Federal Realty Investment Trust (FRT -0.13%), a real estate investment trust specializing in high-quality retail and mixed-use properties, reported results for Q2 2025 on August 6, 2025. The most notable news from the earnings release was non-GAAP EPS (NAREIT FFO per diluted share) of $1.91. GAAP revenue was $311.5 million in Q2 2025, up from $287.1 million in Q2 2024. However, part of the non-GAAP FFO outperformance in Q2 2025 came from a one-time, nonrecurring new market tax credit transaction income. Ove ...

Core Insights - Federal Realty Investment Trust (FRT) reported revenue of $311.52 million for the quarter ended June 2025, reflecting a 5.2% increase year-over-year and a surprise of +0.27% over the Zacks Consensus Estimate of $310.7 million [1] - Earnings per share (EPS) for the quarter was $1.91, compared to $1.32 in the same quarter last year, resulting in an EPS surprise of +10.4% against the consensus estimate of $1.73 [1] Revenue Breakdown - Mortgage interest income was reported at $0.28 million, matching the average estimate from five analysts, with no change year-over-year [4] - Rental income from percentage rents was $3.35 million, which is -14.8% lower than the average estimate of $4.47 million from three analysts [4] - Other lease-related rental income was $5.02 million, significantly below the average estimate of $8.67 million, representing a year-over-year decline of -64.7% [4] - Total rental income was $302.48 million, slightly below the average estimate of $305.89 million, showing a year-over-year increase of +2.3% [4] - Cost reimbursement rental income was $59.27 million, compared to the average estimate of $60.46 million, reflecting a year-over-year increase of +6.5% [4] Stock Performance - Over the past month, shares of Federal Realty Investment Trust have returned -0.8%, while the Zacks S&P 500 composite has changed by +0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Reported FFO per share for Q2 2025 was $1.91, including $0.15 from the development of Freedom Plaza Shopping Center, while excluding this, FFO was $1.76, exceeding consensus and prior year FFO [8][9][27] - Comparable property level operating income grew approximately 5% in Q2, while comparable base rents increased by 4% year-over-year [9][27] - NAREIT FFO per share guidance for 2025 was raised to a range of $7.16 to $7.26, reflecting a 6.5% growth at the midpoint [31][33] Business Line Data and Key Metrics Changes - Leasing activity was strong with 119 comparable deals totaling 644,000 square feet, marking the second-highest volume of leasing ever recorded [22] - Rent spreads were solid at 10% over in-place rents and 21% on a straight-line basis [22] - The company has a robust leasing pipeline of approximately 1,000,000 square feet with rent spreads in the mid-teens [23] Market Data and Key Metrics Changes - The acquisition of Town Center Plaza and Town Center Crossing in Kansas City was highlighted, with a total of 550,000 square feet and medium household incomes of $180,000 in Leawood, indicating strong market demographics [24] - Annual foot traffic for the acquired centers places them in the top 15th percentile of the company's portfolio [24] Company Strategy and Development Direction - The company is expanding its acquisition strategy geographically while maintaining a focus on high-quality retail properties [10][11] - Disposition strategy includes selling assets that limit long-term growth potential, with recent sales totaling $143 million [14][30] - Development remains a core competency, with a focus on residential projects due to historically lower exit cap rates [19][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued leasing demand and strong operational results, despite some market challenges [20][26] - The company anticipates occupancy levels to rise from 93.6% to the low-94% range by year-end [31][104] - Management acknowledged investor concerns and emphasized a commitment to clarifying the company's strategy moving forward [20] Other Important Information - The company declared a quarterly common dividend increase to $1.13 per share, marking the 58th consecutive annual increase [33] - The liquidity position improved to $1.55 billion, with over $1.23 billion available on the unsecured credit facility [29] Q&A Session Summary Question: Potential acquisitions in the pipeline - Management indicated that one potential acquisition is in a familiar market while another is in a new market, with cap rates expected in the high sixes to low sevens [35][36] Question: Transition to new markets - Management noted that post-COVID, there is greater openness to exploring new markets, driven by retailer demand [40][42] Question: Timing of executed leases - Executed deals are expected to come in over the next three quarters, with openings typically occurring about twelve months after execution [45][46] Question: Environment in Washington DC - Restaurants in the company's markets remain resilient, with overall traffic trends showing improvement [49][51] Question: Competitive bidding process for new properties - Management noted that competition for larger assets in new markets is less intense compared to coastal markets [96][97] Question: Multifamily portfolio size - The company expects the percentage of residential income to remain around 10% to 11% of total income [100][101]

Financial Data and Key Metrics Changes - Reported FFO per share for Q2 2025 was $1.91, including $0.15 from the development of Freedom Plaza Shopping Center, while excluding this, FFO was $1.76, exceeding consensus and prior year FFO [6][26] - Comparable property level operating income grew approximately 5% in Q2, excluding tax credit [7] - NAREIT FFO per share guidance for 2025 was raised to a range of $7.16 to $7.26, reflecting a 6.5% growth at the midpoint [31] Business Line Data and Key Metrics Changes - Comparable retail leasing reached 644,000 square feet, nearly an all-time quarterly record, with rent spreads of 10% over in-place rents and 21% on a straight-line basis [20] - Office leasing saw 141,000 square feet signed in Q2, with total amenitized mixed-use portfolio reaching 96% leased [28] Market Data and Key Metrics Changes - The acquisition of Town Center Plaza and Town Center Crossing in Kansas City was highlighted, with demographics showing medium household incomes of $180,000, placing it among the strongest markets [22] - Annual foot traffic for the acquired centers ranked in the top 15% of the portfolio and top 2% of all shopping centers in the US [22] Company Strategy and Development Direction - The company is expanding its acquisition strategy geographically while maintaining a focus on high-quality retail properties [10][11] - Disposition strategy includes selling assets that limit long-term growth potential, with recent sales totaling $143 million [30] - Development remains a core competency, with a focus on residential projects due to historically lower exit cap rates [17][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong leasing demand and a robust pipeline of approximately 1 million square feet [21] - The company anticipates occupancy levels to rise from 93.6% to the low-94% range by year-end [31][107] Other Important Information - The company declared a quarterly common dividend increase to $1.13 per share, marking the 58th consecutive annual increase [33] - The liquidity position improved to $1.55 billion, with over $1.23 billion available on the unsecured credit facility [29] Q&A Session Summary Question: Potential acquisitions in the pipeline - Management indicated that one acquisition is in a familiar market while another is in a new market, with cap rates expected in the high sixes to low sevens [36][37] Question: Transition to new markets - Management noted that post-COVID, there is greater openness to exploring new markets, driven by retailer demand [40][42] Question: Leasing timing and bankrupt tenants - Executed deals are expected over the next three quarters, with a typical 12-month period for new leases to start producing [46][48] Question: Environment in Washington DC - Restaurants in the company's markets remain resilient, with overall traffic trends showing improvement [50][52] Question: Competitive bidding for properties - The company is facing less competition for larger assets in new markets compared to coastal areas [96][97] Question: Multifamily portfolio size - The company expects the residential income percentage to remain around 10% to 11% of total income [100][101]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Federal Realty Investment Trust and OP LP, detailing key financial positions and performance [Federal Realty Investment Trust Financial Statements](index=5&type=section&id=Federal%20Realty%20Investment%20Trust%20Financial%20Statements) Consolidated Balance Sheet Highlights (Federal Realty Investment Trust) | Metric | June 30, 2025 (Unaudited) ($ millions) | December 31, 2024 ($ millions) | | :--- | :--- | :--- | | Total Assets | $8623.8 | $8524.8 | | Total Liabilities | $5122.5 | $5100.3 | | Total Shareholders' Equity | $3320.1 | $3244.1 | Consolidated Income Statement Highlights (Federal Realty Investment Trust) | Metric | Three Months Ended June 30, 2025 ($ millions) | Three Months Ended June 30, 2024 ($ millions) | | :--- | :--- | :--- | | Total Revenue | $311.5 | $296.1 | | Operating Income | $202.7 | $157.0 | | Net Income Attributable to the Trust | $155.9 | $112.0 | | Net Income Available for Common Shareholders | $153.9 | $110.0 | | Diluted EPS | $1.78 | $1.32 | - Net cash provided by operating activities for the six months ended June 30, 2025, was **$329.7 million**, an increase from **$310.9 million** in the same period of 2024. Net cash used in investing activities decreased significantly to **$116.3 million** from **$252.6 million** year-over-year[31](index=31&type=chunk) [Federal Realty OP LP Financial Statements](index=11&type=section&id=Federal%20Realty%20OP%20LP%20Financial%20Statements) - The assets and liabilities of the Operating Partnership are identical to those of the Parent Company, as the Parent Company's only material asset is its interest in the Operating Partnership. The primary difference lies in the capital section, which shows Partner Capital instead of Shareholders' Equity[13](index=13&type=chunk)[33](index=33&type=chunk) Consolidated Income Statement Highlights (Federal Realty OP LP) | Metric | Three Months Ended June 30, 2025 ($ millions) | Three Months Ended June 30, 2024 ($ millions) | | :--- | :--- | :--- | | Total Revenue | $311.5 | $296.1 | | Operating Income | $202.7 | $157.0 | | Net Income Attributable to the Partnership | $155.9 | $112.0 | | Net Income Available for Common Unit Holders | $153.9 | $110.0 | [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - On February 25, 2025, the company acquired Del Monte Shopping Center in Monterey, California, for **$123.5 million**[55](index=55&type=chunk) - During the first six months of 2025, the company sold a residential building at Santana Row, its Hollywood Boulevard property, and a portion of its White Marsh property for net proceeds of **$146.3 million**, resulting in a net gain of **$77.1 million**[55](index=55&type=chunk) - In June 2025, the company recognized **$14.2 million** in income related to the sale of New Market Tax Credits (NMTC) from the Freedom Plaza development, as the seven-year compliance period concluded[68](index=68&type=chunk) - On April 10, 2025, the Board of Trustees approved a new common share repurchase program, authorizing the purchase of up to **$300.0 million** of outstanding common shares. No shares have been repurchased under this program as of June 30, 2025[75](index=75&type=chunk) - Subsequent to the quarter end, on July 1, 2025, the company acquired two retail shopping centers in Leawood, Kansas (Town Center Crossing and Town Center Plaza) for **$289.0 million**[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q2 2025 financial performance, driven by acquisitions, comparable property growth, and strategic asset sales, maintaining robust liquidity [Overview and Outlook](index=25&type=section&id=Overview%20and%20Outlook) - As of June 30, 2025, the company's portfolio of 102 retail real estate projects was **95.4% leased** and **93.6% occupied**[86](index=86&type=chunk) - The company's long-term growth strategy focuses on comparable property growth, portfolio expansion through acquisitions, and value creation from redevelopments and expansions[104](index=104&type=chunk)[108](index=108&type=chunk) - For Q2 2025, the company signed retail leases for **653,000 sq. ft.**, with comparable space leases showing an average rental increase of **10%** on a cash basis[113](index=113&type=chunk) - For the first six months of 2025, comparable space leases covering **1,013,000 sq. ft.** were signed at an average rental increase of **9%** on a cash basis[114](index=114&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Three Months Ended June 30, 2025 vs 2024 | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Property Revenue | $311.5 | $296.1 | +5.2% | | Property Operating Income (POI) | $213.2 | $201.9 | +5.6% | | Operating Income | $202.7 | $157.0 | +29.1% | | Net Income Attributable to the Trust | $155.9 | $112.0 | +39.2% | - The Q2 2025 increase in operating income was primarily driven by a **$76.5 million** gain on sale of real estate and **$14.2 million** in new market tax credit income[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) Six Months Ended June 30, 2025 vs 2024 | Metric | H1 2025 ($ millions) | H1 2024 ($ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Property Revenue | $620.7 | $587.4 | +5.7% | | Property Operating Income (POI) | $418.0 | $397.5 | +5.2% | | Operating Income | $310.9 | $257.2 | +20.9% | | Net Income Attributable to the Trust | $219.7 | $168.7 | +30.2% | - For the first half of 2025, property revenue growth was driven by a **$19.5 million** contribution from acquisitions and a **$19.7 million** increase from comparable properties due to higher rental rates and occupancy[141](index=141&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$177.0 million** in cash and cash equivalents and only **$17.6 million** outstanding on its **$1.25 billion** revolving credit facility[159](index=159&type=chunk) - The company has **$645.2 million** of debt maturing in the next twelve months, including a **$200.0 million** mortgage loan with extension options to 2027[158](index=158&type=chunk) - The company amended its **$600.0 million** unsecured term loan, extending the maturity to March 2028 with options to extend further[158](index=158&type=chunk) - Remaining costs for development and redevelopment projects are estimated at **$306 million**, expected to be incurred over the next two years[160](index=160&type=chunk) [Funds From Operations (FFO)](index=40&type=section&id=Funds%20From%20Operations%20(FFO)) FFO Reconciliation and Per Share Performance | Metric | Three Months Ended June 30, 2025 ($ millions) | Three Months Ended June 30, 2024 ($ millions) | | :--- | :--- | :--- | | Net Income | $159.96 | $114.66 | | FFO Available for Common Shareholders | $165.54 | $141.34 | | FFO per Diluted Share | $1.91 | $1.69 | | **Metric** | **Six Months Ended June 30, 2025** ($ millions) | **Six Months Ended June 30, 2024** ($ millions) | | Net Income | $226.53 | $172.67 | | FFO Available for Common Shareholders | $312.02 | $278.06 | | FFO per Diluted Share | $3.61 | $3.33 | [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risk is interest rate exposure on **$617.6 million** variable-rate debt, largely mitigated by **$3.9 billion** fixed-rate debt and derivatives - The company's primary market risk exposure is to changes in interest rates on its variable rate debt[179](index=179&type=chunk) - As of June 30, 2025, the company had **$617.6 million** of variable rate debt outstanding. A **1.0%** increase in interest rates would result in an approximate **$6.2 million** increase in annual interest expense[184](index=184&type=chunk) - The company had **$3.9 billion** of fixed-rate debt outstanding as of June 30, 2025, which limits the risk of fluctuating interest rates on the majority of its debt portfolio[183](index=183&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures for both the Trust and OP LP were effective as of June 30, 2025, with no material changes to internal controls - Management concluded that the disclosure controls and procedures for both the Trust and the Operating Partnership were **effective** as of June 30, 2025[185](index=185&type=chunk)[187](index=187&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[186](index=186&type=chunk)[188](index=188&type=chunk) PART II. OTHER INFORMATION [Risk Factors](index=43&type=page&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There have been **no material changes** to the risk factors from the company's 2024 Annual Report on Form 10-K[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new **$300.0 million** share repurchase program was approved, with no shares repurchased yet; 77,983 downREIT units were redeemed for cash - A new common share repurchase program for up to **$300.0 million** was approved on April 10, 2025, with **no shares repurchased** as of August 6, 2025[192](index=192&type=chunk) - During Q2 2025, **77,983** downREIT operating partnership units were redeemed for cash[193](index=193&type=chunk)

[Second Quarter 2025 Earnings Press Release](index=3&type=section&id=Second%20Quarter%202025%20Earnings%20Press%20Release) [Highlights and Financial Results](index=3&type=section&id=Highlights%20and%20Financial%20Results) Federal Realty reported strong Q2 2025 results with net income and FFO per diluted share significantly increasing year-over-year Q2 2025 Key Financial Metrics (per diluted share) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income per Share | $1.78 | $1.32 | +34.8% | | FFO per Share | $1.91 | $1.69 | +13.0% | | FFO per Share (ex-NMTC) | $1.76 | $1.69 | +4.1% | - Comparable property operating income (POI) grew by **4.9%**, excluding lease termination fees and prior period rents collected, indicating strong underlying operational performance[8](index=8&type=chunk) - The company increased its regular quarterly cash dividend by approximately **3%** to **$1.13** per common share, marking the **58th consecutive year** of dividend increases[13](index=13&type=chunk) [Operational Update](index=5&type=section&id=Operational%20Update) The portfolio showed solid operational health with increased occupancy and robust leasing activity, achieving 10% cash basis rent rollover growth Portfolio Occupancy and Leased Rates (as of June 30, 2025) | Metric | Q2 2025 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Overall Occupancy | 93.6% | +50 bps | Flat | | Overall Leased Rate | 95.4% | +10 bps | -30 bps | | Small Shop Leased Rate | 93.4% | +90 bps | -10 bps | - For comparable retail spaces, the company signed **119 leases** for **643,810 square feet**, achieving a cash basis rollover growth of **10%** and a straight-line basis growth of **21%**[8](index=8&type=chunk)[15](index=15&type=chunk) [Strategic Activities](index=6&type=section&id=Strategic%20Activities) The company actively managed its portfolio through acquisitions, dispositions, new construction, and a strategic EV charging partnership - Advanced capital allocation strategy with key transactions: - **Acquired:** Two open-air retail centers in Leawood, KS for **$289 million** - **Sold:** Two properties in California for a total of **$143 million**[8](index=8&type=chunk)[21](index=21&type=chunk) - Commenced construction on Lot 12 at Santana Row, a **258-unit** residential project with an expected total investment of approximately **$145 million**[17](index=17&type=chunk) - Announced a first-of-its-kind agreement with Mercedes-Benz High-Power Charging (HPC), naming them the preferred EV charging provider for the portfolio[22](index=22&type=chunk) - The Board of Trustees increased the regular quarterly cash dividend to **$1.13** per common share, marking the **58th consecutive year** of increases, the **longest record in the REIT sector**[19](index=19&type=chunk) [2025 Guidance](index=7&type=section&id=2025%20Guidance) Federal Realty raised and tightened its full-year 2025 FFO per diluted share guidance, reflecting strong Q2 performance and positive outlook Full Year 2025 Guidance Update | Guidance Metric (per diluted share) | Revised Guidance | Prior Guidance | | :--- | :--- | :--- | | Earnings per diluted share | $3.91 to $4.01 | $3.00 to $3.12 | | FFO per diluted share | $7.16 to $7.26 | $7.11 to $7.23 | | FFO per diluted share (ex-NMTC) | $7.01 to $7.11 | $6.96 to $7.08 | [Financial Highlights](index=9&type=section&id=Financial%20Highlights) [Consolidated Income Statements](index=9&type=section&id=Consolidated%20Income%20Statements) Q2 2025 saw increased total revenue and net income, driven by real estate sales gains and NMTC transaction income Q2 Income Statement Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenue | $311,523 | $296,052 | | Operating Income | $202,744 | $157,011 | | Net Income Available for Common Shareholders | $153,908 | $109,974 | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets and shareholders' equity increased slightly, while total liabilities remained stable Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,623,794 | $8,524,757 | | Total Liabilities | $5,122,503 | $5,100,327 | | Total Shareholders' Equity | $3,320,100 | $3,244,144 | [Funds From Operations / Other Supplemental Information](index=12&type=section&id=Funds%20From%20Operations%20%2F%20Other%20Supplemental%20Information) FFO available to common shareholders significantly increased in Q2 2025, leading to a lower dividend payout ratio FFO Reconciliation Summary (Q2 2025, in thousands) | Metric | Amount | | :--- | :--- | | Net Income | $159,956 | | Adjustments (Depreciation, Gain on Sale, etc.) | $7,415 | | FFO | $167,371 | | FFO available for common shareholders | $165,540 | - The dividend payout ratio as a percentage of FFO was **57%** for Q2 2025, compared to **64%** for Q2 2024[32](index=32&type=chunk) [Components of Rental Income](index=13&type=section&id=Components%20of%20Rental%20Income) Total rental income grew in Q2 2025, primarily due to increased commercial minimum rents Rental Income Components (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Commercial Minimum Rents | $208,547 | $194,551 | | Residential Minimum Rents | $26,363 | $26,791 | | Cost Reimbursements | $59,268 | $55,647 | | Total Rental Income | $302,477 | $287,095 | [Comparable Property Information](index=14&type=section&id=Comparable%20Property%20Information) Comparable property operating income (POI) showed strong growth, with improved leased and occupied percentages Comparable Property POI Growth (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Comparable Property POI | $195,813 | $187,470 | 4.5% | | Comparable Property POI (ex-fees) | $194,621 | $185,453 | 4.9% | Comparable Commercial Property Occupancy | Metric | At June 30, 2025 | At June 30, 2024 | | :--- | :--- | :--- | | Leased % | 95.5% | 95.1% | | Occupancy % | 93.5% | 92.8% | [Market Data, Debt Metrics, and Covenants](index=15&type=section&id=Market%20Data%2C%20Debt%20Metrics%2C%20and%20Covenants) The company maintained stable debt-to-market capitalization and strong debt service coverage, complying with all covenants - Total net debt to market capitalization was **34%** as of June 30, 2025, unchanged from the prior year[42](index=42&type=chunk) Senior Notes and Debentures Covenants Compliance | Covenant | Actual (June 30, 2025) | Threshold | | :--- | :--- | :--- | | Total Debt to Total Assets | 39% | < 60% | | Secured Debt to Total Assets | 5% | < 40% | | Consolidated Income to Annual Debt Service Charge | 4.0x | > 1.5x | | Unencumbered Assets to Unsecured Debt | 260% | > 150% | [Summary of Debt](index=16&type=section&id=Summary%20of%20Debt) [Summary of Outstanding Debt](index=16&type=section&id=Summary%20of%20Outstanding%20Debt) Federal Realty's total net debt is approximately $4.49 billion, predominantly fixed-rate with a weighted average effective rate of 4.09% Debt Composition as of June 30, 2025 | Debt Type | Net Balance (in thousands) | % of Total | Weighted Avg. Effective Rate | | :--- | :--- | :--- | :--- | | Total Fixed Rate Debt | $3,874,355 | 86% | 3.87% | | Total Variable Rate Debt | $613,152 | 14% | 5.48% | | **Total Debt, Net** | **$4,487,507** | **100%** | **4.09%** | [Summary of Debt Maturities](index=18&type=section&id=Summary%20of%20Debt%20Maturities) The company has a well-laddered debt maturity profile with a weighted average remaining term of approximately 6 years Scheduled Debt Maturities (in thousands) | Year | Total Maturing | Percent of Debt Maturing | | :--- | :--- | :--- | | 2025 | $45,101 | 1.0% | | 2026 | $455,581 | 10.1% | | 2027 | $893,325 | 19.8% | | 2028 | $370,111 | 8.2% | | 2029 | $945,434 | 21.0% | - The weighted average remaining term on the company's mortgages, notes, and senior notes is approximately **6 years**[54](index=54&type=chunk) [Summary of Redevelopment and Expansion Opportunities](index=19&type=section&id=Summary%20of%20Redevelopment%20and%20Expansion%20Opportunities) The Trust is pursuing over $900 million in redevelopment projects, targeting 5% to 25% unleveraged returns Key Active Redevelopment Projects | Property | Opportunity | Projected Cost (in millions) | Projected ROI | | :--- | :--- | :--- | :--- | | Santana West | 369,000 sq ft office building | $325 - $335 | 5% - 6% | | Pike & Rose - 915 Meeting Street | 262,000 sq ft office building | $180 - $190 | 6% | | Santana Row - Lot 12 | 258 residential units | $140 - $148 | 6% - 7% | | Bala Cynwyd on City Avenue | 217 residential units, 19,000 sq ft retail | $90 - $95 | 7% | [Future Redevelopment and Expansion Opportunities](index=20&type=section&id=Future%20Redevelopment%20and%20Expansion%20Opportunities) Federal Realty has a substantial long-term pipeline of mixed-use redevelopment opportunities with significant remaining entitlements - Remaining entitlements at key mixed-use properties provide a long-term growth runway: - **Assembly Row:** ~**1.5 million sq ft** of commercial space and **326 residential units** - **Pike & Rose:** ~**530,000 sq ft** of commercial space and **741 residential units** - **Santana Row:** ~**321,000 sq ft** of commercial space and **137 residential units**, plus additional commercial space nearby[61](index=61&type=chunk)[62](index=62&type=chunk) [Significant Transactions](index=21&type=section&id=Significant%20Transactions) The company executed significant acquisitions and dispositions, amended a term loan, and authorized a new share repurchase program 2025 Property Acquisitions | Date | Property | Purchase Price (in millions) | | :--- | :--- | :--- | | Feb 25, 2025 | Del Monte Shopping Center | $123.5 | | Jul 1, 2025 | Town Center Plaza & Crossing | $289.0 | 2025 Property Dispositions | Date | Property | Sales Price (in millions) | | :--- | :--- | :--- | | May 12, 2025 | Santana Row Residential (1 building) | $73.9 | | Jun 23, 2025 | Hollywood Boulevard | $69.0 | - The Board of Trustees approved a new common share repurchase program, authorizing the purchase of up to **$300.0 million** of outstanding common shares[68](index=68&type=chunk) [Real Estate Status Report](index=22&type=section&id=Real%20Estate%20Status%20Report) The portfolio comprises 102 properties with 27.4 million sq ft commercial GLA and 2,996 residential units, 95% leased and geographically diversified Grand Total Portfolio Statistics | Metric | Value | | :--- | :--- | | Total Commercial GLA | 27,397,000 sq ft | | % Leased (Commercial) | 95% | | Total Residential Units | 2,996 | [Retail Leasing Summary](index=26&type=section&id=Retail%20Leasing%20Summary) Q2 2025 comparable retail leasing activity resulted in a 10% cash basis and 21% straight-lined rent increase over prior leases Q2 2025 Comparable Retail Leasing Activity | Metric | Value | | :--- | :--- | | Number of Leases Signed | 119 | | GLA Signed | 643,810 sq ft | | Cash Basis % Increase Over Prior Rent | 10% | | Straight-lined Basis % Increase Over Prior Rent | 21% | | Weighted Average Lease Term | 6.6 years | [Lease Expirations](index=28&type=section&id=Lease%20Expirations) The company's lease expiration schedule is well-staggered, with 9% of total square footage expiring in 2026 Lease Expirations by Year (% of Total SF, No Options Exercised) | Year | % of Total SF Expiring | | :--- | :--- | | 2025 (remainder) | 2% | | 2026 | 9% | | 2027 | 12% | | 2028 | 12% | | 2029 | 14% | [Portfolio Leased Statistics](index=29&type=section&id=Portfolio%20Leased%20Statistics) The commercial portfolio was 95.4% leased and 93.6% occupied as of June 30, 2025, showing year-over-year improvements Commercial Portfolio Statistics Comparison | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Leased % | 95.4% | 95.7% | 95.3% | | Occupied % | 93.6% | 93.6% | 93.1% | [Summary of Top 25 Tenants](index=30&type=section&id=Summary%20of%20Top%2025%20Tenants) The top 25 tenants represent 24.08% of total annualized base rent, with TJX Companies as the largest Top 5 Tenants by Annualized Base Rent | Rank | Tenant Name | Percentage of Total ABR | | :--- | :--- | :--- | | 1 | TJX Companies, The | 2.61% | | 2 | Ahold Delhaize | 1.86% | | 3 | NetApp, Inc. | 1.68% | | 4 | Cisco Systems, Inc. | 1.51% | | 5 | Gap, Inc., The | 1.25% | - The top 25 tenants in aggregate represent **24.08%** of total annualized base rent and occupy **28.82%** of total GLA[88](index=88&type=chunk) [Reconciliation of FFO Guidance](index=31&type=section&id=Reconciliation%20of%20FFO%20Guidance) This section reconciles 2025 net income guidance to FFO guidance, detailing key adjustments and underlying assumptions Reconciliation of 2025 Guidance (per diluted share) | Metric | Low End | High End | | :--- | :--- | :--- | | Estimated Net Income | $3.91 | $4.01 | | Adjustments | +$3.25 | +$3.25 | | **Estimated FFO** | **$7.16** | **$7.26** | - Key guidance assumptions for 2025 include: - Comparable properties growth: **3.25% - 4%** - Development/redevelopment capital: **$175 - $225 million** - NMTC transaction income, net: **$13.0 million**[92](index=92&type=chunk) [Glossary of Terms](index=32&type=section&id=Glossary%20of%20Terms) This section defines key financial and operational terms, including non-GAAP measures like FFO and EBITDAre, for investor clarity - Provides definitions for key non-GAAP and industry-specific terms, including: - **EBITDA for Real Estate (EBITDAre):** A NAREIT-defined measure of performance independent of capital structure - **Funds From Operations (FFO):** A supplemental measure of a REIT's operating performance - **Comparable Properties:** The property portfolio excluding assets that distort period-over-period comparability - **Annualized Base Rent (ABR):** Aggregate, annualized in-place contractual minimum rent[94](index=94&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)

Core Viewpoint - Federal Realty Investment Trust reported strong financial results for the second quarter of 2025, with significant increases in net income and funds from operations (FFO), leading to raised guidance for the remainder of the year [2][3][11]. Financial Results - For Q2 2025, net income available for common shareholders was $153.9 million, or $1.78 per diluted share, compared to $110.0 million, or $1.32 per diluted share in Q2 2024 [3][22]. - Operating income for the same periods was $202.7 million in Q2 2025, up from $157.0 million in Q2 2024 [3][22]. - FFO for Q2 2025 was $165.5 million, or $1.91 per diluted share, which includes $13.0 million of new market tax credit transaction income [4][23]. Operational Update - The overall portfolio occupancy was reported at 93.6%, with a leased rate of 95.4% at the end of Q2 2025, reflecting a year-over-year increase of 50 basis points in occupancy and 10 basis points in leased rate [5][13]. - The company signed 119 leases for 643,810 square feet of comparable retail space, achieving a cash basis rollover growth of 10% and 21% on a straight-line basis [5][7]. Transaction Activity - Federal Realty acquired two open-air retail centers in Leawood, KS, totaling 550,000 square feet for $289 million and sold two properties in California for $143 million [5][14]. - Construction commenced on a 258-unit residential project at Santana Row in San Jose, CA, with an expected total investment of approximately $145 million [8][14]. Dividend and Guidance - The quarterly cash dividend was increased by approximately 3% to $1.13 per common share, marking the 58th consecutive year of dividend increases [9][11]. - The company raised its 2025 earnings per diluted share guidance to a range of $3.91 to $4.01 and FFO per diluted share to $7.16 to $7.26, representing over 6% growth at the midpoint year-over-year [11].

Core Viewpoint - Federal Realty Investment Trust (FRT) is preparing to report its second-quarter 2025 results, with analysts and investors keen to evaluate its performance amid current economic conditions [1] Company Performance - In the last reported quarter, FRT's funds from operations (FFO) per share was $1.70, exceeding the Zacks Consensus Estimate by $0.01, and reflecting a 3.7% increase from $1.64 in the same quarter last year [2] - Over the past four quarters, FRT has surpassed estimates twice, met once, and missed once, with an average beat of 0.15% [3] U.S. Retail Real Estate Market - The U.S. shopping center market experienced a slight pullback in net absorption, with negative net absorption of 6.5 million square feet in Q2 2025, an improvement from negative 7.1 million square feet in Q1 2025 [4][5] - The national vacancy rate increased by 50 basis points year over year to 5.8%, although it remains lower than the 6.4% level from 2017 to 2019 [6] - Asking rents for U.S. shopping centers rose by 2.3% year over year to $24.99 per square foot in Q2 2025 [7] Factors Influencing FRT's Performance - FRT is expected to benefit from its premium retail assets in upscale locations and a diverse tenant base, with 80% of its centers featuring grocery components [8][9] - The estimated leased occupancy rate for FRT is 95.4%, a decrease of 30 basis points sequentially, while rent per square foot is projected to grow by 0.7% year over year [9] - FRT's Q2 FFO per share is projected at $1.73, reflecting a 2.4% year-over-year increase, with rental revenues expected to grow by 3.4% [10] Revenue Projections - The Zacks Consensus Estimate for FRT's quarterly revenues is $310.70 million, indicating a 4.95% increase from the previous year [11] - Rental income from minimum rents is projected at $201.56 million, up from $194.55 million in the year-ago period [11] Interest Expenses - High interest expenses are anticipated to have a slight negative impact on FRT's performance during the quarter, with a marginal year-over-year increase expected [12] Analyst Sentiment - Analysts have shown cautious confidence in FRT, with the Zacks Consensus Estimate for Q2 FFO per share remaining unchanged at $1.73 for over three months [13] - FRT has an Earnings ESP of +2.37% and a Zacks Rank of 3, indicating a potential for a positive surprise in FFO [14]

Core Insights - Federal Realty Investment Trust has been recognized as one of the best places to work in 2025, earning accolades from The Washington Post, The San Francisco Chronicle, and Philadelphia Business Journal [1][2]. Company Recognition - The honors received are based on direct employee feedback collected through independent third-party surveys, focusing on workplace culture aspects such as leadership, alignment, engagement, and execution [3]. - Federal Realty's CEO, Don Wood, emphasized that the recognition reflects the company's values and the culture cultivated within the organization [4]. Employee Experience - Earlier in 2025, Federal Realty was also named one of the Best Places to Work by Virginia Business Magazine, showcasing consistent performance in employee experience across the Mid-Atlantic region [4]. - The company's headquarters, Pike & Rose, received a 2025 Employer Recognition Award for its support of sustainable commuting options and accessible workplace design [4]. Company Overview - Federal Realty operates 103 properties across major coastal markets and underserved regions, with a focus on long-term sustainable growth [6]. - The company manages approximately 3,500 tenants across 27 million commercial square feet and around 3,100 residential units as of March 31, 2025 [6]. Financial Performance - Federal Realty has increased its quarterly dividends to shareholders for 57 consecutive years, marking the longest record in the REIT industry [7].

Group 1: Federal Realty - Federal Realty has a dividend yield of approximately 4.4%, outperforming the S&P 500's 1.3% and the average REIT's 4.1% [2] - It is the only REIT to achieve Dividend King status, having increased its dividend annually for over 50 consecutive years, focusing on quality properties [3] - The company emphasizes redevelopment and development to enhance its portfolio's rent-generating capacity, resulting in a strong dividend track record [4] Group 2: Bank of Nova Scotia - Bank of Nova Scotia has paid dividends every year since 1833, although it is not on the Dividend Kings list [6] - The bank maintained its dividend during the 2007-2009 financial crisis, as Canadian regulators prevented increases during that period [7] - The dividend yield is about 5.8%, and the bank has recently focused on growth opportunities in the U.S. market, leading to a dividend increase this year [8] Group 3: W.P. Carey - W.P. Carey has a dividend yield of nearly 5.8%, but it cut its dividend at the end of 2023, just before reaching 25 years of annual increases [9] - The company exited the office sector due to high vacancy rates post-pandemic, allowing it to focus on warehouses, industrial assets, and retail properties [10] - Despite the dividend cut, W.P. Carey has increased its dividend every quarter since, indicating a positive turnaround and better positioning for future growth [11] Group 4: Market Overview - The current stock market is perceived as expensive, yet there are still opportunities for high-yield investments like Federal Realty, Scotiabank, and W.P. Carey [12]