FT Markets Data
Federal Realty Investment Trust

Federal Realty Investment Trust Announces Third Quarter 2024 Operating Results

NORTH BETHESDA, Md. , Oct. 30, 2024 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2024. For the three months ended September 30, 2024 and 2023, net income available for common shareholders was $0.70 per diluted share and $0.67 per diluted share, respectively. For the three months ended September 30, 2024 and 2023, operating income was $105.8 million and $100.1 million, respectively.

Highlights for the third quarter include:

  • Generated funds from operations available to common shareholders (FFO) per diluted share of $1.71 for the quarter, compared to $1.65 for the third quarter of 2023.
  • Signed 126 leases for 580,977 square feet of comparable retail space at a cash basis rollover growth of 14% and 26% on a straight-line basis.
  • Generated comparable property operating income (POI) growth of 2.9% for the third quarter, excluding lease termination fees and prior period rents collected.
  • Reported portfolio occupancy of 94.0% and a leased rate of 95.9% at quarter end, representing an increase of:
    • +90 basis points of occupancy and +60 basis points of leased rate quarter-over-quarter
    • +170 basis points of occupancy and +190 basis points of leased rate year-over-year
  • Continued strong small shop leasing, ending the quarter at 93.1% leased, with an increase of +60 basis points quarter-over-quarter and +240 basis points year-over-year.
  • Acquired Pinole Vista Crossing in Pinole, California, a grocery-anchored shopping center, comprising 216,000 square feet on 19 acres of land, for a purchase price of $60 million.
  • Tightened and raised 2024 earnings per diluted share guidance to $3.40 – $3.50 and 2024 FFO per diluted share guidance to $6.76 – $6.86.

"Federal Realty delivered another strong quarter, driven by record FFO, elevated leasing activity, and significant occupancy gains," said Donald C. Wood, Chief Executive Officer. "The demographics of our properties continue to be our greatest asset. Looking ahead, we are confident that Federal Realty is well-positioned for continued success, thanks to our exposure to affluent and resilient shoppers who frequent our best-in-class properties."

Financial Results

Net Income

For the third quarter 2024, net income available for common shareholders was $58.9 million and earnings per diluted share was $0.70 versus $55.0 million and $0.67, respectively, for the third quarter 2023.

FFO

For the third quarter 2024, FFO was $144.6 million, or $1.71 per diluted share, compared to $135.3 million, or $1.65 per diluted share for the third quarter 2023.

FFO is a non-GAAP supplemental earnings measure which the trust considers meaningful in measuring its operating performance. A reconciliation of FFO to net income is attached to this press release.

Operational Update

Occupancy

As of September 30, 2024, the portfolio was 94.0% occupied, an increase of 90 basis points quarter-over-quarter and 170 basis points year-over-year. The portfolio was 95.9% leased, an increase of 60 basis points quarter-over-quarter and 190 basis points year-over-year.

Small shop leased rate was 93.1% as of September 30, 2024, an increase of 60 basis points quarter-over-quarter and 240 basis points year-over-year.

The anchor tenant leased rate was 97.3%, reflecting an increase of 60 basis points quarter-over-quarter and 150 basis points year-over-year.

Additionally, residential properties were 97.5% leased as of September 30, 2024.

Leasing Activity

During the third quarter 2024, Federal Realty signed 129 leases for 592,527 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 126 leases for 580,977 square feet at an average rent of $34.94 per square foot compared to the average contractual rent of $30.51 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 14%, 26% on a straight-line basis. Comparable leases represented 98% of total comparable and non-comparable retail leases signed during the third quarter 2024.

Transaction Activity

  • July 31, 2024 — Acquired Pinole Vista Crossing, a dominant 216,000-square-foot, 19-acre regional open-air grocery-anchored community center located along I-80 in Pinole, CA, 13 miles north of Federal Realty'sEast Bay Bridge Shopping Center, for $60 million, expanding the company's presence in Northern California'sEast Bay sub-market.

Regular Quarterly Dividends

Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.10 per common share, resulting in an indicated annual rate of $4.40 per common share. The regular common dividend will be payable on January 15, 2025 to common shareholders of record as of January 2, 2025.

Federal Realty's Board of Trustees also declared a quarterly cash dividend on its Class C depositary shares, each representing 1/1000 of a 5.000% Series C Cumulative Preferred Share of Beneficial Interest, of $0.3125 per depositary share. All dividends on the depositary shares will be payable on January 15, 2025 to shareholders of record as of January 2, 2025.

2024 Guidance

Federal Realty has updated its 2024 guidance, as summarized in the table below:

Full Year 2024 Guidance

Revised Guidance

Prior Guidance

2024 Earnings per diluted share

$3.40 to $3.50

$3.33 to $3.51

2024 FFO per diluted share

$6.76 to $6.86

$6.70 to $6.88

Conference Call Information

Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its third quarter 2024 earnings conference call, which is scheduled for Wednesday, October 30, 2024 at 5:00 PM ET. To participate, please call 1-844-826-3035 or 1-412-317-5195 five to ten minutes prior to the call start time. The teleconference can also be accessed via a live webcast at www.federalrealty.com in the Investors section. A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through November 13, 2024 by dialing 1-844-512-2921 or 1-412-317-6671; Passcode: 10192360.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as Northern and Southern California. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 102 properties include approximately 3,500 tenants, in 27 million commercial square feet, and approximately 3,100 residential units.
 
Federal Realty has increased its quarterly dividends to its shareholders for 57 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.

Safe Harbor Language

Certain matters discussed within this Press Release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K filed on February 12, 2024 and include the following:

  • risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire or to fill existing vacancy;
  • risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
  • risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
  • risks that our growth will be limited if we cannot obtain additional capital, or if the costs of capital we obtain are significantly higher than historical levels;
  • risks associated with general economic conditions, including inflation and local economic conditions in our geographic markets;
  • risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense;
  • risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT; and
  • risks related to natural disasters, climate change and public health crises (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Press Release. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2024 and subsequent quarterly reports on Form 10-Q.

Federal Realty Investment Trust

Consolidated Balance Sheets

September 30, 2024


September 30,


December 31,


2024


2023


(in thousands, except share and
per share data)


(unaudited)



ASSETS




Real estate, at cost




Operating (including $1,822,143 and $2,021,622 of consolidated variable interest
entities, respectively)

$  10,355,292


$  9,932,891

Construction-in-progress (including $8,352 and $8,677 of consolidated variable interest
entities, respectively)

524,707


613,296


10,879,999


10,546,187

Less accumulated depreciation and amortization (including $414,128 and $416,663 of
consolidated variable interest entities, respectively)

(3,115,910)


(2,963,519)

Net real estate

7,764,089


7,582,668

Cash and cash equivalents

97,023


250,825

Accounts and notes receivable, net

206,513


201,733

Mortgage notes receivable, net

9,157


9,196

Investment in partnerships

33,008


34,870

Operating lease right of use assets, net

86,415


86,993

Finance lease right of use assets, net

6,685


6,850

Prepaid expenses and other assets

276,328


263,377

TOTAL ASSETS

$  8,479,218


$  8,436,512

LIABILITIES AND SHAREHOLDERS' EQUITY




Liabilities




Mortgages payable, net (including $187,311 and $189,286 of consolidated variable
interest entities, respectively)

$      515,012


$      516,936

Notes payable, net

601,307


601,945

Senior notes and debentures, net

3,356,298


3,480,296

Accounts payable and accrued expenses

201,066


174,714

Dividends payable

95,849


92,634

Security deposits payable

30,284


30,482

Operating lease liabilities

75,409


75,870

Finance lease liabilities

12,754


12,670

Other liabilities and deferred credits

224,693


225,443

Total liabilities

5,112,672


5,210,990

Commitments and contingencies




Redeemable noncontrolling interests

180,946


183,363

Shareholders' equity




Preferred shares, authorized 15,000,000 shares, $.01 par:




5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation
preference $25,000 per share), 6,000 shares issued and outstanding

150,000


150,000

5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation
preference $25 per share), 392,878 shares issued and outstanding

9,822


9,822

Common shares of beneficial interest, $.01 par, 200,000,000 shares authorized, respectively,
84,952,538 and 82,775,286 shares issued and outstanding, respectively

855


833

Additional paid-in capital

4,160,451


3,959,276

Accumulated dividends in excess of net income

(1,211,833)


(1,160,474)

Accumulated other comprehensive income

2,172


4,052

Total shareholders' equity of the Trust

3,111,467


2,963,509

Noncontrolling interests

74,133


78,650

Total shareholders' equity

3,185,600


3,042,159

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$  8,479,218


$  8,436,512

 

Federal Realty Investment Trust








Consolidated Income Statements








September 30, 2024









Three Months Ended


Nine Months Ended


September 30,


September 30,


2024


2023


2024


2023


(in thousands, except per share data)


(unaudited)

REVENUE








Rental income

$    303,352


$    286,323


$    890,172


$    839,509

Mortgage interest income

281


281


836


833

Total revenue

303,633


286,604


891,008


840,342

EXPENSES








Rental expenses

63,898


58,595


184,448


169,410

Real estate taxes

36,053


33,045


105,402


97,992

General and administrative

10,822


13,149


34,920


37,607

Depreciation and amortization

87,028


81,731


255,481


239,342

Total operating expenses

197,801


186,520


580,251


544,351









Gain on sale of real estate

—


—


52,280


1,702









OPERATING INCOME

105,832


100,084


363,037


297,693









OTHER INCOME/(EXPENSE)








Other interest income

978


721


3,512


3,775

Interest expense

(44,237)


(42,726)


(132,242)


(124,835)

Income from partnerships

888


1,313


1,825


3,494

NET INCOME

63,461


59,392


236,132


180,127

   Net income attributable to noncontrolling interests

(2,508)


(2,344)


(6,461)


(7,245)

NET INCOME ATTRIBUTABLE TO THE TRUST

60,953


57,048


229,671


172,882

Dividends on preferred shares

(2,008)


(2,008)


(6,024)


(6,024)

NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS

$      58,945


$      55,040


$    223,647


$    166,858









EARNINGS PER COMMON SHARE, BASIC AND DILUTED:








Net income available for common shareholders

$           0.70


$           0.67


$           2.68


$           2.04

Weighted average number of common shares

83,994


81,274


83,180


81,210

 

Federal Realty Investment Trust









Funds From Operations



September 30, 2024











Three Months Ended


Nine Months Ended



September 30,


September 30,



2024


2023


2024


2023



(in thousands, except per share data)

Funds from Operations available for common shareholders (FFO)







Net income


$   63,461


$   59,392


$ 236,132


$ 180,127

Net income attributable to noncontrolling interests


(2,508)


(2,344)


(6,461)


(7,245)

Gain on sale of real estate


—


—


(52,280)


(1,702)

Depreciation and amortization of real estate assets


76,581


71,802


225,676


212,792

Amortization of initial direct costs of leases


8,757


8,116


24,673


23,468

Funds from operations


146,291


136,966


427,740


407,440

Dividends on preferred shares (1)


(1,875)


(1,875)


(5,625)


(5,625)

Income attributable to downREIT operating partnership units


688


693


2,068


2,074

Income attributable to unvested shares


(506)


(494)


(1,524)


(1,481)

FFO


$ 144,598


$ 135,290


$ 422,659


$ 402,408

Weighted average number of common shares, diluted (1)(2)


84,714


82,004


83,904


81,942










FFO per diluted share (2)


$        1.71


$        1.65


$        5.04


$        4.91










Notes:




(1)

For the three and nine months ended September 30, 2024 and 2023, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and are included in "weighted average number of common shares, diluted."



(2)

The weighted average common shares used to compute FFO per diluted common share includes downREIT operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted share, but is anti-dilutive for the computation of dilutive EPS for the three and nine months ended September 30, 2024 and 2023.

 

Investor Inquiries:

Leah Andress Brady

Vice President, Investor Relations

301.998.8265

lbrady@federalrealty.com



Media Inquiries:

Brenda Pomar

Senior Director, Corporate Communications

301.998.8316

bpomar@federalrealty.com



 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/federal-realty-investment-trust-announces-third-quarter-2024-operating-results-302291901.html

SOURCE Federal Realty Investment Trust