Federal Realty Investment Trust(US:FRT)2025-10-31 11:35Real Estate Portfolio - As of September 30, 2025, the company owned or had a majority interest in 103 retail real estate projects comprising approximately 27.9 million commercial square feet, with a leasing rate of 95.4% and an occupancy rate of 93.8%[84] - The company completed 2.4 million square feet of comparable space leasing in the last twelve months, with a leased rate of 95.4% and an occupied rate of 93.8%[104] - As of September 30, 2025, the leasable commercial square feet was 95.4% leased and 93.8% occupied, indicating a higher leased rate due to spaces under redevelopment[111] - For Q3 2025, the company signed retail leases totaling 775,000 square feet, with an average rental increase of 28% on a cash basis[112] - The percentage occupied at shopping centers was 93.8% as of September 30, 2025, compared to 94.0% in 2024[138] Acquisitions and Sales - The company acquired Del Monte Shopping Center for $123.5 million and Town Center Crossing and Town Center Plaza for $289.0 million during 2025, totaling $412.5 million in acquisitions[88][90] - During the nine months ended September 30, 2025, the company sold properties for net proceeds of $146.3 million, resulting in a net gain of $77.1 million[91] - The company acquired three properties for $599.5 million year to date through October 2025[157] Financial Performance - Total property revenue increased by $18.6 million, or 6.1%, to $322.3 million in Q3 2025 compared to $303.6 million in Q3 2024[119] - Property operating income rose by $12.9 million, or 6.3%, to $216.6 million in Q3 2025 compared to $203.7 million in Q3 2024[129] - Total property revenue increased by $51.9 million, or 5.8%, to $942.9 million for the nine months ended September 30, 2025, compared to $891.0 million for the same period in 2024[138] - Net income attributable to the Trust rose by $51.7 million, or 22.5%, to $281.3 million for the nine months ended September 30, 2025, compared to $229.7 million in 2024[135] - Property operating income increased by $33.5 million, or 5.6%, to $634.6 million for the nine months ended September 30, 2025, driven by acquisitions and higher rental rates[143] Expenses and Costs - General and administrative expenses increased by $0.8 million, or 7.6%, to $11.6 million in Q3 2025 compared to $10.8 million in Q3 2024[130] - Depreciation and amortization expense increased by $7.2 million, or 8.3%, to $94.3 million in Q3 2025 compared to $87.0 million in Q3 2024[131] - The company capitalized total costs of $220 million for the nine months ended September 30, 2025, compared to $204 million for the same period in 2024[102] - The company expects overall capital costs (excluding acquisitions) to be slightly above 2024 levels, with remaining costs of $285 million for development and redevelopment projects[157] Debt and Financing - The company amended its $600 million unsecured term loan, extending the maturity date to March 20, 2028, and increased the total amount outstanding to $750 million[93] - The company has $652.4 million of debt maturing in the next twelve months, including a $200.0 million mortgage loan secured by Bethesda Row[155] - Total debt outstanding as of September 30, 2025, was $4.7 billion, with a significant portion maturing in the next few years[165] - The weighted average interest rate on the revolving credit facility was 5.2% for the nine months ended September 30, 2025[156] - The company has interest rate swap agreements that effectively fix the rate on $300 million of its term loan at 4.21% until March 1, 2028[172] Cash Flow - Net cash provided by operating activities increased by $22.6 million to $477.5 million for the nine months ended September 30, 2025, compared to $454.9 million for the same period in 2024[159] - Net cash used in investing activities rose by $98.1 million to $473.5 million during the nine months ended September 30, 2025, from $375.5 million in the prior year[160] - Net cash used in financing activities decreased by $222.1 million to $11.8 million for the nine months ended September 30, 2025, down from $233.9 million in 2024[161] - Cash, cash equivalents, and restricted cash at the end of the period were $127.7 million, an increase of $22.1 million from $105.6 million at the end of the same period in 2024[159] Shareholder Returns - Cash dividends paid in the nine months ended September 30, 2025, were approximately $290.2 million[154] - The company intends to maintain its qualification as a REIT, which requires distributing at least 90% of its taxable income to shareholders[174] - The company must distribute at least 90% of its annual taxable income to maintain its REIT status, which may necessitate an increase in distributions if FFO significantly rises[176] Operational Strategy - The company continues to pursue acquisition opportunities that complement its portfolio and provide long-term growth[110] - The company has several ongoing development projects, including a 272,000 square foot office building at Pike & Rose expected to cost between $180 million and $190 million[107] - The company has redevelopment projects with a projected total cost of approximately $283 million, expected to stabilize over the next several years[108] - The company expects leasing activity in 2025 to align with historical averages of 2.0 to 2.4 million square feet of retail space each year[115] Interest Rate Management - The company uses interest rate protection and swap agreements to manage interest rate risk associated with its variable rate debt[180] - The company’s strategy includes entering into derivative financial instruments to hedge against interest rate fluctuations rather than for speculative purposes[180] - The company had $4.2 billion of fixed-rate debt outstanding as of September 30, 2025, with a potential fair value decrease of approximately $144.3 million if market interest rates increased by 1.0%[183] - The company’s variable rate debt outstanding was $552.4 million as of September 30, 2025, with an estimated annual interest expense increase of $5.5 million if market interest rates rose by 1.0%[184] Funds from Operations - Funds from operations (FFO) available for common shareholders for the three months ended September 30, 2025, was $153,045,000, an increase from $144,598,000 for the same period in 2024, representing a growth of 3.1%[178] - For the nine months ended September 30, 2025, FFO available for common shareholders was $465,061,000, compared to $422,659,000 in 2024, indicating a year-over-year increase of 10.0%[178] - The net income for the three months ended September 30, 2025, was $64,499,000, slightly up from $63,461,000 in 2024, reflecting a growth of 1.6%[178] - Depreciation and amortization of real estate assets for the three months ended September 30, 2025, was $81,155,000, compared to $76,581,000 in 2024, marking an increase of 5.5%[178] - The weighted average number of common shares, diluted, for the three months ended September 30, 2025, was 86,599,000, up from 84,714,000 in 2024[178]