Federal Realty Investment Trust-Federal Realty Meets Q4 FFO Estimates, Sees Solid Leasing Activity

Core Viewpoint - Federal Realty Investment Trust (FRT) reported strong fourth-quarter 2024 results, with funds from operations (FFO) per share of $1.73, reflecting a 5.5% increase year-over-year, and revenues of$ 311.4 million, a 6.7% improvement from the previous year, although slightly below consensus estimates [1][2][3]. Financial Performance - FRT's FFO per share for the full year 2024 was $6.77, a 3.4% increase from$ 6.55 in 2023, aligning with consensus estimates [3]. - Quarterly revenues of $311.4 million narrowly missed the consensus mark of$ 311.8 million but improved 6.7% from the year-ago quarter [2]. - For the full year, revenues increased 6.2% year-over-year to $1.20 billion, meeting the consensus mark [3]. Leasing Activity - In the fourth quarter, FRT signed 103 leases for 653,869 square feet of retail space, achieving the highest quarterly comparable leasing volume on record [4]. - The average rent for comparable space was$ 34.29 per square foot, indicating cash-basis rollover growth of 10% and 21% on a straight-line basis [4]. - The portfolio occupancy rate increased to 94.1%, up 10 basis points quarter-over-quarter and 190 basis points year-over-year [5]. Operational Metrics - The portfolio was 96.2% leased as of December 31, 2024, a 30 basis point increase quarter-over-quarter and 200 basis points year-over-year [5]. - Comparable property operating income grew by 4.2% in the fourth quarter, excluding lease termination fees and prior-period rents collected [7]. Future Guidance - For 2025, FRT expects FFO per share in the range of $7.10-$ 7.22, with the Zacks Consensus Estimate at $7.13 [10]. - The guidance is supported by assumptions for comparable properties growth of 3%-4%, acquisitions worth$ 124 million, and lease termination fees of $4-$ 5 million [10]. Dividend Announcement - FRT announced a regular quarterly cash dividend of $1.10 per share, translating to an annual rate of$ 4.40 per share, payable on April 15, 2025 [11]. Portfolio Activity - FRT is under contract to purchase a 673,000-square-foot shopping center in Northern California for $124 million, expected to close in late February 2025 [8]. - The company announced a residential development project in Hoboken, NJ, with a projected cost of$ 45- $48 million and an ROI of 6%-7% [8]. - Additionally, FRT plans to redevelop the Andorra Shopping Center in Philadelphia, PA, at a projected cost of$ 32 million with an incremental ROI of 7%-8% [9].