10-K 1 form10k2015.htm FORM 10K 2015  
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2015

 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 1-12803

URSTADT BIDDLE PROPERTIES INC.
(Exact name of registrant as specified in its charter)


Maryland
04-2458042
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
 
321 Railroad Avenue, Greenwich, CT
06830
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code: (203) 863-8200

Securities registered pursuant to Section 12(b) of the Act:

 
Name of each exchange
Title of each class
on which registered
   
Common Stock, par value $.01 per share
New York Stock Exchange
   
Class A Common Stock, par value $.01 per share
New York Stock Exchange
   
7.125% Series F Cumulative Preferred Stock
New York Stock Exchange
   
6.75% Series G Cumulative Preferred Stock
New York Stock Exchange
   
Preferred Share Purchase Rights
New York Stock Exchange


 
 

Securities registered pursuant to Section 12 (g) of the Act:  None
 
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes □
No ☒
 
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act.
Yes □
No ☒
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒
No □
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer □
Accelerated filer ☒
Non-accelerated filer □
Smaller reporting company □
 
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes  □
No ☒
 
The aggregate market value of the voting common stock held by non-affiliates of the Registrant as of April 30, 2015 (price at which the common equity was last sold as of the last business day of the Registrant's most recently completed second fiscal quarter): Common Shares, par value $.01 per share, $38,993,661; Class A Common Shares, par value $.01 per share, $537,248,936.
 
Indicate the number of shares outstanding of each of the Registrant's classes of Common Stock and Class A Common Stock, as of January 5, 2016 (latest date practicable): 9,502,985 Common Shares, par value $.01 per share, and 26,463,816 Class A Common Shares, par value $.01 per share.


DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for Annual Meeting of Stockholders to be held on March 24, 2016 (certain parts as indicated herein) (Part III).
 
1
 

 
TABLE OF CONTENTS

Item No.
Page No.
 
PART I
  
     
1.
  3
     
1 A.
  8
     
1 B.
  12
     
2.
  13
     
3.
  14
     
4.
  14
     
 
PART II
  
     
5.
  15
     
6.
  17
     
7.
  18
     
7 A.
  29
     
8.
  29
     
9.
  29
     
9 A.
  29
     
9 B.
  32
     
 
PART III
  
     
10.
  32
     
11.
  32
     
12.
  32
     
13.
  33
     
14.
  33
     
 
PART IV
  
     
15.
  33
     
   59


2
PART I
Forward-Looking Statements

This Annual Report on Form 10-K 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 the Company expects, believes or anticipates 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 the Company's operations and other such matters, are forward-looking statements.  These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes 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.  Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to: economic and other market conditions; financing risks, such as the inability to obtain debt or equity financing on favorable terms; the level and volatility of interest rates; financial stability of tenants; the inability of the Company's properties to generate revenue increases to offset expense increases; governmental approvals, actions and initiatives; environmental/safety requirements; risks of real estate acquisitions (including the failure of acquisitions to close); risks of disposition strategies; as well as other risks identified in this Annual Report on Form 10-K under Item 1A. Risk Factors and in the other reports filed by the Company with the Securities and Exchange Commission (the "SEC").

Item 1.                          Business.

Organization

The Company, a Maryland Corporation, is a real estate investment trust engaged in the acquisition, ownership and management of commercial real estate. The Company was organized as an unincorporated business trust (the "Trust") under the laws of the Commonwealth of Massachusetts on July 7, 1969. In 1997, the shareholders of the Trust approved a plan of reorganization of the Trust from a Massachusetts business trust to a corporation organized in Maryland.  The plan of reorganization was effected by means of a merger of the Trust into the Company.  As a result of the plan of reorganization, the Trust was merged with and into the Company, the separate existence of the Trust ceased, the Company was the surviving entity in the merger and each issued and outstanding common share of beneficial interest of the Trust was converted into one share of Common Stock, par value $.01 per share, of the Company.

Tax Status – Qualification as a Real Estate Investment Trust

The Company elected to be taxed as a real estate investment trust ("REIT") under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"), beginning with its taxable year ended October 31, 1970.  Pursuant to such provisions of the Code, a REIT which distributes at least 90% of its real estate investment trust taxable income to its shareholders each year and which meets certain other conditions regarding the nature of its income and assets will not be taxed on that portion of its taxable income which is distributed to its shareholders.  Although the Company believes that it qualifies as a real estate investment trust for federal income tax purposes, no assurance can be given that the Company will continue to qualify as a REIT.

Description of Business

The Company's sole business is the ownership of real estate investments, which consist principally of investments in income-producing properties, with primary emphasis on properties in the metropolitan New York tri-state area outside of the City of New York.  The Company's properties consist principally of neighborhood and community shopping centers and seven office buildings.  The Company seeks to identify desirable properties for acquisition, which it acquires in the normal course of business.  In addition, the Company regularly reviews its portfolio and from time to time may sell certain of its properties.

The Company intends to continue to invest substantially all of its assets in income-producing real estate, with an emphasis on neighborhood and community shopping centers, although the Company will retain the flexibility to invest in other types of real property.  While the Company is not limited to any geographic location, the Company's current strategy is to invest primarily in properties 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.

3


At October 31, 2015, the Company owned or had equity interests in seventy-four properties comprised of neighborhood and community shopping centers, office buildings, single tenant retail or restaurant properties and office/retail mixed use properties located in four states throughout the United States, containing a total of 4.9 million square feet of gross leasable area ("GLA").  For a description of the Company's individual investments, see Item 2 – Properties.

Investment and Operating Strategy

The Company's investment objective is to increase the cash flow and the value of its properties.  The Company seeks growth through (1) the strategic re-tenanting, renovation and expansion of its existing properties, and (2) the selective acquisition of income-producing properties, primarily neighborhood and community shopping centers, in its targeted geographic region.  The Company may also invest in other types of real estate in the targeted geographic region. For a discussion of key elements of the Company's growth strategies and operating policies, see Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Company invests in properties where cost effective renovation and expansion programs, combined with effective leasing and operating strategies, can improve the properties' values and economic returns.  Retail properties are typically adaptable for varied tenant layouts and can be reconfigured to accommodate new tenants or the changing space needs of existing tenants.  In determining whether to proceed with a renovation or expansion, the Company considers both the cost of such expansion or renovation and the increase in rent attributable to such expansion or renovation.  The Company believes that certain of its properties provide opportunities for future renovation and expansion.

When evaluating potential acquisitions, the Company considers such factors as (1) economic, demographic, and regulatory conditions in the property's local and regional market; (2) the location, construction quality, and design of the property; (3) the current and projected cash flow of the property and the potential to increase cash flow; (4) the potential for capital appreciation of the property; (5) the terms of tenant leases, including the relationship between the property's current rents and market rents and the ability to increase rents upon lease rollover; (6) the occupancy and demand by tenants for properties of a similar type in the market area; (7) the potential to complete a strategic renovation, expansion or re-tenanting of the property; (8) the property's current expense structure and the potential to increase operating margins; and (9) competition from comparable properties in the market area.

The Company may from time to time enter into arrangements for the acquisition of properties with unaffiliated property owners through the issuance of units of limited partnership (or units of limited liability company) interests in entities that the Company controls.  These units may be redeemable for cash or for shares of the Company's Common stock or Class A Common stock.  The Company believes that this acquisition method may permit it to acquire properties from property owners wishing to enter into tax-deferred transactions.

At October 31, 2015, the Company's properties collectively had 868 leases with tenants providing a wide range of products and services.  Tenants include regional supermarkets, national and regional discount department stores, other local retailers and office tenants.  At October 31, 2015, the sixty-seven consolidated properties were 95.8% leased (see Results of Operations discussion in Item 7).   At October 31, 2015, the Company had equity investments in seven properties which it does not consolidate; those properties were 98.1% leased.  The Company believes the properties are adequately covered by property and liability insurance.

A substantial portion of the Company's operating lease income is derived from tenants under leases with terms greater than one year.  Certain of the leases provide for the payment of monthly fixed base rentals and for the payment by the tenant of a pro-rata share of the real estate taxes, insurance, utilities and common area maintenance expenses incurred in operating the properties.

4
For the fiscal year ended October 31, 2015, no single tenant comprised more than 7.7% of the total annual base rents of the Company's properties. The following table sets out a schedule of our ten largest tenants by percent of total annual base rent of our properties as of October 31, 2015.

 
 
Tenant
  
Number
of
Stores
    
% of Total
Annual Base Rent of
Properties
  
         
Stop & Shop Supermarket
    
7
      
7.70
%
CVS
    
8
      
4.09
%
A&P Supermarkets
    
4
      
3.54
%
TJX Companies
    
5
      
3.46
%
Bed Bath & Beyond
    
3
      
3.32
%
ACME Supermarkets
    
4
      
3.16
%
Staples
    
3
      
1.68
%
BJ's
    
1
      
1.48
%
King's Supermarkets
    
2
      
1.34
%
ShopRite
    
2
      
1.32
%
     
39
      
31.09
%

See Item 2 – Properties for a complete list of the Company's properties. Also see Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources, for a discussion of the impact of A&P's bankrupcty on the Company.

The Company's single largest real estate investment is its 100% ownership of the general and limited partnership interests in the Ridgeway Shopping Center ("Ridgeway").

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. For the year ended October 31, 2015, Ridgeway revenues represented approximately 11.7% of the Company's total revenues and approximately 8.4% of the Company's total assets at October 31, 2015. As of October 31, 2015, Ridgeway was 97.0% leased. The property's largest tenants (by base rent) are: The Stop & Shop Supermarket Company (19%), Bed, Bath & Beyond (14%) and Marshall's Inc., a division of the TJX Companies (11%).  No other tenant accounts for more than 10% of Ridgeway's annual base rents.

The following table sets out a schedule of the annual lease expirations for retail leases at Ridgeway as of October 31, 2015 for each of the next ten years and thereafter (assuming that no tenants exercise renewal or cancellation options and that there are no tenant bankruptcies or other tenant defaults):

Year of
Expiration
  
Number of
Leases Expiring
    
Square Footage of Expiring Leases
    
Minimum
Base Rentals
    
Percentage of Total Annual Base Rent That is Represented By the Expiring Leases
  
2016
    
2
      
900
    
$
49,300
      
0.5
%
2017
    
4
      
62,900
      
2,154,400
      
21.0
%
2018
    
10
      
94,500
      
3,297,200
      
32.1
%
2019
    
1
      
800
      
45,400
      
0.4
%
2020
    
3
      
31,800
      
517,000
      
5.0
%
2021
    
1
      
42,700
      
826,200
      
8.1
%
2022
    
3
      
22,400
      
872,500
      
8.5
%
2023
    
6
      
66,800
      
2,131,500
      
20.8
%
2024
    
2
      
10,300
      
363,700
      
3.6
%
2025
    
-
      
-
      
-
      
-
%
Thereafter
    
-
      
-
      
-
      
-
%
Total
    
32
      
333,100
    
$
10,257,200
      
100
%
 

 
5

Non-Core Properties

In a prior year, the Board of Directors of the Company expanded and refined the strategic objectives of the Company to concentrate the real estate portfolio into one of primarily retail properties located in the Northeast and authorized the sale of the Company's non-core properties in the normal course of business over a period of years given prevailing market conditions and the characteristics of each property.

In December 2013, the Company sold its two non-core properties.  The Company reinvested the proceeds into properties in its core marketplace.

Financing Strategy

The Company intends to continue to finance acquisitions and property improvements and/or expansions with the most advantageous sources of capital which it believes are available to the Company at the time, and which may include the sale of common or preferred equity through public offerings or private placements, the incurrence of additional indebtedness through secured or unsecured borrowings, investments in real estate joint ventures and the reinvestment of proceeds from the disposition of assets.  The Company's financing strategy is to maintain a strong and flexible financial position by (1) maintaining a prudent level of leverage, and (2) minimizing its exposure to interest rate risk represented by floating rate debt.

Matters Relating to the Real Estate Business

The Company is subject to certain business risks arising in connection with owning real estate which include, among others, (1) the bankruptcy or insolvency of, or a downturn in the business of, any of its major tenants, (2) the possibility that such tenants will not renew their leases as they expire, (3) vacated anchor space affecting an entire shopping center because of the loss of the departed anchor tenant's customer drawing power or the difficulty in re-leasing that space as a result of co-tenancy lease clauses in other tenants leases, (4) risks relating to leverage, including uncertainty that the Company will be able to refinance its indebtedness, and the risk of higher interest rates, (5) potential liability for unknown or future environmental matters, and (6) the risk of uninsured losses. Unfavorable economic conditions could also result in the inability of tenants in certain retail sectors to meet their lease obligations and otherwise could adversely affect the Company's ability to attract and retain desirable tenants.  The Company believes that its shopping centers are relatively well positioned to withstand adverse economic conditions since they typically are anchored by grocery stores, drug stores and discount department stores that offer day-to-day necessities rather than luxury goods. For a discussion of various business risks, see Item 1A – Risk Factors.

Compliance with Governmental Regulations

The Company, like others in the commercial real estate industry, is subject to numerous environmental laws and regulations.  Although potential liability could exist for unknown or future environmental matters, the Company believes that its tenants are operating in accordance with current laws and regulations.

Competition

The real estate investment business is highly competitive.  The Company competes for real estate investments with investors of all types, including domestic and foreign corporations, financial institutions, other real estate investment trusts, real estate funds, individuals and privately owned companies.  In addition, the Company's properties are subject to local competitors from the surrounding areas.  The Company's shopping centers compete for tenants with other regional, community or neighborhood shopping centers in the respective areas where the Company's retail properties are located.  In addition, the retail industry is seeing greater competition from internet retailers who do not need to establish "brick and mortar" locations for their businesses. This reduces the demand for traditional retail space in shopping centers like ours and other grocery-anchored shopping center properties.  The Company's office buildings compete for tenants principally with office buildings throughout the respective areas in which they are located.  Leasing decisions are generally determined by prospective tenants on the basis of, among other things, rental rates, location, and physical quality of the property and availability of space.

The Company does not consider its real estate business to be seasonal in nature.
 
 
6

Property Management

The Company actively manages and supervises the operations and leasing at all of its properties.

Employees

The Company's executive offices are located at 321 Railroad Avenue, Greenwich, Connecticut.  It occupies approximately 10,000 square feet in a two-story office building owned by the Company. The Company has 49 employees and believes that its relationship with its employees is good.

Company Website

All of the Company's filings with the SEC, including the Company's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge at the Company's website at www.ubproperties.com as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.  These filings can also be accessed through the SEC's website at www.sec.gov.

Code of Business Conduct and Ethics and Whistleblower Policy

The Company's Board of Directors has adopted a Code of Business Conduct and Ethics for Senior Financial Officers that applies to the Company's Chief Executive Officer, Chief Financial Officer and Controller.  The Board also adopted a Code of Business Conduct and Ethics applicable to all employees as well as a "Whistleblower Policy". These are available free of charge by contacting the Company.

Financial Information About Operating Segments

See Item 8 included in this Annual Report on 10-K for the year ended October 31, 2015.
 
 
7

Item 1A.                          Risk Factors

Risks related to our operations and properties

There are risks relating to investments in real estate and the value of our property interests depends on conditions beyond our control.  Real property investments are illiquid and we may be unable to change our property portfolio on a timely basis in response to changing market or economic conditions.  Yields from our properties depend on their net income and capital appreciation.  Real property income and capital appreciation may be adversely affected by general and local economic conditions, neighborhood values, competitive overbuilding, zoning laws, weather, casualty losses and other factors beyond our control.  Since substantially all of the Company's income is rental income from real property, the Company's income and cash flow could be adversely affected if a large tenant is, or a significant number of tenants are, unable to pay rent or if available space cannot be rented on favorable terms.

Operating and other expenses of our properties, particularly significant expenses such as interest, real estate taxes and maintenance costs, generally do not decrease when income decreases and, even if revenues increase, operating and other expenses may increase faster than revenues.

Our business strategy is mainly concentrated in one type of commercial property and in one geographic location.  Our primary investment focus is neighborhood and community shopping centers located in the northeastern United States, with a concentration in the metropolitan New York tri-state area outside of the City of New York.  For the year ended October 31, 2015, approximately 97.8% of our total revenues were from properties located in this area. Various factors may adversely affect a shopping center's profitability.  These factors include circumstances that affect consumer spending, such as general economic conditions, economic business cycles, rates of employment, income growth, interest rates and general consumer sentiment.  These factors could have a more significant localized effect in the areas where our properties are concentrated.  Changes to the real estate market in our focus areas, such as an increase in retail space or a decrease in demand for shopping center properties, could adversely affect operating results.  As a result, we may be exposed to greater risks than if our investment focus was based on more diversified types of properties and in more diversified geographic areas.

The Company's single largest real estate investment is its ownership of the Ridgeway Shopping Center ("Ridgeway") located in Stamford, Connecticut.  For the year ended October 31, 2015, Ridgeway revenues represented approximately 11.7% of the Company's total revenues and approximately 8.4% of the Company's total assets at October 31, 2015.  The loss of this center or a material decrease in revenues from the center could have a material adverse effect on the Company.

We are dependent on anchor tenants in many of our retail properties.  Most of our retail properties are dependent on a major or anchor tenant.  If we are unable to renew any lease we have with the anchor tenant at one of these properties upon expiration of the current lease, or to re-lease the space to another anchor tenant of similar or better quality upon departure of an existing anchor tenant on similar or better terms, we could experience material adverse consequences such as higher vacancy, re-leasing on less favorable economic terms, reduced net income, reduced funds from operations and reduced property values.  Vacated anchor space also could adversely affect an entire shopping center because of the loss of the departed anchor tenant's customer drawing power.  Loss of customer drawing power also can occur through the exercise of the right that some anchors have to vacate and prevent re-tenanting by paying rent for the balance of the lease term.  In addition, vacated anchor space could, under certain circumstances, permit other tenants to pay a reduced rent or terminate their leases at the affected property, which could adversely affect the future income from such property.  There can be no assurance that our anchor tenants will renew their leases when they expire or will be willing to renew on similar economic terms.  See Item 1 – Business – in this Annual Report on Form 10-K for additional information on our ten largest tenants by percent of total annual base rent of our properties.

Similarly, if one or more of our anchor tenants goes bankrupt, we could experience material adverse consequences like those described above.  Under bankruptcy law, tenants have the right to reject their leases.  In the event a tenant exercises this right, the landlord generally may file a claim for lost rent equal to the greater of either one year's rent (including tenant expense reimbursements) or 15% of the rent remaining under the balance of the lease term, not to exceed three years.  Actual amounts received in satisfaction of those claims will be subject to the tenant's final plan of reorganization and the availability of funds to pay its creditors.

We face potential difficulties or delays in renewing leases or re-leasing space.  We derive most of our income from rent received from our tenants.  Although substantially all of our properties currently have favorable occupancy rates, we cannot predict that current tenants will renew their leases upon the expiration of their terms.  In addition, current tenants could attempt to terminate their leases prior to the scheduled expiration of such leases or might have difficulty in continuing to pay rent in full, if at all, in the event of a severe economic downturn.  If this occurs, we may not be able to promptly locate qualified replacement tenants and, as a result, we would lose a source of revenue while remaining responsible for the payment of our obligations.  Even if tenants decide to renew their leases, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms.

In some cases, our tenant leases contain provisions giving the tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center, or limit the ability of other tenants within the center to sell that merchandise or provide those services.  When re-leasing space after a vacancy in a center with one of these tenants, such provisions may limit the number and types of prospective tenants for the vacant space.  The failure to re-lease space or to re-lease space on satisfactory terms could adversely affect our results from operations.  Additionally, properties we may acquire in the future may not be fully leased and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property until the property is fully leased. As a result, our net income, funds from operations and ability to pay dividends to stockholders could be adversely affected.
 
8
Competition may adversely affect acquisition of properties and leasing operations.  We compete for the purchase of commercial property with many entities, including other publicly traded REITs.  Many of our competitors have substantially greater financial resources than ours.  In addition, our competitors may be willing to accept lower returns on their investments.  If we are unable to successfully compete for the properterties we have targeted for acquisition, we may not be able to meet our property acquisition and development goals.  We may incur costs on unsuccessful acquisitions that we will not be able to recover.  The operating performance of our property acquisitions may also fall short of our expectations, which could adversely affect our financial performance.

If our competitors offer space at rental rates below our current rates or the market rates, we may lose current or potential tenants to other properties in our markets and we may need to reduce rental rates below our current rates in order to retain tenants upon expiration of their leases.  As a result, our results of operations and cash flow may be adversely affected.  In addition, our tenants face increasing competition from internet commerce, outlet malls, discount retailers, warehouse clubs and other sources which could hinder our ability to attract and retain tenants and/or cause us to reduce rents at our properties, which could have an adverse effect on our results of operations and cash flows.

We face risks associated with the use of debt to fund acquisitions and developments, including refinancing risk.  We have incurred, and expect to continue to incur, indebtedness to advance our objectives. The only restrictions on the amount of indebtedness we may incur are certain contractual restrictions and financial covenants contained in our unsecured revolving credit agreement. Using debt to acquire properties, whether with recourse to us generally or only with respect to a particular property, creates an opportunity for increased return on our investment, but at the same time creates risks.  We use debt to fund investments only when we believe it will enhance our risk-adjusted returns.  However, we cannot be sure that our use of leverage will prove to be beneficial.  Moreover, when our debt is secured by our assets, we can lose those assets through foreclosure if we do not meet our debt service obligations.  Incurring substantial debt may adversely affect our business and operating results by:

·
requiring us to use a substantial portion of our cash flow to pay interest and principal, which reduces the amount available for distributions, acquisitions and capital expenditures;
·
making us more vulnerable to economic and industry downturns and reducing our flexibility to respond to changing business and economic conditions; or
·
requiring us to agree to less favorable terms, including higher interest rates, in order to incur additional debt; and otherwise limiting our ability to borrow for operations, working capital or to finance acquisitions in the future.

We are obligated to comply with financial and other covenants in our debt that could restrict our operating activities, and failure to comply could result in defaults that accelerate the payment under our debt.  Our unsecured revolving credit agreement contains financial and other covenants which may limit our ability, without our lenders' consent, to engage in operating or financial activities that we may believe desirable.  Our mortgage notes payable contain customary covenants for such agreements including, among others, provisions:

·
relating to the maintenance of the property securing the debt;
·
restricting our ability to assign or further encumber the properties securing the debt; and
·
restricting our ability to enter into certain new leases or to amend or modify certain existing leases without obtaining consent of the lenders.

Our unsecured revolving credit facility contains, among others, provisions restricting our ability to:

·
permit unsecured debt to exceed $150 million;
·
create certain liens;
·
increase our overall secured and unsecured borrowing beyond certain levels;
·
consolidate, merge or sell all or substantially all of our assets;
·
permit secured debt to be more than 35% of gross asset value, as defined in the agreement; or
·
permit unsecured indebtedness to exceed, excluding preferred stock, 50% of eligible real estate asset value as defined in the agreement.

In addition, covenants of unsecured revolving credit facility (i) limit the amount of debt we may incur, excluding preferred stock, as a percentage of gross asset value, as defined in the agreement, to less than 55% (leverage ratio), (ii) require earnings before interest, taxes, depreciation and amortization to be at least 175% of fixed charges, (iii) require net operating income from unencumbered properties to be at least 200% of unsecured interest expenses, (iv) require not more than 15% of gross asset value, as defined in the agreement, to 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 (v) require at least 10 unencumbered properties in the unencumbered asset pool.

If we were to breach any of our debt covenants and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan.  As a result, a default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares.
 
 
9
Our ability to grow will be limited if we cannot obtain additional capital.  Our growth strategy includes the redevelopment of properties we already own and the acquisition of additional properties.  We are required to distribute to our stockholders at least 90% of our taxable income each year to continue to qualify as a REIT for federal income tax purposes.  Accordingly, in addition to our undistributed operating cash flow, we rely upon the availability of debt or equity capital to fund our growth, which financing may or may not be available on favorable terms or at all.  The debt could include mortgage loans from third parties or the sale of debt securities.  Equity capital could include our common stock or preferred stock.  Additional financing, refinancing or other capital may not be available in the amounts we desire or on favorable terms.

Our access to debt or equity capital depends on a number of factors, including the general state of the capital markets, the markets perception of our growth potential, our ability to pay dividends, and our current and potential future earnings.  Depending on the outcome of these factors, we could experience delay or difficulty in implementing our growth strategy on satisfactory terms, or be unable to implement this strategy.

Market interest rates could adversely affect the share price of our stock and increase the cost of refinancing debt.  A variety of factors may influence the price of our common equities in the public trading markets.  We believe that investors generally perceive REITs as yield-driven investments and compare the annual yield from dividends by REITs with yields on various other types of financial instruments.  An increase in market interest rates may lead purchasers of stock to seek a higher annual dividend rate from other investments, which could adversely affect the market price of the stock.  In addition, we are subject to the risk that we will not be able to refinance existing indebtedness on our properties.  We anticipate that a portion of the principal of our debt will not be repaid prior to maturity.  Therefore, we likely will need to refinance at least a portion of our outstanding debt as it matures.  A change in interest rates may increase the risk that we will not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt.

If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as new equity capital or sales of properties, our cash flow will not be sufficient to repay all maturing debt in years when significant "balloon" payments come due.  As a result, our ability to retain properties or pay dividends to stockholders could be adversely affected and we may be forced to dispose of properties on unfavorable terms, which could adversely affect our business and net income.

Construction and renovation risks could adversely affect our profitability. We currently are renovating some of our properties and may in the future renovate other properties, including tenant improvements required under leases.  Our renovation and related construction activities may expose us to certain risks.  We may incur renovation costs for a property which exceed our original estimates due to increased costs for materials or labor or other costs that are unexpected.  We also may be unable to complete renovation of a property on schedule, which could result in increased debt service expense or construction costs.  Additionally, some tenants may have the right to terminate their leases if a renovation project is not completed on time.  The time frame required to recoup our renovation and construction costs and to realize a return on such costs can often be significant.

We are dependent on key personnel.  We depend on the services of our existing senior management to carry out our business and investment strategies.  We do not have employment agreements with any of our existing senior management.  As we expand, we may continue to need to recruit and retain qualified additional senior management.  The loss of the services of any of our key management personnel or our inability to recruit and retain qualified personnel in the future could have an adverse effect on our business and financial results.

Uninsured and underinsured losses may affect the value of, or return from, our property interests.  We maintain comprehensive insurance on our properties, including the properties securing our loans, in amounts which we believe are sufficient to permit replacement of the properties in the event of a total loss, subject to applicable deductibles.  There are certain types of losses, such as losses resulting from wars, terrorism, earthquakes, floods, hurricanes or other acts of God that may be uninsurable or not economically insurable.  Should an uninsured loss or a loss in excess of insured limits occur, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property.  In addition, changes in building codes and ordinances, environmental considerations and other factors might make it impracticable for us to use insurance proceeds to replace a damaged or destroyed property.  If any of these or similar events occur, it may reduce our return from an affected property and the value of our investment.

Properties with environmental problems may create liabilities for us.  Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, as an owner of real property, we may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under our properties, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property).  These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances.  This liability may be imposed on us in connection with the activities of an operator of, or tenant at, the property.  The cost of any required remediation, removal, fines or personal or property damages and our liability therefore could exceed the value of the property and/or our aggregate assets.  In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect our ability to sell or rent that property or to borrow using that property as collateral, which, in turn, would reduce our revenues and ability to make distributions.

A property can be adversely affected either through direct physical contamination or as the result of hazardous or toxic substances or other contaminants that have or may have emanated from other properties.  Although our tenants are primarily responsible for any environmental damages and claims related to the leased premises, in the event of the bankruptcy or inability of any of our tenants to satisfy any obligations with respect to the property leased to that tenant, we may be required to satisfy such obligations.  In addition, we may be held directly liable for any such damages or claims irrespective of the provisions of any lease.
 
10

Prior to the acquisition of any property and from time to time thereafter, we obtain Phase I environmental reports and, when deemed warranted, Phase II environmental reports concerning the Company's properties.  Management is not aware of any environmental condition with respect to any of our property interests that we believe would be reasonably likely to have a material adverse effect on the Company.  There can be no assurance, however, that (a) the discovery of environmental conditions that were previously unknown, (b) changes in law, (c) the conduct of tenants, or (d) activities relating to properties in the vicinity of the Company's properties, will not expose the Company to material liability in the future.  Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition and results of operations.

We face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions.  We rely extensively on computer systems to process transactions and manage our business, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be both individual and/or highly organized attempts organized by very sophisticated hacking organizations. We employ a number of measures to prevent, detect and mitigate these threats, which include password encryption, frequent password change events, firewall detection systems, anti-virus software in-place and frequent backups; however, there is no guarantee such efforts will be successful in preventing a cyber attack. A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful attack could disrupt and otherwise adversely affect our business operations.

Changes in accounting standards may adversely impact our financial results.  The Financial Accounting Standards Board ("FASB"), in conjunction with the SEC, has several key projects on their agenda that could impact how we currently account for our material transactions, including lease accounting and other convergence projects with the International Accounting Standards Board. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what level of impact any such proposal could have on the presentation of our consolidated financial statements, our results of operations and our financial ratios required by our debt covenants.

Risks Related to our Organization and Structure

We will be taxed as a regular corporation if we fail to maintain our REIT status.  Since our founding in 1969, we have operated, and intend to continue to operate, in a manner that enables us to qualify as a REIT for federal income tax purposes.  However, the federal income tax laws governing REITs are complex.  The determination that we qualify as a REIT requires an analysis of various factual matters and circumstances that may not be completely within our control.  For example, to qualify as a REIT, at least 95% of our gross income must come from specific passive sources, such as rent, that are itemized in the REIT tax laws.  In addition, to qualify as a REIT, we cannot own specified amounts of debt and equity securities of some issuers.  We also are required to distribute to our stockholders at least 90% of our REIT taxable income (excluding capital gains) each year. Our continued qualification as a REIT depends on our satisfaction of the asset, income, organizational, distribution and stockholder ownership requirements of the Internal Revenue Code on a continuing basis. At any time, new laws, interpretations or court decisions may change the federal tax laws or the federal tax consequences of qualification as a REIT.  If we fail to qualify as a REIT in any taxable year and do not qualify for certain Internal Revenue Code relief provisions, we will be subject to federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates.  In addition, distributions to stockholders would not be deductible in computing our taxable income.  Corporate tax liability would reduce the amount of cash available for distribution to stockholders which, in turn, would reduce the market price of our stock.  Unless entitled to relief under certain Internal Revenue Code provisions, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.

We will pay federal taxes if we do not distribute 100% of our taxable income.  To the extent that we distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed income.  In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of:

·
85% of our ordinary income for that year;
·
95% of our capital gain net income for that year; and
·
100% of our undistributed taxable income from prior years.

We have paid out, and intend to continue to pay out, our income to our stockholders in a manner intended to satisfy the distribution requirement and to avoid corporate income tax and the 4% nondeductible excise tax.  Differences in timing between the recognition of income and the related cash receipts or the effect of required debt amortization payments could require us to borrow money or sell assets to pay out enough of our taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year.

Gain on disposition of assets deemed held for sale in the ordinary course of business is subject to 100% tax.  If we sell any of our assets, the IRS may determine that the sale is a disposition of an asset held primarily for sale to customers in the ordinary course of a trade or business.  Gain from this kind of sale generally will be subject to a 100% tax.  Whether an asset is held "primarily for sale to customers in the ordinary course of a trade or business" depends on the particular facts and circumstances of the sale.  Although we will attempt to comply with the terms of safe-harbor provisions in the Internal Revenue Code prescribing when asset sales will not be so characterized, we cannot assure you that we will be able to do so.

Our ownership limitation may restrict business combination opportunities.
To qualify as a REIT under the Internal Revenue Code, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals during the last half of each taxable year.  To preserve our REIT qualification, our charter generally prohibits any person from owning shares of any class with a value of more than 7.5% of the value of all of our outstanding capital stock and provides that:

·
a transfer that violates the limitation is void;
·
shares transferred to a stockholder in excess of the ownership limitation are automatically converted, by the terms of our charter, into shares of "Excess Stock;"
·
a purported transferee receives no rights to the shares that violate the limitation except the right to designate a transferee of the Excess Stock held in trust; and
·
the Excess Stock will be held by us as trustee of a trust for the exclusive benefit of future transferees to whom the shares of capital stock ultimately will be transferred without violating the ownership limitation.
 
11

We may also redeem Excess Stock at a price which may be less than the price paid by a stockholder.  Pursuant to authority under our charter, our board of directors has determined that the ownership limitation does not apply to Mr. Charles J. Urstadt, our Chairman, who beneficially owns 46.6% of our outstanding Common Stock and 0.4% of our outstanding Class A common stock or to Mr. Willing L. Biddle, our CEO, who beneficially owns 28.9% of our outstanding Common Stock and 0.2% of our outstanding Class A Common Stock, each as of the date of this Annual Report on Form 10-K.  Such holdings represent approximately 66.3% of our outstanding voting interests.  Together as a group Messrs. Urstadt, Biddle, and the other directors and executive officers hold approximately 66.8% of our outstanding voting interests through their beneficial ownership of our Common Stock and Class A common stock.  The ownership limitation may discourage a takeover or other transaction that some of our stockholders may believe to be desirable.

Certain provisions in our charter and bylaws and Maryland law may prevent or delay a change of control or limit our stockholders from receiving a premium for their shares.  Among the provisions contained in our charter and bylaws and Maryland law are the following:

·
Our board of directors is divided into three classes, with directors in each class elected for three-year staggered terms.
·
Our directors may be removed only for cause upon the vote of the holders of two-thirds of the voting power of our common equity securities.
·
Our stockholders may call a special meeting of stockholders only if the holders of a majority of the voting power of our common equity securities request such a meeting in writing.
·
Any consolidation, merger, share exchange or transfer of all or substantially all of our assets must be approved by (a) a majority of our directors who are currently in office or who are approved or recommended by a majority of our directors who are currently in office (the "Continuing Directors") and (b) the holders of two-thirds of the voting power of our common equity securities.
·
Certain provisions of our charter may only be amended by (a) a vote of a majority of our Continuing Directors and (b) the holders of a majority of the voting power of our common equity securities. These provisions relate to the election and classification of directors, the ownership limit and the stockholder vote required for certain business combination transactions.  An action by stockholders to remove a director would require a vote of at least two-thirds of the voting power of our outstanding common equity securities.
·
The number of directors may be increased or decreased by a vote of our board of directors.

In addition, we are subject to various provisions of Maryland law that impose restrictions and require affected persons to follow specified procedures with respect to certain takeover offers and business combinations, including combinations with persons who own 10% or more of our outstanding shares.  These provisions of Maryland law could delay, defer or prevent a transaction or a change of control that our stockholders might deem to be in their best interests.  Furthermore, shares acquired in a control share acquisition have no voting rights, except to the extent approved by the affirmative vote of two-thirds of all votes entitled to be cast on the matter, excluding all interested shares.  Under Maryland law, "control shares" are those which, when aggregated with any other shares held by the acquiror, allow the acquiror to exercise voting power within specified ranges.  The control share provisions of Maryland law also could delay, defer or prevent a transaction or a change of control which our stockholders might deem to be in their best interests.  As permitted by Maryland law, our charter and bylaws provide that the "control shares" and "business combinations" provisions of Maryland law described above will not apply to acquisitions of those shares by Mr. Charles J. Urstadt or Mr. Willing L. Biddle or to transactions between the Company and Mr. Urstadt or Mr. Biddle or any of their respective affiliates.  Consequently, unless such exemptions are amended or repealed, we may in the future enter into business combinations or other transactions with Mr. Urstadt, Mr. Biddle or any of their respective affiliates without complying with the requirements of Maryland anti-takeover laws.  In view of the common equity securities controlled by Messrs. Urstadt and Biddle, either may control a sufficient percentage of the voting power of our common equity securities to effectively block approval of any proposal which requires a vote of our stockholders.

Our stockholder rights plan could deter a change of control.  We have adopted a stockholder rights plan.  This plan may deter a person or a group from acquiring more than 10% of the combined voting power of our outstanding shares of common stock and Class A common stock because, after (i) the person or group acquires more than 10% of the combined voting power of our outstanding Common stock and Class A Common stock, or (ii) the commencement of a tender offer or exchange offer by any person (other than us, any one of our wholly owned subsidiaries or any of our employee benefit plans, or certain exempt persons), if, upon consummation of the tender offer or exchange offer, the person or group would beneficially own 30% or more of the combined voting power of our outstanding shares of Common stock and Class A Common stock, all other stockholders will have the right to purchase securities from us at a price that is less than their fair market value.  This would substantially reduce the value of the stock owned by the acquiring person.  Our board of directors can prevent the plan from operating by approving the transaction and redeeming the rights.  This gives our board of directors significant power to approve or disapprove of the efforts of a person or group to acquire a large interest in us.  The rights plan exempts acquisitions of Common stock and Class A Common stock by Mr. Charles J. Urstadt, Willing L. Biddle, members of their families and certain of their affiliates.

Item 1B.                          Unresolved Staff Comments.

None.
 
12

 
Item 2.        Properties.

Properties

The following table sets forth information concerning each property at October 31, 2015.  Except as otherwise noted, all properties are 100% owned by the Company.

 
Year
Renovated
Year
Completed
Year
Acquired
Gross
Leasable
Sq Feet
Acres
Number
of
Tenants
%
Leased
Principal Tenant
Retail Properties:
                
Stamford, CT
1997
1950
2002
374,000
13.6
34
97%
Stop & Shop Supermarket
Stratford, CT
1988
1978
2005
278,000
29
17
99%
Stop & Shop Supermarket
Scarsdale, NY (1)
2004
1958
2010
247,000
14
26
99%
ShopRite Supermarket
New Milford, CT
2002
1972
2010
235,000
20
12
100%
Walmart
Riverhead, NY (2)
-
2014
2014
199,000
20.7
3
98%
Walmart
Danbury, CT
-
1989
1995
194,000
19.3
20
98%
Christmas Tree Shops
Carmel, NY (3)
2006
1971
2010
190,000
22
34
96%
Hannaford Brothers
White Plains, NY (4)
1994
1958
2003
189,000
3.5
4
10%
Hudson Gateway Board of Realtors
Ossining, NY
2000
1978
1998
137,000
11.4
26
100%
Stop & Shop Supermarket
Somers, NY
-
2002
2003
135,000
26
26
97%
Home Goods
Midland Park, NJ
1999
1970
2015
130,000
7.9
29
98%
Kings Supermarket
Carmel, NY
1999
1983
1995
129,000
19
19
98%
ShopRite Supermarket
Pompton Lakes, NJ
2000
1965
2015
125,000
12
17
94%
Planet Fitness
Yorktown, NY
1997
1973
2005
117,000
16.4
8
72%
Staples
New Providence, NJ
2010
1965
2013
109,000
7.8
23
98%
Acme Supermarket
Newark, NJ (5)
-
1995
2008
108,000
8.4
14
96%
Acme Supermarket
Wayne, NJ
1992
1959
1992
102,000
9
44
97%
PNC Bank N.A.
Newington, NH
1994
1975
1979
102,000
14.3
8
97%
Jo-Ann Fabrics
Darien, CT
1992
1955
1998
96,000
9.5
24
96%
Stop & Shop Supermarket
Emerson, NJ
2013
1981
2007
92,000
7
18
89%
ShopRite Supermarket
New Milford, CT
-
1966
2008
81,000
7.6
6
92%
Big Y Supermarket
Somers, NY
-
1991
1999
80,000
10.8
32
95%
CVS
Orange, CT
-
1990
2003
78,000
10
11
96%
Trader Joe's Supermarket
Kinnelon, NJ
2015
1961
2015
77,000
7.5
13
100%
Marshall's
Montvale, NJ (2)
2010
1965
2013
76,000
9.9
15
100%
The Fresh Market
Orangeburg, NY (6)
2014
1966
2012
74,000
10.6
27
93%
CVS
New Milford, CT
-
2003
2011
72,000
8.8
8
87%
TJ Maxx
Eastchester, NY
2013
1978
1997
70,000
4
14
100%
Acme Supermarket
Fairfield, CT
-
1995
2011
63,000
7
3
100%
Marshall's
Boonton, NJ
-
1999
2014
63,000
5.4
10
100%
A&P Supermarket
Yonkers, NY
-
1982
2014
58,000
5
13
100%
Acme Supermarket
Bloomfield, NJ
-
1977
2014
56,000
5.1
9
100%
Walgreen's
Ridgefield, CT
1999
1930
1998
52,000
2.1
39
93%
Keller Williams
Cos Cob, CT
2008
1986
2014
48,000
1.1
34
96%
CVS
Briarcliff Manor, NY
2014
1975
2001
47,000
1
18
76%
CVS
Wyckoff, NJ
2014
1971
2015
43,000
5.2
16
96%
Walgreen's
Westport, CT
-
1986
2003
40,000
3
9
100%
Pier One Imports
Old Greenwich, CT
-
1976
2014
40,000
1.4
16
94%
Kings Supermarket
Rye, NY
-
Various
2004
39,000
1
22
100%
Parkers
Danbury, CT
2012
1988
2002
33,000
2.7
5
91%
Buffalo Wild Wings
Bethel, CT
1967
1957
2014
31,000
4
7
100%
Nutmeg Liquors
Ossining, NY
2001
1981
1999
29,000
4
4
100%
Westchester CC
Katonah, NY
1986
Various
2010
28,000
1.7
26
100%
Ms. Greens Market
Harrison, NY
-
1970
2015
26,000
1.6
12
100%
Key Food Supermarket
Pelham, NY
2014
1975
2006
25,000
1
9
100%
Manor Market
Spring Valley, NY (2)
-
1950
2013
24,000
1.6
12
100%
Spring Valley Foods
Eastchester, NY
2014
1963
2012
24,000
2.1
5
100%
CVS
Waldwick, NJ
-
1961
2008
20,000
1.8
1
100%
RiteAid
Somers, NY
-
1987
1992
19,000
4.9
11
95%
Putnam County Savings
Various (7)
-
Various
2013
15,000
5
4
80%
Friendly's Restaurants
Cos Cob, CT
1970
1947
2013
15,000
0.9
9
89%
Jos A Bank
Monroe, CT
-
2005
2007
10,000
2
6
100%
Starbucks
Greenwich, CT
-
1961
2013
10,000
0.8
7
100%
Cosi
Riverhead, NY (2)
-
2000
2014
8,000
2.7
2
100%
Applebee's
Fort Lee, NJ
-
1967
2015
7,000
0.4
1
100%
HMART Supermarket
                 
Office Properties and
Bank Branches
                
Greenwich, CT
-
various
various
57,000
2.8
15
80%
UBP
Bronxville and Yonkers, NY
-
1960
2008 & 2009
19,000
0.7
4
100%
People's United Bank, JP Morgan Chase
Bernardsville, NJ
-
1970
2013
14,000
1.1
7
73%
Laboratory Corp
Chester, NJ
-
1950
2013
9,000
2.0
-
0%
n/a
       
4,868,000
441.1
868
    
 

 
13

(1)  Two wholly owned subsidiaries of the Company own an 11.642% economic ownership interest in Midway.  The Company accounts for this joint venture under the equity method of accounting and does not consolidate the entity owning the property.
(2) A wholly owned subsidiary of the Company has a 50% tenant in common interest in the property. The Company accounts for this joint venture under the equity method of accounting and does not consolidate its interest in the property.
(3) A wholly owned subsidiary of the Company has a 66.67% tenant in common interest in the property. The Company accounts for this joint venture under the equity method of accounting and does not consolidate its interest in the property.
(4) The Company is in the process of vacating the property to allow for the sale of the property.
(5) A wholly owned subsidiary of the Company is the sole general partner of a partnership that owns this property (84% Ownership Interest)
(6) A wholly owned subsidiary of the Company is the sole managing member of a limited liability company that owns this property (33.2% Ownership Interest)
(7) The Company owns five separate free standing properties, three of which are occupied 100% by a Friendly's Restaurant.  The properties are located in New York, New Jersey and Connecticut.


Lease Expirations – Total Portfolio

The following table sets forth a summary schedule of the annual lease expirations for the consolidated properties for leases in place as of October 31, 2015, assuming that none of the tenants exercise renewal or cancellation options, if any, at or prior to the scheduled expirations.

 
 
 
 
 
Year of Lease Expiration
  
 
 
 
 
Number of Leases Expiring
    
 
 
 
 
Square Footage of Expiring Leases
    
 
 
Minimum Base
Rentals
    
Percentage of Total
Annual Base Rent That is Represented By The Expiring Leases
  
2016 (1)
    
168
      
275,700
    
$
7,399,000
      
9
%
2017
    
105
      
365,500
      
9,404,300
      
11
%
2018
    
94
      
560,400
      
11,910,800
      
15
%
2019
    
92
      
363,500
      
8,052,200
      
10
%
2020
    
82
      
426,800
      
9,199,300
      
11
%
2021
    
42
      
295,100
      
6,519,600
      
8
%
2022
    
49
      
346,500
      
6,684,200
      
8
%
2023
    
29
      
195,300
      
5,633,600
      
7
%
2024
    
29
      
156,100
      
3,813,300
      
5
%
2025
    
34
      
243,600
      
4,788,000
      
6
%
Thereafter
    
38
      
446,600
      
8,163,900
      
10
%
                                 
Total
    
762
      
3,675,100
    
$
81,568,200
      
100
%

(1)
Represents lease expirations from November 1, 2015 to October 31, 2016 and month-to-month leases.
Item 3.                                        Legal Proceedings.

In the ordinary course of business, the Company is involved in legal proceedings. There are no material legal proceedings presently pending against the Company.

Item 4.                          Mine Safety Disclosures.

Not Applicable
 
14

PART II

Item 5.                          Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity  Securities.

(a) Market Information
Shares of Common Stock and Class A Common Stock of the Company are traded on the New York Stock Exchange under the symbols "UBP" and "UBA," respectively.  The following table sets forth the high and low closing sales prices for the Company's Common Stock and Class A Common Stock during the fiscal years ended October 31, 2015 and 2014 as reported on the New York Stock Exchange:

Common shares:
  
Fiscal Year Ended
October 31, 2015
    
Fiscal Year Ended
October 31, 2014
  
   
Low
    
High
    
Low
    
High
  
First Quarter
  
$
11.73
    
$
20.00
    
$
15.39
    
$
16.39
  
Second Quarter
  
$
17.33
    
$
20.09
    
$
15.64
    
$
17.99
  
Third Quarter
  
$
16.53
    
$
17.92
    
$
17.28
    
$
18.44
  
Fourth Quarter
  
$
16.23
    
$
19.95
    
$
16.90
    
$
18.65
  

Class A Common shares:
  
Fiscal Year Ended
October 31, 2015
    
Fiscal Year Ended
October 31, 2014
  
   
Low
    
High
    
Low
    
High
  
First Quarter
  
$
21.56
    
$
24.22
    
$
18.13
    
$
19.64
  
Second Quarter
  
$
20.75
    
$
24.01
    
$
18.45
    
$
20.96
  
Third Quarter
  
$
18.68
    
$
21.03
    
$
20.04
    
$
21.48
  
Fourth Quarter
  
$
17.43
    
$
20.52
    
$
19.88
    
$
22.08
  

(b) Approximate Number of Equity Security Holders

At December 31, 2015 (latest date practicable), there were 685 shareholders of record of the Company's Common Stock and 694 shareholders of record of the Class A Common Stock.

(c) Dividends Declared on Common Stock and Class A Common Stock and Tax Status

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, 2015 and 2014:

   
Common Shares
    
Class A Common Shares
  
Dividend Payment Date 
  
Gross Dividend Paid Per Share
    
Ordinary Income
    
Capital Gain
    
Non-Taxable Portion
    
Gross Dividend Paid Per Share
    
Ordinary Income
    
Capital Gain
    
Non-Taxable Portion
  
                                 
January 16, 2015
  
$
0.2250
    
$
0.085
    
$
0.11375
    
$
0.02625
    
$
0.2550
    
$
0.09625
    
$
0.12875
    
$
0.03
  
April 17, 2015
  
$
0.2250
    
$
0.085
    
$
0.11375
    
$
0.02625
    
$
0.2550
    
$
0.09625
    
$
0.12875
    
$
0.03
  
July 17, 2015
  
$
0.2250
    
$
0.085
    
$
0.11375
    
$
0.02625
    
$
0.2550
    
$
0.09625
    
$
0.12875
    
$
0.03
  
October 16, 2015
  
$
0.2250
    
$
0.085
    
$
0.11375
    
$
0.02625
    
$
0.2550
    
$
0.09625
    
$
0.12875
    
$
0.03
  
   
$
0.90
    
$
0.34
    
$
0.455
    
$
0.105
    
$
1.02
    
$
0.385
    
$
0.515
    
$
0.12
  
                                                                 
Dividend Payment Date 
  
Gross Dividend Paid Per Share
    
Ordinary Income
    
Capital Gain
    
 
  
Non-Taxable Portion  
    
Gross Dividend Paid Per Share  
    
Ordinary Income
    
Capital Gain
    
Non-Taxable Portion
  
January 17, 2014
  
$
0.225
    
$
0.108
    
$
0.031
    
$
0.086
    
$
0.2525
    
$
0.12125
    
$
0.035
    
$
0.09625
  
April 17, 2014
  
$
0.225
    
$
0.108
    
$
0.031
    
$
0.086
    
$
0.2525
    
$
0.12125
    
$
0.035
    
$
0.09625
  
July 18, 2014
  
$
0.225
    
$
0.108
    
$
0.031
    
$
0.086
    
$
0.2525
    
$
0.12125
    
$
0.035
    
$
0.09625
  
October 17, 2014
  
$
0.225
    
$
0.108
    
$
0.031
    
$
0.086
    
$
0.2525
    
$
0.12125
    
$
0.035
    
$
0.09625
  
   
$
0.90
    
$
0.432
    
$
0.124
    
$
0.344
    
$
1.01
    
$
0.485
    
$
0.140
    
$
0.385
  

The Company has paid quarterly dividends since it commenced operations as a real estate investment trust in 1969.  During the fiscal year ended October 31, 2015, the Company made distributions to stockholders aggregating $0.90 per Common share and $1.02 per Class A Common share. On December 17, 2015, the Company's Board of Directors approved the payment of a quarterly dividend payable January 15, 2016 to stockholders of record on January 5, 2016. The quarterly dividend rates were declared in the amounts of $0.23 per Common share and $0.26 per Class A Common share.
 

15
Although the Company intends 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 the Company 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.

Each share of Common Stock entitles the holder to one vote.  Each share of Class A Common Stock entitles the holder to 1/20 of 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.

The Company has a Dividend Reinvestment and Share Purchase Plan ("DRIP") that allows shareholders to acquire additional shares of Common Stock and Class A Common Stock by automatically reinvesting dividends.  Shares are acquired pursuant to the DRIP at a price equal to the higher of 95% of the market price of such shares on the dividend payment date or 100% of the average of the daily high and low sales prices for the five trading days ending on the day of purchase without payment of any brokerage commission or service charge.  As of October 31, 2015, 1,197,373 shares of Common Stock and 239,831 shares of Class A Common Stock have been issued under the DRIP.

(d)  Issuer Repurchase

The Board of Directors of the Company has approved a share repurchase program ("Program") for the repurchase of up to 2,000,000 shares, in the aggregate, of Common stock, Class A Common stock and Series F Cumulative Preferred stock in open market transactions.  For the three month period ended October 31, 2015, the Company repurchased 188,753 shares of Class A Common Stock under the Program.


The following table sets forth the shares repurchased by the Company during the three-month period ended October 31, 2015:

Period
  
Total Number
of Shares
Purchased
    
Average Price
Per Share
Purchased
    
Total Number
Shares Re-
purchased as
Part of Publicly
Announced
Plan or
Program
    
Maximum
Number of
Shares That
May be
Purchased
Under the Plan
or Program
  
August 1, 2015 – August 31, 2015
    
30,686
    
$
17.77
      
759,864
      
1,240,136
  
September 1, 2015 – September 30, 2015
    
158,067
    
$
17.79
      
917,931
      
1,082,069
  
October 1, 2015 – October 31, 2015
    
-
      
-
      
917,931
      
1,082,069
  


16
Item 6.                          Selected Financial Data.
(In thousands, except per share data)

Year Ended October 31,
  
2015
    
2014
    
2013
    
2012
    
2011
  
Balance Sheet Data:
                    
Total Assets
  
$
861,075
    
$
819,005
    
$
650,026
    
$
724,243
    
$
576,264
  
                                         
Revolving Credit Lines and Unsecured Term Loan
  
$
22,750
    
$
40,550
    
$
9,250
    
$
11,600
    
$
41,850
  
                                         
Mortgage Notes Payable and Other Loans
  
$
260,457
    
$
205,147
    
$
166,246
    
$
143,236
    
$
118,135
  
                                         
Preferred Stock Called For Redemption
  
$
-
    
$
61,250
     $
-
     $
58,508
     $
-
  
                                         
Redeemable Preferred Stock
  
$
-
    
$
-
    
$
-
    
$
21,510
    
$
96,203
  
                                         
Operating Data:
                                        
Total Revenues
  
$
115,312
    
$
102,328
    
$
95,203
    
$
90,395
    
$
90,468
  
                                         
Total Expenses and payments to noncontrolling interests
  
$
88,594
    
$
75,927
    
$
70,839
    
$
64,367
    
$
61,535
  
                                         
Income from Continuing Operations before Discontinued Operations
  
$
50,212
    
$
53,091
    
$
29,105
    
$
27,282
    
$
30,483
  
                                         
Per Share Data:
                                        
Net Income from Continuing Operations - Basic:
                                        
Class A Common Stock
  
$
1.04
    
$
1.22
    
$
.31
    
$
.42
    
$
.63
  
Common Stock
  
$
.92
    
$
1.09
    
$
.28
    
$
.38
    
$
.57
  
                                         
Net Income from Continuing Operations - Diluted:
                                        
Class A Common Stock
  
$
1.02
    
$
1.19
    
$
.30
    
$
.41
    
$
.61
  
Common Stock
  
$
.90
    
$
1.06
    
$
.27
    
$
.36
    
$
.55
  
                                         
Cash Dividends Paid on:
                                        
Class A Common Stock
  
$
1.02
    
$
1.01
    
$
1.00
    
$
.99
    
$
.98
  
Common Stock
  
$
.90
    
$
.90
    
$
.90
    
$
.90
    
$
.89
  
                                         
Other Data:
                                        
                                         
Net Cash Flow Provided by (Used in):
                                        
Operating Activities
  
$
51,100
    
$
50,915
    
$
50,952
    
$
52,504
    
$
46,548
  
                                         
Investing Activities
  
$
(105,034
)
  
$
(54,624
)
  
$
(49,631
)
  
$
(10,778
)
  
$
(42,351
)
                                         
Financing  Activities
  
$
(12,472
)
  
$
73,793
    
$
(76,468
)
  
$
31,837
    
$
(15,343
)
                                         
Funds from Operations (Note 1)
  
$
38,056
    
$
33,032
    
$
29,506
    
$
30,627
    
$
34,453
  

Note 1: 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 18.  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.  The Company considers FFO a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of its 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 the Company's operating performance.  However, comparison of the Company's presentation of FFO, using the NAREIT definition, to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.  For a further discussion of FFO, see Management's Discussion and Analysis of Financial Condition and Results of Operations on page 18.
 
17

Item 7.                          Management's Discussion and Analysis of Financial Condition and Results of Operations

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.

Forward-Looking Statements
This Item 7 includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  All statements included in this Item 7 that address activities, events or developments that the Company expects, believes or anticipates 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 the Company's operations and other such matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, including, among other things, general economic and business conditions, the business opportunities that may be presented to and pursued by the Company, changes in laws or regulations and other factors, many of which are beyond the control of the Company. Many of these risks are discussed in Item 1A. Risk Factors.  Any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those anticipated in the forward-looking statements.

Executive Summary and Overview
The Company, a REIT, is a fully integrated, self-administered real estate company, 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. Other real estate assets include office properties. The Company's major tenants include supermarket chains and other retailers who sell basic necessities. At October 31, 2015, the Company owned or had equity interests in 74 properties containing a total of 4.9 million square feet of GLA of which approximately 96.1% was leased (95.3% at October 31, 2014).

The above percentages exclude the Company's White Plains property.  In November, 2014 the Company obtained a zoning change from the City of White Plains that will allow this property to be converted to a higher and better use.  On this basis, the Company is maintaining vacancies to make potential redevelopment possible.  In February 2015, two more leases at the property totaling 90,000 square feet expired, for which the average base rent per square foot was approximately $24.69 per annum. Currently, the 189,000 square foot property has only 20,000 square feet leased and occupied at an average base rent per square foot of $22.79.  In April 2015, the Company entered into a contract to sell this property.  The contract contains certain contingencies that need to be satisfied in order for the transaction to close, and there is the possibility it may not close. If all contingencies are satisfied, the Company expects the transaction to close in the second quarter of fiscal 2016.

Included in the 74 properties are equity interests in seven unconsolidated joint ventures, which joint ventures were approximately 98.1% leased at October 31, 2015 (97.7% at October 31, 2014).

The Company has paid quarterly dividends to its shareholders continuously since its founding in 1969 and has increased the level of dividend payments to its shareholders for 21 consecutive years.

The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to long-term leases and focuses its investment activities on community and neighborhood shopping centers, anchored principally by regional supermarket chains. The Company believes, because of the need of consumers to purchase food and other staple goods and services generally available at supermarket-anchored shopping centers, that the nature of its investments provide for relatively stable revenue flows even during difficult economic times.

The Company has a conservative capital structure and does not have any secured debt maturing until August 2016.  Consistent with its business strategy, the Company expects to continue to explore acquisition opportunities that may arise.

Primarily as a result of property acquisitions in fiscal 2014 and 2015, the Company's financial data shows increases in total revenues and expenses from period to period.

The Company focuses on increasing cash flow, and consequently the value of its properties, and seeks continued growth through strategic re-leasing, renovations and expansion of its existing properties and selective acquisition of income-producing properties, 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.

Key elements of the Company's growth strategies and operating policies are to:

●
Acquire neighborhood and community shopping centers in the northeastern part of the United States with a concentration on properties in the metropolitan New York tri-state area outside of the City of New York
●
Hold properties for long-term investment and enhance their value through regular maintenance, periodic renovation and capital improvement
●
Selectively dispose of underperforming properties and re-deploy the proceeds into properties 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
●
Increase property values by aggressively marketing available GLA and renewing existing leases
●
Renovate, reconfigure or expand existing properties to meet the needs of existing or new tenants
●
Negotiate and sign leases which provide for regular or fixed contractual increases to minimum rents
●
Control property operating and administrative costs
 
 
18
Critical Accounting Policies
Critical accounting policies are those that are both important to the presentation of the Company's financial condition and results of operations and require management's most difficult, complex or subjective judgments.  For a further discussion about the Company's critical accounting policies, please see Note 1 to the consolidated financial statements of the Company included in Item 8 of this Annual Report on Form 10-K.

Liquidity and Capital Resources
At October 31, 2015, the Company had unrestricted cash and cash equivalents of $6.6 million compared to $73.0 million at October 31, 2014.  The Company's sources of liquidity and capital resources include its cash and cash equivalents, proceeds from bank borrowings and long-term mortgage debt, capital financings and sales of real estate investments. Payments of expenses related to real estate operations, debt service, management and professional fees, and dividend requirements place demands on the Company's short-term liquidity.  In October 2014, the Company completed the sale of 2.8 million shares of Series G - 6.75% preferred stock that raised net proceeds of $67.8 million.  In November 2014, the Company completed the sale of an additional 200,000 shares of the Series G preferred stock that raised an additional $4.8 million of net proceeds and the sale of 2,875,000 shares of Class A Common stock that raised proceeds of $59.9 million.  The Company used the proceeds from these stock sales in connection with the following:

•
On November 21, 2014, $61.25 million was used to repurchase all of the Company's outstanding Series D Preferred Stock.
•
On December 10, 2014, $61.9 million was used to fund a portion of the $124.6 million purchase of four retail properties located in three counties in northern New Jersey.
•
In November and December 2014 and March 2015 the Company repaid a net $9.35 million on its Unsecured Revolving Credit Facility (the "Facility").

The Company maintains a conservative capital structure with low leverage levels by commercial real estate standards.  The Company maintains a ratio of total debt to total assets below 34% and a very strong fixed charge coverage ratio of over 2.75 to 1, which we believe will allow the Company to obtain additional secured mortgage borrowings if necessary.  The Company does not have any fixed rate debt coming due until August 2016 and has forty-five properties in its consolidated portfolio that are not encumbered by secured mortgage debt. At October 31, 2015, the Company had loan availability of $56.2 million on its unsecured revolving line of credit.

In July 2015, one of the Company's largest tenants, A&P filed a voluntary petition under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code").  As of November 2015, four of the nine A&P leases in our portfolio have been purchased by ACME, a division of Albertson's and one of the leases has been purchased by Key Food.  As a result, there will be no negative effect on the Company for those leases.  The Company has purchased and terminated the leases within its Valley Ridge and Bloomfield shopping centers from A&P and now has control of those spaces, which it expects to re-lease in due course.  The Company purchased these two leases believing the base rental rate on the leases was below market, which would allow for the Company to increase its cash flow if the spaces could be re-leased to new tenants at prevailing market rates.  The remaining two spaces (Pompton and Boonton) may still be sold by A&P to a new operator during the bankruptcy process.  Alternatively, the leases could be rejected in bankruptcy, in which event the Company would have to re-lease those spaces.  The Company believes that it will be able to re-lease the two spaces it purchased from A&P and potentially the Pompton and Boonton spaces (if necessary) but cannot predict when such re-leasing will occur.
 
The table below details information about the nine leases in Company's portfolio affected by the A&P bankruptcy.

Property
Location
  
Square Feet
    
Base Rent Per Annum
    
Base Rent Per Square Foot
  
Lease Expiration
                      
Pompton Lakes Town Square
Pompton Lakes, NJ
    
63,000
    
$
1,244,000
    
$
19.80
  
Oct 2025*
Ferry Plaza Shopping Center
Newark, NJ
    
63,000
      
1,215,000
    
$
19.15
  
Nov 2020*
Village Shopping Center
New Providence, NJ
    
46,000
      
990,000
    
$
21.75
  
Feb 2029*
Boonton Shopping Center
Boonton, NJ
    
49,000
      
950,000
    
$
19.21
  
Oct 2024*
Valley Ridge Shopping Center
Wayne, NJ
    
36,000
      
540,000
    
$
15.00
  
Repurchased by UBP
Harrison Shopping Center
Harrison, NY
    
12,000
      
264,000
    
$
22.00
  
Sept 2024*
Bloomfield Shopping Center
Bloomfield, NJ
    
31,000
      
154,000
    
$
5.00
  
Repurchased by UBP
Shoppes at Eastchester
Eastchester, NY
    
30,000
      
110,000
    
$
3.71
  
Oct 2019**
McLean Plaza Shopping Center
Yonkers, NY
    
35,000
      
73,000
    
$
2.09
  
Oct 2034*
       
365,000
    
$
5,540,000
             
                                  
* Subject to further tenant renewals
** Company has amended the lease with tenant to increase the base rent per square foot from $3.71 to $10.00 per square foot through 10/31/19 and to provide a new tenant option though 10/31/24 at a base rent per square foot of $25.00.

Cash Flows

The Company expects to meet its short-term liquidity requirements primarily by generating net cash from the operations of its properties.  The Company believes that its net cash provided by operations will be sufficient to fund its short-term liquidity requirements for fiscal 2016 and to meet its dividend requirements necessary to maintain its REIT status. In fiscal 2015, 2014 and 2013, net cash flow provided by operations amounted to $51.1 million, $50.9 million and $51.0 million, respectively.  Cash dividends paid on common and preferred shares equaled $50.0 million in fiscal 2015 compared to $45.9 million in fiscal 2014 and $46.6 million in fiscal 2013.

The Company expects to continue paying regular dividends to its stockholders.  These dividends will be paid from operating cash flows which are expected to increase due to property acquisitions and growth in operating income in the existing portfolio and from other sources. The Company derives substantially all of its revenues from rents under existing leases at its properties. The Company's operating cash flow therefore depends on the rents that it is able to charge to its tenants, and the ability of its tenants to make rental payments. The Company believes that the nature of the properties in which it typically invests, primarily grocery-anchored neighborhood and community shopping centers, provides a more stable revenue flow in uncertain economic times, in that consumers still need to purchase basic staples and convenience items. However, even in the geographic areas in which the Company owns properties, general economic downturns may adversely impact the ability of the Company's tenants to make lease payments, the Company's ability to re-lease space as leases expire, and the ability of the Company to re-lease space at rents equal to or greater than expiring rents. In any of these cases, the Company's cash flow could be adversely affected.  Over the last several years, the entire retail commercial real estate industry has seen increased competition from Internet commerce, which has made it more difficult for certain types of "brick and mortar" businesses to compete, the result of which has been a reduction in the tenant pool for retail commercial real estate owners like us.  If internet commerce continues to erode the need for traditional retail stores it could make it more difficult for the Company to lease available space and the Company's future cash flow could be adversely affected.
 
19

Net Cash Flows from:

Operating Activities

Net cash flows provided by operating activities amounted to $51.1 million in fiscal 2015, compared to $50.9 million in fiscal 2014, and $51.0 million in fiscal 2013.  The changes in operating cash flows were primarily the result of:

Decrease from fiscal 2014 to fiscal 2015:
The decrease was due primarily to an increase in other assets and other liabilities offset by an increase in the operating income generated by the Company's properties in the year ended October 31, 2015 versus fiscal 2014.

Decrease from fiscal 2013 to fiscal 2014:
This decrease was predominantly caused by a decrease in accounts receivable collected and an increase in restricted cash related to new escrow accounts associated with mortgages assumed with new property acquisitions in fiscal 2014 offset by the addition of the net operating results of the Company's acquired properties in fiscal 2013 and fiscal 2014.

Investing Activities

Net cash flows used in investing activities was $105.0 million in fiscal 2015, $54.6 million in fiscal 2014 and $49.6 million in fiscal 2013. The change in investing cash flows was primarily the result of:

Increase in cash used from fiscal 2014 to fiscal 2015:
The increase in cash flows used in investing activities in fiscal 2015 when compared to the prior fiscal year was the result of the Company purchasing six properties totaling $136.3 million in fiscal 2015 versus purchasing 8 properties in fiscal 2014 requiring $81.7 million.

Increase in cash used from fiscal 2013 to fiscal 2014:
The Company acquired 8 properties in fiscal 2014 requiring $81.7 million in equity versus acquiring 11 properties in fiscal 2013 requiring $58.4 million in equity.  The Company also re-tenanted two shopping centers and as a result, the Company expended $19.3 million on improvements to its properties in fiscal 2014 versus only $9.5 million in fiscal 2013.  In addition, the Company had loaned $13 million to one of its unconsolidated joint ventures in a prior year, which loan was repaid in fiscal 2013.  This increase in cash used by investing activities was partially offset by proceeds in the amount of $47.8 million from the sale of three of the Company's properties in fiscal 2014.

The Company regularly makes capital investments in its properties for property improvements, tenant improvements costs and leasing commissions.

Financing Activities

Net cash flows used by financing activities amounted to $12.5 million in fiscal 2015 compared with net cash provided by financing activities in fiscal 2014 of $73.8 and net cash used by financing activities in the amount of $76.5 million in fiscal 2013.  The change in net cash provided (used) by financing activities was primarily attributable to:

Cash generated:

Fiscal 2015: (Total $237.6 million)
•
Proceeds from mortgage financing in the amount of $68.2 million.
•
Proceeds from revolving credit line borrowings in the amount of $104.8 million.
•
Proceeds from the insurance of Series G Preferred Stock in the amount of $4.6 million.
•
Proceeds from the insurance of Class A Common stock in the amount of $59.8 million.
 
Fiscal 2014: (Total $198.8 million)
•
Proceeds from revolving credit line borrowings of $65.1 million.
•
Proceeds from unsecured term loan borrowing of $25 million.
•
Proceeds from mortgage financings of $40.7 million.
•
Proceeds from issuance of Series G preferred stock of $67.8 million.

Fiscal 2013: (Total $39.9 million)
•
Proceeds from revolving credit line borrowings of $38.4 million.
•
Return of escrow deposit of $1.3 million.

Cash used:

Fiscal 2015:  (Total $250.1 million)
•
Dividends to shareholders in the amount of $50.0 million.
•
Repayment of mortgage notes payable in the amount of $12.9 million.
•
Repayment of revolving credit line borrowings in the amount of $97.6 million.
•
Repayment of the unsecured term loan in the amount of $25 million.
•
Redemption of preferred stock in the amount of $61.3 million.
•
Repurchase of Class A Common stock in the amount of $3.4 million.

Fiscal 2014: (Total $125.0 million)
•
Dividends to shareholders in the amount of $45.9 million.
•
Repayments of mortgage notes payable in the amount of $20.3 million.
•
Repayments of revolving credit line borrowings in the amount of $58.8 million.

Fiscal 2013: (Total $116.3 million)
•
Dividends to shareholders in the amount of $46.6 million.
•
Repayment of mortgage notes payable in the amount of $6.6 million.
•
Repayment of revolving credit line borrowings in the amount of $40.7 million.
•
Repurchase of shares of the Company's Series C Senior Cumulative Preferred Stock in the amount of $22.4 million.
 
20

Capital Resources

The Company expects to fund its long-term liquidity requirements such as property acquisitions, repayment of indebtedness and capital expenditures through other long-term indebtedness (including indebtedness assumed in acquisitions), proceeds from sales of properties and/or the issuance of equity securities. The Company believes that these sources of capital will continue to be available to it in the future to fund its long-term capital needs. However, there are certain factors that may have a material adverse effect on its access to capital sources; the Company's ability to incur additional debt is dependent upon its existing leverage, the value of its unencumbered assets and borrowing limitations imposed by existing lenders. The Company's ability to raise funds through sales of equity securities is dependent on, among other things, general market conditions for REITs and market perceptions about the Company and its stock price in the market. The Company's ability to sell properties in the future to raise cash will be dependent upon market conditions at the time of sale.

Financings and Debt

The Company has an $80 million Unsecured Revolving Credit Facility with a syndicate of four banks led by The Bank of New York Mellon, as administrative agent.  The syndicate also includes Wells Fargo Bank N.A. (syndication agent), Bank of Montreal and Regions Bank (co-documentation agents).  The Facility gives the Company the option, under certain conditions, to increase the Facility's borrowing capacity up to $125 million.  The maturity date of the Facility is September 21, 2016 with a 1-year extension at the Company's option.  Borrowings under the Facility can be used for, among other things, acquisitions, working capital, capital expenditures, and repayment of other indebtedness and the issuance of letters of credit (up to $10 million).  Borrowings will bear interest at the Company's option of Eurodollar rate plus 1.5% to 2.0% or The Bank of New York Mellon's prime lending rate plus 0.50% based on consolidated indebtedness, as defined.  The Company will pay an annual fee on the unused commitment amount of up to 0.25% to 0.35% based on outstanding borrowings during the year.  The Facility contains certain representations and financial and other covenants typical for this type of facility.  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 and additionally require the Company to maintain certain debt coverage ratios.  The Company was in compliance with such covenants at October 31, 2015.

In August 2014, the Company borrowed $25.0 million under a newly executed Unsecured Term Loan (the "Term Loan") with The Bank of New York Mellon as the lender. The Term Loan had a term of six months with a Company option for a six month extension.  The interest rate was the Eurodollar rate plus 1.40% to 1.90% based on consolidated indebtedness.  The Term Loan had the same financial covenants as the Facility.  The Company used the borrowings to fund a portion of the purchase price of the Greenwich Properties.  The Term Loan was repaid in August 2015 with proceeds from the sale of the Company's Meriden, CT property.

During the fiscal years ended October 31, 2015 and 2014 the Company borrowed $104.8 million and $65.1 million, respectively, on its Facility to fund a portion of the equity for property acquisitions and capital improvements to its properties.  During the fiscal years ended October 31, 2015 and 2014 the Company re-paid $97.6 million and $58.8 million, respectively, on its Facility with proceeds from a combination of non-recourse mortgage financings, secured mortgage financings and available cash.

In December 2014, through four wholly-owned subsidiaries, the Company obtained a $62.7 million non-recourse first mortgage loan secured by the NJ Retail Properties that were purchased in December 2014.  The mortgage loan requires monthly payments of principal and interest in the amount of $294,000 at a fixed interest rate of 3.85% per annum.  The mortgage matures in January 2027.  Proceeds from the mortgage were used to repay the Facility.

In July 2015, the Company repaid at maturity its $4.5 million non-recourse first mortgage loan encumbered by its Fairfield Plaza property.  The Company funded this repayment with a borrowing on its Facility.

During fiscal 2014, the Company, through a wholly-owned subsidiary, assumed an existing non-recourse first mortgage loan encumbering the Boonton Property at its estimated fair value of $7.8 million.  The mortgage loan requires monthly payments of principal and interest at a fixed rate of 4.2% per annum.  The mortgage matures in September 2022.

During fiscal 2014, the Company, through a wholly-owned subsidiary, assumed an existing non-recourse first mortgage loan encumbering the Bloomfield Property at its estimated fair value of $7.7 million.  The mortgage loan requires monthly payments of principal and interest at a fixed rate of 5.5% per annum.  The mortgage matures in August 2016.

During fiscal 2014, the Company, through a wholly-owned subsidiary, assumed an existing non-recourse first mortgage loan encumbering the McLean Plaza Property at its estimated fair value of $2.8 million.  The mortgage matured in November 2014 and was refinanced with a new lender.  The new $5 million mortgage matures in November 2024 and requires monthly payments of interest only at a fixed rate of interest of 3.7% per annum.

During fiscal 2014, the Company, through a wholly-owned subsidiary, placed a non-recourse first mortgage loan encumbering the Greenwich Properties in the amount of $24.5 million.  The mortgage loan requires monthly payments of principal and interest at a fixed rate of 4.07% per annum.  The mortgage matures in November 2024.  Proceeds from the mortgage were used to repay the Facility.

During fiscal 2014, the Company refinanced a non-recourse mortgage loan encumbering its Arcadian property in the amount of $16.2 million.  The mortgage loan requires monthly payments of principal and interest at a fixed rate of 3.995% per annum.  The mortgage matures in August 2024.

During fiscal 2013, the Company, through a wholly-owned subsidiary, assumed an existing first mortgage loan encumbering the Post Road Properties at its estimated fair value of $8.3 million.  The mortgage loan requires monthly payments of principal and interest at a fixed rate of 4.0% per annum.  The mortgage matures in August 2016.

During fiscal 2013, the Company, through a wholly-owned subsidiary, assumed a first mortgage loan encumbering the New Providence Property at its estimated fair value of $21.3 million.  The mortgage loan requires monthly payments of principal and interest at the fixed rate of 4.0% per annum. The mortgage matures in January 2022.

In June of fiscal 2013, the Company repaid, at maturity, its first mortgage payable secured by its Veterans Plaza property in the amount of $3.2 million.
 
21

The Company is exposed to interest rate risk primarily through its borrowing activities. There is 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 the Company's future financing requirements.  Mortgage notes payable and other loans in the amount of $260.5 million consist of fixed rate mortgage loan indebtedness with a weighted average interest rate of 4.6% at October 31, 2015. The mortgage loans are secured by 22 properties with a net book value of $454 million and have fixed rates of interest ranging from 2.8% to 6.6%.  The Company made principal payments of $12.9 million in the year ended October 31, 2015 (including the repayment of a mortgage at maturity in the amount of $4.5 million) compared to $20.3 million (including the refinancing of $16.2 million mortgage) in the comparable period in fiscal 2014.  The Company may refinance its 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.

Contractual Obligations

The Company's contractual payment obligations as of October 31, 2015 were as follows (amounts in thousands):

Payments Due by Period
  
                             
   
Total
    
2016
    
2017
    
2018
    
2019
    
2020
    
Thereafter
  
Mortgage notes payable and other loans
  
$
260,457
      $
20,493
      $
55,029
      $
4,473
      $
31,065
      $
3,801
      $
145,596
  
Interest on mortgage notes payable
    
67,547
      
12,429
      
11,340
      
8,717
      
7,848
      
6,680
      
20,533
  
Revolving Credit Lines
    
22,750
      
22,750
      
-
      
-
      
-
      
-
      
-
  
Tenant obligations*
    
11,036
      
11,036
      
-
      
-
      
-
      
-
      
-
  
Total Contractual Obligations
  
$
361,790
    
$
66,708
    
$
66,369
    
$
13,190
    
$
38,913
    
$
10,481
    
$
166,129
  


*Committed tenant-related obligations based on executed leases as of October 31, 2015.

The Company has various standing or renewable service contracts with vendors related to its property management. In addition, the Company also has 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.

Off-Balance Sheet Arrangements

The Company has seven off-balance sheet investments in real property including a 66.67% equity interest in the Putnam Plaza shopping center, an 11.642% equity interest in the Midway Shopping Center L.P., a 50% equity interest in the Chestnut Ridge Shopping Center and Plaza 59 Shopping Centers, 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 primarily retail real estate investment.  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 off-balance sheet arrangements are more fully discussed in Note 6, "Investments in and Advances to Unconsolidated Joint Ventures" in the Company's financial statements in Item 8.

Capital Expenditures

The Company invests in its existing properties and regularly incurs capital expenditures in the ordinary course of business to maintain its properties. The Company believes that such expenditures enhance the competitiveness of its properties. In fiscal 2015, the Company paid approximately $12.2 million for property improvements, tenant improvements and leasing commission costs.  The Company expects to incur approximately $11.0 million for anticipated capital and tenant improvements and leasing costs in fiscal 2016. These expenditures are expected to be funded from operating cash flows or bank borrowings.
 
 
22

Significant Property Acquisitions

The Company seeks to acquire properties which are primarily shopping centers 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.

In July 2015, the Company, through a wholly-owned subsidiary purchased, for $10.0 million, a 26,000 square foot grocery anchored shopping center located in Harrison (Westchester County), New York.  The acquisition was funded with a borrowing on the Company's Facility.

In June 2015, the Company, through a wholly-owned subsidiary, purchased, for $4.0 million, a 7,000 square foot retail property located in Fort Lee (Bergen County), New Jersey.  The Company funded the acquisition with a combination of available cash and borrowings under its Facility.

In December 2014 (fiscal 2015), the Company, through four wholly-owned subsidiaries, purchased, for $124.6 million, four retail properties totaling 375,000 square feet located in Northern New Jersey.  The Company funded the acquisition with a combination of available cash remaining from the sale of Class A Common Stock and the sale of its Series G Preferred Stock, borrowings under its Facility and a non-recourse mortgage secured by the subject properties.

In October 2014, the Company, through a wholly-owned subsidiary, acquired a 51% interest in McLean Plaza Associates for a net investment of $6.2 million.  McLean Plaza's sole asset is a grocery anchored shopping center located in Yonkers, NY.  McLean Plaza is encumbered by a first mortgage payable in the amount of $5.0 million and has a term of ten years and requires payments of interest only at the fixed rate of 3.7%.

In August 2014, the Company, through a wholly-owned subsidiary, purchased for $47.4 million, two retail properties totaling 88,000 square feet located in Greenwich, CT.  The Company funded the acquisition with a combination of available cash, borrowings under its Facility, other unsecured borrowings and a non-recourse mortgage secured by the subject property (see Note 4).

In January 2014, the Company, through a wholly-owned subsidiary, purchased for $9 million a 31,000 square foot retail shopping center located in Bethel, CT.  The Company funded the equity needed to complete the purchase with proceeds from the sale of its two non-core properties in December 2013.

In December 2013, the Company, through a wholly-owned subsidiary, purchased for $18.4 million a 63,000 square foot retail shopping center located in Boonton, NJ. The acquisition required the assumption of an existing mortgage in the amount of $7.8 million. The mortgage loan requires monthly payments of principal and interest at a fixed rate of 4.20% per annum.  The mortgage matures in September 2022.  The Company funded the equity needed to complete the purchase with borrowings under its Facility.

In December 2013, the Company, through a wholly-owned subsidiary, purchased for $11 million a 56,000 square foot retail shopping center located in Bloomfield, NJ. The acquisition required the assumption of an existing mortgage in the amount of $7.7 million. The mortgage loan requires monthly payments of principal and interest at a fixed rate of 5.5% per annum.  The mortgage matures in August 2016.  The Company funded the equity needed to complete the purchase with borrowings under its Facility.

In May 2013, the Company, through a wholly owned subsidiary, purchased 2 retail properties located in Greenwich, CT, with a combined GLA totaling 24,000 square feet, for $18 million.  In conjunction with the purchase, the Company assumed an existing first mortgage loan encumbering the properties at its estimated fair value of $8.3 million. The mortgage loan requires monthly payments of principal and interest at a fixed rate of 4.00% per annum.  The mortgage matures in August 2016.  The Company funded the remaining equity needed to complete the purchase with proceeds from its Class A Common Stock and Series F Preferred Stock offerings completed in October 2012.

In May 2013, the Company, through a wholly owned subsidiary, purchased a 107,000 square foot retail shopping center located in New Providence, New Jersey for $34.9 million.  In connection with the purchase, the Company assumed a first mortgage loan encumbering the property at its estimated fair value of $21.3 million.  The mortgage loan requires monthly payments of principal and interest at the fixed rate of 4.00% per annum. The mortgage matures in January 2022.  The Company funded the remaining equity needed to complete the purchase with proceeds from its Class A Common Stock and Series F Preferred Stock offerings completed in October 2012.

In January and March 2013, the Company purchased 6 free standing net leased properties located in the Company's primary marketplace with a combined GLA of 20,000 square feet.  The gross purchase price of the six properties was $7.8 million. The Company funded the equity with proceeds from its Class A Common Stock and Series F Preferred Stock offerings completed in October 2012.
 
23

Funds from Operations
The Company considers Funds from Operations ("FFO") to be an additional measure of an equity REIT's operating performance.  The Company reports FFO in addition to its 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 its 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 the Company's 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 the Company's 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, 2015 (amounts in thousands):

   
Year Ended October 31,
  
   
2015
    
2014
    
2013
  
             
Net Income Applicable to Common and Class A Common Stockholders
  
$
34,659
    
$
49,469
    
$
10,613
  
                         
Real property depreciation
    
18,750
      
15,361
      
14,194
  
Amortization of tenant improvements and allowances
    
3,161
      
3,298
      
2,957
  
Amortization of deferred leasing costs
    
449
      
520
      
593
  
Depreciation and amortization on unconsolidated joint ventures
    
1,414
      
1,255
      
974
  
(Gain)/loss on sale of properties
    
(20,377
)
    
(36,871
)
    
175
  
                         
Funds from Operations Applicable to Common and Class A Common Stockholders
  
$
38,056
    
$
33,032
    
$
29,506
  
                         
Net Cash Provided by (Used in):
                        
Operating Activities
  
$
51,100
    
$
50,915
    
$
50,952
  
Investing Activities
  
$
(105,034
)
  
$
(54,624
)
  
$
(49,631
)
Financing Activities
  
$
(12,472
)
  
$
73,793
    
$
(76,468
)

 
FFO amounted to $38.1 million in fiscal 2015 compared to $33.0 million in fiscal 2014 and $29.5 million in fiscal 2013.
 
24

The net increase in FFO in fiscal 2015 when compared with fiscal 2014 was predominantly attributable, among other things, to: a) the additional net operating income generated from properties acquired in fiscal 2014 and fiscal 2015, b) an overall increase in net operating income at properties owned in both fiscal 2014 and 2015, offset by c) an increase in acquisition costs of $1.4 million in fiscal 2015 when compared with fiscal 2014 and d) an increase in interest expense of $3.2 million as a result of the Company's secured mortgage borrowings increasing when we assumed the mortgage encumbering two properties we acquired in fiscal 2014 and when the Company placed a new $62.7 million combined mortgage on the four properties it acquired in fiscal 2015.

The net increase in FFO in fiscal 2014 when compared with fiscal 2013 was predominantly attributable, among other things, to: a) the Company incurring $4.2 million in one-time preferred stock redemption charges in fiscal 2013 versus only $1.87 million in fiscal 2014; b) a decrease of $1.1 million in preferred stock dividends in fiscal 2014, mainly the result of the Company issuing a new preferred stock series in October 2012 in advance of being able to redeem its Series C Preferred Stock in fiscal 2013; and c) the additional net operating income related to the Company's acquisitions in fiscal 2013 and fiscal 2014 in excess of the financing cost of that capital.


Results of Operations

Fiscal 2015 vs. Fiscal 2014

The following information summarizes the Company's results of operations for the years ended October 31, 2015 and 2014 (amounts in thousands):


   
Year Ended
                        
   
October 31,
            
Change Attributable to:
    
Revenues
  
2015
    
2014
    
Increase
(Decrease)
    
%
Change
    
Property
Acquisitions/Sales
        
Properties Held In Both Periods (Note 1)
    
Base rents
  
$
83,885
    
$
75,099
    
$
8,786
      
11.7
%
  
$
9,010
        
$
(224
)
  
Recoveries from tenants
    
28,703
      
24,947
      
3,756
      
15.1
%
    
2,888
          
868
    
Other income
    
2,252
      
2,099
      
153
      
7.3
%
    
225
          
(72
)
  
                                                       
Operating Expenses
                                                      
Property operating
    
21,267
      
18,926
      
2,341
      
12.4
%
    
1,659
          
682
    
Property taxes
    
18,224
      
16,997
      
1,227
      
7.2
%
    
1,203
          
24
    
Depreciation and amortization
    
22,435
      
19,249
      
3,186
      
16.6
%
    
2,743
          
443
    
General and administrative
    
8,576
      
8,016
      
560
      
7.0
%
    
n/a
       
 
    
n/a
    
                                                          
Non-Operating Income/Expense
                                                         
Interest expense
    
13,475
      
10,235
      
3,240
      
31.7
%
    
3,452
             
(212
)
  
Interest, dividends, and other investment income
    
228
      
134
      
94
      
70.1
%
    
n/a
       
 
    
n/a
    

Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2015 and 2014.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

Revenues:
Base rents increased by 11.7% to $83.9 million in fiscal 2015 as compared with $75.1 million in the comparable period of 2014.  The increase in base rents and the changes in other income statement line items were attributable to:
 
Property Acquisitions/Sales:

In fiscal 2014 and fiscal 2015, the Company purchased equity interests in fourteen properties totaling approximately 906,000 square feet of GLA and sold three properties totaling 569,000 square feet of GLA, whose operating results are included in continuing operations.   These properties accounted for all of the revenue and expense changes attributable to property acquisitions and sales in the years ended October 31, 2015 and 2014.  The Company also sold three properties in fiscal 2014 that are included in discontinued operations.  The revenue and expense changes for these two properties are not included in the above variance analysis.

Properties Held in Both Periods:

Revenues
Base rents decreased during the year ended October 31, 2015 by $224,000 when compared with the corresponding prior period primarily as a result of the loss of rent caused by the departure of two large tenants in the Company's Westchester Pavilion property after January 31, 2015.  The Company is in the process of selling this property and in order to accomplish this we had to vacate the remaining tenants from the property.  The negative base rent variance for Westchester Pavilion for the year ended October 31, 2015 when compared with fiscal 2014 was $2.0 million.  This decrease was mostly offset by an increase in base rents billed to tenants as our leased rate increased from the year ended 2014 to the year ended 2015.

In fiscal 2015, the Company leased or renewed 507,000 square feet (or approximately 12.9% of total consolidated property leasable area).  At October 31, 2015, the Company's consolidated properties were approximately 95.8% leased (excluding the Westchester Pavilion), an increase of 1.00% from the end of fiscal 2014. Overall property occupancy increased to 95.0% at October 31, 2015, up from 94.2% at the end of fiscal 2014.

For the year ended October 31, 2015, recoveries from tenants for properties owned in both periods (which represents reimbursements from tenants for operating expenses and property taxes) increased by a net $868,000. This increase was a result of an increase in the percentage of the portfolio that is leased, which allows the Company to bill and collect a higher percentage of operating costs from its tenants and an actual increase in operating costs incurred in properties held in both periods.  This operating expense increase was predominantly the result of an increase in snow removal costs and parking lot repairs.

Expenses
Property operating expenses for properties held in both periods increased for the year ended October 31, 2015, when compared with fiscal 2014, by $682,000 as a result of an increase in expenses relating to snow removal costs and parking lot repairs.

Real estate taxes for properties held in both periods were relatively unchanged for the year ended October 31, 2015 when compared with fiscal 2014 as a result of normal property tax assessment increases at a majority of the properties held in both periods, offset by a reduction in tax expense at the Company's Westchester Pavilion property caused by a property tax assessment reduction.

Depreciation and amortization for properties held in both fiscal 2015 and 2014 increased as a result of tenant improvements being completed at several properties that had significant leasing activity in the end of fiscal 2014 and 2015.

General and administrative expense increased in the year ended October 31, 2015 when compared with fiscal 2014 by $560,000 as a result of increased compensation expense for additional staffing at the Company over the last quarter of fiscal 2014 and the first three quarters of fiscal 2015.

Interest expense for properties owned in the year ended October 31, 2015 when compared with fiscal 2014 decreased by $212,000 as a result of normal amortization on the Company's fixed rate mortgages and the repayment of a $4.5 million mortgage in July 2015.
25

Results of Operations

Fiscal 2014 vs. Fiscal 2013

The following information summarizes the Company's results of operations for the years ended October 31, 2014 and 2013 (amounts in thousands):

   
Year Ended
                  
   
October 31,
            
Change Attributable to:
  
Revenues
  
2014
    
2013
    
Increase
(Decrease)
    
%
Change
    
Property
Acquisitions/Sales
    
Properties Held In Both Periods (Note 1)
  
Base rents
  
$
75,099
    
$
70,052
    
$
5,047
      
7.2
%
  
$
4,753
    
$
294
  
Recoveries from tenants
    
24,947
      
22,594
      
2,353
      
10.4
%
    
1,934
      
419
  
Other income
    
2,099
      
2,343
      
(244
)
    
(10.4
)%
    
77
      
(321
)
                                                 
Operating Expenses
                                                
Property operating
    
18,926
      
17,471
      
1,455
      
8.3
%
    
1,260
      
195
  
Property taxes
    
16,997
      
15,524
      
1,473
      
9.5
%
    
1,029
      
444
  
Depreciation and amortization
    
19,249
      
17,769
      
1,480
      
8.3
%
    
1,235
      
245
  
General and administrative
    
8,016
      
8,211
      
(195
)
    
(2.4
)%
    
n/
a
    
n/
a
                                                 
Non-Operating Income/Expense
                                                
Interest expense
    
10,235
      
9,094
      
1,141
      
12.5
%
    
1,277
      
(136
)
Interest, dividends, and other investment income
    
134
      
1,345
      
(1,211
)
    
(90.0
)%
    
n/
a
    
n/
a

Note 1 – Properties held in both periods includes only properties owned for the entire periods of 2014 and 2013.  All other properties are included in the property acquisition/sales column.  There are no properties excluded from the analysis.

Revenues