What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-12 compared with 2024-02-14 · 145 added, 144 removed, 252 unchanged (53% of the section changed)

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

As of December 31, 2023, our portfolio was comprised of 17.1 million square feet including 71 shopping centers, two outlet centers, two malls and one industrial building.

As of December 31, 2024, our portfolio was comprised of 17.4 million square feet including 71 shopping centers, two outlet centers and two malls.

Economic Considerations

Microeconomic and macroeconomic conditions have caused volatility in the financial markets, and a rapid rise in inflation since the beginning of 2022.

The Federal Reserve took measures to mitigate the impact of inflation by raising its benchmark interest rate several times throughout 2022.

While the rate hikes enacted by the Federal Reserve had a significant impact on interest rates and increased the cost of borrowing, we continued to see consumer confidence remain strong providing support for retail real estate.

The demand for retail spaces was strong as evidenced by the record number of new leases we executed in 2022.

In 2023, the Federal Reserve continued its interest rate hikes raising the benchmark rate to above 5%.

These rate increases proved to be successful in reducing inflation beginning in the second quarter of 2023.

While inflation has decreased compared to the prior year, it remains at an elevated level relative to the years preceding 2021.

Despite the volatility in interest rates, we were able to complete the largest single asset refinancing in Company history with a new $290 million, 6.3% mortgage on Bergen Town Center on favorable terms compared to similar assets in the market.

Our leasing activity remained strong in 2023, signing a record volume of leases in the fourth quarter and generating an average cash rent spread of 24% on new leases for the year.

We expect to continue to add value to our portfolio through executing our leasing pipeline, active development, redevelopment and anchor repositioning projects, commencing leases signed but not yet opened and identifying additional capital recycling opportunities.

In recent years, microeconomic and macroeconomic conditions have caused volatility in the financial markets.

Inflation began to increase rapidly during 2021 through 2022, resulting in increased costs for certain goods and services.

The Federal Reserve took measures to mitigate the impact of inflation by raising its benchmark interest rate several times between 2022 and 2023, resulting in significant increases in the cost of borrowing.

These interest rate increases proved to be successful in reducing inflation as inflation rates began to fall beginning in the second quarter of 2023 and continued to fall through most of 2024.

In September 2024, the Federal Reserve cut rates by 50 basis points, driven in part by positive economic reports and the decrease in inflation levels.

This was followed by additional rate cuts in November and December of 2024, lowering the target rate to a range of 4.25% to 4.50%.

While interest rates and inflation have decreased compared to the prior year, both remain at elevated levels relative to the years preceding 2021 and could remain at these levels in the near-term and long-term.

The current levels of inflation could also result in reduced discretionary spending by consumers, putting pricing pressure on rents and limiting the amounts we are able to charge new tenants or tenants up for renewals.

Notwithstanding the foregoing, the Company continued to see strong demand from grocers, discounters, quick-service restaurants and other tenants wanting to operate in our core market of the Washington, D.C.

to Boston corridor.

The Company was also able to pay off, finance and refinance several mortgage loans during the year and continues to maintain a strong balance sheet that we believe provides us with financial flexibility.

Our debt consists primarily of well-laddered, single asset, non-recourse mortgages with approximately 9% of debt maturing through 2026.

2024 Highlights

Set forth below are highlights of our leasing activities, completed and activated development, redevelopment and anchor repositioning projects, and property acquisitions:

• Signed 64 new leases totaling approximately 486,201 square feet, including 49 new leases on a same-space (1) basis totaling 418,322 square feet at an average rental rate of $29.64 per square foot on a GAAP basis and $27.86 per square foot on a cash basis, resulting in average rent spreads of 39.0% on a GAAP basis and 24.2% on a cash basis;

• Renewed or extended 110 leases totaling 1,519,738 square feet, all of which are on a same-space (1) basis, at an average rental rate of $24.35 per square foot on a GAAP basis and $23.95 per square foot on a cash basis, generating average rent spreads of 10.2% on a GAAP basis and 8.4% on a cash basis;

• Completed 11 development, redevelopment and anchor repositioning projects, aggregating $58.6 million, seven of which stabilized during the fourth quarter, highlighted by the opening of Sector Sixty6 at Shops at Caguas in October 2023;

• Activated 12 development, redevelopment, and anchor repositioning projects aggregating $60.9 million, expected to generate an approximate 20% unleveraged yield;

• Refinanced the $300 million mortgage secured by the Outlets at Bergen Town Center with a 7-year, $290 million loan at a fixed rate of 6.3%;

• Refinanced the $117 million outstanding mortgage secured by Shops at Caguas (formerly Las Catalinas Mall) with a 10-year, $82 million loan at a fixed rate of 6.6%.

The proceeds were used in conjunction with exercising the discounted payoff option of the previous mortgage on the property which had a carrying value of $117 million and resulted in the recognition of a $43 million gain on the extinguishment of debt;

• Acquired two properties, Shoppers World and Gateway Center, for a total purchase price of $312.2 million inclusive of transaction costs.

The properties, located in the greater Boston area, total 1,392,000 square feet and provide us with critical mass in the Boston market;

• Sold two properties and one property parcel for an aggregate sales price of $318 million.

The two property sales were structured as part of a 1031 exchange with the Boston acquisitions to allow for the deferral of capital gains for income tax purposes.

Set forth below are highlights of our leasing activities, completed and activated development, redevelopment and anchor repositioning projects, financings, refinancings, and property acquisitions and dispositions:

• Signed 79 new leases totaling 485,153 square feet, including 55 new leases on a same-space (1) basis totaling 334,972 square feet at an average rental rate of $31.34 per square foot on a GAAP basis and $27.95 per square foot on a cash basis, generating average rent spreads of 47.3% on a GAAP basis and 25.7% on a cash basis;

• Renewed or extended 86 leases totaling 1,910,688 square feet, including 84 leases on a same-space (1) basis totaling 1,682,610 square feet, at an average rental rate of $19.92 per square foot on a GAAP basis and $19.60 per square foot on a cash basis, generating average rent spreads of 11.3% on a GAAP basis and 9.3% on a cash basis;

• Acquired three properties in our core market of the Washington, D.C.

to Boston corridor, totaling 917,000 square feet, for an aggregate purchase price of $245.3 million, inclusive of transaction costs, at an average capitalization rate of 7%;

• Sold three single-tenant and non-core properties, totaling 454,000 square feet, for an aggregate gross price of $108.9 million at an average capitalization rate of 5%;

• Completed five development, redevelopment and anchor repositioning projects, aggregating $29.7 million, expected to generate an approximate 16% unleveraged yield;

• Activated eight development, redevelopment, and anchor repositioning projects aggregating $14.7 million, expected to generate an approximate 25% unleveraged yield;

• Paid off three single-asset, non-recourse, variable rate mortgage loans aggregating $75.7 million in January 2024 that were due to mature in the fourth quarter of 2024 and had interest rates of 7.34% on the date of repayment;

• Refinanced two single-asset, non-recourse mortgages with two new loans aggregating $100 million with a weighted average interest rate of 5.8%;

• Financed three assets with individual non-recourse mortgages aggregating $111 million with a weighted average interest rate of 5.9%;

• Assumed a $60 million fixed rate mortgage with a below-market interest rate of 3.76% in connection with the acquisition of The Village at Waugh Chapel, partially financing the purchase;

• Issued 7,097,124 common shares at a weighted average gross price of $18.71 per share under our $250 million at-the-market equity offering program (the “ATM program”), generating cash proceeds of $131.1 million, net of commissions paid to distribution agents.

(1) Same-space leases represent those leases signed on spaces for which there was a previous lease.

We intend to create value and grow earnings, funds from operations, and cash flows by:

• Adding essential tenants to our properties and positioning our retail environments with a mix of high-quality tenants including grocers, discounters, premium healthcare operators and elevated food offerings;

• Adding essential tenants to our properties and positioning our retail assets with a mix of high-quality, credit tenants including grocers, discounters, premium healthcare operators and elevated food offerings;

• Managing our balance sheet to allow for flexibility and execution on financing, refinancing, or prepayment opportunities when identified;

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• Leasing vacant spaces, proactively extending leases, managing the exercise of tenant options and, when possible, replacing underperforming tenants with operators that can pay higher rents and positively impact our properties;

• Expediting the delivery of space to tenants and the collection of rents from executed leases that have not yet commenced;

• Expediting the delivery of space to tenants and the collection of rents from executed leases that have not yet rent commenced;

• Generating additional income from our existing assets by redeveloping underutilized existing space, repositioning anchors, and monetizing unused land by developing new spaces and pad sites and researching additional income producing uses;

• Recycling capital by divesting non-retail and smaller assets in non-core markets and acquiring assets that meet our investment criteria in our target markets.

There can be no assurance that we will be able to execute on our growth strategy.

See “Forward-Looking Statements” in this Annual Report on Form 10-K.

• Recycling capital by divesting non-retail and smaller assets in non-core markets and single-tenant assets with low growth, and acquiring assets that meet our investment criteria in our target markets.

Critical Accounting Estimates

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These estimates are prepared using management’s best judgment, after considering past and current events and economic conditions.

In addition, certain information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third-party experts.

consultations with third-party experts.

Actual results could differ from these estimates.

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Our significant accounting policies are more fully described in Note 3 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.

The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.

Real Estate - Estimates Related to Valuing Acquired Assets and Liabilities

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities.

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

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

Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions.

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In the case that these assumptions change materially, they could have a material impact on our results and financial statements.

During 2023, we acquired two properties and utilized the above factors, including the use of a third party, to allocate the purchase price of these properties among various assets and liabilities.

During 2024, we acquired three properties and utilized the above factors, including the use of a third party, to allocate the purchase price of these properties among various assets and liabilities.

Further information on these allocations can be found in Part II, Item 8, Note 4 of this Annual Report on Form 10-K.

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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.

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

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

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Estimates are subjective and may change if additional damage is later assessed or if future cash flows are revised.

During the year ended December 31, 2024, we have had no changes to the methods or assumptions used in our assessment of fair value of our real estate assets and have not incurred any material impairments.

During 2023, we recognized a $34.1 million impairment charge related to one of our properties located in Brooklyn, NY.

Further information on impairments can be found in Part II, Item 8, Note 9 of this Annual Report on Form 10-K.

We have had no changes to the methods or assumptions used in our analyses of fair value of our real estate assets during the year ended December 31, 2023.

We operate in a business that has significant investments in real estate and our estimates of valuation are subject to current market conditions and tenant operations, which drive future cash flows, and are beyond our control.

We operate in a business that has significant investments in real

estate and our estimates of valuation are subject to current market conditions and tenant operations, which drive future cash flows, and are beyond our control.

As these factors can result in changes to our estimates and result in material impairment losses, this is deemed a critical accounting estimate.

Recent Accounting Pronouncements

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.

During June 2023, the Company entered into loan amendments to transition its four LIBOR-based loans to SOFR.

The amendments went into effect July 2023 and did not have a material impact on the loans affected.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40):

Disaggregation of Income Statement Expenses which provides an update to improve the disclosures about a public business entity’s expenses and provide more detailed information about the types of expenses, including purchase of inventory, employee compensation, depreciation and amortization in commonly presented expense captions such as cost of sales, selling, general and administrative expenses and research and development.

The Company is evaluating the impact of this update and will adopt the amendments in our December 31, 2025 Annual Report on Form 10-K.

In March 2024, FASB issued ASU 2024-01 Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards which provides clarity on how an entity determines whether a profits interest or similar award is within the scope of ASC 718.

It also offers guidance on identifying whether such an award is not a share-based payment arrangement and therefore within the scope of other guidance.

The Company has reviewed the update and determined it does not issue any profits interest or similar awards and therefore is not impacted by this ASU.

In December 2023, FASB issued ASU 2023-09 Income Tax (Topic 740):

Improvements to Income Tax Disclosures which provides for additional disclosures for rate reconciliations, disaggregation of income taxes paid, and other disclosures.

The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of this update and will adopt the amendments in its December 31, 2025 Annual Report on Form 10-K.

In November 2023, FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which provides for additional disclosures as they relate to a Company’s segments.

Additional requirements per the update include disclosures for significant segment expenses, measures of profit or loss used by the Chief Operating Decision Maker (the “CODM”) and how these measures are used to allocate resources and assess segment performance.

The amendments in this ASU will also apply to entities with a single reportable segment and are effective for all public entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company has evaluated the impact of this update on its disclosures and has applied the required amendments in this Annual report on Form 10-K for the year ended December 31, 2024.

In August 2023, FASB issued ASU 2023-05 Business Combinations - Joint Venture Formation (Subtopic 805-60):

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The update is to be applied prospectively, with a retrospective option for previously formed joint ventures.

The Company has not elected retrospective application for its previously formed joint ventures and has no new joint ventures impacted by this update.

In November 2023, FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which provides for additional disclosures as they relate to a Company’s segments.

Additional requirements per the update include disclosures for significant segment expenses, measures of profit or loss used by the Chief Operating Decision Maker and how these measures are used to allocate resources and assess segment performance.

The amendments in this ASU will also apply to entities with a single reportable segment and is effective for all public entities for fiscal years beginning after December 15, 2023.

The Company is evaluating the impact of this update on its disclosures and will apply the required amendments in its December 31, 2024 Annual report on Form 10-K.

In December 2023, FASB issued ASU 2023-09 Income Tax (Topic 740):

Improvements to Income Tax Disclosures which provides for additional disclosures for rate reconciliations, disaggregation of income taxes paid, and other disclosures.

The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of this update and will adopt the amendments in our December 31, 2025 Annual Report on Form 10-K.

The Company has not elected retrospective application for its previously formed joint ventures and will adopt the provisions of this ASU for any future joint venture formations.

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.

Recent SEC Reporting Updates

On January 11, 2021, the SEC issued Final Rule Release No.

33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information.

This rule, which became effective on February 10, 2021, adopts amendments to modernize, simplify and enhance certain financial disclosure requirements in Regulation S-K.

Specifically, the amendments eliminate the requirement for Selected Financial Data, streamline the requirement to disclose Supplementary Financial Information, and amend Management’s Discussion & Analysis of Financial Condition and Results of Operations (‘‘MD&A’’).

We early adopted the amendments to two items resulting in the elimination of Item 301, Selected Financial Data, and the omission of Item 302(a), Supplementary Financial Information.

The amendments to Item 303(a)(b) MD&A were adopted in our Form 10-K for the year ended December 31, 2021.

On July 26, 2023, the SEC issued Final Rule Release No.

33-11216, Cybersecurity Risk Management, Strategy Governance, and Incident Disclosure.

This rule, effective on December 15, 2023, adopts amendments to Regulation S-K and adds Item 1C.

Cybersecurity be provided in Part I of Form 10-K.

The main provisions of the amendments require companies to provide disclosure around their risk management, strategy and governance as it relates to cybersecurity to give investors insight into the processes and policies in place.

These amendments were adopted in our Annual Report on Form 10-K for the year ended December 31, 2023.

On March 6, 2024, the SEC issued its final ruling on The Enhancement and Standardization of Climate-Related Disclosures for Investors (Release No.

Provisions of the final rule require registrants to include climate-related disclosures that are both qualitative and quantitative in their annual reports and registration statements.

These disclosures include, but are not limited to, governance, risk management, strategy, emissions, capital expenditures, and climate-related targets and goals.

Subsequent to issuance, the rules became the subject of litigation, and the SEC issued an order staying the rules to allow the legal process to proceed.

At this time it is not easily determined what the timeline for resolution is and it is uncertain whether the rules will be upheld, amended or abolished.

The Company is continuing to review the final rule and monitoring the litigation progress for possible impacts on the disclosure requirements.

See Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements that may affect us.

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Our primary cash expenditures consist of our property operating and capital costs, general and administrative expenses, and interest and debt expense.

Property operating expenses include:

real estate taxes, repairs and maintenance, management expenses, insurance and utilities;

Property operating expenses include real estate taxes, repairs and maintenance, management expenses, insurance and utilities;

general and administrative expenses, which include payroll, professional fees, information technology, office expenses and other administrative expenses;

and interest and debt expense primarily consists of interest on our mortgage debt.

and interest and debt expense primarily consists of interest on our mortgage debt and our line of credit under the Revolving Credit Agreement (our “line of credit”).

In addition, we incur substantial non-cash charges for depreciation and amortization on our properties.

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Our results of operations are affected by national, regional and local economic conditions, as well as macroeconomic conditions, which are at times subject to volatility and uncertainty.

During 2021 and 2022, inflation levels were elevated resulting in increased costs for certain goods and services.

Inflation began to decrease in the second quarter of 2023 but still remains at elevated levels compared to the years preceding 2021.

In recent years, inflation levels were elevated resulting in increased costs for certain goods and services.

Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation, although some larger tenants have capped the amount of these operating expenses they are responsible for under their lease.

Throughout 2022 and the first half of 2023, the Federal Reserve raised the benchmark interest rate to mitigate rising inflation, resulting in an increase in the cost of borrowing.

As of December 31, 2023, approximately 84% of our outstanding debt is fixed rate, with the remaining 16% indexed to SOFR, plus an applicable margin per the respective loan agreements.

In response to the rising rate of inflation, the Federal Reserve raised benchmark interest rates several times between 2022 and 2023, resulting in an increase in the cost of borrowing.

In 2024, the Federal Reserve cut rates driven in part by positive economic reports and a decrease in inflation levels.

Interest rates still remain at elevated levels compared to the years preceding 2021, and could remain at this level in the near-term and long-term.

We occasionally utilize interest rate derivative agreements to hedge the effect of rising interest rates on our variable rate debt.

As of December 31, 2024, all of our outstanding mortgage debt is fixed rate or hedged with interest rate derivative agreements.

Our only variable rate debt exposure is related to our line of credit which has an outstanding balance of $50 million as of December 31, 2024 and is indexed to SOFR, plus an applicable margin per the Revolving Credit Agreement.

As of December 31, 2024, we were counterparty to one interest rate swap agreement and one interest rate cap agreement, both of which qualify for, and are designated as, hedging instruments.

We are actively managing our business to respond to the economic and social impact from events such as those described above.

See “Risk Factors” in Part I, Item 1A for more information.

We are actively managing our business to respond to the economic and social impacts from events and circumstances such as those described above.

See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for more information.

The following provides an overview of our key non-GAAP measures based on our consolidated results of operations (refer to NOI, same-property NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section):

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Net income for the year ended December 31, 2024 was $75.4 million, compared to net income of $259.9 million for the year ended December 31, 2023.

The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items which changed significantly in the year ended December 31, 2023 as compared to the same period of 2022:

For the Year Ended December 31,

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• $20.6 million increase as a result of property acquisitions net of dispositions;

• $9.7 million increase in other income primarily driven by a litigation settlement payment received in the fourth quarter of 2023;

• $17.5 million increase in property rentals and tenant reimbursements due to rent commencements and contractual rent increases, partially offset by tenant vacates;

• $1.2 million increase in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in connection with certain lease terminations in 2023;

• $3.2 million increase in rental revenue deemed uncollectible.

• $1.2 million decrease in rental revenue deemed uncollectible;

• $9.9 million decrease in other income primarily driven by a litigation settlement payment received in the fourth quarter of 2023;

• $1.4 million decrease in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in the fourth quarter of 2023 related to a tenant termination.

Depreciation and amortization increased by $41.4 million to $150.4 million in the year ended December 31, 2024 from $109.0 million in the year ended December 31, 2023.

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The increase is primarily attributable to:

• $2.3 million increase as a result of successful tax appeals and lowered assessments in 2022 and higher assessments, net of successful appeals in 2023;

• $4.5 million increase as a result of property acquisitions net of dispositions;

• $0.4 million increase in capitalized real estate taxes due to the commencement of development, redevelopment and anchor repositioning projects, offset by project completions;

Property operating expenses decreased by $5.8 million to $68.6 million in the year ended December 31, 2023 from $74.3 million in the year ended December 31, 2022.

The decrease is primarily attributable to:

• $7.0 million lower common area maintenance expenses across the portfolio as a result of lower snow removal, utilities, and repairs and maintenance at our properties in 2023;

• $0.3 million decrease as a result of successful tax appeals and lower assessments.

Property operating expenses increased by $10.2 million to $78.8 million in the year ended December 31, 2024 from $68.6 million in the year ended December 31, 2023.

The increase is primarily attributable to:

• $7.3 million higher expenses incurred for increased insurance premiums, snow removal, and higher common area maintenance expenses across the portfolio as compared to 2023;

• $2.9 million increase as a result of property acquisitions net of dispositions.

General and administrative expenses decreased by $6.0 million to $37.1 million in the year ended December 31, 2023 from $43.1 million in the year ended December 31, 2022.

The decrease is primarily attributable to lower employment expenses, professional fees and transaction costs.

General and administrative expenses increased by $0.4 million to $37.5 million in the year ended December 31, 2024 from $37.1 million in the year ended December 31, 2023.

The increase is primarily attributable to higher employment expenses.

We recognized a real estate impairment loss of $34.1 million in the first quarter of 2023, reducing the carrying value of an office and retail property located in Brooklyn, NY.

A gain on sale of real estate of $217.7 million was recognized in 2023 related to the sale of two properties and one property parcel.

We recognized a gain on sale of real estate of $0.4 million in 2022 in connection with the release of escrow funds related to a property disposed of in a prior period.

Interest income increased by $1.9 million to $3.0 million in the year ended December 31, 2023 from $1.1 million in the year ended December 31, 2022.

The increase is attributable to higher average cash balances and higher interest rates on our deposits.

We recognized a gain on sale of real estate of $38.8 million in 2024 primarily related to the sale of three properties.

We recognized a gain on sale of real estate of $217.7 million in 2023 related to the sale of two properties and one property parcel.

Interest income decreased by $0.4 million to $2.7 million in the year ended December 31, 2024 from $3.0 million in the year ended December 31, 2023.

The decrease is attributable to lower average cash balances and lower interest rates on our deposits.

Interest and debt expense increased by $6.6 million to $81.6 million in the year ended December 31, 2024 from $74.9 million in the year ended December 31, 2023.

The increase is primarily attributable to:

• $11.0 million increase due to financings and refinancings of mortgage loans, net of repayments;

• $3.7 million increase due to higher rates on our variable rate mortgage loans;

• $3.2 million increase due to a draw on our line of credit to finance the acquisition of two properties in the fourth quarter of 2023;

• $0.7 million increase in amortization of deferred financing costs related to debt transactions during 2023;

• $2.6 million increase in capitalized interest expense due to an increase in active development, redevelopment and anchor repositioning projects.

We recognized a $41.1 million gain on the extinguishment of debt for the year ended December 31, 2023 attributable to the Shops at Caguas loan refinancing in August 2023, partially offset by a loss on extinguishment of debt related to the early payoff of three mortgage loans during the year.

Income tax expense increased by $14.9 million to $17.8 million in the year ended December 31, 2023 from $2.9 million in the year ended December 31, 2022.

The increase was primarily driven by an income tax expense recognized in the third quarter of 2023 related to the Shops at Caguas loan refinancing in August 2023.

• $4.1 million increase due to the balance on our line of credit, used to finance several acquisitions in 2023 and 2024;

• $3.3 million increase due to new financings and refinancings since the fourth quarter of 2023, net of loan repayments;

• $1.1 million increase in amortization of deferred financing costs;

• $0.6 million decrease in capitalized interest expense due to the completion of development, redevelopment, and anchor repositioning projects, offset by project commencements;

• $2.5 million decrease in interest expense due to the mortgage debt forgiven in connection with the foreclosure of Kingswood Center.

We recognized a $21.7 million gain on the extinguishment of debt for the year ended December 31, 2024 attributable to the foreclosure settlement of Kingswood Center;

partially offset by a $0.3 million loss on extinguishment of debt as a result of the early payoff of three variable rate loans in January 2024.

During the year ended December 31, 2023, we recognized a $41.1 million gain on the extinguishment of debt attributable to the refinancing of the Shops at Caguas loan in August 2023, partially offset by a $0.5 million loss on extinguishment of debt recognized in the second quarter of 2023 related to the early payoff of the mortgage loan secured by Plaza at Cherry Hill.

Income tax expense decreased by $15.4 million to $2.4 million in the year ended December 31, 2024 from $17.8 million in the year ended December 31, 2023.

The decrease is primarily attributable to the income tax impact of the Shops at Caguas loan refinancing in August 2023.

Comparison of the Year Ended December 31, 2023 to December 31, 2022

Discussions of 2022 items and comparisons between the year ended December 31, 2022 and 2021, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Discussions of 2023 items and comparisons between the years ended December 31, 2023 and 2022 that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Non-GAAP Financial Measures

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Same-property NOI, including properties in redevelopment, increased by $11.6 million, or 5.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The following table reconciles net income to NOI and same-property NOI for the years ended December 31, 2023 and 2022.

The following table reconciles net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the years ended December 31, 2024 and 2023.

For the year ended December 31,

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Net income $ 75,442 $ 259,876

Other income (9,097) (125)

Other expense (income) 897 (9,097)

Depreciation and amortization 150,389 108,979

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Tenant bankruptcy settlement income and lease termination income (1,762) (1,428)

Real estate tax settlements related to prior periods — (1,441)

Non-same property NOI and other (1)

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Net income $ 75,442 $ 259,876

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

net (income) loss attributable to noncontrolling interests in:

Operating partnership (3,978) (11,899)

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FFO applicable to diluted common shareholders $ 186,732 $ 184,438

(1) Represents earnings allocated to Long-Term Incentive Plan (“LTIP”) and OP unitholders for unissued common shares, which have been excluded for purposes of calculating earnings per diluted share for the periods presented because they are anti-dilutive.

(1) Represents earnings allocated to Long-Term Incentive Plan (“LTIP”) and OP unitholders for unissued common shares.

LTIP and OP units are excluded for purposes of calculating earnings per diluted share when their effect is anti-dilutive.

Liquidity and Capital Resources

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Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales.

We have an $800 million revolving credit agreement with certain financial institutions which has a maturity date of February 9, 2027 and includes two six-month extension options.

During the year ended December 31, 2023, the Company obtained five letters of credit issued under the Agreement, aggregating $30.1 million, and provided them to mortgage lenders to secure its obligations for certain capital requirements per the respective mortgage agreements.

On October 23, 2023, the Company used its line of credit to partially finance the acquisition of two properties located in the greater Boston area.

As of December 31, 2023 there was approximately $153 million drawn under the Agreement with an available remaining balance of $616.9 million under the facility.

The letters of credit issued under the Agreement have reduced the amount available under the facility but remain undrawn and no separate liability has been recorded in association with them.

We have an $800 million line of credit under the Revolving Credit Agreement which has a maturity date of February 9, 2027 and includes two six-month extension options.

The Company has obtained seven letters of credit issued under the Revolving Credit Agreement, aggregating $32.1 million, and provided them to mortgage lenders and other entities to secure its obligations in relation to certain reserves and capital requirements.

The letters of credit issued under the Revolving Credit Agreement have reduced the amount available under the facility commensurate with their face values but remain undrawn and no separate liability has been recorded in association with them.

As of December 31, 2024, there was $50 million drawn under the Revolving Credit Agreement with an available remaining balance of $717.9 million under the facility, including undrawn letters of credit.

See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on our Revolving Credit Agreement.

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

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”).

As of December 31, 2023, no common shares had been issued under the ATM Program.

On January 2, 2024, the Company issued 73,550 common shares at a weighted average price of $18.30 per share under the ATM Program, generating net cash proceeds of $1.3 million.

In August 2022, in connection with the launch of the ATM Program, the Company entered into an equity distribution agreement with various financial institutions acting as agents, forward sellers, and forward purchasers (the “Equity Distribution Agreement”).

During the year ended December 31, 2024, the Company issued 7,097,124 common shares at a weighted average gross price of $18.71 per share under the ATM Program, generating cash proceeds of $131.1 million, net of commissions paid to distribution agents.

See Note 14 in Part II, Item 8 of this Annual Report on Form 10-K for more information regarding the ATM Program.

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Our long-term capital requirements consist primarily of maturities under our long-term debt agreements, development and redevelopment costs and potential acquisitions.

As of the date of this filing, we have approximately $70.8 million of debt maturing within the next 12 months related to mortgage loans encumbering two of our properties and are actively exploring our options to refinance or pay at maturity.

As of the date of this filing, we have approximately $23.7 million of debt maturing within the next 12 months related to a mortgage loan encumbering one of our properties and are actively exploring our options to refinance or pay at maturity.

At December 31, 2024, we had cash and cash equivalents, including restricted cash, of $90.6 million and $717.9 million available under our Revolving Credit Agreement.

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Summary of Cash Flows

Cash and cash equivalents, including restricted cash, was $174.2 million at December 31, 2023, compared to $128.8 million as of December 31, 2022, an increase of $45.5 million.

Cash and cash equivalents, including restricted cash, was $90.6 million at December 31, 2024, compared to $174.2 million as of December 31, 2023, a decrease of $83.6 million.

Our cash flow activities are summarized as follows:

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Net cash used in investing activities (234,697) (117,702)

Net cash provided by (used in) financing activities 161 (78,767)

Net cash (used in) provided by financing activities (2,088) 161

Operating Activities

Net cash provided by operating activities primarily consists of cash inflows from rental revenue and cash outflows for property operating expenses, general and administrative expenses and interest and debt expense.

Net cash provided by operating activities for the year ended December 31, 2023 increased by $23.4 million as compared to December 31, 2022.

The increase is attributed to a $10 million litigation settlement received in the fourth quarter of 2023, higher rental revenue from new tenant rent commencements and the timing of cash receipts and payments related to tenant collections and operating expenses.

Net cash provided by operating activities for the year ended December 31, 2024 decreased by $9.8 million as compared to December 31, 2023.

The decrease is attributed to a $10 million litigation settlement payment received in the fourth quarter of 2023, offset by higher rental revenue from new tenant rent commencements and the timing of cash receipts and payments related to tenant collections and operating expenses.

Investing Activities

Net cash used in investing activities is impacted by the timing and extent of our real estate development, capital improvements, and acquisition and disposition activities during the period.

Net cash used in investing activities for the year ended December 31, 2023 decreased by $34.2 million compared to December 31, 2022.

The increase is attributed to (i) $312.6 million increase in cash provided by the sale of properties and operating leases, and (ii) $0.3 million decrease in cash used for real estate development and capital improvements, offset by (iii) $278.7 million increase in cash used for acquisitions.

Net cash used in investing activities for the year ended December 31, 2024 increased by $117.0 million compared to December 31, 2023.

The increase is attributed to:

• $252.5 million decrease in proceeds from the sale of real estate;

• $130.4 million decrease in cash used for acquisitions of real estate;

• $5.1 million decrease in cash used for real estate development and capital improvements.

The Company has 26 active development, redevelopment or anchor repositioning projects with total estimated costs of $162.6 million, of which $73.1 million has been incurred and $89.5 million remains to be funded as of December 31, 2024.

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Net cash provided by or used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other payments associated with our outstanding indebtedness.

Net cash provided by financing activities for the year ended December 31, 2023, increased by $78.9 million from net cash used in financing activities of $78.8 million for the year ended December 31, 2022.

The increase is primarily due to (i) $366.3 million increase in proceeds from borrowings under mortgage loans, (ii) $309.0 million increase in borrowings under the Company’s unsecured line of credit, and (iii) $0.3 million increase in cash contributed by noncontrolling interests, offset by (iv) $595.6 million increase in debt repayments related to mortgage loans and our unsecured line of credit, and (v) $1.2 million increase of deferred financing fees paid in connection with the financing and refinancing of mortgages during the year.

Net cash provided by financing activities of $0.2 million for the year ended December 31, 2023 decreased by $2.3 million to $2.1 million used in financing activities for the year ended December 31, 2024.

The decrease is primarily due to:

• $136.2 million decrease in proceeds from mortgage loan and credit facility borrowings, net of repayments;

• $8.9 million increase in distributions to shareholders and unitholders of the Operating Partnership;

• $136.2 million increase in proceeds from the issuance of common shares;

• $4.4 million decrease in deferred financing fees paid in connection with financings and refinancings;

• $2.2 million increase in cash contributed by noncontrolling interests.

Financing activity for the year included:

• On December 29, 2023, the Company completed the sale of Freeport Commons and repaid the $43.1 million mortgage secured by the property at closing.

We recognized a $0.8 million loss on extinguishment of debt as a result of the early payoff.

• On November 29, 2023, the Company paid off the $20.6 million mortgage secured by its property, Hudson Mall, which had a maturity date of December 1, 2023 and a fixed interest rate of 5.07%.

• On November 20, 2023, the Company obtained a 6-year, $43.7 million non-recourse mortgage secured by its property Huntington Commons, bearing interest at a fixed rate of 6.29%.

• On October 23, 2023, the Company closed on the acquisitions of Shoppers World and Gateway Center and used its line of credit to partially finance the acquisitions.

As of December 31, 2023, there was $153 million drawn on the credit facility bearing interest at 6.56%.

• On October 20, 2023, the Company completed the sale of its East Hanover Warehouses portfolio and repaid the $40.1 million mortgage secured by the property at closing.

We recognized a $0.6 million loss on extinguishment of debt as a result of the early payoff.

• On August 30, 2023, the Company refinanced its mortgage secured by Shops at Caguas with a new 10-year, $82 million loan at a fixed interest rate of 6.6%.

The proceeds from the new loan were used to pay off the Company’s previous loan, at a discounted amount of $72.5 million, resulting in a gain on extinguishment of debt of $43 million for the year ended December 31, 2023.

• On June 23, 2023, the Company refinanced its mortgage secured by the Shops at Bruckner with a new 6-year, $38 million loan at a fixed interest rate of 6.0%.

The proceeds from the refinancing were used to pay off the outstanding principal balance on the previous loan of approximately $8.7 million.

• On June 23, 2023, the Company used the remaining funds from the Shops at Bruckner refinancing to pay off the $29 million mortgage secured by the Plaza at Cherry Hill, which had a maturity date of June 15, 2025.

• On June 7, 2023, the Company obtained a 10-year, $16 million non-recourse mortgage at fixed interest rate of 6.0% secured by its property, Newington Commons.

• On April 6, 2023, the Company refinanced the mortgage secured by its property, Bergen Town Center, with a 7-year, $290 million loan at a fixed interest rate of 6.30%.

The proceeds from the loan were used to pay off the Company’s previous mortgage on the property which had an outstanding balance of $300 million.

In May 2023, the Company entered into a two-year interest rate cap agreement with a third-party to limit the maximum SOFR of our Plaza at Woodbridge floating rate debt to 3%.

The new cap has an effective date of July 3, 2023 and replaces the previous interest rate cap which expired on July 1, 2023.

The purchase price of the new interest rate cap was $1.1 million and is included in the prepaid expenses and other assets line item of the consolidated balance sheets.

On January 2, 2024, the Company repaid three variable rate loans aggregating $75.7 million with interest rates of 7.34% on the payoff date.

• On November 21, 2024, the Company refinanced the mortgage secured by Brick Commons, with a new 7-year, $50 million mortgage loan bearing interest at a fixed rate of 5.20%.

The proceeds from the refinancing were used to pay off the previous mortgage loan on the property, which had an outstanding balance of $46.8 million;

• On October 29, 2024, the Company assumed a $60 million mortgage loan in connection with the acquisition of The Village at Waugh Chapel.

The mortgage bears interest at a fixed rate of 3.76% and has a remaining term of approximately 7 years;

• On September 13, 2024, the Company obtained a 10-year, $30 million mortgage loan secured by Briarcliff Commons, located in Morris Plains, NJ.

The loan bears interest at a fixed rate of 5.47%;

• On August 29, 2024, the Company obtained a 5-year $31 million mortgage loan secured by Greenbrook Commons, located in Watchung, NJ.

The loan bears interest at a fixed rate of 6.03%;

• On June 27, 2024, the foreclosure process for Kingswood Center was completed and the corresponding $68.6 million mortgage loan secured by the property was forgiven, resulting in a $21.7 million gain on extinguishment of debt;

• On May 3, 2024, the Company obtained a 5-year, $50 million mortgage loan secured by Ledgewood Commons located in Roxbury Township, NJ.

The loan bears interest at a fixed rate of 6.03%;

• On March 28, 2024, the Company refinanced the mortgage secured by Yonkers Gateway Center, with a new 5-year, $50 million mortgage loan bearing interest at a fixed rate of 6.30%.

The proceeds from the refinancing were used to pay off the previous mortgage loan on the property, which had an outstanding balance of $22.7 million;

• On January 2, 2024, the Company repaid three variable rate mortgage loans aggregating $75.7 million with interest rates of 7.34% on the payoff date.

The loans were secured by Hudson Commons, Greenbrook Commons, and Gun Hill Commons and were due to mature in the fourth quarter of 2024;

• During the year ended December 31, 2024, the Company issued 7,097,124 common shares at a weighted average gross price of $18.71 per share under the ATM Program, generating cash proceeds of $131.1 million, net of commissions paid to distribution agents.

See Note 14 , Equity and Noncontrolling Interest in Part II, Item 8 of this Annual Report on Form 10-K for more information regarding the ATM Program.

Contractual Obligations

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In connection with reference rate reform and the discontinuation of LIBOR, all of our LIBOR-indexed debt has been transitioned to SOFR effective July 2023.

The discontinuation of LIBOR did not have an impact on our ability to borrow or maintain already outstanding borrowings, but it could result in higher interest rates and accordingly, higher costs of borrowing to us.

The discontinuation of LIBOR did not have an impact on our ability to borrow or maintain already outstanding borrowings.

Further information on our mortgage loans can be found in Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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• Recorded debt premiums or discounts that are not obligations.

We believe that cash flows from our current operations, cash on hand, our line of credit under our revolving credit agreement, the potential to refinance our loans and our general ability to access the capital markets will be sufficient to finance our operations and fund our obligations in both the short-term and long-term.

We believe that cash flows from our current operations, cash on hand, our line of credit, the potential to refinance our loans and our general ability to access the capital markets will be sufficient to finance our operations and fund our obligations in both the short-term and long-term.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis