Federal Realty Investment Trust Reports First Quarter 2025 Results

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May 08, 2025, 16:05 ET

NORTH BETHESDA, Md., May 8, 2025 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported its results for the first quarter ended March 31, 2025. For the three months ended March 31, 2025 and 2024, net income available for common shareholders was $0.72 per diluted share and $0.66 per diluted share, respectively. Operating income for the same periods was $108.1 million and $100.2 million, respectively.

Highlights for the first quarter and subsequent to quarter-end include:

Generated funds from operations available to common shareholders (FFO) per diluted share of $1.70 for the quarter, compared to $1.64 for the first quarter of 2024.
Generated comparable property operating income (POI) growth of 2.8%, excluding lease termination fees and prior period rents collected.
Reported comparable portfolio occupancy of 93.6% and a leased rate of 95.9% at quarter end, representing a change of:
- +180 basis points of occupancy and +160 basis points of leased rate year-over-year
- -10 basis points of occupancy and -20 basis points of leased rate quarter-over-quarter
Continued strong small shop leased rate, ending the quarter at 93.5% leased representing an increase of +210 basis points year-over-year.
Extended our $600 million unsecured term loan maturity date to March 2028, plus 2 one-year extension options, and increased the potential size to $750 million. We ended the quarter with nearly $1.5 billion of total liquidity.
Subsequent to quarter end, announced a new common share repurchase program, under which we may purchase up to $300 million of our outstanding common shares.
Closed on our previously announced acquisition of Del Monte Shopping Center in Monterey, California.
Maintained 2025 earnings per diluted share guidance of $3.00 to $3.12 and raised 2025 FFO per share guidance to $7.11 to $7.23, which represents 6% growth at the midpoint year-over-year.

"We started the year with strong operating results and are encouraged to see continuing elevated foot traffic across our properties," said Donald C. Wood, Federal Realty's Chief Executive Officer. "Decades of experience have taught us how to insulate our portfolio against economic cycles and disruptive forces. With irreplaceable real estate and a high-quality, diverse tenant base in affluent markets, we are well positioned for continued growth and stability."

Financial Results

Net Income

For the first quarter 2025, net income available for common shareholders was $61.8 million and earnings per diluted share was $0.72 versus $54.7 million and $0.66, respectively, for the first quarter 2024.

FFO

For the first quarter 2025, FFO was $146.5 million, or $1.70 per diluted share, compared to $136.7 million, or $1.64 per diluted share for the first quarter 2024.

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

The following operational metrics for the commercial portfolio are as of March 31, 2025:

The comparable portfolio was 93.6% occupied, an increase of 180 basis points year-over-year and down 10 basis points sequentially.
Leased rate for the comparable portfolio was 95.9%, an increase of 160 basis points year-over-year and down 20 basis points sequentially.
Small shop leased rate was 93.5%, an increase of 210 basis points year-over-year and down 10 basis points sequentially.
Anchor tenant leased rate was 96.8%, an increase of +100 basis points year-over-year and down 70 basis points sequentially.

The residential leased rate was 94.9% as of March 31, 2025.

Leasing Activity

During the first quarter 2025, Federal Realty signed 91 leases for 429,865 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 87 leases for 368,759 square feet at an average rent of $40.63 per square foot, compared to the average contractual rent of $38.51 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 6%, and 17% on a straight-line basis. Comparable leases represented 96% of total comparable and non-comparable retail leases signed during the first quarter 2025.

Acquisitions

Federal Realty closed on the previously announced $123.5 million acquisition of Del Monte Shopping Center in Monterey, California on February 25, 2025.

Financing Activity

Amended and restated our $600 million unsecured term loan, extending the maturity date to March 20, 2028 plus 2 one-year extensions, at our option. In addition, we have the right until December 20, 2025 to borrow up to an additional $150 million in the form of one or more unsecured term loans.
Subsequent to quarter end, announced a new common share repurchase program, under which we may purchase up to $300 million of our outstanding common shares.

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 July 15, 2025 to common shareholders of record as of July 1, 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 July 15, 2025 to shareholders of record as of July 1, 2025.

2025 Guidance

Federal Realty has raised its 2025 FFO guidance, as summarized in the table below:

Full Year 2025 Guidance	Revised Guidance	Prior Guidance
2025 Earnings per diluted share	$3.00 to $3.12	$3.00 to $3.12
2025 FFO per diluted share	$7.11 to $7.23	$7.10 to $7.22

Conference Call Information

Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its first quarter 2025 earnings conference call, which is scheduled for Thursday, May 8, 2025 at 5:00 PM ET. To participate, please call 833-821-4548 or 412-652-1258 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 May 22, 2025 by dialing 844-512-2921 or 412-317-6671; Passcode: 10197791.

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 103 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 13, 2025 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, tariffs, 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 worldwide pandemics), 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 13, 2025.

Federal Realty Investment Trust
Consolidated Balance Sheets
March 31, 2025
	March 31,	December 31,
	2025	2024
	(in thousands, except share and per share data)
	(unaudited)
ASSETS
Real estate, at cost
Operating (including $1,817,974 and $1,825,656 of consolidated variable interest entities, respectively)	$ 10,521,108	$ 10,363,961
Construction-in-progress (including $18,161 and $9,939 of consolidated variable interest entities, respectively)	561,101	539,752
	11,082,209	10,903,713
Less accumulated depreciation and amortization (including$434,226 and $424,044 of consolidated variable interest entities, respectively)	(3,220,113)	(3,152,799)
Net real estate	7,862,096	7,750,914
Cash and cash equivalents	109,224	123,409
Accounts and notes receivable, net	220,262	229,080
Mortgage notes receivable, net	9,131	9,144
Investment in partnerships	32,888	33,458
Operating lease right of use assets, net	85,165	85,806
Finance lease right of use assets, net	6,575	6,630
Prepaid expenses and other assets	296,509	286,316
TOTAL ASSETS	$ 8,621,850	$ 8,524,757
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable, net (including $184,813 and $186,643 of consolidated variable interest entities, respectively)	$ 512,579	$ 514,378
Notes payable, net	641,331	601,414
Senior notes and debentures, net	3,359,383	3,357,840
Accounts payable and accrued expenses	197,422	183,564
Dividends payable	97,265	96,743
Security deposits payable	34,194	30,941
Operating lease liabilities	74,230	74,837
Finance lease liabilities	12,812	12,783
Other liabilities and deferred credits	247,029	227,827
Total liabilities	5,176,245	5,100,327
Commitments and contingencies
Redeemable noncontrolling interests	181,339	180,286
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, $0.01 par, 200,000,000 shares authorized, 86,255,005 and 85,666,220 shares issued and outstanding, respectively	869	862
Additional paid-in capital	4,303,363	4,248,824
Accumulated dividends in excess of net income	(1,275,769)	(1,242,654)
Accumulated other comprehensive income	3,596	4,740
Total shareholders' equity of the Trust	3,191,881	3,171,594
Noncontrolling interests	72,385	72,550
Total shareholders' equity	3,264,266	3,244,144
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 8,621,850	$ 8,524,757

Federal Realty Investment Trust
Consolidated Income Statements
March 31, 2025
	Three Months Ended
	March 31,
	2025	2024
	(in thousands, except per share data)
	(unaudited)
REVENUE
Rental income	$ 302,294	$ 283,986
Other property income	6,585	7,059
Mortgage interest income	275	278
Total revenue	309,154	291,323
EXPENSES
Rental expenses	67,804	61,659
Real estate taxes	36,567	34,060
General and administrative	10,875	12,006
Depreciation and amortization	86,946	83,404
Total operating expenses	202,192	191,129

Gain on sale of real estate	1,171	—

OPERATING INCOME	108,133	100,194

OTHER INCOME/(EXPENSE)
Other interest income	743	1,483
Interest expense	(42,475)	(43,693)
Income from partnerships	177	32
NET INCOME	66,578	58,016
Net income attributable to noncontrolling interests	(2,810)	(1,280)
NET INCOME ATTRIBUTABLE TO THE TRUST	63,768	56,736
Dividends on preferred shares	(2,008)	(2,008)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS	$ 61,760	$ 54,728

EARNINGS PER COMMON SHARE, BASIC AND DILUTED:
Net income available for common shareholders	$ 0.72	$ 0.66
Weighted average number of common shares	85,472	82,605

Federal Realty Investment Trust
Funds From Operations
March 31, 2025
	Three Months Ended
	March 31,
	2025	2024
	(in thousands, except per share data)
Funds from Operations available for common shareholders (FFO)
Net income	$ 66,578	$ 58,016
Net income attributable to noncontrolling interests	(2,810)	(1,280)
Gain on sale of real estate	(1,171)	—
Depreciation and amortization of real estate assets	76,498	73,938
Amortization of initial direct costs of leases	9,077	7,737
Funds from operations	148,172	138,411
Dividends on preferred shares (1)	(1,875)	(1,875)
Income attributable to downREIT operating partnership units	669	692
Income attributable to unvested shares	(490)	(503)
FFO	$ 146,476	$ 136,725
Weighted average number of common shares, diluted (1)(2)	86,177	83,334

FFO per diluted share (2)	$ 1.70	$ 1.64

Notes:
(1)	For the three months ended March 31, 2025 and 2024, 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 for all periods presented, but is anti-dilutive for the computation of diluted EPS.