Revenues Funds From Operations Common & Class A Dividends Paid
$120
$110
$130
(In Millions)
$140
$150
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2022 Annual Report
53 consecutive years of uninterrupted dividends.
URSTADT BIDDLE PROPERTIES INC.
Urstadt Biddle Properties Inc. is a self-administered
publicly held real estate investment trust providing
investors with a means of participating in the
ownership of income-producing properties.
Our investment properties consist primarily of
neighborhood and community shopping centers
in the metropolitan New York tri-state area outside
of the City of New York.
Class A Common Shares, Common Shares, Series H
Preferred Shares and Series K Preferred Shares of the
Company trade on the New York Stock Exchange under
the symbols “UBA,” “UBP,” “UBPPRH” and “UBPPRK.”
CONTENTS
Selected Financial Data
1
Letter to Our Stockholders
2
Map of Investment Properties
8
Investment Portfolio
12
Financials
13
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
42
Directors and Officers
68
TOTAL REVENUES
(In thousands)
FUNDS FROM OPERATIONS
(In thousands)
COMBINED DIVIDENDS PAID
ON COMMON AND CLASS A
COMMON SHARES (In thousands)
’18
’19
’20
’18
’19
’20
’18
’19
’20
’21
’21
’21
’22
’22
’22
SELECTED FINANCIAL DATA
(Amounts in thousands, except share data)
Year Ended October 31,
2022
2021
2020
2019
2018
Balance Sheet Data:
Total Assets
$997,326
$973,852
$1,010,179
$1,072,304
$1,008,233
Revolving Credit Lines and Unsecured Term Loan
$ 30,500
$ —
$ 35,000
$ —
$ 28,595
Mortgage Notes Payable and Other Loans
$302,316
$296,449
$ 299,434
$ 306,606
$ 293,801
Preferred Stock Called for Redemption
$ —
$ —
$ —
$ 75,000
$ —
Operating Data:
Total Revenues
$143,103
$135,581
$ 126,745
$ 136,882
$ 135,352
Total Expenses and Payments to
Noncontrolling Interests
$105,802
$101,716
$ 100,604
$ 101,630
$ 100,320
Income from Continuing Operations
$ 43,274
$ 50,928
$ 26,070
$ 41,613
$ 42,183
Per Share Data:
Net Income Applicable to Common and Class A
Common Stockholders –
Basic:
Class A Common Stock
$ .69
$.89
$.23
$ .59
$ .68
Common Stock
$ .62
$.80
$.20
$ .53
$ .61
Net Income Applicable to Common and Class A
Common Stockholders –
Diluted:
Class A Common Stock
$ .68
$ .88
$ .22
$ .58
$ .67
Common Stock
$ .61
$ .79
$ .20
$ .52
$ .60
Cash Dividends Per Share on:
Class A Common Stock
$ .95
$ .74
$ .77
$1.10
$1.08
Common Stock
$.858
$.664
$.688
$ .98
$ .96
Other Data:
Net Cash Flow Provided by (Used in):
Operating Activities
$ 77,751
$ 73,669
$ 61,883
$ 72,317
$ 71,584
Investing Activities
$(44,232)
$ (445)
$(18,820
$(14,739
$(20,540
Financing Activities
$(42,610)
$(89,962)
$(96,347
$ 26,216
$(49,433
Funds from Operations (Note)
$ 56,545
$ 52,251
$ 45,172
$51,955
$ 55,171
1
)
)
)
)
)
Note: The Company has adopted the definition of Funds from Operations (FFO) suggested by the National Association of Real Estate Investment Trusts (NAREIT) and defines FFO as net income
(computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of properties plus real estate related depreciation and amortization and after
adjustments for unconsolidated joint ventures. For a reconciliation of net income and FFO, see Management’s Discussion and Analysis of Financial Condition and Results of Operations on page 42
and “Non-GAAP Financial Measures Reconciliations” at the end of this report. FFO does not represent cash flows from operating activities in accordance with generally accepted accounting
principles and should not be considered an alternative to net income as an indicator of the Company’s operating performance.
2
These are challenging times for investors, but Urstadt Biddle Properties
Inc. is well-positioned to continue to succeed. We are not immune from the
effects of high inflation, rapidly-rising interest rates, labor shortages and a slowing
economy, and we understand that the average American citizen is worried about
making ends meet. However, despite these challenges, we believe that our company
is a smart long-term investment. Our strategy is sound, our results are strong, and
our future is bright.
• For over 30 years, we have carefully acquired and redeveloped a unique,
irreplaceable portfolio of well-located and primarily grocery-anchored
shopping centers in the wealthy suburban markets surrounding New York City.
87% of the gross leasable area in our portfolio is comprised of properties
anchored by a grocery store, drug store or wholesale club.
• Securing a location to profitably build a new grocery store in our market
is extremely difficult, given the lack of land available for development,
challenging approval processes and increased labor and material costs.
Thus, we believe that barriers to new competition exist in our markets
that make our portfolio increasingly valuable.
• In fiscal 2022, our year-over-year gross revenues rose 5% to $143 million, our
highest ever.
• In fiscal 2022, our year-over-year Funds From Operations (FFO)1 rose 8% to
$56.5 million or $1.47 per diluted Class A Common share, our highest ever.
• In fiscal 2022, the percentage of our portfolio leased rose 1.1% to 93%, inching
closer to our twenty-year historical average of 95%.
• In December 2022, we announced an approximately 5% increase in the
dividends on our Common and Class A Common shares.
• Our leverage ratio (debt: total assets) is 33%, one of the lowest of any comparable
retail REIT, we benefit from low, fixed-rate debt, and we have no mortgages
maturing until 2024.
LETTER TO OUR STOCKHOLDERS
CHRISTOPHER PEREZ
Vice President and Controller
JOHN T. HAYES
Senior Vice President, Chief
Financial Officer and Treasurer
1 A reconciliation of GAAP net income to FFO is provided in the “Non-GAAP Financial Measures Reconciliations” at the
end of this Annual Report.
3
MIYUN SUNG
Senior Vice President, Chief
Legal Officer and Secretary
• The pandemic and social issues have accelerated a migration of people from
NYC to the surrounding suburbs where our properties are located, and
a large portion of NYC office workers are now permitted to work remotely
at least part of the time. The resulting increase in daytime population means
that people are spending more money at our properties.
• We have a seasoned team of professionals managing our business and a
highly-experienced Board of Directors. We know our markets and business
better than anyone, and we are wholly-focused on our portfolio and growing
shareholder value.
E-COMMERCE
The debate over the relevance and viability of brick-and-mortar retail has largely
been settled. Physical stores are a required component of the successful
omni-channel business model that many retailers now follow, and physical stores
are obviously a key component of the business model for restaurant, medical,
DeCICCO’S PLAZA, EASTCHESTER, NEW YORK
4
service and entertainment uses. Notably, Amazon recently terminated leases for
millions of square feet of warehouse space and laid off thousands of employees,
while allowing many newly-built Amazon Fresh grocery stores to sit empty as the
company apparently reassesses its foray into the highly-competitive brick-and-
mortar grocery store business.
LEASING AND DEVELOPMENT
Our portfolio continues to recover well from the pandemic, which caused overall
occupancy to fall approximately 3% in 2020. Although some of our tenants are
still struggling, the vast majority are paying full rent and have figured out how to
conduct business in a post-pandemic world. The difficulties of the past few years
weeded out many weaker retailers, and those that survived are in better financial
condition. In 2022, we signed 172 renewal leases for 752,000 square feet (16.4%
of our consolidated portfolio) at an average rent increase of 1.8%, and we signed
LINDA LACEY
Senior Vice President
Director of Leasing
JOSEPH ALLEGRETTI
Vice President
Leasing
POMPTON LAKES TOWN SQUARE, POMPTON LAKES, NEW JERSEY
5
80 new leases for 190,000 square feet, thus increasing total occupancy to 93%.
We have a robust leasing pipeline, and we are hopeful of returning this year to our
twenty-year historical average occupancy rate of 95%.
This past year we focused on the work needed to deliver vacant spaces to our new
tenants. We also completed a number of façade renovations, and we imminently
expect to complete the development of a wholly-owned 75,000 square foot
self-storage facility at our Pompton Lakes, NJ property, which will be managed
by Extra Space Storage.
ACQUISITIONS AND INVESTMENT
We purchased two properties in 2022, Shelton Square Shopping Center and an
adjacent gas station parcel, both in Shelton, CT (Fairfield County). Shelton Square
is a 187,000 square foot center anchored by a 67,000 square foot Stop & Shop.
An interesting aspect of this acquisition is that, in addition to its store, Stop &
Shop leased a 70,000 square foot space under an old, below-market lease that it
assumed years ago from Bradlees, a now-defunct department store chain. As 24,000
square feet within the former Bradlees space remained vacant and Stop & Shop had
insufficient remaining lease term to secure a new subtenant, we concluded a deal
with Stop & Shop in December 2022 to take back the entire former Bradlees space.
We simultaneously entered into a new lease with HomeGoods for the vacancy. This
transaction will result in an improved return on our investment in Shelton Square
while improving the tenant mix, and we expect HomeGoods to open in summer 2023.
The acquisitions environment in our market for grocery-anchored shopping
centers is currently very difficult, largely as a result of uncertainty with respect
to inflation and the interest rate environment. Many sellers of grocery-anchored
shopping centers seem to believe that rising rates are temporary and will soon revert
back to historic lows, leading them to value their properties at 5%+ cap rates.
With the 10-year Treasury yielding close to 4%, however, it is difficult to justify
buying properties at those prices. As a result of this bid-ask disconnect, transaction
opportunities have been few, and we deem it prudent to remain disciplined and
focused on our existing portfolio.
NICHOLAS CAPUANO
Vice President
Real Estate Counsel
SUZANNE MOORE
Vice President and Director of
Accounts Receivable
ANDREW ALBRECHT
Vice President
Director of
Management and Construction
JAMES M. ARIES
Senior Vice President
Director of Acquisitions
6
Given our knowledge of the value of our portfolio, we determined in the fourth
quarter of fiscal 2022 that the stock market was not reflective of the value of our
underlying assets. Therefore, we took the opportunity to repurchase approximately
3% of our combined outstanding Common and Class A Common shares. The
average cost we paid was more than 10% below our fiscal year-end share prices.
ENVIRONMENTAL SUSTAINABILITY
We continue to install solar projects on rooftops at our properties, add electric
vehicle charging stations in our parking lots and convert parking lot and building
lighting to LED. As of fiscal year-end, we had solar projects at 18 properties
and EV charging stations at 20 properties, with additional solar projects and EV
charging stations currently under development. In total, our existing solar projects
produced approximately 24 million kilowatt-hours (kWh) of electricity from our
first installation in 2010 through June 2022. We also foresee future opportunities
to add battery storage facilities for electricity at our properties and are in the process
of obtaining municipal approvals to do this where the right specifications exist.
STEPHAN A. RAPAGLIA
Senior Vice President, Chief
Operating Officer, Real Estate
Counsel and Assistant Secretary
SHELTON SQUARE, SHELTON, CONNECTICUT
7
OUTLOOK
We feel we are in a good place with the wind at our backs. The fundamentals
of our business are good. Demand for space in our shopping centers is rising
and absorption of space is positive. Supply is constrained as it is very difficult
to build new properties that will compete with our existing properties,
and we currently own over 500 acres of land improved with retail properties.
In some instances, our land, over time, may have more value for multi-family
development opportunities than for retail uses, and we are exploring greater
use flexibility with certain forward-thinking municipalities. We have a solid team
of long-term dedicated employees and a board of directors which understands
our business, and we are confident in the strength of our portfolio and optimistic
about the prospects of grocery-anchored retail real estate.
WILLING L. BIDDLE
President and Chief Executive Officer
CHARLES D. URSTADT
Chairman
January 2023
CHARLES D. URSTADT
WILLING L. BIDDLE
FAIRFIELD
LITCHFIELD
NEW HAVEN
PASSAIC
BERGEN
UNION
MORRIS
ESSEX
ROCKLAND
WESTCHESTER
PUTNAM
SUFFOLK
LONG ISLAND
CONNECTICUT
NEW JERSEY
NEW YORK
MASSACHUSETTS
1
2
3
4
5
10
12
17
16
14
15
6
13
20
19
22
21
18
7
8
35
36
34
37
38
39
33
32
28
30
41
29
31
27
26
24
25
42
23
9
40
11
8
Kings Shopping Center, Greenwich
Newfield Green, Stamford
Cos Cob Commons, Greenwich
Greenwich Commons, Greenwich
970 High Ridge Road, Stamford
Corporate Headquarters, Greenwich
3
2
3
2
3
2
1
Ridgeway Shopping Center, Stamford
Cos Cob Plaza, Greenwich
High Ridge Shopping Center,
Stamford
2
3
NEW HAMPSHIRE
Fairfield Plaza, New Milford
9
470 Main Street, Ridgefield
Goodwives Shopping Center, Darien
Veterans Plaza, New Milford
New Milford Plaza, New Milford
Orange Meadows Shopping Center,
Orange
The Dock, Stratford
Carmel ShopRite Center, Carmel
Shelton Square, Shelton
Aldi Square, Derby
Fairfield Centre, Fairfield
Ridgefield Center, Ridgefield
Danbury Square, Danbury
Airport Plaza, Danbury
7
6
10
8
7
5
12
The Hub Center, Bethel
9
8
6
4
14
11
13
8
10
Arcadian Shopping Center, Ossining
Village Commons, Katonah
Towne Centre Shopping Center,
Somers
Chilmark Shopping Center,
Briarcliff Manor
Staples Plaza, Yorktown Heights
Somers Commons, Somers
76 N Main Street, New City
Lakeview Shopping Center,
Brewster
Heritage 202 Center, Somers
Midway Shopping Center, Scarsdale
Tanglewood Shopping Center,
Yonkers
M&T Bank, Bronxville
DeCicco’s Plaza, Eastchester
Eastchester Plaza, Eastchester
Pelham Manor Plaza, Pelham
Harrison Market Square, Harrison
Orangetown Shopping Center,
Orangeburg
25
24
21
18
16
25
26
23
20
17
16
25
26
22
19
16
15
Putnam Plaza, Carmel
14
11
Midland Park Shopping Center,
Midland Park
Chestnut Ridge Shopping Center,
Montvale
Gateway Plaza, Riverhead
Rite Aid, Waldwick
Ferry Plaza, Newark
Emerson Shopping Plaza, Emerson
Cedar Hill Shopping Center, Wyckoff
Village Shopping Center,
New Providence
Waldwick Plaza, Waldwick
Bloomfield Crossing, Bloomfield
Valley Ridge Shopping Center,
Wayne
Van Houten Plaza, Passaic
H-Mart Plaza, Fort Lee
Washington Commons, Dumont
McLean Plaza, Yonkers
Meadtown Shopping Center,
Kinnelon
Pompton Lakes Town Square,
Pompton Lakes
Boonton Acme Shopping Center,
Boonton
40
27
37
34
32
30
39
42
34
29
38
41
35
33
31
28
36
32
MAP LOCATION SQUARE FEET
PRINCIPAL TENANT
PROPERTY TYPE
CONNECTICUT
Fairfield County, CT
3 Stamford
374,000
Stop & Shop Supermarket
Shopping center
10 Stratford
281,000
Stop & Shop Supermarket/
Shopping center
BJ’S Wholesale Club
7 Danbury
194,000
Christmas Tree Shops
Shopping center
11 Shelton
189,000
Stop & Shop Supermarket
Shopping center
4 Darien
96,000
Stop & Shop Supermarket
Shopping center
3 Stamford
87,000
Trader Joe’s Supermarket
Shopping center
3 Stamford
74,000
Grade A Market
Shopping center
6 Ridgefield
62,000
Keller Williams
Street retail
5 Fairfield
62,000
Marshalls
Shopping center
1 Greenwich
58,000
UBP
5 Office buildings
2 Cos Cob
48,000
CVS
Retail/Office
Westport
40,000
BevMax
Shopping center
2 Old Greenwich
39,000
Kings Supermarket
Retail/Office
7 Danbury
33,000
Buffalo Wild Wings
Shopping center
9 Bethel
31,000
Rite Aid/
Shopping center
La Placita Supermarket
3 Stamford
27,000
FedEx
Shopping center
6 Ridgefield
23,000
William Pitt
Retail/Office
2 Cos Cob
15,000
Veterinary Emergency
Retail/Office
2 Greenwich
10,000
Wells Fargo Bank
Shopping center
Old Greenwich
8,000
CVS
Retail
Stamford
4,000
Chase Bank
Bank
1,755,000
Litchfield County, CT
8 New Milford
235,000
Walmart/Stop & Shop
Shopping center
Supermarket
8 New Milford
81,000
Big Y Supermarket
Shopping center
8 New Milford
72,000
Staples
Shopping center
388,000
New Haven County, CT
12 Orange
77,000
Trader Joe’s Supermarket/
Shopping center
TJ Maxx
13 Derby
38,000
Aldi Supermarket
Shopping center
115,000
NEW YORK
Westchester County, NY
26 Scarsdale
244,000
ShopRite Supermarket
Shopping center
19 Ossining
137,000
Stop & Shop Supermarket
Shopping center
16 Somers
135,000
Goodwill
Shopping center
18 Yorktown
123,000
Staples
Shopping center
16 Somers
80,000
CVS
Shopping center
25 Eastchester
70,000
DeCicco’s Supermarket
Shopping center
27 Yonkers
58,000
Acme Supermarket
Shopping center
20 Briarcliff Manor
47,000
CVS
Shopping center
Rye
39,000
A&S Deli
Street retail
(4 buildings)
Ossining
29,000
Westchester Community
Shopping center
College
17 Katonah
28,000
Squires Family Clothing
Retail/Office
and Footwear
26 Yonkers
27,000
AutoZone
Shopping center
MAP LOCATION
SQUARE FEET
PRINCIPAL TENANT
PROPERTY TYPE
23
Harrison
26,000
Harrison Market
Shopping center
24
Pelham
25,000
Manor Market
Shopping center
25
Eastchester
24,000
CVS
Shopping center
25
Bronxville/
19,000
M&T Bank/
Retail
Yonkers
JP Morgan Chase
(4 buildings)
16
Somers
19,000
Putnam County Savings Bank
Shopping center
1,130,000
Putnam County, NY
14
Carmel
189,000
Tops Supermarket
Shopping center
15
Brewster
174,000
Acme Supermarket
Shopping center
14
Carmel
145,000
ShopRite Supermarket
Shopping center
508,000
Suffolk County, NY
42
Riverhead
211,000
Walmart/Applebee’s
Shopping center
Rockland County, NY
22
Orangeburg
74,000
CVS
Shopping center
21
New City
3,000
Putnam County
Retail
Savings Bank
(1 building)
77,000
Ulster County, NY
Kingston
3,000
Marine’s Taste of Italy
Net leased
property
NEW JERSEY
Bergen County, NJ
34
Midland Park
130,000
Kings Supermarket
Shopping center
31
Emerson
93,000
ShopRite Supermarket
Shopping center
33
Montvale
76,000
The Fresh Market
Shopping center
Supermarket
29
Dumont
74,000
Stop & Shop Supermarket
Shopping center
34
Wyckoff
43,000
Walgreens
Shopping center
32
Waldwick
27,000
United States Post Office
Shopping center
32
Waldwick
20,000
Rite Aid
Retail—Single
tenant
28
Fort Lee
7,000
H-Mart Supermarket
Retail
supermarket—
Single tenant
470,000
Passaic County, NJ
38
Wayne
103,000
Whole Foods Market
Shopping center
36
Pompton Lakes
94,000
Planet Fitness
Shopping center
30
Passaic
37,000
Dollar Tree/Family Dollar
Shopping center
234,000
Essex County, NJ
40
Newark
108,000
Seabra Supermarket
Shopping center
39
Bloomfield
59,000
Walgreens/Food World
Shopping center
Supermarket
167,000
Morris County, NJ
35
Kinnelon
77,000
Marshalls
Shopping center
37
Boonton
63,000
Acme Supermarket
Shopping center
140,000
Union County, NJ
41
New Providence 109,000
Acme Supermarket
Shopping center
INVESTMENT PORTFOLIO (as of January 11, 2023)
UBP owns or has equity interests in 77 properties which
total 5,307,000 square feet.
12
Urstadt Biddle Properties inc.
13
financials
contents
Consolidated Balance Sheets at October 31, 2022 and 2021 . . . . . . . . . 14
Consolidated Statements of Income for each of the
three years in the period ended October 31, 2022 . . . . . . . . . . . . . . 15
Consolidated Statements of Comprehensive Income for each
of the three years in the period ended October 31, 2022 . . . . . . . . 16
Consolidated Statements of Cash Flows for each of the
three years in the period ended October 31, 2022 . . . . . . . . . . . . . . 17
Consolidated Statements of Stockholders’ Equity
for each of the three years in the period
ended October 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . 20
Report of Independent Registered Public Accounting Firm . . . . . . . . 40
Management’s Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . 42
Management’s Report on Internal Control
over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Report of Independent Registered Public Accounting Firm
on Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . 63
Quantitative and Qualitative Disclosures about Market Risk . . . . . . . 64
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 65
Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Non-GAAP Financial Measures Reconciliations . . . . . . . . . . . . . . . . . . 66
FINANCIAL STATEMENTS
14
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
October 31,
2022
2021
ASSETS
Real Estate Investments:
Real Estate—at cost
Less: Accumulated depreciation
Investments in and advances to unconsolidated joint ventures
Cash and cash equivalents
Tenant receivables
Prepaid expenses and other assets
Deferred charges, net of accumulated amortization
Total Assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Revolving credit lines
Mortgage notes payable and other loans
Accounts payable and accrued expenses
Deferred compensation—officers
Other liabilities
Total Liabilities
Redeemable Noncontrolling Interests
Commitments and Contingencies
Stockholders’ Equity:
6. 25% Series H Cumulative Preferred Stock (liquidation preference of $25 per share);
4,600,000 shares issued and outstanding
5. 875% Series K Cumulative Preferred Stock (liquidation preference of $25 per share);
4,400,000 shares issued and outstanding
Excess Stock, par value $0. 01 per share; 20,000,000 shares authorized; none issued
and outstanding
Common Stock, par value $0. 01 per share; 30,000,000 shares authorized; 10,247,072 and
10,153,689 shares issued and outstanding
Class A Common Stock, par value $0. 01 per share; 100,000,000 shares authorized;
28,963,433 and 30,073,807 shares issued and outstanding
Additional paid in capital
Cumulative distributions in excess of net income
Accumulated other comprehensive income (loss)
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity
The accompanying notes to consolidated financial statements are an integral part of these statements.
FINANCIAL STATEMENTS
$1,148,382
(278,605)
869,777
29,027
898,804
24,057
23,806
19,175
8,010
$ 973,852
$ —
296,449
11,443
62
22,599
330,553
67,395
115,000
110,000
—
103
301
528,713
(170,493)
(7,720)
575,904
$ 973,852
$1,190,356
(303,488)
886,868
29,586
916,454
14,966
22,889
34,559
8,458
$ 997,326
$ 30,500
302,316
5,399
54
23,205
361,474
61,550
115,000
110,000
—
104
290
511,471
(179,754)
17,191
574,302
$ 997,326
Urstadt Biddle Properties inc.
15
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Year Ended October 31,
2022
2021
2020
Revenues
Lease income
Lease termination
Other
Total Revenues
Expenses
Property operating
Property taxes
Depreciation and amortization
General and administrative
Directors’ fees and expenses
Total Operating Expenses
Operating Income
Non-Operating Income (Expense):
Interest expense
Equity in net income from unconsolidated joint ventures
Gain on sale of marketable securities
Interest, dividends and other investment income
Gain (loss) on sale of properties
Net Income
Noncontrolling interests:
Net income attributable to noncontrolling interests
Net income attributable to Urstadt Biddle Properties Inc.
Preferred stock dividends
Net Income Applicable to Common and Class A Common Stockholders
Basic Earnings Per Share:
Per Common Share
Per Class A Common Share
Diluted Earnings Per Share:
Per Common Share
Per Class A Common Share
The accompanying notes to consolidated financial statements are an integral part of these statements.
$120,941
705
5,099
126,745
19,542
23,464
29,187
10,643
373
83,209
43,536
(13,508)
1,433
258
398
(6,047)
26,070
(3,887)
22,183
(13,650)
$ 8,533
$ 0. 20
$ 0. 23
$ 0. 20
$ 0. 22
$137,660
721
4,722
143,103
25,124
23,700
29,799
9,934
500
89,057
54,046
(13,175)
1,397
—
239
767
43,274
(3,570)
39,704
(13,650)
$ 26,054
$ 0.62
$ 0.69
$ 0.61
$ 0.68
$ 130,364
967
4,250
135,581
22,938
23,674
29,032
8,985
355
84,984
50,597
(13,087)
1,323
—
231
11,864
50,928
(3,645)
47,283
(13,650)
$ 33,633
$ 0. 80
$ 0. 89
$ 0. 79
$ 0. 88
FINANCIAL STATEMENTS
16
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Year Ended October 31,
2022
2021
2020
Net Income
Other comprehensive income:
Change in unrealized gain (loss) on interest rate swaps
Change in unrealized gain (loss) on interest rate swaps—equity investees
Total comprehensive income
Comprehensive income attributable to noncontrolling interests
Total comprehensive income attributable to Urstadt Biddle Properties Inc.
Preferred stock dividends
Total comprehensive income applicable to Common
and Class A Stockholders
The accompanying notes to consolidated financial statements are an integral part of these statements.
$ 50,928
7,080
906
58,914
(3,645)
55,269
(13,650)
$ 41,619
$ 43,274
22,077
2,834
68,185
(3,570)
64,615
(13,650)
$ 50,965
$ 26,070
(6,546)
(710)
18,814
(3,887)
14,927
(13,650)
$ 1,277
Urstadt Biddle Properties inc.
17
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended October 31,
2022
2021
2020
Cash Flows from Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Straight-line rent adjustment
Provisions for tenant credit losses
(Gain) on sale of marketable securities
Restricted stock compensation expense and other adjustments
Deferred compensation arrangement
(Gain) loss on sale of properties
Equity in net (income) of unconsolidated joint ventures
Distributions of operating income from unconsolidated joint ventures
Changes in operating assets and liabilities:
Tenant receivables
Accounts payable and accrued expenses
Other assets and other liabilities, net
Net Cash Flow Provided by Operating Activities
Cash Flows from Investing Activities:
Acquisitions of real estate investments
Deposits on acquisition of real estate investments
Return of deposits on real estate investments
Improvements to properties and deferred charges
Net proceeds from sale of properties
Purchases of securities available for sale
Proceeds from the sale of available for sale securities
Investment in note receivable
Return of capital from unconsolidated joint ventures
Net Cash Flow (Used in) Investing Activities
Cash Flows from Financing Activities:
Dividends paid—Common and Class A Common Stock
Dividends paid—Preferred Stock
Amortization payments on mortgage notes payable
Proceeds from mortgage note payable and other loans
Repayment of mortgage notes payable and other loans
Proceeds from revolving credit line borrowings
Sales of additional shares of Common and Class A Common Stock
Repayments on revolving credit line borrowings
Acquisitions of noncontrolling interests
Distributions to noncontrolling interests
Repurchase of shares of Class A Common Stock
Payment of taxes on shares withheld for employee taxes
Net proceeds from issuance of Preferred Stock
Redemption of preferred stock
Net Cash Flow (Used in) Financing Activities
Net Increase/(Decrease) In Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
The accompanying notes to consolidated financial statements are an integral part of these statements.
$ 50,928
29,032
2,396
3,540
—
3,909
41
(11,864)
(1,323)
1,323
(3,796)
1,006
(1,523)
73,669
—
(10)
500
(15,463)
16,707
(955)
—
(1,738)
514
(445)
(29,025)
(13,650)
(6,888)
39,238
(34,645)
—
148
(35,000)
(5,126)
(3,645)
(1,049)
(320)
—
—
(89,962)
(16,738)
40,795
$ 24,057
$ 26,070
29,187
(2,641)
6,244
(258)
5,448
(33)
6,047
(1,433)
1,433
(6,715)
609
(2,075)
61,883
—
(1,030)
530
(22,336)
3,732
(6,983)
7,240
—
27
(18,820)
(30,018)
(14,188)
(7,089)
—
—
35,000
149
—
(758)
(3,887)
—
(573)
17
(75,000)
(96,347)
(53,284)
94,079
$ 40,795
$ 43,274
29,799
(241)
23
—
3,677
(7)
(767)
(1,397)
1,397
1,135
691
167
77,751
(35,671)
—
—
(15,572)
4,399
—
—
409
2,203
(44,232)
(37,263)
(13,650)
(7,389)
46,000
(32,412)
40,500
197
(10,000)
(3,897)
(3,570)
(20,536)
(590)
—
—
(42,610)
(9,091)
24,057
$ 14,966
FINANCIAL STATEMENTS
18
Balances—October 31, 2019
Net income applicable to Common and Class A common stockholders
Change in unrealized (loss) on interest rate swap
Cash dividends paid:
Common stock ($0. 6875 per share)
Class A common stock ($0. 77 per share)
Issuance of shares under dividend reinvestment plan
Shares issued under restricted stock plan
Shares withheld for employee taxes
Forfeiture of restricted stock
Restricted stock compensation and other adjustment
Adjustments to redeemable noncontrolling interests
Balances—October 31, 2020
Net income applicable to Common and Class A common stockholders
Change in unrealized gain (loss) on interest rate swap
Cash dividends paid:
Common stock ($0. 664 per share)
Class A common stock ($0. 74 per share)
Issuance of shares under dividend reinvestment plan
Shares issued under restricted stock plan
Shares withheld for employee taxes
Forfeiture of restricted stock
Repurchase of Common and Class A Common stock
Restricted stock compensation and other adjustment
Adjustments to redeemable noncontrolling interests
Balances—October 31, 2021
Net income applicable to Common and Class A common stockholders
Change in unrealized gains on interest rate swap
Cash dividends paid:
Common stock ($0. 858 per share)
Class A common stock ($0. 95 per share)
Issuance of shares under dividend reinvestment plan
Shares issued under restricted stock plan
Shares withheld for employee taxes
Forfeiture of restricted stock
Repurchase of Common and Class A Common stock
Restricted stock compensation and other adjustments
Adjustments to redeemable noncontrolling interests
Balances—October 31, 2022
Issued
4,600,000
—
—
—
—
—
—
—
—
—
—
4,600,000
—
—
—
—
—
—
—
—
—
—
—
4,600,000
—
—
—
—
—
—
—
—
—
—
—
4,600,000
Issued
4,400,000
—
—
—
—
—
—
—
—
—
—
4,400,000
—
—
—
—
—
—
—
—
—
—
—
4,400,000
—
—
—
—
—
—
—
—
—
—
—
4,400,000
Amount
$115,000
—
—
—
—
—
—
—
—
—
—
115,000
—
—
—
—
—
—
—
—
—
—
—
115,000
—
—
—
—
—
—
—
—
—
—
—
$115,000
Amount
$110,000
—
—
—
—
—
—
—
—
—
—
110,000
—
—
—
—
—
—
—
—
—
—
—
110,000
—
—
—
—
—
—
—
—
—
—
—
$110,000
6. 25% Series H
Preferred Stock
5. 875% Series K
Preferred Stock
The accompanying notes to consolidated financial statements are an integral part of these statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Urstadt Biddle Properties inc.
19
Issued
9,963,751
—
—
—
—
4,451
105,450
—
—
—
—
10,073,652
—
—
—
—
3,341
105,850
—
—
(29,154)
—
—
10,153,689
—
—
—
—
3,600
109,500
—
—
(19,717)
—
—
10,247,072
Issued
29,893,241
—
—
—
—
6,837
120,800
(23,873)
(700)
—
—
29,996,305
—
—
—
—
5,355
125,800
(23,249)
(1,250)
(29,154)
—
—
30,073,807
—
—
—
—
7,538
149,000
(27,680)
(36,300)
(1,202,932)
—
—
28,963,433
$520,988
—
—
—
—
149
(2)
(573)
—
5,465
—
526,027
—
—
—
—
148
(2)
(319)
—
(1,049)
3,908
—
528,713
—
—
—
—
197
(2)
(590)
—
(20,524)
3,677
—
$511,471
$ (8,451)
—
(7,256)
—
—
—
—
—
—
—
—
(15,707)
—
7,987
—
—
—
—
—
—
—
—
—
(7,720)
—
24,911
—
—
—
—
—
—
—
—
—
$ 17,191
Amount
$101
—
—
—
—
—
1
—
—
—
—
102
—
—
—
—
—
1
—
—
—
—
—
103
—
—
—
—
—
1
—
—
—
—
—
$104
Amount
$299
—
—
—
—
—
1
—
—
—
—
300
—
—
—
—
—
1
—
—
—
—
—
301
—
—
—
—
—
1
—
—
(12)
—
—
$290
$(158,213)
8,533
—
(6,923)
(23,095)
—
—
—
—
—
15,047
(164,651)
33,633
—
(6,756)
(22,269)
—
—
—
—
—
—
(10,450)
(170,493)
26,054
—
(8,805)
(28,458)
—
—
—
—
—
—
1,948
$(179,754)
$579,724
8,533
(7,256)
(6,923)
(23,095)
149
—
(573)
—
5,465
15,047
571,071
33,633
7,987
(6,756)
(22,269)
148
—
(319)
—
(1,049)
3,908
(10,450)
575,904
26,054
24,911
(8,805)
(28,458)
197
—
(590)
—
(20,536)
3,677
1,948
$574,302
Common
Stock
Class A
Common Stock
Additional
Paid In
Capital
Cumulative
Distributions
In Excess of
Net Income
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION, BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Business
Urstadt Biddle Properties Inc. (“Company”), a
Maryland Corporation, is a real estate investment
trust (REIT), 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 with a
concentration in the metropolitan New York tri-state area
outside of the City of New York. The Company’s major
tenants include supermarket chains and other retailers
who sell basic necessities. At October 31, 2022, the
Company owned or had equity interests in 77 properties
containing a total of 5. 3 million square feet of gross
leasable area (“GLA”).
COVID-19 Pandemic
On March 11, 2020, the novel coronavirus disease
(“COVID-19”) was declared a pandemic (“COVID-19
pandemic”) by the World Health Organization as the
disease spread throughout the world. During March
2020, measures to prevent the spread of COVID-19
were initiated, with federal, state and local government
agencies issuing regulatory orders enforcing social
distancing and limiting certain business operations and
group gatherings in order to further prevent the spread
of COVID-19. While these regulatory orders vary by state
and have changed over time, as of October 31, 2022
most of our tenants’ businesses are operating normally.
We have seen foot traffic, retail activity and general
business conditions for most of our tenants essentially
return to pre-pandemic levels. The pandemic is still
ongoing, however, with existing and new variants making
the situation difficult to predict.
Principles of Consolidation and Use of Estimates
The accompanying consolidated financial statements
include the accounts of the Company, its wholly
owned subsidiaries, and joint ventures in which the
Company meets certain criteria of a sole general partner
in accordance with Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 810, “Consolidation. ” The Company
has determined that such joint ventures should be
consolidated into the consolidated financial statements
of the Company. In accordance with ASC Topic 970-323,
“Real Estate-General-Equity Method and Joint Ventures;”
joint ventures that the Company does not control but
otherwise exercises significant influence in, are accounted
for under the equity method of accounting. See Note 6 for
further discussion of the unconsolidated joint ventures.
All significant intercompany transactions and balances
have been eliminated in consolidation.
The accompanying financial statements are prepared
on the accrual basis in accordance with accounting
principles generally accepted in the United States
of America (“GAAP”). The preparation of financial
statements in conformity with GAAP requires
management to make estimates and assumptions that
affect the disclosure of contingent assets and liabilities,
the reported amounts of assets and liabilities at the date
of the financial statements, and the reported amounts
of revenue and expenses during the periods covered
by the financial statements. The most significant
assumptions and estimates relate to the valuation of real
estate, depreciable lives, revenue recognition, fair value
measurements and the collectability of tenant receivables.
Actual results could differ from these estimates.
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 as a REIT and intends
to distribute all of its taxable income for fiscal 2022 in
accordance with the provisions of the Code. Accordingly,
no provision has been made for Federal income taxes in
the accompanying consolidated financial statements.
The Company follows the provisions of ASC Topic 740,
“Income Taxes,” that, among other things, defines a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return.
ASC Topic 740 also provides guidance on de-recognition,
classification, interest and penalties, accounting in
interim periods, disclosure, and transition. Based on
its evaluation, the Company determined that it has no
uncertain tax positions and no unrecognized tax benefits
as of October 31, 2022. As of October 31, 2022, the fiscal
tax years 2018 through and including 2021 remain open
to examination by the Internal Revenue Service. There are
currently no federal tax examinations in progress.
Urstadt Biddle Properties inc.
21
Acquisitions of Real Estate Investments and
Capitalization Policy
Acquisition of Real Estate Investments:
The Company evaluates each acquisition of real estate
or in-substance real estate (including equity interests
in entities that predominantly hold real estate assets) to
determine if the integrated set of assets and activities
acquired meet the definition of a business and need to
be accounted as a business combination. If either of the
following criteria is met, the integrated set of assets and
activities acquired would not qualify as a business:
• Substantially all of the fair value of the gross assets
acquired is concentrated in either a single identifiable
asset or a group of similar identifiable assets; or
• The integrated set of assets and activities is lacking,
at a minimum, an input and a substantive process
that together significantly contribute to the ability
to create outputs (i. e. revenue generated before and
after the transaction).
An acquired process is considered substantive if:
• The process includes an organized workforce
(or includes an acquired contract that provides
access to an organized workforce), that is skilled,
knowledgeable, and experienced in performing
the process;
• The process cannot be replaced without significant
cost, effort, or delay; or
• The process is considered unique or scarce.
Generally, the Company expects that acquisitions of
real estate or in-substance real estate will not meet the
definition of a business because substantially all of the
fair value is concentrated in a single identifiable asset or
group of similar identifiable assets (i.e. land, buildings,
and related intangible assets) or because the acquisition
does not include a substantive process in the form of
an acquired workforce or an acquired contract that cannot
be replaced without significant cost, effort or delay.
Acquisitions of real estate and in-substance real estate
which do not meet the definition of a business are
accounted for as asset acquisitions. The accounting model
for asset acquisitions is similar to the accounting model
for business combinations except that the acquisition
consideration (including acquisition costs) is allocated to
the individual assets acquired and liabilities assumed on
a relative fair value basis. As a result, asset acquisitions
do not result in the recognition of goodwill or a bargain
purchase gain. The relative fair values used to allocate the
cost of an asset acquisition are determined using the same
methodologies and assumptions as the Company utilizes
to determine fair value in a business combination.
The value of tangible assets acquired is based upon our
estimation of value on an “as if vacant” basis. The value
of acquired in-place leases includes the estimated costs
during the hypothetical lease-up period and other costs
that would have been incurred in the execution of similar
leases under the market conditions at the acquisition date
of the acquired in-place lease. We assess the fair value
of tangible and intangible assets based on numerous
factors, including estimated cash flow projections that
utilize appropriate discount and capitalization rates and
available market information. Estimates of future cash
flows are based on a number of factors, including the
historical operating results, known trends, and market/
economic conditions that may affect the property.
The values of acquired above and below-market leases,
which are included in prepaid expenses and other assets
and other liabilities, respectively, are amortized over
the terms of the related leases and recognized as either
an increase (for below-market leases) or a decrease (for
above-market leases) to rental revenue. The values of
acquired in-place leases are classified in other assets in the
accompanying consolidated balance sheets and amortized
over the remaining terms of the related leases.
Capitalization Policy:
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.
Depreciation and Amortization
The Company uses the straight-line method for
depreciation and amortization. Real estate investment
properties are depreciated over the estimated useful
lives of the properties, which range from 30 to 40
years. Property improvements are depreciated over the
estimated useful lives that range from 10 to 20 years.
Furniture and fixtures are depreciated over the estimated
useful lives that range from 3 to 10 years. Tenant
improvements are amortized over the shorter of the life
of the related leases or their useful life.
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sale of Investment Property and Property Held for Sale
The Company reports properties that are either
disposed of or are classified as held for sale in continuing
operations in the consolidated statement of income if the
removal, or anticipated removal, of the asset(s) from the
reporting entity does not represent a strategic shift that
has or will have a major effect on an entity’s operations
and financial results when disposed of.
In March 2022, the Company sold its free-standing
restaurant property located in Unionville, CT (the
“Unionville Property”) to an unrelated third party for a
sale price of $950,000, as that property no longer met the
Company’s investment objectives. In accordance with
ASC Topic 606, “Contracts with Customers,” and ASC
Topic 610-20 “Gains and Losses from the Derecognition
of Nonfinancial Assets,” the Company recorded a gain
on sale in the amount of $204,000, which gain is included
in continuing operations in its consolidated income
statements for the year ended October 31, 2022, when
the Company’s performance obligation was met, the
transfer of the property’s title to the buyer and when
consideration was received from the buyer for that
performance obligation.
In February 2022, the Company sold its free-standing
restaurant property located in Bloomfield, NJ (the
“Bloomfield Property”) to an unrelated third party for a
sale price of $1. 8 million, as that property no longer met
the Company’s investment objectives. In accordance with
ASC Topic 606, “Contracts with Customers,” and ASC
Topic 610-20 “Gains and Losses from the Derecognition
of Nonfinancial Assets,” the Company recorded a gain
on sale in the amount of $544,000, which gain is included
in continuing operations in its consolidated income
statements for the year ended October 31, 2022, when
the Company’s performance obligation was met, the
transfer of the property’s title to the buyer and when
consideration was received from the buyer for that
performance obligation.
In September 2021, the Company entered into a
purchase and sale agreement to sell its property located
in Chester, NJ (the “Chester Property”), to an unrelated
third party for a sale price of $1. 96 million as that
property no longer met its investment objectives. In
accordance with ASC Topic 360-10-45, the property met
all the criteria to be classified as held for sale in the fourth
quarter of fiscal 2021, and accordingly the Company
recorded a loss on property held for sale of $342,000,
which loss was included in continuing operations in the
consolidated statement of income for the year ended
October 31, 2021. The amount of the loss represented the
net carrying amount of the property over the fair value
of the asset less estimated cost to sell. The net book value
of the Chester Property was insignificant to financial
statement presentation and as a result the Company did
not include the asset as held for sale on its consolidated
balance sheet at October 31, 2021. In December 2021, the
Chester Property sale was completed and the Company
realized an additional loss on sale of property of $7,000,
which loss will be included in continuing operations in
the consolidated statement of income for the year ended
October 31, 2022.
In June 2021, the Company sold its property located
in Newington, NH (the “Newington Property”) to an
unrelated third party for a sale price of $13. 4 million as
that property no longer met the Company’s investment
objectives. In accordance with ASC Topic 606, “Contracts
with Customers,” and ASC Topic 610-20 “Gains and
Losses from the Derecognition of Nonfinancial Assets,”
the Company recorded a gain on sale in the amount
of $11. 8 million, which gain is included in continuing
operations in its consolidated income statements for
the year ended October 31, 2021, when the Company’s
performance obligation was met, the transfer of the
property’s title to the buyer and when consideration was
received from the buyer for that performance obligation.
In March 2021, the Company sold its property
located in Hillsdale, NJ (the “Hillsdale Property”) to an
unrelated third party for a sale price of $1. 3 million, as
that property no longer met the Company’s investment
objectives. In accordance with ASC Topic 606, “Contracts
with Customers,” and ASC Topic 610-20 “Gains and
Losses from the Derecognition of Nonfinancial Assets,”
the Company recorded a gain on sale in the amount of
$435,000, which gain is included in continuing operations
in its consolidated income statements for the year ended
October 31, 2021, when the Company’s performance
obligation was met, the transfer of the property’s title to
the buyer and when consideration was received from the
buyer for that performance obligation.
Urstadt Biddle Properties inc.
23
In January 2020, the Company entered into a purchase
and sale agreement, subject to certain conditions, to sell
a 29,000 square foot portion of its property located in
Pompton Lakes, NJ (the “Pompton Lakes Property”) to
an unrelated third party for a sale price of $2. 8 million.
In accordance with ASC Topic 360-10-45, that portion of
the property met all the criteria to be classified as held
for sale in September of fiscal 2020, and accordingly
the Company recorded a loss on property held for sale
of $5. 7 million, which loss was included in continuing
operations in the consolidated statement of income for
the year ended October 31, 2020. The amount of the loss
represented the net carrying amount of that portion of the
property over the fair value of that portion of the asset
less estimated cost to sell. In December 2020, the sale of
that portion of the property was completed.
In January 2020, the Company sold for $1. 3 million
its retail property located in Carmel, NY (the “Carmel
Property”), as that property no longer met the Company’s
investment objectives. In conjunction with the sale, the
Company realized a loss on sale of the Carmel property
in the amount of $242,000, which loss is included in
continuing operations in the consolidated statement of
income for the year ended October 31, 2020.
The combined operating results of the Unionville
Property, the Bloomfield Property, the Chester Property,
the Newington Property, the Hillsdale Property, the
Carmel Property and the sold portion of the Pompton
Lakes property, which are included in continuing
operations, were as follows (amounts in thousands):
Year Ended October 31,
2022
2021
2020
Revenues
$ 54
$1,125
$2,024
Property operating expense
(26)
(456)
(573)
Depreciation and amortization
(14)
(132)
(528)
Net Income
$ 14
$ 537
$ 923
Deferred Charges
Deferred charges consist principally of leasing
commissions (which are amortized ratably over the life of
the tenant leases). Deferred charges in the accompanying
consolidated balance sheets are shown at cost, net of
accumulated amortization of $5,316,000 and $4,994,000 as
of October 31, 2022 and 2021, respectively.
Asset Impairment
On a periodic basis, management assesses whether
there are any indicators that the value of its real estate
investments 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, trends 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. As of October 31, 2022, management
does not believe that the value of any of its real estate
investments is impaired.
Lease Income, Revenue Recognition and Tenant
Receivables
Lease Income:
The Company accounts for lease income in accordance
with ASC Topic 842, “Leases. ”
The Company’s existing leases are generally classified
as operating leases. However, certain longer-term leases
(both lessee and lessor leases) may be classified as direct
financing or sales type leases, which may result in selling
profit and an accelerated pattern of earnings recognition.
The Company leases space to tenants under agreements
with varying terms that generally provide for fixed
payments of base rent, with designated increases over the
term of the lease. Some of the lease agreements contain
provisions that provide for additional rents based on
tenants’ sales volume (“percentage rent”). Percentage
rents are recognized when the tenants achieve the
specified targets as defined in their lease agreements.
Additionally, most all lease agreements contain provisions
for reimbursement of the tenants’ share of actual real estate
taxes, insurance and Common Area Maintenance (“CAM”)
costs (collectively, “Recoverable Costs”) incurred.
Lease terms generally range from 1 to 5 years for tenant
spaces under 10,000 square feet (“Shop Space”) and in
excess of 5 years for spaces greater than 10,000 square feet
(“Anchor Spaces”). Many leases also provide the option for
the tenants to extend their lease beyond the initial term of
the lease. If the tenants do not exercise renewal options
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and the leases mature, the tenants must relinquish their
space so it can be leased to a new tenant, which generally
involves some level of cost to prepare the space for re-
leasing. These costs are capitalized and depreciated over
the shorter of the life of the subsequent lease or the life of
the improvement.
CAM is a non-lease component of the lease contract
under ASC Topic 842, and therefore would be accounted
for under ASC Topic 606, “Revenue from Contracts with
Customers,” and presented separate from lease income
in the accompanying consolidated statements of income,
based on an allocation of the overall contract price, which
is not necessarily the amount that would be billable to
the tenants for CAM reimbursements per the terms of the
lease contract. As the timing and pattern of providing the
CAM service to the tenant is the same as the timing and
pattern of the tenants’ use of the underlying lease asset,
the Company, in accordance with ASC Topic 842, combines
CAM with the remaining lease components, along with
tenants’ reimbursement of real estate taxes and insurance,
and recognize them together as lease income in the
accompanying consolidated statements of income.
Lease income for operating leases with fixed payment
terms is recognized on a straight-line basis over the
expected term of the lease for all leases for which
collectability is considered probable at the commencement
date. At lease commencement, the Company expects
that collectability is probable for all of its leases due
to the Company’s credit checks on tenants and other
creditworthiness analysis undertaken before entering
into a new lease; therefore, income from all operating
leases is initially recognized on a straight-line basis. Lease
income each period is reduced by amounts considered
uncollectable on a lease-by-lease basis, with any changes
in collectability assessments recognized as a current
period adjustment to lease income. For operating leases
in which collectability of lease income is not considered
probable, lease income is recognized on a cash basis and all
previously recognized uncollected lease income, including
straight-line rental income, is reversed in the period in
which the lease income is determined not to be probable
of collection.
The Company, as a lessor, may only defer as initial direct
costs the incremental costs of a tenant operating lease that
would not have been incurred if the lease had not been
obtained. These costs generally include third-party broker
payments, which are capitalized to deferred costs in the
accompanying consolidated balance sheets and amortized
over the expected term of the lease to depreciation and
amortization expense in the accompanying consolidated
statements of income.
COVID-19 Pandemic
From the onset of COVID-19 through October 31, 2022,
the Company has completed 290 lease modifications,
consisting of base rent deferrals totaling $4. 0 million
and rent abatements totaling $4. 7 million. Through
October 31, 2022, the Company has received repayment
of approximately $3. 7 million of the base rent deferrals.
In April 2020, in response to the COVID-19 pandemic,
the FASB staff issued guidance that it would be acceptable
for entities to make an election to account for lease
concessions related to the effects of the COVID-19
pandemic consistent with how those concessions would
be accounted for under Topic 842, as if enforceable rights
and obligations for those concessions existed (regardless
of whether those enforceable rights and obligations for
the concessions explicitly exist in the lease contract).
Consequently, for concessions related to the effects of the
COVID-19 pandemic, an entity will not have to analyze
each lease contract to determine whether enforceable rights
and obligations for concessions exist in the lease contract
and may elect to apply or not apply the lease modification
guidance in Topic 842 to those contracts.
This election is available for concessions related to the
effects of the COVID-19 pandemic that do not result in
a substantial increase in the rights of the lessor or the
obligations of the lessee. For example, this election is
available for concessions that result in the total payments
required by the modified contract being substantially the
same as or less than total payments required by the original
contract. The FASB staff expects that reasonable judgment
will be exercised in making those determinations.
Most concessions will provide a deferral of payments
with no substantive changes to the consideration in the
original lease contract. A deferral affects the timing,
but the amount of the consideration is substantially
the same as that required by the original lease contract.
The FASB staff expects that there will be multiple ways
to account for those deferrals, none of which the staff
believes are preferable over others. The Company has
made the election not to analyze each lease contract, and
believes that, based on FASB guidance, the appropriate
way to account for the concessions as described above
is to account for such concessions as if no changes to
the lease contracts were made. Under that accounting,
a lessor would increase its lease receivable (straight-
line rents receivable) and would continue to recognize
income during the deferral period, assuming that the
collectability of the future rents under the lease contract
are considered collectable. If it is determined that the
future rents of any lease contract are not collectable, the
Company would treat that lease contract on a cash basis
as defined in ASC Topic 842.
Urstadt Biddle Properties inc.
25
When collection of substantially all lease payments
during the lease term is not considered probable, total
lease revenue is limited to the lesser of revenue recognized
under accrual accounting or cash received. Determining
the probability of collection of substantially all lease
payments during a lease term requires significant
judgment. This determination is impacted by numerous
factors, including our assessment of the tenant’s credit
worthiness, economic conditions, tenant sales productivity
in that location, historical experience with the tenant and
tenants operating in the same industry, future prospects
for the tenant and the industry in which it operates, and
the length of the lease term. If leases currently classified as
probable are subsequently reclassified as not probable, any
outstanding lease receivables (including straight-line rent
receivables) would be written-off with a corresponding
decrease in lease income.
Revenue Recognition
In those instances in which the Company funds tenant
improvements and the improvements are deemed to be
owned by the Company, revenue recognition on operating
leases will commence when the improvements are
substantially completed and possession or control of the
space is turned over to the tenant. When the Company
determines that the tenant allowances are lease incentives,
the Company commences revenue recognition when
possession or control of the space is turned over to the
tenant for tenant work to begin.
Lease termination amounts are recognized in operating
revenues when there is a signed termination agreement,
all of the conditions of the agreement have been met,
the tenant is no longer occupying the property and the
termination consideration is probable of collection. Lease
termination amounts are paid by tenants who want to
terminate their lease obligations before the end of the
contractual term of the lease by agreement with the
Company. There is no way of predicting or forecasting the
timing or amounts of future lease termination fees. Interest
income is recognized as it is earned. Gains or losses on
disposition of properties are recorded when the criteria for
recognizing such gains or losses under U. S. GAAP have
been met.
Percentage rent is recognized when a specific tenant’s
sales breakpoint is achieved.
Tenant Receivables
During the early days of the pandemic, the actions taken
by federal, state and local governments to mitigate the
spread of COVID-19, initially by ordering closures of non-
essential businesses and ordering residents to generally
stay at home, and subsequent phased re-openings resulted
in many of our tenants temporarily or even permanently
closing their businesses, and for some, it has impacted their
ability to pay rent.
As a result, in accordance with ASC Topic 842, we
revised our collectability assumptions for many of
our tenants that were most significantly impacted
by COVID-19. This amount includes changes in our
collectability assessments for certain tenants in our
portfolio from probable to not probable, which requires
that revenue recognition for those tenants be converted to
cash-basis accounting, with previously uncollected billed
rents reversed in the current period. From the beginning
of the COVID-19 pandemic through the end of our second
quarter of fiscal 2021, we converted 89 tenants to cash-basis
accounting in accordance with ASC Topic 842.
We did not convert any additional tenants to cash-basis
accounting in the second half of fiscal 2021 or the fiscal
year ended October 31, 2022. As of October 31, 2022, 34
of the 89 tenants that were previously converted to cash-
basis are no longer tenants in the Company’s properties. In
addition, when one of the Company’s tenants is converted
to cash-basis accounting in accordance with ASC Topic 842,
all previously recorded straight-line rent receivables need
to be reversed in the period that the tenant is converted
to cash-basis revenue recognition. In the fiscal year ended
October 31, 2021, the Company reversed straight-line rent
revenue in the amount of $1. 3 million related to tenants
converted to cash-basis revenue recognition. The Company
did not reverse any straight-line rent revenue in the fiscal
year ended October 31, 2022, as no tenants were converted
to cash-basis revenue recognition in that period.
During the fiscal years ended October 31, 2022 and
2021, we restored 10 and 13 of the original 89 tenants,
respectively, to accrual-basis revenue recognition as those
tenants paid all of their billed rents for six consecutive
months and have no significant unpaid billings at the time
of restoration to accrual basis accounting. When a tenant is
restored to accrual-basis revenue recognition, the Company
records revenue on the straight-line basis. As such, the
Company restored straight-line rent revenue in the fiscal
years ended October 31, 2022 and 2021 in the amounts of
$57,000 and $582,000, respectively, for these tenants.
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of October 31, 2022, the Company is recording lease
income on a cash basis for approximately 3. 7% of our
tenants in accordance with ASC Topic 842.
During the fiscal year ended October 31, 2021, we
recognized collectability adjustments totaling $4. 2 million.
The Company did not have any significant collectability
adjustments in the fiscal year ended October 31, 2022.
At October 31, 2022 and October 31, 2021, $19,895,000
and $19,670,000, respectively, have been recognized as
straight-line rents receivable (representing the current
cumulative rents recognized prior to when billed and
collectible as provided by the terms of the leases),
all of which is included in tenant receivables in the
accompanying consolidated financial statements.
The Company provides an allowance for doubtful
accounts against the portion of tenant receivables that
is estimated to be uncollectable. Such allowances are
reviewed periodically. At October 31, 2022 and October 31,
2021, tenant receivables in the accompanying consolidated
balance sheets are shown net of allowances for doubtful
accounts of $6,213,600 and $7,469,000, respectively.
Included in the aforementioned allowance for doubtful
accounts is an amount for future tenant credit losses of
approximately 10% of the deferred straight-line rents
receivable which is estimated to be uncollectable.
Cash Equivalents
Cash and cash equivalents consist of cash in banks and
short-term investments with original maturities of less than
three months.
Marketable Securities
Marketable equity securities are carried at fair value
based upon quoted market prices in active markets.
In March 2020, the Company purchased REIT securities
in the amount of $7. 0 million. In May 2020, the Company
sold all of its REIT securities for $7. 3 million and realized
a gain on sale of $258,000, which is included in the
consolidated statement of income for the year ended
October 31, 2020.
Derivative Financial Instruments
The Company occasionally utilizes derivative financial
instruments, such as interest rate swaps, to manage its
exposure to fluctuations in interest rates. The Company
has established policies and procedures for risk assessment
and the approval, reporting and monitoring of derivative
financial instruments. Derivative financial instruments
must be effective in reducing the Company’s interest rate
risk exposure in order to qualify for hedge accounting.
When the terms of an underlying transaction are modified,
or when the underlying hedged item ceases to exist, all
changes in the fair value of the instrument are marked-
to-market with changes in value included in net income
for each period until the derivative instrument matures
or is settled. Any derivative instrument used for risk
management that does not meet the hedging criteria is
marked-to-market with the changes in value included in
net income. The Company has not entered into, and does
not plan to enter into, derivative financial instruments
for trading or speculative purposes. Additionally, the
Company has a policy of entering into derivative contracts
only with major financial institutions.
As of October 31, 2022, the Company believes it has
no significant risk associated with non-performance of
the financial institutions that are the counterparty to its
derivative contracts. At October 31, 2022, the Company
had approximately $155. 7 million in secured mortgage
financings subject to interest rate swaps. Such interest
rate swaps converted the LIBOR or Secured Overnight
Financing Rate (“SOFR”)-based variable rates on the
mortgage financings to a fixed annual rate of 3.74% per
annum. As of October 31, 2022 and 2021, the Company
had a deferred liability of $0 and $6. 7 million, respectively,
(included in accounts payable and accrued expenses on
the consolidated balance sheets) relating to the fair value
of the Company’s interest rate swaps applicable to secured
mortgages. As of October 31, 2022 and 2021, the Company
had a deferred assets of $15. 9 million and $515,000,
respectively, (included in other assets on the consolidated
balance sheets) relating to the fair value of the Company’s
interest rate swaps applicable to secured mortgages.
Charges and/or credits relating to the changes in
fair values of such interest rate swap are made to other
comprehensive (loss) as the swap is deemed effective and
is classified as a cash flow hedge.
Urstadt Biddle Properties inc.
27
Comprehensive Income
Comprehensive income is comprised of net
income applicable to Common and Class A Common
stockholders and other comprehensive income (loss).
Other comprehensive income (loss) includes items that
are otherwise recorded directly in stockholders’ equity,
such as unrealized gains and losses on interest rate
swaps designated as cash flow hedges, including the
Company’s share from entities accounted for under
the equity method of accounting. At October 31, 2022,
accumulated other comprehensive income consisted of
net unrealized gains on interest rate swap agreements
of $17. 2 million, inclusive of the Company’s share of
accumulated comprehensive income from joint ventures
accounted for by the equity method of accounting. At
October 31, 2021, accumulated other comprehensive loss
consisted of net unrealized losses on interest rate swap
agreements of $7. 7 million inclusive of the Company’s
share of accumulated comprehensive income/(loss) from
joint ventures accounted for by the equity method of
accounting. Unrealized gains and losses included in other
comprehensive income/(loss) will be reclassified into
earnings when gains and losses are realized.
Concentration of Credit Risk
Financial instruments that potentially subject the
Company to concentrations of credit risk consist primarily
of cash and cash equivalents, 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
re-tenanting the space. There is no dependence upon any
single tenant.
Earnings Per Share
The Company calculates basic and diluted earnings per
share in accordance with the provisions of ASC Topic 260,
“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 average
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):
Year Ended October 31,
2022
2021
2020
Numerator
Net income applicable to common
stockholders—basic
$ 5,790 $ 7,366
$1,849
Effect of dilutive securities:
Restricted stock awards
187
190
34
Net income applicable to common
stockholders—diluted
$ 5,977 $ 7,556
$1,883
Denominator
Denominator for basic EPS—
weighted average common shares
9,326
9,244
9,144
Effect of dilutive securities:
Restricted stock awards
455
364
241
Denominator for diluted EPS—
weighted average common
equivalent shares
9,781
9,608
9,385
Numerator
Net income applicable to Class A
common stockholders—basic
$20,264 $26,267
$6,684
Effect of dilutive securities:
Restricted stock awards
(187)
(190)
(34)
Net income applicable to Class A
common stockholders—diluted
$20,077 $26,077
$6,650
Denominator
Denominator for basic EPS—
weighted average Class A
common shares
29,481
29,576
29,506
Effect of dilutive securities:
Restricted stock awards
196
177
70
Denominator for diluted EPS—
weighted average Class A
common equivalent shares
29,677
29,753
29,576
28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Stock-Based Compensation
The Company accounts for its stock-based compensation
plans under the provisions of ASC Topic 718, “Stock
Compensation,” which requires that compensation expense
be recognized, based on the fair value of the stock awards
less estimated forfeitures. The fair value of stock awards is
equal to the fair value of the Company’s stock on the grant
date. The Company recognizes compensation expense
for its stock awards by amortizing the fair value of stock
awards over the requisite service periods of such awards.
In certain cases as defined in the participant agreements,
the vesting of stock awards can be accelerated, which will
result in the Company charging to compensation expense
the remaining unamortized restricted stock compensation
related to those stock awards.
Segment Reporting
The Company’s primary business is the ownership,
management, and redevelopment of retail properties. The
Company reviews operating and financial information for
each property on an individual basis and therefore, each
property represents an individual operating segment. The
Company evaluates financial performance using property
operating income, which consists of base rental income and
tenant reimbursement income, less rental expenses and real
estate taxes. Only one of the Company’s properties, located
in Stamford, CT (“Ridgeway”), is considered significant
as its revenue is in excess of 10% of the Company’s
consolidated total revenues and accordingly is a reportable
segment. The Company has aggregated the remainder of
our properties as they share similar long-term economic
characteristics and have other similarities including the fact
that they are operated using consistent business strategies,
are typically located in the same major metropolitan area,
and have similar tenant mixes.
Ridgeway is located in Stamford, Connecticut and was
developed in the 1950’s and redeveloped in the mid 1990’s.
The property contains approximately 374,000 square feet
of GLA. It is the dominant grocery-anchored center and
the largest non-mall shopping center located in the City
of Stamford, Fairfield County, Connecticut.
Segment information about Ridgeway as required by
ASC Topic 280 is included below:
Year Ended October 31,
2022
2021
2020
Ridgeway Revenues
10.1%
10. 4%
11. 2%
All Other Property Revenues
89.9%
89. 6%
88. 8%
Consolidated Revenue
100.0%
100. 0%
100. 0%
Year Ended
October 31,
2022
2021
Ridgeway Assets
6.5%
6. 3%
All Other Property Assets
93.5%
93. 7%
Consolidated Assets (Note 1)
100.0%
100. 0%
Note 1—Ridgeway did not have any significant expenditures for additions
to long-lived assets in any of the fiscal years ended October 31, 2022,
2021 and 2020.
Year Ended October 31,
2022
2021
2020
Ridgeway Percent Leased
98%
92%
92%
Ridgeway Significant Tenants (by base rent):
Year Ended October 31,
2022
2021
2020
The Stop & Shop Supermarket
Company
21%
21%
20%
Bed, Bath & Beyond
15%
15%
14%
Marshall’s Inc. , a division of the
TJX Companies
11%
11%
10%
All Other Tenants at Ridgeway
(Note 2)
53%
53%
56%
Total
100%
100%
100%
Note 2—No other tenant accounts for more than 10% of Ridgeway’s annual
base rents in any of the three years presented. Percentages are
calculated as a ratio of the tenants’ base rent divided by total base
rent of Ridgeway.
Income Statement (In thousands):
Year Ended October 31, 2022
All Other
Operating
Total
Ridgeway
Segments
Consolidated
Revenues
$14,448
$128,655
$143,103
Operating Expenses
$ 4,553
$ 44,271
$ 48,824
Interest Expense
$ 1,603
$ 11,572
$ 13,175
Depreciation and
Amortization
$ 2,200
$ 27,599
$ 29,799
Income from
Continuing
Operations
$ 6,092
$ 37,182
$ 43,274
Urstadt Biddle Properties inc.
29
Year Ended October 31, 2021
All Other
Operating
Total
Ridgeway
Segments
Consolidated
Revenues
$14,167
$121,414
$135,581
Operating Expenses
$ 4,495
$ 42,117
$ 46,612
Interest Expense
$ 1,632
$ 11,455
$ 13,087
Depreciation and
Amortization
$ 2,238
$ 26,794
$ 29,032
Income from
Continuing
Operations
$ 5,802
$ 45,126
$ 50,928
Year Ended October 31, 2020
All Other
Operating
Total
Ridgeway
Segments
Consolidated
Revenues
$14,180
$112,565
$126,745
Operating Expenses
$ 4,424
$ 38,582
$ 43,006
Interest Expense
$ 1,673
$ 11,835
$ 13,508
Depreciation and
Amortization
$ 2,494
$ 26,693
$ 29,187
Income from
Continuing
Operations
$ 5,589
$ 20,481
$ 26,070
Reclassification
Certain fiscal 2020 and 2021 amounts have been
reclassified to conform to current period presentation.
New Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04,
“Reference Rate Reform (Topic 848). ” --ASU No. 2020-04
contains practical expedients for reference rate-reform
related activities that impact debt, leases, derivatives
and other contracts. The guidance in ASU No. 2020-04 is
optional and may be elected over time as reference rate
reform activities occur. During the three months ended
April 30, 2020, the Company elected to apply the hedge
accounting expedients related to probability and the
assessments of effectiveness for future LIBOR-indexed
cash flows to assume that the index upon which future
hedged transactions will be based matches the index
on the corresponding derivatives. Application of these
expedients preserves the presentation of derivatives
consistent with past presentation. The Company
continues to evaluate the impact of the guidance and
may apply other elections as applicable as additional
changes in the market occur.
The Company has evaluated all other new ASU’s
issued by FASB, and has concluded that these updates do
not have a material effect on the Company’s consolidated
financial statements as of October 31, 2022.
(2) REAL ESTATE INVESTMENTS
The Company’s investments in real estate, net
of depreciation, were composed of the following at
October 31, 2022 and 2021 (in thousands):
Consolidated
Investment
Unconsolidated
2022
2021
Properties
Joint Ventures
Totals
Totals
Retail
$880,256
$29,586
$909,842
$891,921
Office
6,612
—
6,612
6,883
Total
$886,868
$29,586
$916,454
$898,804
The Company’s investments at October 31, 2022
consisted of equity interests in 77 properties. The 77
properties are located in the northeastern part of the
United States with a concentration in the metropolitan
New York tri-state area outside of the City of New
York. The Company’s primary investment focus is
neighborhood and community shopping centers
located in the region just described. Since a significant
concentration of the Company’s properties are in the
northeast, market changes in this region could have an
effect on the Company’s leasing efforts and ultimately
its overall results of operations.
(3) INVESTMENT PROPERTIES
The components of the properties consolidated in the
financial statements are as follows (in thousands):
October 31,
2022
2021
Land
$ 245,844 $ 235,233
Buildings and improvements
944,512
913,149
1,190,356
1,148,382
Accumulated depreciation
(303,488)
(278,605)
$ 886,868 $ 869,777
Space at the Company’s properties is generally leased to
various individual tenants under short and intermediate-
term leases which are accounted for as operating leases.
Certain of the Company’s leases provide for the payment
of additional rent based on a percentage of the tenant’s
revenues. Such additional percentage rents are included
in operating lease income and were less than 1. 00% of
consolidated revenues in each of the three years ended
October 31, 2022.
Significant Investment Property Acquisition Transactions
In February 2022, the Company purchased Shelton Square
shopping center, and in July 2022 exercised an option
to purchase a pad site adjacent to the shopping center
(collectively, “Shelton”), for an aggregate of $36 million
(exclusive of closing costs). Shelton is a 188,000 square foot
30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
grocery-anchored shopping center located in Shelton, CT.
The Company funded the purchase with available cash,
borrowings on our unsecured revolving credit facility (the
“Facility”) and proceeds from mortgage borrowings.
The Company accounted for the purchase of Shelton as
an asset acquisition and allocated the total consideration
transferred for the acquisition, including transaction costs,
to the individual assets and liabilities acquired on a relative
fair value basis.
The financial information set forth below summarizes
the Company’s purchase price allocation of the cash
consideration paid on a relative fair value basis (Level 3 of
the fair value hierarchy) for Shelton during the year ended
October 31, 2022 (in thousands).
Shelton
Assets:
Land
$11,484
Building and improvements
$21,803
In-place leases
$ 2,285
Above market leases
$ 1,179
Liabilities:
In-place leases
$ —
Below market leases
$ 1,081
The value of above and below market leases are
amortized as a reduction/increase to base rental revenue
over the term of the respective leases. The value of in-place
leases are amortized as an expense over the terms of the
respective leases.
For the fiscal year ended October 31, 2022, 2021 and
2020, the net amortization of above-market and below-
market leases was approximately $972,000, $570,000 and
$706,000, respectively, which is included in base rents in
the accompanying consolidated statements of income.
In Fiscal 2022, the Company incurred costs of
approximately $15. 6 million related to capital improvements
and leasing costs to its properties.
(4) MORTGAGE NOTES PAYABLE, BANK LINES
OF CREDIT AND OTHER LOANS
At October 31, 2022, the Company has mortgage notes
payable and other loans that are due in installments
over various periods to fiscal 2037. The mortgage loans
bear interest at rates ranging from 3. 1% to 5. 6% and are
collateralized by real estate investments having a net
carrying value of approximately $491. 5 million.
Combined aggregate principal maturities of mortgage
notes payable during the next five years and thereafter
are as follows (in thousands):
Principal
Scheduled
Repayments Amortization
Total
2023
$ —
$ 7,612
$ 7,612
2024
18,711
7,738
26,449
2025
82,277
5,206
87,483
2026
7,751
5,189
12,940
2027
39,104
4,229
43,333
Thereafter
113,440
11,059
124,499
$261,283
$41,033
$302,316
The Company has a $125 million unsecured revolving
credit facility with a syndicate of three banks led by
The Bank of New York Mellon, as administrative agent.
The syndicate also includes Wells Fargo Bank N. A. and
Bank of Montreal (co-syndication agents). The Facility
gives the Company the option, under certain conditions,
to increase the Facility’s borrowing capacity to $175
million (subject to lender approval). The maturity
date of the Facility is March 29, 2024, with a one year
extension at the Company’s option. Borrowings under
the Facility can be used for general corporate purposes
and the issuance of letters of credit (up to $10 million).
Borrowings will bear interest at the Company’s option
of the Eurodollar rate plus 1. 45% to 2. 20% or The Bank
of New York Mellon’s prime lending rate plus 0. 45%
to 1. 20% based on consolidated total indebtedness, as
defined. The Company pays a quarterly commitment
fee on the unused commitment amount of 0. 15% to
0. 25% based on outstanding borrowings during the year.
The Company’s ability to borrow under the Facility is
subject to its compliance with the covenants and other
restrictions on an ongoing basis. The principal financial
covenants limit the Company’s level of secured and
unsecured indebtedness, including preferred stock, and
additionally require the Company to maintain certain
debt coverage ratios. The Company was in compliance
with such covenants at October 31, 2022. The Facility
includes market standard provisions for determining
the benchmark replacement rate for LIBOR.
Urstadt Biddle Properties inc.
31
As of October 31, 2022, $94 million was available to
be drawn on the Facility.
During the fiscal year ended October 31, 2022, the
Company borrowed $40. 5 million on its Facility to
fund capital improvements to our properties, property
acquisitions and for general corporate purposes. During
the fiscal years ended October 31, 2022 and 2021, the
Company re-paid $10. 0 million and $35. 0 million,
respectively, on its Facility with available cash, and
proceeds from mortgage refinancings.
In March 2022, the Company repaid with available cash
its existing $3.1 million first mortgage secured by Van
Houten Farms shopping center in Passaic, NJ.
In February 2022, the Company refinanced its existing
$22.8 million first mortgage secured by The Dock
Shopping Center in Stratford, CT. The new mortgage
has a principal balance of $35. 0 million, a term of 10
years, and requires payments of principal and interest
at a variable rate based on the SOFR, plus an applicable
spread. Concurrent with entering into the mortgage, the
Company entered into an interest rate swap agreement
with the lender as the counterparty, which converts the
variable rate based on SOFR to a fixed rate of interest of
3. 05% per annum.
In December 2021, the Company refinanced its existing
$6.5 million first mortgage secured by the Boonton
Acme shopping center located in Boonton, NJ. The new
mortgage has a principal balance of $11. 0 million, a term
of 10 years, and requires payments of principal and
interest at a fixed rate of 3.45%.
In October 2021, the Company refinanced its existing
$16.4 million first mortgage secured by Village Shopping
Center in New Providence, NJ. The new mortgage has a
principal balance of $21. 0 million, has a term of 10 years,
and requires payments of principal and interest at a fixed
rate of 3. 50%.
Interest paid in the years ended October 31, 2022, 2021
and 2020 was approximately $12. 6 million, $13. 0 million
and $13. 3 million, respectively.
(5) CONSOLIDATED JOINT VENTURES
AND REDEEMABLE NONCONTROLLING
INTERESTS
The Company has an investment in four joint ventures,
UB Orangeburg, LLC (“Orangeburg”), McLean Plaza
Associates, LLC (“McLean”) and UB Dumont I, LLC
(“Dumont”) each of which owns a commercial retail
property, and UB High Ridge, LLC (“High Ridge”),
which owns three commercial real estate properties.
The Company has evaluated its investment in these
four joint ventures and has concluded that these joint
ventures are fully controlled by the Company and that
the presumption of control is not offset by any rights of
any of the limited partners or non-controlling members
in these ventures and that the joint ventures should be
consolidated into the consolidated financial statements
of the Company in accordance with ASC Topic 810,
“Consolidation. ” The Company’s investment in these
consolidated joint ventures is more fully described below:
Orangeburg
The Company, through a wholly-owned subsidiary,
is the managing member and owns a 43. 8% interest in
Orangeburg, which owns a drug store-anchored shopping
center. The other member (non-managing) of Orangeburg
is the prior owner of the contributed property who, in
exchange for contributing the net assets of the property,
received units of Orangeburg equal to the value of the
contributed property less the value of the assigned first
mortgage payable. The Orangeburg operating agreement
provides for the non-managing member to receive an
annual cash distribution equal to the regular quarterly
cash distribution declared by the Company for one share
of the Company’s Class A Common stock, which amount
is attributable to each unit of Orangeburg ownership.
The annual cash distribution is paid from available cash,
as defined, of Orangeburg. The balance of available
cash, if any, is fully distributable to the Company. Upon
liquidation, proceeds from the sale of Orangeburg assets
are to be distributed in accordance with the operating
agreement. The non-managing member is not obligated
to make any additional capital contributions to the
partnership. Orangeburg has a defined termination date
of December 31, 2097. Since purchasing this property,
the Company has made additional investments in the
amount of $6. 8 million in Orangeburg and as a result as of
October 31, 2022 its ownership percentage has increased
to 43. 8% from approximately 2. 92% at inception.
32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
McLean
The Company, through a wholly-owned subsidiary,
is the managing member and owns a 53% interest in
McLean Plaza Associates, LLC, a limited liability company
(“McLean”), which owns a grocery-anchored shopping
center. The McLean operating agreement provides for the
non-managing members to receive a fixed annual cash
distribution equal to 5. 05% of their invested capital. The
annual cash distribution is paid from available cash, as
defined, of McLean. The balance of available cash, if any,
is fully distributable to the Company. Upon liquidation,
proceeds from the sale of McLean assets are to be
distributed in accordance with the operating agreement.
The non-managing members are not obligated to make
any additional capital contributions to the entity.
High Ridge
The Company is the managing member and owns
a 29. 2% interest in High Ridge. The Company’s initial
investment was $5. 5 million, and the Company has
purchased additional interests totaling $11. 1 million
and contributed $1. 5 million in additional equity to the
venture through October 31, 2022. High Ridge, either
directly or through a wholly-owned subsidiary, owns three
commercial real estate properties, High Ridge Shopping
Center (“High Ridge Center”), a grocery-anchored
shopping center, and two single tenant commercial retail
properties, one leased to JP Morgan Chase and one leased
to CVS. Two properties are located in Stamford, CT and
one property is located in Greenwich, CT. High Ridge
Center is a shopping center anchored by a Trader Joe’s
grocery store. The properties were contributed to the
new entities by the former owners who received units of
ownership of High Ridge equal to the value of properties
contributed less liabilities assumed. The High Ridge
operating agreement provides for the non-managing
members to receive an annual cash distribution, currently
equal to 5. 22% of their invested capital.
Dumont
The Company is the managing member and owns
a 37. 8% interest in Dumont. The Company’s initial
investment was $3. 9 million, and the Company has
purchased additional interests totaling $798,000 through
October 31, 2022. Dumont owns a retail and residential
real estate property, which retail portion is anchored
by a Stop & Shop grocery store. The property is located
in Dumont, NJ. The property was contributed to the
new entity by the former owners who received units of
ownership of Dumont equal to the value of contributed
property less liabilities assumed. The Dumont operating
agreement provides for the non-managing members to
receive an annual cash distribution, currently equal to
5. 03% of their invested capital.
New City
In March 2022, the Company redeemed the remaining
noncontrolling interests in New City for $502,000. After
the redemption, the Company’s ownership of New City
increased from 84. 3% to 100%. New City owns a single
tenant retail real estate property located in New City, NY,
which is leased to a savings bank. In addition, New City
rents certain parking spaces on the property to the owner
of an adjacent grocery-anchored shopping center.
Noncontrolling interests:
The Company accounts for noncontrolling interests
in accordance with ASC Topic 810, “Consolidation. ”
Because the limited partners or noncontrolling members
in Orangeburg, McLean, High Ridge and Dumont
have the right to require the Company to redeem all or
a part of their limited partnership or limited liability
company units for cash, or at the option of the Company
shares of its Class A Common stock, at prices as defined
in the governing agreements, the Company reports
the noncontrolling interests in the consolidated joint
ventures in the mezzanine section, outside of permanent
equity, of the consolidated balance sheets at redemption
value which approximates fair value. The value of the
Orangeburg, McLean and a portion of the High Ridge
and Dumont redemptions are based solely on the price
of the Company’s Class A Common stock on the date of
redemption. For the years ended October 31, 2022 and
2021, the Company increased/(decreased) the carrying
value of the non-controlling interests by $(1. 9) million
and $10. 5 million, respectively, with the corresponding
adjustment recorded in stockholders’ equity.
Urstadt Biddle Properties inc.
33
The following table sets forth the details of the
Company’s redeemable non-controlling interests
(amounts in thousands):
October 31,
2022
2021
Beginning Balance
$67,395
$62,071
Partial Redemption of High Ridge
Noncontrolling Interest
(2,681)
(5,126)
Redemption of New City
Noncontrolling Interest
(502)
—
Partial Redemption of Dumont
Noncontrolling Interest
(168)
—
Redemption of UB Rye, LLC
Noncontrolling Interest
(546)
—
Change in Redemption Value
(1,948)
10,450
Ending Balance
$61,550
$67,395
(6) INVESTMENTS IN AND ADVANCES TO
UNCONSOLIDATED JOINT VENTURES
At October 31, 2022 and 2021, investments in and
advances to unconsolidated joint ventures consisted of
the following (with the Company’s ownership percentage
in parentheses) (amounts in thousands):
October 31,
2022
2021
Chestnut Ridge Shopping Center (50%)
$11,617
$12,188
Gateway Plaza (50%)
5,858
6,845
Putnam Plaza Shopping Center (66. 67%)
4,952
3,231
Midway Shopping Center, L. P. (11. 792%)
3,647
3,982
Applebee’s at Riverhead (50%)
2,789
2,058
81 Pondfield Road Company (20%)
723
723
Total
$29,586
$29,027
Chestnut Ridge
The Company, through a wholly-owned subsidiary,
owns a 50% undivided tenancy-in-common equity
interest in the 76,000 square foot Chestnut Ridge
Shopping Center located in Montvale, New Jersey
(“Chestnut”), which is anchored by a Fresh Market
grocery store.
Gateway Plaza and Applebee’s at Riverhead
The Company, through two wholly-owned subsidiaries,
owns a 50% undivided tenancy-in-common equity
interest in the Gateway Plaza Shopping Center
(“Gateway”) and Applebee’s at Riverhead (“Applebee’s”).
Both properties are located in Riverhead, New York
(together the “Riverhead Properties”). Gateway, a 198,500
square foot shopping center anchored by a 168,000 square
foot Walmart which also has 27,000 square feet of in-line
space that is leased and a 3,500 square foot outparcel that
is leased. Applebee’s has a 5,400 square foot free-standing
Applebee’s restaurant with a 7,200 square foot pad site
that is leased.
On July 1, 2022, Gateway refinanced its existing $10.8
million non-recourse first mortgage loan prior to the
original maturity date and incurred a prepayment penalty
of $220,000, which was paid to the prior lender at the
date of repayment. The new $14. 0 million mortgage loan
matures on July 1, 2032 and requires payments of interest
only for the first 7 years at a rate equal to the SOFR plus
1. 75% and then requires payments of principal and
interest for the duration of the loan. Concurrent with
entering into the mortgage, Gateway entered into an
interest rate swap agreement, which converts the variable
rate based on SOFR to a fixed interest rate of 4.07% per
annum for the term of the mortgage note.
Putnam Plaza Shopping Center
The Company, through a wholly-owned subsidiary,
owns a 66. 67% undivided tenancy-in-common equity
interest in the 189,000 square foot Putnam Plaza Shopping
Center (“Putnam Plaza”), which is anchored by a Tops
grocery store.
Putnam Plaza has a first mortgage payable in the
amount of $17. 7 million. The mortgage requires monthly
payments of principal and interest at a fixed rate of
4. 81% and will mature in 2028.
Midway Shopping Center, L.P.
The Company, through a wholly-owned subsidiary,
owns an 11. 792% equity interest in Midway Shopping
Center L. P. (“Midway”), which owns a 247,000 square
foot grocery-anchored shopping center in Westchester
County, New York. Although the Company only has an
11. 792% equity interest in Midway, it controls 25% of the
voting power of Midway, and as such, has determined
that it exercises significant influence over the financial
and operating decisions of Midway but does not control
the venture and accounts for its investment in Midway
under the equity method of accounting.
34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has allocated the $7. 4 million excess of
the carrying amount of its investment in and advances to
Midway over the Company’s share of Midway’s net book
value to real property and is amortizing the difference
over the property’s estimated useful life of 39 years.
The remaining unamortized balance at October 31, 2022
is $5. 1 million.
Midway currently has a non-recourse first mortgage
payable in the amount of $23. 7 million. The loan requires
payments of principal and interest at the rate of 4. 80%
per annum and will mature in 2027.
81 Pondfield Road Company
The Company’s other investment in an unconsolidated
joint venture is a 20% economic interest in a partnership
which owns a retail and office building in Westchester
County, New York.
The Company accounts for the above investments
under the equity method of accounting since it exercises
significant influence, but does not control the joint
ventures. The other venturers in the joint ventures
have substantial participation rights in the financial
decisions and operation of the ventures or properties,
which preclude the Company from consolidating the
investments. The Company has evaluated its investment
in the joint ventures and has concluded that the joint
ventures are not Variable Interest Entities (“VIE’s”).
Under the equity method of accounting the initial
investment is recorded at cost as an investment
in unconsolidated joint venture, and subsequently
adjusted for equity in net income (loss) and cash
contributions and distributions from the venture. Any
difference between the carrying amount of the investment
on the Company’s balance sheet and the underlying
equity in net assets of the venture is evaluated for
impairment at each reporting period.
(7) LEASES
Lessor Accounting
The Company’s Lease income is comprised of both
fixed and variable income, as follows:
Fixed lease income includes stated amounts per the lease
contract, which are primarily related to base rent. Income
for these amounts is recognized on a straight-line basis.
Variable lease income includes recoveries from tenants,
which represents amounts that tenants are contractually
obligated to reimburse the Company for the tenants’
portion of Recoverable Costs. Generally, the Company’s
leases provide for the tenants to reimburse the Company
for Recoverable Costs based on the tenants’ share of the
actual costs incurred in proportion to the tenants’ share of
leased space in the property.
The following table provides a disaggregation of lease
income recognized during the years ended October 31,
2022, 2021 and 2020, under ASC Topic 842, “Leases,” as
either fixed or variable lease income based on the criteria
specified in ASC Topic 842 (in thousands):
October 31,
2022
2021
2020
Operating lease income:
Fixed lease income (Base Rent)
$102,587
$ 98,918
$ 98,678
Variable lease income (Recoverable Costs)
34,067
35,090
28,889
Other lease related income, net:
Above/below market rent amortization
972
570
706
Uncollectable amounts in lease income
(13)
(1,529)
(3,916)
ASC Topic 842 cash basis lease income reversal
47
(2,685)
(3,416)
Total lease income
$137,660
$130,364
$120,941
Urstadt Biddle Properties inc.
35
Future minimum rents under non-cancelable operating
leases for the next five years and thereafter, excluding
variable lease payments, are as follows (in thousands):
Fiscal Year Ending
2023(a)
$ 95,060
2024
85,624
2025
73,713
2026
64,768
2027
56,057
Thereafter
229,029
Total
$604,251
(a) The amounts above are based on existing leases in place at
October 31, 2022.
(8) STOCKHOLDERS’ EQUITY
Authorized Stock
The Company’s Charter authorizes up to 200,000,000
shares of various classes of stock. The total number of
shares of authorized stock consists of 100,000,000 shares
of Class A Common Stock, 30,000,000 shares of Common
Stock, 50,000,000 shares of Preferred Stock, and 20,000,000
shares of Excess Stock.
Preferred Stock
The 6. 25% Series H Senior Cumulative Preferred Stock
(the “Series H Preferred Stock”) is nonvoting, has no stated
maturity and is redeemable for cash at $25 per share at
the Company’s option on or after September 18, 2022.
The holders of our Series H Preferred Stock have general
preference rights with respect to liquidation and quarterly
distributions. Except under certain conditions, holders of
the Series H Preferred Stock will not be entitled to vote
on most matters. In the event of a cumulative arrearage
equal to six quarterly dividends, holders of Series H
Preferred Stock, together with all of the Company’s other
Series of preferred stock (voting as a single class without
regard to series) will have the right to elect two additional
members to serve on the Company’s Board of Directors
until the arrearage has been cured. Upon the occurrence
of a Change of Control, as defined in the Company’s
Articles of Incorporation, the holders of the Series H
Preferred Stock will have the right to convert all or part of
the shares of Series H Preferred Stock held by such holder
on the applicable conversion date into a number of the
Company’s shares of Class A common stock. Underwriting
commissions and costs incurred in connection with the sale
of the Series H Preferred Stock are reflected as a reduction
of additional paid in capital.
The 5. 875% Series K Senior Cumulative Preferred Stock
(“Series K Preferred Stock”) is non-voting, has no stated
maturity and is redeemable for cash at $25 per share at
the Company’s option on or after October 1, 2024. The
holders of our Series K Preferred Stock have general
preference rights with respect to liquidation and quarterly
distributions. Except under certain conditions, holders of
the Series K Preferred Stock will not be entitled to vote
on most matters. In the event of a cumulative arrearage
equal to six quarterly dividends, holders of Series K
Preferred Stock, together with all of the Company’s other
series of preferred stock (voting as a single class without
regard to series) will have the right to elect two additional
members to serve on the Company’s Board of Directors
until the arrearage has been cured. Upon the occurrence of
a Change of Control, as defined in the Company’s Articles
of Incorporation, the holders of the Series K Preferred
Stock will have the right to convert all or part of the
shares of Series K Preferred Stock held by such holders
on the applicable conversion date into a number of the
Company’s shares of Class A common stock. Underwriting
commissions and costs incurred in connection with the sale
of the Series K Preferred Stock are reflected as a reduction
of additional paid in capital.
Common Stock
The Class A Common Stock entitles the holder to 1/20
of one vote per share. The Common Stock entitles the
holder to one vote per share. Each share of Common
Stock and Class A Common Stock have identical rights
with respect to dividends except that each share of Class
A Common Stock will receive not less than 110% of
the regular quarterly dividends paid on each share of
Common Stock.
36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth the dividends declared per Common share and Class A Common share and tax status
for Federal income tax purposes of the dividends paid during the fiscal years ended October 31, 2022 and 2021:
Common Shares
Class A Common Shares
Gross
Gross
Dividend
Dividend
Dividend
Paid Per
Ordinary
Capital
Non-Taxable
Paid Per
Ordinary
Capital
Non-Taxable
Payment Date
Share
Income
Gain
Portion
Share
Income
Gain
Portion
January 14, 2022
$0. 2145
$0. 20704
$0. 00426
$0. 00319
$0. 2375
$0. 22924
$0. 004721
$0. 00354
April 14, 2022
$0. 2145
$0. 20704
$0. 00426
$0. 00319
$0. 2375
$0. 22924
$0. 004721
$0. 00354
July 15, 2022
$0. 2145
$0. 20704
$0. 00426
$0. 00319
$0. 2375
$0. 22924
$0. 004721
$0. 00354
October 14, 2022
$0. 2145
$0. 20704
$0. 00426
$0. 00319
$0. 2375
$0. 22924
$0. 004721
$0. 00354
$0. 858
$0. 82816
$0. 01704
$0. 01276
$0. 95
$0. 91696
$0. 018884
$0. 01416
January 15, 2021
$0. 125
$0. 10924
$0. 01576
$ —
$0. 14
$0. 12235
$0. 01765
$ —
April 16, 2021
$0. 125
$0. 10924
$0. 01576
$ —
$0. 14
$0. 12235
$0. 01765
$ —
July 16, 2021
$0. 207
$0. 18090
$0. 02610
$ —
$0. 23
$0. 20100
$0. 02900
$ —
October 15, 2021
$0. 207
$0. 18090
$0. 02610
$ —
$0. 23
$0. 20100
$0. 02900
$ —
$0. 664
$0. 58028
$0. 08372
$ —
$0. 74
$0. 64670
$0. 09330
$ —
The Company has a Dividend Reinvestment and Share
Purchase Plan (as amended, the “DRIP”), that permits
stockholders to acquire additional shares of Common Stock
and Class A Common Stock by automatically reinvesting
dividends. During fiscal 2022, the Company issued 3,600
shares of Common Stock and 7,538 shares of Class A
Common Stock (3,341 shares of Common Stock and 5,355
shares of Class A Common Stock in fiscal 2021) through the
DRIP. As of October 31, 2022, there remained 322,469 shares
of Common Stock and 368,003 shares of Class A Common
Stock available for issuance under the DRIP.
The Company has adopted a stockholder rights plan,
pursuant to which each holder of Common Stock
received a Common Stock right and each holder of
Class A Common Stock received a Class A Common Stock
right. The rights are not exercisable until the Distribution
Date and will expire on November 11, 2028, unless
earlier redeemed by the Company. If the rights become
exercisable, each holder of a Common Stock right will
be entitled to purchase from the Company one one
hundredth of a share of Series I Participating Preferred
Stock, and each holder of a Class A Common Stock
right will be entitled to purchase from the Company
one one hundredth of a share of Series J Participating
Preferred Stock, in each case, at a price of $85, subject to
adjustment. The “Distribution Date” will be the earlier
to occur of the close of business on the tenth business
day following: (a) a public announcement that an
acquiring person has acquired beneficial ownership of
10% or more of the total combined voting power of the
outstanding Common Stock and Class A Common Stock,
or (b) the commencement of a tender offer or exchange
offer that would result in the beneficial ownership
of 30% or more of the combined voting power of the
outstanding Common Stock and Class A Common Stock,
number of outstanding Common Stock, or the number of
outstanding Class A Common Stock. Thereafter, if certain
events occur, holders of Common Stock and Class A
Common Stock, other than the acquiring person, will be
entitled to purchase shares of Common Stock and Class
A Common Stock, respectively, of the Company having a
value equal to 2 times the exercise price of the right.
The Company’s articles of incorporation provide that
if any person acquires more than 7. 5% of the aggregate
value of all outstanding stock, except, among other
reasons, as approved by the Board of Directors, such
shares in excess of this limit automatically will be
exchanged for an equal number of shares of Excess Stock.
Excess Stock has limited rights, may not be voted and is
not entitled to any dividends.
Urstadt Biddle Properties inc.
37
Stock Repurchase
Following its initial December 2013 authorization, in
June 2017, our Board of Directors re-approved a share
repurchase program (“Prior Repurchase Program”) for
the repurchase of up to 2,000,000 shares, in the aggregate,
of Common Stock and Class A Common Stock in open
market transactions. For year ended October 31, 2022,
the Company repurchased 716,934 shares of Class A
Common Stock at an average price per share of $17. 56
and 12,877 shares of Common Stock at an average price
per share of $17. 80 under the Prior Repurchase Program.
For the year ended October 31, 2021, the Company
repurchased 29,154 shares of Class A Common Stock at
an average price per share of $19. 15 and 29,154 shares of
Common Stock at an average price per share of $16. 76
under the Prior Repurchase Program.
On October 3, 2022, our Board of Directors re-approved
a new share repurchase program (“Current Repurchase
Program”) for the repurchase of up to 2,000,000 shares,
in the aggregate, of Common Stock and Class A
Common Stock in open market transactions. The Current
Repurchase Program was announced on October 3, 2022
and has no set expiration date. The timing and actual
number of shares purchased under the program depend
upon marketplace conditions and other factors. For the
year ended October 31, 2022, the Company repurchased
485,998 shares of Class A Common stock at an average
price per share of $17. 07 and 6,840 shares of Common
stock at an average price per share of $17. 91 under the
Current Repurchase Program.
In addition, from November 1, 2022 to December 19,
2022, the Company repurchased 116,016 shares of Class
A Common Stock at an average price per share of $18. 39
and 287 shares of Common Stock at an average price per
share of $18. 40 under the Current Repurchase Program
through a Rule 10b5-1(c)(1) agreement entered into
between the Company and its broker Deutsche Bank
Securities Inc.
As of the date of this report, the Company has purchased
602,014 shares of Class A Common Stock and 7,127
Shares of Common Stock under the Current Repurchase
Program. From the inception of all repurchase programs,
the Company has purchased 2,268,093 shares of Class A
Common Stock and 53,758 shares of Common stock.
(9) STOCK COMPENSATION AND OTHER
BENEFIT PLANS
Restricted Stock Plan
The Company has a Restricted Stock Plan, as
amended (the “Plan”) that provides a form of equity
compensation for employees of the Company. The Plan,
which is administered by the Company’s compensation
committee, authorizes grants of up to an aggregate
of 5,500,000 shares of the Company’s common equity
consisting of 350,000 Common shares, 350,000 Class A
Common shares and 4,800,000 shares, which at the
discretion of the compensation committee, may be
awarded in any combination of Class A Common shares
or Common shares.
In fiscal 2022, the Company awarded 109,500 shares of
Common Stock and 149,000 shares of Class A Common
Stock to participants in the Plan. The grant date fair
value of restricted stock grants awarded to participants
in 2022 was approximately $5. 2 million. As of October 31,
2022, there was $12. 4 million of unamortized restricted
stock compensation related to non-vested restricted
stock grants awarded under the Plan. The remaining
unamortized expense is expected to be recognized over a
weighted average period of 4. 6 years. For the years ended
October 31, 2022, 2021 and 2020, amounts charged to
compensation expense totaled $3,657,000, $3,938,000 and
$5,523,000, respectively. The year ended October 31, 2020
amount charged to compensation expense includes $1. 4
million related to the accelerated vesting of previously
unamortized restricted stock compensation as the result
of the death of our Chairman Emeritus, Charles J. Urstadt,
in March 2020.
38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the status of the Company’s non-vested restricted stock awards as of October 31, 2022, and changes
during the year ended October 31, 2022 is presented below:
Common Shares
Class A Common Shares
Profit Sharing and Savings Plan
The Company has a profit sharing and savings plan
(the “401K Plan”), which permits eligible employees
to defer a portion of their compensation in accordance
with the Internal Revenue Code. Under the 401K Plan,
the Company made contributions on behalf of eligible
employees. The Company made contributions to the 401K
Plan of approximately $277,000, $267,000 and $253,000
in each of the three years ended October 31, 2022, 2021
and 2020, respectively. The Company also has an Excess
Benefit and Deferred Compensation Plan that allows
eligible employees to defer benefits in excess of amounts
provided under the Company’s 401K Plan and a portion
of the employee’s current compensation.
(10) FAIR VALUE MEASUREMENTS
ASC Topic 820, “Fair Value Measurements and
Disclosures,” defines fair value as the price that would be
received to sell an asset, or paid to transfer a liability, in
an orderly transaction between market participants.
ASC Topic 820’s valuation techniques are based on
observable or unobservable inputs. Observable inputs
reflect market data obtained from independent sources,
while unobservable inputs reflect the Company’s market
assumptions. These two types of inputs have created the
following fair value hierarchy:
• Level 1—Quoted prices for identical instruments in
active markets
• Level 2—Quoted prices for similar instruments in
active markets; quoted prices for identical or similar
instruments in markets that are not active; and
model-derived valuations in which significant
value drivers are observable
• Level 3—Valuations derived from valuation
techniques in which significant value drivers
are unobservable
The Company calculates the fair value of the
redeemable noncontrolling interests based on either
quoted market prices on national exchanges for those
interests based on the Company’s Class A Common stock
(level 1), contractual redemption prices per share as stated
in governing agreements (level 2) or unobservable inputs
considering the assumptions that market participants
would make in pricing the obligations (level 3). The
level 3 inputs used include an estimate of the fair value
of the cash flow generated by the limited partnership or
limited liability company in which the investor owns the
joint venture units capitalized at prevailing market rates
for properties with similar characteristics or located in
similar areas.
The fair values of interest rate swaps are determined
using widely accepted valuation techniques, including
discounted cash flow analysis, on the expected cash flows
of each derivative. The analysis reflects the contractual
terms of the swaps, including the period to maturity, and
uses observable market-based inputs, including interest
rate curves (“significant other observable inputs.”) The
fair value calculation also includes an amount for risk of
non-performance using “significant unobservable inputs”
such as estimates of current credit spreads to evaluate the
likelihood of default. The Company has concluded, as of
October 31, 2022 and 2021, that the fair value associated
with the “significant unobservable inputs” relating to the
Company’s risk of non-performance was insignificant to
the overall fair value of the interest rate swap agreements
and, as a result, the Company has determined that the
relevant inputs for purposes of calculating the fair value
of the interest rate swap agreements, in their entirety,
were based upon “significant other observable inputs”.
Weighted-
Weighted-
Average Grant
Average Grant
Shares
Date Fair Value
Shares
Date Fair Value
Non-vested at October 31, 2021
927,800
$17. 08
521,700
$20. 12
Granted
109,500
$18. 47
149,000
$21. 32
Vested
(103,100)
$18. 30
(87,100)
$23. 45
Forfeited
—
—
(36,300)
$19. 49
Non-vested at October 31, 2022
934,200
$17. 11
547,300
$19. 96
Urstadt Biddle Properties inc.
39
The Company measures its redeemable noncontrolling interests and interest rate swap derivatives at fair value on
a recurring basis. The fair value of these financial assets and liabilities was determined using the following inputs at
October 31, 2022 and 2021 (amounts in thousands):
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents,
tenant receivables, prepaid expenses, other assets,
accounts payable and accrued expenses, are reasonable
estimates of their fair values because of the short-term
nature of these instruments. The carrying value of the
Facility is deemed to be at fair value since the outstanding
debt is directly tied to monthly LIBOR contracts.
Mortgage notes payable that were assumed in property
acquisitions were recorded at their fair value at the time
they were assumed.
The estimated fair value of mortgage notes payable
and other loans was approximately $278 million and
$300 million at October 31, 2022 and October 31, 2021,
respectively. The estimated fair value of mortgage notes
payable is based on discounting the future cash flows at a
year-end risk adjusted borrowing rates currently available
to the Company for issuance of debt with similar terms
and remaining maturities. These fair value measurements
fall within level 2 of the fair value hierarchy.
Although management is not aware of any factors
that would significantly affect the estimated fair value
amounts from October 31, 2021, such amounts have not
been comprehensively revalued for purposes of these
financial statements since that date and current estimates
of fair value may differ significantly from the amounts
presented herein.
(11) COMMITMENTS AND CONTINGENCIES
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. At October 31, 2022, the Company had
commitments of approximately $10. 5 million for tenant-
related obligations.
(12) SUBSEQUENT EVENTS
On December 14, 2022, the Board of Directors of the
Company declared cash dividends of $0. 2250 for each
share of Common Stock and $0. 2500 for each share of
Class A Common Stock. The dividends are payable on
January 14, 2023 to stockholders of record on January 5,
2023. The Board of Directors also ratified the actions of the
Company’s compensation committee authorizing awards
of 109,800 shares of Common Stock and 151,750 shares
of Class A Common Stock to certain officers, directors
and employees of the Company effective January 3, 2023,
pursuant to the Company’s restricted stock plan. The fair
value of the shares awarded totaling $4. 9 million will
be charged to expense over the requisite service periods
(see Note 1).
Quoted Prices in
Significant
Significant
Active Markets
Other Observable
Unobservable
for Identical Assets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
October 31, 2022
Assets:
Interest Rate Swap Agreements
$15,856
$ —
$15,856
$ —
Liabilities:
Redeemable noncontrolling interests
$61,550
$11,979
$49,571
$ —
October 31, 2021
Assets:
Interest Rate Swap Agreements
$ 515
$ —
$ 515
$ —
Liabilities:
Interest Rate Swap Agreements
$ 6,735
$ —
$ 6,735
$ —
Redeemable noncontrolling interests
$67,395
$20,283
$46,566
$546
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors and Stockholders of Urstadt Biddle Properties Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Urstadt Biddle Properties, Inc. (the “Company”)
as of October 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income,
stockholders’ equity, and cash flows for each of the three years in the period ended October 31, 2022, and the related
notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of October 31, 2022 and
2021, and the results of its operations and its cash flows for each of the three years in the period ended October 31,
2022, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the Company’s internal control over financial reporting as of October 31, 2022, based on criteria
established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), and our report dated January 12, 2023, expressed an unqualified opinion.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U. S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in
any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures
to which it relates.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Urstadt Biddle Properties inc.
41
Real Estate Investments: Determination of Impairment Indicators
The Company’s evaluation of real estate investments for impairment involves an initial assessment of each real
estate investments to determine whether events or changes in circumstances exist that may indicate that the carrying
amounts of real estate investments are no longer recoverable. The Company’s criteria for possible impairment
indicators include computations of property fair value based on net operating income (“NOI”), and a future cash flow
analysis. If the Company believes there is an indication of possible impairment, management evaluates its real estate
investments by comparing detailed undiscounted future cash flows expected to be generated over the life of each asset
to the respective carrying amount of the property. If the carrying amount of an asset exceeds the undiscounted future
cash flows, an analysis is performed to determine the fair value of the asset and any potential impairment charge.
The Company makes significant assumptions to evaluate real estate assets for possible indicators of impairment.
Changes in these assumptions could result in additional analysis or, in some cases, an impairment charge. Given
the Company’s evaluation of possible indicators of impairment of real estate assets requires management to make
significant assumptions, performing audit procedures to evaluate whether management appropriately identified
events or changes in circumstances indicating that the carrying amounts of real estate assets may not be recoverable
required a high degree of auditor judgment.
Our audit procedures related to the evaluation of real estate investments for possible indicators of impairment
included the following, among others:
• We obtained an understanding of management’s process to identify indicators of impairment and we evaluated
the design and tested the operating effectiveness of the controls that address the identification of indicators of
impairment.
• We evaluated management’s property by property analysis by testing real estate assets for possible indicators
of impairment, including searching for adverse asset-specific and/or market conditions, as well as assessing the
properties’ holding periods, including expected asset dispositions.
• We analyzed and independently calculated estimated fair values and future cash flow analysis used by
management in their assessment of impairment indicators.
• We independently analyzed properties experiencing a significant decrease in NOI and evaluated whether such
properties resulted in potential indicators of impairment.
• We performed inquiries with management to determine whether factors were identified in the current period that
may be an impairment indicator, including changes in tenant vacancies, expected holding periods, or changes in
market rental rates.
/s/ PKF O’Connor Davies, LLP
We have served as the Company’s auditor since 2006.
New York, New York
January 12, 2023
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
42
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.
SPECIAL NOTE REGARDING FORWARD-
LOOKING STATEMENTS
This Annual Report of Urstadt Biddle Properties Inc.
(the “Company”) contains certain forward-looking
statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Such
statements can generally be identified by such words
as “anticipate,” “believe,” “can,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “seek,”
“should,” “will” or variations of such words or other
similar expressions and the negatives of such words.
All statements included in this report that address
activities, events or developments that we expect, believe
or anticipate will or may occur in the future, including
such matters as future capital expenditures, dividends
and acquisitions (including the amount and nature
thereof), business strategies, expansion and growth of
our operations and other such matters, are forward-
looking statements. These statements are based on
certain assumptions and analyses made by us in light of
our experience and our perception of historical trends,
current conditions, expected future developments and
other factors we believe are appropriate. Such statements
are inherently subject to risks, uncertainties and other
factors, many of which cannot be predicted with accuracy
and some of which might not even be anticipated. Future
events and actual results, performance or achievements,
financial and otherwise, may differ materially from
the results, performance or achievements expressed or
implied by the forward-looking statements. We caution
not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. We do
not undertake or accept any obligation or undertaking
to release publicly any updates or revisions to any
forward-looking statement to reflect any change in our
expectations or any change in events, conditions or
circumstances on which any such statement is based.
Important factors that we think could cause our actual
results to differ materially from expected results are
summarized below.
New factors emerge from time to time, and it is not
possible for us to predict which factors will arise.
In addition, we cannot assess the impact of each factor
on our business or the extent to which any factor,
or combination of factors, may cause actual results to
differ materially from those contained in any forward-
looking statements.
Important factors, among others, that may affect our
actual results include:
• negative impacts from the continued spread of
COVID-19 or from the emergence of a new strain of
novel corona virus, including on the U. S. or global
economy or on our business, financial position or
results of operations;
• economic and other market conditions, including real
estate and market conditions, that could impact us,
our properties or the financial stability of our tenants;
• consumer spending and confidence trends, as well as
our ability to anticipate changes in consumer buying
practices and the space needs of tenants;
• our relationships with our tenants and their financial
condition and liquidity;
• any difficulties in renewing leases, filling vacancies or
negotiating improved lease terms;
• the inability of our properties to generate increased,
or even sufficient, revenues to offset expenses,
including amounts we are required to pay to
municipalities for real estate taxes, payments for
common area maintenance expenses at our properties
and salaries for our management team and other
employees;
• the market value of our assets and the supply of, and
demand for, retail real estate in which we invest;
• risks of real estate acquisitions and dispositions,
including our ability to identify and acquire retail
real estate that meet our investment standards
in our markets, as well as the potential failure of
transactions to close;
• risks of operating properties through joint ventures
that we do not fully control;
• financing risks, such as the inability to obtain debt or
equity financing on favorable terms or the inability
to comply with various financial covenants included
in our Unsecured Revolving Credit Facility (the
“Facility”) or other debt instruments we currently
have or may subsequently obtain, as well as the level
and volatility of interest rates, which could impact the
market price of our common stock and the cost of our
borrowings;
• environmental risk and regulatory requirements;
• risks related to our status as a real estate investment
trust, including the application of complex federal
income tax regulations that are subject to change;
• legislative and regulatory changes generally that may
impact us or our tenants; and
• as well as other reports filed by the Company with
the Securities and Exchange Commission (the “SEC”).
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Urstadt Biddle Properties inc.
43
EXECUTIVE SUMMARY
Overview
We are a fully integrated, self-administered real estate
company that has elected to be a Real Estate Investment
Trust (“REIT”) for federal income tax purposes, engaged in
the acquisition, ownership and management of commercial
real estate, primarily neighborhood and community
shopping centers, anchored by supermarkets, pharmacy/
drug-stores and wholesale clubs, with a concentration in
the metropolitan tri-state area outside of the City of New
York. Other real estate assets include office properties,
two self-storage facilities, single tenant retail or restaurant
properties and office/retail mixed-use properties. Our
major tenants include supermarket chains and other
retailers who sell basic necessities.
At October 31, 2022, we owned or had equity interests
in 77 properties, which include equity interests we own in
four consolidated joint ventures and six unconsolidated
joint ventures, containing a total of 5. 3 million square feet
of Gross Leasable Area (“GLA”). Of the properties owned
by wholly-owned subsidiaries or joint venture entities
that we consolidate, approximately 93. 0% of the GLA
was leased (91. 9% at October 31, 2021). Of the properties
owned by unconsolidated joint ventures, approximately
94. 4% of the GLA was leased (93. 9% at October 31, 2021).
In addition, we own and operate self-storage facilities at
two of our retail properties. Both self-storage facilities are
managed for us by Extra Space Storage, a publicly-traded
REIT. One of the self-storage facilities is located in the back
of our Yorktown Heights, NY shopping center in below
grade space. As of October 31, 2022, this self-storage facility
had 57,300 square feet of available GLA, which was 94. 1%
leased. As discussed later in this Annual Report, we have
also developed a second self-storage facility located in
Stratford, CT with 90,000 square feet of available GLA. This
facility has been operational for approximately 18 months
and is 87. 0% leased. We are also close to completion on
a third self-storage facility at our Pompton Lakes, NJ
property and our anticipated investment to develop the
facility is approximately $7 million.
We have paid quarterly dividends to our stockholders
continuously since our founding in 1969.
Impact of COVID-19
In March 2020, the World Health Organization declared
the outbreak of COVID-19 a global pandemic. During
the early part of the pandemic, the U. S. market came
under severe pressure due to numerous factors, including
preventive measures taken by local, state and federal
authorities to alleviate the public health crisis, such as
mandatory business closures, quarantines, and restrictions on
travel. These measures, as implemented by the tri-state area of
Connecticut, New York and New Jersey, generally permitted
businesses designated as “essential” to remain open, but
limited the operations of other categories of our tenants to
varying degrees. These restrictions have been long since
lifted, and the negative impact of the COVID-19 pandemic
appears to be much improved, with most tenant businesses
operating at pre-pandemic levels. For certain categories of
our tenants, such as dry cleaners and some small format
fitness tenants, however, the negative impact of COVID-19
was more severe and the recovery is still in progress.
The following information is intended to provide
certain information regarding the impact of the COVID-19
pandemic on our portfolio and our tenants:
• As of October 31, 2022, all of our 71 retail shopping
centers, stand-alone restaurants and stand-alone bank
branches are open and operating.
• As of October 31, 2022, approximately 87% of our
GLA is located in properties anchored by grocery
stores, pharmacies or wholesale clubs, 3. 7% of our
GLA is located in outdoor retail shopping centers
adjacent to regional malls, and 7. 8% of our GLA is
located in outdoor neighborhood convenience retail,
with the remaining 1. 5% of our GLA consisting of
six suburban office buildings located in Greenwich,
Connecticut and Bronxville, New York and three
retail bank branches. All six suburban office buildings
are open and all of the retail bank branches are open.
Rent Deferrals, Abatements and Lease Restructurings
Similar to other retail landlords across the United
States, we received a number of requests for rent
relief from tenants, with most requests received during
the early days of the COVID-19 pandemic when
stay-at-home orders were in place and many businesses
were required to close. We evaluated each request on a
case-by-case basis to determine the best course of action,
recognizing that in many cases some type of concession
may be appropriate and beneficial to our long-term
interests. Although each negotiation has been specific to
that tenant, most concessions have been in the form of
deferred rent for some portion of rents due in April 2020
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
44
through the beginning of fiscal 2021, to be paid back over
the later part of the lease, preferably within a period of
one year or less. Some of these concessions have been in
the form of rent abatements for some portion of tenant
rents due.
In addition, we have continued to receive a small
number of follow-on requests from tenants to whom we
had already provided temporary rent relief in the early
days of the pandemic. These tenants are generally ones
whose businesses have been slower to recover from
the pandemic, as discussed above, due to the high touch
nature of their services or the impact of the remote
workforce. These requests, however, are greatly reduced.
Each reporting period, we must make estimates
as to the collectability of our tenants’ accounts
receivable related to base rent, straight-line rent, expense
reimbursements and other revenues. Management
analyzes accounts receivable by considering tenant
creditworthiness, current economic trends, including
the impact of the COVID-19 pandemic on tenants’
businesses, and changes in tenants’ payment patterns
when evaluating the adequacy of the allowance for
doubtful accounts.
As a result, in accordance with ASC Topic 842, we
revised our collectability assumptions for many of
our tenants that were most significantly impacted
by COVID-19. This amount includes changes in our
collectability assessments for certain tenants in our
portfolio from probable to not probable, which requires
that revenue recognition for those tenants be converted
to cash basis accounting, with previously uncollected
billed rents reversed in the current period. From the
beginning of the COVID-19 pandemic through the end
of our second quarter of fiscal 2021, we converted 89
tenants to cash basis accounting in accordance with ASC
Topic 842. We have not converted any additional tenants
to cash basis accounting since our second quarter of fiscal
2021. As of October 31, 2022, 34 of the 89 tenants are no
longer tenants in the Company’s properties. In addition,
when one of the Company’s tenants is converted to
cash basis accounting in accordance with ASC Topic 842,
all previously recorded straight-line rent receivables
need to be reversed in the period, in which the tenant is
converted to cash basis revenue recognition.
In continuing to evaluate the collectability of tenant
lease income billings, during the year ended October 31,
2022 and 2021 we determined that lease payments for
10 and 13 tenants, respectively, which had previously
been converted to cash-basis accounting as a result of
our earlier assessment that their future lease payments
were not probable of collection, had become probable of
collection and were restored to accrual basis accounting.
Our criteria for restoring a cash-basis tenant to accrual
accounting required the tenant to demonstrate its ability
to make current rental payments over the preceding
six months and for that tenant to have no significant
receivables at the time of reinstatement. As a result of the
change in assessment for these tenants and the restoration
of such tenants’ straight-line rent receivables, we recorded
$57,200 and $582,000 in lease income in the years ended
October 31, 2022 and 2021, respectively.
During the years ended October 31, 2022 and 2021,
we recognized collectability adjustments/(recoveries)
totaling $(34,000) and $4. 2 million, respectively.
As of October 31, 2022, the revenue from approximately
3. 7% of our tenants (based on total commercial leases)
is being recognized on a cash basis.
Each reporting period, management assesses
whether there are any indicators that the value of the
Company’s real estate investments may be impaired, and
management has concluded that none of the Company’s
investment properties are impaired at October 31, 2022.
We will continue to monitor the economic, financial,
and social conditions resulting from the COVID-19
pandemic and assess our real estate asset portfolio for any
impairment indicators as required under GAAP. If we
determine that any of our real estate assets are impaired,
we will be required to take impairment charges, and such
amounts could be material. See Footnote 1 to the Notes
to the Company’s Consolidated Financial Statements
for additional discussion regarding our policies on
impairment charges.
Strategy, Challenges and Outlook
We have a conservative capital structure, which
includes permanent equity sources of Common Stock,
Class A Common Stock and two series of perpetual
preferred stock, which are only redeemable at our option.
In addition, we have mortgage debt secured by some of
our properties and a $125 million Unsecured Revolving
Credit Facility (the “Facility”). We do not have any
secured debt maturing until August of 2024.
Urstadt Biddle Properties inc.
45
Key elements of our growth strategy and operating
policies are to:
• maintain our focus on community and neighborhood
shopping centers, anchored principally by regional
supermarkets, pharmacy chains or wholesale clubs,
which we believe can provide a more stable revenue
flow even during difficult economic times, given the
focus on food and other types of staple goods;
• acquire quality neighborhood and community
shopping centers in the northeastern part of the
United States with a concentration on properties
in the metropolitan tri-state area outside of the
City of New York, and unlock further value in these
properties with selective enhancements to both the
property and tenant mix, as well as improvements
to management and leasing fundamentals, with the
hope of growing our assets through acquisitions
subject to the availability of acquisitions that meet
our investment parameters;
• selectively dispose of underperforming properties
and re-deploy the proceeds into potentially higher
performing properties that meet our acquisition
criteria;
• invest in our properties for the long term through
regular maintenance, periodic renovations and capital
improvements, enhancing their attractiveness to
tenants and customers (e. g. curbside pick-up), as well
as increasing their value;
• leverage opportunities to increase GLA at existing
properties, through development of pad sites and
reconfiguring of existing square footage, to meet the
needs of existing or new tenants;
• proactively manage our leasing strategy by
aggressively marketing available GLA, renewing
existing leases with strong tenants, anticipating
tenant weakness when necessary by pre-leasing their
spaces and replacing below-market-rent leases with
increased market rents, with an eye towards securing
leases that include regular or fixed contractual
increases to minimum rents;
• improve and refine the quality of our tenant mix at
our shopping centers;
• maintain strong working relationships with our
tenants, particularly our anchor tenants;
• maintain a conservative capital structure with low
debt levels; and
• control property operating and administrative costs.
We believe our strategy of focusing on community and
neighborhood shopping centers, anchored principally by
regional supermarkets, pharmacy chains or wholesale
clubs, has been validated during the COVID-19
pandemic. We believe the nature of our properties makes
them less susceptible to economic downturns than other
retail properties whose anchor tenants do not supply
basic necessities. During normal conditions, we believe
that consumers generally prefer to purchase food and
other staple goods and services in person, and even
during the COVID-19 pandemic our supermarkets,
pharmacies and wholesale clubs have been posting strong
in-person sales. Moreover, most of our grocery stores
implemented or expanded curbside pick-up or partnered
with delivery services to cater to the needs of their
customers during the COVID-19 pandemic.
We recognize, however, that the pandemic may have
accelerated a movement towards e-commerce that may
be challenging for weaker tenants that lack an omni-
channel sales or micro-fulfillment strategy. We launched
a program designating dedicated parking spots for
curbside pick-up and are assisting tenants in many other
ways. Many tenants have adapted to the new business
environment through use of our curbside pick-up
program, and early industry data seems to indicate that
micro-fulfillment from retailers with physical locations
may be a new competitive alternative to e-commerce.
We have seen significant improvement in general
business conditions, but the pandemic is still ongoing,
with existing and new variants making the situation
difficult to predict. Moreover, challenges presented by
inflation, labor shortages, supply chain disruptions
and uncertainties in the U. S. economy could present
continued or new challenges for our tenants. We will
continue to accrue rental revenue during the deferral
period, except for tenants for which revenue recognition
was converted to cash basis accounting in accordance
with ASC Topic 842.
As a REIT, we are susceptible to changes in interest
rates, the lending environment, the availability of capital
markets and the general economy. The impacts of any
changes are difficult to predict.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
46
Highlights of Fiscal 2022; Recent Developments
Set forth below are highlights of our recent property
acquisitions, potential acquisitions under contract, other
investments, property dispositions and financings:
• In September 2021, we entered into a purchase
and sale agreement to sell our property located in
Chester, NJ to an unrelated third party for a sale
price of $1. 96 million, as that property no longer met
our investment objectives. In accordance with ASC
Topic 360-10-45, the property met all the criteria to be
classified as held for sale in the fourth quarter of fiscal
2021, and accordingly we recorded a loss on property
held for sale of $342,000, which loss was included in
continuing operations in the consolidated statement
of income for the year ended October 31, 2021. This
loss has been added back to our FFO as discussed
below in this Annual Report. The amount of the loss
represented the net carrying amount of the property
over the fair value of the asset, less estimated cost
to sell. In December 2021, the Chester sale was
completed and we realized an additional loss on
sale of property of $7,000, which loss is included in
continuing operations in the consolidated statement
of income for the year ended October 31, 2022.
• In November 2021, we redeemed 59,819 units of
UB High Ridge, LLC from noncontrolling members.
The total cash price paid for the redemptions was
$1. 4 million. As a result of the redemptions, our
ownership percentage of High Ridge increased to
26. 9% from 24. 6%.
• In December 2021, we refinanced our existing
$6.5 million first mortgage payable secured by
our Boonton, NJ property. The new mortgage has
a principal balance of $11 million and requires
payments of principal and interest at a fixed
interest rate of 3. 45%. The new mortgage matures
in November 2031.
• In February 2022, we sold one free-standing
restaurant property located in Bloomfield, NJ, as that
property no longer met our investment objectives.
The property was sold for $1. 8 million and we
recorded a gain on sale of property in our second
quarter of fiscal 2022 in the amount of $544,000.
• In February 2022, we refinanced our existing $22.8
million first mortgage secured by our Stratford, CT
property. The new mortgage has a principal balance
of $35. 0 million, a term of 10 years, and requires
payments of principal and interest at a variable
rate based on the Secured Overnight Finance Rate
(“SOFR”), plus an applicable spread. Concurrent
with entering into the mortgage, we entered into an
interest rate swap agreement with the lender as the
counterparty, which converts the variable rate based
on SOFR to a fixed rate of interest totaling 3.0525%
per annum.
• In February 2022, we purchased Shelton Square
shopping center, and in July 2022 exercised an option
to purchase a pad site adjacent to the shopping
center (collectively, “Shelton”), for an aggregate of
$35. 6 million (exclusive of closing costs). Shelton is
a 188,000 square foot grocery-anchored shopping
center located in Shelton, CT. We funded the purchase
with available cash, a $20 million borrowing on our
Facility, $10 million of which was repaid in March
2022, and proceeds from mortgage borrowings.
• In March 2022, we sold one free-standing restaurant
property located in Unionville, CT, as that property
no longer met our investment objectives. The
property was sold for $950,000 and we recorded a
gain on sale of property in our second quarter of
fiscal 2022 in the approximate amount of $204,000.
• In March 2022, we redeemed the remaining units of
UB New City, LLC from the noncontrolling member.
The total cash price paid for the redemption was
$502,000. As a result of the redemption, we now own
100% of the entity.
• In March 2022, we repaid our first mortgage secured
by our Passaic, NJ property in the amount of
$3. 1 million with available cash.
• In August 2022, we redeemed 59,760 units of
UB High Ridge, LLC from noncontrolling members.
The total cash price paid for the redemptions was
$1. 4 million. As a result of the redemptions, our
ownership percentage of High Ridge increased to
29. 2% from 26. 9%.
• In October 2022, we redeemed 8,000 units of UB
Dumont I, LLC from noncontrolling members.
The total cash price paid for the redemptions
was $168,000. As a result of the redemptions, our
ownership percentage of Dumont increased to 37. 8%
from 36. 4%.
Urstadt Biddle Properties inc.
47
• In the fiscal year ended October 31, 2022, we
repurchased 1,202,932 shares of our Class A Common
stock at an average price of $16. 76 per share and
19,717 shares of our Common stock at an average
price per share of $17. 02 under previously announced
share repurchase programs, as we believed it was a
good use of our cash and a way to add value to
our stockholders.
Leasing
Overview
With the early negative impacts of the COVID-19
pandemic much improved and most tenant businesses
operating at pre-pandemic levels, we have observed a
marked increase in leasing activity, including interest
from potential new tenants and tenants interested in
renewing their leases. However, challenges presented
by inflation, labor shortages, supply chain disruptions
and uncertainties in the U. S. economy could present
continued or new challenges for our tenants.
For the fiscal year 2022, we executed new leases
and renewals for a total of 942,000 square feet of
predominantly retail space in our consolidated portfolio.
New leases for vacant spaces were signed for 190,000
square feet at an average rental increase of 1. 8% on a
cash basis. Renewals for 752,000 square feet of currently
occupied space were signed at an average rental increase
of 3. 7% on a cash basis.
Tenant improvements and leasing commissions
averaged $46. 70 per square foot for new leases for
the fiscal year ended October 31, 2022. There was no
significant cost related to our lease renewals for the fiscal
year ended 2022. There is risk that some new tenants may
be delayed in taking possession of their space or opening
their businesses due to supply chain issues that result
in construction delays or labor shortages. In the event
we are responsible for all or a portion of the construction
resulting in the delay, some tenants may have the right
to terminate their leases or delay paying rent.
The rental increases/decreases associated with new
and renewal leases generally include all leases signed
in arms-length transactions reflecting market leverage
between landlords and tenants during the period. The
comparison between average rent for expiring leases
and new leases is determined by including minimum
rent paid on the expiring lease and minimum rent to be
paid on the new lease in the first year. In some instances,
management exercises judgment as to how to most
effectively reflect the comparability of spaces reported
in this calculation. The change in rental income on
comparable space leases is impacted by numerous factors
including current market rates, location, individual
tenant creditworthiness, use of space, market conditions
when the expiring lease was signed, the age of the
expiring lease, capital investment made in the space and
the specific lease structure. Tenant improvements include
the total dollars committed for the improvement (fit-out)
of a space as it relates to a specific lease but may also
include base building costs (i. e. expansion, escalators
or new entrances) that are required to make the space
leasable. Incentives (if applicable) include amounts paid
to tenants as an inducement to sign a lease that does not
represent building improvements.
New leases signed in 2022 generally become effective
over the following one to two years and have an
average term of 5. 3 years. Renewals also have an average
term of 4 years. There is risk that some new tenants
will not ultimately take possession of their space and that
tenants for both new and renewal leases may not pay
all of their contractual rent due to operating, financing
or other reasons.
Impact of Inflation on Leasing
Our long-term leases contain provisions to mitigate
the adverse impact of inflation on our operating results.
Such provisions include clauses entitling us to receive
scheduled base rent increases and percentage rents based
upon tenants’ gross sales, which could increase as prices
rise. In addition, many of our non-anchor leases are for
terms of less than ten years, which permits us to seek
increases in rents upon renewal at then current market
rates if rents provided in the expiring leases are below
then current market rates. Most of our leases require
tenants to pay a share of operating expenses, including
common area maintenance, real estate taxes, insurance
and utilities, thereby reducing our exposure to increases
in costs and operating expenses resulting from inflation.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
48
CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those estimates made
in accordance with GAAP that involve a significant
level of estimation and uncertainty and are reasonably
likely to have a material impact on the financial condition
or results of operations of the Company and require
management’s most difficult, complex or subjective
judgments. Our most significant accounting estimates
are as follows:
• Valuation of investment properties
• Revenue recognition
• Determining the amount of our allowance for
doubtful accounts
Valuation of Investment Properties
At each reporting period management must assess
whether the value of any of its investment properties are
impaired. The judgement of impairment is subjective
and requires management to make assumptions about
future cash flows of an investment property and to
consider other factors. The estimation of these factors
has a direct effect on valuation of investment properties
and consequently net income. As of October 31, 2022,
management does not believe that any of our investment
properties are impaired based on information available
to us at October 31, 2022. In the future, almost any level
of impairment would be material to our net income.
Revenue Recognition
Our main source of revenue is lease income from our
tenants to whom we lease space at our 77 shopping
centers. The COVID-19 pandemic has caused distress for
many of our tenants as some of those tenant businesses
were forced to close early in the pandemic, and although
most have been allowed to re-open and operate, some
categories of tenants have been slower to recover. As
a result, we had several tenants who had difficulty
paying all of their contractually obligated rents and we
reached agreements with many of them to defer or abate
portions of the contractual rents due under their leases
with the Company. In accordance with ASC Topic 842,
where appropriate, we will continue to accrue rental
revenue during the deferral period, except for tenants for
which revenue recognition was converted to cash basis
accounting in accordance with ASC Topic 842. However,
we anticipate that some tenants eventually will be unable
to pay amounts due, and we will incur losses against
our rent receivables, which would reduce lease income.
The extent and timing of the recognition of such losses
will depend on future developments, which are highly
uncertain and cannot be predicted and these future losses
could be material.
Allowance for Doubtful Accounts
GAAP requires us to bill our tenants based on the terms
in their leases and to record lease income on a straight-
line basis. When a tenant does not pay a billed amount
due under their lease, it becomes a tenant account
receivable, or an asset of the Company. GAAP requires
that receivables, like most assets, be recorded at their
realizable value. Each reporting period we analyze our
tenant accounts receivable, and based on the information
available to management at the time, record an allowance
for doubtful account for any unpaid tenant receivable
that we believe is uncollectable. This analysis is subjective
and the conclusions reached have a direct impact on net
income. As of October 31, 2022, the portion of our billed
but unpaid tenant receivables, excluding straight-line rent
receivables that we believe are collectable, amounts to
$1. 4 million.
For a further discussion of our accounting estimates
and critical accounting policies, please see Note 1 in
our consolidated financial statements included in this
Annual Report.
LIQUIDITY AND CAPITAL RESOURCES
Overview
At October 31, 2022, we had cash and cash equivalents
of $15. 0 million, compared to $24. 1 million at October 31,
2021. Our sources of liquidity and capital resources
include operating cash flows from real estate operations,
proceeds from bank borrowings and long-term
mortgage debt, capital financings and sales of real estate
investments. Substantially all of our revenues are
derived from rents paid under existing leases, which
means that our operating cash flow depends on the
ability of our tenants to make rental payments. In fiscal
2022, 2021 and 2020, net cash flow provided by operating
activities amounted to $77. 8 million, $73. 7 million and
$61. 9 million, respectively.
Urstadt Biddle Properties inc.
49
Our short-term liquidity requirements consist primarily
of normal recurring operating expenses and capital
expenditures, debt service, management and professional
fees, cash distributions to certain limited partners
and non-managing members of our consolidated joint
ventures, and regular dividends paid to our Common and
Class A Common stockholders. Cash dividends paid on
Common and Class A Common stock for fiscal years ended
October 31, 2022, 2021 and 2020 totaled $37. 3 million,
$29. 0 million and $30. 0 million, respectively. Historically,
we have met short-term liquidityrequirements, which is
defined as a rolling twelve-month period, primarily by
generating net cash from the operation of our properties.
During the first two quarters of fiscal 2021, the Board
of Directors declared and the Company paid quarterly
dividends that were reduced from pre-pandemic levels.
Subsequent to the end of the second quarter of fiscal
2021, the Board of Directors increased our Common and
Class A Common stock dividends when compared to
the reduced dividends that were paid during the earlier
part of the pandemic. In December 2021, the Board of
Directors further increased the annualized dividend by
$0. 03 per Common and Class A Common share beginning
with our January 2022 dividend and continued at that
rate with our second, third and fourth quarter dividends
payable in April, July and October 2022, respectively.
On December 14, 2022, the Board of Directors declared
a quarterly dividend, payable January 13, 2023, of $0. 25
per Class A Share and $0. 225 per Common share. Future
determinations regarding quarterly dividends will impact
the Company’s short-term liquidity requirements.
Although we intend to continue to declare quarterly
dividends on its Common shares and Class A Common
shares, no assurances can be made as to the amounts
of any future dividends. The declaration of any future
dividends by us is within the discretion of the Board
of Directors and will be dependent upon, among other
things, the earnings, financial condition and capital
requirements of the Company, as well as any other factors
deemed relevant by the Board of Directors. Two principal
factors in determining the amounts of dividends are
(i) the requirement of the Internal Revenue Code that a
real estate investment trust distribute to shareholders at
least 90% of its real estate investment trust taxable income,
and (ii) the amount of the Company’s available cash.
In December 2021 and February 2022, we generated
$16.7 million in net proceeds from refinancing two
non-recourse first mortgages that were maturing.
In March 2022, we repaid our first mortgage secured
by our Passaic, NJ property in the amount of $3. 1 million
with available cash.
In February 2022, we purchased Shelton Square
shopping center, and in July 2022 exercised an option
to purchase a pad site adjacent to the shopping center
for an aggregate of $35. 6 million (exclusive of closing
costs). We funded the purchase with available cash,
a $20 million borrowing on our Facility, $10 million of
which was repaid in March 2022, and proceeds from
mortgage borrowings.
In fiscal 2022, we repurchased 1,202,932 shares of our
Class A Common stock at an average price per share
of $16. 76 and 19,717 shares of our Common stock at an
average price per share of $17. 02. All share repurchases
were funded with available cash, borrowings under our
Facility and proceeds from investment property sales.
Our long-term liquidity requirements consist primarily
of obligations under our long-term debt, dividends
paid to our preferred stockholders, capital expenditures
and capital required for acquisitions. In addition, the
limited partners and non-managing members of our
four consolidated joint venture entities, McLean Plaza
Associates, LLC, UB Orangeburg, LLC, UB High Ridge,
LLC and UB Dumont I, LLC, have the right to require
us to repurchase all or a portion of their limited partner
or non-managing member interests at prices and on
terms as set forth in the governing agreements. See Note 5 to
the financial statements included in this Annual Report.
Historically, we have financed the foregoing requirements
through operating cash flow, borrowings under our
Facility, debt refinancings, new debt, equity offerings and
other capital market transactions, and/or the disposition
of under-performing assets, with a focus on keeping our
debt level low. We expect to continue doing so in the
future. We cannot assure you, however, that these sources
will always be available to us when needed, or on the
terms we desire.
Capital Expenditures
We invest in our existing properties and regularly
make capital expenditures in the ordinary course of
business to maintain our properties. We believe that
such expenditures enhance the competitiveness of our
properties. For the fiscal year ended October 31, 2022,
we paid approximately $15. 6 million for property
improvements, tenant improvements and leasing
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
50
commission costs ($5. 7 million representing property
improvements, $4. 8 million in property improvements
related to our Stratford project and Pompton Lakes,
NJ self-storage project (see paragraphs below) and
approximately $5. 1 million related to new tenant space
improvements, leasing costs and capital improvements
as a result of new tenant spaces). The amount of these
expenditures can vary significantly depending on
tenant negotiations, market conditions and rental rates.
We expect to incur approximately $10. 5 million for
anticipated capital improvements, tenant improvements/
allowances and leasing costs related to new tenant leases
and property improvements during fiscal 2023. This
amount is inclusive of commitments for the Stratford, CT
and Pompton Lakes, NJ developments discussed directly
below. These expenditures are expected to be funded
from operating cash flows, bank borrowings or other
financing sources.
We have begun construction of a new self-storage
facility at our Pompton Lakes, NJ property. Our
investment in this development is estimated to be
$7 million, which will be funded with available cash
or borrowings on our Facility.
We are currently in the process of developing 3. 4 acres
of acquired land adjacent to a shopping center we own
in Stratford, CT. We built one pad-site building that is
leased to two retail chains and will be building another
pad-site building once we receive approvals to move a
cell tower to an alternate site on our adjacent shopping
center property. These two pad sites total approximately
5,200 square feet. In addition, we built a recently-opened
self-storage facility of approximately 131,000 square feet
located in Stratford, CT, which is managed for us by a
national self-storage company. The total project cost of
the completed pad site and the completed self-storage
facility was approximately $18. 8 million (excluding land
cost). We plan on funding the development cost for the
second pad site with available cash, borrowings on our
Facility or other sources, as more fully described earlier
in this Annual Report. The Stratford storage building is
approximately 87. 0% leased as of October 31, 2022.
Financing Strategy, Unsecured Revolving Credit Facility and
other Financing Transactions
Our strategy is to maintain a conservative capital
structure with low leverage levels by commercial real
estate standards. Mortgage notes payable and other
loans of $302. 3 million primarily consist of $1. 7 million
in variable rate debt with an interest rate of 4. 3% as
of October 31, 2022 and $299.2 million in fixed-rate
mortgage loans with a weighted average interest rate of
3. 83% at October 31, 2022. The mortgages are secured by
23 properties with a net book value of $489 million and
have fixed rates of interest ranging from 3.1% to 5.6%.
The $1. 7 million in variable rate debt is unsecured.
We may refinance our 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 re-financings can be achieved. At October 31,
2022, we had 48 properties in the consolidated portfolio
that were unencumbered by mortgages.
Included in the mortgage notes discussed above,
we have nine promissory notes secured by properties
we consolidate and two promissory notes secured by
properties in joint ventures that we do not consolidate,
the interest rate on which 11 notes is based on some
variation of the London Interbank Offered Rate
(“LIBOR”) or SOFR, plus a specified credit spread
amount. In addition, on each of the dates these notes
were executed by us, we entered into a corresponding
derivative interest rate swap contract, the counterparty
of which was either the lender on the aforementioned
promissory notes or an affiliate of that lender. These swap
contracts are in accordance with the International Swaps
and Derivatives Association, Inc (“ISDA”). These swap
contracts convert the variable interest rate in the notes,
which are based on LIBOR or SOFR, to a fixed rate of
interest for the life of each note. In July 2017, the United
Kingdom regulator that regulates LIBOR announced its
intention to phase out LIBOR rates by the end of 2021.
However, the ICE Benchmark Administration, in its
capacity as administrator of USD LIBOR, subsequently
announced that it extended publication of USD LIBOR
(other than one-week and two-month tenors) by 18
months to June 2023. In August and December 2022, we
amended six mortgages and their related interest rate
swap agreements to include market standard provisions
for determining the benchmark replacement rate for
LIBOR in the form of SOFR. We are in the process of
working with the lenders and counterparties to amend
the remaining promissory notes and swap contracts that
Urstadt Biddle Properties inc.
51
reference LIBOR. We have good working relationships
with all of our lenders/counterparties, and expect that
the replacement reference rate under the amended notes
will continue to match the replacement rates in the swaps.
Therefore, we believe there would be no material effect
on our financial position or results of operations. See
“Quantitative and Qualitative Disclosures about Market
Risk” included in this Annual Report for additional
information on our interest rate risk.
We currently maintain a ratio of total debt to total assets
below 34.0% and a fixed charge coverage ratio of over
3. 5 to 1 (excluding preferred stock dividends), which
we believe will allow us to obtain additional secured
mortgage loans or other types of borrowings, if necessary.
We currently have a $125 million unsecured revolving
credit facility with a syndicate of three banks led by The
Bank of New York Mellon, as administrative agent. The
syndicate also included Wells Fargo Bank N. A. and Bank
of Montreal, as co-syndication agents. The Facility gives
us the option, under certain conditions, to increase the
Facility’s borrowing capacity to $175 million, subject
to lender approval. The maturity date of the Facility is
March 29, 2024, with a one-year extension at our option.
Borrowings under the Facility can be used for general
corporate purposes and the issuance of letters of credit
(up to $10 million). Borrowings will bear interest at
our option of either the Eurodollar rate plus 1. 45% to
2. 20%, or The Bank of New York Mellon’s prime lending
rate plus 0. 45% to 1. 20% based on consolidated total
indebtedness, as defined. We pay a quarterly commitment
fee on the unused commitment amount of 0. 15% to
0. 25% based on outstanding borrowings during the year.
Our ability to borrow under the Facility is subject to our
compliance with the covenants and other restrictions
on an ongoing basis. The principal financial covenants
limit our level of secured and unsecured indebtedness,
including preferred stock, and additionally requires us
to maintain certain debt coverage ratios. We were in
compliance with such covenants at October 31, 2022.
The Facility includes market standard provisions for
determining the benchmark replacement rate for LIBOR.
The Facility contains representations and financial
and other affirmative and negative covenants usual and
customary for this type of agreement. So long as any
amounts remain outstanding or unpaid under the Facility,
we must satisfy certain financial covenants:
• unsecured indebtedness may not exceed $400 million;
• secured indebtedness may not exceed 40% of gross
asset value, as determined under the Facility;
• total secured and unsecured indebtedness, excluding
preferred stock, may not be more than 60% of gross
asset value;
• total secured and unsecured indebtedness, plus
preferred stock, may not be more than 70% of gross
asset value;
• unsecured indebtedness may not exceed 60% of
the eligible real asset value of unencumbered
properties in the unencumbered asset pool as defined
under the Facility;
• earnings before interest, taxes, depreciation and
amortization must be at least 175% of fixed charges,
which exclude preferred stock dividends;
• the net operating income from unencumbered
properties must be 200% of unsecured interest
expenses;
• not more than 25% of the gross asset value and
unencumbered asset pool may be attributable
to the Company’s pro rata share of the value of
unencumbered properties owned by non-wholly
owned subsidiaries or unconsolidated joint ventures;
and
• the number of un-mortgaged properties in the
unencumbered asset pool must be at least 10 and at
least 10 properties must be owned by the Company
or a wholly-owned subsidiary.
For purposes of these covenants, eligible real estate
value is calculated as the sum of the Company’s
properties annualized net operating income for the prior
four fiscal quarters capitalized at 6.75% and the purchase
price of any eligible real estate asset acquired during the
prior four fiscal quarters. Gross asset value is calculated
as the sum of eligible real estate value, the Company’s
pro rata share of eligible real estate value of eligible joint
venture assets, cash and cash equivalents, marketable
securities, the book value of the Company’s construction
projects and the Company’s pro rata share of the book
value of construction projects owned by unconsolidated
joint ventures, and eligible mortgages and trade
receivables, as defined in the agreement.
At October 31, 2022, we have $30. 5 million outstanding
on our Facility, with remaining borrowing capacity of
$93. 7 million.
See Note 4 to our consolidated financial statements
included in this Annual Report for a further description
of mortgage financing transactions in fiscal 2022 and 2021.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
52
Contractual Obligations
Our contractual payment obligations as of October 31, 2022 were as follows (amounts in thousands):
Payments Due by Period
Total
2023
2024
2025
2026
2027
Thereafter
Mortgage notes payable and other loans
$302,316
$ 7,612
$26,449
$87,483
$12,940
$43,333
$124,499
Interest on mortgage notes payable
62,402
12,522
12,135
8,719
7,381
6,794
14,851
Capital improvements to properties*
10,500
10,500
—
—
—
—
—
Total Contractual Obligations
$375,218
$30,634
$38,584
$96,202
$20,321
$50,127
$139,350
*Includes committed tenant-related obligations based on executed leases as of October 31, 2022.
We have various standing or renewable service contracts
with vendors related to property management. In addition,
we also have certain other utility contracts entered into
in the ordinary course of business which may extend
beyond one year, which vary 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.
Unconsolidated Joint Venture Debt
We have six investments in real property through
unconsolidated joint ventures:
• a 66. 67% equity interest in the Putnam Plaza Shopping
Center,
• an 11. 792% equity interest in Midway Shopping
Center L. P.,
• a 50% equity interest in the Chestnut Ridge Shopping
Center,
• a 50% equity interest in the Gateway Plaza shopping
center and the Riverhead Applebee’s Plaza, and
• a 20% economic interest in a partnership that owns a
suburban office building with ground level retail.
These unconsolidated joint ventures are accounted
for under the equity method of accounting, as we have
the ability to exercise significant influence over, but
not control of, the operating and financial decisions of
these investments. Our unconsolidated joint venture
investments are more fully discussed in Note 6 to our
consolidated financial statements included in this Annual
Report. Although we have not guaranteed the debt
of these joint ventures, we have agreed to customary
environmental indemnifications and nonrecourse carve-
outs (e. g. guarantees against fraud, misrepresentation and
bankruptcy) on certain loans of the joint ventures. The
below table details information about the outstanding non-
recourse mortgage financings on our unconsolidated joint
ventures (amounts in thousands):
Principal Balance
Original
At October 31, Fixed Interest Rate
Maturity
Joint Venture Description
Location
Balance
2022
Per Annum
Date
Midway Shopping Center
Scarsdale, NY
$32,000
$23,700
4. 80%
Dec 2027
Putnam Plaza Shopping Center
Carmel, NY
$18,900
$17,700
4. 81%
Oct 2028
Gateway Plaza
Riverhead, NY
$14,000
$14,000
4. 07%
July 2032
Urstadt Biddle Properties inc.
53
Net Cash Flows from Operating Activities
Variance from fiscal 2021 to 2022:
The net increase in operating cash flows when compared
with the corresponding prior period was primarily related
to an increase of the collection of tenant accounts receivable
in fiscal 2022 when compared with 2021, predominantly
related to the company and our tenants as a whole further
recovering from the effects of the COVID-19 pandemic,
which allowed tenants to service their leases, and in some
cases make payments of prior years’ accounts receivable
that had been fully reserved.
Variance from fiscal 2020 to 2021:
The net increase in operating cash flows when
compared with the corresponding prior period was
primarily related to an increase of lease income related
to the collection of rents that were deferred in fiscal
2020 and the collection of lease income from tenants that
we account for on a cash basis in accordance with ASC
Topic 842.
Net Cash Flows from Investing Activities
Variance from fiscal 2021 to 2022:
The increase in net cash flows used in investing
activities for the fiscal year ended October 31, 2022 when
compared to the corresponding prior period was the
result of purchasing one property in fiscal 2022 for a
cash investment of $35. 7 million. We did not acquire
any properties in fiscal 2021.
Variance from 2020 to 2021:
The decrease in net cash flows used in investing
activities for the fiscal year ended October 31, 2021
when compared to the corresponding prior period was
the result of selling two properties in fiscal 2021, which
generated $13.0 million more in cash flow in fiscal 2021
versus fiscal 2020, and expending $6.9 million less on
property improvements in fiscal 2021 when compared
with the corresponding prior period.
Net Cash Flows from Financing Activities
Cash generated:
Fiscal 2022: (Total $86.7 million)
• Proceeds from revolving credit line borrowings in the
amount of $40. 5 million.
• Proceeds from mortgage notes payable and other
loans of $46. 0 million.
Fiscal 2021: (Total $39.4 million)
• Proceeds from revolving credit line borrowings in the
amount of $39. 2 million.
Fiscal 2020: (Total $35.2 million)
• Proceeds from revolving credit line borrowings in the
amount of $35. 0 million.
Cash used:
Fiscal 2022: (Total $129.3 million)
• Dividends to shareholders in the amount of $50. 9
million, an increase of $8. 2 million when compared
with the prior period.
• The repurchase of shares of Common and Class A
stock in the amount of $20. 5 million.
• Repayment of mortgage notes payable $32. 4 million.
• Amortization of mortgage notes payable $7. 4 million.
• Repayments of revolving credit line borrowings
$10. 0 million.
Fiscal 2021: (Total $129.3 million)
• Dividends to shareholders in the amount of
$42. 7 million.
• Repayment of mortgage notes payable $34. 6 million.
• Amortization of mortgage notes payable $6. 9 million.
• Repayments of revolving credit line borrowings
$35. 0 million.
• Acquisitions of noncontrolling interests of
$5. 1 million.
• Distributions to noncontrolling interests of
$3. 6 million.
• Repurchase of Common and Class A Common stock
in the amount of $1. 0 million.
Fiscal 2020: (Total $131.5 million)
• Dividends to shareholders in the amount of $44. 2
million.
• Repayment of mortgage notes payable in the amount
of $7. 1 million.
• Acquisitions of noncontrolling interests in the amount
of $3. 9 million.
• Redemption of preferred stock series in the amount
of $75. 0 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
54
RESULTS OF OPERATIONS
Fiscal 2022 vs. Fiscal 2021
The following information summarizes our results of operations for the years ended October 31, 2021 and 2020
(amounts in thousands):
Year Ended
October 31,
Change Attributable to:
Property
Properties Held
Increase
% Acquisitions/
in Both Periods
2022
2021
(Decrease) Change
Sales
(Note 1)
Revenues
Base rents
$103,559
$ 99,488
$ 4,071
4. 1%
$1,592
$ 2,479
Recoveries from tenants
34,067
35,090
(1,023)
(2. 9)%
319
(1,342)
Less uncollectable amounts in lease income
13
1,529
1,516
99. 1%
—
1,516
Less ASC Topic 842 cash basis lease income reversal
(47)
2,685
2,732
101. 8%
—
2,732
Total lease income
137,660
130,364
Lease termination
721
967
(246)
(25. 4)%
—
(246)
Other income
4,722
4,250
472
11. 1%
6
466
Operating Expenses
Property operating
25,124
22,938
2,186
9. 5%
196
1,990
Property taxes
23,700
23,674
26
0. 1%
156
(130)
Depreciation and amortization
29,799
29,032
767
2. 6%
749
18
General and administrative
9,934
8,985
949
10. 6%
n/a
n/a
Non-Operating Income/Expense
Interest expense
13,175
13,087
88
0. 7%
—
88
Interest, dividends, and other investment income
239
231
8
3. 5%
n/a
n/a
Note 1—Properties held in both periods includes only properties owned for the entire periods of 2022 and 2021 and for interest expense the amount also
includes parent company interest expense. All other properties are included in the property acquisition/sales column. There are no properties
excluded from the analysis.
Base rents increased by 4. 1% to $103. 6 million for the
fiscal year ended October 31, 2022 as compared with
$99. 5 million in the comparable period of 2021. The
change in base rent and the changes in other income
statement line items analyzed in the table above were
attributable to:
Property Acquisitions and Properties Sold:
In fiscal 2022, we acquired one property totaling 188,000
square feet and sold three properties totaling 14,300
square feet. In fiscal 2021, we sold two properties totaling
105,800 square feet. These properties accounted for all of
the revenue and expense changes attributable to property
acquisitions and sales in the fiscal year ended October 31,
2022 when compared with fiscal 2021.
Properties Held in Both Periods:
Revenues
Base Rent
In the fiscal year ended October 31, 2022, base rent for
properties held in both periods increased by $2. 5 million
when compared with the corresponding prior periods as
a result of additional leasing in the portfolio in fiscal 2022
when compared to the corresponding prior period.
In fiscal 2022, we leased or renewed approximately
942,000 square feet (or approximately 20. 6% of total
consolidated GLA). At October 31, 2022, the Company’s
consolidated properties were 93. 0% leased (91. 9% leased
at October 31, 2021).
Urstadt Biddle Properties inc.
55
Tenant Recoveries
In the fiscal year ended October 31, 2022, recoveries
from tenants (which represent reimbursements from
tenants for operating expenses and property taxes)
decreased by a net $1. 3 million when compared with the
corresponding prior period.
The decrease in tenant recoveries was the result of an
under-accrual adjustment in the first quarter of fiscal
2021. We completed the 2020 annual reconciliations for
both common area maintenance and real estate taxes in
the first quarter of fiscal 2021, and those reconciliations
resulted in us billing our tenants more than we had
anticipated and accrued for in the prior period. This
increased tenant reimbursement income in the first
quarter of fiscal 2021, and caused a negative variance
in the first quarter of fiscal 2022. This net decrease was
offset by an increase in property operating expenses in
the fiscal year ended October 31, 2022, when compared to
the corresponding prior periods, predominantly related
to insurance, environmental costs and roof repairs.
Uncollectable Amounts in Lease Income
In the year ended October 31, 2022, uncollectable
amounts in lease income decreased by $1. 5 million. In the
second quarter of fiscal 2020, we significantly increased
our uncollectable amounts in lease income based on
our assessment of the collectability of existing non-
credit small shop tenants’ receivables given the on-set
of the COVID-19 pandemic in March 2020. A number of
non-credit small shop tenants’ businesses were deemed
non-essential by the states in which they operate and
forced to close for a portion of the second and third
quarters of fiscal 2020. This placed stress on our small
shop tenants and made it difficult for many of them to
pay their rents when due. This stress continued through
the first half of fiscal 2021. Our assessment was that any
billed but unpaid rents would likely be uncollectable.
During the year ended October 31, 2022, many of our
tenants continued to experience business improvement as
regulatory restrictions continued to ease and individuals
continued to return to pre-pandemic activities. As
a result, the uncollectable amounts in lease income
declined during such period, when compared with the
corresponding period of the prior year and in addition
we were successful in collecting prior period unpaid rents
that we had fully reserved for.
ASC Topic 842 Cash Basis Lease Income Reversals
We adopted ASC Topic 842 “Leases” at the beginning of
fiscal 2020. ASC Topic 842 requires, among other things,
that if the collectability of a specific tenant’s future lease
payments as contracted are not probable of collection,
revenue recognition for that tenant must be converted to
cash-basis accounting and be limited to the lesser of the
amount billed or collected from that tenant. In addition,
any straight-line rental receivables would need to be
reversed in the period that the collectability assessment
changed to not probable. As a result of continuing to
analyze our entire tenant base, we determined that as a
result of the COVID-19 pandemic, 89 tenants’ future lease
payments were no longer probable of collection. All such
tenants were converted to cash basis after our second
quarter of fiscal 2020 and prior to our third quarter of
fiscal 2021. As of October 31, 2022, 34 of these 89 tenants
are no longer tenants in the Company’s properties. As a
result of converting these tenants to cash-basis accounting
in fiscal 2021, we reversed straight-line rent receivables
in the net amount of $673,000 and reversed billed but
unpaid rents related to cash-basis tenants of $2. 0 million.
There were no significant charges related to cash-basis
tenants in the year ended October 31, 2022.
As of October 31, 2022, 32 tenants continue to be
accounted for on a cash basis, or approximately 3. 7%
of our tenants. Many of our cash-basis tenants are now
paying a larger portion of their billed rents, which results
in an increase in revenue recognition for those tenants
accounted for on a cash basis when compared with the
corresponding period of the prior year.
Expenses
Property Operating
In the fiscal year ended October 31, 2022, property
operating expenses increased by $2. 0 million when
compared to the prior period as a result of having higher
common area maintenance expenses related to insurance,
environmental costs and roof repairs.
Property Taxes
In the fiscal year ended October 31, 2022, property tax
expense was relatively unchanged when compared with
the corresponding prior period.
Interest
In the fiscal year ended October 31, 2022, interest
expense was relatively unchanged, when compared with
the corresponding prior period.
Depreciation and Amortization
In the fiscal year ended October 31, 2022, depreciation
and amortization was relatively unchanged, when
compared with the corresponding prior period.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
56
General and Administrative Expenses
In the fiscal year ended October 31, 2022, general and administrative expenses increased by $949,000 when compared
with the corresponding prior period, predominantly related to an increase in employee compensation, state tax
expense related to a capital gain for a property we sold that was located in New Hampshire and professional fees.
Fiscal 2021 vs. Fiscal 2020
The following information summarizes our results of operations for the years ended October 31, 2021 and 2020
(amounts in thousands):
Year Ended
October 31,
Change Attributable to:
Property
Properties Held
Increase
% Acquisitions/
in Both Periods
2021
2020
(Decrease) Change
Sales
(Note 2)
Revenues
Base rents
$ 99,488
$ 99,387
$ 101
0. 1%
$(113)
$ 214
Recoveries from tenants
35,090
28,889
6,201
21. 5%
(105)
6,306
Less uncollectable amounts in lease income
1,529
3,916
(2,387)
(61. 0)%
—
(2,387)
Less ASC Topic 842 cash basis lease income reversal
2,685
3,419
(734)
(21. 5)%
(158 )
(576)
Total lease income
130,364
120,941
Lease termination
967
705
262
37. 2%
—
262
Other income
4,250
5,099
(849)
(16. 7)%
(10)
(839)
Operating Expenses
Property operating
22,938
19,542
3,396
17. 4%
220
3,176
Property taxes
23,674
23,464
210
0. 9%
52
158
Depreciation and amortization
29,032
29,187
(155)
(0. 5)%
73
(228)
General and administrative
8,985
10,643
(1,658)
(15. 6)%
n/a
n/a
Non-Operating Income/Expense
Interest expense
13,087
13,508
(421)
(3. 1)%
—
(421)
Interest, dividends, and other investment income
231
398
(167)
(42. 0)%
n/a
n/a
Note 2—Properties held in both periods includes only properties owned for the entire periods of 2021 and 2020 and for interest expense the amount also
includes parent company interest expense. All other properties are included in the property acquisition/sales column. There are no properties
excluded from the analysis.
Base rents increased by 0. 1% to $99. 5 million for the
fiscal year ended October 31, 2021 as compared with $99.4
million in the comparable period of 2020. The change in
base rent and the changes in other income statement line
items analyzed in the table above were attributable to:
Property Acquisitions and Properties Sold:
In fiscal 2020, we sold two properties totaling 18,100
square feet. In fiscal 2021, we sold two properties totaling
105,800 square feet. These properties accounted for all of
the revenue and expense changes attributable to property
acquisitions and sales in the fiscal year ended October 31,
2021 when compared with fiscal 2020.
Properties Held in Both Periods:
Revenues
Base Rent
In the fiscal year ended October 31, 2021, base rent for
properties held in both periods increased by $214,000
when compared with the corresponding prior periods as
a result of additional leasing in the portfolio in fiscal 2021
when compared to the corresponding prior period.
In fiscal 2021, we leased or renewed approximately
742,000 square feet (or approximately 16. 8% of total
consolidated GLA). At October 31, 2021, the Company’s
consolidated properties were 91. 9% leased (90. 4% leased
at October 31, 2020).
Urstadt Biddle Properties inc.
57
Tenant Recoveries
In the fiscal year ended October 31, 2021, recoveries
from tenants (which represent reimbursements from
tenants for operating expenses and property taxes)
increased by a net $6. 3 million when compared with the
corresponding prior period.
The increase in tenant recoveries was the result of
having higher common area maintenance expenses in
the fiscal year ended October 31, 2021 when compared
with the corresponding prior period related to snow
removal, landscaping and parking lot repairs. In addition,
we completed the 2020 annual reconciliations for both
common area maintenance and real estate taxes in the
first half of fiscal 2021 and those reconciliations resulted
in us billing our tenants more than we had anticipated
and accrued for in the prior period, which increased
tenant reimbursement income in fiscal 2021. In addition,
the percentage of common area maintenance and real
estate tax costs that we recover from our tenants generally
increased in fiscal 2021 when compared with fiscal 2020
as the effects of the pandemic on our tenants businesses
is lessening.
Uncollectable Amounts in Lease Income
In the fiscal year ended October 31, 2021, uncollectable
amounts in lease income decreased by $2. 4 million when
compared with the prior year. In the second quarter of
fiscal 2020, we significantly increased our uncollectable
amounts in lease income based on our assessment of the
collectability of existing non-credit small shop tenants’
receivables given the on-set of the COVID-19 pandemic in
March 2020. A number of non-credit small shop tenants’
businesses were deemed non-essential by the states where
they operate and were forced to close for a portion of the
second and third quarters of fiscal 2020. This placed stress
on our small shop tenants and made it difficult for many
of them to pay their rents when due. Our assessment
was that any billed but unpaid rents would likely be
uncollectable. During the fiscal year ended 2021, many
of our tenants saw early signs of business improvement
as regulatory restrictions were relaxed and individuals
began returning to pre-pandemic activities following
significant progress made in vaccinating the U.S. public.
As a result, the uncollectable amounts in lease income
have been declining.
ASC Topic 842 Cash Basis Lease Income Reversals
The Company adopted ASC Topic 842 “Leases” at the
beginning of fiscal 2020. ASC Topic 842 requires, amongst
other things, that if the collectability of a specific tenant’s
future lease payments as contracted are not probable of
collection, revenue recognition for that tenant must be
converted to cash-basis accounting and be limited to the
lesser of the amount billed or collected from that tenant,
and in addition, any straight-line rental receivables
would need to be reversed in the period that the
collectability assessment changed to not probable. As a
result of continuing to analyze our entire tenant base, we
determined that as a result of the COVID-19 pandemic, 89
tenants’ future lease payments were no longer probable
of collection. All of these tenants were converted to cash
basis after our second quarter of fiscal 2020 and prior to
our third quarter of fiscal 2021. As of October 31, 2021, 27
of the 89 tenants are no longer tenants in the Company’s
properties. During the three months ended October 31,
2021, we restored 13 of the 89 tenants to accrual-basis
accounting as those tenants have now demonstrated their
ability to service the payments due under their leases
and have no arrears balances. As of October 31, 2021,
49 tenants continue to be accounted for on a cash-basis,
or 5. 9% of our approximate 832 tenants. As a result of
this assessment, we reversed $576,000 more in billed
but uncollected rent and straight-line rent for cash basis
tenants in the fiscal year ended October 31, 2020 than we
did in fiscal 2021.
Expenses
Property Operating
In the fiscal year ended October 31, 2021, property
operating expenses increased by $3. 2 million when
compared to the prior period as a result of having higher
common area maintenance expenses related to snow
removal, landscaping and parking lot repairs.
Property Taxes
In the fiscal year ended October 31, 2021, property tax
expense was relatively unchanged when compared with
the corresponding prior period.
Interest
In the fiscal year ended October 31, 2021, interest
expense decreased by $421,000 when compared with
the corresponding prior period, predominantly related
to the refinancing of a mortgage secured by our New
Providence, NJ property in fiscal 2021 and by repaying
all outstanding amounts on our Facility in fiscal 2021.
Depreciation and Amortization
In the fiscal year ended October 31, 2021, depreciation
and amortization was relatively unchanged when
compared with the corresponding prior period.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
58
General and Administrative Expenses
In the fiscal year ended October 31, 2021, general
and administrative expenses decreased by $1. 7 million
when compared with the corresponding prior period,
predominantly related to a decrease in compensation
and benefits expense. The decrease was the result of
accelerated vesting of restricted stock grant value upon
the death of our former Chairman Emeritus in the second
quarter of fiscal 2020.
Funds from Operations
We consider Funds from Operations (“FFO”) to be
an additional measure of our operating performance.
We report FFO in addition to 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 our 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 our
performance. It is helpful as it excludes various items
included in net income that are not indicative of our
operating performance, such as gains (or losses) from
sales of property and depreciation and amortization.
However, FFO:
• 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
• should not be considered an alternative to net income
as an indication of our performance.
FFO as defined by us 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 applicable to Common and Class A Common
Stockholders in accordance with GAAP to FFO for
each of the three years in the period ended October 31,
2022, 2021 and 2020 (amounts in thousands):
Year Ended October 31,
2022
2021
2020
Net Income Applicable to Common and Class A Common Stockholders
$26,054
$ 33,633
$ 8,533
Real property depreciation
23,403
22,936
22,662
Amortization of tenant improvements and allowances
4,211
4,429
4,694
Amortization of deferred leasing costs
2,114
1,599
1,737
Depreciation and amortization on unconsolidated joint ventures
1,530
1,518
1,499
(Gain)/loss on sale of properties
(767)
$(11,864)
6,047
Funds from Operations Applicable to Common and Class A Common Stockholders
$56,545
$ 52,251
$45,172
FFO amounted to $56.5 million in fiscal 2022 compared
to $52.3 million in fiscal 2021 and $45.2 million in fiscal 2020.
The net increase in FFO in fiscal 2022 when compared
with fiscal 2021 was predominantly attributable, among
other things, to:
Increases:
• An increase in base rent for new leasing in the
portfolio after the first quarter of fiscal 2021.
• A $1. 5 million net increase in operating income
related to our Shelton Square shopping center
acquisition in the first quarter of fiscal 2022 compared
with the loss of operating income for properties sold
in fiscal 2021 and fiscal 2022.
• A decrease in uncollectable amounts in lease income
of $1.5 million in the fiscal year ended October 31,
2022, when compared with the corresponding prior
period. We significantly increased our uncollectable
amounts in lease income based on our assessment
of the collectability of existing non-credit small shop
tenants’ receivables given the onset of the COVID-19
pandemic in March 2020. A number of non-credit
small shop tenants’ businesses were deemed non-
essential by the states in which they operate and
forced to close for a portion of the second and third
quarters of fiscal 2020. This placed stress on our small
shop tenants and made it difficult for many of them
to pay their rents when due. This stress continued
Urstadt Biddle Properties inc.
59
through our first half of fiscal 2021. Our assessment
was that any billed but unpaid rents would likely be
uncollectable. During the fiscal year ended October 31,
2022, many of our tenants continued to see signs
of business improvement as regulatory restrictions
continued to ease and individuals continued to
return to pre-pandemic activities. As a result, the
uncollectable amounts in lease income declined in
fiscal 2022, when compared with the prior year.
In addition, we collected prior period unpaid rents
for tenants that we had fully reserved for.
• We adopted ASC Topic 842 “Leases” at the beginning
of fiscal 2020. ASC Topic 842 requires, among other
things, that if the collectability of a specific tenant’s
future lease payments as contracted are not probable
of collection, revenue recognition for that tenant
must be converted to cash-basis accounting and be
limited to the lesser of the amount billed or collected
from that tenant. In addition, any straight-line rental
receivables would need to be reversed in the period
that the collectability assessment changed to not
probable. As a result of continuing to analyze our
entire tenant base, we determined that as a result
of the COVID-19 pandemic, 89 tenants’ future lease
payments were no longer probable of collection.
All such tenants were converted to cash basis after
our second quarter of fiscal 2020 and prior to our
third quarter of fiscal 2021. As of October 31, 2022,
34 of these 89 tenants are no longer tenants in the
Company’s properties. As a result of converting
these tenants to cash-basis accounting, we reversed
straight-line rent receivables in the net amount of
$673,000 and reversed billed but uncollected rents in
the amount of $2.0 million in the fiscal year ended
October 31, 2021. There were no significant charges
related to cash-basis tenants in the fiscal year ended
October 31, 2022.
As of October 31, 2022, 3. 7% of our tenants continue to
be accounted for on a cash basis. Many of our cash-basis
tenants are now paying a larger portion of their billed
rents, which results in an increase in revenue recognition
for those tenants accounted for on a cash basis when
compared with the corresponding period of the prior year.
Decreases:
• A decrease in variable lease income (cost recovery
income) related to an under-accrual adjustment in
recoveries from tenants for real estate taxes and
common area maintenance in the first quarter of fiscal
2021, which increased revenue in the first quarter of
fiscal 2021 and caused a negative variance in the fiscal
year ended October 31, 2022.
• A $949,000 increase in general and administrative
expenses predominantly related to increases in
employee compensation, state tax expense related to a
capital gain for a property we sold that was located in
New Hampshire and professional fees in fiscal 2022,
when compared to the corresponding prior period.
The net increase in FFO in fiscal 2021 when compared
with fiscal 2020 was predominantly attributable, among
other things, to:
Increases:
• An increase in variable lease income (cost recovery
income) related to an under-accrual adjustment in
recoveries from tenants for real estate taxes and
common area maintenance in fiscal 2021 and a
general increase in the rate at which we recover costs
from our tenants as a result of the reduced impact of
the COVID-19 pandemic on our tenants businesses,
which resulted in a positive variance in fiscal 2021
when compared to the same period of fiscal 2020.
• A $262,000 increase in lease termination income in
fiscal 2021 when compared with the corresponding
prior period as a result of one tenant that occupied
multiple spaces in our portfolio ceasing operations
and buying out the remaining terms of its leases.
• A net decrease in general and administrative expenses
of $1. 7 million, predominantly related to a decrease
in compensation and benefits expense in fiscal 2021
when compared to the corresponding prior period.
The decrease was the result of accelerated vesting
of restricted stock grant value upon the death of our
former Chairman Emeritus in the second quarter of
fiscal 2020.
• A decrease in uncollectable amounts in lease income
of $2.4 million. In the second quarter of fiscal
2020, we significantly increased our uncollectable
amounts in lease income based on our assessment
of the collectability of existing non-credit small shop
tenants’ receivables given the onset of the COVID-19
pandemic in March 2020. A number of non-credit
small shop tenants’ businesses were deemed non-
essential by the states where they operate and were
forced to close for a portion of the second and third
quarters of fiscal 2020. This placed stress on our small
shop tenants and made it difficult for many of them
to pay their rents when due. Our assessment was that
any billed but unpaid rents for such tenants would
likely be uncollectable. During the fiscal year ended
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
60
October 31, 2021, many of our tenants saw early signs
of business improvement as regulatory restrictions
were relaxed and individuals began returning to
pre-pandemic activities following significant progress
made in vaccinating the U. S. public. As a result, the
uncollectable amounts in lease income have been
declining. We have even recovered receivables that
were previously reserved for.
• A decrease in the reversal of lease income as a result
of the application of ASC Topic 842 “Leases” in fiscal
2021 when compared with fiscal 2020. ASC Topic 842
requires among other things, that if the collectability
of a specific tenant’s future lease payments as
contracted are not probable of collection, revenue
recognition for that tenant must be converted to
cash-basis accounting and be limited to the lesser
of the amount billed or collected from that tenant,
and in addition, any straight-line rental receivables
would need to be reversed in the period that the
collectability assessment changed to not probable.
As a result of continuing to analyze our entire tenant
base, we determined that as a result of the COVID-19
pandemic, 89 tenants’ future lease payments were
no longer probable of collection. All of these tenants
were converted to cash basis after our second quarter
of fiscal 2020 and prior to our third quarter of fiscal
2021. As a result of this assessment, we reversed
$734,000 more in billed but uncollected rent and
straight-line rent for cash basis tenants in the fiscal
year ended October 31, 2020 than we did in fiscal
2021. In addition, as the effect of the pandemic has
lessened, even certain tenants accounted for on a
cash-basis have paid more of their rents in fiscal 2021
than they did in fiscal 2020, which created a positive
variance in FFO in fiscal 2021 when compared with
fiscal 2020.
• A decrease of $242,000 in net income to noncontrolling
interests. This decrease was caused by our redemption
of noncontrolling units in fiscal 2020 and fiscal 2021.
In addition, distributions decreased to noncontrolling
unit owners whose distributions per unit were based
on the dividend rate of our Class A Common stock,
which was significantly reduced in the first half
of fiscal 2021 when compared to the corresponding
prior period.
Decreases:
• A decrease in gain on marketable securities as we
had invested excess cash in marketable securities and
sold them in fiscal 2020, realizing a gain of $258,000
in fiscal 2020. We did not have similar gains in fiscal
2021, which creates a negative variance in fiscal 2021
when compared with fiscal 2020.
Same Property Net Operating Income
We present Same Property Net Operating Income
(“Same Property NOI”), which is a non-GAAP financial
measure. Same Property NOI excludes from Net
Operating Income (“NOI”) properties that have not been
owned for the full periods presented. The most directly
comparable GAAP financial measure to NOI is operating
income. To calculate NOI, operating income is adjusted
to add back depreciation and amortization, general and
administrative expense, interest expense, amortization
of above and below-market lease intangibles and to
exclude straight-line rent adjustments, interest, dividends
and other investment income, equity in net income of
unconsolidated joint ventures, and gain/loss on sale of
operating properties.
We use Same Property NOI internally as a performance
measure and believe Same Property NOI provides
useful information to investors regarding our financial
condition and results of operations because it reflects
only those income and expense items that are incurred
at the property level. Our management also uses Same
Property NOI to evaluate property level performance and
to make decisions about resource allocations. Further,
we believe Same Property NOI is useful to investors
as a performance measure because, when compared
across periods, Same Property NOI reflects the impact on
operations from trends in occupancy rates, rental rates
and operating costs on an unleveraged basis, providing
perspective not immediately apparent from income from
continuing operations. Same Property NOI excludes
certain components from net income attributable to
Urstadt Biddle Properties Inc. in order to provide results
that are more closely related to a property’s results
of operations. For example, interest expense is not
necessarily linked to the operating performance of a real
estate asset and is often incurred at the corporate level as
opposed to the property level. In addition, depreciation
and amortization, because of historical cost accounting
and useful life estimates, may distort operating
performance at the property level. Same Property NOI
presented by us may not be comparable to Same Property
NOI reported by other REITs that define Same Property
NOI differently.
Urstadt Biddle Properties inc.
61
Twelve Months Ended
Three Months Ended
October 31,
October 31,
%
%
2022
2021
Change
2022
2021
Change
Same Property Operating Results:
Number of Properties (Note 1)
72
72
Revenue (Note 2):
Base Rent (Note 3)
$ 98,814
$ 99,065
(0. 3)%
$ 24,751
$22,811
1. 0%
Uncollectable amounts in lease income
(13)
(1,520)
(99. 1)%
159
(149)
(206. 7)%
ASC Topic 842 cash-basis lease income reversal—
same property
(10)
(2,011)
(99. 5)%
56
(129)
(143. 4)%
Recoveries from tenants
33,506
34,847
(3. 8)%
8,143
8,044
1. 2%
Other property income
1,491
476
213. 2%
229
117
95. 7%
133,788 130,857
2. 2%
33,338
32,382
3. 0%
Expenses:
Property operating
14,469
14,107
2. 6%
3,487
3,111
12. 1%
Property taxes
23,387
23,542
(0. 7)%
5,833
5,887
(0. 9)%
Other non-recoverable operating expenses
2,523
2,053
22. 9%
899
573
56. 9%
40,379
39,702
1. 7%
10,219
9,571
6. 8%
Same Property Net Operating Income
$ 93,409
$ 91,155
2. 5%
$ 23,119
$22,811
1. 4%
Reconciliation of Same Property NOI to
Most Directly Comparable GAAP Measure:
Other reconciling items:
Other non same-property net operating income
2,131
937
686
55
Other Interest income
657
471
187
122
Other Dividend Income
84
52
24
16
Consolidated lease termination income
723
967
32
166
Consolidated amortization of above and below market leases
972
632
274
177
Consolidated straight line rent income
241
(2,396)
289
306
Equity in net income of unconsolidated joint ventures
1,397
1,323
583
298
Taxable REIT subsidiary income/(loss)
(287)
303
(107)
(116)
Solar income/(loss)
(361)
(163)
(128)
(4)
Storage income/(loss)
2,225
1,236
653
431
Unrealized holding gains arising during the periods
—
—
—
—
Gain on sale of marketable securities
—
—
—
—
Interest expense
(13,175)
(13,087)
(3,425)
(3,025)
General and administrative expenses
(9,934)
(8,985)
(2,261)
(2,109)
Uncollectable amounts in lease income
(13)
(1,529)
159
(149)
Uncollectable amounts in lease income—same property
13
1,520
(159)
149
ASC Topic 842 cash-basis lease income reversal
(10)
(2,011)
56
(129)
ASC Topic 842 cash-basis lease income reversal—same property
10
2,011
(56)
129
Directors fees and expenses
(500)
(355)
(217)
(78)
Depreciation and amortization
(29,799)
(29,032)
(7,439)
(7,259)
Adjustment for intercompany expenses and other
(5,276)
(3,985)
(1,064)
(950)
Total other—net
(50,902)
(52,091)
(11,913)
(11,970)
Income from continuing operations
42,507
39,064
8. 8%
11,206
10,841
3. 4%
Gain (loss) on sale of real estate
767
11,864
(1)
(350)
Net income
43,274
50,928
(15. 0)%
11,205
10,491
6. 8%
Net income attributable to noncontrolling interests
(3,570)
(3,645)
(875)
(921)
Net income attributable to Urstadt Biddle Properties Inc.
$ 39,704
$ 47,283
(16. 0)%
$10,330
$ 9,570
7. 9%
Same Property Operating Expense Ratio (Note 4)
88.5%
92. 6%
(4. 0)%
87.4%
89. 4%
(2. 0)%
Note 1—Includes only properties owned for the entire period of both periods presented.
Note 2—Excludes straight line rent, above/below market lease rent, lease termination income.
Note 3—Base rents for the three and twelve month periods ended October 31, 2022 are reduced by approximately $0 and $87,000, respectively, in rents that were deferred
and approximately $0 and $160,000, in rents that were abated because of COVID-19. Base rents for the three and twelve month periods ended October 31, 2022
are increased by approximately $5,000 and $470,000, respectively, in COVID-19 deferred rents that were billed and collected in the fiscal 2022 periods.
Base rents for the three and twelve month periods ended October 31, 2021 are reduced by approximately $27,000 and $552,000, respectively, in rents that were
deferred and approximately $309,000 and $3. 0 million, in rents that were abated because of COVID-19. Base rents for the three and nine month periods ended
October 31, 2021, are increased by approximately $345,000 and $3.0 million, respectively, in COVID-19 deferred rents that were billed and collected in the fiscal
2021 periods.
Note 4—Represents the percentage of property operating expense and real estate tax.
FINANCIAL STATEMENTS
62
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of
1934. The Company’s internal control over financial reporting is a process designed by, or under the supervision
of, the Company’s Chief Executive Officer and Chief Financial Officer and effected by the Company’s Board of
Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with generally accepted accounting principles.
The Company’s internal control over financial reporting includes policies and procedures that: relate to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
assets of the Company; provide reasonable assurance of the recording of all transactions necessary to permit the
preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting
principles and the proper authorization of receipts and expenditures in accordance with authorization of the
Company’s management and directors; and provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the
Company’s consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies and
procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of October 31,
2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013). Based on
its assessment, management determined that the Company’s internal control over financial reporting was effective
as of October 31, 2022. The Company’s independent registered public accounting firm, PKF O’Connor Davies,
LLP has audited the effectiveness of the Company’s internal control over financial reporting, as indicated in their
attestation report which is included on the following page.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
Urstadt Biddle Properties inc.
63
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Directors and Stockholders of Urstadt Biddle Properties Inc.
Opinion on Internal Control over Financial Reporting
We have audited Urstadt Biddle Properties Inc.’s (the “Company”) internal control over financial reporting as of
October 31, 2022, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of October 31, 2022, based on criteria established
in Internal Control–Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (“PCAOB”), the consolidated balance sheets of the Company as of October 31, 2022 and 2021, and the
related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of
the three years in the period ended October 31, 2022, and our report dated January 12, 2023, expressed an unqualified
opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U. S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit
also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/PKF O’Connor Davies, LLP
New York, New York
January 12, 2023
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
64
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
We are exposed to interest rate risk primarily through our borrowing activities, which include fixed-rate mortgage
debt and, in limited circumstances, variable rate debt. As of October 31, 2022, we had total mortgage debt and other
notes payable of $299.2 million, of which 100% was fixed-rate, inclusive of variable rate mortgages that have been
swapped to fixed interest rates using interest rate swap derivatives contracts.
Our fixed-rate debt presents 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 our
future financing requirements.
To reduce our exposure to interest rate risk on variable-rate debt, we use interest rate swap agreements, for example,
to convert some of our variable-rate debt to fixed-rate debt. As of October 31, 2022, we had nine open derivative
financial instruments in our consolidated portfolio. These interest rate swaps are cross collateralized with mortgages
on properties in Ossining, NY, Yonkers, NY, Orangeburg, NY, Brewster, NY, Stamford, CT, Greenwich CT, Darien, CT,
Stratford, CT, and Dumont, NJ. The Ossining swap expires in August 2024, the Yonkers swap expires in November
2024, the Orangeburg swap expires in October 2024, the Brewster swap expires in July 2029, the Stamford swap expires
in July 2027, the Greenwich swaps expire in October 2026, the Darien swap expires in April 2029, the Stratford swap
expires in February 2032 and the Dumont swap expires in August 2028, in each case concurrent with the maturity of
the respective mortgages. All of the aforementioned derivatives contracts are adjusted to fair market value at each
reporting period. We have concluded that all of the aforementioned derivatives contracts are effective cash flow hedges
as defined in ASC Topic 815. We are required to evaluate the effectiveness at inception and at each reporting date. As a
result of the aforementioned derivatives contracts being effective cash flow hedges all changes in fair market value are
recorded directly to stockholders equity in accumulated comprehensive income and have no effect on our earnings.
Under existing guidance, the publication of the LIBOR reference rate was to be discontinued beginning on or around
the end of 2021. However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, has
announced that it intends to extend publication of USD LIBOR (other than one-week and two-month tenors) by 18
months to June 2023. Notwithstanding this possible extension, a joint statement by key regulatory authorities calls on
banks to cease entering into new contracts that use USD LIBOR as a reference rate by no later than December 31, 2021.
However, the ICE Benchmark Administration, in its capacity as administrator of USD LIBOR, subsequently announced
that it extended publication of USD LIBOR (other than one-week and two-month tenors) by 18 months to June 2023.
In August and December 2022, we amended six mortgages and their related interest rate swap agreements to include
market standard provisions for determining the benchmark replacement rate for LIBOR in the form of SOFR. We are
in the process of working with the lenders and counterparties to amend the remaining promissory notes and swap
contracts that reference LIBOR. We have good working relationships with all of our lenders/counterparties, and
expect that the replacement reference rate under the amended notes will continue to match the replacement rates in
the swaps. Therefore, we believe there would be no material effect on our financial position or results of operations.
At October 31, 2022, we had $30. 5 million outstanding on our Facility, which bears interest at LIBOR plus 1. 45%.
If interest rates were to rise 1%, our interest expense as a result of the variable rate would increase by any amount
outstanding multiplied by 1% per annum.
The following table sets forth the Company’s long-term debt obligations by principal cash payments and maturity
dates, weighted average fixed interest rates and estimated fair value at October 31, 2022 (amounts in thousands, except
weighted average interest rate):
For The Fiscal Year Ended October 31,
Estimated
2023
2024
2025
2026
2027
Thereafter
Total
Fair Value
Mortgage notes payable
and other loans
$7,612
$26,449
$87,483
$12,940
$43,333
$124,499
$302,316
$277,574
Weighted average interest
rate for debt maturing
n/a
4. 15%
3. 93%
3. 53%
3. 50%
3. 85%
3. 83%
Urstadt Biddle Properties inc.
65
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes in, or any disagreements with, the Company’s independent registered public accounting
firm on accounting principles and practices or financial disclosure during the years ended October 31, 2022 and 2021.
PERFORMANCE GRAPH
The following graph compares, for the five-year period beginning October 31, 2017 and ended October 31, 2022,
the Company’s cumulative total return to holders of the Company’s Class A Common Shares and Common Shares
with the returns for the NAREIT All—REITs Total Return Index, NAREIT Equity Shopping Centers Total Return Index
(both peer group indexes) published by the National Association of Real Estate Investment Trusts (NAREIT) and for
the S&P 500 Index for the same period.
10/17
10/18
10/19
10/20
10/21
10/22
Urstadt Biddle Properties Inc.
100. 00
100. 54
119. 07
57. 29
121. 67
137. 65
Urstadt Biddle Properties Inc. —Class A
100. 00
96. 48
124. 25
51. 32
110. 58
111. 33
S&P 500
100. 00
107. 35
122. 72
134. 64
192. 42
164. 31
FTSE Nareit All REITs
100. 00
101. 97
126. 65
105. 12
153. 82
123. 41
FTSE Nareit Equity Shopping Centers
100. 00
101. 40
121. 14
60. 50
128. 01
118. 16
The stock price performance shown on the graph is not necessarily indicative of future price performance.
FINANCIAL STATEMENTS
66
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
Year Ended October 31,
2022
2021
2020
2019
2018
Net Income Applicable to Common and
Class A Common Stockholders
$26,054
$ 33,633
$ 8,533
$22,128
$25,217
Real property depreciation
23,403
22,936
22,662
22,668
22,139
Amortization of tenant improvements and allowances
4,211
4,429
4,694
3,521
4,039
Amortization of deferred leasing costs
2,114
1,599
1,737
1,652
2,057
Depreciation and amortization on unconsolidated
joint ventures
1,530
1,518
1,499
1,505
1,719
(Gain)/loss on sale of properties
(767)
(11,864)
6,047
19
—
Loss on sale of property of unconsolidated joint venture
—
—
—
462
—
Funds from Operations Applicable to Common and
Class A Common Stockholders
$56,545
$ 52,251
$45,172
$51,955
$55,171
Funds from Operations (Diluted) Per Share:
Common
$1.33
$1. 22
$1. 06
$1. 22
$1. 30
Class A Common
$1.47
$1. 36
$1. 19
$1. 37
$1. 47
Weighted Average Number of Shares Outstanding (Diluted):
Common and Common Equivalent
9,781
9,608
9,385
9,349
9,114
Class A Common And Class A Common Equivalent
29,677
29,753
29,576
29,654
29,513
Funds from Operations (“FFO”)
The Company considers FFO to be an additional
measure of our operating performance. We report
FFO in addition to 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 the Company’s
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 our operating performance, such as
gains (or losses) from sales of property and depreciation
and amortization. However, FFO:
• 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
• should not be considered an alternative to net income
as an indication of our performance.
FFO as defined by us 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 tables below provide a reconciliation of net
income applicable to Common and Class A Common
Stockholders in accordance with GAAP to FFO
for each of the fiscal years ended October 31, 2013 to
October 31, 2022.
Urstadt Biddle Properties inc.
67
Year Ended October 31,
2017
2016
2015
2014
2013
Net Income Applicable to Common and
Class A Common Stockholders
$33,898
$19,436
$ 34,659
$ 49,469
$10,613
Real property depreciation
20,505
18,866
18,750
15,361
14,194
Amortization of tenant improvements and allowances
4,448
3,517
3,161
3,298
2,957
Amortization of deferred leasing costs
1,468
557
449
520
593
Depreciation and amortization on unconsolidated
joint ventures
1,618
1,589
1,414
1,255
974
(Gain)/loss on sale of properties
(18,734)
(362)
(20,377)
(36,871)
175
Loss on sale of property of unconsolidated joint venture
—
—
—
—
—
Funds from Operations Applicable to Common and
Class A Common Stockholders
$43,203
$43,603
$ 38,056
$ 33,032
$29,506
Funds from Operations (Diluted) Per Share:
Common
$1. 02
$1. 10
$0. 99
$0. 95
$0. 86
Class A Common
$1. 15
$1. 25
$1. 12
$1. 06
$0. 95
Weighted Average Number of Shares Outstanding (Diluted):
Common and Common Equivalent
9,026
8,910
8,728
8,536
8,383
Class A Common And Class A Common Equivalent
29,503
27,112
26,332
23,427
23,357
FINANCIAL STATEMENTS
68
DIRECTORS
OFFICERS
KEVIN J. BANNON
Director
PGIM Retail Mutual Funds
CATHERINE U. BIDDLE
Executive Vice President
Urstadt Property Company, Inc.
WILLING L. BIDDLE
President and
Chief Executive Officer
Urstadt Biddle Properties Inc.
NOBLE O. CARPENTER, JR.
Senior Managing Director
Banyan Street Capital
BRYAN O. COLLEY
Principal of entities that own
and operate multiple McDonalds
restaurants
RICHARD GRELLIER
Managing Director
Deutsche Bank Securities Inc.
ROBERT J. MUELLER
Retired Senior Executive
Vice President
The Bank of New York
WILLIS H. STEPHENS, JR.
Principal
Stephens Law Firm PLLC
CHARLES D. URSTADT
Chairman
Urstadt Biddle Properties Inc.
CHARLES D. URSTADT
Chairman
WILLING L. BIDDLE
President and
Chief Executive Officer
JOHN T. HAYES
Senior Vice President,
Chief Financial Officer
and Treasurer
STEPHAN A. RAPAGLIA
Senior Vice President,
Chief Operating Officer,
Real Estate Counsel and
Assistant Secretary
MIYUN SUNG
Senior Vice President,
Chief Legal Officer and Secretary
JAMES M. ARIES
Senior Vice President
Director of Acquisitions
LINDA LACEY
Senior Vice President
Director of Leasing
ANDREW ALBRECHT
Vice President
Director of Management
and Construction
JOSEPH ALLEGRETTI
Vice President
Leasing
NICHOLAS CAPUANO
Vice President
Real Estate Counsel
SUZANNE MOORE
Vice President and Director of
Accounts Receivable
CHRISTOPHER PEREZ
Vice President and Controller
ELINOR P. BIDDLE
Assistant Vice President
Leasing
DIJANA COTAJ
Assistant Vice President
Leasing Transaction Manager
SUZANNE CRISCITELLI
Assistant Vice President
Lease Administration
ERIN DEEGAN
Assistant Vice President and Assistant
Director of Accounts Receivable and
Tenant Billing
STEVE DUDZIEC
Assistant Vice President
Leasing
ELLEN HANRAHAN
Assistant Vice President
Assistant Secretary
JANINE IAROSSI
Assistant Vice President
Employee Benefits
BRIAN McCAFFREY
Assistant Vice President
Tenant Relations Manager
ALEXANDER MURAVSKY
Assistant Vice President
Acquisitions
MARY MURRAY
Assistant Vice President
Director of Operations
MONICA ROTH
Assistant Vice President
Environmental Manager,
Management and Construction
BRENDAN SHANLEY
Assistant Vice President
Property Management
and Sustainability Manager
CORPORATE INFORMATION
Securities Traded
New York Stock Exchange Symbols: UBA, UBP,
UBPPRH and UBPPRK. Stockholders of Record
as of December 31, 2022:
Common Stock: 485 and
Class A Common Stock: 530
Annual Meeting
The annual meeting of stockholders will
be on March 22, 2023 conducted live via audio
webcast at 2:00 P.M., Eastern Time via
www.virtualshareholdermeeting.com/UBA2023.
Form 10-K
A copy of the Company’s 2022 Annual Report on
Form 10-K filed with the Securities and Exchange
Commission, without exhibits, may be obtained
by stockholders without charge by writing to the
Secretary of the Company at its executive office.
Shareholder Information and
Dividend Reinvestment Plan
Inquiries regarding stock ownership, dividends
or the transfer of shares can be made by writing
to our Transfer Agent, Shareholder Services at
Computershare, P.O. Box 43006, Providence, RI
02940-3006 or by calling toll-free at 1-866-203-6250.
The Company has a dividend reinvestment plan
that provides stockholders with a convenient means
of increasing their holdings without incurring
commissions or fees. For information about the plan,
stockholders should contact the Transfer Agent.
Other shareholder inquiries should be directed to
Miyun Sung, Secretary, telephone (203) 863-8200.
Investor Relations
Investors desiring information about the Company
can contact Laura Santangelo, in our Investor
Relations Department, telephone (203) 863-8225.
Investors are also encouraged to visit our website at:
www.ubproperties.com
Independent Registered Public
Accounting Firm
PKF O’Connor Davies, LLP
General Counsel
Baker & McKenzie LLP
Internal Audit
Berdon LLP, CPAs and Advisors
Executive Office of the Company
321 Railroad Avenue
Greenwich, CT 06830
Tel: (203) 863-8200
Fax: (203) 861-6755
Website: www.ubproperties.com
Memberships
National Association of Real Estate Investment
Trusts, Inc. (NAREIT); International Council
of Shopping Centers (ICSC)
321 Railroad Avenue
Greenwich, CT 06830
Lakeview Shopping Center, Brewster, New York
Pompton Lakes Town Square,
Pompton Lakes, New Jersey