Federal Realty Investment Trust (NYSE:FRT) Bank of America 2023 Global Real Estate Conference September 13, 2023 1:25 PM ET CorporateParticipants Don Wood - Chief Executive Officer Dan Guglielmone - Chief Financial Officer ConferenceCall Participants Lizzy Doykan - Bank of America Lizzy Doykan So hi, everybody. This is a roundtable presentation with Federal Realty. I'm joined by Don Wood, CEO; and Dan Guglielmone, CFO. I'm Lizzy Doykan. I work with Jeff Spector covering the retail REITs at BofA. So I'm goin ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-07533 (Federal Realty Investment Trust) Commission file number: 333-262016-01 (Federal Realty OP LP) FEDERAL REALTY INV ...

Federal Realty Investment Trust (NYSE:FRT) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Leah Brady - Vice President-Investor Relations Donald Wood - Chief Executive Officer Daniel Guglielmone - Executive Vice President, Chief Financial Officer and Treasurer Wendy Seher - Executive Vice President and Eastern Region President Jan Sweetnam - Chief Investment Officer Conference Call Participants Juan Sanabria - BMO Capital Markets Craig Schmidt - Bank of America Steve Sakwa - Eve ...

THE LONGEST RECORD IN THE REIT INDUSTRY $4.32 2 2022 → 3.6% comparable POI growth over 1Q 2022 Comparable POI 4 $2.59 - $2.79 Growth over 2021 2% - 4% ncludes the expected additional POI to be recognized in 2023 compared to the amount recognized in 2022 from all of the redevelopments listed on pages 16 and 17. Does not include any additional POI G&A expenses Development / redevelopment capital Equity to be issued $4 - $6 million $5 - $6 million $20 - $22 million Dispositions / acquisitions See appendix for ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR FEDERAL REALTY INVESTMENT TRUST ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FEDERAL REALTY OP LP (Exact Name of Registrant as Specified in its Charter) Maryland (Federal Realty Investment Trust) 87-3916363 Delaware (Federa ...

Summary of Federal Realty Investment Trust Conference Call Company Overview - **Company**: Federal Realty Investment Trust (NYSE:FRT) - **Industry**: Real Estate Investment Trust (REIT) - **Founded**: 1962, one of the oldest REITs in the U.S. - **Focus Areas**: Primarily operates in coastal markets including Boston, New York, New Jersey, Philadelphia, Washington D.C., Miami, and Southern California [6][8] Core Business Insights - **Business Model**: Primarily a retail real estate company with about one-third of its business in mixed-use real estate, which has grown organically [7][8] - **Portfolio Value**: Total capitalization of approximately $12 billion, built through selective acquisitions rather than large portfolio purchases [8] - **Long-term Strategy**: Focus on building a portfolio that can generate consistent cash flow through economic cycles [8] Investment Thesis - **Demographics**: Strong demographics in target markets, which are critical for maintaining cash flow during economic downturns [10][12] - **Visible Growth**: The company has a multifaceted business plan that includes a development component, contributing to visible growth in 2023 and 2024 [10][11] - **Earnings Multiple**: Currently trading at a premium compared to the industry, but this premium is the tightest in a decade, indicating relative affordability [10][11] Rent and Lease Dynamics - **Mark-to-Market Ability**: The company is successfully signing new leases at significantly higher rates than existing ones, with in-place rents around $29-$30 and new leases in the high $30s to mid-$40s [16][18] - **Inflation Impact**: The company benefits from contractual rent bumps averaging 2.25% per year, which helps maintain property value over time [18][19] - **Tenant Diversity**: The largest tenant accounts for only 2.8% of revenue, with a highly diversified portfolio reducing exposure to single tenant failures [33][34] Economic Outlook - **Consumer Sentiment**: While there are concerns about economic weakness, the company believes that high-quality real estate will continue to attract tenants [24][27] - **Bad Debt Expectations**: Historically, bad debt averages around 1% of revenues; the company expects 2023 to fall within this range [32][35] - **Tenant Health**: Tenants are currently paying rent and performing well, which supports strong leasing activity [34] External Growth Strategies - **Acquisitions and Development**: The company is cautious about acquisitions in the current market but remains open to opportunities that align with long-term growth strategies [40][41] - **Development Pipeline**: The company has a million square feet of shovel-ready projects but is currently turning down development activity due to market uncertainties [49][50] Conclusion - **Long-term Resilience**: The company is positioned to outperform in a typical recession due to its diversified portfolio, strong tenant base, and strategic focus on high-quality real estate [51][52] - **Market Positioning**: Federal Realty Investment Trust emphasizes the importance of location, tenant quality, and a multifaceted business plan to navigate economic cycles effectively [28][50]

Real Estate Portfolio - As of December 31, 2022, the company owned or had a majority interest in 103 predominantly retail real estate projects comprising approximately 25.8 million square feet, with a leasing rate of 94.5% and occupancy rate of 92.8%[24]. - As of December 31, 2022, the occupancy rate for anchor tenant space is 95.6%, with 96.9% leased[51]. - The company currently owns 100% of the OP Units issued by the Partnership and is its sole Limited Partner[105]. - The company’s business plan focuses on high-quality retail properties, primarily through redevelopments and acquisitions[108]. - The company’s growth strategy relies on the development and acquisition of properties, but it must distribute at least 90% of taxable income to maintain REIT status, limiting cash available for growth[82]. - The company has a workforce of 314 full-time employees and 8 part-time employees, with no employees represented by a collective bargaining unit[32]. - The company is focused on acquiring quality retail and mixed-use properties in densely populated areas with high barriers to entry for further development[31]. - The company has maintained a prudent level of overall leverage and manages exposure to variable-rate debt to support its financial strategies[31]. - The company has included necessary investments for compliance with energy and emissions regulations in its capital improvement planning, which have not materially affected financial results to date[44]. - The company is subject to financial covenants that could restrict operational flexibility and lead to defaults if not complied with[78]. Financial Performance - Total property revenue increased by $123.2 million, or 12.9%, to $1.1 billion in 2022 compared to $951.2 million in 2021[198]. - Rental income rose by $124.5 million, or 13.1%, to $1.1 billion in 2022, primarily driven by the recovery from COVID-19 impacts[203]. - Property operating income increased by $83.0 million, or 13.1%, to $717.6 million in 2022, attributed to higher occupancy and rental rates[210]. - Operating income increased by $131.7 million, or 33.4%, to $526.4 million in 2022 compared to $394.7 million in 2021, driven by the gain on deconsolidation of a VIE and recovery from COVID-19 impacts[216]. - Interest expense increased by $9.3 million, or 7.3%, to $137.0 million in 2022, with gross interest costs at $155.7 million[219]. - The company reported a $90.0 million gain on sale of real estate for the year ended December 31, 2021, from the sale of two properties and portions of three properties[215]. Dividends and Shareholder Returns - The company has paid quarterly dividends continuously since its founding in 1962 and has increased dividends per common share for 55 consecutive years[24]. - Total annual dividends paid per common share for 2022 were $4.29, an increase from $4.25 in 2021, marking a continuous dividend increase for 55 consecutive years[148]. - The ordinary dividend for 2022 was $3.518 per share, up from $3.358 in 2021, while capital gain dividends increased to $0.772 from $0.680[149]. - The company must generally make annual distributions to shareholders of at least 90% of its taxable income to maintain REIT status[100]. - Failure to qualify as a REIT would result in the company being taxed as a corporation, significantly reducing funds available for distributions[89]. Market and Economic Conditions - The company continues to monitor general economic conditions, including inflation and rising interest rates, which may impact business operations and growth strategies[40]. - Economic downturns or adverse conditions in the 12 states and the District of Columbia where the company operates could negatively affect financial performance[53]. - The shift from brick-and-mortar retail to online shopping may adversely impact cash flow and financial condition, despite a strategy to maintain a diverse portfolio[52]. - The company faces competition from numerous commercial developers and real estate companies, which may limit its ability to attract tenants and acquire new properties[65]. - Rising interest rates could increase interest expenses on approximately $655.1 million of variable rate debt, adversely affecting cash flow and the ability to service debt[83]. Risk Management - The company actively manages properties to maximize rents and maintain occupancy levels, focusing on attracting and retaining a diverse tenant base[27]. - The company has implemented various measures to mitigate risks from cyber attacks, although no guarantee of success can be provided[110]. - The company believes its properties are adequately insured against various risks, including fire, flood, and business interruption[112]. - The company may experience delays and unexpected costs in enforcing lease terms if tenants default, adversely affecting financial results[50]. - The presence of hazardous materials on properties could reduce their value and profitability, impacting financial condition[86]. - Natural disasters and climate change could disrupt operations and increase costs, impacting cash flow and tenant demand[71]. Property Management and Leasing - The company completed 2.0 million square feet of comparable space leasing in 2022, with a leased rate of 94.5% compared to an occupied rate of 92.8%[189]. - The company expects to execute comparable space leases for 1.4 to 2.0 million square feet of retail space in 2023, in line with historical averages[122]. - The company had approximately 3,300 commercial leases and 3,000 residential leases, with no single tenant accounting for more than 2.8% of annualized base rent[113]. - The company continues to focus on expanding its portfolio with strategic acquisitions and developments in key markets[130]. - The company may face challenges in renewing leases or re-leasing space, which could lead to reduced net income[55]. Sustainability and Compliance - The company has 19 LEED certified buildings and is focused on sustainable development practices, including energy efficiency and waste minimization[162]. - The company has installed on-site solar systems at 25 properties with a total capacity of 14 MW and over 300 electric vehicle charging stations[163]. - Changes in government legislation on climate change could lead to increased capital expenditures for energy efficiency improvements[86]. - Increased focus on ESG factors may impose additional costs and expose the company to reputational risks if it fails to meet investor expectations[73].

Financial Performance - Net income for the three months ended September 30, 2022, was $158.8 million, compared to $54.5 million for the same period in 2021[76]. - Earnings per common share (diluted) for the nine months ended September 30, 2022, was $3.31, up from $1.81 in 2021[76]. - Dividends declared for common shares were $3.220 per share for the nine months ended September 30, 2022, compared to $3.190 for the same period in 2021[69]. Acquisitions and Sales - The company acquired properties during the nine months ended September 30, 2022, with a total gross value of $434.1 million, including Kingstowne Towne Center for $200 million, Hilton Village for $53.6 million, and The Shops at Pembroke Gardens for $180.5 million[55]. - The company sold one residential property and one retail property for total sales prices of $66.8 million, resulting in net gains of approximately $20.4 million[56]. - The company acquired a 21.8% redeemable noncontrolling interest in the Plaza El Segundo shopping center for $23.6 million, increasing its ownership to 100%[66]. - The company acquired a 47.5% interest in a joint venture for $58.9 million, which owns two shopping centers totaling 617,000 square feet[79]. Debt and Financing - As of September 30, 2022, the company had $889.6 million in mortgages and notes payable, with a fair value of $867.0 million[62]. - The maximum amount of borrowings under the company's $1.0 billion revolving credit facility was $330 million, with a weighted average interest rate of 3.4% for the three months ended September 30, 2022[59]. - The company amended its revolving credit facility, increasing the borrowing capacity from $1.0 billion to $1.25 billion on October 5, 2022[78]. - As of September 30, 2022, the company had $3.7 billion of fixed-rate debt outstanding, including $55.4 million of mortgage payables effectively fixed by interest rate swap agreements[189]. - The company had $567.0 million of variable rate debt outstanding as of September 30, 2022[190]. Cash and Liquidity - The company reported total cash, cash equivalents, and restricted cash of $158.6 million as of September 30, 2022, down from $175.2 million at December 31, 2021[54]. - The company has the remaining capacity to issue up to $466.7 million in common shares under its ATM equity program as of September 30, 2022[71]. - The company issued 296,843 common shares at a weighted average price of $112.11 for net cash proceeds of $32.9 million during the nine months ended September 30, 2022[71]. - The company settled forward sales agreements by issuing 2,203,655 common shares for net proceeds of $259.4 million during the nine months ended September 30, 2022[72]. Gains and Valuations - The company recognized a $70.4 million gain on deconsolidation of a variable interest entity (VIE) related to the Escondido Promenade transaction[57]. - The company recognized a gain of $9.3 million related to a reduction in liability for condemnation and transaction costs for the three and nine months ended September 30, 2022[67]. - A total of 652,233 downREIT operating partnership units are outstanding with a fair value of approximately $58.8 million as of September 30, 2022[68]. - The fair value of the company's interest rate swap agreements was an asset of $6.5 million as of September 30, 2022, reflecting an increase of $8.0 million for the nine months ended[62]. Interest Rate Sensitivity - If market interest rates had been 1.0% higher, the fair value of the fixed-rate debt instruments would have decreased by approximately $169.9 million[189]. - If market interest rates had been 1.0% lower, the fair value of the fixed-rate debt instruments would have increased by approximately $190.2 million[189]. - An increase of 1.0% in market interest rates would lead to an annual interest expense increase of approximately $5.7 million[190]. - A decrease of 1.0% in market interest rates would result in an annual interest expense decrease of approximately $5.7 million[190]. Compliance and Agreements - The company is in compliance with all default-related debt covenants as of September 30, 2022[61]. - As of September 30, 2022, the company executed rent deferral agreements totaling approximately $47 million, with $33 million subsequently collected[50].

Summary of Federal Realty Investment Trust Conference Call Company Overview - **Company**: Federal Realty Investment Trust (NYSE:FRT) - **Participants**: Don Wood (CEO), Jeff Berkes (President & COO) [1] Industry Insights - **Market Position**: Federal Realty operates in nine major markets including the East Coast, Mid-Atlantic, South Florida, California, and Phoenix, Arizona [4] - **Market Characteristics**: The company focuses on areas with high population density, affluence, and barriers to entry, which are crucial for retail property performance [4][10] Core Business Strategy - **Portfolio Quality**: Emphasis on high-quality retail and mixed-use properties as a differentiator in the market [2] - **Acquisition Strategy**: Focus on acquiring properties individually rather than in bulk, ensuring each acquisition meets specific criteria for potential returns [3] - **Long-term Cash Flow**: The company aims to create sustainable long-term cash flow through redevelopment, higher rents, and operational efficiencies [3] Performance During COVID-19 - **Impact of COVID-19**: The pandemic disproportionately affected Federal Realty due to its tenant mix, which included gyms and restaurants that were heavily impacted by shutdowns [5][6] - **Recovery Post-COVID**: The company has seen a strong recovery in leasing activity, with occupancy rates rebounding from the mid-eighties to the mid-nineties [8] Financial Metrics - **Affluent Demographics**: 90% of Federal's shopping centers serve communities with household incomes over $75,000, contrasting with the average shopping center in the U.S. [9][10] - **Spending Power**: Within three miles of Federal's centers, there is an average of 175,000 people with a combined spending power exceeding $10 billion [10] Leasing and Tenant Relationships - **Leasing Pipeline**: The leasing pipeline is described as deep and broad, with a focus on getting tenants open and paying rent [14] - **Tenant Quality**: The company has proactively replaced underperforming tenants with stronger ones, enhancing overall portfolio quality [22] Challenges and Risks - **Inflation and Cost Pressures**: The company acknowledges potential margin pressures due to inflation and rising operational costs, but believes it can pass some costs onto consumers in affluent markets [20][21] - **Supply Chain Concerns**: Initial concerns about supply chain disruptions have been managed effectively, allowing for timely tenant openings [15][16] Future Outlook - **Market Dynamics**: The return of employees to offices in tech hubs like Silicon Valley is expected to drive demand for quality retail and office spaces [34][35] - **Acquisition Strategy**: The company maintains a proactive approach to acquisitions, focusing on properties that can enhance its portfolio over time [39][40] Conclusion - **Overall Confidence**: Despite uncertainties in the market, Federal Realty expresses confidence in its business model, tenant relationships, and the quality of its properties, positioning itself for continued growth [13][18]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-07533 (Federal Realty Investment Trust) Commission file number: 333-262016-01 (Federal Realty OP LP) FEDERAL REALTY INV ...