Urban Edge Properties 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES Page CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm for Urban Edge Properties (PCAOB ID No. 34 ) 41 Report of Independent Registered Public Accounting Firm for Urban Edge Properties LP (PCAOB ID No. 34 ) 43 Urban Edge Properties Consolidated Balance Sheets as of December 31, 2022 and 2021 45 Urban Edge Properties Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 46 Urban Edge Properties Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020 47 Urban Edge Properties Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 48 Urban Edge Properties LP Consolidated Balance Sheets as of December 31, 2022 and 2021 50 Urban Edge Properties LP Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 51 Urban Edge Properties LP Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020 52 Urban Edge Properties LP Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 53 Notes to Consolidated Financial Statements 55 CONSOLIDATED FINANCIAL STATEMENT SCHEDULES Schedule III – Real Estate and Accumulated Depreciation 93 40 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Trustees of Urban Edge Properties 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, 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. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 14, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate Impairment —Refer to Notes 3 and 9 to the financial statements Critical Audit Matter Description The Company’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s evaluation of the recoverability of real estate assets involves the comparison of the projected undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount. The Company’s undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates. 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 extent of effort, including the need to involve our fair value specialists. 41 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others: • We tested the effectiveness of the Company’s internal controls over management’s evaluation of the recoverability of real estate, including internal controls over management’s determination of the reasonableness of the applicable capitalization rates. • 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 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. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2023 We have served as the Company’s auditor since 2014. 42 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Partners of Urban Edge Properties LP Opinion on 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. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 14, 2023, expressed an unqualified opinion on the Operating Partnership's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Operating Partnership's management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate Impairment —Refer to Notes 3 and 9 to the financial statements Critical Audit Matter Description The Operating Partnership's real estate assets are individually evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The Operating Partnership's evaluation of the recoverability of real estate assets involves the comparison of the projected undiscounted future cash flows expected to be generated by each real estate asset over the Operating Partnership's estimated holding period to the respective carrying amount. The Operating Partnership's undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates. Total real estate assets as of December 31, 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 extent of effort, including the need to involve our fair value specialists. 43 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Operating Partnership's estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others: • We tested the effectiveness of the Operating Partnership's internal controls over management’s evaluation of the recoverability of real estate, including internal controls over management’s determination of the reasonableness of the applicable capitalization rates. • 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 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. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2023 We have served as the Operating Partnership’s auditor since 2016. 44 URBAN EDGE PROPERTIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) December 31, December 31, 2022 2021 ASSETS Real estate, at cost: Land $ 535,770 $ 543,827 Buildings and improvements 2,468,385 2,441,797 Construction in progress 314,190 212,296 Furniture, fixtures and equipment 8,539 7,530 Total 3,326,884 3,205,450 Accumulated depreciation and amortization ( 791,485 ) ( 753,947 ) Real estate, net 2,535,399 2,451,503 Operating lease right-of-use assets 64,161 69,361 Cash and cash equivalents 85,518 164,478 Restricted cash 43,256 55,358 Tenant and other receivables 17,523 15,812 Receivables arising from the straight-lining of rents 64,713 62,692 Identified intangible assets, net of accumulated amortization of $ 40,983 and $ 37,361 , respectively 62,856 71,107 Deferred leasing costs, net of accumulated amortization of $ 20,107 and $ 17,641 , respectively 26,799 20,694 Prepaid expenses and other assets 77,207 74,111 Total assets $ 2,977,432 $ 2,985,116 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net $ 1,691,690 $ 1,687,190 Operating lease liabilities 59,789 64,578 Accounts payable, accrued expenses and other liabilities 102,519 84,829 Identified intangible liabilities, net of accumulated amortization of $ 40,816 and $ 35,029 , respectively 93,328 100,625 Total liabilities 1,947,326 1,937,222 Commitments and contingencies ( Note 10 ) Shareholders’ equity: Common shares: $ 0.01 par value; 500,000,000 shares authorized and 117,450,951 and 117,147,986 shares issued and outstanding, respectively 1,173 1,170 Additional paid-in capital 1,011,293 1,001,253 Accumulated other comprehensive income 629 — Accumulated deficit ( 36,104 ) ( 7,091 ) Noncontrolling interests: Operating partnership 39,209 39,616 Consolidated subsidiaries 13,906 12,946 Total equity 1,030,106 1,047,894 Total liabilities and equity $ 2,977,432 $ 2,985,116 See notes to consolidated financial statements. 45 URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except share and per share amounts) Year Ended December 31, 2022 2021 2020 REVENUE Rental revenue $ 396,376 $ 422,467 $ 328,280 Other income 1,562 2,615 1,815 Total revenue 397,938 425,082 330,095 EXPENSES Depreciation and amortization 98,432 92,331 96,029 Real estate taxes 61,864 63,844 60,049 Property operating 74,334 68,531 56,126 General and administrative 43,087 39,152 48,682 Casualty and impairment loss — 468 3,055 Lease expense 12,460 12,872 13,667 Total expenses 290,177 277,198 277,608 Gain on sale of real estate 353 18,648 39,775 Interest income 1,107 360 2,599 Interest and debt expense ( 58,979 ) ( 57,938 ) ( 71,015 ) Gain on extinguishment of debt — — 34,908 Income before income taxes 50,242 108,954 58,754 Income tax (expense) benefit ( 2,903 ) ( 1,139 ) 38,996 Net income 47,339 107,815 97,750 Less net (income) loss attributable to NCI in: Operating partnership ( 1,895 ) ( 4,296 ) ( 4,160 ) Consolidated subsidiaries 726 ( 833 ) ( 1 ) Net income attributable to common shareholders $ 46,170 $ 102,686 $ 93,589 Earnings per common share - Basic: $ 0.39 $ 0.88 $ 0.79 Earnings per common share - Diluted: $ 0.39 $ 0.88 $ 0.79 Weighted average shares outstanding - Basic 117,366 117,029 117,722 Weighted average shares outstanding - Diluted 121,640 121,447 117,902 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. 46 URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands, except share and per share amounts) Common Shares Noncontrolling Interests (“NCI”) Shares Amount Additional 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 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 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) — — — — ( 80,480 ) — — ( 80,480 ) Distributions to redeemable NCI ($ 0.68 per unit) — — — — — ( 3,386 ) — ( 3,386 ) Contributions from noncontrolling interests — — — — — — 5,447 5,447 Share-based compensation expense 5,871 — — 11,123 — 16,994 Share-based awards retained for taxes ( 127,862 ) ( 1 ) ( 1,464 ) — — — — ( 1,465 ) Balance, December 31, 2020 117,014,317 $ 1,169 $ 989,863 $ — $ ( 39,467 ) $ 38,456 $ 5,872 $ 995,893 Net income attributable to common shareholders — — — — 102,686 — — 102,686 Net income attributable to noncontrolling interests — — — — — 4,296 833 5,129 Limited partnership interests: Units redeemed for common shares 100,000 — 840 — — ( 6,302 ) — ( 5,462 ) Reallocation of noncontrolling interests — — 8,206 — — ( 2,744 ) — 5,462 Common shares issued 46,731 1 509 — ( 144 ) — — 366 Dividends to common shareholders ($ 0.60 per share) — — — — ( 70,166 ) — — ( 70,166 ) Distributions to redeemable NCI ($ 0.60 per unit) — — — — — ( 2,864 ) — ( 2,864 ) Contributions from noncontrolling interests — — — — — — 6,241 6,241 Share-based compensation expense — — 2,045 — — 8,774 — 10,819 Share-based awards retained for taxes ( 13,062 ) — ( 210 ) — — — — ( 210 ) Balance, December 31, 2021 117,147,986 $ 1,170 $ 1,001,253 $ — $ ( 7,091 ) $ 39,616 $ 12,946 $ 1,047,894 Net income attributable to common shareholders — — — — 46,170 — — 46,170 Net income (loss) attributable to noncontrolling interests — — — — — 1,895 ( 726 ) 1,169 Other comprehensive income — — — 629 — 27 — 656 Limited partnership interests: Units redeemed for common shares 250,000 3 2,121 — — 2,124 — 4,248 Reallocation of noncontrolling interests — — 6,126 — — ( 10,374 ) — ( 4,248 ) Common shares issued 60,193 — 466 — ( 84 ) — — 382 Dividends to common shareholders ($ 0.64 per share) — — — — ( 75,099 ) — — ( 75,099 ) Distributions to redeemable NCI ($ 0.64 per unit) — — — — — ( 3,109 ) — ( 3,109 ) Contributions from noncontrolling interests — — — — — — 1,686 1,686 Share-based compensation expense — — 1,456 — — 9,030 — 10,486 Share-based awards retained for taxes ( 7,228 ) — ( 129 ) — — — — ( 129 ) Balance, December 31, 2022 117,450,951 $ 1,173 $ 1,011,293 $ 629 $ ( 36,104 ) $ 39,209 $ 13,906 $ 1,030,106 See notes to consolidated financial statements. 47 URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 47,339 $ 107,815 $ 97,750 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 100,787 94,135 97,751 Gain on sale of real estate ( 353 ) ( 18,648 ) ( 39,775 ) Amortization of below market leases, net ( 6,660 ) ( 55,173 ) ( 10,624 ) Noncash lease expense 7,051 6,802 7,522 Straight-lining of rent ( 2,020 ) ( 878 ) 10,523 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: Tenant and other receivables ( 1,712 ) ( 139 ) 5,892 Deferred leasing costs ( 8,660 ) ( 5,818 ) ( 1,218 ) Prepaid and other assets 854 5,661 ( 41,982 ) Lease liabilities ( 6,641 ) ( 6,227 ) ( 6,680 ) Accounts payable, accrued expenses and other liabilities ( 853 ) ( 3,544 ) 8,522 Net cash provided by operating activities 139,618 135,273 112,822 CASH FLOWS FROM INVESTING ACTIVITIES Real estate development and capital improvements ( 116,044 ) ( 95,377 ) ( 28,522 ) Acquisitions of real estate ( 36,222 ) ( 252,632 ) ( 124,340 ) Proceeds from sale of operating properties 353 34,482 54,402 Proceeds from sale of operating lease — 2,367 — 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 ) Dividends paid to common shareholders ( 75,099 ) ( 123,998 ) ( 26,647 ) Distributions paid to redeemable noncontrolling interests ( 3,109 ) ( 4,937 ) ( 1,314 ) Taxes withheld for vested restricted shares ( 129 ) ( 210 ) ( 1,465 ) Debt issuance costs ( 7,292 ) — ( 3,471 ) Purchase of interest rate cap ( 285 ) — — Proceeds related to the issuance of common shares 382 366 398 Contributions from noncontrolling interests 1,686 6,241 5,447 Cash paid to repurchase shares — — ( 54,141 ) Net cash used in financing activities ( 78,767 ) ( 23,530 ) ( 80,245 ) 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 Cash and cash equivalents and restricted cash at end of year $ 128,774 $ 219,836 $ 419,253 See notes to consolidated financial statements 48 Year Ended December 31, 2022 2021 2020 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash payments for interest net of amounts capitalized of $ 8,512 , $ 2,023 and $ 715 , respectively $ 55,740 $ 58,621 $ 68,113 Cash payments for income taxes 913 4,663 499 NON-CASH INVESTING AND FINANCING ACTIVITIES Accrued capital expenditures included in accounts payable and accrued expenses 34,673 18,702 5,808 Write-off of fully depreciated and impaired assets 8,733 10,706 21,447 Forgiveness of mortgage debt — — 30,000 Assumption of debt from the acquisition of real estate — — 72,473 Dividend/distribution declared and paid in subsequent period — — 55,905 RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents at beginning of year $ 164,478 $ 384,572 $ 432,954 Restricted cash at beginning of year 55,358 34,681 52,182 Cash and cash equivalents and restricted cash at beginning of year $ 219,836 $ 419,253 $ 485,136 Cash and cash equivalents at end of year $ 85,518 $ 164,478 $ 384,572 Restricted cash at end of year 43,256 55,358 34,681 Cash and cash equivalents and restricted cash at end of year $ 128,774 $ 219,836 $ 419,253 See notes to consolidated financial statements. 49 URBAN EDGE PROPERTIES LP CONSOLIDATED BALANCE SHEETS (In thousands, except unit and per unit amounts) December 31, December 31, 2022 2021 ASSETS Real estate, at cost: Land $ 535,770 $ 543,827 Buildings and improvements 2,468,385 2,441,797 Construction in progress 314,190 212,296 Furniture, fixtures and equipment 8,539 7,530 Total 3,326,884 3,205,450 Accumulated depreciation and amortization ( 791,485 ) ( 753,947 ) Real estate, net 2,535,399 2,451,503 Operating lease right-of-use assets 64,161 69,361 Cash and cash equivalents 85,518 164,478 Restricted cash 43,256 55,358 Tenant and other receivables 17,523 15,812 Receivables arising from the straight-lining of rents 64,713 62,692 Identified intangible assets, net of accumulated amortization of $ 40,983 and $ 37,361 , respectively 62,856 71,107 Deferred leasing costs, net of accumulated amortization of $ 20,107 and $ 17,641 , respectively 26,799 20,694 Prepaid expenses and other assets 77,207 74,111 Total assets $ 2,977,432 $ 2,985,116 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net $ 1,691,690 $ 1,687,190 Operating lease liabilities 59,789 64,578 Accounts payable, accrued expenses and other liabilities 102,519 84,829 Identified intangible liabilities, net of accumulated amortization of $ 40,816 and $ 35,029 , respectively 93,328 100,625 Total liabilities 1,947,326 1,937,222 Commitments and contingencies ( Note 10 ) Equity: Partners’ capital: General partner: 117,450,951 and 117,147,986 units outstanding, respectively 1,012,466 1,002,423 Limited partners: 4,713,558 and 4,662,654 units outstanding, respectively 41,810 41,030 Accumulated other comprehensive income 629 — Accumulated deficit ( 38,705 ) ( 8,505 ) Total partners’ capital 1,016,200 1,034,948 Noncontrolling interest in consolidated subsidiaries 13,906 12,946 Total equity 1,030,106 1,047,894 Total liabilities and equity $ 2,977,432 $ 2,985,116 See notes to consolidated financial statements. 50 URBAN EDGE PROPERTIES LP CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except unit and per unit amounts) Year Ended December 31, 2022 2021 2020 REVENUE Rental revenue $ 396,376 $ 422,467 $ 328,280 Other income 1,562 2,615 1,815 Total revenue 397,938 425,082 330,095 EXPENSES Depreciation and amortization 98,432 92,331 96,029 Real estate taxes 61,864 63,844 60,049 Property operating 74,334 68,531 56,126 General and administrative 43,087 39,152 48,682 Casualty and impairment loss — 468 3,055 Lease expense 12,460 12,872 13,667 Total expenses 290,177 277,198 277,608 Gain on sale of real estate 353 18,648 39,775 Interest income 1,107 360 2,599 Interest and debt expense ( 58,979 ) ( 57,938 ) ( 71,015 ) Gain on extinguishment of debt — — 34,908 Income before income taxes 50,242 108,954 58,754 Income tax (expense) benefit ( 2,903 ) ( 1,139 ) 38,996 Net income 47,339 107,815 97,750 Less: net (income) loss attributable to NCI in consolidated subsidiaries 726 ( 833 ) ( 1 ) Net income attributable to unitholders $ 48,065 $ 106,982 $ 97,749 Earnings per unit - Basic: $ 0.40 $ 0.88 $ 0.80 Earnings per unit - Diluted: $ 0.39 $ 0.88 $ 0.80 Weighted average units outstanding - Basic 121,374 120,966 121,957 Weighted average units outstanding - Diluted 121,640 122,107 122,811 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. 51 URBAN EDGE PROPERTIES LP CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In thousands, except unit and per unit amounts) Total Shares General Partner Total Units Limited Partners (1) 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 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 Repurchase of common shares ( 5,873,923 ) ( 54,141 ) — — — — — ( 54,141 ) Reallocation of noncontrolling interests — 8,833 — ( 19,977 ) — — — ( 11,144 ) Distributions to Partners ($ 0.68 per unit) — — — — — ( 83,866 ) — ( 83,866 ) Contributions from noncontrolling interests — — — — — — 5,447 5,447 Share-based compensation expense — 5,871 — 11,123 — — — 16,994 Share-based awards retained for taxes ( 127,862 ) ( 1,465 ) — — — — — ( 1,465 ) Balance, December 31, 2020 117,014,317 $ 991,032 4,729,010 $ 41,302 $ — $ ( 42,313 ) $ 5,872 $ 995,893 Net income attributable to unitholders — — — — — 106,982 — 106,982 Net income attributable to noncontrolling interests — — — — — — 833 833 Common units issued as a result of common shares issued by Urban Edge 46,731 510 33,644 — — ( 144 ) — 366 Equity redemption of OP Units 100,000 840 ( 100,000 ) ( 6,302 ) — — — ( 5,462 ) Reallocation of noncontrolling interests — 8,206 — ( 2,744 ) — — — 5,462 Distributions to Partners ($ 0.60 per unit) — — — — — ( 73,030 ) — ( 73,030 ) Contributions from noncontrolling interests — — — — — — 6,241 6,241 Share-based compensation expense — 2,045 — 8,774 — — — 10,819 Share-based awards retained for taxes ( 13,062 ) ( 210 ) — — — — — ( 210 ) Balance, December 31, 2021 117,147,986 $ 1,002,423 4,662,654 $ 41,030 $ — $ ( 8,505 ) $ 12,946 $ 1,047,894 Net income attributable to unitholders — — — — — 48,065 — 48,065 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 Equity redemption of OP units 250,000 2,124 ( 250,000 ) 2,124 — — — 4,248 Reallocation of noncontrolling interests — 6,126 — ( 10,374 ) — — — ( 4,248 ) Distributions to Partners ($ 0.64 per unit) — — — — — ( 78,208 ) — ( 78,208 ) Contributions from noncontrolling interests — — — — — — 1,686 1,686 Share-based compensation expense — 1,456 — 9,030 — — — 10,486 Share-based awards retained for taxes ( 7,228 ) ( 129 ) — — — — — ( 129 ) Balance, December 31, 2022 117,450,951 $ 1,012,466 4,713,558 $ 41,810 $ 629 $ ( 38,705 ) $ 13,906 $ 1,030,106 (1) Limited partners have a 3.9 % common limited partnership interest in the Operating Partnership as of December 31, 2022 in the form of units of interest in the Operating Partnership (“OP Units”) and Long-Term Incentive Plan (“LTIP”) units. See notes to consolidated financial statements. 52 URBAN EDGE PROPERTIES LP CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 47,339 $ 107,815 $ 97,750 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 100,787 94,135 97,751 Gain on sale of real estate ( 353 ) ( 18,648 ) ( 39,775 ) Amortization of below market leases, net ( 6,660 ) ( 55,173 ) ( 10,624 ) Noncash lease expense 7,051 6,802 7,522 Straight-lining of rent ( 2,020 ) ( 878 ) 10,523 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: Tenant and other receivables ( 1,712 ) ( 139 ) 5,892 Deferred leasing costs ( 8,660 ) ( 5,818 ) ( 1,218 ) Prepaid and other assets 854 5,661 ( 41,982 ) Lease liabilities ( 6,641 ) ( 6,227 ) ( 6,680 ) Accounts payable, accrued expenses and other liabilities ( 853 ) ( 3,544 ) 8,522 Net cash provided by operating activities 139,618 135,273 112,822 CASH FLOWS FROM INVESTING ACTIVITIES Real estate development and capital improvements ( 116,044 ) ( 95,377 ) ( 28,522 ) Acquisitions of real estate ( 36,222 ) ( 252,632 ) ( 124,340 ) Proceeds from sale of operating properties 353 34,482 54,402 Proceeds from sale of operating lease — 2,367 — 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 ) Distributions paid to partners ( 78,208 ) ( 128,935 ) ( 27,961 ) Taxes withheld for vested restricted units ( 129 ) ( 210 ) ( 1,465 ) Debt issuance costs ( 7,292 ) — ( 3,471 ) Purchase of interest rate cap ( 285 ) — — Proceeds related to the issuance of common shares 382 366 398 Contributions from noncontrolling interests 1,686 6,241 5,447 Cash paid to repurchase shares — — ( 54,141 ) Net cash used in financing activities ( 78,767 ) ( 23,530 ) ( 80,245 ) 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 Cash and cash equivalents and restricted cash at end of year $ 128,774 $ 219,836 $ 419,253 See notes to consolidated financial statements. 53 Year Ended December 31, 2022 2021 2020 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash payments for interest net of amounts capitalized of $ 8,512 , $ 2,023 and $ 715 , respectively $ 55,740 $ 58,621 $ 68,113 Cash payments for income taxes 913 4,663 499 NON-CASH INVESTING AND FINANCING ACTIVITIES Accrued capital expenditures included in accounts payable and accrued expenses 34,673 18,702 5,808 Write-off of fully depreciated and impaired assets 8,733 10,706 21,447 Forgiveness of mortgage debt — — 30,000 Assumption of debt from the acquisition of real estate — — 72,473 Dividend/distribution declared and paid in subsequent period — — 55,905 RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents at beginning of year $ 164,478 $ 384,572 $ 432,954 Restricted cash at beginning of year 55,358 34,681 52,182 Cash and cash equivalents and restricted cash at beginning of year $ 219,836 $ 419,253 $ 485,136 Cash and cash equivalents at end of year $ 85,518 $ 164,478 $ 384,572 Restricted cash at end of year 43,256 55,358 34,681 Cash and cash equivalents and restricted cash at end of year $ 128,774 $ 219,836 $ 419,253 See notes to consolidated financial statements. 54 URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION 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 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. Unless the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries. The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). 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. Urban Edge serves as the sole general partner of the Operating Partnership. The third-party unitholders have limited rights over the Operating Partnership such that they do not have characteristics of a controlling financial interest. As such, the Operating Partnership is considered a variable interest entity (“VIE”), and the Company is the primary beneficiary which consolidates it. The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest. As of December 31, 2022, our portfolio consisted of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million sf, which is inclusive of a 95 % controlling interest in Walnut Creek, CA (Mt. Diablo), and an 82.5 % controlling interest in Sunrise Mall, in Massapequa, NY. 2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for annual financial information and with the instructions of Form 10-K . The consolidated financial statements as of and for the years ended December 31, 2022, 2021 and 2020 reflect the consolidation of the Company, the Operating Partnership, wholly-owned subsidiaries and those entities in which we have a controlling financial interest. All intercompany transactions have been eliminated in consolidation. 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 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. 3. 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. 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 Estimates” of this Annual Report on Form 10-K. Real Estate — Real estate is carried at cost, net of accumulated depreciation and amortization. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Significant renovations that improve or extend the useful lives of assets are capitalized. As real estate is undergoing redevelopment activities, all property operating expenses directly associated with and attributable to the redevelopment, including interest, are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the property when completed. 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 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. 55 Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and assumption of liabilities and we allocate the purchase price based on these assessments on a relative fair value basis. We assess fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. We record acquired intangible assets (including acquired above-market leases, acquired in-place leases and tenant relationships) and acquired intangible liabilities (including below-market leases) at their estimated fair value. 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 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. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Estimated fair value may be based on discounted future cash flows utilizing appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the projected future cash flows 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. 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 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. Restricted Cash — Restricted cash consists of security deposits and cash escrowed under loan agreements for debt service, real estate taxes, property insurance, tenant improvements, leasing commissions, capital expenditures and cash held for potential Internal Revenue Code Section 1031 tax deferred exchange transactions. Tenant and Other Receivables and Changes in Collectibility Assessment — Tenant receivables include unpaid amounts billed to tenants, disputed enforceable charges and accrued revenues for future billings to tenants for property expenses. 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 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. Tenant receivables, and receivables arising from the straight-lining of rents, are written-off directly when management deems the collectibility of substantially all future lease payments from a specific lease is not probable, at which point, the Company will begin recognizing revenue from such leases prospectively, based on actual amounts received. This write-off effectively reduces cumulative non-cash rental income recognized from the straight-lining of rents since lease commencement. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance, including those arising from the straight-lining of rents. Deferred Leasing Costs — Deferred leasing costs include incremental costs of a lease that would have not been incurred if the lease had not been executed, including broker and sale commissions, and contingent legal fees. 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 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 associated with the revolving credit agreement are included in prepaid expenses and other assets on the 56 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: • Rental revenue: Rental revenue comprises revenue from fixed and variable lease payments, as designated within tenant operating leases in accordance with ASC 842 Leases, as described further in our Leases accounting policy in Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. • Rental revenue deemed uncollectible: We evaluate the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level, which result from the inability of tenants to make required payments under their operating lease agreements. We recognize changes in the collectibility assessment of these operating leases as adjustments to rental revenue in accordance with ASC 842. • Other Income: 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 . Leases — We have approximately 900 operating leases at our properties, which generate rental income from tenants and operating cash flows for the Company. Our tenant leases are dependent on the Company, as lessor, agreeing to provide our tenants with the right to control the use of our real estate assets, as lessees. Our real estate assets are comprised of retail shopping centers, malls and industrial parks. Tenants agree to use and control their agreed upon space for their business purposes. Thus, our tenants obtain substantially all of the economic benefits from the use of our shopping center space and have the right to direct how and for what purpose the real estate space is used throughout the period of use. Given these contractual terms, the Company has determined that all tenant contracts of this nature contain a lease. The Company assesses lease classification for each new and modified lease. All new and modified leases which commenced in the year ended December 31, 2022 have been assessed and classified as operating leases. Contractual rent increases of renewal options are often fixed at the time of the initial lease agreement which may result in tenants being able to exercise their renewal options at amounts that are less than the fair value of the rent at the date of renewal. In addition to fixed base rents, certain rental income derived from our tenant leases is variable and may be dependent on percentage rent or the Consumer Price Index ("CPI"). Variable lease payments from percentage rents are earned by the Company in the event the tenant's gross sales exceed certain amounts. Terms of percentage rent are agreed upon in the tenant's lease and will vary based on the tenant's sales. Variable lease payments dependent on the CPI, will change in accordance with the corresponding increase or decrease in CPI if negotiated and agreed upon in the tenant's lease. Variable lease payments dependent on percentage rent and the CPI were $ 9.2 million and $ 9.8 million for the years ended December 31, 2022 and 2021, respectively. Variable lease payments also arise from tenant expense reimbursements, which provide for the recovery of all or a portion of the operating expenses, common area maintenance expenses, real estate taxes, insurance and capital improvements of the respective property and amounted to $ 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 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. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The initial measurement of a ROU asset may differ from the initial measurement of the lease liability due to initial direct costs, prepaid lease payments and lease incentives. As of December 31, 2022, no other contracts have been identified as leases . Our leases often offer renewal options, which we assess against relevant economic factors to determine whether the Company is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods, for which the Company has determined are reasonably certain of being exercised, are included in the measurement of the corresponding lease liability and ROU asset. For finance leases and operating leases, the discount rate applied to measure each ROU asset and lease liability is based on the incremental borrowing rate of the lease due to the rate implicit in the lease not being readily determinable. 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 57 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. Noncontrolling Interests — Noncontrolling interests in consolidated subsidiaries represent the portion of equity that we do not own in those entities that we consolidate. We identify our noncontrolling interests separately within the equity section on the consolidated balance sheets. Noncontrolling interests in the Operating Partnership include OP units and limited partnership interests in the Operating Partnership in the form of long-term incentive plan (“LTIP”) unit awards classified as equity. Variable Interest Entities — Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, or for which the equity owners as a group lack any one of the following characteristics: (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity’s economic performance, (ii) the obligation to absorb the expected losses of the legal entity, or (iii) the right to receive the expected residual returns of the legal entity, qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The consolidated financial statements reflect the consolidation of VIEs in which the Company is the primary beneficiary. Management uses its judgment when determining if we are the primary beneficiary of, or have a controlling financial interest in, an entity in which we have a variable interest. Factors considered in determining whether we have the power to direct the activities that most significantly impact the entity’s economic performance include voting rights, involvement in day-to-day capital and operating decisions and the extent of our involvement in the entity. Excluding the Operating Partnership, the Company had two entities that met the criteria of a VIE in which we held variable interests as of December 31, 2022 and 2021. These entities are VIEs primarily because the noncontrolling interests do not have substantive kick-out or participating rights and we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of these entities. As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for these entities, they were consolidated in our financial statements as of December 31, 2022 and 2021. The majority of the operations of these VIEs are funded with cash flows generated by the properties and periodic cash contributions. As of December 31, 2022 and 2021, excluding the Operating Partnership, the two consolidated VIEs had total assets of $ 47.6 million and $ 48.5 million, respectively and total liabilities of $ 23.2 million and $ 24.7 million, respectively. Earnings Per Share and Unit — Basic earnings per common share and unit is computed by dividing net income attributable to common shareholders and unitholders by the weighted average common shares and units outstanding during the period. Unvested share-based payment awards that entitle holders to receive non-forfeitable dividends, such as our restricted stock awards, are classified as “participating securities.” Because the awards are considered participating securities, the Company and the Operating Partnership are required to apply the two-class method of computing basic and diluted earnings that would otherwise have been available to common shareholders and unitholders. Under the two-class method, earnings for the period are allocated between common shareholders and unitholders and other shareholders and unitholders, based on their respective rights to receive dividends. During periods of net loss, losses are allocated only to the extent the participating securities are required to absorb their share of such losses. Diluted earnings per common share and unit reflects the potential dilution of the assumed exercises of shares including stock options and unvested restricted shares to the extent they are dilutive. Share-Based Compensation — We grant stock options, LTIP units, OP units, deferred share units, restricted share awards and performance-based units to our officers, trustees and employees. The term of each award is determined by the compensation committee of our Board of Trustees (the “Compensation Committee”), but in no event can such term be longer than ten years from the date of grant. The vesting schedule of each award is determined by the Compensation Committee, in its sole and absolute discretion, at the date of grant of the award. Dividends are paid on certain shares of unvested restricted stock, which makes the restricted stock a participating security. Fair value is determined, depending on the type of award, using either the Black-Scholes option-pricing model or the Monte Carlo method, both of which are intended to estimate the fair value of the awards at the grant date. In using the Black-Scholes option-pricing model, expected volatilities and dividend yields are primarily based on available implied data and peer group companies’ historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. 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 58 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 and comprehensive income. When the Company issues common shares as compensation, it receives a like number of common units from the Operating Partnership. Accordingly, the Company’s ownership in the Operating Partnership will increase based on the number of common shares awarded under our 2015 Omnibus Share Plan. As a result of the issuance of common units to the Company for share-based compensation, the Operating Partnership accounts for share-based compensation in the same manner as the Company. Income Taxes — 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. 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. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. The Company applies the FASB’s guidance relating to uncertainty in income taxes recognized in a Company’s financial statements. Under this guidance the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. The Company records interest and penalties relating to unrecognized tax benefits, if any, as income tax expense. Concentration of Credit Risk — A concentration of credit risk arises in our business when a national or regionally-based tenant occupies a substantial amount of space in multiple properties owned by us. In that event, if the tenant suffers a significant downturn in its business, it may become unable to make its contractual rent payments to us, exposing us to potential losses in rental revenue, expense recoveries, and percentage rent. Further, the impact may be magnified if the tenant is renting space in multiple locations. Generally, we do not obtain security from our national or regionally-based tenants in support of their lease obligations to us. We regularly monitor our tenant base to assess potential concentrations of credit risk. None of our tenants accounted for more than 10% of total revenues in the year ended December 31, 2022. 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 59 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 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. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief, that lessors provide to mitigate the economic effects of COVID-19 on lessees, is a lease modification under ASC 842. Instead, when the cash flows resulting from the lease concession granted for COVID-19 rent relief are substantially the same or less than the cash flows of the original contract, an entity may elect to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). The FASB stated that there are multiple ways to account for rent concessions, none of which the FASB believes are more preferable than the others. Two of those methods are: (i) account for the concessions as if no changes to the lease contract were made; under that accounting, a lessor would continue to increase its lease receivable and continue to recognize income, referred to as the “receivable approach”; or (ii) account for the deferred payments or abatements as variable lease payments; under that accounting, a lessor would recognize the payment as income in profit or loss in the period in which the changes in facts and circumstances on which the variable lease payments are based occurred, referred to as the “variable approach”. The Company 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. 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. 60 4. ACQUISITIONS AND DISPOSITIONS Acquisitions During the years ended December 31, 2022 and December 31, 2021, we closed on the following acquisitions: Date Purchased Property Name City State Square Feet Purchase Price (1) (in thousands) 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 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, 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. 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 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) 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 ) $ — $ 18,312 151 Ridgedale Avenue 2,990 35,509 — ( 740 ) — 37,759 Woodmore Towne Centre (2) 28,398 144,834 23,128 ( 8,035 ) 9,730 198,055 2021 Total $ 33,463 $ 195,076 $ 24,850 $ ( 8,993 ) $ 9,730 $ 254,126 (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. 61 (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. Dispositions 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. Of these dispositions completed during the year ended December 31, 2021, two were completed as a 1031 exchange with the acquisition of 151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale for income tax purposes. 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. 5. IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES The following table summarizes our identified intangible assets and liabilities: (Amounts in thousands) December 31, 2022 December 31, 2021 In-place leases $ 93,191 $ 96,648 Accumulated amortization ( 36,196 ) ( 33,057 ) Above-market leases 9,013 10,185 Accumulated amortization ( 3,396 ) ( 3,147 ) Other intangible assets 1,635 1,635 Accumulated amortization ( 1,391 ) ( 1,157 ) Identified intangible assets, net of accumulated amortization 62,856 71,107 Below-market leases 134,144 135,654 Accumulated amortization ( 40,816 ) ( 35,029 ) Identified intangible liabilities, net of accumulated amortization $ 93,328 $ 100,625 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 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. The intangibles related to these leases were fully amortized and subsequently written-off in 2021. 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 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: (Amounts in thousands) Below-Market Above-Market In-Place Lease Year Operating Lease Amortization Operating Lease Amortization Amortization 2023 $ 7,764 $ ( 1,081 ) $ ( 9,064 ) 2024 7,528 ( 920 ) ( 7,801 ) 2025 7,348 ( 725 ) ( 6,334 ) 2026 6,971 ( 606 ) ( 5,630 ) 2027 6,693 ( 458 ) ( 5,101 ) 62 6. MORTGAGES PAYABLE The following is a summary of mortgages payable as of December 31, 2022 and December 31, 2021. Interest Rate at December 31, December 31, (Amounts in thousands) Maturity December 31, 2022 2022 2021 First mortgages secured by: Variable rate Hudson Commons (1) 11/15/2024 5.97 % $ 27,482 $ 28,034 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 Plaza at Cherry Hill (2) 6/15/2025 8.00 % 29,000 28,244 Plaza at Woodbridge (3) 6/8/2027 5.26 % 52,947 54,029 Total variable rate debt 159,198 161,084 Fixed rate 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 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 (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) 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 Mount Kisco Commons 11/15/2034 6.40 % 11,760 12,377 Total fixed rate debt 1,540,293 1,534,324 Total mortgages payable 1,699,491 1,695,408 Unamortized debt issuance costs ( 7,801 ) ( 8,218 ) Total mortgages payable, net of unamortized debt issuance costs $ 1,691,690 $ 1,687,190 (1) Bears interest at one month LIBOR plus 190 bps. (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. 63 The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $ 1.5 billion as of December 31, 2022. Our mortgage loans contain covenants that limit our ability to incur additional indebtedness on these properties and in certain circumstances require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. As of December 31, 2022, we were in compliance with all debt covenants. As of December 31, 2022, the principal repayments for the next five years and thereafter are as follows: (Amounts in thousands) Year Ending December 31, 2023 $ 351,497 2024 166,380 2025 72,683 2026 229,553 2027 316,771 Thereafter 562,607 Revolving Credit Agreement On January 15, 2015, we entered into a $ 500 million Revolving Credit Agreement (the “Agreement”) with certain financial institutions. On March 7, 2017, we amended and extended the Agreement. The amendment increased the credit facility size by $ 100 million to $ 600 million and extended the maturity date to March 7, 2021 with two six-month extension options. On July 29, 2019, we entered into a second amendment to the Agreement to extend the maturity date to January 29, 2024 with two six-month extension options. On June 3, 2020, we entered into a third amendment to the Agreement, which among other things, modifies certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized. 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. 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. 64 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. 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. Therefore, in accordance with ASC 470-60 Troubled Debt Restructurings , the Company did not recognize a gain at the time of the restructuring, as the future cash payments, including contingent payments, are greater than the carrying value of the mortgage payable. We have accrued interest of $ 5.4 million related to this mortgage, which is included in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets as of December 31, 2022. 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 The Outlets at Montehiedra 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. There was no separate liability recorded related to this guarantee. 7. 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. 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. 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. The taxability of such dividends for the years ended December 31, 2022, 2021 and 2020 are as follows: Year Ended December 31, 2022 2021 2020 Dividend paid per share (1) $ 0.64 $ 0.60 $ 0.68 Ordinary income 100 % 100 % 100 % Return of capital — % — % — % Capital gains — % — % — % (1) The special cash dividend of $ 0.46 per common share declared in December 2020, and paid in January 2021, was fully allocable to the 2020 tax year. For U.S. federal income tax purposes, the REIT and other minority members are partners in the Operating Partnership. As such, the partners are required to report their share of taxable income on their respective tax returns. However, 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 income tax expense in the consolidated statements of income and comprehensive income. 65 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 and comprehensive income. 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. federal taxable income. The strategies implemented resulted in the recognition of a state and local income tax liability and corresponding deferred tax asset for the REIT of $ 4.5 million during the year ended December 31, 2020. 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. 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, 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 . 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. Deferred income taxes are recognized for the tax effect of temporary differences between the financial reporting basis and the tax basis of taxable assets and liabilities and for the tax effect of carried forward tax attributes such as net operating losses and tax credits. Income tax expense (benefit) for the years ended December 31, 2022, 2021 and 2020 consists of the following: Year Ended December 31, (Amounts in thousands) 2022 2021 2020 Income tax expense (benefit): Current: U.S. federal income tax $ 11 $ — $ — U.S. state and local income tax 10 ( 1,228 ) 4,525 Puerto Rico income tax 78 110 1,293 Total current 99 ( 1,118 ) 5,818 Deferred: U.S. federal income tax 1 5 ( 6 ) Puerto Rico income tax 2,803 2,252 ( 44,808 ) Total deferred 2,804 2,257 ( 44,814 ) Total income tax expense (benefit) $ 2,903 $ 1,139 $ ( 38,996 ) 66 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: Year Ended December 31, (Amounts in thousands) 2022 2021 2020 Federal provision at statutory tax rate (1) $ 10,551 $ 22,880 $ 12,338 REIT income before income taxes not subject to federal tax provision ( 10,539 ) ( 22,875 ) ( 12,339 ) State and local income tax provision, net of federal benefit 10 225 11 Puerto Rico income tax provision 2,881 2,362 ( 43,515 ) Change in valuation allowance — ( 1,453 ) 4,509 Total income tax expense (benefit) $ 2,903 $ 1,139 $ ( 38,996 ) (1) Federal statutory tax rate of 21% for the years ended December 31, 2022, 2021 and 2020. Below is a table summarizing the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021: Balance at (Amounts in thousands) December 31, 2022 December 31, 2021 Deferred tax assets: Depreciation $ 37,404 $ 40,793 Amortization of deferred financing costs 650 860 Rental revenue deemed uncollectible 525 735 Charitable contribution 7 7 Net operating loss 1,451 1,425 Valuation allowance — ( 3,061 ) Total deferred tax assets 40,037 40,759 Deferred tax liabilities: Mortgage liability ( 3,021 ) ( 1,394 ) Straight line rent ( 1,009 ) ( 961 ) Amortization of acquired leases ( 178 ) ( 205 ) Accrued interest expense ( 1,213 ) ( 779 ) Total deferred tax liabilities ( 5,421 ) ( 3,339 ) Net deferred tax assets $ 34,616 $ 37,420 8. LEASES Leases as lessor We have approximately 900 operating leases at our retail shopping centers, malls and industrial properties which generate rental income from tenants and operating cash flows for the Company. Our tenant base comprises a diverse group of merchants including department stores, supermarkets, discounters, entertainment offerings, health clubs, DIY stores, in-line specialty shops, restaurants and other food and beverage vendors and service providers. Tenant leases under 10,000 sf generally have lease terms of 5 years or less. Tenant leases 10,000 sf or more are considered anchor leases and generally have lease terms of 10 to 25 years, with one or more renewal options available upon expiration of the initial lease term. Contractual rent increases for the renewal options are often fixed at the time of the initial lease agreement which may result in tenants being able to exercise their renewal options at amounts that are less than the fair value of the rent at the date of renewal. 67 The components of rental revenue for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, (Amounts in thousands) 2022 2021 2020 Rental Revenue Fixed lease revenue $ 290,784 $ 318,585 $ 235,488 Variable lease revenue 105,592 103,882 92,792 Total rental revenue $ 396,376 $ 422,467 $ 328,280 Property, plant and equipment under operating leases as lessor As of December 31, 2022, 2021 and 2020 , substantially all of the Company’s real estate assets are subject to operating leases. Maturity analysis of lease payments as lessor The Company’s operating leases, including those with revenue recognized on a cash basis, are disclosed in the aggregate due to their consistent nature as real estate leases. As of December 31, 2022 , the undiscounted cash flows to be received from lease payments of our operating leases on an annual basis for the next five years and thereafter are as follows: (Amounts in thousands) Year Ending December 31, 2023 $ 275,745 2024 254,064 2025 234,884 2026 214,970 2027 196,381 Thereafter 871,650 Total undiscounted cash flows $ 2,047,694 Leases as lessee 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. 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 the property. 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. The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, (Amounts in thousands) 2022 2021 2020 Lease expense Operating lease cost (1) $ 9,707 $ 10,162 $ 10,875 Variable lease cost 2,753 2,710 2,792 Total lease expense $ 12,460 $ 12,872 $ 13,667 (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. 68 Supplemental balance sheet information related to leases as of December 31, 2022 and December 31, 2021 was as follows: December 31, 2022 December 31, 2021 Supplemental noncash information Operating leases Finance lease Operating leases Finance lease Weighted-average remaining lease term 14.3 years 33.2 years 14.8 years 34.2 years Weighted-average discount rates 4.30 % 4.01 % 3.98 % 4.01 % 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, Cash paid for amounts included in the measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 9,284 $ 9,584 Operating cash flows from finance lease 121 120 Financing cash flows from finance lease 12 11 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 1,852 $ 772 Maturity analysis of lease payments as lessee The undiscounted cash flows to be paid on an annual basis for the next five years and thereafter are presented in the table below. The total amount of lease payments, on an undiscounted basis, are reconciled to the lease liability on the consolidated balance sheet by considering the present value discount. (Amounts in thousands) Operating Finance Year Ending December 31, leases lease 2023 $ 9,321 $ 109 2024 8,594 109 2025 6,692 109 2026 6,460 124 2027 6,201 127 Thereafter 45,607 6,172 Total undiscounted cash flows 82,875 6,750 Present value discount ( 23,086 ) ( 3,734 ) Discounted cash flows $ 59,789 $ 3,016 9. FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurement and Disclosures defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. 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 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: 69 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 Financial assets and liabilities that are not measured at fair value on the consolidated balance sheets include cash and cash equivalents and mortgages payable. Cash and cash equivalents are carried at cost, which approximates fair value. The fair value of mortgages payable is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt, which is provided by a third-party specialist. 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 (Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Mortgages payable (1) $ 1,699,491 $ 1,542,869 $ 1,695,408 $ 1,692,674 (1) Carrying amounts exclude unamortized debt issuance costs of $ 7.8 million and $ 8.2 million as of December 31, 2022 and December 31, 2021, respectively. 70 Nonfinancial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis 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, 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. 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. The Company recognized an impairment charge of $ 0.4 million on its property in Westfield, NJ which was sold on July 22, 2021. Additionally, the Company recognized an impairment charge of $ 0.1 million on its ground lease in Vallejo, CA which was sold on December 21, 2021. Prior to these dispositions, the carrying value of these assets exceeded the estimated fair value less costs to sell. The aggregated fair values of $ 7.9 million were based on sale agreements under negotiation with third-party buyers. During the year ended December 31, 2020, the Company recognized an impairment charge of $ 3.1 million on a parcel of our property in Lodi, NJ, which was sold on January 8, 2021 . Prior to the sale of the parcel, the carrying value of this property exceeded its estimated fair value less costs to sell of $ 7.2 million . The fair value of the parcel was based on a sale agreement under negotiation with a third-party buyer. The Company believes the inputs utilized to measure these fair values were reasonable in the context of applicable market conditions, however due to the significance of the unobservable inputs in the overall fair value measures, including market conditions and expectations for growth, the Company determined that such fair value measurements are classified as Level 3. 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. 10. COMMITMENTS AND CONTINGENCIES Legal Matters 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 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. Insurance The Company maintains numerous insurance policies including for general liability, property, pollution, acts of terrorism, trustees’ and officers’, cyber, workers’ compensation and automobile-related liabilities. However, all such policies are subject to terms, conditions, exclusions, deductibles and sub-limits, amount other limiting factors. For example, the Company’s terrorism insurance excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization Act. The Company’s primary and excess insurance policies providing coverage for pollution related losses have an aggregate limit of $ 50 million and provide remediation and business interruption coverage for pollution incidents, which pursuant to our policies expressly include the presence and dispersal of viruses. On December 23, 2020, the Company initiated litigation in New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the COVID-19 virus. Insurance premiums are typically charged directly to each of the properties but not all of the cost of such premiums are recovered. The Company is responsible for deductibles, losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material. 71 We continue to monitor the state of the insurance market and the scope and costs of available coverage. 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 consolidated financial position. Certain of our loans and other agreements contain customary covenants requiring the maintenance of insurance coverage. Although we believe that we currently have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. 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. 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 $ 1.6 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. 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. Bankruptcies Although our rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the related tenant stores may permanently vacate prior to lease expiration. In the event a tenant with a significant number of leases or square footage in our shopping centers files for bankruptcy and rejects its leases with us, we could experience a reduction in our revenues. 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. 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. 11. PREPAID EXPENSES AND OTHER ASSETS The following is a summary of the composition of the prepaid expenses and other assets in the consolidated balance sheets: Balance at (Amounts in thousands) December 31, 2022 December 31, 2021 Other assets $ 18,386 $ 19,712 Deferred tax asset, net 34,616 37,420 Deferred financing costs, net of accumulated amortization of $ 7,269 and $ 5,932 , respectively 6,749 2,234 Finance lease right-of-use asset 2,724 2,724 Prepaid expenses: Real estate taxes 12,080 9,982 Insurance 1,391 1,088 Rent, licenses/fees 1,261 951 Total Prepaid expenses and other assets $ 77,207 $ 74,111 72 12. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES The following is a summary of the composition of accounts payable, accrued expenses and other liabilities in the consolidated balance sheets: Balance at (Amounts in thousands) December 31, 2022 December 31, 2021 Accrued capital expenditures and leasing costs $ 35,732 $ 19,164 Deferred tenant revenue 28,468 28,898 Accrued interest payable 10,789 9,879 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 13. INTEREST AND DEBT EXPENSE The following table sets forth the details of interest and debt expense: Year Ended December 31, (Amounts in thousands) 2022 2021 2020 Interest expense $ 55,557 $ 54,946 $ 68,184 Amortization of deferred financing costs 3,422 2,992 2,831 Total Interest and debt expense $ 58,979 $ 57,938 $ 71,015 14. EQUITY AND NONCONTROLLING INTEREST At-The-Market Program 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. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of our common shares, and our capital needs. The Company has no obligation to sell any shares under the ATM Program. Share Repurchase Program In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $ 200 million of the Company’s common shares. Under the program, the Company may repurchase its shares from time to time in the open market or in privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The amount and timing of the purchases will depend on a number of factors including the price and availability of the Company’s shares, trading volume and general market conditions. The share repurchase program does not obligate the Company to acquire any particular amount of common shares and may be suspended or discontinued at any time at the Company’s discretion. 73 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. 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. Urban Edge serves as the sole general partner of the Operating Partnership. The third-party unitholders have limited rights over the Operating Partnership such that they do not have characteristics of a controlling financial interest. As such, the Operating Partnership is considered a VIE, and the Company is the primary beneficiary which consolidates it. The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest. Dividends and Distributions 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. We have a Dividend Reinvestment Plan (the “DRIP”), whereby shareholders may use their dividends to purchase shares. During the years ended December 31, 2022, 2021 and 2020, 5,512 , 4,442 and 3,445 shares were issued under the DRIP, respectively. Noncontrolling Interests in Operating Partnership Noncontrolling interests in the Operating Partnership reflected on the consolidated balance sheets of the Company are comprised of OP units and limited partnership interests in the Operating Partnership in the form of LTIP unit awards. LTIP unit awards were granted to certain executives pursuant to our 2015 Omnibus Share Plan (the “Omnibus Share Plan”) and our 2018 Inducement Equity Plan (the “Inducement Plan”). OP units were issued to contributors in exchange for their property interests in connection with the Company’s property acquisitions in 2017. The total of the OP units and LTIP units represent a 4.0 % weighted-average interest in the Operating Partnership for the year ended December 31, 2022. Holders of outstanding vested LTIP units may, from and after two years from the date of issuance, redeem their LTIP units for cash, or for the Company’s common shares on a one -for-one basis, solely at our election. 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. 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. 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 and comprehensive income. 15. SHARE-BASED COMPENSATION Omnibus Share Plan 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. 74 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 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 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. The terms and conditions of the Inducement Plan and any awards thereunder granted are substantially similar to those under the 2015 Omnibus Share Plan. The Company has granted an aggregate of 352,890 restricted LTIP Units and 2,000,000 stock options under the Inducement Plan with grant date fair values of $ 7.2 million and $ 9.3 million, respectively. 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 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). 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 For the performance-based awards under the 2020 LTI Plan, participants, have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year Performance Period beginning on February 20, 2020 and ending on February 19, 2023. The Company granted performance-based awards under the 2020 LTI Plan that represent 630,774 LTIP Units. 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. 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 11 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 75 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 The time-based awards granted under the 2020 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years . 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, 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 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). The total grant date fair value under the 2021 LTI Plan was $ 7.8 million, comprising both performance-based and time-based awards. Performance-based awards For the performance-based awards under the 2021 LTI Plan, participants have the opportunity to earn awards in the form of LTIP Units if Urban Edge’s absolute and/or relative TSR meets certain criteria over the three-year Performance Period beginning on February 10, 2021 and ending on February 9, 2024. The Company granted performance-based awards under the 2021 LTI Plan that represent 398,977 LTIP Units. 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. Under the Absolute TSR component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 18 %, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to 27 %, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or greater than 36 %. The Relative TSR component is based on the Company’s performance compared to a peer group comprised of 14 companies. Under the Relative TSR Component, 40 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 35 th percentile of the peer group, 100 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to the 55 th percentile of the peer group, and 165 % of the LTIP Units will be earned if the Company’s TSR over the Performance Period is equal to or above the 75 th percentile of the peer group, with earning determined using linear interpolation if in between such relative and absolute TSR thresholds. During the 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 The time-based awards granted under the 2021 LTI Plan, also granted in the form of LTIP Units, vest ratably over three years except in the case of our Chairman and Chief Executive Officer, where the vesting is ratably over four years. As of December 31, 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: 76 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. 2023 Long-Term Incentive Plan 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. 77 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 . 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, 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 The following table presents information regarding restricted share activity during the years ended December 31, 2022, 2021, and 2020: Shares Weighted Average Grant Date Fair Value per Share Unvested at January 1, 2022 49,347 $ 17.23 Granted 44,214 17.69 Vested ( 23,652 ) 17.39 Forfeited ( 16,531 ) 17.24 Unvested at December 31, 2022 53,378 $ 17.54 During the year ended December 31, 2022, we granted 44,214 restricted shares that are subject to forfeiture and vest over periods ranging from one to three years. The total grant date value of the 23,652 restricted shares vested during the year ended December 31, 2022 was $ 0.4 million. Restricted Units 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 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, 2022 the remaining 487,001 units vest over a weighted average period of approximately three years . 78 Share-Based Compensation Expense 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, (Amounts in thousands) 2022 2021 2020 Share-based compensation expense components: LTIP expense (1) $ 5,862 $ 4,909 $ 7,331 Performance-based LTI expense (2) 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 Total Share-based compensation expense $ 10,486 $ 10,819 $ 16,994 (1) LTIP expense includes the time-based portion of the 2022, 2021, 2020, 2019 and 2018 LTI Plans. (2) Performance-based LTI expense includes the 2017 OPP plan and the performance-based portion of the 2022, 2021, 2020, 2019 and 2018 LTI Plans. As of December 31, 2022, we had a total of $ 9.3 million of unrecognized compensation expense related to unvested and restricted share-based payment arrangements including unvested stock options, LTIP units, deferred share units, and restricted share awards which were granted under our Omnibus Share Plan as well as OPP awards. This expense is expected to be recognized over a weighted average period of two years . 16. EARNINGS PER SHARE AND UNIT Urban Edge Earnings per Share We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of Urban Edge common shares and participating securities is calculated according to dividends declared and participating rights in undistributed earnings. Restricted shares issued pursuant to our share-based compensation program are considered participating securities, and as such, have non-forfeitable rights to receive dividends. The computation of diluted EPS reflects potential dilution of securities by adding potential common shares, including stock options and unvested restricted shares, to the weighted average number of common shares outstanding for the period. 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, 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. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests in the accompanying consolidated financial statements. As such, the assumed redemption of these units would have no net impact on the determination of diluted earnings per share since they would be anti-dilutive. 79 The following table sets forth the computation of our basic and diluted earnings per share: Year Ended December 31, (Amounts in thousands, except per share amounts) 2022 2021 2020 Numerator: Net income attributable to common shareholders $ 46,170 $ 102,686 $ 93,589 Less: Earnings allocated to unvested participating securities ( 23 ) ( 47 ) ( 62 ) Net income available for common shareholders - basic $ 46,147 $ 102,639 $ 93,527 Impact of assumed conversions: OP and LTIP units 1,635 3,675 81 Net income available for common shareholders - dilutive $ 47,782 $ 106,314 $ 93,608 Denominator: Weighted average common shares outstanding - basic 117,366 117,029 117,722 Effect of dilutive securities: Restricted share awards 59 55 77 Assumed conversion of OP and LTIP units 4,215 4,363 103 Weighted average common shares outstanding - diluted 121,640 121,447 117,902 Earnings per share available to common shareholders: Earnings per common share - Basic $ 0.39 $ 0.88 $ 0.79 Earnings per common share - Diluted $ 0.39 $ 0.88 $ 0.79 Operating Partnership Earnings per Unit The following table sets forth the computation of basic and diluted earnings per unit: Year Ended December 31, (Amounts in thousands, except per unit amounts) 2022 2021 2020 Numerator: Net income attributable to unitholders $ 48,065 $ 106,982 $ 97,749 Less: net income attributable to participating securities ( 23 ) ( 47 ) ( 62 ) Net income available for unitholders $ 48,042 $ 106,935 $ 97,687 Denominator: Weighted average units outstanding - basic 121,374 120,966 121,957 Effect of dilutive securities issued by Urban Edge 59 55 77 Unvested LTIP units 207 1,086 777 Weighted average units outstanding - diluted 121,640 122,107 122,811 Earnings per unit available to unitholders: Earnings per unit - Basic $ 0.40 $ 0.88 $ 0.80 Earnings per unit - Diluted $ 0.39 $ 0.88 $ 0.80 80 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None.