Urban Edge Properties (UE) Risk Analysis

Epidemics, pandemics or other public health crises, including the recent COVID-19 pandemic, that impact economic and market conditions, particularly in the markets where our properties are located, and preventative measures taken to alleviate their impact, including mandatory business shutdowns, "shelter-in-place" or "stay-at-home" orders issued by local, state or federal authorities, may have a material adverse effect on our and our tenants' business, financial condition, results of operations, liquidity, and ability to access capital markets and satisfy debt service obligations. Our retail tenants depend on in-person interactions with their customers, and the COVID-19 pandemic has decreased customer willingness to visit, and mandated "shelter-in-place" or "stay-at-home" orders have prevented customers from visiting, our tenants' businesses, which has and may continue to negatively impact their profitability or cash flow and ability make timely rental payments to us. As a result of our concentrated operations in the New York metropolitan area, the extent and magnitude, or perception, of the impact of the current COVID-19 pandemic on our and our tenants' business is heightened. As of November 3, 2020, 98% of our portfolio's gross leasable area (97% as measured by annualized base rent) was open for business. We remain in active discussions and negotiations with our impacted tenants and anticipate granting further rent concessions or other lease-related relief. As of November 3, 2020, we have executed or approved an approximate total of 116 rent deferrals for an aggregate deferral amount of $7.1 million; however, the full financial impact of such rent relief is currently unknown. As of November 3, 2020 the Company collected approximately 83% of third quarter rental revenue billed and 86% of October rental revenue billed, respectively. We have experienced and expect to continue to experience a decline in our percentage rent throughout 2020 as a result of reduced sales volume from temporary store closures and changes in consumer behavior. Moreover, the ongoing COVID-19 pandemic and restrictions intended to prevent and mitigate its spread have had, and could have, additional adverse effects on our business, including with regards to: - the ability and willingness of our tenants to renew their leases upon expiration, our ability to re-lease the properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and the conditions under which potential tenants will be able to operate physical retail locations in the future;- anticipated returns from development and redevelopment projects, which have been temporarily delayed and may, in some cases, be abandoned;- the broader impact of the severe economic contraction due to the COVID-19 pandemic, the resulting increase in unemployment that has occurred and its effect on consumer behavior, and the negative consequences that will occur if these trends are not timely reversed;- macroeconomic conditions, such as a disruption of, or lack of access to, the capital markets as well as the significant decline in our share price from prices prior to the spread of the COVID-19 pandemic;- our decision to pay dividends at all, or pay them in stock, which in the case of the latter may result in our shareholders having a tax liability with respect to such dividends that exceeds the amount of cash received, if any;- our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due and potential limitations on our ability to borrow funds under our existing credit facility as a result of covenants relating to our financial results in the second quarter of 2020 or future quarters; and - potential reduction in our operating effectiveness as employees work remotely or if key personnel become unavailable due to illness or other personal circumstances related to COVID-19. The COVID-19 pandemic and restrictions intended to prevent and mitigate its spread have already had a significant adverse impact on economic and market conditions around the world, including the United States and markets where our properties are located and could further trigger a period of sustained global and U.S. economic downturn or recession. While the rapid developments regarding the COVID-19 pandemic preclude any prediction as to its ultimate adverse impact, the current economic, political and social environment presents material risks and uncertainties with respect to our and our tenants'business, financial condition, results of operations, cash flows, liquidity and ability to access the capital markets and satisfy debt service obligations. To the extent any of these risks and uncertainties adversely impact us in the ways described above or otherwise, they may also have the effect of heightening many of the other risks described under the section entitled "Item 1A. Risk Factors" in our most recent annual report on Form 10-K for the year ended December 31, 2019.