Executive Summary

Q1 2025 delivered record quarterly earnings for UE by management’s account, with FFO as Adjusted of $0.35 per diluted share (+6% YoY) and same-property NOI growth of 3.8% driven by rent commencements from the signed-not-open pipeline, higher net recovery revenue, and 2024 acquisitions .
Net income per diluted share was $0.07 vs $0.02 in Q1 2024; total revenue was $118.17M vs $109.63M in Q1 2024; leasing momentum remained strong (42 deals; shop occupancy a new record 92.4%) .
Guidance: Net income per diluted share raised to $0.40–$0.45; FFO and FFO as Adjusted reiterated at $1.36–$1.41 and $1.37–$1.42; management noted they would have raised guidance by ~$0.02 if not for April macro/tariff volatility .
Capital recycling continues: $25M land sale closed and ~$41.2M under contract (weighted avg ~5% cap), with proceeds targeted to 1031 exchanges; dividend maintained at $0.19 per share (declared May 7, 2025) .

What Went Well and What Went Wrong

What Went Well

Record quarterly FFO as Adjusted and accelerating rent growth: “FFO as adjusted of $0.35 per share… the highest quarterly earnings result in UE’s 10-year history… Rent growth is accelerating…” .
Leasing execution and occupancy quality: 42 leases (434k sf) with strong spreads (new leases same-space cash +34.3%); shop occupancy rose to 92.4%, up 400 bps YoY .
Redevelopment pipeline and capital recycling: $156.4M active projects at ~14% expected yield; $66M of assets sold/under contract at ~5% cap, improving portfolio mix .

What Went Wrong

Occupancy ticked down vs Q4 due to anchor recaptures tied to bankruptcies; same-property leased occupancy fell 50 bps QoQ (96.6%) .
Macro uncertainty post-tariff announcements led management to hold back a potential ~$0.02 guidance raise despite a stronger start to the year .
Investment sales market showing early signs of slowing; bid-ask spreads remain wide and CMBS issuance limited since April, tempering external growth pacing .

Financial Results

Core metrics vs prior year and prior quarter

Metric	Q1 2024	Q4 2024	Q1 2025
Total Revenue ($USD)	$109.63M	$116.37M	$118.17M
Net Income attributable to common shareholders ($USD)	$2.60M	$30.12M	$8.20M
Diluted EPS ($USD)	$0.02	$0.24	$0.07
FFO per diluted share ($USD)	$0.32	$0.35	$0.35
FFO as Adjusted per diluted share ($USD)	$0.33	$0.34	$0.35
Same-property NOI growth (%)	—	6.6%	3.6% (3.8% incl. redevelopment)

Quarterly trend view (prior two quarters plus current)

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenue ($USD)	$112.43M	$116.37M	$118.17M
Diluted EPS ($USD)	$0.07	$0.24	$0.07
FFO per diluted share ($USD)	$0.34	$0.35	$0.35
FFO as Adjusted per diluted share ($USD)	$0.35	$0.34	$0.35
Same-property NOI growth (%)	4.8% (5.1% incl. redevelopment)	6.6% (7.4% incl. redevelopment)	3.6% (3.8% incl. redevelopment)

KPIs

KPI	Q1 2024	Q4 2024	Q1 2025
Consolidated leased occupancy (%)	—	96.8%	96.4%
Same-property leased occupancy (%)	—	96.6%	96.6%
Shop leased occupancy (%)	—	90.9%	92.4%
Leases executed (count / sf)	—	29 / 402k sf	42 / 434k sf
New leases same-space cash spread (%)	—	44%	34.3%
Total same-space cash spread (%)	—	21%	10.2%
SNO pipeline (future annual gross rent, $USD)	—	$25.0M	$25.1M
Expected SNO gross rent recognized in remainder of 2025 ($USD)	—	$7.8M	$4.4M
NOI margin (%)	—	—	62.9%
Same-property recovery ratio (%)	—	—	86.9%

Estimates vs actuals (S&P Global consensus)

Metric	Period	Consensus	Actual
Primary EPS ($USD)	Q1 2025	$0.16	$0.0687
# of EPS estimates	Q1 2025	1	—
Revenue ($USD)	Q1 2025	N/A	$118.17M

Values retrieved from S&P Global. FFO/FFO as Adjusted consensus was unavailable; Street tends to focus on FFO for REITs, but only EPS consensus was present [Values retrieved from S&P Global].

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net income per diluted share	FY 2025	$0.32–$0.37	$0.40–$0.45	Raised
Net income attributable to common shareholders per diluted share	FY 2025	$0.31–$0.35	$0.39–$0.44	Raised
FFO per diluted share	FY 2025	$1.36–$1.41	$1.36–$1.41	Maintained
FFO as Adjusted per diluted share	FY 2025	$1.37–$1.42	$1.37–$1.42	Maintained
Same-property NOI growth incl. redevelopment	FY 2025	3.0%–4.0%	3.0%–4.0%	Maintained
Recurring G&A	FY 2025	$35.0–$37.0M	$35.0–$36.5M	Lower high end
Interest & debt expense	FY 2025	$78.5–$80.5M	$78.5–$80.5M	Maintained
Dispositions assumption	FY 2025	Not specified	$66M; 1031 redeploy	Added/updated
Dividend	Quarterly	$0.19 (Feb 2025)	$0.19 (May 7, 2025)	Maintained

Management commentary: “We would have likely increased our guidance by $0.02 a share, if not for the economic volatility in April.”

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/macro environment	No tariff comment; improved 2024 guidance; increased liquidity; debt maturities modest	Post-early-April tariffs; no slowdown in retailer demand yet; investment sales slowing; held back ~$0.02 guidance raise due to volatility	Cautious
Leasing demand/occupancy	Strong leasing; shop occupancy rising; SNO ~$23.8M by Q3; increased FFO Adj guidance	42 deals; shop occupancy record 92.4%; same-space cash spreads +34.3% for new leases; tenant retention ~95%	Improving
Capital recycling (acq/dispo)	Closed Waugh Chapel acquisition; sold Home Depot; acquisitions ~7% cap, dispos ~5% cap	$25M land sale; ~$41.2M under contract; weighted ~5% cap; reinvest via 1031	Continuing, disciplined
Debt markets/liquidity	Paid down revolver; raised equity via ATM; new mortgages at fixed rates	Limited CMBS issuance; lifeco/banks lending with spreads +10–30 bps; ~$791M liquidity	Mixed but manageable
Bankruptcy/anchor recapture	Kingswood foreclosure resolved; redevelopment pace strong	Occupancy dip QoQ due to recaptures (Big Lots, Party City, buybuy BABY); re-leasing at better terms expected	Transitional but constructive
Redevelopment pipeline	Active ~$159M at ~14% expected yield (Q3)	Active $156.4M; expected ~14% yield; several stabilizations in Q1	Stable/high-IRR

Management Commentary

“FFO as adjusted of $0.35 per share, a 6% increase over the first quarter of last year and the highest quarterly earnings result in UE's 10-year history.” – Jeff Olson, CEO .
“We would have likely increased our guidance by $0.02 a share, if not for the economic volatility in April.” – Jeff Olson, CEO .
“Since the tariffs were announced in early April, we have not seen any changes in retailer demand at our properties… investment sales market is showing early signs of slowing down.” – Jeff Olson, CEO .
“Our same-property NOI… increased 3.8%… due in part to higher net recoveries, CAM reconciliation billings and collections from tenants in bankruptcy…” – Mark Langer, CFO .
“We are actively recycling capital by selling some of our noncore lower cap assets and redeploying that capital into accretive acquisitions.” – Jeff Olson, CEO .

Q&A Highlights

Tariffs/macro impact: Management sees no slowdown in retailer demand to date; brokers report robust leasing pipelines; cautious stance maintained due to April volatility .
Dispositions vs acquisitions spread: Recent dispos at ~~5% cap; acquisitions in low-7% range over past 18 months (~~$550M buys vs ~$450M sells) – attractive spread; many transactions structured as 1031 exchanges .
Dividend and 1031: 1031 exchanges defer gains and do not add pressure to dividend payout; tax basis mechanics confirmed .
Market pricing and bid-ask: Bid-ask remains wide post-tariffs; UE is patient and underwriting deals amid changing rates/lending spreads .
Bad debt and tenant risk: Bad debt guidance reiterated at 75–100 bps; Q1 ran ~10 bps below; Kohl’s seen as low bankruptcy risk, with strong store productivity and low rents .

Estimates Context

Q1 2025 EPS missed consensus: $0.07 actual vs $0.16 consensus; REITs are typically assessed on FFO, where UE delivered $0.35 and +6% YoY growth; Street FFO consensus was unavailable, implying estimates may need to recalibrate focus to NOI/FFO drivers (SNO commencements, recovery rates) [Values retrieved from S&P Global] .
Revenue: Actual $118.17M; revenue consensus for Q1 was not available in S&P Global for comparison; prior quarters show sequential revenue growth consistent with lease commencements [Values retrieved from S&P Global] .

Key Takeaways for Investors

Execution remains strong: Record FFO as Adjusted and robust leasing (shop occupancy record; 34% cash spreads on new leases) reinforce organic growth trajectory into 2H 2025 .
Guidance conservatism is macro-driven, not operational: Management explicitly held back a ~$0.02 raise due to April volatility; watch for potential upward revision next quarter if macro stabilizes .
Capital recycling at favorable spreads continues: Dispositions at ~5% cap and targeted accretive 1031 acquisitions should enhance portfolio quality and growth .
Redevelopment pipeline (~$156M at ~14% yield) supports medium-term NOI visibility, especially as SNO ($25.1M) commences with $4.4M expected in remainder of 2025 .
Balance sheet/liquidity (~$791M) and limited near-term maturities (8% through 2026) reduce financing risk amid wider spreads and limited CMBS issuance .
Near-term stock catalysts: Signs of tariff-related slowdown (none to date) vs investment sales market softening; potential guidance raise; incremental SNO commencements; further redevelopments stabilizing .
Risk monitor: Bankruptcy-driven anchor recaptures temporarily pressure occupancy, but replacements are negotiating at better terms; watch macro, lending spreads, and investment sales velocity .

Urban Edge Properties (UE)·Q1 2025 Earnings Summary