Financial Data and Key Metrics Changes - Core FFO per share increased by 5.4% year over year, reaching $0.26 for the quarter and $0.51 for the six months [9][25] - Same store NOI growth was 2.5% for the quarter and 3.9% for the six months, with a target range of 3% to 4.5% for the year [9][10][25] - Occupancy rose by 100 basis points sequentially from Q1 to 93.9% [4][5] Business Line Data and Key Metrics Changes - The company signed $33.2 million in total lease value, slightly up from Q1, with leasing spreads of 41.4% for new leases and 15.2% for renewals, resulting in a combined leasing spread of 17.9% for the quarter [13][25] - The addition of new tenants, such as Ace Hardware and the Pickler, is expected to enhance same store NOI growth in the future [5][14] Market Data and Key Metrics Changes - The company is focusing on high-growth Sunbelt markets, which are experiencing strong leasing environments [4][5] - Significant urban developments are occurring around the company's properties, such as the $1 billion Park 8 Place redevelopment in Houston and TSMC's $165 billion investment in Phoenix [9][20][19] Company Strategy and Development Direction - The company aims to leverage its leadership position in the high-value shop space to achieve core FFO growth of 5% to 7% and same store NOI growth of 3% to 5% [4][9] - Strategic acquisitions, such as San Clemente in Austin and South Hewlett in Fort Worth, align with the company's criteria for growth and neighborhood dynamics [6][8][21] - The company is committed to capital recycling, with an estimated $40 million in acquisitions and dispositions planned for the remainder of the year [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving future same store NOI growth due to strong leasing activity and tenant mix improvements [32][33] - The company is actively managing expenses, reducing G&A and interest expenses by about 6% from the previous year [11][28] - Management reiterated guidance for core FFO per share and year-end occupancy, indicating strong momentum heading into the second half of the year [25][26] Other Important Information - The company has a strong liquidity position with $5.3 million in cash and $69 million available under the credit facility [28] - The company is focused on maintaining a dividend payout of approximately 50% of FFO, with plans to grow the dividend in line with earnings growth [28] Q&A Session Summary Question: Concerns about same store comps in upcoming quarters - Management expressed confidence in meeting forecasts due to improved occupancy and leasing activity contributing to future same store NOI growth [30][32] Question: Impact of new tenants on same store NOI - Management indicated that new tenants like the Pickler will commence in the second half of the year, contributing minimally to same store NOI this year but expected to enhance future growth [34] Question: Details on acquisitions and dispositions - Management confirmed ongoing activities related to $40 million in acquisitions and dispositions, emphasizing the importance of capital recycling [35][36] Question: Interest expense forecast changes - Management clarified that the increase in interest expense is due to timing related to acquisitions and is expected to be offset by increased non-same store NOI [39] Question: Insights on recent acquisitions - Management highlighted the quality of neighborhoods and potential for rent increases in the recent acquisitions, indicating strong upside opportunities [42][43] Question: Cap rates and market pricing trends - Management noted stability in cap rates for recent acquisitions, with a focus on asset-specific evaluations rather than broad market trends [52][53] Question: Same store growth guidance and leasing activity - Management confirmed that the guidance is based on normal leasing activity, with a mix of routine leasing and larger spaces that will contribute to future growth [60][62]

Financial Data and Key Metrics Changes - FFO per diluted share for Q2 2025 was $0.52, with same store cash NOI approximately flat for the quarter and up 1.4% year to date compared to the prior year [5][15] - The office portfolio ended the quarter 82% leased, with the same store office portfolio at 87% leased [5] - Same store cash NOI for all sectors combined was approximately flat year over year in 2025 compared to the same period in 2024 [16] Business Line Data and Key Metrics Changes - Retail portfolio ended the quarter 98% leased, with same store cash NOI growth of 4.5% [8] - Executed over 220,000 square feet of new and renewal leases in Q2, with spreads increasing over 7% on a cash basis and 22% on a straight line basis [8] - Multifamily portfolio ended the quarter approximately 94% leased, with rent increases of 7% on renewals and 4% on new leases, resulting in a blended rent increase of 6% [10] Market Data and Key Metrics Changes - The San Diego market showed strong demand, with two major real estate firms choosing the company's properties for their new headquarters [7] - The hotel segment in Waikiki experienced a 15% decline in NOI due to lower paid occupancy and RevPAR amid ongoing softness in domestic leisure demand [12] - The Japanese yen remains around $1.47 to the US dollar, impacting tourism demand from Japan [19] Company Strategy and Development Direction - The company aims to maintain balance sheet strength and create long-term value for shareholders while navigating elevated interest rates and inflation [4] - Focus remains on driving occupancy, enhancing tenant experience, and positioning the portfolio to perform well under current utilization patterns [7] - The company is exploring opportunities in multifamily and retail sectors while avoiding office acquisitions for the time being [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strength of Hawaii's tourism market despite current challenges [19] - The company is optimistic about the potential recovery in tourism and expects improved performance at the Embassy Suites property [22] - Guidance for full year 2025 was increased to a range of $1.89 to $2.01 per FFO share, reflecting steady momentum across core sectors [20] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q3, reflecting confidence in long-term stability and cash flows [13] - The company published its 2024 sustainability report, highlighting progress in environmental, social, and governance initiatives [13] Q&A Session Summary Question: Any changes to the same store NOI growth outlook for the various segments? - Management indicated they are still on track and hope to outperform current guidance, with some segments potentially outperforming while others may underperform [26][27] Question: Discuss the leasing pipeline and interest level for La Jolla Commons 3 and 1 Beach. - Increased touring activity and prospects were noted, with plans to develop parking and amenities to meet demand [28][29] Question: Commentary on the multifamily portfolio and new lease spreads. - Management acknowledged challenges in Portland due to excess supply but noted stability in San Diego, with expectations for growth later this year [44][45] Question: Demand drivers for the hotel in Hawaii and future expectations. - Management highlighted the impact of the Japanese yen on tourism demand and expressed cautious optimism for recovery next year [49][51] Question: Plans for utilizing cash on the balance sheet for acquisitions. - The company is actively looking for opportunities, particularly in multifamily and retail, while maintaining a cautious approach [58][59]

Core Insights - Federal Realty (FRT) is actively pursuing a capital deployment strategy through acquisitions and dispositions to enhance portfolio quality and long-term value creation [1][6]. Acquisition Activities - FRT acquired two open-air retail centers, Town Center Plaza and Town Center Crossing, in Leawood, Kansas, totaling 550,000 square feet for $289 million, benefiting from strong local demographics and demand from top-tier tenants like Trader Joe's, Apple, and Sephora [2][8]. Disposition of Non-Core Assets - The company sold its Hollywood Boulevard retail portfolio in Los Angeles, comprising 181,000 square feet, for $69 million, and a 108-unit residential building in Santana Row for $74 million, with plans to identify an additional $1 billion in potential asset dispositions [3][8]. Development Projects - FRT is commencing the development of Lot 12, a 258-unit residential project at Santana Row, with an investment of approximately $145 million, aimed at meeting the growing demand for high-quality residential spaces [4][6]. Additional Residential Projects - The company has two more residential projects underway: a 45-unit building in Hoboken, NJ, expected by 2027, and a 217-unit multifamily project in Bala Cynwyd, PA, anticipated by mid-2026, both showing strong early leasing demand [5]. Strategic Focus - FRT's strategy emphasizes capitalizing on expansion opportunities in premium markets, focusing on mixed-use developments that cater to the trend of living, working, and playing in the same area, thereby driving income growth and long-term value [6]. Stock Performance - Over the past three months, FRT's shares have increased by 4.9%, outperforming the industry growth of 3.6% [7].

Financial Data and Key Metrics Changes - FFO excluding financing expenses was approximately $87 million or $0.33 per share for Q1 2025, compared to $75 million or $0.33 per share for Q1 2024, driven by higher leasing revenues [32] - Same center NOI, excluding lease termination income, increased by 0.9% year-over-year, while excluding Eddy assets, it increased by 2.4% [34] - Net debt to EBITDA at the end of Q1 was 7.9 times, nearly a full turn lower than at the outset of the path forward plan [36] Business Line Data and Key Metrics Changes - In Q1 2025, the company signed 2.6 million square feet of leases, including 2.3 million square feet of renewals, more than double the leases signed in Q1 2024 [12] - Trailing twelve-month leasing spreads were 10.9%, up from 8.8% in the previous quarter, marking 14 consecutive quarters of positive leasing spreads [22] - New deal completion percentage reached 60%, up from 39% last quarter, with a target of 70% by year-end 2025 [14] Market Data and Key Metrics Changes - Portfolio sales at the end of Q1 were $837 per square foot, flat compared to Q4 2024, but $928 per square foot when excluding Eddy properties, which is an increase of $13 [21] - Traffic for the year increased by 2% compared to the same period in 2024 [21] - Occupancy in Q1 was 92.6%, down from 94.1% in Q4 2024, primarily due to the decrease in temporary holiday stores [21] Company Strategy and Development Direction - The company is focused on executing its path forward plan, which aims to simplify the business, improve operational performance, and reduce leverage [6] - A new structure has been implemented to streamline leasing teams and enhance collaboration across departments [9] - The company is targeting $2 billion in asset sales and loan givebacks to strengthen its balance sheet [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing progress and the overall execution of the path forward plan, indicating that they are ahead of schedule [6][19] - Minimal impact from tariffs has been observed, with retailers continuing to honor their leases [15][44] - Future same store NOI growth is expected to be in the 3% to 4% range for 2026, with higher growth anticipated in 2027 and 2028 [62] Other Important Information - The company has completed $1.1 billion in dispositions to date and is on track to achieve its $2 billion target [39] - The redevelopment of Green Acres is set to begin, with strong demand and pre-leasing activity [30] - The company anticipates realizing approximately $25 million from its current $80 million signed not open (SNO) pipeline in 2025 [29] Q&A Session Summary Question: Potential upside on leasing due to recent news - Management noted minimal pullback from tenants and strong leasing metrics, indicating no significant change in upside [44][45] Question: Clarification on SNO pipeline - The $80 million SNO pipeline is incremental over revenue from 2024, with $25 million expected to be realized in 2025 [46] Question: CapEx spending trends - Spending on leases is trending slightly higher than initially envisioned, with major uplifts in FFO and EBITDA expected in 2027 and 2028 [50][51] Question: Success of new deals - The new organizational structure has contributed to a significant increase in new leasing activity, with a focus on high-quality tenants [53][54] Question: Same store NOI growth expectations - Management expects same store NOI to grow in the 3% to 4% range for 2026, with higher growth in subsequent years [62] Question: Clarification on renewal leasing spread statistics - The renewal spread statistics reflect different metrics, with the 1% figure being more appropriate for same space renewals [88][90] Question: Details on same store revenues and expenses - Operating expenses increased, but revenue generation offset these increases, with further details expected in future disclosures [97][99]

Financial Data and Key Metrics Changes - FFO excluding certain expenses was approximately $87 million or $0.33 per share for Q1 2025, compared to approximately $75 million or $0.33 per share for Q1 2024, driven by higher leasing revenues [31][32] - Same center NOI, excluding lease termination income, increased by 0.9% year-over-year, while excluding Eddy assets, it increased by 2.4% [33] - Net debt to EBITDA at the end of Q1 was 7.9 times, nearly a full turn lower than at the outset of the path forward plan [35] Business Line Data and Key Metrics Changes - In Q1 2025, the company signed 2.6 million square feet of leases, including 2.3 million square feet of renewals, more than double the leases signed in Q1 2024 [11][21] - Trailing twelve-month leasing spreads were 10.9%, up from 8.8% last quarter, marking 14 consecutive quarters of positive leasing spreads [20] - The leasing speedometer indicated a completion percentage of 60% for new deals, up from 39% last quarter [13] Market Data and Key Metrics Changes - Portfolio sales at the end of Q1 were $837 per square foot, flat compared to Q4 2024, but $928 per square foot when excluding Eddy properties, which is up $13 from the last quarter [19] - Traffic for the year increased by 2% compared to the same period in 2024 [19] - Occupancy in Q1 was 92.6%, down from 94.1% in Q4 2024, primarily due to a decrease in temporary holiday stores [19] Company Strategy and Development Direction - The company is focused on executing its path forward plan, which aims to simplify the business, improve operational performance, and reduce leverage [5][7] - The leasing dashboard, referred to as the leasing speedometer, has been implemented to drive leasing and capital allocation decisions [8] - The company anticipates reaching a mid-2026 inflection point, indicating substantial completion of its plan [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing progress and the overall execution of the path forward plan, stating that they are ahead of schedule [5][15] - Minimal impact from tariffs has been observed, with retailers continuing to honor their leases [14][42] - The company expects same store NOI growth in the 3% to 4% range for 2026, with significantly higher growth anticipated in 2027 and 2028 [61] Other Important Information - The company has made substantial progress on asset sales, with total dispositions reaching approximately $1.1 billion, and has identified additional assets totaling up to $400 million for sale or giveback [38][39] - The redevelopment and expansion of Green Acres is set to begin, addressing 370,000 square feet of vacant space [29] Q&A Session Summary Question: Potential upside on leasing due to recent news - Management noted minimal pullback from tenants regarding leasing, indicating strong retailer sentiment and confidence in the leasing metrics [41][42] Question: Clarification on the SNO pipeline - The $80 million SNO pipeline is incremental over revenue generated from 2024, with $25 million expected to be realized in 2025 [44] Question: Spending on leases and guidance reinstatement - Current spending on leases is slightly more than initially envisioned, with expectations for major uplifts in FFO and EBITDA in 2027 and 2028 [47][48] Question: Success of new deals and organizational structure - The consolidation of leasing teams has led to increased leasing activity, with a strong pipeline of new deals and a focus on high-quality spaces [52][53] Question: Same store NOI growth expectations - Management expects same store NOI growth of 3% to 4% in 2026, with higher growth anticipated in subsequent years [61] Question: Clarification on renewal leasing spread statistics - The renewal spread statistics include temporary spaces and are reflective of the exact same space, leading to differences in reported metrics [85][86] Question: Impact of tariffs on asset sales - Management indicated that tariffs have not significantly impacted asset sales, with positive demand and pricing for outparcels and other assets [110][111]

Financial Data and Key Metrics Changes - The company reported a normalized FFO of $0.27 per diluted share and an FFO of $0.29 per diluted share for Q4 2024, with a full year FFO of $1.02 and normalized FFO of $1.29 per diluted share [10][38] - The overall portfolio occupancy at the end of Q4 stood at 96%, slightly increasing compared to the prior quarter [42] - The company achieved same-store NOI growth of $1.3 million at 3.6% on a GAAP basis [41] Business Line Data and Key Metrics Changes - The retail segment achieved an 11.1% GAAP releasing spread, while the office segment achieved an 18.7% GAAP releasing spread [39] - The multi-family portfolio reported a combined trade-out spread of negative 0.8% for the quarter, with renewal spreads remaining strong at 4.7% [40] - The construction management segment posted $2.1 million of gross profit, with expectations to return closer to historical levels in the short term [42] Market Data and Key Metrics Changes - The office assets in mixed-use environments commanded around a 15% premium above competing central business districts [22] - The retail portfolio had a strong performance with 95% occupancy, executing new leases covering approximately 195,000 square feet [27] - The multi-family portfolio operated at 95.3% occupancy, with rent growth in markets such as Baltimore and Virginia Beach [33] Company Strategy and Development Direction - The company remains committed to improving income streams and balance sheet quality, focusing on sustainable growth and financial strength [9] - The strategy includes recycling stabilized assets and capitalizing on better long-term opportunities [14] - The company is focused on strengthening its balance sheet by reducing leverage and enhancing financial flexibility [18] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be the trough year for earnings, with anticipated growth in 2026 and beyond as developments stabilize [90] - The company is actively managing challenges related to construction delivery delays and increased interest expenses [46] - Management remains confident in the long-term value of the portfolio and the potential for redevelopment opportunities [36] Other Important Information - The company disposed of two non-core retail assets at a blended cap rate in the low 6% range, achieving an $82 million aggregate sales price [15] - The company successfully executed a $109 million common equity offering to reduce leverage and position for future growth [19] - The company has hedged 100% of its variable rate debt exposure to ensure stability in interest expenses [44] Q&A Session Summary Question: What does the market look like going forward on the Mez side? - Management noted inquiries about financing deals and the pressure in the lending market has created a gap that needs to be filled [52][54] Question: Any new investments need to be a loan to own rather than just a straight loan? - Management indicated that all options are possible, but the focus is on risk-adjusted returns [57][58] Question: Can you talk about the occupancy of your apartment assets in the home market? - Management attributed lower occupancy to price point issues and new developments in the broader market, but expressed confidence in maintaining market rents [59][60] Question: Can you comment on the dilution from recent equity raises and asset sales? - Management stated that the equity raise in September resulted in roughly 5 cents worth of dilution [62][65] Question: How is the company thinking about the longer-term play with T. Rowe headquarters? - Management is monitoring the market and believes it is not the right time to sell the asset at a discount [66][68] Question: Can you provide details on Southgates First occupancy decline? - Management explained the decline was related to specific tenants and expressed optimism about backfill negotiations [73][74] Question: Do you have any active properties that you are marketing on the retail side? - Management mentioned receiving unsolicited activity for retail properties and is open to capital recycling opportunities [80][81]