for these leases, which represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from these leases.

6 unchanged sentences

The Company initially considers the general economic environment and factors in various financing and asset specific secured borrowings so that the overall incremental borrowing rate is appropriate to the intended use of the lease.

Certain expenses derived from these leases are variable and are not included in the measurement of the corresponding lease liability and ROU asset, but are recognized in the period in which the obligation for those payments is incurred.

Certain expenses derived from these

leases are variable and are not included in the measurement of the corresponding lease liability and ROU asset, but are recognized in the period in which the obligation for those payments is incurred.

These variable lease payments consist of payments for real estate taxes and common area maintenance, which is dependent on projects and activities at each individual property under ground or building lease.

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Compensation expense for restricted share awards is based on the fair value of our common shares at the date of the grant and is recognized ratably over the vesting period.

For grants with a graded vesting schedule or a cliff vesting schedule, we have elected to recognize compensation expense on a straight-line basis.

For grants with a graded vesting schedule or a cliff vesting schedule, we have

elected to recognize compensation expense on a straight-line basis.

The OPP unrecognized compensation expense is recognized on a straight-line basis over the remaining life of the OPP awards issued.

Share-based compensation expense is included in general and administrative expenses on the consolidated statements of income.

Share-based compensation expense is included in general and administrative expenses on the consolidated statements of income and comprehensive income.

When the Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership.

2 unchanged sentences

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

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

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

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

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.

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

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None of our tenants accounted for more than 10% of total revenues in the year ended December 31, 2022.

As of December 31, 2021, The TJX Companies, Inc.

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.

As of December 31, 2022, The Home Depot, Inc.

was our largest tenant with six stores which comprised an aggregate of 808,926 sf and accounted for approximately $ 21.4 million, or 5.4 % of our total revenue for the year ended December 31, 2022.

Derivative Financial Instruments and Hedging — At times, the Company may use derivative financial instruments to manage and mitigate exposure to fluctuations in interest rates on our variable rate debt.

These derivatives are measured at fair value and are recognized as assets or liabilities on the Company’s consolidated balance sheets, depending on the Company’s rights or obligations under the respective derivative contracts.

The accounting for changes in the fair value of a derivative varies based on eligibility and Company elections, including the intended use of the derivative, whether the Company has elected to designate the derivative in a hedging relationship and apply hedge accounting, and whether the hedge relationship has satisfied certain criteria to be deemed an effective hedge.

Effectiveness of the hedging relationship is assessed on a quarterly basis by a third party to determine if the relationship still meets the criteria to be considered an effective hedge.

Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

In a cash flow hedge, hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the earnings effect of the hedged transaction.

A derivative instrument designated as a cash flow hedge is adjusted to fair value on the Company’s consolidated balance sheets.

The change in fair value, net of the amortization of the purchase price of the instrument, is deemed to be the effective portion of change and is recognized in Other Comprehensive Income (“OCI”) in the Company’s consolidated statements of income and comprehensive income, with the amortization of the purchase price included in interest and debt expense.

Cash flows from the derivative are included in the

prepaid expenses and other assets, or accounts payable, accrued expenses and other liabilities line item in the statement of cash flows, depending on whether the hedged item is recognized as an asset or a liability.

For further information on the Company’s derivative instruments and hedge designations, refer to Note 9 .

Recently Issued Accounting Literature

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).

In connection with the adoption of ASU 2016-02, we also adopted (i) ASU 2019-01 Leases (ASC 842):

Codification Improvements , (ii) ASU 2018-20 Leases (ASC 842):

Narrow-Scope Improvements for Lessors , (iii) ASU 2018-11 Leases (ASC 842):

Targeted Improvements , (iv) ASU 2018-10 Codification Improvements to ASC 842, Leases and (v) ASU 2018-01 Leases (ASC 842):

Land Easement Practical Expedient for Transition to Topic 842.

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

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

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

This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease.

A lessee is also required to record a ROU asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

The Company has elected the short-term lease recognition exemption, and therefore, leases with a term of 12 months or less are not recognized on the balance sheet.

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

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

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.

From a lessee perspective, the initial adoption on January 1, 2019 resulted in the recognition of operating lease ROU assets and lease liabilities.

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.

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.

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.

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.

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.

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

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

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

We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04, which allows entities to account for the modification as if the modification was not substantial.

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

In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 Reference Rate Reform (ASC 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and ASU 2021-01 Reference Rate Reform (ASC 848):

Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met.

ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022.

In December 2022, FASB issued ASU 2022-06 Reference Rate Reform (ASC 848):

Deferral of the Sunset Date of Topic 848 , which extended the final sunset date from December 31, 2022 to December 31, 2024.

There were no modifications to our existing debt agreements as a result of reference rate reform in the current year, however, we refinanced two loans in 2022 previously indexed to LIBOR, which are now indexed to SOFR and the Prime Rate.

We plan to transition all variable rate loans currently indexed to LIBOR to SOFR, based on discussions with our lenders.

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

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

The Company 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.

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.

The Company made the election to account for rent concessions using the receivable approach or variable approach on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.

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.

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.

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

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(in thousands)

August 10, 2021 601 Murray Road East Hanover NJ 88,000 $ 18,312

August 19, 2021 151 Ridgedale Avenue East Hanover NJ 187,000 37,759

December 23, 2021 Woodmore Towne Centre Glenarden MD 712,000 198,055

February 24, 2022 40 Carmans Road (2)

Massapequa NY 12,000 $ 4,260

June 8, 2022 The Shops at Riverwood Hyde Park MA 78,000 33,343

2022 Total $ 37,603

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

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

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

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

August 10, 2021 601 Murray Road (3)

East Hanover NJ 88,000 $ 18,312

August 19, 2021 151 Ridgedale Avenue (3)

East Hanover NJ 187,000 37,759

December 23, 2021 Woodmore Towne Centre Glenarden MD 712,000 198,055

2021 Total $ 254,126

(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.

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.

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.

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.

To partially fund the acquisition, the Company entered into a 10 -year, $ 117.2 million non-recourse first mortgage secured by the property.

The mortgage has a fixed interest rate of 3.39 % and is interest-only for the entire loan term.

(1) The total purchase price for the properties acquired in the years ended December 31, 2022 and December 31, 2021 include $ 0.6 million and $ 5.2 million, respectively, of transaction costs incurred related to the transactions.

(2) The outparcel is included with Sunrise Mall in our total property count.

The Company has an 82.5 % controlling interest in the property with the remaining 17.5 % owned by others.

(3) These properties are included with East Hanover Warehouses in our total property count.

During the year ended December 31, 2022, the Company purchased two assets, comprising 90,000 sf, at an aggregate purchase price of $ 37.6 million.

The 12,000 sf outparcel acquired in February 2022, located at 40 Carmans Road, is adjacent to the entrance of our mall in Massapequa, NY.

This acquisition supports the overall plans we currently have under way to redevelop Sunrise Mall.

On June 8, 2022, the Company closed on the acquisition of The Shops at Riverwood, a 78,000 sf grocery-anchored shopping center located in Hyde Park, MA, for a purchase price of $ 33.3 million, including transaction costs.

The center is located in the greater Boston area and is anchored by a grocer and a strong array of national and regional tenants.

During the year ended December 31, 2021, the Company purchased three assets with a total consideration of $ 254.1 million.

The two industrial properties, acquired in August 2021, are adjacent to our existing 943,000 sf warehouse park in East Hanover, NJ.

The acquisition of 151 Ridgedale Avenue was partially funded via a 1031 exchange using cash proceeds from previous dispositions.

The Company purchased four assets with a total consideration of $ 199.5 million during the year ended December 31, 2020.

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.

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

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

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

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

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;

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

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

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

The property 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.

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

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

Identified intangible liabilities (1)

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

Other assets, net Total Purchase Price

(in thousands)

40 Carmans Road $ 1,118 $ 3,142 $ — $ — $ — $ 4,260

The Shops at Riverwood 10,866 19,441 4,024 ( 988 ) — 33,343

2022 Total $ 11,984 $ 22,583 $ 4,024 $ ( 988 ) $ — $ 37,603

601 Murray Road $ 2,075 $ 14,733 $ 1,722 $ ( 218 ) $ — $ 18,312

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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

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

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

Sunrise Mall (2)

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

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

(1) As of December 31, 2022, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2022 were 8.6 years and 16.2 years, respectively and the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2021 were 8.3 years and 13.9 years, respectively.

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

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

(2) 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.

During the year ended December 31, 2022, no dispositions were completed by the Company.

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.

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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.

Real Estate Held for Sale

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

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

The parcel was sold in January 2021.

There was no real estate held for sale as of December 31, 2021.

IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES

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Amortization of acquired below-market leases, net of acquired above-market leases resulted in rental income of $ 6.7 million , $ 55.2 million , and $ 10.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

On September 29, 2021, the Company entered into agreements to terminate our three remaining Kmart and Sears leases effective October 15, 2021.

On September 29, 2021, the Company entered into agreements to terminate certain leases, effective October 15, 2021.

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.

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Amortization of acquired in-place leases and customer relationships resulted in depreciation and amortization expense of $ 10.9 million , $ 8.6 million , and $ 10.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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.

During 2021, we recognized $ 0.4 million of accelerated amortization of the in-place lease intangibles related to the terminations of the leases 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, 2023:

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Variable rate

Cherry Hill (Plaza at Cherry Hill) (1)

5/24/2022 1.70 % $ 28,244 $ 28,930

Woodbridge (Plaza at Woodbridge) (1)

Hudson Commons (1)

11/15/2024 5.97 % $ 27,482 $ 28,034

Jersey City (Hudson Commons) (2)

Greenbrook Commons (1)

11/15/2024 5.97 % 25,581 26,097

Gun Hill Commons (1)

12/1/2024 5.97 % 24,188 24,680

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

Plaza at Cherry Hill (2)

6/15/2025 8.00 % 29,000 28,244

Westfield (One Lincoln Plaza) (3)

Plaza at Woodbridge (3)

6/8/2027 5.26 % 52,947 54,029

Total variable rate debt 159,198 161,084

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

Bronx (Shops at Bruckner) 5/1/2023 3.90 % 9,698 10,351

Jersey City (Hudson Mall) 12/1/2023 5.07 % 22,154 22,904

Bergen Town Center 4/8/2023 3.56 % 300,000 300,000

Shops at Bruckner 5/1/2023 3.90 % 9,020 9,698

Hudson Mall 12/1/2023 5.07 % 21,380 22,154

Yonkers Gateway Center 4/6/2024 4.16 % 24,996 26,774

Brick 12/10/2024 3.87 % 49,554 50,000

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

Las Catalinas 2/1/2026 4.43 % 123,977 127,669

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

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

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

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

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

Millburn 6/1/2027 3.97 % 22,944 23,381

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

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

East Brunswick 12/6/2027 4.38 % 63,000 63,000

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

Brooklyn (Kingswood Center) 2/6/2028 5.07 % 70,815 71,696

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

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

Brick Commons 12/10/2024 3.87 % 48,636 49,554

West End Commons 12/10/2025 3.99 % 24,658 25,100

Las Catalinas Mall 2/1/2026 4.43 % 119,633 123,977

Town Brook Commons 12/1/2026 3.78 % 30,825 31,400

Rockaway River Commons 12/1/2026 3.78 % 27,291 27,800

Hanover Commons 12/10/2026 4.03 % 62,453 63,000

Tonnelle Commons 4/1/2027 4.18 % 98,870 100,000

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

Millburn Gateway Center 6/1/2027 3.97 % 22,489 22,944

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

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

Brunswick Commons 12/6/2027 4.38 % 63,000 63,000

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

Kingswood Center 2/6/2028 5.07 % 69,935 70,815

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

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

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

Union (2445 Springfield Ave) 12/10/2028 4.01 % 45,600 45,600

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

Montehiedra 6/1/2030 5.00 % 79,381 81,141

Union (Vauxhall) 12/10/2028 4.01 % 45,600 45,600

The Shops at Riverwood 6/24/2029 4.25 % 21,466 —

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

The Outlets at Montehiedra 6/1/2030 5.00 % 77,531 79,381

Montclair (4)

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

8/15/2030 3.15 % 7,250 7,250

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

Woodmore Towne Centre 1/6/2032 3.39 % 117,200 117,200

Mt Kisco 11/15/2034 6.40 % 12,377 12,952

Mount Kisco Commons 11/15/2034 6.40 % 11,760 12,377

Total fixed rate debt 1,540,293 1,534,324

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

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

(3) Loan repaid in July 2021 in connection with the disposition of the property.

(2) Bears interest at the Prime Rate plus 50 bps with a minimum rate of 4.25 %.

(3) Bears interest at one month SOFR plus 226 bps.

The variable component of the debt is hedged with an interest rate cap agreement to limit SOFR to a maximum of 3 %.

(4) Bears interest at LIBOR plus 257 bps.

The fixed and variable components of the debt are hedged with an interest rate swap agreement, fixing the rate at 3.15 %, which expires at the maturity of the loan.

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $ 1.5 billion as of December 31, 2022.

12 unchanged sentences

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

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

Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to change.

On August 9, 2022, we restated and amended the Agreement, in order to, among other things, increase the credit facility size by $ 200 million to $ 800 million and extend the maturity date to February 9, 2027, with two six-month extension options.

Borrowings under the amended and restated Agreement are subject to interest at SOFR plus 1.05 % to 1.50 % and an annual facility fee of 15 to 30 basis points.

Both the spread over SOFR 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.

No amounts were drawn or outstanding under the Agreement as of December 31, 2022 and 2021.

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.

As of December 31, 2022, financing costs associated with executing the Agreement of $ 6.7 million, are included in the prepaid expenses and other assets line item of the consolidated balance sheets, as deferred financing costs, net.

Mortgage on Plaza at Cherry Hill

On June 3, 2022, the Company refinanced the mortgage loan secured by its property, Plaza at Cherry Hill, located in Cherry Hill, NJ, with a new $ 29 million, 3 -year, floating rate mortgage.

The floating rate is calculated as the Prime Rate plus 50 basis points with a floor of 4.25 % and is interest-only for the entire loan term.

Mortgage on Plaza at Woodbridge

On June 8, 2022, the Company refinanced the mortgage loan secured by its property, Plaza at Woodbridge, located in Woodbridge, NJ, and entered into a new 5 -year loan agreement for $ 52.9 million.

The terms of the loan require payment of interest at a floating rate equal to 2.26 % plus one-month SOFR.

Additionally, the agreement with the lender requires the Company to enter into an interest rate cap agreement to limit the maximum SOFR to 3 % if the current rate is greater than 2% for five consecutive business days.

On June 23, 2022, the Company purchased a one -year interest rate cap for $0.3 million which has been designated as a hedging instrument.

Mortgage on The Shops at Riverwood

On June 24, 2022, the Company obtained a 7 -year non-recourse mortgage loan of $ 21.5 million at a fixed interest rate of 4.25 % to partially fund the acquisition of The Shops at Riverwood.

Mortgage on Las Catalinas Mall

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

In December 2020, the non-recourse mortgage loan on Las Catalinas Mall was modified to convert the mortgage from an amortizing 4.43 % loan to interest only payments, starting at 3.00 % in 2021 and increasing 50 basis points annually until returning to 4.43 % in 2024 and thereafter, and 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.

The terms of the modification enable 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.

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.

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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.

Mortgage on Woodmore Towne Centre

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.

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

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.

The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately five years.

In connection with the refinancing of the loan secured by The Outlets at Montehiedra in the second quarter of 2020, the Company provided a $ 12.5 million limited corporate guarantee.

The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately 3.8 years.

As of December 31, 2022, the remaining exposure under the guarantee is $ 8.0 million.

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

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

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.

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.

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.

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

The Company satisfied its REIT distribution requiremen t by distributing $ 0.64 , $ 0.60 and $ 0.68 per common share in 2022, 2021 and 2020, respectively.

The distributions comprised a regular quarterly cash dividend of $ 0.16 and $ 0.15 per common share declared for each quarter of 2022 and 2021, respectively.

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.

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

The taxability of such dividends for the years ended December 31, 2022, 2021 and 2020 are as follows:

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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.

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

During the year ended December 31, 2022, the REIT was subject to Puerto Rico corporate income taxes on its allocable share of the Company’s Puerto Rico operating activities.

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

In addition, the REIT is subject to a 10 % branch 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.

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.

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.

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.

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

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

As a result of The Outlets at Montehiedra mortgage refinancing and the Las Catalinas Mall troubled debt restructuring that occurred during the year ended December 31, 2020, the Company recognized a gain on extinguishment of debt for U.S.

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

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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.

During the year ended December 31, 2022, no state and local income tax was recognized as a result of the transactions.

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

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

As of December 31, 2021, no valuation allowance has been recorded against the deferred tax assets that resulted from the legal entity restructurings of the Puerto Rico malls.

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

During the year ended December 31, 2020, the Company recorded a $ 4.5 million valuation allowance against the 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.

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.

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.

As of December 31, 2022, with the exception of certain state and local deferred tax assets, management determined that it is more likely than not that all deferred tax assets will be realized.

The Company recorded a valuation allowance against certain state and local deferred tax assets because management determined it is not more likely than not that these state and local deferred tax assets will be realized.

There has been no change to the valuation allowance recorded against these state and local deferred tax assets during 2022.

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.

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.

Puerto Rico income tax expense of $ 1.2 million was recorded for the year ended December 31, 2019.

During the years ended December 31, 2022 and 2021, income before income taxes from the Company’s operating activities in the United States was $ 41.2 million and $ 100.4 million, respectively, and in Puerto Rico was $ 9.1 million and $ 8.5 million, respectively.

For the year ended December 31, 2022, the Puerto Rico income tax expense was $ 2.9 million, as compared to a Puerto Rico income tax expense of $ 2.4 million and a REIT state and local income tax benefit of $ 1.2 million for the year ended December 31, 2021.

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

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Income tax expense (benefit):

federal income tax $ 11 $ — $ —

state and local income tax 10 ( 1,228 ) 4,525

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Puerto Rico income tax 2,803 2,252 ( 44,808 )

2,252 ( 44,808 ) 370

Total deferred 2,804 2,257 ( 44,814 )

Total income tax expense (benefit) $ 2,903 $ 1,139 $ ( 38,996 )

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

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

Provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate to consolidated net income before income taxes as follows:

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As of December 31, 2022, the Company had twenty properties in its portfolio either completely or partially on land or in a building owned by third parties.

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

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

During the year ended December 31, 2022, the Company reassessed the lease term of one of its ground leases due to our election to renew the ground lease and remeasured the lease liability by using revised inputs as of the reassessment date of the respective lease.

As a result of the reassessment, the Company recorded an additional $ 1.1 million of operating lease ROU asset and corresponding lease liability related to the ground lease.

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.

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Total lease expense $ 12,460 $ 12,872 $ 13,667

(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.

(1) During the years ended December 31, 2022, 2021, and 2020 the Company recognized sublease income of $ 18.6 million, $ 19.1 million and $ 17.7 million, respectively, included in rental revenue on the consolidated statements of income and comprehensive 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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Supplemental cash information related to leases for the years ended December 31, 2022 and 2021 was as follows:

(Amounts in thousands)

Year Ended December 31,

(Amounts in thousands) Year Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

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In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value.

Financial Assets and Liabilities Measured at Fair Value on a Recurring or Non-Recurring Basis

There were no financial assets or liabilities measured at fair value on a recurring or non-recurring basis as of December 31, 2021 and December 31, 2020.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of one interest rate cap and one interest rate swap.

We rely on third-party valuations that use market observable inputs, such as credit spreads, yield curves and discount rates, to assess the fair value of these instruments.

In accordance with the fair value hierarchy established by ASC 820, these financial instruments have been classified as Level 2 as quoted market prices are not readily available for valuing the assets.

The table below summarizes the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:

As of December 31, 2022

(Amounts in thousands) Level 1 Level 2 Level 3 Total

Interest rate cap and swap (1)

$ — $ 1,976 $ — $ 1,976

(1) Included in Prepaid expenses and other assets on the consolidated balance sheets.

There were no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2021.

Derivatives and Hedging

When we designate a derivative as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument will be recognized in OCI until the gains or losses are reclassified to earnings.

Derivatives that are not designated as hedges are adjusted to fair value through earnings.

As of December 31, 2022, the Company was a counterparty to two interest rate derivative agreements which have been designated as cash flow hedges.

On June 23, 2022, in conjunction with the refinancing of the mortgage loan encumbering our property Plaza at Woodbridge, we entered into an interest rate cap agreement (the “Cap Agreement”) with a third party to limit the maximum SOFR of our floating rate debt to 3%.

On the date of the Cap Agreement, we elected to designate cash flow hedge accounting for this derivative instrument.

The table below summarizes our derivative instruments, which are used to hedge the corresponding variable rate debt, as of December 31, 2022:

(Amounts in thousands)

Hedged Instrument Fair Value Notional Amount Spread Interest Rate Effective Interest Rate Expiration

Plaza at Woodbridge interest rate cap $ 509 $ 52,947 SOFR + 2.26% 6.27% 5.26% 7/1/2023

Montclair interest rate swap $ 1,467 $ 7,250 LIBOR + 2.57% 6.89% 3.15% 8/15/2030

The table below summarizes the effect of our derivative instruments on our consolidated statements of income and comprehensive income for the years ended December 31, 2022 and 2021:

Unrealized Gain Recognized in OCI on Derivatives

(Amounts in thousands) Years ended December 31,

Hedged Instrument 2022 2021

Plaza at Woodbridge interest rate cap $ 370 $ —

Montclair interest rate swap 286 —

Total $ 656 $ —

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

There were no financial assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2022 and December 31, 2021.

Financial Assets and Liabilities not Measured at Fair Value

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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.

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.

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

The table below summarizes the carrying amounts and fair value of our level 2 financial instruments as of December 31, 2022 and December 31, 2021.

As of December 31, 2022 As of As of December 31, 2021

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

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.

There were no impairment charges recognized during the year ended December 31, 2022.

During the year ended December 31, 2021, the Company recognized impairment charges on two retail properties that the Company was actively marketing.

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The fair value of the parcel was based on a sale agreement under negotiation with a third-party buyer.

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.

The valuation of these properties were based on capitalization rates, discounted future cash flows, third-party appraisals, broker selling estimates and sale agreements under negotiations.

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.

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.

Aggregate impairment charges of $ 0.5 million, $ 3.1 million and $ 26.3 million, respectively, are included as an expense within casualty and impairment loss, net on our consolidated statements of income for the years ended December 31, 2021, 2020 and 2019.

Aggregate impairment charges of $ 0.5 million and $ 3.1 million, respectively, are included as an expense within casualty and impairment loss on our consolidated statements of income and comprehensive income for the years ended December 31, 2021 and 2020.

COMMITMENTS AND CONTINGENCIES

Legal Matters

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

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.

From time to time, we are a party to various legal proceedings, claims or regulatory inquiries and investigations arising out of, or incident to, our ordinary course of business.

While we are unable to predict with certainty the outcome of any particular matter, management does not currently expect, when such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our results of operations or consolidated financial position.

Redevelopment and Anchor Repositioning

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.

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.

The Company has 25 active development, redevelopment or anchor repositioning projects with total estimated costs of $ 216 million, of which $ 159.7 million remains to be funded as of December 31, 2022.

We continue to monitor the stabilization dates of these projects, which can be impacted from economic conditions affecting our tenants, vendors and supply chains.

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.

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We cannot anticipate what coverage will be available on commercially reasonable terms in the future and expect premiums across most coverage lines to increase in light of recent events.

The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.

The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and consolidated financial position.

Certain of our loans and other agreements contain customary covenants requiring the maintenance of insurance coverage.

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If lenders or other counterparties insist on greater coverage than we are able to obtain, such requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

Tornado-Related Charges

On June 13, 2018, a tornado hit our shopping center in Wilkes-Barre, PA, damaging approximately 13 % of the property’s gross leasable area.

During the year ended December 31, 2019, the Company settled the related insurance claim with its carrier for $ 5.5 million.

Of this amount, the Company recognized $ 4.8 million as a casualty gain during the year ended December 31, 2019 included in casualty and impairment loss, net on the accompanying consolidated statements of income.

As part of the settlement, the Company recognized $ 0.3 million as business interruption proceeds within rental revenue during the year ended December 31, 2019.

Hurricane-Related Charges

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.

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

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

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.

Based on these assessments, we have accrued costs of $ 1.6 million and $ 1.7 million on our consolidated balance sheets as of December 31, 2022 and 2021, respectively, for remediation costs for environmental contamination at certain properties.

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.

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.

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

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.

As of December 31, 2022, we have not experienced any material adverse effects from tenant bankruptcies.

On January 17, 2023, Party City filed for Chapter 11 bankruptcy protection.

The Company has three leases with Party City comprising approximately 35,000 sf, which generate $1.1 million in annual rental revenue.

One of these leases, which generates $0.4 million in annual rental revenue, is a franchise and is not impacted by the bankruptcy filing.

Additionally, according to public reports, Bed Bath & Beyond is at risk of filing for bankruptcy and has seven leases with us, including wholly-owned store concepts buybuy Baby and Harmon Face Values.

These leases generate $4.6 million in annual rental revenue.

At this time we have not experienced any material adverse effects from either tenant but may in the future.

PREPAID EXPENSES AND OTHER ASSETS

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Deferred tax asset, net 34,616 37,420

Real estate held for sale — 7,056

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

Deferred financing costs, net of accumulated amortization of $ 7,269 and $ 5,932 , respectively

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

Prepaid expenses:

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(Amounts in thousands) December 31, 2022 December 31, 2021

Dividend payable $ — $ 55,905

Deferred tenant revenue 28,898 26,594

Accrued capital expenditures and leasing costs $ 35,732 $ 19,164

Finance lease liability 3,004 2,993

Deferred tenant revenue 28,468 28,898

Accrued interest payable 10,789 9,879

Security deposits 6,693 5,884

Accrued payroll expenses 9,527 9,134

Security deposits 8,048 6,693

Other liabilities and accrued expenses 6,939 8,057

Finance lease liability 3,016 3,004

Total accounts payable, accrued expenses and other liabilities $ 102,519 $ 84,829

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At-The-Market Program

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.

On August 15, 2022 the Company and the Operating Partnership entered into an equity distribution agreement (the “Equity Distribution Agreement”) with various financial institutions acting as agents, forward sellers, and forward purchasers.

Pursuant to the Equity Distribution Agreement, the Company may from time to time offer and sell, through the agents and forward sellers, the Company’s common shares, par value $0.01 per share, having an aggregate offering price of up to $250 million (the “ATM Program”).

Concurrently with the Equity Distribution Agreement, the Company entered into separate master forward confirmations (collectively, the “Master Confirmations”) with each of the forward purchasers.

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.

The ATM Program replaces the Company’s previous at-the-market program established on June 7, 2021.

The Equity Distribution Agreement provides that the Company may also enter into forward sale agreements pursuant to any Master Confirmation and related supplemental confirmations with the forward purchasers.

In connection with any forward sale agreement, a forward purchaser will, at the Company’s request, borrow from third parties, through its forward seller, and sell a number of shares equal to the amount provided in such agreement.

As of December 31, 2022, the Company has not issued any common shares under the ATM Program.

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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.

During the year ended December 31, 2021, no shares were repurchased by the Company.

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.

During the years ended December 31, 2022 and December 31, 2021, no shares were repurchased by the Company.

As of December 31, 2022, the Company has repurchased 5.9 million common shares at a weighted average share price of $ 9.22 , for a total of $ 54.1 million.

All share repurchases by the Company were completed between March and April of 2020.

There is approximately $145.9 million remaining for share repurchases under this program.

Units of the Operating Partnership

The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”).

The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership.

As of December 31, 2022, Urban Edge owned approximately 96.1 % of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired.

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Dividends and Distributions

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 years ended December 31, 2022 and 2021, the Company declared distributions on our common shares and OP units of $ 0.64 and $ 0.60 per share/unit, respectively.

This comprised regular quarterly dividends of $ 0.16 and $0.15 per common share and OP unit declared for each quarter in 2022 and 2021, respectively.

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

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

During the 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.

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Holders of outstanding OP units may redeem their units for cash or the Company’s common shares on a one -for-one basis, solely at our election.

On August 5, 2019, the Company received requests from certain holders of OP units to redeem 357,998 units.

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.

During the years ended December 31, 2022, 2021 and 2020, 250,000 , 100,000 and 1,355,836 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.

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

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

Noncontrolling Interests in Consolidated Subsidiaries

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

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

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

SHARE-BASED COMPENSATION

Omnibus Share Plan

On January 7, 2015 our board and initial shareholder approved the Urban Edge Properties Omnibus Share Plan, under which awards may be granted up to a maximum of 15,000,000 of our common shares or share equivalents.

On January 7, 2015 our board and initial shareholder approved the Urban Edge Properties Omnibus Share Plan (the “Omnibus Share Plan”), under which awards may be granted up to a maximum of 15,000,000 of our common shares or share equivalents.

Pursuant to the Omnibus Share Plan, stock options, LTIP units, operating partnership units and restricted shares were granted.

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.

Both Outperformance Plans are multi-year, performance-based equity compensation plans under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units if, and only if, we outperform a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to a relative TSR over the three-year period beginning on the date the respective plan was approved.

The aggregate notional amounts of the 2015 OPP grant and the 2017 OPP grant are $ 10.2 million and $ 12.0 million, respectively.

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.

If the designated performance objectives are achieved, LTIP units are also subject to time-based vesting requirements.

Awards earned under the 2015 OPP and the 2017 OPP vest 50 % in year three, 25 % in year four and 25 % in year five.

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.

Long-Term Incentive Plans

On February 24, 2017, the Company established the 2017 Outperformance Plan (“2017 OPP”) under the Omnibus Share Plan, a multi-year, performance-based equity compensation plan under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units if, and only if, we achieve predetermined total shareholder return (“TSR”) thresholds and/or the TSRs of certain peer companies over the three-year period beginning on the date the plan was established.

The fair value of the 2017 OPP on the date of grant was $ 4.1 million.

On February 22, 2018, the Company established the 2018 Long-Term Incentive Plan (“2018 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time and performance goals tied to our relative and absolute TSR.

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.

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.

For the 2015 OPP, assumptions include historical volatility ( 25.0 %), risk-free interest rates ( 1.2 %), and historical daily return as compared to our Peer Group (which ranged from 19.0 % to 27.0 %).

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.

For the 2018 LTI Plan, assumptions include historical volatility, risk-free interest rates, and historical daily return as compared to our Peer Group.

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.

The 2015 OPP was fully vested as of November 5, 2020 and there is no compensation cost remaining as of December 31, 2021.

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.

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.

The fair value of the 2018 LTI Plan on the date of grant was $ 3.6 million

On April 4, 2019, the Company established the 2019 Long-Term Incentive Plan (“2019 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-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).

The fair value of the 2019 LTI Plan on the date of grant was $6.3 million.

In the years ending December 31, 2022, 2021, and 2020 we recognized $ 0.9 million, $ 2.1 million and $ 3.5 million, respectively, of compensation expense related to the 2017 OPP, 2018 LTI Plan and 2019 LTI Plan.

The compensation expense incurred during the year ended December 31, 2020, included $ 0.2 million related to the 2015 OPP Plan which expired in February 2020.

As of December 31, 2022, there was less than $ 0.1 million unrecognized compensation cost related to the 2018 LTI Plan.

2018 Inducement Equity Plan

The Inducement Plan was approved by the Compensation Committee of the Board of Trustees of the Company on September 26, 2018.

On September 26, 2018, the Company established an equity incentive plan to induce certain executives to join the Company (the “Inducement Plan”).

Under the Inducement Plan, the Compensation Committee of the Board of Trustees may grant, subject to any Company performance conditions as specified by the Compensation Committee, awards to individuals who were not previously employees as an inducement material to the individual’s entry into employment with the Company.

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The Company has granted an aggregate of 352,890 restricted LTIP Units and 2,000,000 stock options under the Inducement Plan with grant date fair values of $ 7.2 million and $ 9.3 million, respectively.

As of December 31, 2022, there were no outstanding unvested LTIP units or stock options related to this plan.

2020 Long-Term Incentive Plan

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”).

On February 20, 2020, the Company established the 2020 Long-Term Incentive Plan (“2020 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-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).

Performance-based awards

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.

Under the Absolute TSR component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 18 %, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27 %, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36 %.

The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 12 companies.

Under the Relative TSR Component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35 th percentile of the peer group, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55 th percentile of the peer group, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75 th percentile of the peer group, with earning determined using linear interpolation if between such relative and absolute TSR thresholds.

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.

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.

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”).

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:

The total grant date fair value under the 2020 LTI Plan was $ 8.8 million comprising performance-based and time-based awards.

Performance-based awards

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The fair value of the performance-based award portion of the 2020 LTI Plan on the date of grant was $ 5.9 million using a Monte Carlo simulation to estimate the fair value through a risk-neutral premise.

Assumptions include historical volatility (21.4%), risk-free interest rates (1.4%), and historical daily return as compared to certain peer companies.

The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 11 companies.

During the years ended December 31, 2021

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.

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 years ended December 31, 2022, 2021, and 2020, respectively, we recognized $ 1.1 million, $ 1.3 million, and $ 1.1 million of compensation expense related to the performance-based awards under the 2020 LTI Plan.

Time-based awards

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The Company granted time-based awards under the 2020 LTI Plan that represent 169,004 LTIP units with a grant date fair value of $ 2.9 million.

During the 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.

During the years ended December 31, 2022, 2021 and 2020, respectively, we recognized $ 0.6 million, $ 0.7 million, and $ 1.1 million of compensation expense related to the time-based awards under the 2020 LTI Plan.

2021 Long-Term Incentive Plan

On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”).

On February 10, 2021, the Company established the 2021 Long-Term Incentive Plan (“2021 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units that vest based on the passage of time (one-half of the program) and performance goals tied to our relative and absolute TSR during the three-year Performance Period following their grant (one-half of the program).

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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.

Assumptions include historical volatility (49.9%), risk-free interest rates (0.2%), and historical daily return as compared to certain peer companies.

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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.

During the years ended December 31, 2022 and 2021, respectively, we recognized $ 0.9 million and $ 1.0 million of compensation expense related to the performance-based awards under the 2021 LTI Plan.

Time-based awards

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As of December 31, 2022, the Company granted time-based awards under the 2021 LTI Plan that represent 273,615 LTIP units with a grant date fair value of $ 3.9 million.

During the years ended December 31, 2022 and 2021, respectively, we recognized $ 1.3 million and $ 1.0 million of compensation expense related to the time-based awards under the 2021 LTI Plan.

2022 Long-Term Incentive Plan

On February 11, 2022, the Company established the 2022 Long-Term Incentive Plan (“2022 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, receive awards in the form of LTIP Units that, with respect to one half of the program, vest based solely on the passage of time, and with respect to the other half of the program, are earned and vest if certain relative and absolute TSR and/or FFO growth targets are achieved by the Company over a three-year performance period.

The total grant date fair value under the 2022 LTI Plan was $8.6 million comprising both performance-based and time-based awards as described further below:

Performance-based awards

For the performance-based awards under the 2022 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 “TSR Performance Period”) beginning on February 11, 2022 and ending on February 10, 2025.

Participants also have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s FFO growth component meets certain criteria over the three-year performance measurement period (the “FFO Performance Period”) beginning January 1, 2022 and ending on December 31, 2024.

The Company granted performance-based awards under the 2022 LTI Plan representing 349,438 Units.

The fair value of the performance-based award portion of the 2022 LTI Plan on the grant date was $4.3 million using a Monte Carlo simulation to estimate the fair value of the Absolute and Relative components through a risk-neutral premise.

Assumptions include historical volatility (51.0%), risk-free interest rates (1.7%), and historical daily return as compared to certain peer companies.

Under the absolute TSR component, 50% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to 18%, 100% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to 27%, and 200% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to or greater than 36%.

The relative TSR component is based on the Company’s performance compared to a peer group comprised of 14 companies.

Under the relative TSR Component, 50% of the LTIP Units will be earned if the Company’s TSR over the TSR 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 TSR Performance Period is equal to the 55 th percentile of the peer group, and 200% of the LTIP Units will be earned if the Company’s TSR over the TSR Performance Period is equal to or above the 75 th percentile of the peer group.

Under the FFO growth component, 50% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to 3%, 100% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to 5%, and 200% of the LTIP Units will be earned if the Company’s FFO growth over the FFO Performance Period is equal to or greater than 7%.

If the Company’s performance-based awards are between such thresholds, earnings will be determined using linear interpolation.

During the year ended December 31, 2022, we recognized $0.7 million of compensation expense related to the performance-based awards under the 2022 LTI Plan.

Time-based awards

The time-based awards granted under the 2022 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 ratable over four years.

As of December 31, 2022, the Company granted time-based awards under the 2022 LTI Plan that represent 266,766 LTIP Units with a grant date fair value of $4.3 million.

During the year ended December 31, 2022, we recognized $1.5 million of compensation expense related to the time-based awards under the 2022 LTI Plan.

Units and Deferred Share Units Granted to Trustees

On May 6, 2020, certain trustees elected to receive a portion of their compensation in deferred share units and an aggregate of 12,121 shares were granted to those trustees based on the weighted average grant date fair value of $ 8.25 .

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 .

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 .

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 .

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 .

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 .

2023 Long-Term Incentive Plan

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”).

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).

On February 10, 2023, the Company established the 2023 Long-Term Incentive Plan (“2023 LTI Plan”) under the Omnibus Share Plan.

The plan is a multi-year, equity compensation program under which participants, including our Chairman and Chief Executive Officer, receive awards in the form of LTIP Units that, with respect to one half of the program, vest based solely on the passage of time, and with respect to the other half of the program, are earned and vest if certain relative and absolute TSR and/or FFO and same-property NOI growth targets are achieved by the Company over a three year performance period (one-half of the program).

The total grant date fair value under the 2023 LTI Plan was $8.4 million, comprising both performance-based and time-based awards.

Units and Deferred Share Units Granted to Trustees

All trustees are granted annual awards in the form of LTIP units or Deferred Share Units (“DSU”).

The following table presents trustee awards granted over the last three years:

Award Date Award Type # of Units Granted Weighted Average Grant Date Fair Value

October 3, 2022 LTIP 15,566 $10.97

September 1, 2022 LTIP 14,194 12.74

June 10, 2022 DSU 8,645 13.88

June 10, 2022 LTIP 51,498 13.99

November 22, 2021 LTIP 10,208 14.17

July 1, 2021 LTIP 12,254 15.02

May 5, 2021 DSU 6,476 15.44

May 5, 2021 LTIP 39,756 15.09

May 6, 2020 DSU 12,121 8.25

May 6, 2020 LTIP 87,117 8.03

Shares Under Option

All stock options granted have ten-year contractual lives, containing vesting terms of three to five years .

The following table presents stock option activity for the year ended December 31, 2021:

Shares Under Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term

Outstanding at January 1, 2021 4,930,762 $ 22.89 —

Granted — — —

Exercised — — —

Forfeited or expired ( 1,000,000 ) 21.72 —

Outstanding at December 31, 2021 3,930,762 $ 23.19 3.56

Exercisable at December 31, 2021 3,156,449 $ 23.61 —

As of December 31, 2022 and 2021, the Company had 3,930,762 shares under options with a weighted average exercise price per share of $23.19.

No options were granted or exercised during the year ended December 31, 2022.

As of December 31, 2021, there was no intrinsic value for the outstanding and exercisable shares under option.

As of December 31, 2022, the remaining average contractual term of shares under options was 3.47 years.

There are 3,898,628 shares under options exercisable with a weighted average price per share of $23.22 with no intrinsic value as of December 31, 2022.

Restricted Shares

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Restricted Units

During the years ended December 31, 2021, 2020 and 2019, respectively, there were 335,833 , 297,195 and 276,482 additional LTIP units issued.

During the years ended December 31, 2022, 2021 and 2020, respectively, there were 431,330 , 335,833 , and 297,195 LTIP units issued.

During the years ended December 31, 2022, 2021 and 2020, 498,298 , 271,635 , and 433,016 , units vested, respectively.

There were no restricted units converted to common shares during the year ended December 31, 2021.

There were no restricted units converted to common shares during the years ended December 31, 2022 and 2021.

During the year ended December 31, 2020, 223,553 restricted units were converted to common shares.

As of December 31, 2021 the remaining 629,931 units vest over a weighted average period of approximately two years .

As of December 31, 2022 the remaining 487,001 units vest over a weighted average period of approximately three years .

Share-Based Compensation Expense

Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income, is summarized as follows:

Share-based compensation expense, which is included in general and administrative expenses in our consolidated statements of income and comprehensive income, is summarized as follows:

Year Ended December 31,

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Share-based compensation expense components:

Restricted share expense $ 461 $ 832 $ 1,697

Stock option expense 1,435 4,991 4,055

LTIP expense (1)

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3,170 3,865 3,792

Stock option expense 977 1,435 4,991

Restricted share expense 367 461 832

DSU expense 110 149 48

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For the years ended December 31, 2022 and 2021 there were options outstanding for 3,930,762 shares that potentially could be exercised for common shares.

During the year ended December 31, 2020 there were options outstanding for 4,930,762 shares that potentially could be exercised for common shares.

During the years ended December 31, 2022, 2021 and 2020, 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, 2022 there were 53,378 unvested restricted shares outstanding that potentially could become unrestricted common shares.

The computation of diluted EPS for the years ended December 31, 2021, 2020 and 2019 included the 54,988 , 77,289 , and 100,406 weighted average unvested restricted shares outstanding, respectively, as their effect is dilutive.

The computation of diluted EPS for the years ended December 31, 2022, 2021 and 2020 included 59,459 , 54,988 , and 77,289 weighted average unvested restricted shares outstanding, respectively, as their effect is dilutive.

The effect of the redemption of OP and vested LTIP units is not reflected in the computation of basic and diluted earnings per share, as they are redeemable for common shares on a one-for-one basis.

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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 8. Financial Statements and Supplementary Data