SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549



x☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Registrant’s telephone number including area code:		(212) ~~956‑2556~~	956-2556

Securities registered pursuant to Section 12(b) of the Act:
Title of class of registered securities	Trading symbol	Name of exchange on which registered
Common shares of beneficial interest, par value $0.01 per share	UE	The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Urban Edge Properties ~~YES~~ Yesx NO oUrban Edge Properties LP ~~YES~~ Yes x NO o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~(232.405~~(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Urban Edge Properties ~~YES~~ Yes x NO oUrban Edge Properties LP ~~YES~~ Yes x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Urban Edge Properties:

Large Accelerated Filerx

Accelerated Filero

☐

Non-Accelerated Filero

☐

Smaller Reporting Companyo

☐

Emerging Growth Companyo

☐

Urban Edge Properties LP:

Large Accelerated Filero

☐

Accelerated Filero

☐

Non-Accelerated Filerx

Smaller Reporting Companyo

☐

Emerging Growth Companyo

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section ~~139a)~~13(a) of the Exchange Act.

Urban Edge PropertiesoUrban Edge Properties LPo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Urban Edge Properties YES o☐ NO xUrban Edge Properties LP YES o☐ NO x

As of October ~~27, 2017,~~29, 2021, Urban Edge Properties ~~had 113,817,429 common~~had 117,137,788 common shares outstanding.

URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED SEPTEMBER 30, 2021

PART I

Item 1.

Financial Statements

Consolidated Financial Statements of Urban Edge Properties:

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)

Consolidated Financial Statements of Urban Edge Properties LP:

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (unaudited)

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited)

Urban Edge Properties and Urban Edge Properties LP

Notes to Consolidated Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

Signatures

This report combines the quarterly reports on Form 10-Q for the period ended September 30, ~~2017~~2021 of Urban Edge Properties and Urban Edge Properties LP. Unless stated otherwise or the context otherwise requires, references to “UE” and “Urban Edge” mean Urban Edge Properties, a Maryland real estate investment trust (“REIT”), and references to “UELP” and the “Operating Partnership” mean Urban Edge Properties LP, a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively UE, UELP and those entities/subsidiaries consolidated by UE.

UELP is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. UE is the sole general partner and also a limited partner of UELP. As the sole general partner of UELP, UE has exclusive control of UELP’s day-to-day management.

As of September 30, ~~2017,~~2021, UE owned an approximate ~~89.9%~~96% ownership interest in UELP. The remaining approximate ~~10.1%~~4% interest is owned by other limited partners. The other limited partners of UELP are ~~Vornado Realty L.P.,~~ members of management, our Board of Trustees and contributors of property interests acquired. Under the limited partnership agreement of UELP, unitholders may present their common units of UELP for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Upon presentation of a common unit for redemption, UELP must redeem the unit for cash equal to the then value of a share of UE’s common shares, as defined by the limited partnership agreement. In lieu of cash redemption by UELP, however, UE may elect to acquire any common units so tendered by issuing common shares of UE in exchange for the common units. If UE so elects, its common shares will be exchanged for common units on a one-for-one basis. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. UE generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having UELP pay cash. With each such exchange or redemption, UE’s percentage ownership in UELP will increase. In addition, whenever UE issues common shares other than to acquire common units of UELP, UE must contribute any net proceeds it receives to UELP and UELP must issue to UE an equivalent number of common units of UELP. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of UE and UELP into this single report provides the following benefits:

•enhances investors’ understanding of UE and UELP by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both UE and UELP; and

•creates time and cost efficiencies throughout the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between UE and UELP in the context of how UE and UELP operate as a consolidated company. The financial results of UELP are consolidated into the financial statements of UE. UE does not have any other significant assets, liabilities or operations, other than its investment in UELP, nor does it have employees of its own. UELP, not UE, generally executes all significant business relationships other than transactions involving the securities of UE. UELP holds substantially all of the assets of ~~UE.~~UE and retains the ownership interests in the Company's joint ventures. UELP conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by UE, which are contributed to the capital of UELP in exchange for units of limited partnership in UELP, as applicable, UELP generates all remaining capital required by the Company’s business. These sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit ~~facility,~~agreement, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of UE and UELP. The limited partners of UELP are accounted for as partners’ capital in UELP’s financial statements and as noncontrolling interests in UE’s financial statements. The noncontrolling interests in UELP’s financial statements include the interests of unaffiliated partners in consolidated entities. The noncontrolling interests in UE’s financial statements include the same noncontrolling interests at UELP’s level and limited partners of UELP. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at UE and UELP levels.

To help investors better understand the key differences between UE and UELP, certain information for UE and UELP in this report has been separated, as set forth below: Item 1. Financial Statements (unaudited), which includes specific disclosures for UE and UELP, Note ~~15,~~14, Equity and Noncontrolling ~~Interests~~Interest and Note 16, ~~thereto,~~ Earnings Per Share and Unit.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of UE and UELP in order to establish that the requisite certifications have been made and that UE and UELP are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

~~URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP~~

~~QUARTERLY REPORT ON FORM 10-Q~~

~~QUARTER ENDED SEPTEMBER 30, 2017~~

~~TABLE OF CONTENTS~~



	~~PART I~~

~~Item 1.~~	~~Financial Statements~~
	~~Consolidated Financial Statements of Urban Edge Properties:~~
	~~Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016~~	1
	~~Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2017 and 2016 (unaudited)~~	2
	~~Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2017 (unaudited)~~	3
	~~Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016 (unaudited)~~	4
	~~Consolidated Financial Statements of Urban Edge Properties LP:~~
	~~Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016~~	6
	~~Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2017 and 2016 (unaudited)~~	7
	~~Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2017 (unaudited)~~	8
	~~Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016 (unaudited)~~	9
	~~Urban Edge Properties and Urban Edge Properties LP~~
	~~Notes to Consolidated Financial Statements (unaudited)~~	11
~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	25
~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	39
~~Item 4.~~	~~Controls and Procedures~~	40

	~~PART II~~

~~Item 1.~~	~~Legal Proceedings~~	40
~~Item 1A.~~	~~Risk Factors~~	40
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	41
~~Item 3.~~	~~Defaults Upon Senior Securities~~	41
~~Item 4.~~	~~Mine Safety Disclosures~~	41
~~Item 5.~~	~~Other Information~~	41
~~Item 6.~~	~~Exhibits~~	41
	~~Signatures~~	42

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

URBAN EDGE PROPERTIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
REVENUE
Rental revenue	$	105,985	$	75,359	$	294,257	$	241,624
Management and development fees	280		404		911		1,003
Other income	574		75		1,338		190
Total revenue	106,839		75,838		296,506		242,817
EXPENSES
Depreciation and amortization	23,171		22,888		68,534		69,658
Real estate taxes	15,862		14,916		47,826		44,778
Property operating	15,692		13,436		51,874		39,867
General and administrative	10,134		8,700		28,286		36,600
Casualty and impairment loss	372		—		372		—
Lease expense	3,164		3,415		9,665		10,200
Total expenses	68,395		63,355		206,557		201,103
Gain on sale of real estate	6,926		—		18,648		39,775
Interest income	77		282		303		2,387
Interest and debt expense	(14,638)		(18,136)		(44,193)		(53,884)
Gain on extinguishment of debt	—		—		—		34,908
Income (loss) before income taxes	30,809		(5,371)		64,707		64,900
Income tax (expense) benefit	(704)		(459)		(905)		13,103
Net income (loss)	30,105		(5,830)		63,802		78,003
Less net (income) loss attributable to noncontrolling interests in:
Operating partnership	(1,149)		225		(2,608)		(3,373)
Consolidated subsidiaries	(1,190)		—		(961)		—
Net income (loss) attributable to common shareholders	$	27,766	$	(5,605)	$	60,233	$	74,630

Earnings (loss) per common share - Basic:	$	0.24	$	(0.05)	$	0.51	$	0.63
Earnings (loss) per common share - Diluted:	$	0.24	$	(0.05)	$	0.51	$	0.63
Weighted average shares outstanding - Basic	117,087		116,625		117,009		118,033
Weighted average shares outstanding - Diluted	117,137		116,625		122,212		118,111

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
REVENUE
Property rentals $ 69,625
$ 59,138
$ 196,831
$ 176,750
Tenant expense reimbursements 23,938
19,888
71,590
62,274
Management and development fees 369
375
1,199
1,356
Income from acquired leasehold interest —
—
39,215
—
Other income 169
572
831
2,118
Total revenue 94,101
79,973
309,666
242,498
EXPENSES
Depreciation and amortization 20,976
14,435
60,505
41,908
Real estate taxes 15,872
12,729
43,975
38,701
Property operating 11,402
9,897
35,858
32,596
General and administrative 6,930
6,618
22,720
20,873
Casualty and impairment loss 2,170
—
5,637
—
Ground rent 2,891
2,508
7,997
7,529
Transaction costs 95
223
278
307
Provision for doubtful accounts 575
149
1,674
994
Total expenses 60,911
46,559
178,644
142,908
Operating income 33,190
33,414
131,022
99,590
Gain on sale of real estate 202
—
202
15,618
Interest income 719
176
1,182
520
Interest and debt expense (14,637 ) (12,766 ) (41,379 ) (39,015 )
Loss on extinguishment of debt —
—
(1,274 ) —
Income before income taxes 19,474
20,824
89,753
76,713
Income tax expense (318 ) (319 ) (942 ) (349 )
Net income 19,156
20,505
88,811
76,364
Less (net income) loss attributable to noncontrolling interests in:
Operating partnership (1,967 ) (1,239 ) (7,431 ) (4,594 )
Consolidated subsidiaries (11 ) (1 ) (33 ) 1
Net income attributable to common shareholders $ 17,178
$ 19,265
$ 81,347
$ 71,771

Earnings per common share - Basic: $ 0.15
$ 0.19
$ 0.77
$ 0.72
Earnings per common share - Diluted: $ 0.15
$ 0.19
$ 0.77
$ 0.72
Weighted average shares outstanding - Basic 110,990
99,304
104,938
99,281
Weighted average shares outstanding - Diluted 111,260
99,870
115,323
99,711

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

(In thousands, except share and per share amounts)


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2020	116,701,311	$	1,166	$	984,933	$	1,012	$	39,575	$	424	$	1,027,110
Net loss attributable to common shareholders	—	—		—		(5,605)		—		—		(5,605)
Net loss attributable to noncontrolling interests	—	—		—		—		(225)		—		(225)
Limited partnership interests:


Reallocation of noncontrolling interests	—	—		1,866		—		(1,866)		—		—




Share-based compensation expense	—	—		637		—		1,967		—		2,604

Balance, September 30, 2020	116,701,311	$	1,166	$	987,436	$	(4,593)	$	39,451	$	424	$	1,023,884

Common Shares Noncontrolling Interests (“NCI”)
Shares Amount

Additional
Paid-In Capital

Accumulated Earnings
(Deficit)
Redeemable NCI NCI in Consolidated Subsidiaries Total Equity
Balance, December 31, 2016 99,754,900
$ 997
$ 488,375
$ (29,066 ) $ 35,451
$ 360
$ 496,117
Net income attributable to common shareholders
—
—
—
81,347
—
—
81,347
Net income attributable to noncontrolling interests
—
—
—
—
7,431
33
7,464
Limited partnership units issued —
—
105,279
—
65,805
—
171,084
Common shares issued
14,073,037
141
348,326
(253 ) —
—
348,214
Share-based awards withheld for taxes
(10,508 ) —
(287 ) —
—
—
(287 )
Dividends on common shares ($0.66 per share) —
—
—
(70,408 ) —
—
(70,408 )
Share-based compensation expense
—
—
3,354
58
1,836
—
5,248
Distributions to redeemable NCI ($0.66 per unit) —
—
—
—
(6,705 ) —
(6,705 )
Balance, September 30, 2017 113,817,429
$ 1,138
$ 945,047
$ (18,322 ) $ 103,818
$ 393
$ 1,032,074


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, June 30, 2021	117,137,337	$	1,170	$	990,255	$	(42,157)	$	43,568	$	6,154	$	998,990
Net income attributable to common shareholders	—	—		—		27,766		—		—		27,766
Net income (loss) attributable to noncontrolling interests	—	—		—		—		1,149		1,190		2,339
Limited partnership interests:
Units redeemed for common shares	—	—		—		—		(6,302)		—		(6,302)
Reallocation of noncontrolling interests	—	—		6,302		—		—		—		6,302
Common shares issued	451	—		21		(20)		—		—		1
Dividends to common shareholders ($0.15 per share)	—	—		—		(17,557)		—		—		(17,557)
Distributions to redeemable NCI ($0.15 per unit)	—	—		—		—		(711)		—		(711)
Contributions from noncontrolling interests	—	—		—		—		—		1,418		1,418
Share-based compensation expense	—	—		507		—		2,302		—		2,809

Balance, September 30, 2021	117,137,788	$	1,170	$	997,085	$	(31,968)	$	40,006	$	8,762	$	1,015,055

See notes to consolidated financial statements (unaudited).


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
Balance, December 31, 2019	121,370,125	$	1,213	$	1,019,149	$	(52,546)	$	46,536	$	424	$	1,014,776
Net income attributable to common shareholders	—	—		—		74,630		—		—		74,630
Net income attributable to noncontrolling interests	—	—		—		—		3,373		—		3,373
Limited partnership interests:
Units redeemed for common shares	1,279,389	11		8,617		—		—		—		8,628

Reallocation of noncontrolling interests	—	—		9,724		—		(18,352)		—		(8,628)
Common shares issued	53,193	1		234		(30)		—		—		205
Repurchase of common shares	(5,873,923)	(59)		(54,082)		—		—		—		(54,141)
Dividends to common shareholders ($0.22 per share)	—	—		—		(26,647)		—		—		(26,647)
Distributions to redeemable NCI ($0.22 per unit)	—	—		—		—		(1,314)		—		(1,314)
Share-based compensation expense	—	—		5,255		—		9,208		—		14,463
Share-based awards retained for taxes	(127,473)	—		(1,461)		—		—		—		(1,461)
Balance, September 30, 2020	116,701,311	$	1,166	$	987,436	$	(4,593)	$	39,451	$	424	$	1,023,884


	Common Shares							Noncontrolling Interests (“NCI”)
	Shares	Amount		Additional Paid-In Capital		Accumulated Earnings (Deficit)		Operating Partnership		Consolidated Subsidiaries		Total Equity
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	—	—		—		60,233		—		—		60,233
Net income attributable to noncontrolling interests	—	—		—		—		2,608		961		3,569
Limited partnership interests:
Units redeemed for common shares	100,000	—		840		—		(6,302)		—		(5,462)
Reallocation of noncontrolling interests	—	—		4,614		—		848		—		5,462
Common shares issued	36,533	1		308		(124)		—		—		185
Dividends to common shareholders ($0.45 per share)	—	—		—		(52,610)		—		—		(52,610)
Distributions to redeemable NCI ($0.45 per unit)	—	—		—		—		(2,152)		—		(2,152)
Contributions from noncontrolling interests	—	—		—		—		—		1,929		1,929
Share-based compensation expense	—	—		1,670		—		6,548		—		8,218
Share-based awards retained for taxes	(13,062)	—		(210)		—		—		—		(210)
Balance, September 30, 2021	117,137,788	$	1,170	$	997,085	$	(31,968)	$	40,006	$	8,762	$	1,015,055

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	63,802	$	78,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	69,872		70,965
Gain on sale of real estate	(18,648)		(39,775)
Casualty and impairment loss	372		—
Gain on extinguishment of debt	—		(34,908)

Amortization of below market leases, net	(19,775)		(6,803)
Noncash lease expense	5,343		5,655
Straight-lining of rent	338		9,503
Share-based compensation expense	8,218		14,463

Change in operating assets and liabilities:
Tenant and other receivables	(2,505)		(2,812)
Deferred leasing costs	(1,735)		(1,110)
Prepaid expenses and other assets	512		(11,656)
Lease liabilities	(4,901)		(5,017)
Accounts payable, accrued expenses and other liabilities	(7,756)		(1,679)
Net cash provided by operating activities	93,137		74,829
CASH FLOWS FROM INVESTING ACTIVITIES
Real estate development and capital improvements	(46,447)		(18,266)
Acquisitions of real estate	(54,547)		(92,132)
Proceeds from sale of operating properties	34,482		54,402
Net cash used in investing activities	(66,512)		(55,996)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	(14,324)		(87,567)
Dividends to common shareholders	(106,441)		(26,647)
Distributions to redeemable noncontrolling interests	(4,225)		(1,314)
Taxes withheld for vested restricted shares	(210)		(1,461)
Contributions from noncontrolling interests	1,929		—
Borrowings under unsecured credit facility	—		250,000
Proceeds from mortgage loan borrowings	—		90,250
Repurchase of common shares	—		(54,141)
Debt issuance costs	—		(2,298)
Proceeds related to the issuance of common shares	185		205
Net cash (used in) provided by financing activities	(123,086)		167,027
Net (decrease) increase in cash and cash equivalents and restricted cash	(96,461)		185,860
Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136
Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

Nine Months Ended September 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 88,811
$ 76,364
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 60,576
42,682
Income from acquired leasehold interest (39,215 ) —
Casualty and impairment loss 5,637
—
Loss on extinguishment of debt 1,274
—
Amortization of deferred financing costs 2,175
2,106
Amortization of below market leases, net (6,842 ) (5,907 )
Straight-lining of rent 520
(97 )
Share-based compensation expense 5,248
4,080
Gain on sale of real estate (202 ) (15,618 )
Provision for doubtful accounts 1,674
994
Change in operating assets and liabilities:

Tenant and other receivables (9,605 ) (821 )
Deferred leasing costs (3,556 ) (2,624 )
Prepaid and other assets (6,073 ) (1,954 )
Accounts payable and accrued expenses 12,372
(1,368 )
Other liabilities 1,704
1,346
Net cash provided by operating activities 114,498
99,183
CASH FLOWS FROM INVESTING ACTIVITIES

Real estate development and capital improvements (55,941 ) (45,668 )
Acquisition of real estate (211,393 ) (2,000 )
Proceeds from sale of real estate 5,005
19,938
Net cash used in investing activities (262,329 ) (27,730 )
CASH FLOWS FROM FINANCING ACTIVITIES

Debt repayments (88,559 ) (34,008 )
Dividends paid to shareholders (70,408 ) (59,390 )
Distributions to redeemable noncontrolling interests (6,705 ) (3,711 )
Debt issuance costs (11,352 ) —
Taxes withheld for vested restricted shares (287 ) (38 )
Proceeds from issuance of common shares 348,214
5,020
Proceeds from borrowings 225,500
—
Net cash provided by (used in) financing activities 396,403
(92,127 )
Net increase (decrease) in cash and cash equivalents and restricted cash 248,572
(20,674 )
Cash and cash equivalents and restricted cash at beginning of period 140,186
178,025
Cash and cash equivalents and restricted cash at end of period $ 388,758
$ 157,351

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit and per unit amounts)


	September 30,			December 31,				September 30,		December 31,
	2017			2016				2021		2020
ASSETS	(Unaudited)						ASSETS
Real estate, at cost:							Real estate, at cost:
Land	$	522,085		$	384,217		Land	$	557,890	$	568,662
Buildings and improvements	2,013,767			1,650,054			Buildings and improvements	2,364,061		2,326,450
Construction in progress	117,830			99,236			Construction in progress	108,915		44,689
Furniture, fixtures and equipment	7,129			4,993			Furniture, fixtures and equipment	7,519		7,016
Total	2,660,811			2,138,500			Total	3,038,385		2,946,817
Accumulated depreciation and amortization	(586,187		)	(541,077		)	Accumulated depreciation and amortization	(768,329)		(730,366)
Real estate, net	2,074,624			1,597,423			Real estate, net	2,270,056		2,216,451
Operating lease right-of-use assets							Operating lease right-of-use assets	75,654		80,997
Cash and cash equivalents	380,395			131,654			Cash and cash equivalents	268,952		384,572
Restricted cash	8,363			8,532			Restricted cash	53,840		34,681
Tenant and other receivables, net of allowance for doubtful accounts of $3,469 and $2,332, respectively	24,063			9,340
Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $260 and $261, respectively	85,853			87,695
Identified intangible assets, net of accumulated amortization of $29,771 and $22,361, respectively	91,305			30,875
Deferred leasing costs, net of accumulated amortization of $15,556 and $13,909, respectively	20,500			19,241
Deferred financing costs, net of accumulated amortization of $1,484 and $726, respectively	4,492			1,936
Tenant and other receivables							Tenant and other receivables	18,178		15,673
Receivable arising from the straight-lining of rents							Receivable arising from the straight-lining of rents	61,444		62,106
Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively							Identified intangible assets, net of accumulated amortization of $37,582 and $37,009, respectively	50,719		56,184
Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively							Deferred leasing costs, net of accumulated amortization of $16,915 and $16,419, respectively	17,413		18,585
Prepaid expenses and other assets	16,917			17,442			Prepaid expenses and other assets	65,565		70,311
Total assets	$	2,706,512		$	1,904,138		Total assets	$	2,881,821	$	2,939,560

LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Liabilities:							Liabilities:
Mortgages payable, net	$	1,408,066		$	1,197,513		Mortgages payable, net	$	1,573,702	$	1,587,532
Identified intangible liabilities, net of accumulated amortization of $63,468 and $72,528, respectively	184,061			146,991
Accounts payable and accrued expenses	65,769			48,842
Other liabilities	16,542			14,675
Operating lease liabilities							Operating lease liabilities	70,071		74,972
Accounts payable, accrued expenses and other liabilities							Accounts payable, accrued expenses and other liabilities	94,514		132,980
Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively							Identified intangible liabilities, net of accumulated amortization of $83,596 and $71,375, respectively	128,479		148,183
Total liabilities	1,674,438			1,408,021			Total liabilities	1,866,766		1,943,667
Commitments and contingencies
Commitments and contingencies (Note 10)							Commitments and contingencies (Note 10)	0		0
Equity:							Equity:
Partners’ capital:							Partners’ capital:
General partner:113,817,429 and 99,754,900 units outstanding, respectively	946,185			489,372
Limited partners:12,729,634 and 6,378,704 units outstanding, respectively	104,722			37,081
General partner: 117,137,788 and 117,014,317 units outstanding, respectively							General partner: 117,137,788 and 117,014,317 units outstanding, respectively	998,255		991,032
Limited partners: 4,849,749 and 4,729,010 units outstanding, respectively							Limited partners: 4,849,749 and 4,729,010 units outstanding, respectively	42,396		41,302
Accumulated deficit	(19,226		)	(30,696		)	Accumulated deficit	(34,358)		(42,313)
Total partners’ capital	1,031,681			495,757			Total partners’ capital	1,006,293		990,021
Noncontrolling interest in consolidated subsidiaries	393			360			Noncontrolling interest in consolidated subsidiaries	8,762		5,872
Total equity	1,032,074			496,117			Total equity	1,015,055		995,893
Total liabilities and equity	$	2,706,512		$	1,904,138		Total liabilities and equity	$	2,881,821	$	2,939,560

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except unit and per unit amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
REVENUE
Rental revenue	$	105,985	$	75,359	$	294,257	$	241,624
Management and development fees	280		404		911		1,003
Other income	574		75		1,338		190
Total revenue	106,839		75,838		296,506		242,817
EXPENSES
Depreciation and amortization	23,171		22,888		68,534		69,658
Real estate taxes	15,862		14,916		47,826		44,778
Property operating	15,692		13,436		51,874		39,867
General and administrative	10,134		8,700		28,286		36,600
Casualty and impairment loss	372		—		372		—
Lease expense	3,164		3,415		9,665		10,200
Total expenses	68,395		63,355		206,557		201,103
Gain on sale of real estate	6,926		—		18,648		39,775
Interest income	77		282		303		2,387
Interest and debt expense	(14,638)		(18,136)		(44,193)		(53,884)
Gain on extinguishment of debt	—		—		—		34,908
Income (loss) before income taxes	30,809		(5,371)		64,707		64,900
Income tax (expense) benefit	(704)		(459)		(905)		13,103
Net income (loss)	30,105		(5,830)		63,802		78,003
Less net income attributable to NCI in consolidated subsidiaries	(1,190)		—		(961)		—
Net income (loss) attributable to unitholders	$	28,915	$	(5,830)	$	62,841	$	78,003

Earnings (loss) per unit - Basic:	$	0.24	$	(0.05)	$	0.52	$	0.64
Earnings (loss) per unit - Diluted:	$	0.24	$	(0.05)	$	0.51	$	0.63
Weighted average units outstanding - Basic	120,903		120,618		120,839		122,332
Weighted average units outstanding - Diluted	121,987		120,618		122,212		123,174

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
REVENUE
Property rentals $ 69,625
$ 59,138
$ 196,831
$ 176,750
Tenant expense reimbursements 23,938
19,888
71,590
62,274
Management and development fees 369
375
1,199
1,356
Income from acquired leasehold interest —
—
39,215
—
Other income 169
572
831
2,118
Total revenue 94,101
79,973
309,666
242,498
EXPENSES
Depreciation and amortization 20,976
14,435
60,505
41,908
Real estate taxes 15,872
12,729
43,975
38,701
Property operating 11,402
9,897
35,858
32,596
General and administrative 6,930
6,618
22,720
20,873
Casualty and impairment loss 2,170
—
5,637
—
Ground rent 2,891
2,508
7,997
7,529
Transaction costs 95
223
278
307
Provision for doubtful accounts 575
149
1,674
994
Total expenses 60,911
46,559
178,644
142,908
Operating income 33,190
33,414
131,022
99,590
Gain on sale of real estate 202
—
202
15,618
Interest income 719
176
1,182
520
Interest and debt expense (14,637 ) (12,766 ) (41,379 ) (39,015 )
Loss on extinguishment of debt —
—
(1,274 ) —
Income before income taxes 19,474
20,824
89,753
76,713
Income tax expense (318 ) (319 ) (942 ) (349 )
Net income 19,156
20,505
88,811
76,364
Less: (net income) loss attributable to NCI in consolidated subsidiaries (11 ) (1 ) (33 ) 1
Net income attributable to unitholders $ 19,145
$ 20,504
$ 88,778
$ 76,365

Earnings per unit - Basic: $ 0.15
$ 0.19
$ 0.77
$ 0.72
Earnings per unit - Diluted: $ 0.15
$ 0.19
$ 0.77
$ 0.72
Weighted average units outstanding - Basic 123,433
105,404
114,979
105,370
Weighted average units outstanding - Diluted 123,703
105,970
115,323
105,800

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

(In thousands, except unit and per unit amounts)


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Earnings (Deficit)		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2020	116,701,311	$	986,099	4,676,787	$	40,911	$	(324)	$	424	$	1,027,110
Net loss attributable to unitholders	—	—		—	—		(5,830)		—		(5,830)




Reallocation of noncontrolling interests	—	1,866		—	(1,866)		—		—		—

Share-based compensation expense	—	637		—	1,967		—		—		2,604

Balance, September 30, 2020	116,701,311	$	988,602	4,676,787	$	41,012	$	(6,154)	$	424	$	1,023,884

General Partner
Limited Partners⁽¹⁾

Accumulated Earnings
(Deficit)
NCI in Consolidated Subsidiaries Total Equity
Balance, December 31, 2016 $ 489,372
$ 37,081
$ (30,696 ) $ 360
$ 496,117
Net income attributable to unitholders —
—
88,778
—
88,778
Net income attributable to noncontrolling interests —
—
—
33
33
Common units issued as a result of common
shares issued by Urban Edge
348,467
—
(253 ) —
348,214
Limited partnership units issued 105,279
65,805
—
—
171,084
Distributions to Partners ($0.66 per unit) —
—
(77,113 ) —
(77,113 )
Share-based compensation expense 3,354
1,836
58
—
5,248
Share-based awards withheld for taxes (287 ) —
—
—
(287 )
Balance, September 30, 2017 $ 946,185
$ 104,722
$ (19,226 ) $ 393
$ 1,032,074

⁽¹⁾ Limited partners have a ~~10.1%~~3.9% common limited partnership interest in the Operating Partnership as of September 30, ~~2017~~2020 in the form of units of interest in the OP Units and LTIP units.


	Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Deficit		NCI in Consolidated Subsidiaries		Total Equity
Balance, June 30, 2021	117,137,337	$	991,425	5,376,145	$	46,396	$	(44,985)	$	6,154	$	998,990
Net income attributable to unitholders	—	—		—	—		28,915		—		28,915
Net income attributable to noncontrolling interests	—	—		—	—		—		1,190		1,190
Common units issued as a result of common shares issued by Urban Edge	451	21		(526,396)	—		(20)		—		1
Equity redemption of OP units	—	—		—	(6,302)		—		—		(6,302)

Reallocation of noncontrolling interests	—	6,302		—	—		—		—		6,302
Distributions to Partners ($0.15 per unit)	—	—		—	—		(18,268)		—		(18,268)
Contributions from noncontrolling interests	—	—		—	—		—		1,418		1,418
Share-based compensation expense	—	507		—	2,302		—		—		2,809

Balance, September 30, 2021	117,137,788	$	998,255	4,849,749	$	42,396	$	(34,358)	$	8,762	$	1,015,055

(2) Limited partners have a 4.0% common limited partnership interest in the Operating Partnership (“as of September 30, 2021 in the form of units of interest in the OP ~~Units”)~~Units and ~~Long-Term Incentive Plan (“LTIP”)~~LTIP units.

See notes to consolidated financial statements (unaudited).


	Total Shares	General Partner		Total Units	Limited Partners(1)		Accumulated Earnings (Deficit)		NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2019	121,370,125	$	1,020,362	5,833,318	$	50,156	$	(56,166)	$	424	$	1,014,776
Net income attributable to unitholders	—	—		—	—		78,003		—		78,003
Common units issued as a result of common shares issued by Urban Edge	53,193	235		122,858	—		(30)		—		205
Equity redemption of OP units	1,279,389	8,628		(1,279,389)	—		—		—		8,628
Repurchase of common shares	(5,873,923)	(54,141)		—	—		—		—		(54,141)

Reallocation of noncontrolling interests	—	9,724		—	(18,352)		—		—		(8,628)
Distributions to Partners ($0.22 per unit)	—	—		—	—		(27,961)		—		(27,961)
Share-based compensation expense	—	5,255		—	9,208		—		—		14,463
Share-based awards retained for taxes	(127,473)	(1,461)		—	—		—		—		(1,461)
Balance, September 30, 2020	116,701,311	$	988,602	4,676,787	$	41,012	$	(6,154)	$	424	$	1,023,884

(1) Limited partners have a 3.9% common limited partnership interest in the Operating Partnership as of September 30, 2020 in the form of units of interest in the OP Units and LTIP units.


	Total Shares	General Partner		Total Units	Limited Partners(2)		Accumulated Deficit		NCI in Consolidated Subsidiaries		Total Equity
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	—	—		—	—		62,841		—		62,841
Net income attributable to noncontrolling interests	—	—		—	—		—		961		961
Common units issued as a result of common shares issued by Urban Edge	36,533	309		220,739	—		(124)		—		185
Equity redemption of OP units	100,000	840		(100,000)	(6,302)		—		—		(5,462)

Reallocation of noncontrolling interests	—	4,614		—	848		—		—		5,462
Distributions to Partners ($0.45 per unit)	—	—		—	—		(54,762)		—		(54,762)
Contributions from noncontrolling interests	—	—		—	—		—		1,929		1,929
Share-based compensation expense	—	1,670		—	6,548		—		—		8,218
Share-based awards retained for taxes	(13,062)	(210)		—	—		—		—		(210)
Balance, September 30, 2021	117,137,788	$	998,255	4,849,749	$	42,396	$	(34,358)	$	8,762	$	1,015,055

(2) Limited partners have a 4.0% common limited partnership interest in the Operating Partnership as of September 30, 2021 in the form of units of interest in the OP Units and LTIP units.

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	63,802	$	78,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	69,872		70,965
Gain on sale of real estate	(18,648)		(39,775)
Casualty and impairment loss	372		—
Gain on extinguishment of debt	—		(34,908)

Amortization of below market leases, net	(19,775)		(6,803)
Noncash lease expense	5,343		5,655
Straight-lining of rent	338		9,503
Share-based compensation expense	8,218		14,463

Change in operating assets and liabilities:
Tenant and other receivables	(2,505)		(2,812)
Deferred leasing costs	(1,735)		(1,110)
Prepaid expenses and other assets	512		(11,656)
Lease liabilities	(4,901)		(5,017)
Accounts payable, accrued expenses and other liabilities	(7,756)		(1,679)
Net cash provided by operating activities	93,137		74,829
CASH FLOWS FROM INVESTING ACTIVITIES
Real estate development and capital improvements	(46,447)		(18,266)
Acquisitions of real estate	(54,547)		(92,132)
Proceeds from sale of operating properties	34,482		54,402
Net cash used in investing activities	(66,512)		(55,996)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments	(14,324)		(87,567)
Distributions to partners	(110,666)		(27,961)
Taxes withheld for vested restricted units	(210)		(1,461)
Borrowings under unsecured credit facility	—		250,000
Proceeds from mortgage loan borrowings	—		90,250
Repurchase of common shares	—		(54,141)
Debt issuance costs	—		(2,298)
Proceeds related to the issuance of common shares	185		205
Contributions from noncontrolling interests	1,929		—
Net cash (used in) provided by financing activities	(123,086)		167,027
Net (decrease) increase in cash and cash equivalents and restricted cash	(96,461)		185,860
Cash and cash equivalents and restricted cash at beginning of period	419,253		485,136
Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996

Nine Months Ended September 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 88,811
$ 76,364
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 60,576
42,682
Income from acquired leasehold interest (39,215 ) —
Casualty and impairment loss 5,637
—
Loss on extinguishment of debt 1,274
—
Amortization of deferred financing costs 2,175
2,106
Amortization of below market leases, net (6,842 ) (5,907 )
Straight-lining of rent 520
(97 )
Share-based compensation expense 5,248
4,080
Gain on sale of real estate (202 ) (15,618 )
Provision for doubtful accounts 1,674
994
Change in operating assets and liabilities:

Tenant and other receivables (9,605 ) (821 )
Deferred leasing costs (3,556 ) (2,624 )
Prepaid and other assets (6,073 ) (1,954 )
Accounts payable and accrued expenses 12,372
(1,368 )
Other liabilities 1,704
1,346
Net cash provided by operating activities 114,498
99,183
CASH FLOWS FROM INVESTING ACTIVITIES

Real estate development and capital improvements (55,941 ) (45,668 )
Acquisition of real estate (211,393 ) (2,000 )
Proceeds from sale of real estate 5,005
19,938
Net cash used in investing activities (262,329 ) (27,730 )
CASH FLOWS FROM FINANCING ACTIVITIES

Debt repayments (88,559 ) (34,008 )
Distributions to partners (77,113 ) (63,101 )
Debt issuance costs (11,352 ) —
Taxes withheld for vested restricted units (287 ) (38 )
Proceeds from issuance of units 348,214
5,020
Proceeds from borrowings 225,500
—
Net cash provided by (used in) financing activities 396,403
(92,127 )
Net increase (decrease) in cash and cash equivalents and restricted cash 248,572
(20,674 )
Cash and cash equivalents and restricted cash at beginning of period 140,186
178,025
Cash and cash equivalents and restricted cash at end of period $ 388,758
$ 157,351

See notes to consolidated financial statements (unaudited).

URBAN EDGE PROPERTIES AND URBAN EDGE PROPERTIES LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust ~~that owns, manages, acquires, develops, redevelops~~focused on managing, developing, redeveloping, and ~~operates~~acquiring retail real estate in ~~high barrier-to-entry markets.~~urban communities, primarily in the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as ~~the Company’s~~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 September 30, ~~2017,~~2021, Urban Edge owned approximately ~~89.9%~~96% of the outstanding common OP Units with the remaining limited OP Units held by ~~Vornado Realty L.P.,~~ members of management, ~~our~~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~~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 September 30, ~~2017,~~2021, our portfolio consisted of 8568 shopping centers, ~~four~~5 malls and ~~a warehouse park~~2 industrial parks totaling ~~16.7~~approximately 16.4 million square ~~feet.~~feet (“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 interim financial information and with the instructions of Form 10-Q. Certain information and footnote disclosures included in our annual financial statements have been condensed or omitted. In the opinion of management, the consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and the Operating Partnership and the results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, ~~2017~~2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2017.~~2021. Accordingly, these consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, as filed with the Securities Exchange Commission (“SEC”).

The consolidated balance sheets as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 reflect the consolidation of wholly-owned subsidiaries and those entities in which we have a controlling financial interest. As of September 30, 2021 and December 31, 2020, excluding the Operating Partnership, we consolidated 2 VIEs with total assets of $64.6 million and $43.6 million, respectively and total liabilities of $45.1 million and $31.5 million, respectively. The consolidated statements of income for the three and nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 include the consolidated accounts of the Company and the Operating Partnership. 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 from our primary business or group our operations on a geographical basis for purposes of measuring performance. ~~We review~~The Company’s chief operating decision maker reviews operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. None of our tenants accounted for more than 10% of our revenue or property operating ~~income.~~income as of September 30, 2021. We aggregate all of our properties into ~~one~~1 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~~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. Depreciation is recognized on a straight-line basis over estimated useful lives which range from one to 40 years.

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 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 are individually reviewed for impairment whenever events or changes in circumstances 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 negotiations, less selling costs. 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.

Tenant and Other Receivables and Changes in Collectibility Assessment —~~The preparation~~ 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, adjusting for the amount related to the period when the lease was accounted for on a cash basis.

Recently Issued Accounting Literature — Effective for the fiscal period beginning January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses. In connection with the adoption of ASU 2016-03, we also adopted (i) ASU 2018-19 Codification Improvements to ASC 326, Financial Instruments - Credit Losses, (ii)ASU 2019-04, Codification Improvements to ASC 326, Financial Statements - Credit Losses, Topic 815, Derivatives and Hedging and Topic 825, Financial Instruments, (iii) ASU 2019-05 Financial Instruments - Credit Losses (ASC 326): Targeted Transition Relief and (iv)ASU 2019-11 Codification Improvements to ASC 326, Financial Instruments - Credit Losses. ASU 2016-13 introduces a new model for estimating credit losses for certain types of financial instruments and also modifies the impairment model with new methodology for estimating credits losses. In November 2018, the FASB issued ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which included amendments to clarify receivables arising from operating leases are within the scope ASC 842 Leases. Due to the adoption of ASC 842 on January 1, 2019, the Company includes rental revenue deemed uncollectible as a reduction to rental revenue in "Rental revenue" in the consolidated statements ~~in conformity with GAAP requires management~~of income. As of September 30, 2021, the Company did not have any material outstanding financial

instruments.The adoption of ASU 2016-13 did not have a material impact 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~~our consolidated financial statements and ~~the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.~~disclosures.

~~Recently Issued Accounting Literature~~

In ~~May 2017,~~December 2019, the FASB issued ~~an update (“~~ASU ~~2017-09”)~~ ~~Scope of Modification~~2019-12 Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting will not apply if the fair value, vesting conditions,enhances and ~~classification~~simplifies various aspects of the ~~awards are the same immediately before and after the modification.~~income tax accounting. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted. We expect to adopt the standard beginning January 1, 2018. Once adopted, if we encounter a change to the terms or conditions of any of our share-based payment awards we will evaluate the need to apply modification accounting based on the new guidance. The general treatment for modifications of share-based payment awards is to record the incremental value arising from the change as additional compensation cost.

~~In February 2017, the FASB issued an updated (“ASU 2017-05”)~~ ~~Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets,~~ to clarify the scope and accounting for derecognition of nonfinancial assets. ASU 2017-05 eliminated the guidance specific to real estate sales and partial sales. ASU 2017-05 defines “in-substance nonfinancial assets” and includes guidance on partial sales of nonfinancial assets. ASU 2017-052019-12 is effective for interim and annual reporting periods in fiscal years beginning after December 15, ~~2017, with early~~2020. Early adoption is permitted. ~~At this point in time, we do not believe the~~We adopted ASU 2019-12 effective January 1, 2021. The adoption of ASU ~~2017-05 will~~2019-12 did not have a material impact on our consolidated financial statements and ~~related~~ disclosures.

In March 2020 and January ~~2017,~~2021, the FASB issued ~~an update (“~~ASU ~~2017-01”)~~ ~~Clarifying the Definition of a Business, which changes the definition of a business to exclude acquisitions where substantially all~~2020-04 Reference Rate Reform (ASC 848): Facilitation of the ~~fair value~~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 ~~assets acquired are concentrated~~potential burden in ~~a single identifiable asset or a group of similar identifiable assets. While there are various differences between~~ accounting for ~~an asset acquisition~~reference rate reform in contracts and ~~a business combination,~~other transactions that reference the ~~largest impact is that transaction costs~~London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are ~~capitalized for asset acquisitions rather than expensed when they~~met. ASU 2020-04 and ASU 2021-01 are ~~considered business combinations. ASU 2017-01 is~~ effective for ~~annual periods beginning after~~all entities as of March 12, 2020 through December ~~15, 2017, with early adoption permitted.~~31, 2022. We ~~elected~~currently do not anticipate the need to ~~early adopt~~modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU ~~2017-01 effective January 1, 2017. The adoption of this standard has resulted in asset acquisition classification~~2020-04 and ASU 2021-01, which allows entities to account for the ~~real estate acquisitions closed~~modification as if the modification was not substantial. We will disclose the nature of and reason for electing the optional expedient in ~~the nine months ended September 30, 2017,~~each interim and ~~accordingly, acquisition costs for these acquisitions have been capitalized (refer to Note 4 Acquisitions~~annual financial statement period if and ~~Dispositions).~~when applicable through December 31, 2022.

In ~~February 2016,~~April 2020, the FASB issued ~~an update (“ASU 2016-02”~~a question-and-answer document (the “Lease Modification Q&A”) ~~Leases,~~ ~~which revises~~focused on the application of lease accounting ~~related~~guidance to lease ~~accounting.~~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 ~~lessees will be required~~(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 ~~liability and~~payments are based occurred, referred to as the “variable approach”.

The Company makes this election on a ~~right-of-use asset for all~~disaggregated basis, with such election applied consistently to leases with ~~terms greater than 12 months. Leases will be classified~~similar characteristics and similar circumstances. As of September 30, 2021, the Company has granted rent deferrals accounted under both the receivable approach by electing the Lease Modification Q&A and as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The provisions of ASU 2016-02 are effective for fiscal years beginning after December 15, 2018 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginningmodifications due to term extensions of the ~~earliest comparative period presented~~leases. The Company has also granted abatements accounted for under both the variable approach and as modifications due to the executed agreements including other rental term modifications, such as term extensions and substantial changes in cash flows. Refer to Note 10 to the ~~financial statements. Early adoption is permitted. We expect to adopt the standard beginning January 1, 2019. This standard will impact our~~unaudited consolidated financial statements ~~by the recording~~in Part I, Item I of ~~right-of-use assets and lease liabilities~~this Quarterly Report on our consolidated balance sheets for operating and finance leases where we are the lessee. We are currently in the process of evaluating the inputs required to calculate the amount that will be recorded on our consolidated balance sheets for these leases. In addition, leases where we are the lessor that meet the criteria of a finance lease will be amortized using the effective interest method with corresponding charges to interest expense and amortization expense. Leases where we are the lessor that meet the criteria of an operating lease will continue to be amortized on a straight-line basis. Further, internal leasing department costs previously capitalized will be expensed within general and administrative expenses. Historical capitalization of internal leasing costs was $0.5 million and $0.8 million during the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively. We expect this standard will have an impact on the classification of reimbursements of real estate taxes, insurance expenses and certain non-lease components of revenue (reimbursements of common area maintenance expenses) for new leases executed on or after January 1, 2019. There will be no material impact on total revenues.Form 10-Q.

~~In May 2014, the FASB issued an update (“ASU 2014-09”)~~ ~~Revenue from Contracts with Customers~~ to ASC Topic 606, which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. During the year ended December 31, 2016, the FASB issued the following updates to ASC Topic 606 to clarify and/or amend the guidance in ASU 2014-09: (i) ASU 2016-08 ~~Principal versus Agent Considerations (Reporting Revenue Gross versus Net),~~ ~~which clarifies the implementation guidance on principal versus agent considerations, (ii) ASU 2016-10~~ ~~Identifying Performance Obligations and Licensing,~~ ~~which clarifies guidance related to identifying performance obligations and licensing implementation guidance and (iii) ASU 2016-12~~ ~~Narrow-Scope Improvements and Practical Expedients,~~ ~~which amends certain aspects of ASU 2014-09. In August 2015, the FASB issued an update (“ASU 2015-09”)~~ ~~Revenue from Contracts with Customers~~ to ASC Topic 606, which defers the effective date of ASU 2014-09 for all entities by one year. ASU 2015-09 is effective beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We have commenced the process of adopting ASU 2014-09 for reporting periods beginning after December 15, 2017 using the modified retrospective approach, including evaluating all sources of revenue we expect will be impacted by the adoption of ASU 2014-09. Specifically,

we have evaluated the impact ASU 2014-09 will have on the Company’s management and development fee income as well as tenant reimbursement income relating to certain non-lease components of revenue. Currently, the Company does not believe the adoption will impact the timing of the recognition of these revenue sources. For tenant reimbursement income, we expect there may be an impact to the classification of certain lease and non-lease components of revenue from leases upon the adoption of (“ASU 2016-02”) ~~Leases~~ ~~with no material impact to total revenue. We are in the process of completing our evaluation of the overall impact, including the required disclosures for adoption January 1, 2018.~~

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.


4.	~~ACQUISITIONS AND DISPOSITIONS~~

4. ACQUISITIONS AND DISPOSITIONS

During the nine months ended September 30, ~~2017,~~2021 and 2020, we closed on the following acquisitions:

Date Purchased

Property Name

City

State

Square Feet

Purchase Price(1)

(in thousands)

August 10, 2021

601 Murray Road

East Hanover

88,000

18,312

August 19, 2021

151 Ridgedale Avenue

East Hanover

187,000

37,759

2021 Total

56,071

February 12, 2020

Kingswood Center

Brooklyn

130,000

90,212

February 12, 2020

Kingswood Crossing

Brooklyn

110,000

77,077

2020 Total

167,289

Date Purchased Property Name City State Square Feet
Purchase Price⁽¹⁾
(in thousands)
January 4, 2017 Yonkers Gateway Center Yonkers NY —
⁽²⁾
$ 51,902
January 17, 2017 Shops at Bruckner Bronx NY 114,000
32,269
February 2, 2017 Hudson Mall Jersey City NJ 383,000
44,273
May 24, 2017 Yonkers Gateway Center Yonkers NY 437,000
⁽²⁾
101,825
May 24, 2017 The Plaza at Cherry Hill Cherry Hill NJ 413,000
53,535
May 24, 2017 Manchester Plaza Manchester MO 131,000
20,162
May 24, 2017 Millburn Gateway Center Millburn NJ 102,000
45,583
May 24, 2017 21 E Broad St / One Lincoln Plaza Westfield NJ 22,000
10,158
May 25, 2017 The Plaza at Woodbridge Woodbridge NJ 411,000
103,962
Total $ 463,669

On January 4, 2017, we acquired fee and leasehold interests in Yonkers Gateway Center for $51.9 million. Consideration for this purchase consisted of the issuance of $48.8 million in OP units and $2.9 million of cash.(1) The total ~~number of OP units issued was 1.8 million at a value of $27.09 per unit. Transaction costs associated with this acquisition were $0.2 million.~~

~~On January 17, 2017, we~~purchase price for the properties acquired the leasehold interest in the Shops at Bruckner for $32.3 million, consisting of the assumption of the existing debt of $12.6 million and $19.4 million of cash. The property is a 114,000 sf retail center in the Bronx, NY directly across from our 376,000 sf Bruckner Commons shopping center. We own the land under the Shops at Bruckner and had been leasing it to the seller under a ground lease that ran through September 2044. Concurrent with the acquisition, we wrote-off the unamortized intangible liability balance related to the below-market ground lease as well as the existing straight-line receivable balance. As a result, we recognized $39.2 million of income from acquired leasehold interest in the nine months ended September 30, 2017. Transaction costs associated with this acquisition were $0.3 million.

On February 2, 2017, we acquired Hudson Mall, a 383,000 sf retail center in Jersey City, NJ adjacent to our existing Hudson Commons shopping center. Consideration for this purchase consisted of the assumption of the existing debt of $23.8 million and $19.9 million of cash. Transaction costs associated with this acquisition were $0.6 million.

On May 24 and 25, 2017, we acquired a portfolio of seven retail assets (the "Portfolio”) comprising 1.5 million sf of gross leasable area, predominantly in the New York City metropolitan area, for $325 million. The Portfolio was privately owned for more than three decades and was 83% leased as of the date of acquisition. Consideration for this purchase consisted of the issuance of $122 million in OP units, the assumption of $33 million of existing mortgage debt, the issuance of $126 million of non-recourse, secured mortgage debt and $44 million of cash. The total number of OP units issued was 4.5 million at a value of $27.02 per unit. Transaction costs associated with this acquisition were $10.2 million.

~~All acquisitions closed~~ during the nine months ended September 30, ~~2017 were accounted for as asset acquisitions in accordance with ASU 2017-01, adopted January 1, 2017. Accordingly,~~2021 and 2020 includes $0.6 million and $2.5 million, respectively, of transaction costs incurred ~~since January 1, 2017~~ related to ~~these transactions~~the acquisitions.

The 2 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 Section 1031 exchange (a “1031 exchange”) using cash proceeds from previous dispositions.

Kingswood Center and Kingswood Crossing, acquired in February 2020, are located along Kings Highway in the Midwood neighborhood of Brooklyn, NY and were ~~capitalized~~funded via 1031 exchanges using cash proceeds from dispositions. Additionally, as part of the ~~asset’s purchase price. The purchase prices for all acquisitions were allocated to~~acquisition of Kingswood Center, the ~~acquired assets and liabilities based on their relative fair values at date of acquisition.~~Company assumed a $65.5 million mortgage, which matures in 2028.

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


Property Name	Land		Buildings and improvements		Identified intangible assets(1)		Identified intangible liabilities(1)		Debt premium		Total Purchase Price
(in thousands)
601 Murray Road	$	2,075	$	14,733	$	1,722	$	(218)	$	—	$	18,312
151 Ridgedale Avenue	2,990		35,509		—		(740)		—		37,759
2021 Total	$	5,065	$	50,242	$	1,722	$	(958)	$	—	$	56,071

Kingswood Center	$	15,690	$	76,766	$	9,263	$	(4,534)	$	(6,973)	$	90,212
Kingswood Crossing	8,150		64,159		4,768		—		—		77,077
2020 Total	$	23,840	$	140,925	$	14,031	$	(4,534)	$	(6,973)	$	167,289

Property Name Land Buildings and improvements Identified intangible assets Identified intangible liabilities Debt premium Total purchase price
(in thousands)
Yonkers Gateway Center $ 40,699
$ —
$ 25,858
$ (14,655 ) $ —
$ 51,902
Shops at Bruckner —
32,979
12,029
(12,709 ) (30 ) 32,269
Hudson Mall 15,824
37,593
9,930
(17,344 ) (1,730 ) 44,273
Yonkers Gateway Center 22,642
110,635
38,162
(68,694 ) (920 ) 101,825
The Plaza at Cherry Hill 14,602
33,666
7,800
(2,533 ) —
53,535
Manchester Plaza 4,409
13,756
3,256
(1,259 ) —
20,162
Millburn Gateway Center 15,783
25,387
5,360
(947 ) —
45,583
21 E Broad St / One Lincoln Plaza 5,728
4,305
679
(554 ) —
10,158
The Plaza at Woodbridge 21,547
75,017
11,596
(4,198 ) —
103,962
Total $ 141,234
$ 333,338
$ 114,670
$ (122,893 ) $ (2,680 ) $ 463,669
(1) As of September 30, 2021, the remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2021 were 7.6 years and 1.4 years, respectively. The remaining weighted average amortization periods of the identified intangible assets and identified intangible liabilities acquired in 2020 were 8.1 years and 9.1 years, respectively.

~~On June~~During the nine months ended September 30, ~~2017,~~2021, we ~~completed the sale~~disposed of ~~our~~3 properties and 1 property ~~previously classified as held for sale in Eatontown, NJ, for $4.8~~parcel and received proceeds of $34.9 million, net of selling ~~costs. Prior to the~~costs, resulting in an $18.6 million gain on sale ~~the book value~~ of ~~this property exceeded its estimated fair value less costs to sell, and as such, an impairment charge of $3.5 million was recognized~~real estate. Of these dispositions completed during the nine months ended September 30, ~~2017. Our determination of fair value was based on the executed contract of sale~~2021, two were completed as a 1031 exchange with the ~~third-party buyer.~~

~~On September 8, 2017, we completed~~acquisition of 151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale ~~of excess land in Kearny, NJ~~ for ~~$0.3 million, resulting in a gain of $0.2 million.~~

~~On June 9, 2016, we completed the sale of a shopping center located in Waterbury, CT for $21.6 million, resulting in a gain of $15.6 million.~~

In connection with the separation, the Company and Vornado Realty Trust (“Vornado”) entered into a transition services agreement under which Vornado provided transition services to the Company including human resources, information technology, risk management,income tax services and office space and support. The fees charged to us by Vornado for those transition services approximated the actual cost incurred by Vornado in providing such services. On June 28, 2016, the Company executed an amendment to the transition services agreement, extending Vornado’s provision of information technology, risk management services and the portion of the human resources service related to health and benefits through July 31, 2018, unless terminated earlier. Fees for these services remain the same except that they may be adjusted for inflation. As of September 30, 2017 and December 31, 2016, there were no amounts due to Vornado related to such services.

During the ~~three and~~ nine months ended September 30, ~~2017, there~~2020, we disposed of 3 properties and received proceeds of $58.1 million, net of selling costs, resulting in a $39.8 million net gain on sale of real estate. The sale of these properties were $0.3 million and $1.2 million, respectively, of costs paid to Vornado included in general and administrative expenses, which consisted of $0.2 million and $0.7 million, respectively, of rent expense for two of our office locations and $0.1 million and $0.5 million, respectively, of transition services fees. For the three and nine months ended September 30, 2016, there were $0.4 million and $1.3 million, respectively, of costs paid to Vornado included in general and administrative expenses, which consisted of $0.2 million and $0.7 million, respectively, of rent expense for two of our office locations and $0.2 million and $0.6 million of transition services fees, respectively.

~~Management and Development Fees~~

~~In connection~~completed as 1031 exchanges with the separation, the Company and Vornado entered into property management agreements under which the Company provides management, development, leasing and other services to certain properties owned by Vornado and its affiliates, including Interstate Properties (“Interstate”) and Alexander’s, Inc. (NYSE:ALX). Interstate isKingswood Crossing as a general partnership that owns retail properties in which Steven Roth, Chairman of Vornado’s Board and Chief Executive Officer of Vornado, and a member of our Board of Trustees, is the managing general partner. Interstate and its partners beneficially owned an aggregate of approximately 7.1%result of the ~~common shares~~sales occurring within 180 days of ~~beneficial interest of Vornado as of December 31, 2016. As of September 30, 2017, Vornado owned 32.4% of Alexander’s, Inc. During~~ the three and nine months ended September 30, 2017, we recognized management and development fee income of $0.4 million and $1.2 million, respectively, and $0.4 million and $1.4 million for the same periods in 2016. As of September 30, 2017 and December 31, 2016, respectively, there were $0.3 million of fees due from Vornado included in tenant and other receivables in our consolidated balance sheets.Company’s acquisition.

6.5. IDENTIFIED INTANGIBLE ASSETS AND LIABILITIES

Our identified intangible assets (acquired in-place and ~~above and below-market~~above-market leases) and liabilities (acquired below-market leases), net of accumulated amortization, were ~~$91.3~~$50.7 million and ~~$184.1~~$128.5 million, respectively, as of September 30, ~~2017, respectively,~~2021 and ~~$30.9~~$56.2 million and ~~$147.0~~$148.2 million, respectively, as of December 31, ~~2016, respectively.~~2020.

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of ~~$2.7~~$15.0 million and ~~$6.8~~$19.8 million ~~and~~ for the three and nine months ended September 30, ~~2017,~~2021, respectively, and ~~$2.2~~$2.3 million and ~~$6.0~~$6.8 million for the same periods in ~~2016.~~2020.

Amortization of acquired in-place leases ~~and~~inclusive of customer relationships resulted in additional depreciation and amortization expense of ~~$2.9~~$2.2 million and ~~$6.0~~$6.1 million for the three and nine months ended September 30, ~~2017,~~2021, respectively, and ~~$0.8~~$2.1 million and ~~$1.6~~$6.3 million for the same periods in ~~2016.~~2020.

~~Certain shopping centers are subject~~On September 29, 2021, the Company entered into agreements to ~~ground~~terminate our three remaining Kmart and Sears leases ~~or ground and building leases. Amortization~~effective October 15, 2021. The modification of these ~~acquired below-market~~ leases resulted in ~~additional rent expense~~accelerated amortization of ~~$0.2~~the below-market intangible lease liabilities and in-place lease intangible assets of $12.5 million and ~~$0.7~~$0.4 million, ~~for the three and nine months ended September 30, 2017 and 2016,~~ respectively.

The following table sets forth the estimated annual amortization income and expense related to intangible assets and liabilities for the remainder of 2021 and the five succeeding ~~years commencing January 1, 2018:~~years:

(1) Remainder of 2021. Includes accelerated amortization of below-market leases of $33.5 million related to the leases with Kmart and Sears.

(Amounts in thousands) Below-Market Above-Market Below-Market
Year Operating Lease Income Operating Lease Expense In-Place Leases Ground Leases
2018 $ 12,074
$ 1,574
$ 11,285
$ 972
2019 11,620
1,294
8,592
972
2020 11,453
1,016
7,325
972
2021 11,251
803
6,013
622
2022 10,802
426
4,224
590

7.6. MORTGAGES PAYABLE

The following is a summary of mortgages payable as of September 30, ~~2017~~2021 and December 31, ~~2016.~~

2020.

Interest Rate at September 30, December 31,
(Amounts in thousands) Maturity September 30, 2017 2017 2016
Cross-collateralized mortgage loan:

Fixed Rate 9/10/2020 4.39% $ 507,993
$ 519,125
Variable Rate⁽¹⁾
9/10/2020 2.59% 38,756
38,756
Total cross collateralized 546,749
557,881
First mortgages secured by:
Englewood⁽³⁾
10/1/2018 6.22% 11,537
11,537
Montehiedra Town Center, Senior Loan⁽²⁾
7/6/2021 5.33% 86,383
87,308
Montehiedra Town Center, Junior Loan⁽²⁾
7/6/2021 3.00% 30,000
30,000
Plaza at Cherry Hill⁽⁸⁾
5/24/2022 2.84% 28,930
—
Westfield - One Lincoln⁽⁸⁾
5/24/2022 2.84% 4,730
—
Plaza at Woodbridge⁽⁸⁾
5/25/2022 2.84% 55,340
—
Bergen Town Center 4/8/2023 3.56% 300,000
300,000
Shops at Bruckner⁽⁶⁾
5/1/2023 3.90% 12,304
—
Hudson Mall⁽⁷⁾
12/1/2023 5.07% 25,170
—
Yonkers Gateway Center⁽⁹⁾
4/6/2024 4.16% 33,601
—
Las Catalinas 8/6/2024 4.43% 130,000
130,000
North Bergen (Tonnelle Avenue)⁽⁵⁾
4/1/2027 4.18% 100,000
73,951
Manchester Plaza 6/1/2027 4.32% 12,500
—
Millburn Gateway Center 6/1/2027 3.97% 24,000
—
Mount Kisco (Target)⁽⁴⁾
11/15/2034 6.40% 14,562
14,883
Total mortgages payable 1,415,806

1,205,560
Unamortized debt issuance costs (7,740 ) (8,047 )
Total mortgages payable, net of unamortized debt issuance costs

$ 1,408,066
$ 1,197,513

On March 30, 2015, we notified the lender that due to tenants vacating, the property’s operating cash flow would be insufficient to pay its debt service. As of September 30, 2017, we were in default and the property was transferred to receivership. Urban Edge no longer manages the property but will remain its title owner until the receiver disposes of the property. We have determined this property is held in a VIE for which we are the primary beneficiary. Accordingly, as of September 30, 2017, we consolidated Englewood and its operations. The consolidated balance sheet included total assets and liabilities of $12.4 million~~and $14.6 million, respectively.~~

On March 29, 2017, we refinanced the $74 million, 4.59% mortgage loan secured by our Tonnelle Commons property in North Bergen, NJ, increasing the principal balance to $100 million with a 10-year fixed rate mortgage, at 4.18%. As a result, we recognized a loss on extinguishment of debt of $1.3 million during the nine months ended September 30, 2017 comprised of a $1.2 million prepayment penalty and write-off of $0.1 million of unamortized deferred financing fees on the original loan.

On February 2, 2017, we assumed the existing mortgage secured by Hudson Mall in connection with our acquisition of the property. The mortgage payable balance on the loan secured by Hudson Mall includes $1.6 million of unamortized debt premium as of September 30, 2017. The effective interest rate including amortization of the debt premium is 3.37%~~as of September 30, 2017.~~

Reflects the $33 million existing mortgage assumed in connection with the acquisition of Yonkers Gateway Center on May 24, 2017. The mortgage payable balance on the loan secured by Yonkers Gateway Center includes $0.9 million of unamortized debt premium as of September 30, 2017. The effective interest rate including amortization of the debt premium is 1.77%~~as of September 30, 2017.~~


		Interest Rate at
(Amounts in thousands)	Maturity	September 30, 2021	September 30, 2021		December 31, 2020
First mortgages secured by:
Variable rate
Cherry Hill (Plaza at Cherry Hill)(1)	5/24/2022	1.69%	$	28,541	$	28,930
Westfield (One Lincoln Plaza)(1)(3)	5/24/2022	1.69%	—		4,730
Woodbridge (Plaza at Woodbridge)(1)	5/25/2022	1.69%	54,595		55,340
Jersey City (Hudson Commons)(2)	11/15/2024	1.99%	28,172		28,586
Watchung(2)	11/15/2024	1.99%	26,226		26,613
Bronx (1750-1780 Gun Hill Road)(2)	12/1/2024	1.99%	24,803		25,172
Total variable rate debt			162,337		169,371
Fixed rate
Bergen Town Center - West, Paramus	4/8/2023	3.56%	300,000		300,000
Bronx (Shops at Bruckner)	5/1/2023	3.90%	9,864		10,351
Jersey City (Hudson Mall)	12/1/2023	5.07%	22,345		22,904
Yonkers Gateway Center	4/6/2024	4.16%	27,207		28,482
Brick	12/10/2024	3.87%	49,778		50,000
North Plainfield	12/10/2025	3.99%	25,100		25,100
Las Catalinas	2/1/2026	4.43%	124,897		127,669
Middletown	12/1/2026	3.78%	31,400		31,400
Rockaway	12/1/2026	3.78%	27,800		27,800
East Hanover (200 - 240 Route 10 West)	12/10/2026	4.03%	63,000		63,000
North Bergen (Tonnelle Ave)	4/1/2027	4.18%	100,000		100,000
Manchester	6/1/2027	4.32%	12,500		12,500
Millburn	6/1/2027	3.97%	23,055		23,381
Totowa	12/1/2027	4.33%	50,800		50,800
Woodbridge (Woodbridge Commons)	12/1/2027	4.36%	22,100		22,100
East Brunswick	12/6/2027	4.38%	63,000		63,000
East Rutherford	1/6/2028	4.49%	23,000		23,000
Brooklyn (Kingswood Center)	2/6/2028	5.07%	71,035		71,696
Hackensack	3/1/2028	4.36%	66,400		66,400
Marlton	12/1/2028	3.86%	37,400		37,400
East Hanover Warehouses	12/1/2028	4.09%	40,700		40,700
Union (2445 Springfield Ave)	12/10/2028	4.01%	45,600		45,600
Freeport (Freeport Commons)	12/10/2029	4.07%	43,100		43,100
Montehiedra	6/1/2030	5.00%	79,831		81,141
Montclair	8/15/2030	3.15%	7,250		7,250
Garfield	12/1/2030	4.14%	40,300		40,300
Mt Kisco	11/15/2034	6.40%	12,526		12,952
Total fixed rate debt			1,419,988		1,428,026
Total mortgages payable			1,582,325		1,597,397
	Unamortized debt issuance costs		(8,623)		(9,865)
Total mortgages payable, net			$	1,573,702	$	1,587,532

(1)Bears interest at one month LIBOR plus 160 bps.

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

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

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of September 30, ~~2017.~~2021. 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 September 30, ~~2017,~~2021, we were in compliance with all debt covenants.

As of September 30, ~~2017,~~2021, the principal repayments of the Company’s total outstanding debt for the next five years and thereafter are as follows:


(Amounts in thousands)
Year Ending December 31,
2021(1)	$	4,114
2022	98,915
2023	349,814
2024	163,720
2025	40,946
2026	230,694
Thereafter	694,122

(Amounts in thousands)
Year Ending December 31,
2017⁽¹⁾
$ 5,126
2018 29,762
2019 20,398
2020 517,328
2021 122,727
2022 96,749
Thereafter 623,716

⁽¹⁾Remainder of ~~2017.~~2021.

Revolving Credit Agreement

On June 3, 2020, we entered into a third amendment to the Agreement, which among other things, modified certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter annualized. Company borrowings under the Agreement are subject to interest at LIBOR plus ~~1.15%~~1.05% to 1.50% and ~~we are required to pay~~ an annual facility fee of 15 to 30 basis ~~points which is expensed within interest and debt expense as incurred.~~points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to ~~increase if our leverage ratio increases above predefined thresholds.~~change. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x.

No amounts ~~have been~~were drawn ~~to date~~or outstanding under the ~~Agreement.~~Agreement as of September 30, 2021 or December 31, 2020, respectively. Financing ~~fees~~costs associated with executing the Agreement of ~~$3.5~~$2.5 million and ~~$1.9~~$3.3 million as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively, are included in ~~deferred financing fees in~~the prepaid expenses and other assets line item of the consolidated balance ~~sheets.~~sheets, as deferred financing costs, net.

Mortgage on Las Catalinas Mall

In April 2020, we notified the servicer of the $129 million non-recourse mortgage loan on Las Catalinas Mall in Puerto Rico that cash flow would be insufficient to service the debt and that we were unwilling to fund the shortfalls. In December 2020, the non-recourse mortgage loan on Las Catalinas Mall was modified to convert the mortgage from an amortizing 4.43% loan to interest only payments, starting at 3.00% in 2021 and increasing 50 basis points annually until returning to 4.43% in 2024 and thereafter, and to include the ability for the Company 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, 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 sheet as of September 30, 2021. 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 (“Montehiedra”) in the second quarter of 2020, the Company provided a $12.5 million limited corporate guarantee. The guarantee is reduced commensurate with the loan amortization schedule and will reduce to zero in approximately five years. As of September 30, 2021, the remaining exposure under the guarantee is $10.3 million. There was no separate liability recorded related to this guarantee.

The Company ~~has~~ elected to ~~qualify~~be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with the filing of ~~our~~its 2015 tax return for its tax year ended December 31, 2015. With the ~~2015 fiscal year. Under those sections, a~~exception of the Company’s taxable REIT ~~that distributes at least 90% of its REIT taxable income as a dividend~~subsidiary (“TRS”), to ~~its shareholders each year and which~~the extent the Company meets certain ~~other conditions~~requirements under the Code, the Company will not be taxed on ~~that portion of~~ its ~~taxable income which is distributed to its shareholders. As a REIT, we generally will not be subject to~~ federal ~~income taxes, provided that we distribute 100% of~~ taxable income. ~~It is our intention to adhere to the organizational and operational requirements to maintain our REIT status.~~ If we fail to qualify as a REIT for any taxable year, we will be subject to federal income taxes at regular corporate rates, ~~(including~~including any alternative minimum ~~tax)~~tax, which, for corporations, was repealed under the Tax Cuts and Jobs Act (“TCJA”) and may not be able to qualify as a REIT for the four subsequent taxable years. In addition to its TRS, the Company is subject to certain foreign and state and local income taxes, in particular income taxes arising from its operating activities in Puerto Rico, which are included in income tax expense in the consolidated statements of income.

~~The~~For U.S. federal income tax purposes, the REIT and ~~the~~ 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. ~~We are also~~However, during the nine months ended September 30, 2021 and 2020, certain non-real estate operating activities that could not be performed by the REIT, occurred through the Company’s taxable REIT subsidiary (“TRS”), and the Company’s TRS is subject to ~~certain other taxes, including~~federal, state and local income taxes. These income taxes ~~and franchise taxes which~~ are included in ~~general and administrative expenses~~the income tax expense in the consolidated statements of income.

~~Our two~~During the nine months ended September 30, 2021, the REIT was subject to Puerto Rico ~~malls are~~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 ~~29% non-resident withholding~~10% branch profit tax ~~which~~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. ~~The~~During the nine months ended September 30, 2020 the Company also had activities occurring in special partnerships subject to a Puerto Rico 29% non-resident withholding tax on the net income from operating activities allocated to the Operating Partnership.

During the nine months ended September 30, 2020, the Company completed a refinancing and legal entity restructuring transaction at The Outlets at Montehiedra in San Juan, PR, which resulted in a deferred tax asset, net of $13.1 million and recognized an accompanying income tax benefit on its consolidated statements of income. As a result, for the three and nine months ended September 30, 2020 the Company recorded an income tax benefit of $1.3 million and $14.8 million, respectively, which is included in income tax benefit (expense) in the consolidated statements of income.

For the tax 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 an estimated state and local income tax expense ~~recorded was $0.3~~of $4.5 million for the ~~quarters~~REIT during the year ended December 31, 2020. During the nine months ended September 30, ~~2017~~2021, the Company refined the estimated state and ~~2016,~~local income tax accrued in 2020 and recognized an income tax benefit of $0.5 million.

For the three and nine months ended September 30, 2021, the Puerto Rico income tax expense was $0.7 million and $1.4 million, respectively and ~~$0.9 million~~the REIT’s state and ~~$0.3~~local income tax benefit was $0.5 million for the nine months ended September 30, ~~2017~~2021. There was no state and ~~2016,~~local income tax benefit recognized for the three months ended September 30, 2021. All amounts for the three and nine months ended September 30, 2021 and 2020 are included in income tax expense on the consolidated statements of income.

All rental revenue was generated from operating leases for the three and nine months ended September 30, 2021 and September 30, 2020, respectively. ~~Both properties are held in a special partnership~~The components of rental revenue for ~~Puerto Rico tax reporting (the general partner being a qualified REIT subsidiary or “QRS”).~~the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Rental Revenue
Fixed lease revenue(1)	$	80,961	$	53,396	$	216,200	$	174,141
Variable lease revenue	25,024		21,963		78,057		67,483
Total rental revenue	$	105,985	$	75,359	$	294,257	$	241,624

(1) Amount includes write-off of $12.5 million of below-market intangible liabilities related to the termination of the Kmart and Sears leases.

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 or Non-Recurring Basis

There were no financial assets or liabilities measured at fair value on a recurring ~~basis as of September 30, 2017 and December 31, 2016.~~

~~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 September 30, ~~2017~~2021 and December 31, ~~2016.~~2020.

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 by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist. The fair value of cash and cash equivalents is classified as Level 1 and the fair ~~value~~values of mortgages payable is classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments as of September 30, ~~2017~~2021 and December 31, ~~2016.~~2020.


	As of September 30, 2021				As of December 31, 2020
(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	268,952	$	268,952	$	384,572	$	384,572
Liabilities:
Mortgages payable(1)	$	1,582,325	$	1,588,270	$	1,597,397	$	1,611,868

As of September 30, 2017 As of December 31, 2016
(Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value
Assets:

Cash and cash equivalents $ 380,395
$ 380,395
$ 131,654
$ 131,654
Liabilities:

Mortgages payable⁽¹⁾
$ 1,415,806
$ 1,432,817
$ 1,205,560
$ 1,216,989

⁽¹⁾Carrying amounts exclude unamortized debt issuance costs of ~~$7.7~~$8.6 million and ~~$8.0~~$9.9 million as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively.

~~The following market spreads were used by~~Nonfinancial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We assess the ~~Company to estimate the fair~~carrying value of ~~mortgages payable:~~our properties for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

No material impairment charges were recognized during the three and nine months ended September 30, 2021 or 2020.

September 30, 2017 December 31, 2016
Low High Low High
Mortgages payable 1.8% 2.2% 2.0% 2.3%

10. COMMITMENTS AND CONTINGENCIES

There are various legal actions against us in the ordinary course of business. ~~In our opinion, after~~After consultation with legal counsel, we have concluded that the outcome of such matters will not have a material adverse effect on our financial condition, results of operations, or cash flows.

~~Loan Commitments:~~ In January 2015, we completed the modification of the $120.0 million, 6.04% mortgage loan secured by Montehiedra Town Center. As part of the planned redevelopment of the property, we committed to fund $20.0 million for leasing

Redevelopment and ~~building capital expenditures which has been fully funded as of September 30, 2017.~~Anchor Repositioning

~~Redevelopment:~~ As of September 30, ~~2017,~~2021, we had approximately ~~$199.4~~$152.4 million of active development, redevelopment and anchor repositioning projects ~~underway~~under way, of which ~~$109.4~~$91.1 million remains to be funded. ~~Based on current plans~~Further, while we have identified future projects in our development pipeline, we are under no obligation to execute and ~~estimates we anticipate the remaining amounts will be expended over the next two years.~~

~~Insurance~~

~~We maintain general liability insurance with limits~~fund any of ~~$200 million for properties in the U.S.~~these projects and Puerto Rico and all-risk property and rental value insurance coverage with limits of $500 million for properties in the U.S. and $139 million for properties in Puerto Rico, with sub-limits for certain perils such as floods and earthquakes on each of ~~our properties. Our~~these projects is being reevaluated considering market conditions.

Termination of Kmart and Sears Leases

On September 29, 2021, the Company reached an agreement with Transform HoldCo LLC, the owner and operator of Kmart and Sears, to terminate its remaining leases at Bruckner Commons, Sunrise Mall and The Outlets at Montehiedra effective October 15, 2021. The Company recorded a $20 million accrual as of September 30, 2021, for the payment made on October 15, 2021, to recapture control of these spaces. As controlling these anchor spaces is a critical aspect of the value creation plans the Company has under way to reposition these spaces, the $20 million has been capitalized as construction in progress.

Insurance

The Company’s primary and excess insurance ~~includes~~policies providing coverage for ~~terrorism acts but excludes~~pollution related losses have an aggregate limit of $50 million and provide remediation and business interruption coverage for ~~nuclear, biological, chemical or radiological terrorism events as defined by~~pollution incidents, which pursuant to our policies expressly include the ~~Terrorism Risk Insurance Program Reauthorization Act, which expires~~presence and dispersal of viruses. On December 23, 2020, the Company initiated litigation in ~~December 2020. In addition, we maintain coverage for cybersecurity with limits of $5 million in~~New Jersey state court, Bergen County, under these policies to recover uncollected rents and other amounts resulting from the ~~aggregate providing first and third party coverage including network interruption, event management, cyber extortion and claims for media content, security and privacy liability.~~ COVID-19 virus.

Insurance premiums are typically charged directly to each of the ~~retail~~ properties ~~and warehouses. We will be~~but not all of the cost of such premiums are recovered. The Company is responsible for deductibles, ~~and~~ losses in excess of insurance coverage, and the portion of premiums not reimbursable by tenants at our properties, which could be material.

We continue to monitor the state of the insurance market and the scope and costs of ~~coverage for acts of terrorism. However, we~~available coverage. We cannot anticipate what coverage will be available on commercially reasonable terms in the ~~future.~~future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.

~~Our mortgage~~Certain of our loans ~~are non-recourse~~ and other agreements contain customary covenants requiring ~~adequate~~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, itsuch requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

~~Hurricane-Related Charges~~

On September 20, 2017, Hurricane Maria made landfall on Puerto Rico and damaged our two properties. The Company estimates it will spend approximately $6.5 million repairing its properties and expects insurance proceeds to cover these costs in addition to business interruption losses, subject to applicable deductibles estimated to be approximately $2.5 million. Based on management’s estimates, which are subject to change, the Company recognized a $2.2 million charge reflecting the net book value of assets damaged during the third quarter.

All anchor tenants are open for business with the exception of Marshalls at Montehiedra, which requires substantial restoration work. The Company has made significant progress remediating the damage to its assets, but full operations, particularly with respect to the interior of each mall, will not resume until power is restored on a continuous basis, the timing of which is uncertain and outside the Company’s control.

The Company has comprehensive, all-risk property and rental value insurance coverage on these properties, including business interruption, with a limit of $139 million per occurrence and in the aggregate and with sub-limits for certain perils such as floods, earthquakes, civil authority and service interruption. Our deductible for windstorm is 2% of total insured value and business interruption coverage has a deductible equal to three days of cessation of operations. No determination has been made as to the total amount or timing of insurance payments that may be received as a result of the hurricane.

The Company has received a $1.0 million cash advance from its insurance provider for the business interruption caused to these properties. Approximately $0.5 million of the advance is included in property rentals on our consolidated statement of income which offsets rent abatements due to tenants in September. The remaining $0.5 million is recorded as deferred revenue and is included in accounts payable and accrued expenses on our consolidated balance sheet as of September 30, 2017 and will be recognized as earned in subsequent periods.

As of September 30, 2017, the Company has individual, non-recourse mortgages on each of the properties as follows: a $116.4 million mortgage, comprised of a senior and junior loan, maturing in July 2021 secured by the Montehiedra Town Center and a $130.0 million mortgage maturing in August 2024 secured by the Las Catalinas Mall.

Environmental Matters

balance sheets as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively, for ~~potential~~ remediation costs for environmental contamination at ~~two~~certain properties. While this accrual reflects our best estimates of the potential costs of remediation at these properties, ~~$0.1 million has currently been expended during the nine months ended September 30, 2017 and~~ there can be no assurance that the actual costs will not exceed ~~this amount. With respect to our~~these amounts. Although we are not aware of any other ~~properties, the environmental assessments did not reveal any~~ material environmental ~~contamination. However,~~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.

Pandemic-Related Contingencies

On March 11, 2020, the World Health Organization characterized the COVID-19 outbreak as a pandemic. Since March 2020, the Company has granted rent concessions and other lease-related relief, such as rent deferrals, to tenants impacted by the pandemic. Rent relief, deferral or abatements and tenant defaults on lease obligations, such as repayment of deferred rent may have a negative impact on our rental revenue and net income.

Other than adjusting revenue for tenant receivables that may not be collectible, the Company is not currently aware of any other loss contingencies related to the COVID-19 pandemic that would require recognition at this time.

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. Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed for Chapter 11 bankruptcy protection since the pandemic was declared. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and the Company is currently exploring leasing alternatives for these spaces.

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					Balance at
(Amounts in thousands)	September 30, 2017		December 31, 2016		(Amounts in thousands)	September 30, 2021		December 31, 2020
Other assets	$	3,600	$	2,161	Other assets	$	9,463	$	5,953
Deposits for acquisitions	—		6,600
Deferred tax asset, net					Deferred tax asset, net	38,376		39,677
Deferred financing costs, net of accumulated amortization of $5,653 and $4,819, respectively					Deferred financing costs, net of accumulated amortization of $5,653 and $4,819, respectively	2,512		3,347
Finance lease right-of-use asset					Finance lease right-of-use asset	2,724		2,724
Real estate held for sale					Real estate held for sale	—		7,056
Prepaid expenses:					Prepaid expenses:
Real estate taxes	7,425		5,198		Real estate taxes	7,560		8,093
Insurance	4,400		2,545		Insurance	3,298		1,583
Rent, licenses/fees	1,492		938
Licenses/fees					Licenses/fees	1,632		1,878
Total Prepaid expenses and other assets	$	16,917	$	17,442	Total Prepaid expenses and other assets	$	65,565	$	70,311

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)	September 30, 2021		December 31, 2020
Dividend payable	$	—	$	55,905
Deferred tenant revenue	23,958		26,594
Accrued interest payable	9,437		11,095
Accrued capital expenditures and leasing costs(1)	33,115		7,797
Security deposits	6,720		5,884
Finance lease liability	3,001		2,993
Accrued payroll expenses	6,811		5,797
Other liabilities and accrued expenses	11,472		16,915

Total accounts payable, accrued expenses and other liabilities	$	94,514	$	132,980

(1) Amount includes $20 million due in connection with the agreements to terminate our three Kmart and Sears leases.

Balance at
(Amounts in thousands) September 30, 2017 December 31, 2016
Deferred ground rent expense $ 6,445
$ 6,284
Deferred tax liability, net 3,867
3,802
Deferred tenant revenue 4,532
3,280
Environmental remediation costs 1,232
1,309
Other liabilities 466
—
Total Other liabilities $ 16,542
$ 14,675

13. INTEREST AND DEBT EXPENSE

The following table sets forth the details of interest and debt ~~expense:~~expense in the consolidated statements of income:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Interest expense	$	13,893	$	17,433	$	41,946	$	51,771
Amortization of deferred financing costs	745		703		2,247		2,113
Total Interest and debt expense	$	14,638	$	18,136	$	44,193	$	53,884

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands) 2017 2016 2017 2016
Interest expense $ 13,913
$ 12,043
$ 39,204
$ 36,909
Amortization of deferred financing costs 724
723
2,175
2,106
Total Interest and debt expense $ 14,637
$ 12,766
$ 41,379
$ 39,015

14. EQUITY AND NONCONTROLLING INTEREST

At-The-Market Program

~~In 2016,~~On May 5, 2021 the Company established an at-the-market ~~(“ATM”)~~ equity program (the “ATM Program”), pursuant to which the Company may offer and sell ~~from time to time its~~ common shares, par value $0.01 per share, with an aggregate gross sales price of up to ~~$250.0 million through a consortium~~$250 million. Sales under the ATM Program may be made from time to time, as needed, by means of ~~broker dealers acting~~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.

As of September 30, ~~2017, $241.3 million of~~2021, the Company has not issued any common shares ~~remained available for issuance under this ATM equity program and there were no common shares issued~~ under the ATM equity program during the nine months ended September 30, 2017. From September 2016 to December 31, 2016, the Company issued 307,342 common shares at a weighted average price of $28.45 under its ATM equity program, generating cash proceeds of $8.7 million. We paid $0.1 million of commissions to distribution agents and $0.4 million in additional offering expenses related to the issuance of these common shares. Actual futureProgram. 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. ~~We have~~The Company has no obligation to sell ~~the remaining~~any shares ~~available~~ under the ~~active~~ ATM ~~equity program.~~Program.

~~Underwritten Public Offering~~Share Repurchase Program

~~On May 10, 2017,~~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 ~~issued 7.7~~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.

During the nine months ended September 30, 2021, no shares were repurchased by the Company. During the nine months ended September 30, 2020, the Company repurchased 5.9 million common shares of beneficial interest in an underwritten public offering pursuant to the Company’s effective shelf registration statement previously filed on Form S-3 (File No. 333-212951) with the SEC on August 5, 2016. This offering generated cash proceeds of $193.5 million, net of $1.3 million of issuance costs.

~~Stock Purchase Agreement~~

~~On August 4, 2017, the Company issued 6.25 million common shares of beneficial interest to a large institutional investor~~ at a ~~net~~weighted average share price of ~~$24.80 per share, pursuant to the Company’s effective shelf registration statement previously filed on Form S-3 (File No. 333-212951) with the SEC on August 5, 2016. The issuance was~~$9.22 under this program, for a ~~direct sale with no underwriter or placement agent such that net cash proceeds to the Company were $155~~total of $54.1 million.

~~Units of the Operating Partnership~~

~~An equivalent number of common units were issued by the Operating Partnership to the Company in connection with the Company’s issuance of common shares of beneficial interest, as discussed above.~~

The Operating Partnership issued 1.8 million OP units in connection with the acquisition of Yonkers Gateway Center on January 4, 2017, at a value of $27.09 per unit. On May 24 and 25, 2017, the Operating Partnership issued 2.6 million OP units and 1.9 million OP units, respectively, in connection with the Portfolio acquisition at a value of $27.02 per unit (refer to Note 4 Acquisitions and Dispositions).

Dividends and Distributions

During the three months ended September 30, ~~2017 and 2016,~~2021, the Company declared distributions on common shares and OP units of $0.15 per share/unit. During the three months ended September 30, 2020, the Company temporarily suspended dividends as a result of the COVID-19 pandemic and resulting uncertainty, and as such, no dividends were declared on our common shares ~~and~~or OP ~~unit distributions of $0.22 and $0.20 per share/unit, respectively.~~units. During the nine months ended September 30, ~~2017~~2021 and ~~2016~~, 2020, respectively, the Company declared distributions on our common ~~stock dividends~~shares and OP ~~unit distributions~~units of ~~$0.66~~$0.45 and ~~$0.60~~$0.22 per share/unit ~~respectively.~~in the aggregate.

~~Redeemable~~ Noncontrolling Interests in Operating Partnership

~~Redeemable noncontrolling~~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. In connection with the separation, the Company issued 5.7 million OP units, representing a 5.4% interest in the Operating Partnership to VRLP in exchange for interests in VRLP properties contributed by VRLP. 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 ~~acquisition of Yonkers Gateway Center and the Portfolio acquisition.~~ property acquisitions in 2017.

The total of the OP units and LTIP units represent a ~~10.3%~~4.0% and ~~9.0%~~4.2% weighted-average interest in the Operating Partnership for the three and nine months ended September 30, ~~2017,~~2021, respectively. 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~~1-for-one basis, solely at our election. Holders of outstanding OP units may ~~at a determinable date,~~ redeem their units for cash or the Company’s common shares on a ~~one-for-one~~1-for-one basis, solely at our election.

Noncontrolling ~~Interest~~Interests in Consolidated Subsidiaries

The Company’s noncontrolling ~~interest relates~~interests relate to the 5% interest held by others in our property in Walnut Creek, CA (Mount Diablo)~~. The~~ and 17.5% held by others in our property in Massapequa, NY. The net income attributable to noncontrolling ~~interest~~interests is presented separately in our consolidated statements of income.

15. SHARE-BASED COMPENSATION

~~2017 Outperformance Plan~~

On February 24, 2017, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2017 Outperformance Plan (“2017 OPP”), a multi-year performance-based equity compensation program. Under the 2017 OPP, participants, including our Chairman and Chief Executive Officer, have the opportunity to earn awards in the form of LTIP units if, and only if, we outperform a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to a relative TSR in any year during the requisite performance periods as described below. The aggregate notional amount of the 2017 OPP grant is $12.0 million.

Awards under the 2017 OPP may be earned if we (i) achieve a TSR level greater than 7% per annum, or 21% over the three-year performance measurement period, and/or (ii) achieve a TSR equal to or above, that of the 50^th percentile of a retail REIT peer group comprised of 14 of our peer companies, over a three-year performance measurement period. Distributions on awards accrue during the measurement period, except that 10% of such distributions are paid in cash. If the designated performance objectives are achieved, LTIP units are also subject to time-based vesting requirements. Awards earned under the 2017 OPP vest 50% in year three, 25% in year four and 25% in year five.

The fair value of the 2017 OPP on the date of grant was $4.1 million using a Monte Carlo simulation to estimate the fair value based on the probability of satisfying the market conditions and the projected share price at the time of payment, discounted to the valuation date over a three-year performance period. Assumptions include historic volatility (19.7%), risk-free interest rates (1.5%), and historic daily return as compared to our Peer Group. Such amount is being amortized into expense over a five-year period from the date of grant, using a graded vesting attribution model.

Share-Based Compensation Expense

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Share-based compensation expense components:
Restricted share expense	$	98	$	199	$	365	$	653
Stock option expense	384		432		1,181		4,559
LTIP expense(1)	1,326		1,023		3,659		6,323
Performance-based LTI expense(2)	976		944		2,889		2,886
Deferred share unit (“DSU”) expense	25		6		124		42
Total Share-based compensation expense	$	2,809	$	2,604	$	8,218	$	14,463

(1) LTIP expense includes the time-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.

(2) Performance-based LTI expense includes the 2017 OPP plan and the performance-based portion of the 2018, 2019, 2020 and 2021 LTI Plans.

Equity award activity during the nine months ended September 30, 2021 included: (i) 333,333 stock options vested, (ii) 325,625 LTIP units granted, (iii) 151,398 LTIP units vested, (iv) 2,886 LTIP units forfeited, (v) 34,532 restricted shares vested, (vi) 17,933 restricted shares granted, and (vii) 5,945 restricted shares forfeited.

2021 Long-Term Incentive Plan

On February 10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s 2021 Long-Term Incentive Plan (“2021 LTI Plan”). 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 total shareholder return (“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 as described further below:

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 measurement period (the “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.

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 15 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 35th 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 55th 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 75th percentile of the peer group, with earning determined using linear interpolation if in between such relative and absolute TSR thresholds.

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands) 2017 2016 2017 2016
Share-based compensation expense components:
Restricted share expense $ 527
$ 352
$ 1,435
$ 968
Stock option expense 650
604
1,919
1,833
LTIP expense 147
95
410
378
Outperformance Plan (“OPP”) expense 565
308
1,484
901
Total Share-based compensation expense $ 1,889
$ 1,359
$ 5,248
$ 4,080
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 September 30, 2021, 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.

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 following table sets forth the computation of our basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per share amounts)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to common shareholders	$	27,766	$	(5,605)	$	60,233	$	74,630
Less: Earnings allocated to unvested participating securities	(12)		4		(29)		(50)
Net income (loss) available for common shareholders - basic	$	27,754	$	(5,601)	$	60,204	$	74,580
Impact of assumed conversions:
OP and LTIP units	—		—		2,608		—
Net income available for common shareholders - dilutive	$	27,754	$	(5,601)	$	62,812	$	74,580

Denominator:
Weighted average common shares outstanding - basic	117,087		116,625		117,009		118,033
Effect of dilutive securities(1):

Restricted share awards	50		—		56		78
Assumed conversion of OP and LTIP units	—		—		5,147		—
Weighted average common shares outstanding - diluted	117,137		116,625		122,212		118,111

Earnings per share available to common shareholders:
Earnings (loss) per common share - Basic	$	0.24	$	(0.05)	$	0.51	$	0.63
Earnings (loss) per common share - Diluted	$	0.24	$	(0.05)	$	0.51	$	0.63

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands, except per share amounts) 2017 2016 2017 2016
Numerator:
Net income attributable to common shareholders $ 17,178
$ 19,265
$ 81,347
$ 71,771
Less: Earnings allocated to unvested participating securities (39 ) (26 ) (133 ) (88 )
Net income available for common shareholders - basic $ 17,139
$ 19,239
$ 81,214
$ 71,683
Impact of assumed conversions:
OP and LTIP units —
—
7,175
—
Net income available for common shareholders - dilutive $ 17,139
$ 19,239
$ 88,389
$ 71,683

Denominator:
Weighted average common shares outstanding - basic 110,990
99,304
104,938
99,281
Effect of dilutive securities⁽¹⁾:

Stock options using the treasury stock method 94
436
180
259
Restricted share awards 176
130
164
109
Assumed conversion of OP and LTIP units —
—
10,041
62
Weighted average common shares outstanding - diluted 111,260
99,870
115,323
99,711

Earnings per share available to common shareholders:
Earnings per common share - Basic $ 0.15
$ 0.19
$ 0.77
$ 0.72
Earnings per common share - Diluted $ 0.15
$ 0.19
$ 0.77
$ 0.72

⁽¹⁾(1) For the three months ended September 30, 2021 and the three and nine months ended September 30, ~~2016 and the three months endedSeptember 30, 2017~~2020, the effect of the redemption of OP and LTIP units for Urban Edge common shares would have an anti-dilutive effect on the calculation of diluted EPS. Accordingly, the impact of such redemption has not been included in the determination of diluted EPS for these periods.

Operating Partnership Earnings per Unit

The following table sets forth the computation of basic and diluted earnings per unit:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands, except per unit amounts)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to unitholders	$	28,915	$	(5,830)	$	62,841	$	78,003
Less: net income attributable to participating securities	(12)		4		(29)		(50)
Net income (loss) available for unitholders	$	28,903	$	(5,826)	$	62,812	$	77,953

Denominator:
Weighted average units outstanding - basic	120,903		120,618		120,839		122,332
Effect of dilutive securities issued by Urban Edge	50		—		56		78
Unvested LTIP units	1,034		—		1,317		764
Weighted average units outstanding - diluted	121,987		120,618		122,212		123,174

Earnings per unit available to unitholders:
Earnings (loss) per unit - Basic	$	0.24	$	(0.05)	$	0.52	$	0.64
Earnings (loss) per unit - Diluted	$	0.24	$	(0.05)	$	0.51	$	0.63

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands, except per unit amounts) 2017 2016 2017 2016
Numerator:
Net income attributable to unitholders $ 19,145
$ 20,504
$ 88,778
$ 76,365
Less: net income attributable to participating securities (39 ) (43 ) (142 ) (174 )
Net income available for unitholders $ 19,106

$ 20,461

$ 88,636

$ 76,191

Denominator:
Weighted average units outstanding - basic 123,433
105,404
114,979
105,370
Effect of dilutive securities issued by Urban Edge 270
566
344
368
Unvested LTIP units —
—
—
62
Weighted average units outstanding - diluted 123,703
105,970
115,323
105,800

Earnings per unit available to unitholders:
Earnings per unit - Basic $ 0.15
$ 0.19
$ 0.77
$ 0.72
Earnings per unit - Diluted $ 0.15
$ 0.19
$ 0.77
$ 0.72

~~17. SUBSEQUENT EVENTS~~

Pursuant to the Subsequent Events Topic of the FASB ASC, we have evaluated subsequent events and transactions that occurred after our September 30, 2017 consolidated balance sheet date for potential recognition or disclosure in our consolidated financial statements. Based on this evaluation, the Company has determined there are no subsequent events required to be disclosed.


~~ITEM 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can ~~find~~identify many of these statements by ~~looking for~~ words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of ~~these and our other~~ forward-looking statements are beyond our ability to control or ~~predict; these factors~~predict and include, among ~~others,~~others: (i) the ~~estimated remediation~~economic, political and ~~repair~~social impact of, and uncertainty relating to, the COVID-19 pandemic, including its impact on our retail tenants and their ability to make rent and other payments or honor their commitments under existing leases; (ii) the loss or bankruptcy of major tenants; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (iv) the impact of e-commerce on our tenants’ business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as potential volatility in the Company’s share price; (vi) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company’s revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company’s borrowing costs ~~related~~as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR; (ix) the Company’s ability to ~~Hurricane Maria~~pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company’s ability to borrow funds under its existing credit facility as a result of covenants relating to the Company’s financial results; (x) potentially higher costs associated with the Company’s development, redevelopment and anchor repositioning projects, and the ~~timing~~Company’s ability to lease the properties at projected rates; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of ~~re-opening~~climate change; (xiii) the Company’s ability and ~~resumption~~willingness to maintain its qualification as a REIT in light of ~~full operations at~~economic, market, legal, tax and other considerations; (xiv) information technology security breaches; and (xv) the ~~affected properties.~~loss of key executives. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020 and the other documents filed by the Company with the SEC, including the information contained in this Quarterly Report on Form 10-Q.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Part I of this Quarterly Report on Form 10-Q.

Overview

Urban Edge Properties (“UE”, “Urban Edge” or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that ~~owns,~~ manages, ~~acquires,~~ develops, redevelops, and ~~operates~~acquires retail real estate, primarily in ~~high barrier-to-entry markets.~~the New York metropolitan area. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as ~~the Company’s~~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 September 30, ~~2017,~~2021, Urban Edge owned approximately ~~89.9%~~96% of the outstanding common OP Units with the remaining limited OP Units held by ~~Vornado Realty L.P.,~~ members of management, ~~our~~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 September 30, ~~2017,~~2021, our portfolio consisted of 8568 shopping centers, ~~four~~five malls and ~~a warehouse park~~two industrial parks totaling ~~16.7~~approximately 16.4 million square feet.

Critical Accounting Policies and Estimates

The Company’s ~~2016~~ Annual Report on Form 10-K for the fiscal year ended December 31, 2020 contains a description of our critical ~~accounting~~accounting policies, including accounting for real estate, ~~allowance for doubtful accounts~~leases and revenue recognition. For the nine months ended September 30, ~~2017,~~2021, there were no material changes to these policies, other than the adoption of the Accounting Standards Update (“ASU”) 2017-01 described in Note 3 to the unaudited consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.policies.

Recent Accounting Pronouncements

Refer to Note 3 to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that may affect us.

Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases on each of our properties. This revenue includes fixed base rents, recoveries of expenses that we have incurred and that we pass through to the individual tenants and percentage rents that are based on specified percentages of tenants’ revenue, in each case as provided in the respective leases.

Our primary cash ~~expenses~~expenditures consist of our property operating and capital ~~expenses,~~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; general and administrative expenses include payroll, professional fees, information technology, office expenses and other administrative expenses; and interest and debt expense is primarily consists of interest on our mortgage ~~debt and amortization of deferred financing costs on our revolving credit facility.~~debt. In addition, we incur substantial non-cash charges for depreciation and amortization on our properties. We also capitalize certain expenses, such as taxes, interest and salaries related to properties under development or redevelopment until the property is ready for its intended use.

Our consolidated results of operations often are not comparable from period to period due to the impact of property acquisitions, dispositions, developments, redevelopments and ~~redevelopments.~~changes in accounting policies. The results of operations of any acquired properties are included in our financial statements as of the date of acquisition. 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. The current COVID-19 pandemic has increased volatility and uncertainty and has created significant economic disruption in many markets. Vaccinations for the COVID-19 virus have been widely distributed among the general U.S. population, which has loosened restrictions previously mandated on our tenants identified as nonessential; however the potential emergence of vaccine-resistant variants of COVID-19 may trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. The long-term consequences of the various restrictions taken during the pandemic on consumer behavior is currently unknown. Specifically, the revenue and sales volume for certain tenants identified as nonessential may decline significantly as demand for their services and products declines potentially longer term. We are actively managing our business to respond to the ongoing economic and social impact and uncertainty relating to the COVID-19 pandemic; however, our future near term and potentially longer term results of operations may be significantly adversely affected. See “Pandemic-Related Contingencies” under Liquidity and Capital Resources and “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The following provides an overview of our key financial metrics based on our consolidated results of operations (refer to ~~cash~~ Net Operating Income (“NOI”), same-property ~~cash~~ NOI and Funds From Operations applicable to diluted common shareholders (“FFO”) described later in this section):


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
FFO applicable to diluted common shareholders(1)	45,302		16,880		112,463		107,330
NOI(2)	56,809		46,019		167,625		151,020
Same-property NOI(2)	55,676		43,940		159,925		140,057

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands) 2017 2016 2017 2016
Net income $ 19,156
$ 20,505
$ 88,811
$ 76,364
FFO applicable to diluted common shareholders⁽¹⁾
40,000
34,773
152,131
102,166
Cash NOI⁽²⁾
60,807
52,867
175,355
157,590
Same-property cash NOI⁽²⁾
47,812
46,017
142,978
136,527

⁽¹⁾Refer to page 3335 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.

⁽²⁾Refer to page 3234 for a reconciliation to the nearest GAAP measure.

~~Significant Development/~~Redevelopment ~~Activity~~

and Anchor Repositioning

The Company ~~had 16~~has sixteen active development, redevelopment or anchor repositioning projects with total estimated costs of ~~$199.4~~$152.4 million, of which ~~$90.0~~$61.3 million (or ~~45%~~40%) ~~has~~have been incurred and $91.1 million remains to be funded as of September 30, ~~2017. As~~2021. We plan on generating additional income from our existing assets by redeveloping underutilized existing space, developing new space and pad sites, repositioning anchors, and incorporating non-retail uses such as industrial, self-storage, office and other uses. We continue to monitor the stabilization dates of these projects as a result of the impact of the COVID-19 pandemic on our tenants and vendors. 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 reevaluated considering market conditions.

Termination of Kmart and Sears Leases

On September 29, 2021, the Company reached an agreement with Transform HoldCo LLC, the owner and operator of Kmart and Sears, to terminate its remaining leases at Bruckner Commons, Sunrise Mall and The Outlets at Montehiedra effective October 15, 2021. The Company recorded a $20 million accrual as of September 30, ~~2017,~~2021, for the payment made on October 15, 2021, to recapture control of these spaces. As controlling these anchor spaces is a critical aspect of the value creation plans the Company ~~had completed projects at six properties for a total investment of $36.5 million.~~has under way to reposition these spaces, the $20 million has been capitalized as construction in progress.

Acquisition/Disposition Activity

On January 4, 2017, we acquired fee and leasehold interests in Yonkers Gateway Center for $51.9 million. Consideration for this purchase consisted of the issuance of $48.8 million in OP units and $2.9 million of cash. The total number of OP units issued was 1.8 million at a value of $27.09 per unit. Transaction costs associated with this acquisition were $0.2 million.

On January 17, 2017, we acquired the leasehold interest in the Shops at Bruckner for $32.3 million, consisting of the assumption of the existing debt of $12.6 million and $19.4 million of cash. The property is a 114,000 sf retail center in the Bronx, NY directly across from our 376,000 sf Bruckner Commons shopping center. We own the land under the Shops at Bruckner and had been leasing it to the seller under a ground lease that ran through September 2044. Concurrent with the acquisition, we wrote-off the unamortized intangible liability balance related to the below-market ground lease as well as the existing straight-line receivable balance. As a result, we recognized $39.2 million of income from acquired leasehold interest inDuring the nine months ended September 30, ~~2017. Transaction costs associated with this acquisition were $0.3 million.~~

~~On February 2, 2017,~~2021, we ~~acquired Hudson Mall, a 383,000 sf retail center in Jersey City, NJ adjacent to our existing Hudson Commons shopping center. Consideration for this purchase consisted~~disposed of ~~the assumption~~three properties and one property parcel and received proceeds of ~~the existing debt of $23.8 million and $19.9 million of cash. Transaction costs associated with this acquisition were $0.6 million.~~

~~On June 30, 2017, we completed the sale of our property previously classified as held for sale in Eatontown, NJ, for $4.8~~$34.9 million, net of selling ~~costs. Prior to the~~costs, resulting in an $18.6 million gain on sale ~~the book value~~ of ~~this property exceeded its estimated fair value less costs to sell, and as such, an impairment charge of $3.5 million was recognized~~real estate. Of these dispositions completed during the nine months ended September 30, ~~2017. Our determination of fair value was based on the executed contract of sale with the third-party buyer.~~

~~On September 8, 2017, we~~2021, two were completed ~~the sale of excess land in Kearny, NJ for $0.3 million, resulting in~~as a ~~gain of $0.2 million.~~

On June 9, 2016, we completed the sale of a shopping center located in Waterbury, CT for $21.6 million, resulting in a gain of $15.6 million. During the three and nine months ended September 30, 2016, there were no acquisitions.

~~Significant Debt and Equity Activity~~

~~Debt Activity~~

During May of 2017, $126 million of non-recourse, secured debt was obtained in connection with the funding of the Portfolio acquisition. The mortgages are scheduled to mature beginning in 2022 through 2027. In addition, we assumed a $33 million existing mortgage in connection1031 exchange with the acquisition of ~~Yonkers Gateway Center on May 24, 2017.~~151 Ridgedale Avenue, allowing for the deferral of capital gains from the sale for income tax purposes.

In August 2021, the Company acquired two industrial properties, which are adjacent to our existing 943,000 sf warehouse park in East Hanover, NJ. The ~~mortgage payable balance on the loan secured by Yonkers Gateway Center includes $0.9 million~~acquisition of ~~unamortized debt premium as of September 30, 2017.~~151 Ridgedale Avenue was partially funded via a Section 1031 exchange using cash proceeds from previous dispositions.

Equity award activity during the nine months ended September 30, ~~2017 comprised of a $1.2 million prepayment penalty~~2021 included: (i) 333,333 stock options vested, (ii) 325,625 LTIP units granted, (iii) 151,398 LTIP units vested, (iv) 2,886 LTIP units forfeited, (v) 34,532 restricted shares vested, (vi) 17,933 restricted shares granted, and ~~write-off of $0.1 million of unamortized deferred financing fees on the original loan.~~

~~On January~~(vii) 5,945 restricted shares forfeited. Refer to Note 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. Borrowings under the Agreement are subject to interest at LIBOR plus 1.15% and we are required to pay an annual facility fee of 15 basis points which is expensed within interest and debt expense as incurred. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to increase if our leverage ratio increases above predefined thresholds. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x. No amounts have been drawn to date under the Agreement.

During June 2016, in connection with the sale of a shopping center located in Waterbury, CT, we prepaid $21.2 million of our cross collateralized mortgage loan to release the property from the mortgage and maintain compliance with covenant requirements.

On March 30, 2015, we notified the lender that due to tenants vacating the Englewood shopping center, the property’s operating cash flow would be insufficient to pay its debt service. As of September 30, 2017, we were in default and the property was transferred to receivership. Urban Edge no longer manages the property but will remain its title owner until the receiver disposes of the property.

~~Equity Activity~~

On January 7, 2015, our board and initial shareholder approved the Urban Edge Properties 2015 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 are available~~unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for ~~grant. We have a Dividend Reinvestment Plan (the “DRIP”), whereby shareholders may use their dividends to purchase shares.~~

more information regarding the Company’s equity award activity.

On February ~~24, 2017,~~10, 2021, the Compensation Committee of the Board of Trustees of the Company approved the Company’s ~~2017 Outperformance~~2021 Long-Term Incentive Plan (“~~2017 OPP”~~2021 LTI Plan”),. The Plan is a multi-year, ~~performance-based~~ equity compensation ~~program. The purpose~~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 ~~2017 Outperformance Plan is~~program) and performance goals tied to ~~further align~~our relative and absolute total shareholder return (“TSR”) during the ~~interests~~three-year performance period following their grant (one-half of the ~~Company’s shareholders with that of management by encouraging~~program). The total grant date fair value under the ~~Company’s senior officers to create shareholder value in a “pay for performance” structure. The aggregate notional amount of~~2021 LTI Plan was $7.8 million comprising both performance-based and time-based awards. During the

~~2017 OPP grant is $12.0 million. 302,000 LTIP units were granted in connection with the 2017 OPP. LTIP units will be awarded if the performance criteria are met in accordance with the OPPs.~~

~~On May 10, 2017,~~ nine months ended September 30, 2021, the Company issued 7.7 million common shares of beneficial interest in an underwritten public offering pursuant to the Company’s effective shelf registration statement previously filed on Form S-3 (File No. 333-212951) with the SEC on August 5, 2016. This offering generated cash proceeds of $193.5 million, net of $1.3 million of issuance costs. We intend to use the proceeds of this offering for development and redevelopment projects and for general corporate purposes including potential acquisitions that may be identified in the future.

On August 4, 2017, the Company issued 6.25 million common shares of beneficial interest to a large institutional investor at a net price of $24.80 per share, pursuant to the Company’s effective shelf registration statement previously filed on Form S-3 (File No. 333-212951) with the SEC on August 5, 2016. The issuance was a direct sale with no underwriter or placement agent such that net cash proceeds to the Company were $155 million.

An equivalent number of common units were issued by the Operating Partnership to the Company in connection with the Company’s issuance of common shares of beneficial interest, as discussed above. The Operating Partnership issued 1.8 million OP units in connection with the acquisition of Yonkers Gateway Center on January 4, 2017 at a value of $27.09 per unit. On May 24 and 25, 2017, the Operating Partnership issued 2.6 million OP398,977 performance-based LTIP units and ~~1.9 million OP~~273,615 time-based LTIP units, respectively, in connection with the ~~Portfolio acquisition at a value of $27.02 per unit.~~2021 LTI Plan.

Other equity activity during the nine months ended September 30, 2017 included: (i) 137,259 stock options granted, (ii) 104,698 restricted shares granted, (iii) 31,734 LTIP units granted, (iv) 53,236 restricted shares vested, (v) 16,789 LTIP units vested, (vi) 11,760 2015 OPP LTIP units forfeited, (vii) 5,879 stock options forfeited, and (viii) 5,251 restricted shares forfeited.

Comparison of the Three Months Ended September 30, ~~2017~~2021 to September 30, ~~2016~~2020

Net income for the three months ended September 30, ~~2017~~2021 was ~~$19.2~~$30.1 million, compared to a net ~~income~~loss of ~~$20.5~~$5.8 million for the three months ended September 30, ~~2016.~~2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended September 30, ~~2017~~2021 as compared to the same period of ~~2016:~~2020:

For the Three Months ended September 30,
(Amounts in thousands) 2017 2016 $ Change
Total revenue $ 94,101
$ 79,973
$ 14,128
Property operating expenses 11,402
9,897
1,505
Depreciation and amortization 20,976
14,435
6,541
Real estate taxes 15,872
12,729
3,143
Casualty and impairment loss 2,170
—
2,170
Interest and debt expense 14,637
12,766
1,871
Interest income 719
176
543
Provision for doubtful accounts 575
149
426


	Three Months Ended September 30,
(Amounts in thousands)	2021		2020		$ Change
Total revenue	$	106,839	$	75,838	$	31,001


Property operating expenses	15,692		13,436		2,256
General and administrative expenses	10,134		8,700		1,434

Gain on sale of real estate	6,926		—		6,926
Interest and debt expense	14,638		18,136		(3,498)

Total revenue increased by ~~$14.1~~$31.0 million to ~~$94.1~~$106.8 million in the third quarter of ~~2017~~2021 from ~~$80.0~~$75.8 million in the third quarter of ~~2016.~~2020. The increase is primarily attributable to:

•$~~7.6~~12.5 million of accelerated amortization of below-market intangibles in connection with the termination of our Kmart and Sears leases in the third quarter of 2021;

•$10.9 million decrease in rental revenue deemed uncollectible;

•$5.4 million increase in non-cash revenue due to $4.7 million write-offs of receivables arising from the straight-lining of rents for tenants put on cash basis in the third quarter of 2020 compared to a $0.7 million reinstatement of straight-line balances, net, for the third quarter of 2021 in connection with tenants moved from cash basis to accrual basis;

•$0.9 million increase in tenant reimbursement income due to higher common area maintenance expenses for utilities, insurance, repairs and maintenance, and security in the third quarter of 2021 and the Sunrise Mall acquisition in December 2020;

•$0.8 million increase in percentage rent; and

•$0.4 million increase in lease termination income.

Property operating expenses increased by $2.3 million to $15.7 million in the third quarter of 2021 from $13.4 million in the third quarter of 2020. The increase is primarily attributable to:

•$1.4 million increase as a result of property acquisitions, net of ~~dispositions that closed since September 2016;~~dispositions; and

•$~~4.1~~0.9 million ~~net increase in tenant expense reimbursements~~higher common area maintenance expenses across the portfolio as a result of spend reductions and limited center hours due to ~~an increase~~COVID-19 interruptions in ~~recoverable expenses and revenue from recoverable capital projects;~~

~~$2.8 million net increase in property rentals due to rent commencements and contractual rent increases, partially offset by~~

~~$0.4 million decrease in other income due to lower tenant bankruptcy settlement income received during~~ the third quarter of ~~2017.~~2020.

~~Property operating~~General and administrative expenses increased by ~~$1.5~~$1.4 million to ~~$11.4~~$10.1 million in the third quarter of ~~2017~~2021 from ~~$9.9~~$8.7 million in the third quarter of ~~2016. The increase~~2020. This is primarily attributable to an increase in ~~common area maintenance expenses as a result~~professional fees, transaction costs and other expenses.

A gain on the sale of ~~acquisitions that closed since September 2016.~~

~~Depreciation and amortization increased by $6.5~~real estate of $6.9 million ~~to $21.0 million~~was recognized in the third quarter of ~~2017 from $14.4 million~~2021 in connection with the ~~third quarter~~disposition of ~~2016. The increase is primarily attributable to:~~

~~$6.3 million increase as a result of acquisitions net of dispositions that closed since September 2016;~~

~~$0.6 million increase from development projects and tenant improvements placed into service since September 2016, partially offset by~~

~~$0.4 million in-place lease write-off due to a tenant vacating during the third quarter of 2016.~~

~~Real estate taxes increased by $3.2 million to $15.9 million~~our property in ~~the third quarter of 2017 from $12.7 million in the third quarter of 2016. The increase is primarily attributable to:~~

~~$2.4 million increase as a result of acquisitions net of dispositions that closed since September 2016;~~

~~$0.5 million increase due to higher assessed values and tax refunds received in 2016; and~~

~~$0.2 million increase due to additional real estate taxes capitalized in the third quarter of 2016 related to space taken out of service for development and redevelopment projects.~~

~~The Company recognized a casualty loss of $2.2 million in the third quarter of 2017 to write-off the estimated net book value of the fixed assets damaged by Hurricane Maria in Puerto Rico.~~Turnersville, NJ.

Interest and debt expense ~~increased~~decreased by ~~$1.8~~$3.5 million to $14.6 million in the third quarter of ~~2017~~2021 from ~~$12.8~~$18.1 million in the third quarter of ~~2016.~~2020. The ~~increase~~decrease is primarily attributable ~~to interest from loans issued and assumed on acquisitions closed since September 2016~~to:

•$2.6 million as ~~well as~~a result of the ~~increased loan balance from the refinancing~~troubled debt restructuring of the mortgage ~~loan~~ secured by ~~our Tonnelle Commons property~~Las Catalinas Mall in ~~North Bergen, NJ.~~Puerto Rico in December 2020;

~~Interest income increased by $0.5~~•$0.7 million ~~to $0.7 million~~of interest incurred in the third quarter of ~~2017~~2020 resulting from ~~$0.2~~the $250 million draw on our revolving credit agreement in ~~the third quarter of 2016. The increase is primarily attributable to an increase~~March 2020. All borrowings were repaid in ~~the cash balance due to multiple equity offerings since September 2016.~~November 2020; and

~~Provision for doubtful accounts increased by $0.4~~•$0.2 million ~~to $0.6 million in the third quarter of 2017 from $0.2 million in the third quarter of 2016. The increase is primarily attributable to an increase in reserves due to tenant bankruptcies.~~higher capitalized interest on development and redevelopment projects.

Comparison of the Nine Months Ended September 30, ~~2017~~2021 to September 30, ~~2016~~2020

Net income for the nine months ended September 30, ~~2017~~2021 was ~~$88.8~~$63.8 million, compared to net income of ~~$76.4~~$78.0 million for the nine months ended September 30, ~~2016.~~2020. The following table summarizes certain line items from our consolidated statements of income that we believe are important in understanding our operations and/or those items which significantly changed in the nine months ended September 30, ~~2017~~2021 as compared to the same period of ~~2016:~~2020:


	For the Nine Months ended September 30,								Nine Months Ended September 30,
(Amounts in thousands)	2017		2016		$ Change			(Amounts in thousands)	2021		2020		$ Change
Total revenue	$	309,666	$	242,498	$	67,168		Total revenue	$	296,506	$	242,817	$	53,689

Property operating expenses	35,858		32,596		3,262			Property operating expenses	51,874		39,867		12,007
General and administrative expenses	22,720		20,873		1,847			General and administrative expenses	28,286		36,600		(8,314)
Depreciation and amortization	60,505		41,908		18,597
Real estate taxes	43,975		38,701		5,274
Casualty and impairment loss	5,637		—		5,637
Interest income								Interest income	303		2,387		(2,084)
Gain on sale of real estate	202		15,618		(15,416		)	Gain on sale of real estate	18,648		39,775		(21,127)
Interest and debt expense	41,379		39,015		2,364			Interest and debt expense	44,193		53,884		(9,691)
Loss on extinguishment of debt	1,274		—		1,274
Income tax expense	942		349		593
Gain on extinguishment of debt								Gain on extinguishment of debt	—		34,908		(34,908)
Income tax expense (benefit)								Income tax expense (benefit)	905		(13,103)		14,008

Total revenue increased by ~~$67.2~~$53.7 million to ~~$309.7~~$296.5 million in the nine months ended September 30, ~~2017~~2021 from ~~$242.5~~$242.8 million in the nine months ended September 30, ~~2016.~~2020. The increase is primarily attributable to:

•$~~39.2~~23.6 million decrease in rental revenue deemed uncollectible;

•$13.0 million of below-market lease income ~~from acquired leasehold interest due to the write-off~~driven by accelerated amortization of ~~the unamortized intangible liability related to the below-market ground lease acquired and existing straight-line receivable balance~~intangibles in connection with the ~~acquisition~~termination of our Kmart and Sears leases in the ~~ground lease at Shops at Bruckner;~~third quarter of 2021;

•$~~13.8~~9.2 million increase asin non-cash revenue driven by straight-line write-offs for tenants put on cash basis during 2020 compared to a ~~result~~reinstatement of ~~acquisitions~~straight-line balances, net of ~~dispositions that closed since September 2016;~~write-offs, during 2021;

•$~~9.3~~6.0 million increase in tenant ~~expense reimbursements~~reimbursement income due to ~~an increase in recoverable expenses and revenue from recoverable capital projects;~~

higher common area maintenance expenses;

•$~~6.2~~1.1 million increase in ~~property rentals due to~~percentage rent ~~commencements, contractual rent increases~~driven by higher tenant sales in 2021; and an

•$0.8 million net increase in ~~percentage rental~~lease termination income ~~net of tenant vacancies primarily at properties undergoing development, partially offset by~~

~~$1.3 million decrease in~~and other ~~income due to a decrease in tenant bankruptcy settlement income received during 2017.~~income.

Property operating expenses increased by ~~$3.3~~$12.0 million to ~~$35.9~~$51.9 million in the nine months ended September 30, ~~2017~~2021 from ~~$32.6~~$39.9 million in the nine months ended September 30, ~~2016.~~2020. The increase is primarily attributable ~~to an~~to:

•$6.5 million increase in common area maintenance expenses across the portfolio as a result of spend reductions and limited center hours due to COVID-19 interruptions during 2020; and

•$5.5 million increase as a result of property acquisitions, ~~that closed since September 2016.~~net of dispositions.

General and administrative expenses ~~increased~~decreased by ~~$1.8~~$8.3 million to ~~$22.7~~$28.3 million in the nine months ended September 30, ~~2017~~2021 from ~~$20.9~~$36.6 million in the nine months ended September 30, ~~2016.~~2020. The ~~increase~~decrease is primarily attributable to:

•$~~1.6~~7.2 million of executive transition costs incurred in the second quarter of 2020 including accelerated amortizations of unvested equity awards; and

•$1.1 million net ~~increase~~decrease in ~~employment costs including $1.1 million increase in stock compensation expense~~transaction, severance and ~~$0.5 million severance expense; and~~other expenses.

~~$0.2 million net increase in legal, other professional fees and costs related to information technology.~~

~~Depreciation and amortization increased~~Interest income decreased by ~~$18.6~~$2.1 million to ~~$60.5~~$0.3 million in the nine months ended September 30, ~~2017~~2021 from ~~$41.9~~$2.4 million in the nine months ended September 30, ~~2016.~~2020. The ~~increase~~decrease is primarily ~~attributable to:~~attributed to lower interest rates.

~~$12.0 million increase as~~We recognized a ~~result~~gain on sale of ~~acquisitions net~~real estate of ~~dispositions that closed since September 2016;~~

$4.4 million increase in amortization of in-place leases as a result of the write-off of the existing intangible assets at Yonkers Gateway Center upon acquisition of the remaining fee and leasehold interests;

~~$2.6 million increase from development projects and tenant improvements placed into service since September 2016, partially offset by~~

~~$0.4 million in-place lease write-off due to a tenant vacating during the third quarter of 2016.~~

~~Real estate taxes increased by $5.3 million to $44.0~~$18.6 million in the nine months ended September 30, ~~2017 from $38.7~~2021 due to the sale of three properties and one property parcel. We recognized a gain on sale of real estate of $39.8 million in the nine months ended September 30, ~~2016. The increase is primarily attributable to:~~

~~$3.4 million increase as a result of acquisitions net of dispositions that closed since September 2016;~~

~~$1.6 million increase due to higher assessed values and tax refunds received in 2016; and~~

~~$0.3 million increase due to additional real estate taxes capitalized in the third quarter of 2016 related to space taken out of service for development and redevelopment projects.~~

~~Casualty and impairment losses of $5.6 million were recognized in the nine months ended September 30, 2017 as a result of the following events:~~

~~$3.5 million real estate impairment loss on our property previously classified as held for sale in Eatontown, NJ,~~2020 due to the book value of this property exceeding its fair value less costs to sell. The Company’s determination of fair value was based on the executed contract of sale with the third-party buyer less selling costs; and

~~$2.2 million casualty loss in the third quarter of 2017 to write-off the estimated net book value of the fixed assets damaged by Hurricane Maria in Puerto Rico.~~

~~Gain on~~ sale of ~~real estate~~three operating properties.

Interest and debt expense decreased by ~~$15.4~~$9.7 million to ~~$0.2~~$44.2 million in the nine months ended September 30, ~~2017~~2021 from ~~$15.6~~$53.9 million in the nine months ended September 30, ~~2016.~~2020. The decrease is primarily attributable to:

•$~~15.6~~6.2 million ~~gain on sale of real estate in the nine months ended September 30, 2016~~ as a result of the ~~sale of our property in Waterbury, CT on June 9, 2016, offset by~~

~~$0.2 million gain on sale of real estate in the nine months ended September 30, 2017 as a result~~troubled debt restructuring of the ~~sale of excess land at our property~~mortgage secured by Las Catalinas Mall in ~~Kearny, NJ on September 8, 2017.~~Puerto Rico in December 2020;

~~Interest and debt expense increased $2.4~~•$1.8 million ~~to $41.4 million in the nine months ended September 30, 2017 from $39.0 million in the nine months ended September 30, 2016. The increase is primarily attributable to:~~

~~$2.9 million increase~~ of interest incurred from ~~loans issued~~the $250 million draw on our revolving credit agreement in March 2020. All borrowings were repaid in November 2020;

•$0.9 million lower variable-rate debt due to lower interest rates; and ~~assumed on acquisitions closed since September 2016, partially offset by~~

•$~~0.5~~0.8 million ~~interest~~ decrease due to ~~a lower~~the refinancing of the mortgage ~~payable balance as a result of principal payments of our cross-collateralized mortgage loan.~~secured by The Outlets at Montehiedra.

~~Loss~~A gain on extinguishment of debt of ~~$1.3~~$34.9 million in the ~~nine months ended September 30, 2017~~second quarter of 2020 was recognized as a result of the refinancing of ~~our~~the mortgage ~~loan~~ secured by ~~our Tonnelle Commons property in North Bergen, NJ.~~ The ~~loss on extinguishment~~Outlets at Montehiedra, consisting of ~~debt is comprised~~the forgiveness of ~~a $1.2~~the $30 million ~~prepayment penalty and $0.1~~junior loan plus accrued

interest of $5.4 million, offset by the write-off of $0.4 million of unamortized deferred financing fees ~~on the original loan.~~and $0.1 million of transaction costs.

Income tax ~~expense increased by $0.6~~decreased from a $13.1 million ~~resulting in income tax expense of $0.9 million in~~benefit for the nine months ended September 30, ~~2017 from $0.3~~2020 to an expense of $0.9 million ~~of expense in~~for the nine months ended September 30, ~~2016 as a result of a $0.6 million reduction~~2021, primarily attributable to the ~~accrued income~~ tax ~~liability recorded~~impact of the mortgage refinancing and legal entity restructuring transactions related to our mall in Puerto Rico, The Outlets at Montehiedra during the ~~second quarter of 2016.~~nine months ended September 30, 2020.

Non-GAAP Financial Measures

We use NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to that of our peers. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The most directly comparable GAAP financial measure to NOI is net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. We calculate NOI by adjusting net income to add back depreciation and amortization expense, general and administrative expenses, casualty and real estate impairment losses, interest and debt expense, income tax expense and non-cash lease expense, and deduct management and development fee income from non-owned properties, gains on sale of real estate, interest income, non-cash rental income resulting from the straight-lining of rents and amortization of acquired below market leases net of above market leases. NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "Cash NOI." There have been no changes to the calculation of this metric. However, the Company has decided to refer to this metric as "NOI" instead of "Cash NOI" to further clarify that, consistent with the definition of this metric, the revenue and expenses reflected in this metric include some accrued amounts and are not limited to amounts for which the Company actually received or made cash payment during the applicable period.

We calculate same-property NOI using net income as defined by GAAP reflecting only those income and expense items that are reflected in NOI (as described above) and excluding properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service, and also excludes properties acquired or sold during the periods being compared. We also exclude for the following items in calculating same-property NOI: lease termination fees, bankruptcy settlement income, and income and expenses that we do not believe are representative of ongoing operating results, if any. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties, which the Company believes to be useful to investors. Same-property NOI should not be considered a substitute for net income and may not be comparable to similarly titled measures employed by others. The Company has historically defined this metric as "same-property Cash NOI." There have been no changes to the calculation of this metric.

Throughout this section, we have provided certain information on a “same-property” ~~cash~~ basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, ~~totaling 75~~which total 71 and 69 properties for the three and nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020, respectively. Information provided on a same-property basis excludes properties that were under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired ~~sold, under contract to be sold,~~ or ~~that are in the foreclosure process~~sold during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

We calculate same-property cash NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for the following items: lease termination fees, bankruptcy settlement income, non-cash rental income and ground rent expense and income or expenses that we do not believe are representative of ongoing operating results, if any.

The most directly comparable GAAP financial measure to cash NOI is net income. Cash NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. We calculate cash NOI by adjusting GAAP operating income to add back depreciation and amortization expense, general and administrative expenses, casualty and real estate impairment losses and non-cash ground rent expense, and deduct non-cash rental income resulting from the straight-lining of rents and amortization of acquired below market leases net of above market leases.

We use cash NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. Further, we believe cash NOI is useful to investors as a performance measure because, when compared across periods, cash NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from operating income or net income. As such, cash NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company’s properties. Cash NOI and same-property cash NOI should not be considered substitutes for operating income or net income and may not be comparable to similarly titled measures employed by others.

Same-property ~~cash~~ NOI increased by ~~$1.8~~$11.7 million, or ~~3.9%~~26.7%, for the three months ended September 30, ~~2017 as~~2021, compared to the three months ended September 30, ~~2016~~2020 and increased by ~~$6.5~~$19.9 million, or ~~4.7%~~14.2%, for the nine months ended September 30, ~~2017~~2021 as compared to the nine months ended September 30, ~~2016.~~2020.

The following table reconciles net income to ~~cash~~ NOI and same-property ~~cash~~ NOI for the three and nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020, respectively.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
Management and development fee income from non-owned properties	(280)		(404)		(911)		(1,003)
Other expense	205		257		387		713
Depreciation and amortization	23,171		22,888		68,534		69,658
General and administrative expense	10,134		8,700		28,286		36,600
Gain on sale of real estate	(6,926)		—		(18,648)		(39,775)
Interest income	(77)		(282)		(303)		(2,387)
Interest and debt expense	14,638		18,136		44,193		53,884
Gain on extinguishment of debt	—		—		—		(34,908)
Income tax expense (benefit)	704		459		905		(13,103)
Real estate impairment loss	372		—		372		—
Non-cash revenue and expenses	(15,237)		2,095		(18,992)		3,338
NOI(1)	56,809		46,019		167,625		151,020
Adjustments:
Non-same property NOI and other(2)	(600)		(1,828)		(6,406)		(10,205)
Tenant bankruptcy settlement income and lease termination income	(533)		(251)		(1,294)		(758)
Same-property NOI	$	55,676	$	43,940	$	159,925	$	140,057
NOI related to properties being redeveloped	1,019		931		2,778		3,271
Same-property NOI including properties in redevelopment	$	56,695	$	44,871	$	162,703	$	143,328

Three Months Ended September 30, Nine Months Ended September 30,
(Amounts in thousands) 2017 2016 2017 2016
Net income $ 19,156
$ 20,505
$ 88,811
$ 76,364
Add: income tax expense 318
319
942
349
Income before income taxes 19,474
20,824
89,753
76,713
  Interest income (719 ) (176 ) (1,182 ) (520 )
  Gain on sale of real estate (202 ) —
(202 ) (15,618 )
  Interest and debt expense 14,637
12,766
41,379
39,015
  Loss on extinguishment of debt —
—
1,274
—
Operating income 33,190
33,414
131,022
99,590
Depreciation and amortization 20,976
14,435
60,505
41,908
Casualty and impairment loss 2,170
—
5,637
—
General and administrative expense 6,930
6,618
22,720
20,873
Transaction costs 95
223
278
307
NOI 63,361
54,690
220,162
162,678
Less: non-cash revenue and expenses (2,554 ) (1,823 ) (44,807 ) (5,088 )
Cash NOI⁽¹⁾
60,807
52,867
175,355
157,590
Adjustments:
Cash NOI related to properties being redeveloped⁽¹⁾
(6,158 ) (5,809 ) (18,580 ) (16,667 )
Cash NOI related to properties acquired, disposed, or in foreclosure⁽¹⁾
(6,357 ) (164 ) (11,987 ) (1,134 )
Management and development fee income from non-owned properties (369 ) (375 ) (1,199 ) (1,356 )
Tenant bankruptcy settlement income (115 ) (545 ) (628 ) (2,035 )
Other⁽²⁾
4
43
17
129
    Subtotal adjustments (12,995 ) (6,850 )
(32,377 )
(21,063 )
Same-property cash NOI $ 47,812
$ 46,017

$ 142,978

$ 136,527
(1) We have historically defined this metric as “Cash NOI.” There have been no changes to the calculation.

⁽¹⁾~~Cash~~(2) Non-same property NOI ~~is calculated as total property revenues less property operating expenses, excluding~~includes NOI related to properties being redeveloped and properties acquired or disposed in the period. Amounts for 2021 include Sunrise Mall which generated a net ~~effects of non-cash rental income and non-cash ground rent expense.~~

⁽²⁾ ~~Other adjustments include revenue and expense items attributable to non-same properties and corporate activities.~~

~~Funds From Operations~~

~~FFO~~loss for the three and nine months ended September 30, ~~2017~~2021, respectively.

Funds From Operations

FFO was ~~$40.0~~$45.3 million ~~and $152.1 million, respectively, compared to $34.8 million and $102.2 million, respectively,~~ for the three ~~and~~months ended September 30, 2021 compared to $16.9 million for the three months ended September 30, 2020. FFO was $112.5 million for the nine months ended September 30, ~~2016.~~2021 compared to $107.3 million for the nine months ended September 30, 2020.

We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ ~~(‘‘NAREIT’’~~(“Nareit”) definition. ~~NAREIT~~Nareit defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of ~~depreciated~~depreciable real estate ~~assets,~~and land when connected to the main business of a REIT, impairments on depreciable real estate ~~impairment losses,~~or land related to a REIT's main business, and rental property depreciation and amortization expense. We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period to period both internally and among our peers because this non-GAAP measure excludes net gains on sales of depreciable real estate, real estate impairment losses, rental property depreciation and amortization expense which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. We believe the presentation of comparable period operating results generated from FFO provides useful information to investors because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT and impairments on depreciable real estate or land related to a REIT's main business. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions. FFO may not be comparable to similarly titled measures employed by others.


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2017			2016			2017			2016			(Amounts in thousands)	2021		2020		2021		2020
Net income	$	19,156		$	20,505		$	88,811		$	76,364
Less (net income) attributable to noncontrolling interests in:
Net income (loss)													Net income (loss)	$	30,105	$	(5,830)	$	63,802	$	78,003
Less net (income) loss attributable to noncontrolling interests in:													Less net (income) loss attributable to noncontrolling interests in:
Operating partnership	(1,967		)	(1,239		)	(7,431		)	(4,594		)	Operating partnership	(1,149)		225		(2,608)		(3,373)
Consolidated subsidiaries	(11		)	(1		)	(33		)	1			Consolidated subsidiaries	(1,190)		—		(961)		—
Net income attributable to common shareholders	17,178			19,265			81,347			71,771
Net income (loss) attributable to common shareholders													Net income (loss) attributable to common shareholders	27,766		(5,605)		60,233		74,630
Adjustments:													Adjustments:
Rental property depreciation and amortization													Rental property depreciation and amortization	22,941		22,710		67,898		69,102
Gain on sale of real estate	—			—			—			(15,618		)	Gain on sale of real estate	(6,926)		—		(18,648)		(39,775)
Rental property depreciation and amortization	20,855			14,269			59,886			41,419
Limited partnership interests in operating partnership(1)													Limited partnership interests in operating partnership(1)	1,149		(225)		2,608		3,373
Real estate impairment loss	—			—			3,467			—			Real estate impairment loss	372		—		372		—
Limited partnership interests in operating partnership⁽¹⁾	1,967			1,239			7,431			4,594
FFO applicable to diluted common shareholders	$	40,000		$	34,773		$	152,131		$	102,166		FFO applicable to diluted common shareholders	$	45,302	$	16,880	$	112,463	$	107,330

⁽¹⁾ Represents earnings allocated to LTIP and OP ~~unit holders~~unitholders for unissued common shares which have been excluded for purposes of calculating earnings per diluted share for the periods presented. FFO applicable to diluted common shareholders calculations includes earnings allocated to LTIP and OP unit holders. For the nine months ended September 30, 2017 calculation, the weighted average share total includes the redeemable shares outstanding as their inclusion is dilutive. For the three months ended September 30, 2017 and the three and nine months ended September 30, 2016, the respective weighted average share totals are excluded because their inclusion is anti-dilutive.

Liquidity and Capital Resources

Due to the nature of our business, ~~we typically generate significant amounts of cash from operations; however,~~ the cash generated from operations is primarily paid to our shareholders and unitholders of the Operating Partnership in the form of distributions. Our status as a REIT requires that we generally distribute at least 90% of our ~~REIT~~REIT’s ordinary taxable income each year. OurOur Board of Trustees declared a quarterly dividend of ~~$0.22~~$0.15 per common share and OP unit for each of the first three quarters of ~~2017,~~2021, or an annual rate of ~~$0.88. We expect to pay~~$0.60. Historically, we have paid regular cash ~~dividends,~~dividends; however, the timing, declaration, amount and payment of distributions to shareholders and unitholders of the Operating Partnership ~~falls~~fall within the discretion of our Board of Trustees. Our Board of Trustees’ decisions regarding the payment of dividends ~~depends~~depend on many factors, such as maintaining our REIT ~~tax~~ status, our financial condition, earnings, capital requirements, debt service obligations, limitations under our financing arrangements, industry practice, legal requirements, regulatory constraints, uncertainties related to the COVID-19 pandemic and other factors.

Property rental income is our primary source of cash flow and is dependent on a number of factors, including our occupancy level and rental rates, as well as our tenants’ ability to pay rent. Our properties ~~provide~~have historically provided us with a relatively consistent stream of cash flow that enables us to pay operating expenses, debt service and recurring capital expenditures. The COVID-19 pandemic had an adverse impact on our short-term cash flow by negatively impacting our tenants’ ability to pay rent. As of September 30, 2020, we had collected 79% of property rentals and tenant expense reimbursements billed in the quarter. Throughout the pandemic, we have worked with our tenants to evaluate the need for and offer rent relief, including in the form of rent concessions and rent deferrals. As of October 29, 2021, we have collected 92% of amounts billed during the third quarter of 2020, and the collection rate has substantially improved each subsequent quarter. We have collected 97% of rents and tenant expense reimbursements billed during the nine months ended September 30, 2021. Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales.

Our short-term ~~liquidity~~cash requirements consist of normal recurring operating expenses, lease obligations, regular debt service requirements, ~~(including debt service relating to additional or replacement debt, as well as scheduled debt maturities),~~ recurring expenditures (general & administrative expenses), expenditures related to leasing activity and distributions to shareholders and unitholders of the Operating Partnership. Our long-term capital requirements consist primarily of maturities under our long-term debt agreements, development and redevelopment costs and potential acquisitions.

At September 30, ~~2017,~~2021, we had cash and cash equivalents, including restricted cash, of ~~$380.4~~$323 million and no amounts drawn on our ~~line of credit.~~ ~~On March 7, 2017, we amended and extended our line of credit. The amendment increased the credit facility size by $100 million to~~ $600 million revolving credit agreement, which matures on January 29, 2024.

The Company continues to monitor the COVID-19 pandemic and ~~extended~~its impact on our overall liquidity position and outlook. The ultimate impact that COVID-19 may have on our operational and financial performance over the ~~maturity date to March 7, 2021 with two six-month extension options.~~

On May 10, 2017, the Company issued 7.7 million common shares of beneficial interest in an underwritten public offering pursuant to the Company’s effective shelf registration statement previously filed on Form S-3 (File No. 333-212951) with the SEC on August 5, 2016. This offering generated cash proceeds of $193.5 million, net of $1.3 million of issuance costs.

~~In 2016, the Company established an at-the-market (“ATM”) equity program, pursuant to which the Company may offer~~next 12 months is currently uncertain and sell from time to time its common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250.0 million through a consortium of broker dealers acting as sales agents. As of September 30, 2017, $241.3 million of common shares remained available for issuance under this ATM equity program and there were no common shares issued under the ATM equity program during the nine months ended September 30, 2017. From September 2016 to December 31, 2016, the Company issued 307,342 common shares at a weighted average price of $28.45 under its ATM equity program, generating cash proceeds of $8.7 million. We paid $0.1 million of commissions to distribution agents and $0.4 million in additional offering expenses related to the issuance of these common shares. Actual future sales will depend on ~~a variety of~~many factors, including ~~but not limited~~without limitation, its magnitude and duration and the adverse financial impact on our tenants from potential reduced business operations and social distancing requirements, which may impact tenants’ ability to ~~market conditions,~~generate sales at sufficient levels to cover operating costs such as rent. Our ability to utilize amounts available under our revolving credit facility in the ~~trading price~~future will depend on our continued compliance with the applicable financial covenants and other terms of our ~~common shares and our capital needs. We have no obligation~~revolving credit agreement, which may be impacted by failure of tenants to ~~sell the remaining shares available under the active ATM equity program.~~

On January 4, 2017, we issued 1.8 million OP units in connection with the acquisition of Yonkers Gateway Center at a value of $27.09 per unit. On May 24 and 25, 2017 we issued 2.6 million OP units and 1.9 million OP units, respectively, in connection with the Portfolio acquisition at a value of $27.02 per unit.

pay rent. We have no debt scheduled to mature ~~in 2017.~~until the second quarter of 2022. We currently believe that cash ~~flows from operations over the next 12 months, together with cash~~ on hand, ~~our ATM equity program, our line of~~available revolving credit and ~~our~~ general ability to access the capital markets, ~~will~~should be sufficient to finance our operations and fund our debt service requirements and capital ~~expenditures.~~expenditures over the next 12 months.

Summary of Cash Flows

~~Our cash flow activities are summarized as follows:~~

Nine Months Ended September 30,
(Amounts in thousands) 2017 2016 Increase (Decrease)
Net cash provided by operating activities $ 114,498
$ 99,183
$ 15,315
Net cash used in investing activities (262,329 ) (27,730 ) (234,599 )
Net cash provided by (used in) financing activities 396,403
(92,127 ) 488,530

Cash and cash equivalents, including restricted cash, was ~~$388.8~~$322.8 million at September 30, ~~2017,~~2021, compared to ~~$140.2~~$419.3 million ~~as of~~at December 31, ~~2016, an increase~~2020 and $671.0 million at September 30, 2020, a decrease of ~~$248.6 million.~~ $96.5 million and $348.2 million, respectively. Our cash flow activities are summarized as follows:


	Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		$ Change
Net cash provided by operating activities	$	93,137	$	74,829	$	18,308
Net cash used in investing activities	(66,512)		(55,996)		(10,516)
Net cash (used in)/provided by financing activities	(123,086)		167,027		(290,113)

Operating Activities

Net cash flow 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 of ~~$114.5~~$93.1 million for the nine months ended September 30, ~~2017 was comprised of $119.7~~2021 increased by $18.3 million ~~of cash~~ from operating income and a net decrease of $5.2 million in cash due to timing of cash receipts and payments related to changes in operating assets and liabilities. Net cash used in investing activities of $262.3$74.8 million for the nine months ended September 30, ~~2017 was comprised~~2020, driven by the improved collection rates on property rentals and tenant expense reimbursements in 2021 and collection of ~~(i) $211.4 million~~previously billed and deferred amounts from 2020.

Investing Activities

Net cash flow used in investing activities is impacted by the timing and extent of ~~acquisitions of real estate and (ii) $55.9 million of~~our real estate development, ~~and~~ capital improvements, ~~offset by (iii) $5.0 million of proceeds from sale of real estate.~~ and acquisition and disposition activities during the period.

Net cash ~~provided by financing~~used in investing activities of ~~$396.4~~$66.5 million for the nine months ended September 30, ~~2017 was comprised~~2021, increased by $10.5 million compared to net cash used in investing activities of $56.0 million for the nine months ended September 30, 2020 primarily due to (i) ~~$348.2~~$28.2 million ~~proceeds from the issuance of common shares~~increase in cash used for real estate development and capital improvements, and (ii) ~~$225.5~~$19.9 million ~~proceeds from borrowings,~~decrease in cash provided by the sale of properties, offset by (iii) ~~$88.6~~$37.6 million decrease in cash used for the acquisition of real estate.

Financing Activities

Net cash flow provided by or used in financing activities is impacted by the timing and extent of issuances of debt ~~repayments, (iv) $77.1 million of~~and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership ~~(v) $11.3~~as well as principal and other payments associated with our outstanding indebtedness.

Net cash used in financing activities of $123.1 million for the nine months ended September 30, 2021, increased by $290.1 million from cash provided by financing activities of $167.0 million for the nine months ended September 30, 2020 primarily due to (i) $250.0 million of ~~debt issuance costs, and (vi) $0.3~~cash borrowings provided under the Company’s revolving credit agreement in March 2020, of which, all amounts were repaid in November 2020, (ii) $90.3 million of ~~taxes withheld on vested restricted units.~~

proceeds from borrowings under mortgage loans in the second quarter of 2020, (iii) $82.7 million increase in distributions to shareholders and unitholders of the Operating Partnership, offset by (iv) $73.2 million decrease in debt repayments, and (v) $54.1 million of cash paid to repurchase common shares in 2020.

Financing Activities and Contractual Obligations

Below is a summary of our outstanding debt and ~~maturities~~weighted average interest rates as of September 30, ~~2017.~~2021.


(Amounts in thousands)	Principal balance at September 30, 2021		Weighted Average Interest Rate at September 30, 2021
Mortgages payable:
Fixed rate debt	$	1,419,988	4.15%
Variable rate debt(1)	162,337		1.83%
Total mortgages payable	1,582,325		3.92%
Unamortized debt issuance costs	(8,623)
Total mortgages payable, net of unamortized debt issuance costs	$	1,573,702

Interest Rate at Principal Balance at
(Amounts in thousands) Maturity September 30, 2017 September 30, 2017
Cross-collateralized mortgage loan:
Fixed Rate 9/10/2020 4.39% $ 507,993
Variable Rate⁽¹⁾
9/10/2020 2.59% 38,756
Total cross collateralized 546,749
First mortgages secured by:
Englewood⁽³⁾
10/1/2018 6.22% 11,537
Montehiedra Town Center, Senior Loan⁽²⁾
7/6/2021 5.33% 86,383
Montehiedra Town Center, Junior Loan⁽²⁾
7/6/2021 3.00% 30,000
Plaza at Cherry Hill⁽⁸⁾
5/24/2022 2.84% 28,930
Westfield - One Lincoln⁽⁸⁾
5/24/2022 2.84% 4,730
Plaza at Woodbridge⁽⁸⁾
5/25/2022 2.84% 55,340
Bergen Town Center 4/8/2023 3.56% 300,000
Shops at Bruckner⁽⁶⁾
5/1/2023 3.90% 12,304
Hudson Mall⁽⁷⁾
12/1/2023 5.07% 25,170
Yonkers Gateway Center⁽⁹⁾
4/6/2024 4.16% 33,601
Las Catalinas 8/6/2024 4.43% 130,000
North Bergen (Tonnelle Avenue)⁽⁵⁾
4/1/2027 4.18% 100,000
Manchester Plaza 6/1/2027 4.32% 12,500
Millburn Gateway Center 6/1/2027 3.97% 24,000
Mount Kisco (Target)⁽⁴⁾
11/15/2034 6.40% 14,562
Total mortgages payable 1,415,806
Unamortized debt issuance costs (7,740 )
Total mortgages payable, net of unamortized debt issuance costs $ 1,408,066


⁽¹⁾	~~Subject to a LIBOR floor of 1.00%, bears interest at LIBOR plus 136 bps.~~

(1) As of September 30, 2021, $79 million of our variable rate debt bears interest at one month LIBOR plus 190 bps and $83 million of our variable rate debt bears interest at one month LIBOR plus 160 bps.


⁽²⁾	~~As part of the planned redevelopment of Montehiedra Town Center, we committed to fund $20.0 million for leasing and capital expenditures which has been fully funded as of September 30, 2017.~~

⁽³⁾

On March 30, 2015, we notified the lender that due to tenants vacating, the property’s operating cash flow would be insufficient to pay its debt service. As of September 30, 2017, we were in default and the property was transferred to receivership. Urban Edge no longer manages the property but will remain its title owner until the receiver disposes of the property. We have determined this property is held in a VIE for which we are the primary beneficiary. Accordingly, as of September 30, 2017 we consolidated Englewood and its operations. The consolidated balance sheet included total assets and liabilities of $12.4 million~~and $14.6 million, respectively.~~


⁽⁴⁾	The mortgage payable balance on the loan secured by Mount Kisco (Target) includes $1.0 million and $1.1 million of unamortized debt discount as of September 30, 2017 and December 31, 2016. The effective interest rate including amortization of the debt discount is 7.26% as of September 30, 2017.

⁽⁵⁾


⁽⁶⁾	~~On January 17, 2017, we assumed the existing mortgage secured by the Shops at Bruckner in connection with our acquisition of the property’s leasehold interest.~~


⁽⁷⁾	On February 2, 2017, we assumed the existing mortgage secured by Hudson Mall in connection with our acquisition of the property. The mortgage payable balance on the loan secured by Hudson Mall includes $1.6 million of unamortized debt premium as of September 30, 2017. The effective interest rate including amortization of the debt premium is 3.37%~~as of September 30, 2017.~~


⁽⁸⁾	~~Bears interest at one month LIBOR plus 160 bps.~~


⁽⁹⁾	Reflects the $33 million existing mortgage assumed in connection with the acquisition of Yonkers Gateway Center on May 24, 2017. The mortgage payable balance on the loan secured by Yonkers Gateway Center includes $0.9 million of unamortized debt premium as of September 30, 2017. The effective interest rate including amortization of the debt premium is 1.77%~~as of September 30, 2017.~~

The net carrying amount of real estate collateralizing the above indebtedness amounted to approximately $1.3 billion as of September 30, ~~2017.~~2021. 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 September 30, ~~2017,~~2021, we were in compliance with all debt covenants.

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. ~~Borrowings~~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. Company borrowings under the Agreement are subject to interest at LIBOR plus ~~1.15%~~1.05% to 1.50% and ~~we are required to pay~~ an annual facility fee of 15 to 30 basis points. Both the spread over LIBOR and the facility fee are based on our current leverage ratio and are subject to ~~increase if our leverage ratio increases above predefined thresholds.~~change. The Agreement contains customary financial covenants including a maximum leverage ratio of 60% and a minimum fixed charge coverage ratio of 1.5x. No amounts ~~have~~had been drawn ~~to date~~ under the ~~Agreement.~~Agreement as of September 30, 2021.

On June 3, 2020, we amended the Agreement to, among other things, modify certain definitions and the measurement period for certain financial covenants to a trailing four-quarter period instead of the most recent quarter period annualized. Under the Agreement, our financial covenants are generally measured using operating results of a trailing four-quarter period from the

prior trailing four-quarter period, including the maximum leverage ratio, which measures our asset value based on net operating income, as defined in the Agreement. Net operating income is defined, in part, based on rents and other revenues received in the ordinary course of business from our properties. We currently believe that with our cash on hand, we will have sufficient resources to finance our operations and fund our debt service requirements and capital expenditures for at least the next twelve months.

When LIBOR is discontinued, which is currently anticipated to be during 2023, the interest rates for our debt following such event will be based on either alternate base rates or agreed upon replacement rates. Such an event would not affect our ability to borrow or maintain already outstanding borrowings, although it could result in higher interest rates.

On May 5, 2021 we established an at-the-market equity program (the “ATM Program”), pursuant to which we may offer and sell common shares, par value $0.01 per share, with an aggregate gross sales price of up to $250 million. 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.

As of September 30, 2021, we have 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.

Capital Expenditures

The following summarizes capital expenditures presented on a cash basis for the nine months ended September 30, ~~2017~~2021 and ~~2016:~~2020:


	Nine Months Ended September 30,
(Amounts in thousands)	2021		2020
Capital expenditures:
Development and redevelopment costs	$	37,441	$	8,984
Capital improvements	6,781		7,677
Tenant improvements and allowances	2,215		1,605
Total capital expenditures	$	46,437	$	18,266

Nine Months Ended September 30,
(Amounts in thousands) 2017 2016
Capital expenditures:
Development and redevelopment costs $ 39,781
$ 38,835
Capital improvements 4,237
4,081
Tenant improvements and allowances 4,877
2,752
Total capital expenditures $ 48,895
$ 45,668

As of September 30, ~~2017,~~2021, we had approximately ~~$199.4~~$152.4 million of active redevelopment, development and anchor repositioning projects at various stages of completion, ~~and $36.5 million of completed projects,~~ an increase of ~~$44.2~~$20.0 million from ~~$191.7~~$132.4 million of projects as of December 31, ~~2016.~~2020. We have advanced these projects ~~$40.3~~and incurred $25.1 million of additional spend since December 31, ~~2016 and~~2020. We anticipate ~~that~~spending an additional $91.1 million to complete these projects, ~~will require an additional $114.4 million~~which we expect to occur over the next ~~two years~~six to ~~complete.~~eighteen months depending on any restrictions on construction activity. We expect to fund these projects using cash on hand, proceeds from dispositions, ~~borrowings under our line of credit and/~~or ~~using~~from secured ~~debt, or issuing equity.~~debt.

Commitments and Contingencies

~~Loan Commitments~~

In January 2015, we completed a modification of the $120.0 million, 6.04% mortgage loan secured by Montehiedra. As part of the planned redevelopment of the property, we committed to fund $20.0 million for leasing and other capital expenditures which has been fully funded as of September 30, 2017.

Insurance

~~We maintain~~The Company maintains numerous insurance policies including for general liability, ~~insurance with limits~~property, pollution, acts of ~~$200 million for properties in~~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 ~~U.S. and Puerto Rico and all-risk property and rental value~~Company’s terrorism insurance coverage with limits of $500 million for properties in the U.S. and $139 million for properties in Puerto Rico, with sub-limits for certain perils such as floods and earthquakes on each of our properties. Our insurance includes coverage for terrorism acts but excludes coverage for nuclear, biological, chemical or radiological terrorism events as defined by the Terrorism Risk Insurance Program Reauthorization ~~Act, which expires in December 2020. In addition, we maintain~~Act.

The Company’s primary and excess insurance policies providing coverage for ~~cybersecurity with limits~~pollution related losses have an aggregate limit of $5$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 ~~aggregate providing first and third party coverage including network interruption, event management, cyber extortion and claims for media content, security and privacy liability.~~ COVID-19 virus.

We continue to monitor the state of the insurance market and the scope and costs of ~~coverage for acts of terrorism. However, we~~available coverage. We cannot anticipate what coverage will be available on commercially reasonable terms in the ~~future. Our mortgage~~future and expect premiums across most coverage lines to increase in light of recent events. The incurrence of uninsured losses, costs or uncovered premiums could materially and adversely affect our business, results of operations and financial condition.

Certain of our loans ~~are non-recourse~~ and other agreements contain customary covenants requiring ~~adequate~~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, itsuch requirement could materially and adversely affect our ability to finance our properties and expand our portfolio.

~~Hurricane-Related Charges~~

Environmental Matters

Each of our properties has been subjected to varying degrees of environmental assessment at various times. Based on these assessments, ~~and the projected remediation costs,~~ we have accrued costs of ~~$1.2~~$1.7 million and ~~$1.3~~$1.8 million on our consolidated balance sheets as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively, for ~~potential~~ remediation costs for environmental contamination at ~~two~~certain properties. While this accrual reflects our best estimates of the potential costs of remediation at these properties, ~~$0.1 million has currently been expended during the nine months ended September 30, 2017 and~~ there can be no assurance that the actual costs will not exceed ~~this amount. With respect to our~~these amounts. Although we are not aware of any other ~~properties, the environmental assessments did not reveal~~

~~any~~ material environmental ~~contamination. However,~~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.

Pandemic-Related Contingencies

Bankruptcies

Although our ~~base rent~~rental revenue is supported by long-term leases, leases may be rejected in a bankruptcy proceeding and the ~~impacted~~related tenant stores may ~~close~~permanently vacate prior to lease expiration. In the event ~~that~~ 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. ~~During September 2017, Toys “R” Us~~Given the economic environment brought upon by COVID-19, certain tenants experienced liquidity or financial hardships and filed ~~a voluntary petition under~~for Chapter 11 bankruptcy protection since the pandemic was declared. Although some of these tenants intend to exit the ~~United States Bankruptcy Code. As~~Chapter 11 bankruptcy process and resume operations, the outcomes of ~~September 30, 2017,~~such proceedings are unknown and the Company had leases with Toys “R” Us at nine locations with annualized base rent of $5.0 million. We are unable to estimate the outcome of the bankruptcy proceedings at this time. We are not aware of any additional bankruptcies or announced store closings by any tenants in our shopping centers that would individually cause a material reduction in our revenues.is currently exploring leasing alternatives for these spaces.

Inflation and Economic Condition Considerations

Most of our leases contain provisions designed to partially mitigate the impact of inflation. ~~Although~~Prior to 2021, inflation ~~has~~had been low ~~in recent periods~~ and ~~has~~ had a minimal impact on the operating performance of our shopping centers, ~~there are more recent data suggesting that~~however, inflation has increased in 2021 and may continue to be ~~a greater concern~~elevated in the ~~future given economic conditions and governmental fiscal policy.~~future. 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 the lease. A small number of our leases also include percentage rent clauses enabling us to receive additional rent based on tenant sales above a predetermined level, which sales generally increase as prices rise and are typically related to increases in the Consumer Price Index or similar inflation indices.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements as of September 30, ~~2017~~2021 or December 31, ~~2016.~~

2020.


~~ITEM 3.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. The following table discusses our exposure to hypothetical changes in market rates of interest on interest expense for our variable rate debt and fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. This analysis does not take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure. Our exposure to a change in interest rates is summarized in the table below.


	2021							2020
(Amounts in thousands)	September 30, Balance			Weighted Average Interest Rate	Effect of 1% Change in Base Rates			December 31, Balance			Weighted Average Interest Rate

Variable rate mortgages	162,337			1.83%	1,623			$	169,371		1.90%
Fixed rate mortgages	1,419,988			4.15%	—		(2)	1,428,026			4.16%
	$	1,582,325	(1)		$	1,623		$	1,597,397	(1)

2017 2016
(Amounts in thousands) September 30, Balance Weighted Average Interest Rate Effect of 1% Change in Base Rates December 31, Balance Weighted Average Interest Rate

Variable Rate $ 127,756
2.76% $ 1,278
⁽²⁾
$ 38,756
2.36%
Fixed Rate 1,288,050
4.25% —
1,166,804
4.26%
$ 1,415,806
⁽¹⁾
$ 1,278
$ 1,205,560
⁽¹⁾

⁽¹⁾Excludes unamortized debt issuance costs of ~~$7.7~~$8.6 million and ~~$8.0~~$9.9 million as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively.

⁽²⁾~~The variable~~If the weighted average interest rate ~~portion~~ of our ~~cross-collateralized~~fixed rate debt ~~is subject~~increased by 1% (i.e. due to ~~a LIBOR floor~~refinancing at higher rates), annualized interest expense would have increased by approximately $14.2 million based on outstanding balances as of ~~1% such that a change in base rates may not have a corresponding impact on the actual borrowing rate.~~September 30, 2021.

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of September 30, ~~2017,~~2021, we did not have any material hedging instruments in place.

Fair Value of Debt

The estimated fair value of our consolidated debt 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. As of September 30, ~~2017,~~2021, the estimated fair value of our consolidated debt was ~~$1.4~~$1.6 billion.

Other Market Risks

As of September 30, ~~2017,~~2021, we had no material exposure to any other market risks (including foreign currency exchange risk or commodity price risk).

In making this determination and for purposes of the SEC’s market risk disclosure requirements, we have estimated the fair value of our financial instruments at September 30, ~~2017~~2021 based on pertinent information available to management as of that date. Although management is not aware of any factors that would significantly affect the estimated amounts as of September 30, ~~2017,~~2021, future estimates of fair value and the amounts which may be paid or realized in the future may differ significantly from amounts presented.


~~ITEM 4.~~	~~CONTROLS AND PROCEDURES~~

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures (Urban Edge Properties)

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.

There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the three ~~and nine~~ months ended September 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures (Urban Edge Properties LP)

The Operating Partnership’s management maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer of our general partner, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

The Operating Partnership’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of our general partner, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of our general partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective.

PART II - OTHER INFORMATION


~~ITEM 1.~~	~~LEGAL PROCEEDINGS~~

ITEM 1. LEGAL PROCEEDINGS

We are party to various legal actions that arise in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.


~~ITEM 1A.~~	~~RISK FACTORS~~

~~There have been~~ITEM 1A. RISK FACTORS

Except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors ~~previously~~ disclosed in ~~the Company’s~~Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 filed with the SEC on February ~~16, 2017.~~

17, 2021.


~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Urban Edge Properties

(a) Recent Sales of Unregistered Securities: Not applicable.

(b) Use of Proceeds from Sales of Registered Securities: Not applicable.


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share(2)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Program(1)
July 1, 2021 - July 31, 2021	—	$	—	—	$	145,900,000
August 1, 2021 - August 31, 2021	—	—		—	$	145,900,000
September 1, 2021 - September 30, 2021	—	—		—	$	145,900,000
	—	$	—	—

(1) In March 2020, the Company’s Board of Trustees authorized a share repurchase program for up to $200 million of the Company’s 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 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.

(2) Represents common shares surrendered by employees to us to satisfy such employees’ tax withholding obligations in connection with the vesting of restricted common shares.

Urban Edge Properties LP

(a) Recent Sales of Unregistered Securities: Not applicable.

(b) Use of Proceeds from Sales of Registered Securities: Not applicable.


~~ITEM 3.~~	~~DEFAULTS UPON SENIOR SECURITIES~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


~~ITEM 4.~~	~~MINE SAFETY DISCLOSURES~~

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


~~ITEM 5.~~	~~OTHER INFORMATION~~

ITEM 5. OTHER INFORMATION

None.


~~ITEM 6.~~	ITEM 6. EXHIBITS

~~A list of~~

The exhibits tolisted below are included in, or incorporated by reference into, this Quarterly Report on Form ~~10-Q is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.~~10-Q.

INDEX TO EXHIBITS

The following exhibits are ~~filed~~included as part of this Quarterly Report on Form 10-Q:



Exhibit Number		Exhibit Description
~~31.1~~31.1*		Certification by the Chief Executive Officer for Urban Edge Properties pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~31.2~~31.2*		Certification by the Chief Financial Officer for Urban Edge Properties pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~31.3~~31.3*		Certification by the Chief Executive Officer for Urban Edge Properties LP pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~31.4~~31.4*		Certification by the Chief Financial Officer for Urban Edge Properties LP pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~32.1~~32.1**		Certification by the Chief Executive Officer and Chief Financial Officer for Urban Edge Properties pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~32.2~~32.2**		Certification by the Chief Executive Officer and Chief Financial Officer for Urban Edge Properties LP pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101.INS~~101.SCH*		~~XBRL Instance Document~~
~~101.SCH~~	Inline XBRL Taxonomy Extension Schema
~~101.CAL~~101.CAL*		Inline XBRL Extension Calculation Linkbase
~~101.LAB~~101.LAB*		Inline XBRL Extension Labels Linkbase
~~101.PRE~~101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase
~~101.DEF~~101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase
104*		Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)

* Filed herewith

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

PART IV

SIGNATURES

Pursuant to the requirements of the ~~Securities~~ Exchange Act, ~~of 1934,~~ the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


			URBAN EDGE PROPERTIES
			(Registrant)

			~~URBAN EDGE PROPERTIES~~
	~~(Registrant)~~

	/s/ Mark Langer
			Mark Langer, Chief Financial Officer

			Date: November ~~1, 2017~~3, 2021

			URBAN EDGE PROPERTIES LP
			By: Urban Edge Properties, General Partner

			/s/ Mark Langer
			Mark Langer, Chief Financial Officer

			Date: November ~~1, 2017~~3, 2021


	Nine Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2021		2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payment for interest, includes amounts capitalized of $2,912 and $2,755, respectively	$	40,567	$	38,503
Cash payments for interest, net of amounts capitalized of $734 and $513, respectively					Cash payments for interest, net of amounts capitalized of $734 and $513, respectively	$	44,424	$	52,771
Cash payments for income taxes	1,237		1,258		Cash payments for income taxes	5,077		482
NON-CASH INVESTING AND FINANCING ACTIVITIES					NON-CASH INVESTING AND FINANCING ACTIVITIES
Acquisition of real estate through issuance of OP units	171,084		—
Acquisition of real estate through assumption of debt	69,659		—
Accrued capital expenditures included in accounts payable and accrued expenses	15,226		12,340		Accrued capital expenditures included in accounts payable and accrued expenses	32,600		7,330
Write-off of fully depreciated assets	910		958
Write-off of fully depreciated and impaired assets					Write-off of fully depreciated and impaired assets	5,336		10,748

Mortgage debt forgiven in refinancing					Mortgage debt forgiven in refinancing	—		30,000
Assumption of debt through the acquisition of real estate					Assumption of debt through the acquisition of real estate	—		72,473

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	131,654	$	168,983	Cash and cash equivalents at beginning of period	$	384,572	$	432,954
Restricted cash at beginning of period	8,532		9,042		Restricted cash at beginning of period	34,681		52,182
Cash and cash equivalents and restricted cash at beginning of period	$	140,186	$	178,025	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136

Cash and cash equivalents at end of period	$	380,395	$	149,698	Cash and cash equivalents at end of period	$	268,952	$	646,432
Restricted cash at end of period	8,363		7,653		Restricted cash at end of period	53,840		24,564
Cash and cash equivalents and restricted cash at end of period	$	388,758	$	157,351	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996


	Nine Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2021		2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payment for interest, includes amounts capitalized of $2,912 and $2,755, respectively	$	40,567	$	38,503
Cash payments for interest, net of amounts capitalized of $734 and $513, respectively					Cash payments for interest, net of amounts capitalized of $734 and $513, respectively	$	44,424	$	52,771
Cash payments for income taxes	1,237		1,258		Cash payments for income taxes	5,077		482
NON-CASH INVESTING AND FINANCING ACTIVITIES					NON-CASH INVESTING AND FINANCING ACTIVITIES
Acquisition of real estate through issuance of OP units	171,084		—
Acquisition of real estate through assumption of debt	69,659		—
Accrued capital expenditures included in accounts payable and accrued expenses	15,226		12,340		Accrued capital expenditures included in accounts payable and accrued expenses	32,600		7,330
Write-off of fully depreciated assets	910		958
Write-off of fully depreciated and impaired assets					Write-off of fully depreciated and impaired assets	5,336		10,748

Mortgage debt forgiven in refinancing					Mortgage debt forgiven in refinancing	—		30,000
Assumption of debt through the acquisition of real estate					Assumption of debt through the acquisition of real estate	—		72,473

RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	131,654	$	168,983	Cash and cash equivalents at beginning of period	$	384,572	$	432,954
Restricted cash at beginning of period	8,532		9,042		Restricted cash at beginning of period	34,681		52,182
Cash and cash equivalents and restricted cash at beginning of period	$	140,186	$	178,025	Cash and cash equivalents and restricted cash at beginning of period	$	419,253	$	485,136

Cash and cash equivalents at end of period	$	380,395	$	149,698	Cash and cash equivalents at end of period	$	268,952	$	646,432
Restricted cash at end of period	8,363		7,653		Restricted cash at end of period	53,840		24,564
Cash and cash equivalents and restricted cash at end of period	$	388,758	$	157,351	Cash and cash equivalents and restricted cash at end of period	$	322,792	$	670,996


(Amounts in thousands)	Below-Market		Above-Market		In-Place Lease
Year	Operating Lease Amortization		Operating Lease Amortization		Amortization
2021(1)	$	35,787	$	(284)	$	(1,886)
2022	7,223		(803)		(6,198)
2023	7,178		(695)		(5,057)
2024	6,942		(631)		(4,570)
2025	6,761		(452)		(3,922)
2026	6,383		(434)		(3,609)



o☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	General Partner			Limited Partners⁽¹⁾		Accumulated Earnings (Deficit)			NCI in Consolidated Subsidiaries		Total Equity
Balance, December 31, 2016	$	489,372		$	37,081	$	(30,696	)	$	360	$	496,117
Net income attributable to unitholders	—			—		88,778			—		88,778
Net income attributable to noncontrolling interests	—			—		—			33		33
Common units issued as a result of common shares issued by Urban Edge	348,467			—		(253		)	—		348,214
Limited partnership units issued	105,279			65,805		—			—		171,084
Distributions to Partners ($0.66 per unit)	—			—		(77,113		)	—		(77,113		)
Share-based compensation expense	3,354			1,836		58			—		5,248
Share-based awards withheld for taxes	(287		)	—		—			—		(287		)
Balance, September 30, 2017	$	946,185		$	104,722	$	(19,226	)	$	393	$	1,032,074


⁽¹⁾	~~Includes $11.3 million of transaction costs incurred since January 1, 2017.~~



(Amounts in thousands)
Year Ending December 31,
2017⁽¹⁾	$	5,126
2018	29,762
2019	20,398
2020	517,328
2021	122,727
2022	96,749
Thereafter	623,716



	As of September 30, 2017				As of December 31, 2016
(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	380,395	$	380,395	$	131,654	$	131,654
Liabilities:
Mortgages payable⁽¹⁾	$	1,415,806	$	1,432,817	$	1,205,560	$	1,216,989



	September 30, 2017		December 31, 2016
	Low	High	Low	High
Mortgages payable	1.8%	2.2%	2.0%	2.3%



		Interest Rate at	Principal Balance at
(Amounts in thousands)	Maturity	September 30, 2017	September 30, 2017
Cross-collateralized mortgage loan:
Fixed Rate	9/10/2020	4.39%	$	507,993
Variable Rate⁽¹⁾	9/10/2020	2.59%	38,756
Total cross collateralized			546,749
First mortgages secured by:
Englewood⁽³⁾	10/1/2018	6.22%	11,537
Montehiedra Town Center, Senior Loan⁽²⁾	7/6/2021	5.33%	86,383
Montehiedra Town Center, Junior Loan⁽²⁾	7/6/2021	3.00%	30,000
Plaza at Cherry Hill⁽⁸⁾	5/24/2022	2.84%	28,930
Westfield - One Lincoln⁽⁸⁾	5/24/2022	2.84%	4,730
Plaza at Woodbridge⁽⁸⁾	5/25/2022	2.84%	55,340
Bergen Town Center	4/8/2023	3.56%	300,000
Shops at Bruckner⁽⁶⁾	5/1/2023	3.90%	12,304
Hudson Mall⁽⁷⁾	12/1/2023	5.07%	25,170
Yonkers Gateway Center⁽⁹⁾	4/6/2024	4.16%	33,601
Las Catalinas	8/6/2024	4.43%	130,000
North Bergen (Tonnelle Avenue)⁽⁵⁾	4/1/2027	4.18%	100,000
Manchester Plaza	6/1/2027	4.32%	12,500
Millburn Gateway Center	6/1/2027	3.97%	24,000
Mount Kisco (Target)⁽⁴⁾	11/15/2034	6.40%	14,562
Total mortgages payable			1,415,806
Unamortized debt issuance costs			(7,740		)
Total mortgages payable, net of unamortized debt issuance costs			$	1,408,066


1.	~~ORGANIZATION~~


5.	~~RELATED PARTY TRANSACTIONS~~