Federal Realty Investment Trust Announces First Quarter 2023 Operating Results

Federal Realty Investment Trust (NYSE: FRT) has reported operating results for its first quarter ended March 31, 2023. For the three months ended March 31, 2023 and 2022, net income available for common shareholders was $0.65 per diluted share and $0.63 per diluted share, respectively. For the three months ended March 31, 2023 and 2022, operating income was $95.8 million and $86.0 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 $1.59 for the quarter, compared to $1.50 for the first quarter 2022, an increase of 6% year-over-year.
• Generated comparable property operating income (POI) growth of 3.6% for the first quarter.
• Continued robust levels of leasing with 101 signed leases for 504,502 square feet of comparable space in the first quarter at a cash basis rollover of 11%, the second consecutive quarter of double-digit cash basis rollover.
• Federal Realty's portfolio was 92.6% occupied and 94.2% leased, representing year-over-year increases of 140 basis points and 50 basis points, respectively.
• Subsequent to quarter end, issued, as a green bond, $350.0 million of fixed rate senior unsecured notes that mature on May 1, 2028 and bear interest at 5.375%. The notes were offered at 99.590% of the principal amount with a yield to maturity of 5.468%.

"Strong start to 2023, the strongest first quarter in Federal Realty's 60-year history," said Donald C. Wood, Federal Realty's Chief Executive Officer. "Leasing volume has remained strong exceeding pre-pandemic levels by 20 – 30%. The retail demand for the product that Federal Realty offers is in lock step with what today's consumers and retailers demand in the affluent first ring suburbs of major metropolitan areas in which we operate."

Financial Results

Net Income

For the first quarter 2023, net income available for common shareholders was $53.3 million and earnings per diluted share was $0.65 versus $50.0 million and $0.63, respectively, for the first quarter 2022.

FFO

For the first quarter 2023, FFO was $130.3 million, or $1.59 per diluted share, compared to $119.1 million, or $1.50 per diluted share for the first quarter 2022.

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 portfolio was 92.6% occupied as of March 31, 2023, an increase of 140 basis points year-over-year. The portfolio was 94.2% leased as of March 31, 2023, an increase of 50 basis points year-over-year.

Additionally, our comparable residential properties were 96.9% leased as of March 31, 2023.

Leasing Activity

During the first quarter 2023, Federal Realty signed 107 leases for 524,286 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 101 leases for 504,502 square feet at an average rent of $34.72 per square foot compared to the average contractual rent of $31.20 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 11%, 24% on a straight-line basis.

Transaction Activity

During the first quarter, Federal Realty acquired the remaining portions of Huntington Square in East Northport, New York, for $35.5 million.  The acquisition included a 168,000 square foot parcel and the entire fee interest of the property giving us full control of the entirety of this 243,000 square foot property located in the heart of Suffolk County's retail corridor.

In the first quarter, Federal Realty sold one retail property for a total sales price of $13.2 million.

Regular Quarterly Dividends

Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.08 per common share, resulting in an indicated annual rate of $4.32 per common share. The regular common dividend will be payable on July 17, 2023 to common shareholders of record as of June 22, 2023.

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 17, 2023 to shareholders of record as of July 3, 2023.

Guidance

Federal Realty maintained its 2023 guidance for earnings per diluted share of $2.59 to $2.79 and 2023 FFO per diluted share of $6.38 to $6.58.

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