Urban Edge Properties (UE) stock intrinsic value fair value estimate & owner earnings analysis

Urban Edge Properties is a real estate investment trust that owns and redevelops shopping centers, mostly in the Washington, D.C. to Boston corridor. About 65% of its annualized base rent comes from the New York metropolitan area. Tenants are mainly grocers, discounters and big-box retailers; the largest is TJX (Marshalls, T.J. Maxx, HomeGoods) at 5.6% of revenue, and no other tenant exceeds 3.7%. At year-end 2025 the retail portfolio was 96.7% leased. How we measure earnings. We start from operating cash flow, strip out swings in receivables and payables, and subtract stock compensation (about $12 million in 2025). We also subtract capital spending except the slice we can attribute to growth. This company spends roughly $100 million a year on redevelopment and property improvements ($100.9 million in 2025). Under our method almost all of it counts as a cost of staying in business, since revenue growth explains little of it. That is a demanding treatment for a landlord that redevelops on purpose, and it is the main reason our values sit well below what a typical real estate earnings measure would suggest. Leasing commissions and ground-lease payments stay in operating cash flow as ordinary recurring costs. Depreciation and lease-intangible amortization are non-cash and are not an issue for this cash-based measure. The result is lumpy. Over ten years, earnings per share ran from $0.11 (2023) to $0.80 (2020, when spending was cut to $28.5 million). 2025 was $0.58, up 54% in total dollars from 2024. For the level we use the median of the last five years (2021-2025), about $48 million or roughly $0.36 per share on about 132 million shares. That count includes the roughly 6.8 million operating-partnership units held by others, about 5% of the equity, who share in the same cash flows. The ten-year median is nearly identical (about $48 million). We did not lift the level to 2025's $73 million, because that year benefited from lower spending than 2022-2023, and one strong year is not a new level. Growth. Last year's 54% earnings jump came off a depressed 2024 and is not repeatable. Our base case starts at 2.5% a year, well below it. The support is in the filing: 2025 new leases on previously occupied space were signed at cash rents 32% above the prior rent and renewals 10.8% above, and leases covering about 22% of base rent expire within three years. Repricing those expiries at demonstrated spreads supports low-single-digit growth for ten years, after which we assume the existing centers keep producing that earnings level with no further growth. We do not credit the redevelopment pipeline in the base case. Management describes $165.5 million of active projects, $85.6 million still to be funded, with an expected 14% yield. That yield is a management target and the projects are not yet complete. We also do not credit acquisitions, additional share gains or rent growth beyond what recent lease spreads show. Cases. Base case: $7.4 per share, the $48 million level growing 2.5% a year for ten years and holding flat afterward. Bull case: $11.8 per share. Earnings return to about $65 million, below the 2025 level, and the pipeline delivers its stated yield, adding about $12 million of income by 2028, with 3% growth afterward. Bear case: $2.9 per share. Earnings fall to about $25 million, between the $13-15 million years of 2022-2023 and the recent median, and then drift down 1% a year. The named pressures are New York concentration, the 22% of base rent up for renewal within three years against 12.1% of space physically vacant at year-end (excluding signed leases not yet commenced), $113.5 million of mortgage debt due within twelve months to be refinanced, and a $25 million payment agreed in January 2026 to a tenant to regain a space. The company has already refinanced some debt and amended its credit line to mature in 2030, which supports the bear case being a reduced-income scenario rather than a solvency one. What would make this wrong. If the redevelopment spending is better read as discretionary and can be cut without hurting income, as in 2020, true earnings are higher than we show. The bull case partly reflects this. If the tenant base weakens in the New York area, the bear case applies. We could not reconcile how much of the roughly $100 million annual spending is truly discretionary; the filing does not split it between upkeep and new projects. The 2020 prepaid-assets swing of about $42 million was also not fully explained in the data we reviewed, though it does not change the level we use. The margin-of-safety price is $4.5 per share, about 39% below our base value, reflecting the leverage, the retail focus and the uncertainty about how much spending is truly required.