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Urstadt Biddle Acquires Derby Shopping Center: Time to Buy?

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Urstadt Biddle Properties Inc. recently expanded its portfolio with the acquisition of Pershing Square Shopping Center in Derby, CT for $9.0 million. The move is likely to drive its top line, going forward.

The newly constructed 38,750-square foot shopping center on Pershing Drive, anchored by Aldi Grocery Store, denotes a solid buy for Urstadt Biddle, which owns or has equity stakes in 76 properties, comprising around 5.0 million square feet of space. The property enjoys strong trade-area demographics for being positioned in the center of the retail district of Derby.

The region is densely populated and there are around 55,000 people in the 3-mile area adjoining the property who have an average annual household income of about $80,000. Also, there are around 97,000 people earning average household incomes of almost $97,500 per year in the surrounding 5-mile area. As such, the property is expected to experience high footfall, which should translate into high demand for space in this retail property.

Moreover, the property’s tenant roster includes not only Aldi, which is a strong credit tenant, but also other reputed names like Panera Bread , Pet Valu, AT&T (T - Free Report) and Popeye’s. The company has long-term leases with the tenants and is therefore expected to rake in stable revenues from this property.

Further, Urstadt Biddle currently has a Zacks Rank #2 (Buy). Also, it has a long-term growth rate of 8.0%, which is ahead of the industry average of 5.5%. Encouragingly, this company, which is listed on the New York Stock Exchange since 1970, has not only paid uninterrupted dividends to its shareholders for 187 straight quarters since its inception, but has also hiked the total dividend throughout the past 23 successive years. In fact, its dividend yield of 4.53% is above the industry average of 3.94%.

Over the past three months, shares of Urstadt Biddle have outperformed the Zacks categorized REIT and Equity Trust – Retail industry. In fact, over this time frame, Urstadt Biddle’s shares improved 7.94%, while the industry recorded a 4.7% decline.



An equally ranked stock in this sector is Urban Edge Properties (UE - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For Urban Edge Properties, the projected growth rate for FFO per share is 37.6% for 2016 and 6.3% for 2017.

Note: Funds from operations (“FFO”) a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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