Urban Edge surges on record occupancy, 11% dividend hike
Retail REIT delivers exceptional 2025 with 32% cash spreads and 4.5% projected FFO growth for 2026
Urban Edge Properties delivered a stronger-than-expected fourth quarter, capping what chairman and chief executive Jeff Olson called an "exceptional 2025" with record cash spreads and an 11% dividend increase that sent shares higher in Wednesday trading.
The New York-based retail real estate investment trust reported FFO as Adjusted of $0.36 per share for the quarter ended December 31, beating analyst estimates and driving full-year FFO as Adjusted to $1.43 per share, a 6% increase over the prior year. Revenue for the quarter reached $119.6 million, surpassing the consensus estimate of $97.6 million by more than 22%.
The standout performance came from Urban Edge's leasing operations. The company signed over 360,000 square feet of new leases during 2025, generating record cash spreads of 32% — a metric that measures the difference between new lease rates and expiring lease rates. Retail shop occupancy climbed to 92.6%, a record high and up 170 basis points from year-end 2024.
Same-property net operating income grew 4.3% for the full year, driven by rent commencements on new leases and higher net recovery income, partially offset by increased snow removal expenses. Including properties currently in redevelopment, same-property NOI growth reached 5%.
Board of trustees rewarded shareholders with an 11% increase in the quarterly dividend to $0.21 per share, resulting in an indicated annual rate of $0.84. The increase represents an additional $0.08 per share annually and reflects what Olson described as "higher earnings and taxable income" generated by the strong operating performance.
Looking ahead, Urban Edge provided FFO guidance for 2026 of $1.47 to $1.52 per share, representing 4.5% growth at the midpoint compared to 2025 results. The guidance assumes same-property NOI growth, including properties in redevelopment, of 2.75% to 3.75%, and includes approximately $54 million in acquisitions currently under contract.
The company's guidance factors in recurring general and administrative expenses of $34.5 million to $36.5 million, and interest and debt expense ranging from $78.9 million to $80.9 million. The outlook excludes one-time items such as gains or losses on debt extinguishment, transaction costs, severance, and litigation expenses.
"Urban Edge has entered 2026 in an excellent position," Olson said in prepared remarks. "We remain focused on executing leases with leading retailers, prudent capital allocation, and careful management of our operating expenses while we seek additional acquisition opportunities to continue to provide strong earnings growth."
Urban Edge, which specializes in owning and redeveloping retail properties in urban markets with a focus on the New York metropolitan area, has seen its shares rise 0.9% to $21.04. The stock has gained more than 38% over the past year and currently trades above its 50-day and 200-day moving averages of $19.30 and $19.34, respectively.
Analysts maintain a generally positive outlook on the stock, with a mean price target of $22.29, according to recent analyst data. Of seven analysts covering the company, three rate it a buy while four recommend hold.
The strong results contrast with broader challenges in the retail real estate sector, where many shopping center owners have struggled with changing consumer habits and retailer bankruptcies. Urban Edge's focus on urban, necessity-based retail with strong tenant demand has helped it maintain occupancy and pricing power even as mall REITs face headwinds.
The company's portfolio consists primarily of neighborhood and community shopping centers anchored by grocery stores, pharmacies, and other essential retailers that have proven more resilient to e-commerce competition than traditional enclosed malls. With same-property portfolio leased occupancy at 96.7% and consolidated portfolio occupancy matching that level, Urban Edge enters 2026 with nearly fully leased properties.