Urban Edge Properties (UE) FY 2022 MD&A

ITEM 7.    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 and notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K.

This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 items and provides a year-to-year comparison between 2022 and 2021. A discussion of 2020 items and year-to-year comparisons between 2021 and 2020 are not included in this Annual Report on Form 10-K but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Executive Overview

Our Company

Urban Edge Properties (“UE”, “Urban Edge”, or the “Company”) (NYSE: UE) is a Maryland real estate investment trust that manages, develops, redevelops, and acquires retail real estate, primarily in the Washington, D.C. to Boston corridor. Urban Edge Properties LP (“UELP” or the “Operating Partnership”) is a Delaware limited partnership formed to serve as UE’s majority-owned partnership subsidiary and to own, through affiliates, all of our real estate properties and other assets. Unless the context otherwise requires, references to “we”, “us” and “our” refer to Urban Edge Properties and UELP and their consolidated entities/subsidiaries.

The Operating Partnership’s capital includes general and common limited partnership interests in the operating partnership (“OP Units”). As of December 31, 2022, Urban Edge owned approximately 96.1% of the outstanding common OP Units with the remaining limited OP Units held by members of management, Urban Edge’s Board of Trustees and contributors of property interests acquired. Urban Edge serves as the sole general partner of the Operating Partnership. The third-party unitholders have limited rights over the Operating Partnership such that they do not have characteristics of a controlling financial interest. As such, the Operating Partnership is considered a variable interest entity (“VIE”), and the Company is the primary beneficiary that consolidates it. The Company’s only investment is the Operating Partnership. The VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations and the Company’s partnership interest is considered a majority voting interest.

As of December 31, 2022, our portfolio was comprised of 69 shopping centers, five malls and two industrial parks totaling approximately 17.2 million square feet.

Economic Considerations

In March of 2020, the World Health Organization characterized the COVID-19 outbreak as a global pandemic. Many of our tenants faced adverse financial consequences from reduced business operations and restrictions related to the pandemic, and the Company’s results for 2020 were negatively impacted by tenant fallout from COVID-driven bankruptcies, uncollected or disputed rents from impacted tenants, and from abatements granted to tenants facing financial hardships due to the pandemic. Throughout 2021, the widespread distribution of vaccines and reduction of restrictions boosted economic confidence and increased consumer spending, resulting in a strengthened existing retail tenant base and an increase in demand for space. The Company saw leasing momentum and foot traffic at our properties return to near pre-pandemic levels.

During 2022, microeconomic and macroeconomic conditions caused volatility in the financial markets and a rapid rise in inflation. The Federal Reserve has taken steps to mitigate the impact of inflation by raising its benchmark interest rate several times throughout the year. While the rate hikes enacted by the Federal Reserve have had a significant impact on interest rates and increased the cost of borrowing, we continue to see consumer confidence and a conviction in retail real estate. Tenant sales have increased year-over-year and the demand for retail spaces remains strong as evidenced by the record number of new leases we executed in 2022. The geographic location of our portfolio has also proven to be beneficial. With hybrid and remote work becoming more common, consumers have demonstrated that convenience and proximity are valued. The majority of our portfolio is located in one of the most supply-constrained and densely populated markets in the country and offers consumers easy access to essential services and retailers, including medical offices, grocers, and discounters. We expect to continue to add value to our portfolio through executing on our current leasing momentum, our active development, redevelopment and anchor repositioning projects, and commencement of leases signed but not yet opened.

2022 Highlights

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

•Signed a record 69 new leases totaling approximately 1,032,434 square feet, including 55 new leases on a same-space(1) basis totaling 754,812 square feet at an average rental rate of $23.15 per square foot on a GAAP basis and

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$21.34 per square foot on a cash basis, resulting in average rent spreads of 45.1% on a GAAP basis and 22.2% on a cash basis;

•Renewed or extended 90 leases totaling 1,086,469 square feet, all of which are on a same-space(1) basis, at an average rental rate of $20.36 per square foot on a GAAP basis and $20.10 per square foot on a cash basis, generating average rent spreads of 9.2% on a GAAP basis and 6.0% on a cash basis;

•Completed ten development, redevelopment and anchor repositioning projects, aggregating $105.2 million, four of which stabilized during the fourth quarter. The retenanting of the former Century21 space at Bergen Town Center with Kohl’s was completed in October 2022 and ShopRite at Huntington Commons commenced operations in December 2022. Additionally, the Company stabilized two small shops projects at our property in Kearny, NJ and the Shops at Bruckner in the Bronx, NY;

•Activated 14 development, redevelopment, and anchor repositioning projects aggregating $98.6 million, including Target at Bruckner Commons, Ralph’s Grocer, Urology Hub and T.J. Maxx at The Outlets at Montehiedra, Bingo Wholesalers at Burnside Commons, and two industrial leases executed at our warehouse properties in East Hanover, NJ;

•Acquired two properties for a total purchase price of $37.6 million inclusive of transaction costs, including the Shops at Riverwood acquired in June 2022. The property, located in Hyde Park, MA, sits on an eight acre site located just seven miles south of downtown Boston and is anchored by a grocer, Price Rite Marketplace, and has a strong array of national and regional tenants including Santander, Boston Medical Center, and Planet Fitness; and

•Restated and amended the Company’s revolving credit agreement, increasing the facility size by $200 million to $800 million and extending the maturity date to February 9, 2027, with two six-month extension options.

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

2023 Outlook

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

•Adding essential tenants to our properties and positioning our retail environments with quality grocers, premium healthcare operators and elevated food offerings;

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

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

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

•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; and

•Acquiring assets that meet our investment criteria.

There can be no assurance that we will be able to execute on our growth strategy, especially given the ongoing economic uncertainty. See Forward-Looking Statements in this Annual Report on Form 10-K.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP”, requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenue and expenses. These estimates are prepared using management’s best judgment, after considering past and current events and economic conditions. In addition, certain information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third-party experts. Actual results could differ from these estimates. A discussion of possible risks which may affect these estimates is included in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K. Management considers an accounting estimate to be critical if changes in the estimate could have a material impact on our consolidated results of operations or financial condition.

Our significant accounting policies are more fully described in Note 3 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the

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

Revenue Recognition and Receivables - Estimating Collectibility

Rental revenue comprises revenue from fixed and variable lease payments, as designated within tenant operating leases. Components of this include contractual rents arising from tenant operating lease agreements, tenant expense reimbursements, and straight-line rental income. We evaluate the collectibility of amounts due from tenants and disputed enforceable charges on both a lease-by-lease and a portfolio-level basis, 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 which are recorded as rental revenue deemed uncollectible and are included within the line items Rental revenue on our consolidated statements of income and comprehensive income.

Management exercises judgement when evaluating the collectibility of these receivables and will look to both quantitative and qualitative factors. Such factors include tenants’ current credit status, either from third parties or using an internal risk assessment, payment history, amount of outstanding receivables, tenant sales performance, potential liquidity and current economic and sector specific trends. Changes in our assessments of collectibility are recognized as adjustments to rental revenue in accordance with ASC 842.

These assessments are inherently sensitive as they are based on the judgement of management and information available at the time of evaluation. We routinely reassess the quantitative and qualitative factors used to derive these estimates and believe the methods and assumptions noted above to be reasonable in evaluating collectibility. We have not had any changes to the methods or assumptions used to evaluate collectibility. Although we routinely reassess these estimates, taking into consideration all information available and future projections, they are subject to uncertainty and have a direct impact on our net income. Actual results may differ from these estimates and can have a material impact on our operating results.

Real Estate - Estimates Related to Valuing Acquired Assets and Liabilities

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities. We assess fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. Based on these estimates, we allocate the purchase price to the applicable assets and liabilities based on their relative fair values at date of acquisition.

In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the present value of the difference between the contractual amounts, including fixed rate below-market renewal options, to be paid pursuant to the in-place leases and our estimate of the market lease rates and other lease provisions for comparable leases measured over a period equal to the estimated remaining term of the lease. Tenant related intangibles and improvements are amortized on a straight-line basis over the related lease term, including any bargain renewal options. 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. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place leases. If the value of below-market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a lease terminates prior to its stated expiration, all unamortized amounts relating to that lease are written off.

Since the assessment of fair value and allocation of these amounts is made at the time of acquisition, they are subject to future changes in market conditions and tenants’ ability to continue operations and their exercise of options and renewals. In the case that these assumptions change materially, they could have a material impact on our results and financial statements. During 2022, we acquired two properties and utilized the above factors, including the use of a third party, to allocate the purchase price of these properties among various assets and liabilities. Further information on these allocations can be found in Part II, Item 8, Note 4 of this Annual Report on Form 10-K. We have had no changes to our methods of fair value assessment and allocations during the year ended December 31, 2022.

Real Estate - Estimates Related to Impairments

Our properties are individually evaluated 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

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appropriate discount and capitalization rates and, in addition to available market information, third-party appraisals, broker selling estimates or sale agreements under negotiation. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the projected future cash flows change based on uncertain market conditions, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements. The carrying value of a property may also be individually reassessed in the event a casualty occurs at that property. Casualty events may include property damage from a natural disaster or fire. When such an event occurs, management estimates the net book value of assets damaged over the property’s total gross leasable area and adjusts the property’s carrying value to reflect the damages. Estimates are subjective and may change if additional damage is later assessed or if future cash flows are revised.

During the year ended December 31, 2022, we have had no changes to the methods or assumptions used in our analyses of fair value of our real estate assets and have not incurred any material impairment losses. We operate in a business that has significant investments in real estate and our estimates of valuation are subject to current market conditions and tenant operations, which drive future cash flows, and are beyond our control. As these factors can result in changes to our estimates and result in material impairment losses, this is deemed a critical accounting estimate.

Recent Accounting Pronouncements

In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and ASU 2021-01 Reference Rate Reform (ASC 848): Scope which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. In December 2022, FASB issued ASU 2022-06 Reference Rate Reform (ASC 848): Deferral of the Sunset Date of Topic 848, which extended the final sunset date from December 31, 2022 to December 31, 2024. There were no modifications to our existing debt agreements as a result of reference rate reform in the current year, however, we refinanced two loans in 2022 previously indexed to LIBOR, which are now indexed to SOFR and the Prime Rate. We plan to transition all variable rate loans currently indexed to LIBOR to SOFR, based on discussions with our lenders.

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company or the Operating Partnership, or they are not expected to have a material impact on our consolidated financial statements.

Recent SEC Reporting Updates

On January 11, 2021, the SEC issued Final Rule Release No. 33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information. This rule, which became effective on February 10, 2021, adopts amendments to modernize, simplify and enhance certain financial disclosure requirements in Regulation S-K. Specifically, the amendments eliminate the requirement for Selected Financial Data, streamline the requirement to disclose Supplementary Financial Information, and amend Management’s Discussion & Analysis of Financial Condition and Results of Operations (‘‘MD&A’’). We early adopted the amendments to two items resulting in the elimination of Item 301, Selected Financial Data, and the omission of Item 302(a), Supplementary Financial Information. The amendments to Item 303(a)(b) MD&A were adopted in our Form 10-K for the year ended December 31, 2021.

See Note 3 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements that may affect us. Additionally, see Note 7 to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent amendments to the Internal Revenue Code.

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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 expenditures consist of our property operating and capital costs, general and administrative expenses, and interest and debt expense. Property operating expenses include: real estate taxes, repairs and maintenance, management expenses, insurance and utilities; general and administrative expenses, which include payroll, professional fees, information technology, office expenses and other administrative expenses; and interest and debt expense primarily consists of interest on our mortgage debt. 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 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 economic climate has increased volatility in the financial markets, which has resulted in a rise in already increasing inflation. Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation, although some larger tenants have capped the amount of these operating expenses they are responsible for under their lease. The Federal Reserve has taken measures to suppress inflation by way of benchmark interest rate hikes, resulting in an increase in interest rates. As of December 31, 2022, approximately 91% of our outstanding debt is fixed rate, with the remaining 9% indexed to LIBOR, SOFR or the Prime Rate, plus an applicable margin per the loan agreement. We utilize interest rate derivative agreements to hedge the effect of rising interest rates on our variable rate debt. As of December 31, 2022, we were counter-party to one interest rate swap agreement and one interest rate cap agreement, both of which qualify for, and are designated as, hedging instruments. While we have not experienced any material adverse effects at this time, we are actively managing our business to respond to the ongoing economic and social impact from such events. See “Risk Factors” in Part I, Item 1A for more information.

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

(1) Refer to page 35 for a reconciliation to the nearest generally accepted accounting principles (“GAAP”) measure.

(2) Refer to page 34 for a reconciliation to the nearest GAAP measure.

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Comparison of the Year Ended December 31, 2022 to December 31, 2021

Net income for the year ended December 31, 2022 was $47.3 million, compared to net income of $107.8 million for the year ended December 31, 2021. The following table summarizes certain line items from our consolidated statements of income and comprehensive income that we believe are important in understanding our operations and/or those items which significantly changed in the year ended December 31, 2022 as compared to the same period of 2021:

Total revenue decreased by $27.1 million to $397.9 million in the year ended December 31, 2022 from $425.1 million in the year ended December 31, 2021. The decrease is primarily attributable to:

•$47.5 million decrease in non-cash revenues driven by accelerated amortization of below-market intangible liabilities in connection with certain lease terminations in 2021; and

•$0.8 million decrease in management and development fee income; offset by

•$16.2 million increase as a result of property acquisitions net of dispositions;

•$3.2 million decrease in rental revenue deemed uncollectible; and

•$1.8 million net increase in property rentals and tenant reimbursements due to rent commencements, contractual rent increases and higher tenant sales.

Depreciation and amortization increased by $6.1 million to $98.4 million in the year ended December 31, 2022 from $92.3 million in the year ended December 31, 2021. The increase is primarily attributable to:

•$9.7 million increase as a result of property acquisitions net of dispositions; offset by

•$3.6 million decrease due to assets taken out of service for active redevelopment projects and write-offs of fully depreciated assets and lease intangibles as a result of lease terminations and recurring depreciation.

Real estate tax expense decreased by $2.0 million to $61.9 million in the year ended December 31, 2022 from $63.8 million in the year ended December 31, 2021. The decrease is primarily attributable to:

•$2.4 million decrease as a result of successful tax appeals and lowered assessments; and

•$2.1 million of real estate taxes capitalized in connection with active development, redevelopment and anchor repositioning projects; offset by

•$2.5 million increase as a result of property acquisitions net of dispositions.

Property operating expenses increased by $5.8 million to $74.3 million in the year ended December 31, 2022 from $68.5 million in the year ended December 31, 2021. The increase is primarily attributable to:

•$3.0 million higher common area maintenance expenses across the portfolio as a result of increased repairs and maintenance, utility usage, cleaning, and landscaping at our properties in 2022 and spend reductions in 2021; and

•$2.8 million increase as a result of property acquisitions net of dispositions.

General and administrative expenses increased by $3.9 million to $43.1 million in the year ended December 31, 2022 from $39.2 million in the year ended December 31, 2021. The increase is primarily attributable to:

•$2.5 million of executive transition costs including accelerated amortization of unvested equity awards recognized during 2022; and

•$1.4 million increase in professional fees, marketing, transaction and other expenses.

A gain on the sale of real estate of $0.4 million was recognized in 2022 in connection with the release of escrow funds related to a property disposed of in a prior period. We recognized a gain on sale of real estate of $18.6 million in 2021 related to the sale of three properties and one property parcel.

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Interest income increased by $0.7 million to $1.1 million in the year ended December 31, 2022 from $0.4 million in the year ended December 31, 2021. The increase is primarily attributable to an increase in interest rates on our cash deposits.

Interest and debt expense increased by $1.0 million to $59.0 million in the year ended December 31, 2022 from $57.9 million in the year ended December 31, 2021. The increase is primarily attributable to:

•$4.3 million increase in interest expense in connection with the mortgage loans obtained for the acquisitions of Woodmore Towne Centre in December 2021 and The Shops at Riverwood in June 2022; and

•$3.1 million increase in interest expense due to higher rates on our variable rate loans and the refinancing of our mortgage loans at Plaza at Cherry Hill and Plaza at Woodbridge in the second quarter of 2022; offset by

•$6.4 million increase in capitalized interest expense due to an increase in active development, redevelopment and anchor repositioning projects.

Income tax expense increased by $1.8 million to $2.9 million in the year ended December 31, 2022 from $1.1 million in the year ended December 31, 2021. The increase is primarily attributable to the performance of our properties in Puerto Rico and final adjustments to state and local income taxes in 2021.

Comparison of the Year Ended December 31, 2021 to December 31, 2020

Discussions of 2020 items and comparisons between the year ended December 31, 2021 and 2020, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

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 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.

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 excluding 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.

Throughout this section, we have provided certain information on a “same-property” basis which includes the results of operations that were owned and operated for the entirety of the reporting periods being compared, which total 68 properties for the years ended December 31, 2022 and 2021. 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 or 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.

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Same-property NOI increased by $8.2 million, or 4.1%, for the year ended December 31, 2022 as compared to the year ended December 31, 2021. Same-property NOI, including properties in redevelopment, increased by $6.4 million, or 2.9%, for the year ended December 31, 2022 as compared to the year ended December 31, 2021. The comparability of results for the years ended December 31, 2022 and 2021 were impacted by the write-off and subsequent collection of rental revenues previously deemed uncollectible, as well as lease modifications executed in 2021.

The following table reconciles net income to NOI and same-property NOI for the years ended December 31, 2022 and 2021.

(1) Amount for the year ended December 31, 2021 includes accelerated amortization of $45.9 million of below-market intangible liabilities (classified within rental revenue in the consolidated statements of income and comprehensive income).

(2) NOI for the year ended December 31, 2022 includes $1.4 million of prior year real estate tax adjustments for the settlement of successful appeals.

(3) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.

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Funds From Operations

FFO applicable to diluted common shareholders for the year ended December 31, 2022 was $145.2 million compared to $180.3 million for the year ended December 31, 2021.

We calculate FFO in accordance with the National Association of Real Estate Investment Trusts’ (‘‘Nareit’’) definition. Nareit defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business, earnings from consolidated partially owned entities, 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.

The following table reflects the reconciliation of net income to FFO for the years ended December 31, 2022 and 2021.

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

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Liquidity and Capital Resources

Due to the nature of our business, 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’s ordinary taxable income each year. Our Board of Trustees declared a quarterly dividend of $0.16 per common share and OP unit for each of the four quarters in 2022, or an annual rate of $0.64. Historically, we have paid regular cash dividends; however, the timing, declaration, amount and payment of distributions to shareholders and unitholders of the Operating Partnership fall within the discretion of our Board of Trustees. Our Board of Trustees’ decisions regarding the payment of dividends depend on many factors, such as maintaining our REIT status, our financial condition, earnings, capital requirements, debt service obligations, limitations under our financing arrangements, industry practice, legal requirements, regulatory constraints, 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 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. Other sources of liquidity to fund cash requirements include proceeds from financings, equity offerings and asset sales. Additionally, we have an $800 million revolving credit agreement with certain financial institutions which has a maturity date of February 9, 2027 and includes two six-month extension options. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on our revolving credit agreement.

Our short-term cash requirements consist of normal recurring operating expenses, lease obligations, regular debt service requirements, general and 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. We have approximately $329 million of debt maturing within the next 12 months related to mortgage loans encumbering three of our properties and are actively exploring our options to refinance them.

At December 31, 2022, we had cash and cash equivalents, including restricted cash, of $128.8 million and no amounts drawn on our $800 million revolving credit agreement. These amounts are readily available to fund the debt obligations discussed above which are coming due within the next year.

Summary of Cash Flows

Cash and cash equivalents, including restricted cash, was $128.8 million at December 31, 2022, compared to $219.8 million as of December 31, 2021, a decrease of $91.1 million.

Our cash flow activities are summarized as follows:

Operating Activities

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

Net cash provided by operating activities for the year ended December 31, 2022 increased by $4.3 million as compared to December 31, 2021, due to new lease commencements and collection of previously billed and deferred amounts from 2021.

Investing Activities

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

Net cash used in investing activities for the year ended December 31, 2022, decreased by $159.2 million compared to December 31, 2021 due to a (i) $216.4 million decrease in cash used for acquisitions, offset by (ii) $36.5 million decrease in cash provided by the sale of properties and operating leases, and (iii) $20.7 million increase in cash used for real estate development and capital improvements.

The Company has 25 active development, redevelopment or anchor repositioning projects with total estimated costs of $216.0 million, of which $56.3 million has been incurred and $159.7 million remains to be funded as of December 31, 2022.

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The following summarizes capital expenditures presented on a cash basis for the years ended December 31, 2022 and 2021:

Financing Activities

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

Net cash used in financing activities for the year ended December 31, 2022, increased by $55.2 million from the year ended December 31, 2021 primarily due to (i) $80.2 million increase in debt repayments primarily related to the refinancing of the mortgage loans encumbering Plaza at Cherry Hill and Plaza at Woodbridge in 2022, (ii) $13.8 million decrease in proceeds from borrowings under mortgage loans, (iii) $7.3 million of deferred financing fees paid in 2022 in connection with the increase and extension of our line of credit under our revolving credit agreement and the refinancing of our loans at Plaza at Cherry Hill and Plaza at Woodbridge, and (iv) $4.6 million decrease in cash contributed by noncontrolling interests, offset by (v) $50.7 million decrease in distributions paid to shareholders and unitholders of the Operating Partnership for the declaration of a special dividend in the fourth quarter of 2020, paid in January 2021.

On June 23, 2022, in conjunction with the refinancing of the mortgage loan encumbering our property Plaza at Woodbridge, we entered into an interest rate cap agreement (the “Cap Agreement”) with a third party to limit the maximum SOFR of our floating rate debt to 3%. On the date of the Cap Agreement, we elected to designate cash flow hedge accounting for this derivative instrument. Refer to Note 3 and Note 9 in Part II, Item 8 of this Annual Report on Form 10-K for more information related to derivatives and hedging.

On August 9, 2022, we amended and restated our revolving credit agreement to, among other things, increase the available amount under the facility by $200 million to $800 million and extend the maturity date to February 9, 2027, with two six-month extension options. Borrowings under the credit facility may be used to finance pre-development costs, development costs, acquisitions, working capital, equity investments, debt investments, capital expenditures and repayment of indebtedness, to pay fees and expenses incurred in connection with the amended and restated revolving credit agreement and for other general corporate purposes. As of December 31, 2022, there were no amounts drawn on the facility. Refer to Note 6 in Part II, Item 8 of this Annual Report on Form 10-K for more information related to our revolving credit agreement.

On August 15, 2022, we entered into an equity distribution agreement with various sales agents, 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 (the “ATM Program”). The ATM Program replaces the Company’s previous at-the-market program established in June 2021. As of December 31, 2022 we have not issued any common shares under the ATM Program. Refer to Note 14, Equity and Noncontrolling Interest, in Part II, Item 8 of this Annual Report on Form 10-K for more information related to this program.

Contractual Obligations

We have contractual obligations related to our mortgage loans that are both fixed and variable. Our variable rate loans bear interest at a floating rate based on LIBOR, SOFR and the Prime Rate plus an applicable margin ranging from 0.5% to 2.26%. When LIBOR is discontinued, the interest rates of our LIBOR-indexed debt following such event will be based on either alternate base rates, such as SOFR, or agreed upon replacement rates. We do not anticipate that the discontinuation of LIBOR will impact our ability to borrow or maintain already outstanding borrowings, but it could result in higher interest rates and accordingly, higher costs of borrowing to us. Further information on our mortgage loans can be found in Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. In addition, we have contractual obligations for certain properties that are subject to long-term ground and building leases where a third party owns and has leased the underlying land to us. We also have non-cancelable operating leases pertaining to office space from which we conduct our business. Below is a summary of our contractual obligations as of December 31, 2022:

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(1) Includes interest and principal payments. Interest on variable rate debt is computed using rates in effect as of December 31, 2022. See Note 6 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information.

(2) See Note 8 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information.

Additional contractual obligations that have been excluded from this table are as follows:

•Obligations related to construction and development contracts, since amounts are not fixed or determinable. Such contracts will generally be due over the next two years;

•Obligations related to maintenance contracts, since these contracts typically can be canceled upon 30 to 60 days’ notice without penalty;

•Obligations related to employment contracts with certain executive officers, since all agreements are subject to cancellation by either the Company or the executive without cause upon notice; and

•Recorded debt premiums or discounts that are not obligations.

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

Cybersecurity

Cybersecurity is an integral part of the Board of Trustees’ and the Audit Committee’s risk analysis and discussions with management. As we see increased reliance on information technology in the workplace and our business operations, and a shift to remote and hybrid work schedules, Urban Edge has employed several measures to mitigate cyber risks.

In addition to a dedicated information technology and cybersecurity team monitoring our daily operations, the Company engages an independent third-party cybersecurity team for advisory services and penetration testing. We also have a Cyber Risk Committee which works in conjunction with the Computer Incident Response Team (“CIRT”) to develop strategies to mitigate risks and to address any cyber issues that may arise. The Cyber Risk Committee meets quarterly to review emerging threats, controls, and procedures.

We utilize a risk-based approach following the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (CSF), and Microsoft best practices. Our policies and procedures are reviewed and updated annually by the Cyber Risk Committee and incorporate third-party assessments to benchmark ourselves against industry standards. The Company utilizes advanced endpoint protection, firewalls, intrusion detection and prevention, threat intelligence, security event logging and correlation, and backup and redundancy systems. The Company also has cybersecurity coverage incorporated in its insurance policies.

We apprise employees of emerging risks and require them to undergo quarterly security awareness trainings. Additionally, we conduct internal phishing and other exercises to gauge the effectiveness of the trainings and assess the need for additional training.

Termination of Management Agreements with Vornado

In connection with the Company’s spin-off from Vornado Realty Trust (“Vornado”) in January 2015, the Company and Vornado entered into management agreements under which the Company provided management, development, leasing and other services to certain properties owned by Vornado and its affiliates, including Interstate Properties (“Interstate”), a partnership in which Steven Roth, Chairman of the Board and Chief Executive Officer of Vornado and a member of our Board of Trustees, is the managing general partner, and Alexander’s, Inc., a company that Vornado owns a material interest in. Effective March 31, 2022, the Company and Vornado agreed to terminate these management agreements.

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