UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2005
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number 1-12803
URSTADT BIDDLE PROPERTIES INC.
(Exact Name of Registrant in its Charter)
MARYLAND 04-2458042
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
321 Railroad Avenue, Greenwich, CT 06830
----------------------------------------
(Address of principal executive offices) (ZipCode)
Registrant's telephone number, including area code: (203) 863-8200
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. Yes X No___
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes X No ____
As of February 28, 2005, the number of shares of the Registrant's classes of
Common Stock and Class A Common Stock was: 7,387,700 Common Shares, par value
$.01 per share and 18,728,611Class A Common Shares, par value $.01 per share
THE SEC FORM 10-Q, FILED HEREWITH, CONTAINS 23 PAGES, NUMBERED
CONSECUTIVELY FROM 1 TO 23 INCLUSIVE, OF WHICH THIS PAGE IS 1.
1
INDEX
URSTADT BIDDLE PROPERTIES INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - January 31, 2005 and October 31, 2004.
Consolidated Statements of Income -Three months ended January 31, 2005
and 2004.
Consolidated Statements of Cash Flows - Three months ended January 31,
2005 and 2004.
Consolidated Statements of Stockholders' Equity - Three months ended
January 31, 2005.
Notes to Consolidated Financial Statements.
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. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 6. Exhibits
SIGNATURES
2
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
January 31, October 31,
ASSETS 2005 2004
---- ----
(Unaudited)
Real Estate Investments:
Core properties - at cost $432,640 $ 381,937
Non-core properties - at cost 20,621 20,621
Less: accumulated depreciation (63,618) (61,389)
-------- --------
389,643 341,169
Mortgage notes receivable 2,089 2,109
----- -----
391,732 343,278
Property held for sale - 4,002
Cash and cash equivalents 4,637 25,940
Restricted cash 1,187 1,184
Marketable securities 2,609 2,681
Tenant receivables, net of allowances of $2,325 and $2,047, respectively 12,730 11,249
Prepaid expenses and other assets 5,700 3,303
Deferred charges, net of accumulated amortization 3,037 3,280
----- -----
Total Assets $421,632 $ 394,917
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Bank loans $ 19,500 $ -
Mortgage notes payable 106,897 107,443
Accounts payable and accrued expenses 2,615 1,515
Deferred officers compensation 545 501
Other liabilities 4,734 3,617
----- -----
Total Liabilities 134,291 113,076
------- -------
Minority Interests 7,320 7,320
----- -----
Preferred Stock, par value $.01 per share; 20,000,000 shares authorized;
8.99% Series B Senior Cumulative Preferred stock, (liquidation preference of $100
per Share); 150,000 shares issued and outstanding 14,341 14,341
8.50% Series C Senior Cumulative Preferred Stock, (liquidation preference of $100 per share);
400,000 shares issued and outstanding 38,406 38,406
------ ------
Total Preferred Stock 52,747 52,747
------ ------
Commitments and Contingencies
Stockholders' Equity:
Excess stock, par value $.01 per share; 10,000,000 shares authorized; none issued and outstanding -- -
Common stock, par value $.01 per share; 30,000,000 shares authorized;
7,387,700 and 7,189,991 shares issued and outstanding shares respectively. 74 72
Class A Common stock, par value $.01 per share; 40,000,000 shares authorized;
18,728,611 and 18,649,008 shares issued and outstanding shares respectively. 187 186
Additional paid in capital 269,174 264,680
Cumulative distributions in excess of net income (31,886) (36,581)
Accumulated other comprehensive income 498 472
Unamortized restricted stock compensation and officers notes receivable (10,773) (7,055)
-------- -------
Total Stockholders' Equity 227,274 221,774
------- -------
Total Liabilities and Stockholders' Equity $421,632 $ 394,917
======== =========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
3
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Three Months Ended
January 31
2005 2004
Revenues:
Base rents $12,920 $12,437
Recoveries from tenants 4,128 3,644
Lease termination income -- 542
Interest and other 212 221
--- ---
17,260 16,844
Operating Expenses:
Property operating 2,784 2,723
Property taxes 2,244 2,061
Interest 2,053 2,005
Depreciation and amortization 3,031 2,754
General and administrative 1,117 1,019
Directors' fees and expenses 68 57
----- -----
11,297 10,619
------ ------
Operating Income 5,963 6,225
Minority Interests (92) (92)
---- ----
Income from Continuing Operations 5,871 6,133
Discontinued Operations (including gain on sale of real estate of $5,626 and $0) 5,602 138
----- -----
Net Income 11,473 6,271
Preferred Stock Dividends (1,187) (1,187)
------- -------
Net Income Applicable to Common and Class A Common Stockholders $10,286 $5,084
======= ======
Basic Earnings per Share:
Per Common Share:
Income from Continuing operations $.18 $.18
Discontinued operations $.21 $.01
--- ----
Net Income Applicable to Common Stockholders $.39 $.19
==== ====
Per Class A Common Share:
Income from Continuing operations $.19 $.20
Discontinued operations $.23 $.01
--- ----
Net Income Applicable Class A Common Stockholders $.42 $.21
==== ====
Diluted Earnings Per Share:
Per Common Share:
Income from Continuing operations $.17 $.18
Discontinued operations $.20 $.01
--- ----
Net Income Applicable-Common Stockholders $.37 $.19
==== ====
Per Class A Common Share:
Income from Continuing operations $.19 $.20
Discontinued operations $.22 $.01
--- ----
Net Income Applicable to Class A Common Stockholders $.41 $.21
==== ====
Dividends per share:
Common $.20 $.195
==== =====
Class A Common $.22 $.215
==== =====
The accompanying notes to consolidated financial statements are an
integral part of these statements.
4
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Three Months Ended
January 31
2005 2004
----- ----
Operating Activities:
Net income $11,473 $6,271
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 3,031 2,792
Gain on sale of real estate investment (5,626) -
Amortization of restricted stock 365 302
Minority interests 92 92
Increase in tenant receivables (1,207) (1,249)
Increase (decrease) in accounts payable and accrued expenses 1,100 (851)
Increase in other assets and other liabilities, net (1,204) (2,175)
Increase in restricted cash (3) (4)
--- ---
Net Cash Provided by Operating Activities 8,021 5,178
----- -----
Investing Activities:
Acquisition of property (51,000) -
Net proceeds received from sale of property 9,406 -
Sales of marketable securities 98 7,866
Improvements to properties and deferred charges (246) (757)
Distributions to limited partners of consolidated joint ventures (92) (92)
Payments received on mortgage notes receivables 20 18
Deposit on acquisition of property (100) -
----- -----
Net Cash (Used in) Provided by Investing Activities (41,914) 7,035
-------- -----
Financing Activities:
Proceeds from bank loans 19,500 -
Dividends paid -- Common and Class A Common shares (5,591) (5,364)
Dividends paid -- Preferred Stock (1,187) (1,187)
Payments on mortgage notes payable (546) (482)
Sales of additional Common and Class A Common shares 414 690
Repayment of officer note receivable - 133
----- -----
Net Cash Provided by (Used in) Financing Activities 12,590 (6,210)
------ -------
Net (Decrease) Increase In Cash and Cash Equivalents (21,303) 6,003
Cash and Cash Equivalents at Beginning of Period 25,940 22,449
------ ------
Cash and Cash Equivalents at End of Period $4,637 $28,452
====== =======
Supplemental Cash Flow Disclosures:
Interest Paid $ 2,053 $2,005
======= ======
The accompanying notes to consolidated financial statements are an integral part
of these statements.
5
URSTADT BIDDLE PROPERTIES INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (In thousands,
except shares and per share data)
Common Stock Class A Common Stock Unamortized
---------------- --------------- (Cumulative Accumulated Restricted Stock
Outstanding Outstanding Additional Distributions Other Compensation
Number of Par Number of Par Paid In In Excess of Comprehensive and Notes
Shares Value Shares Value Capital Net Income Income Receivable Total
------ ----- ------ ----- ------- ---------- ------ ---------- -----
Balances - October 31, 2004 7,189,991 $72 18,649,008 $186 $264,680 $(36,581) $472 $(7,055) $221,774
Comprehensive Income:
Net income applicable to Common
and Class A common stockholders - - - - - 10,286 - - 10,286
Unrealized gains on marketable
securities - - - - - - 26 - 26
------
Total Comprehensive Income 10,312
Cash dividends paid:
Common stock ($.20 per share) - - - - - (1,473) - - (1,473)
Class A common stock ($.22 per share) - - - - - (4,118) - - (4,118)
Sales of additional shares under
dividend reinvestment plan 21,909 - 3,928 - 414 - - - 414
Shares granted under restricted stock
plan 175,800 2 75,675 1 4,080 - - (4,083) -
Amortization of restricted stock
compensation - - - - - - - 365 365
--------- ---- ---------- ---- -------- -------- ---- -------- --------
Balances - January 31, 2005 7,387,700 $74 18,728,611 $187 $269,174 $(31,886) $498 $(10,773) $227,274
========= ==== ========== ==== ======== ========= ==== ========= ========
The accompanying notes to consolidated financial statements are an integral
part of these statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
Business
Urstadt Biddle Properties Inc. (Company), a real estate investment trust (REIT),
is engaged in the acquisition, ownership and management of commercial real
estate, primarily neighborhood and community shopping centers in the
northeastern part of the United States. Other assets include office and retail
buildings and industrial properties. The Company's major tenants include
supermarket chains and other retailers who sell basic necessities. At January
31, 2005, the Company owned or had interests in 34 properties containing a total
of 3.7 million square feet of leasable area.
Principles of Consolidation and Use of Estimates
The accompanying unaudited consolidated financial statements include the
accounts of the Company, its wholly owned subsidiaries, and joint ventures in
which the Company has the ability to control the affairs of the venture. The
Company believes it has the ability to control the affairs of its consolidated
joint ventures because as the sole general partner, the Company has the
exclusive right to exercise all management powers over the business and affairs
of the respective joint ventures. In addition, the limited partners have no
important rights as defined in the AICPA's Statement of Position ("SOP") 78-9
"Accounting for Investments in Real Estate Ventures". The joint ventures are
consolidated into the consolidated financial statements of the Company. All
significant intercompany transactions and balances have been eliminated in
consolidation.
The financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results of operations for the three month period ended January 31, 2005, are not
necessarily indicative of the results that may be expected for the year ending
October 31, 2005. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended October 31, 2004.
The preparation of financial statements requires management to make use of
estimates and assumptions that affect amounts reported in the financial
statements as well as certain disclosures. Actual results could differ from
those estimates. The balance sheet at October 31, 2004 has been derived from
audited financial statements at that date.
Reclassifications
Certain prior period amounts have been reclassified (including the presentation
of the consolidated statements of income required by SFAS #144) to conform to
the current year presentation.
Federal Income Taxes
The Company has elected to be treated as a real estate investment trust under
Sections 856-860 of the Internal Revenue Code (Code). Under those sections, a
REIT, that among other things, distributes at least 90% of real estate trust
taxable income and meets certain other qualifications prescribed by the Code
will not be taxed on that portion of its taxable income that is distributed. The
Company believes it qualifies and intends to continue to qualify as a REIT.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and cash equivalents, mortgage notes
receivable and tenant receivables. The Company places its cash and cash
equivalents in excess of insured amounts with high quality financial
institutions. The Company performs ongoing credit evaluations of its tenants and
may require certain tenants to provide security deposits or letters of credit.
Though these security deposits and letters of credit are insufficient to meet
the terminal value of a tenant's lease obligation, they are a measure of good
faith and a source of funds to offset the economic costs associated with lost
rent and the costs associated with retenanting the space. There is no dependence
upon any single tenant.
7
Earnings Per Share
The Company calculates basic and diluted earnings per share in accordance with
SFAS No. 128, "Earnings Per Share." Basic earnings per share ("EPS") excludes
the impact of dilutive shares and is computed by dividing net income applicable
to Common and Class A Common stockholders by the weighted number of Common
shares and Class A Common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue Common shares or Class A Common shares were exercised or
converted into Common shares or Class A Common shares and then shared in the
earnings of the Company. Since the cash dividends declared on the Company's
Class A Common stock are higher than the dividends declared on the Common Stock,
basic and diluted EPS have been calculated using the "two-class" method. The
two-class method is an earnings allocation formula that determines earnings per
share for each class of common stock according to the weighted average of the
dividends declared, outstanding shares per class and participation rights in
undistributed earnings.
The following table sets forth the reconciliation between basic and diluted EPS
(in thousands):
Three Months Ended
January 31
2005 2004
Numerator
Net income applicable to common stockholders - basic $2,526 $1,219
Effect of dilutive securities:
Operating partnership units 91 36
----- -----
Net income applicable to common stockholders - diluted $2,617 $1,255
Denominator ===== =====
Denominator for basic EPS weighted average common shares 6,547 6,337
Effect of dilutive securities:
Stock options and awards 402 203
Operating partnership units 55 55
----- -----
Denominator for diluted EPS - weighted average common equivalent shares 7,004 6,595
===== =====
Numerator
Net income applicable to Class A common stockholders-basic $7,760 $3,865
Effect of dilutive securities:
Operating partnership units 1 55
----- -----
Net income applicable to Class A common stockholders - diluted $7,761 $3,920
====== ======
Denominator
Denominator for basic EPS - weighted average Class A common shares 18,289 18,231
Effect of dilutive securities:
Stock options and awards 290 146
Operating partnership units 310 310
----- -----
Denominator for diluted EPS - weighted average Class A common equivalent shares 18,889 18,687
====== ======
Segment Reporting
The Company operates in one industry segment, ownership of commercial real
estate properties which are located principally in the northeastern United
States. Management reviews operating and financial data for each property
separately and independently from all other properties when making resource
allocation decisions and measuring performance.
8
Recently Issued Accounting Pronouncements
In December 2004, the FASB issued SFAS No. 123R "Accounting for Stock-Based
Compensation." The Statement supersedes APB Opinion No. 25 "Accounting for Stock
Issued to Employees." The Statement establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity incurs liabilities
in exchange for goods or services that are based on the fair value of the
entity's equity instruments or that may be settled by the issuance of those
equity instruments. The Statement is effective as of the beginning of the third
fiscal quarter of 2005. Management does not believe that the adoption of this
pronouncement will have a material effect on its operations or financial
position.
(2) CORE PROPERTIES
On January 7, 2005, the Company acquired The Dock Shopping Center, a 269,000
square foot shopping center located in Stratford, Connecticut for $50.25 million
excluding closing costs of approximately $750,000. The acquisition was funded
with available cash and borrowings of $17.5 million under the Company's secured
line of credit.
Upon the acquisition of real estate properties, the fair value of the real
estate purchased is allocated to the acquired tangible assets, (consisting of
land, buildings and building improvements) and identified intangible assets and
liabilities, (consisting of above-market and below-market leases and in-place
leases) in accordance with SFAS No. 141 "Business Combinations". The Company
utilizes methods similar to those used by independent appraisers in estimating
the fair value of acquired assets and liabilities. The fair value of the
tangible assets of an acquired property considers the value of the property
"as-if-vacant". The fair value reflects the depreciated replacement cost of the
asset. In allocating purchase price to identified intangible assets and
liabilities of an acquired property, the value of above-market and below-market
leases are estimated based on the differences between (i) contractual rentals
and the estimated market rents over the applicable lease term discounted back to
the date of acquisition utilizing a discount rate adjusted for the credit risk
associated with the respective tenants and (ii) the estimated cost of acquiring
such leases giving effect to the Company's history of providing tenant
improvements and paying leasing commissions, offset by a vacancy period during
which such space would be leased. The aggregate value of in-place leases, is
measured by the excess of (i) the purchase price paid for a property after
adjusting existing in-place leases to market rental rates over (ii) the
estimated fair value of the property "as-if-vacant," determined as set forth
above.
The Company is currently in the process of analyzing the fair value of in-place
leases for The Dock Shopping Center and consequently, no value has yet been
assigned to the leases. Accordingly, the purchase price allocation is
preliminary and may be subject to change.
The Company is the general partner in a consolidated limited partnership which
owns a shopping center. The limited partnership has a defined termination date
of December 31, 2097. Upon liquidation of the partnership, proceeds from the
sale of partnership assets are to be distributed in accordance with the
respective partner interests. If termination of the partnership occurred on
January 31, 2005, the amount payable to the limited partnership is estimated to
be $3,300,000.
(3) PROPERTY HELD FOR SALE AND DISCONTINUED OPERATIONS
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" (SFAS #144). SFAS #144 requires, among other things, that the assets and
liabilities and the results of operations of the Company's properties which have
been sold or otherwise qualify as held for sale be classified as discontinued
operations and presented separately in the Company's consolidated financial
statements. Properties held for sale represent properties that are under
contract for sale and are expected to close within the next twelve months.
Property held for sale at October 31, 2004, consists of a shopping center in
Farmingdale, New York which was under contract at that date. In November 2004,
the property was sold. Upon the completion of the sale of the property, the
Company recorded a gain of $5.6 million in the accompanying consolidated
statement of income for the three month period ended January 31, 2005. The
property's operating results have been reclassified as discontinued operations
in the accompanying consolidated financial statements. Revenues from
discontinued operations were $6,000 and $314,000 for the three months ended
January 31, 2005 and 2004, respectively.
9
(4) BANK LINES OF CREDIT
At January 31, 2005, the Company had two revolving lines of credit arrangements
with a bank. One line of credit (the"Secured Credit Facility") expires in
October 2005 and is secured by first mortgage liens on two properties (having a
net book value of $28.3 million at January 31, 2005) and provides for draws of
up to $17.5 million. Interest is at prime + 1/2% or LIBOR + 1.5%. The Secured
Credit Facility requires the Company to maintain certain debt service coverage
ratios during its term. The Company pays an annual fee of .25% on the unused
portion of the Secured Credit Facility. At January 31, 2005, the Company had
outstanding borrowings of $17.5 million under this revolving credit agreement.
The Company also has a $20 million unsecured line of credit arrangement with the
same bank which expires in January 2006. The line of credit is available to
acquire real estate, refinance indebtedness and for working capital needs.
Extensions of credit are at the bank's discretion and subject to the bank's
satisfaction of certain conditions. Outstanding borrowings bear interest at the
Prime + 1/2% or LIBOR + 2.5%. The Company pays an annual fee of .25% on unused
amounts. At January 31, 2005 there were borrowings of $2,000,000 outstanding
under this line of credit.
(5) STOCKHOLDERS' EQUITY
The Company has a restricted stock plan for key employees and directors of the
Company. The restricted stock plan ("Plan"), as amended, provides for the grant
of up to 1,650,000 of the Company's common equity consisting of 350,000 Common
shares, 350,000 Class A Common shares and 950,000 shares, which at the
discretion of the Company's compensation committee, may be awarded in any
combination of Class A common shares or Common shares. In January, 2005, the
compensation committee awarded 175,800 shares of Common Stock and 75,675 shares
of Class A Common Stock to participants in the plan. As of January 31, 2005, the
Company has awarded 860,800 shares of Common Stock and 473,550 shares of Class A
Common Stock to participants as an incentive for future services. The shares
vest between five and ten years after the date of grant. At January 31, 2005,
36,750 shares each of Common Stock and Class A Common Stock were vested.
Dividends on vested and non-vested shares are paid as declared. The market value
of shares granted is recorded as unamortized restricted stock compensation on
the date of grant. As a result of the 2005 grants, the Company recorded
$4,082,600 as unamortized restricted stock compensation in the first quarter of
2005. Unamortized restricted stock compensation is expensed over the respective
vesting periods. For the three months ended January 31, 2005, and 2004 amounts
charged to compensation expense totaled $ 365,000 and $302,000 respectively.
The Company has a Dividend Reinvestment and Share Purchase Plan, as amended,
which permits shareholders to acquire additional shares of Common Stock and
Class A Common Stock by automatically reinvesting dividends. During the three
months ended January 31, 2005, the Company issued 21,909 shares of Common Stock
and 3,928 shares of Class A Common Stock through the Plan. As of January 31,
2005, there remained 277,998 shares of Common Stock and 521,300 shares of Class
A Common Stock available for issuance under the Plan.
10
(6) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited pro forma financial information set forth below is based upon the
Company's historical consolidated statements of income for the three months
ended January 31, 2005 and 2004 adjusted to give effect to the acquisition of
The Dock Shopping Center completed in January, 2005 (see Note 2.), and the sale
of Bi-County Shopping Center completed in November 2004, as though these
transactions were completed on November 1, 2003.
The pro forma financial information is presented for informational purposes
only and may not be indicative of what the actual results of operations would
have been had the transactions occurred as of November 1, 2003, nor does it
purport to represent the results of future operations. (Amounts in
thousands,except per share figures).
Three Months Ended
January 31,
2005 2004
---- ----
Pro forma revenues: $18,331 $18,315
======= =======
Pro forma income from continuing operations applicable to
Common and Class A Common $ 5,087 $ 5,500
======= =======
Pro forma basic shares outstanding:
Common and Common Equivalent 6,547 6,337
===== =====
Class A Common and Class A Common Equivalent 18,289 18,231
====== ======
Pro forma diluted shares outstanding:
Common and Common Equivalent 7,004 6,595
===== =====
Class A Common and Class A Common Equivalent 18,889 18,687
====== ======
Pro forma earnings per share from continuing operations:
Basic:
Common $.19 $.21
==== ====
Class A Common $.21 $.23
==== ====
Diluted:
Common $.19 $.20
==== ====
Class A Common $.21 $.22
==== ====
11
(7) SUBSEQUENT EVENTS, COMMITMENTS AND CONTINGENCIES
In January 2005, the Company contracted to purchase a shopping center containing
approximately 218,000 square feet of leasable space located in Yorktown, New
York for a purchase price of $29.5 million. The Company expects to fund the
purchase from borrowings on its existing bank lines of credit. The contract to
purchase is subject to various conditions, including customary conditions to
close and therefore there can be no assurance as to when or if the transaction
will be completed.
In February 2005, the Company terminated purchase contracts it entered into in
December 2004, to acquire four retail properties totaling 73,000 square feet of
leasable space for an aggregate purchase price of $18 million.
The Company has received a commitment to increase its existing secured credit
facility with a bank for up to $30 million from the present borrowing limit of
$17.5 million. The closing of the facility is subject to, among other things,
certain closing requirements of the bank including execution of the loan
documents. The facility is expected to close during the Company's second fiscal
quarter of 2005.
In the normal course of business, from time to time, the Company is involved in
legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities, if any that may ultimately result from
such legal actions are not expected to have a material adverse effect on the
consolidated financial position, results of operations or liquidity of the
Company.
12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto included elsewhere in
this report.
Forward Looking Statements
This report includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
in this report that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including such
matters as future capital expenditures, dividends and acquisitions (including
the amount and nature thereof), expansion and other development trends of the
real estate industry, business strategies, expansion and growth of the Company's
operations and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate. Such statements are subject to a number of assumptions, risks and
uncertainties, general economic and business conditions, the business
opportunities that may be presented to and pursued by the Company, changes in
laws or regulations and other factors, many of which are beyond the control of
the Company. Any such statements are not guarantees of future performance and
actual results or developments may differ materially from those anticipated in
the forward-looking statements.
Overview
The Company, a REIT, is engaged in the acquisition, ownership and management of
commercial real estate, primarily neighborhood and community shopping centers in
the northeastern part of the United States. Other real estate assets include
office and retail buildings and industrial properties. The Company's major
tenants include supermarket chains and other retailers who sell basic
necessities. At January 31, 2005, the Company owned or had controlling interests
in 34 properties containing a total of 3.7 million square feet of GLA of which
approximately 97% was leased at January 31, 2005
The Company focuses on increasing cash flow and, consequently, the value of its
properties and seeks continued growth through strategic re-leasing, renovations
and expansion of its existing properties and selective acquisition of income
producing properties, primarily neighborhood and community shopping centers in
the northeastern part of the United States.
Key elements of the company's growth strategies and operating policies are to:
|X| Acquire neighborhood and community shopping centers in the
northeastern part of the United States with a concentration in
Fairfield County, Connecticut, and Westchester and Putnam Counties,
New York
|X| Hold core properties for long-term investment and enhance their
value through regular maintenance, periodic renovation and capital
improvement
|X| Selectively dispose of non-core assets and re-deploy the proceeds
into properties located in the Company's preferred region
|X| Increase property values by aggressively marketing available GLA
and renewing existing leases
|X| Renovate, reconfigure or expand existing properties to meet the needs
of existing or new tenants
|X| Negotiate and sign leases which provide for regular or fixed
contractual increases to minimum rents
|X| Control property operating and administrative costs
Critical Accounting Policies
Critical accounting policies are those that are both important to the
presentation of the Company's financial condition and results of operations and
require management's most difficult, complex or subjective judgments. Set forth
below is a summary of the accounting policies that management believes are
critical to the preparation of the consolidated financial statements. This
summary should be read in conjunction with the more complete discussion of the
Company's accounting policies included in Note 1 to the consolidated financial
statements of the Company for the year ended October 31, 2004.
13
Revenue Recognition
The Company records base rents on a straight-line basis over the term of each
lease. The excess of rents recognized over amounts contractually due pursuant to
the underlying leases is included in tenant receivables on the accompanying
balance sheets. Most leases contain provisions that require tenants to reimburse
a pro-rata share of real estate taxes and certain common area expenses. These
amounts are recognized in the period the related expenses are incurred. Expense
reimbursement payments generally are made monthly based on an estimated amount
determined at the beginning of the year. The difference between the actual
amount due and the estimated amounts paid by the tenant throughout the year is
billed or credited to the tenant.
Allowance for Doubtful Accounts
The allowance for doubtful accounts and mortgage notes receivable is established
based on a quarterly analysis of the risk of loss on specific accounts. The
analysis places particular emphasis on past-due accounts and considers
information such as the nature and age of the receivables, the payment history
of the tenants or other debtors, the financial condition of the tenants and
management's assessment of their ability to meet their lease obligations, the
basis for any disputes and the status of related negotiations, among other
things. Management's estimates of the required allowance is subject to revision
as these factors change and is sensitive to the effects of economic and market
conditions on tenants, particularly those at retail centers. Estimates are used
to establish reimbursements from tenants for common area maintenance, real
estate tax and insurance costs. Adjustments are also made throughout the year to
tenant receivables and the related cost recovery income based upon the Company's
best estimate of the final amounts to be billed and collected. The Company
analyzes the balance of its estimated accounts receivable for real estate taxes,
common area maintenance and insurance for each of its properties by comparing
actual recoveries versus actual expenses and any actual write-offs. Based on its
analysis, the Company may record an additional amount in its allowance for
doubtful accounts related to these items. It is also the Company's policy to
maintain an allowance of approximately 10% of the deferred straight-line rents
receivable balance for future tenant credit losses.
Real Estate
Land, buildings, property improvements, furniture/fixtures and tenant
improvements are recorded at cost. Expenditures for maintenance and repairs are
charged to operations as incurred. Renovations and/or replacements, which
improve or extend the life of the asset, are capitalized and depreciated over
their estimated useful lives.
The amounts to be capitalized as a result of an acquisition and the periods over
which the assets are depreciated or amortized are determined based on estimates
as to fair value and the allocation of various costs to the individual assets.
The Company allocates the cost of an acquisition based upon the estimated fair
value of the net assets acquired. The Company also estimates the fair value of
intangibles related to its acquisitions. The valuation of the fair value of
intangibles involves estimates related to market conditions, probability of
lease renewals and the current market value of in-place leases. This market
value is determined by considering factors such as the tenant's industry,
location within the property and competition in the specific region in which the
property operates. Differences in the amount attributed to the intangible assets
can be significant based upon the assumptions made in calculating these
estimates.
The Company is required to make subjective assessments as to the useful life of
its properties for purposes of determining the amount of depreciation. These
assessments have a direct impact on the Company's net income.
Properties are depreciated using the straight-line method over the estimated
useful lives of the assets. The estimated useful lives are as follows:
Buildings 30-40 years
Property Improvements 10-20 years
Furniture/Fixtures 3-10 years
Tenant Improvements Shorter of lease term or useful life
14
Assessments by the Company of certain other lease related costs are made when
the Company has a reason to believe that the tenant may not be able to perform
under the terms of the lease as originally expected. This requires management to
make estimates as to the recoverability of such assets.
Asset Impairment
On a periodic basis, management assesses whether there are any indicators that
the value of the real estate properties and mortgage notes receivable may be
impaired. A property value is considered impaired when management's estimate of
current and projected operating cash flows (undiscounted and without interest)
of the property over its remaining useful life is less than the net carrying
value of the property. Such cash flow projections consider factors such as
expected future operating income, trend and prospects, as well as the effects of
demand, competition and other factors. To the extent impairment has occurred,
the loss is measured as the excess of the net carrying amount of the property
over the fair value of the asset. Changes in estimated future cash flows due to
changes in the Company's plans or market and economic conditions could result in
recognition of impairment losses which could be substantial. Management does not
believe that the value of any of its rental properties or mortgage notes
receivable is impaired at January 31, 2005.
Liquidity and Capital Resources
At January 31, 2005, the Company had unrestricted cash and cash equivalents of
$4.6 million compared to $25.9 million at October 31, 2004. The Company utilized
approximately $23 million to complete the acquisition of real property in the
first quarter of fiscal 2005. The Company's sources of liquidity and capital
resources include its cash and cash equivalents, proceeds from bank borrowings
and long-term mortgage debt, capital financings and sales of real estate
investments. Payments of expenses related to real estate operations, debt
service, management and professional fees, and dividend requirements place
demands on the Company's short-term liquidity.
Cash Flows
The Company expects to meet its short-term liquidity requirements primarily by
generating net cash from the operations of its properties. The Company believes
that its net cash provided by operations will be sufficient to fund its
short-term liquidity requirements for fiscal 2005 and to meet its dividend
requirements necessary to maintain its REIT status. Net cash provided by
operations for the three months ended January 31, 2005, amounted to $8.0
million, compared to $5.2 in the comparable period of fiscal 2004. Dividends
paid to stockholders of the Company in the three month periods ended January 31,
2005 and 2004 were $6.8 million and $6.6 million, respectively. The Company
expects to continue paying regular dividends to its stockholders. These
dividends will be paid from operating cash flows which are expected to increase
due to property acquisitions and growth in operating income in the existing
portfolio and from other sources. The Company derives substantially all of its
revenues from tenants under existing leases at its properties. The Company's
operating cash flow therefore depends on the rents that it is able to charge to
its tenants, and the ability of its tenants to make rental payments. The Company
believes that the nature of the properties in which it typically invests -
primarily grocery-anchored neighborhood and community shopping centers -
provides a more stable revenue flow in uncertain economic times, in that
consumers still need to purchase basic staples and convenience items. However,
even in the geographic areas in which the Company owns properties, general
economic downturns may adversely impact the ability of the Company's tenants to
make lease payments and the Company's ability to re-lease space as leases
expire. In either of these cases, the Company's cash flow could be adversely
affected.
Capital Resources
The Company expects to fund its long-term liquidity requirements such as
property acquisitions, repayment of indebtedness and capital expenditures
through other long-term indebtedness (including indebtedness assumed in
acquisitions), proceeds from sales of properties and/or the issuance of equity
securities. The Company believes that these sources of capital will continue to
be available to it in the future to fund its long-term capital needs; however,
there are certain factors that may have a material adverse effect on its access
to capital sources. The Company's ability to incur additional debt is dependent
upon its existing leverage, the value of its unencumbered assets and borrowing
limitations imposed by existing lenders. The Company's ability to raise funds
through sales of equity securities is dependent on, among other things, general
market conditions for REITs, market perceptions about the Company and its stock
price in the market. The Company's ability to sell properties in the future to
raise cash will be dependent upon market conditions at the time of sale.
15
Financings and Debt
The Company has a shelf registration statement on Form S-3 on file for up to
$150 million of debt securities, preferred stock, depository shares, common
stock and Class A common stock. As of January 31, 2005, the Company has $62.3
million available for issuance under this shelf registration statement.
The Company is exposed to interest rate risk primarily through its borrowing
activities. There is inherent rollover risk for borrowings as they mature and
are renewed at current market rates. The extent of this risk is not quantifiable
or predictable because of the variability of future interest rates and the
Company's future financing requirements.
Mortgage notes payable consist of $106,897,000 of fixed rate mortgage loan
indebtedness with a weighted average interest rate of 7.48% at January 31, 2005.
The mortgage loans are secured by fourteen properties and have fixed rates of
interest ranging from 6.29% to 8.375%. The Company anticipates that it will make
principal mortgage payments due in fiscal 2005 from available cash. The Company
expects to refinance a majority of its mortgage loans, at or prior to scheduled
maturity, through replacement mortgage loans. The ability to do so, however, is
dependent upon various factors, including the income level of the properties,
interest rates and credit conditions within the commercial real estate market.
Accordingly, there can be no assurance that such refinancings can be achieved.
At January 31, 2005, the Company had a secured revolving credit facility with a
bank which expires in October 2005 and allows for borrowings up to $17.5
million. The secured credit line is collateralized by two properties having a
net book value of $28.3 million at January 31, 2005. The Company has received a
commitment from the bank to replace the existing facility with a credit facility
of up to $30 million and a term of three years. The closing of the facility is
subject to the bank's satisfaction of certain conditions and execution of
documents. At January 31, 2005, the Company had outstanding borrowings of $17.5
million under the existing revolving credit agreement. The Company also has a
$20 million unsecured revolving line of credit with the same bank. During the
first quarter of 2005, this line of credit was extended for an additional one
year period. At January 31, 2005, there were borrowings of $2.0 million
outstanding under this line of credit. Extensions of credit under the unsecured
credit line are at the bank's discretion and subject to the bank's satisfaction
of certain conditions. Both credit lines are available to finance the
acquisition, management and/or development of commercial real estate, refinance
indebtedness and for working capital purposes.
Contractual Obligations
The Company's contractual payment obligations as of January 31, 2005, were as
follows (amounts in thousands):
Payments Due by Period
---------------------------------------------------------------------------------------------
Total 2005 2006 2007 2008 2009 Thereafter
----- ---- ---- ---- ---- ---- ----------
Mortgage notes payable $106,897 $1,701 $9,040 $11,348 $53,392 $17,754 $13,662
Secured credit line 17,500 17,500 - - - - -
Unsecured credit line 2,000 - 2,000 - - - -
Tenant obligations* 1,809 1,000 809 - - - -
------- ------- ------- -------- -------- ------- -------
Total Contractual Obligations $128,206 $20,201 $11,849 $11,348 $53,392 $17,754 $13,662
======== ======= ======= ======= ======= ======= =======
*Committed tenant-related obligations based on executed leases as of January 31,
2005.
The Company has various standing or renewable service contracts with vendors
related to its property management. In addition, the Company also has certain
other utility contracts entered into in the ordinary course of business which
may extend beyond one year, which very based on usage. These contracts include
terms that provide for cancellation with insignificant or no cancellation
penalties. Contract terms are generally one year or less.
16
Off-Balance Sheet Arrangements
..
During the three month period ended January 31, 2005 and the year ended October
31, 2004, the Company did not have any off-balance sheet arrangements.
Capital Expenditures
The Company invests in its existing properties and regularly incurs capital
expenditures in the ordinary course of business to maintain its properties. The
Company believes that such expenditures enhance the competitiveness of its
properties. During the first three months of fiscal 2005, the Company spent
approximately $246,000 for property improvements and tenant related improvements
and commissions in connection with the Company's leasing activities. The amounts
of these expenditures can vary significantly depending on tenant negotiations,
market conditions and rental rates. The Company expects to incur an additional
$5 million for expected capital improvements and leasing costs in fiscal 2005.
These expenditures are expected to be funded from operating cash flows or
borrowings.
Acquisitions and Sales
The Company seeks to acquire neighborhood and community shopping centers in the
northeastern part of the United States with a concentration in Fairfield County,
Connecticut, and Westchester and Putnam Counties, New York.
On January 7, 2005, the Company acquired The Dock Shopping Center, a
269,000 square foot shopping center located in Stratford, Connecticut for
$50.25 million, excluding closing costs of approximately $750,000. The
acquisition was funded with cash of approximately $23 million, net proceeds
of $9.75 million from the sale of the Farmingdale property and borrowings of
$17.5 million under the Company's secured line of credit.
On November 15, 2004, the Company sold its Farmingdale, New York property for
$9.75 million. The proceeds were used to complete the acquisition of The Dock
Shopping Center in January, 2005. In connection with the transaction, the
Company recorded a gain on the sale of approximately $5.6 million in the first
quarter of 2005.
Non-Core Assets
In a prior year, the Company's Board of Directors expanded and refined the
strategic objectives of the Company to refocus its real estate portfolio into
one of self-managed retail properties located in the northeast and authorized
the sale of the Company's non-core properties in the normal course of business
over a period of several years. The non-core properties consist of two
distribution service facilities, one office building and one retail property
(all of which are located outside of the northeast region of the United States).
The Company intends to sell its non-core properties as opportunities become
available. The Company's ability to generate cash from asset sales is dependent
upon market conditions and will necessarily be limited if market conditions make
such sales unattractive. There were no sales of non-core properties during the
three months ended January 31, 2005. At January 31, 2005, the four non-core
properties have a net book value of approximately $10.5 million.
17
Funds from Operations
The Company considers Funds from Operations ("FFO") to be an additional measure
of an equity REIT's operating performance. The Company reports FFO in addition
to its net income applicable to common stockholders and net cash provided by
operating activities. Management has adopted the definition suggested by The
National Association of Real Estate Investment Trusts ("NAREIT") and defines FFO
to mean net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of property plus real estate related depreciation and
amortization, and after adjustments for unconsolidated joint ventures.
Management considers FFO a meaningful, additional measure of operating
performance because it primarily excludes the assumption that the value of its
real estate assets diminishes predictably over time and industry analysts have
accepted it as a performance measure. FFO is presented to assist investors in
analyzing the performance of the Company. It is helpful as it excludes various
items included in net income that are not indicative of the Company's operating
performance, such as gains (or losses) from sales of property and depreciation
and amortization. However, FFO:
|X| does not represent cash flows from operating activities in accordance
with GAAP (which, unlike FFO, generally reflects all cash effects of
transactions and other events in the determination of net income; and
|X| should not be considered an alternative to net income as an indication of
the Company's performance.
FFO, as defined by the Company, may not be comparable to similarly titled items
reported by other real estate investment trusts due to possible differences in
the application of the NAREIT definition used by such REITs. The table below
provides a reconciliation of net income in accordance with GAAP to FFO for the
three months ended January 31, 2005 and 2004 (amounts in thousands).
Three Months Ended January 31,
2005 2004
---- ----
Net Income Applicable to Common and Class A Common Stockholders $ 10,286 $ 5,084
Plus: Real property depreciation 2,242 2,129
Amortization of tenant improvements and allowances 609 550
Amortization of deferred leasing costs
180 113
Less: Gain on Sale of Real Estate Investments (5,626) -
------- -------
Funds from Operations Applicable to Common and Class A Common Stockholders $ 7,691 $ 7,876
======= =======
Net Cash Provided by (Used in):
Operating Activities $ 8,021 $ 5,178
======= =======
Investing Activities $(41,914) $ 7,035
========= =======
Financing Activities $ 12,590 $(6,210)
======== ========
Results of Operations
Comparison of the three months ended January 31, 2005 to the three months ended
January 31, 2004.
18
Revenues
Base rents increased 3.6% to $12.9 million in the first quarter of fiscal 2005,
compared to $12.4 million in the comparable quarter of fiscal 2004. Rents from
properties owned during both periods were unchanged. The Company's core
properties were 99% at the end of the first quarter of 2005, unchanged from year
end. Rents from new properties increased revenues by $510,000 in the first
quarter. For the first three months of fiscal 2005, the Company leased or
renewed approximately 73,000 square feet of rentable space. Leases totaling
238,000 square feet of space are scheduled to expire in fiscal year 2005. The
Company expects that substantially all of these leases will be renewed at rates
at least comparable to the expiring rates. Recoveries from tenants, which
represents reimbursements from tenants for property operating expenses and
property taxes, increased by 14.2% in fiscal 2005 to $4.1 million from $3.6
million in the first quarter of fiscal 2004. Property tax recoveries increased
as a result of higher tax recovery rates at certain of the Company's properties
and the effect of new properties acquired which increased this component of
income by $46,000.
During the first quarter of fiscal 2005, a tenant occupying 41,000 sf of space
in the Company's 202,000 sf office building property in Southfield, Michigan
vacated the building. As a result, the building is currently 50% leased and
occupied. The Company continues to seek replacement tenants for the building,
however the office leasing market in this region of the country is weak.
In the first quarter of fiscal 2004, the Company received lease termination
payments of $542,000 in satisfaction of two former tenant lease obligations.
There were no lease termination payments in the comparable quarter of fiscal
2005.
Expenses
Property operating expenses were generally unchanged in the first quarter of
fiscal 2005, compared to the same quarter in fiscal 2004. Property operating
expenses for properties owned in 2005 and 2004 decreased by $59,000 from lower
maintenance costs. New properties added $77,000 in additional operating expenses
in the first quarter of 2005. Property tax expenses increased 8.9% to $2,244,000
in the first quarter of fiscal 2005 from $2,061,000 in the comparable quarter of
fiscal 2004. The increase resulted principally from the addition of new
properties in the portfolio which increased this component of expenses by
$105,000 in fiscal 2005. Property taxes for properties owned in both 2005 and
2004 were unchanged.
Interest expense increased $48,000 principally from an additional $4.7 million
in new mortgage loans in 2004 assumed in connection with property acquisitions
that year.
Depreciation and amortization expense increased by $277,000 in the first quarter
of fiscal 2005 from the additional depreciation on recent property acquisitions.
General and administrative expenses increased by $98,000 due principally to
higher compensation costs, including an increase in restricted stock
compensation in fiscal 2005.
Discontinued Operations
In November 2004, the Company sold its Farmingdale, New York shopping center for
$9.75 million. Accordingly, its operating results have been reclassified as
discontinued operations in accordance with SFAS #144. Revenues for this property
totaled $6,000 and $314,000 in the three month periods ended January 31, 2005
and 2004 respectively.
In connection with the sale of the shopping center, the Company recorded a gain
on the sale of the property of approximately $5.6 million in the first quarter
of fiscal 2005.
Inflation
The Company's long-term leases contain provisions to mitigate the adverse impact
of inflation on its operating results. Such provisions include clauses entitling
the Company to receive (a) scheduled base rent increases and (b) percentage
rents based upon tenants' gross sales, which generally increase as prices rise.
In addition, many of the Company's non-anchor leases are for terms of less than
ten years, which permits the Company to seek increases in rents upon renewal at
then current market rates if rents provided in the expiring leases are below
then existing market rates. Most of the Company's leases require tenants to pay
a share of operating expenses, including common area maintenance, real estate
taxes, insurance and utilities, thereby reducing the Company's exposure to
increases in costs and operating expenses resulting from inflation.
19
Environmental Matters
Based upon management's ongoing review of its Properties, management is not
aware of any environmental condition with respect to any of the Company's
properties which would be reasonably likely to have a material adverse effect on
the Company. There can be no assurance, however, that (a) the discovery of
environmental conditions, which were previously unknown, (b) changes in law, (c)
the conduct of tenants or (d) activities relating to properties in the vicinity
of the Company's properties, will not expose the Company to material liability
in the future. Changes in laws increasing the potential liability for
environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions may result in significant unanticipated
expenditures or may otherwise adversely affect the operations of the Company's
tenants, which would adversely affect the Company's financial condition and
results of operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk is the exposure to loss resulting from changes in interest rates,
foreign currency exchange rates, commodity prices and equity prices. The primary
market risk to which we are exposed is interest rate risk, which is sensitive to
many factors, including governmental monetary and tax policies, domestic and
international economic and political considerations and other factors that are
beyond the Company's control.
Interest Rate Risk
The Company is exposed to interest rate risk primarily through its borrowing
activities. There is inherent rollover risk for borrowings as they mature and
are renewed at current market rates. The extent of this risk is not quantifiable
or predictable because of the variability of future interest rates and the
Company's future financing requirements.
As of January 31, 2005, the Company had $19,500,000 of variable rate debt
outstanding under its revolving credit facilities. There were no variable rate
borrowings during fiscal 2004. During the three months ended January 31, 2005,
the weighted average interest rate on variable debt was 4.29%. A hypothetical 1%
increase in interest rates would increase the Company's annual interest expense
by approximately $195,000. The Company does not enter into any derivative
financial instrument transactions for speculative or trading purposes. The
Company believes that its weighted average interest rate of 7.4% on its fixed
rate debt is not materially different from current fair market interest rates
for debt instruments with similar risks and maturities.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on their evaluation at the end of the period covered by this Quarterly
Report on Form 10-Q. the Company's principal executive officer and principal
financial officer have concluded that the Company's disclosure and controls
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
are effective to ensure that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms.
Changes in Internal Controls
During the quarter ended January 31, 2005, there were no changes in the
Company's internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
20
Part II - Other Information
Item 1. Legal Proceedings
The Company is not involved in any litigation, nor to its
knowledge is any litigation threatened against the Company or
its subsidiaries, that in management's opinion, would result
in a material adverse effect on the Company's ownership,
management or operation of its properties, or which is not
covered by the Company's liability insurance.
Item 6. Exhibits
Exhibits
31.1 Certification of the Chief Executive Officer of
Urstadt Biddle Properties Inc. pursuant to Rule 13a-
14(a) of the Securities Exchange Act of 1934, as
amended.
31.2 Certification of the Chief Financial Officer of
Urstadt Biddle Properties Inc. pursuant to Rule 13a-
14(a) of the Securities Exchange Act of 1934, as
amended.
32 Certification of the Chief Executive Officer and
Chief Financial Officer of Urstadt Biddle Properties
Inc. pursuant to Section 906 of Sarbanes-Oxley Act of
2002.
21
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
URSTADT BIDDLE PROPERTIES INC.
(Registrant)
By /s/ Charles J. Urstadt
-------------------------
Charles J. Urstadt
Chairman and
Chief Executive Officer
By /s/ James R. Moore
---------------------
James R. Moore
Executive Vice President/
Chief Financial Officer
(Principal Financial Officer
Dated: March 11 , 2005 and Principal Accounting Officer)
22
EXHIBIT INDEX
Exhibit No.
31.1 Certification of the Chief Executive Officer of Urstadt Biddle Properties
Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,
as amended.
31.2 Certification of the Chief Financial Officer of Urstadt Biddle Properties
Inc. pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934,
as amended.
32 Certification of the Chief Executive Officer and Chief Financial Officer
of Urstadt Biddle Properties Inc. pursuant to Section 906 of Sarbanes-
Oxley Act of 2002
23