Federal Realty Investment Trust Reports Second Quarter 2025 Results

, /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported its results for the second quarter ended June 30, 2025. For the three months ended June 30, 2025 and 2024, net income available for common shareholders was $1.78 per diluted share and $1.32 per diluted share, respectively. Operating income for the same periods was $202.7 million and $157.0 million, respectively. Highlights for the second quarter and subsequent to quarter-end include: Generated NAREIT funds from operations available to common shareholders (FFO) per diluted share of $1.91 for the quarter, compared to $1.69 for the second quarter of 2024. FFO for the second quarter of 2025 included $13.0 million, or $0.15 per share of new market tax credit ("NMTC") transaction income. Excluding this income, FFO per diluted share was $1.76. Signed 119 leases for 643,810 square feet of comparable retail space at a cash basis rollover growth of 10% and 21% on a straight-line basis. Generated comparable property operating income (POI) growth of 4.9%, excluding lease termination fees and prior period rents collected. Reported overall portfolio occupancy of 93.6% and a leased rate of 95.4% at quarter end, representing a change of: +50 basis points of occupancy and +10 basis points of leased rate year-over-year Flat occupancy and -30 basis points of leased rate quarter-over-quarter Continued strong small shop leased rate, ending the quarter at 93.4% leased representing an increase of +90 basis points year-over-year. During the quarter and subsequent to quarter end, announced the advancement of Federal's capital allocation strategy with the following transactions: Acquired two dominant open-air retail centers in Leawood, KS totaling 550,000 square feet for $289 million; Sold two properties in California for $143 million; Commenced construction on Lot 12, a 258-unit residential project at Santana Row in San Jose, CA. Announced a first-of-its-kind agreement with Mercedes-Benz High-Power Charging (HPC), naming the automaker its preferred electric vehicle charging provider. Increased the regular quarterly cash dividend by approximately 3% to $1.13 per common share, resulting in an indicated annual rate of $4.52 per common share. This marks the 58th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector. Ended the quarter with over $1.5 billion in total liquidity. Raised guidance for 2025 earnings per diluted share to $3.91 - $4.01 and 2025 FFO per diluted share to $7.16 - $7.26, which includes $0.15 in NMTC transaction income, representing over 6% growth at the midpoint year-over-year. "Our second quarter results were strong, and we feel great about the back half of the year – driving our confidence to raise guidance," said Donald C. Wood, Federal Realty's Chief Executive Officer. "Our consumer remains healthy, tenant credit is strong, and we're staying sharply focused on disciplined capital allocation. Our new partnership with Mercedes-Benz HCP further reinforces the strength of our premium brand and the caliber of companies that choose to partner with us." Financial Results Net Income For the second quarter 2025, net income available for common shareholders was $153.9 million and earnings per diluted share was $1.78 versus $110.0 million and $1.32, respectively, for the second quarter 2024. FFO For the second quarter 2025, FFO was $165.5 million, or $1.91 per diluted share, which includes $13.0 million, or $0.15 per share, of NMTC transaction income. Excluding this income, FFO was $1.76 per diluted share. This compares to $141.3 million, or $1.69 per diluted share for the second quarter 2024. FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO to net income is attached to this press release. Operational Update Occupancy The following operational metrics for the commercial portfolio are as of June 30, 2025: The overall portfolio was 93.6% occupied, an increase of +50 basis points year-over-year and flat sequentially. Leased rate for the overall portfolio was 95.4%, an increase of +10 basis points year-over-year and down 30 basis points sequentially. Small shop leased rate was 93.4%, an increase of +90 basis points year-over-year and down 10 basis points sequentially. The residential leased rate was 96.9% as of June 30, 2025. Leasing Activity During the second quarter 2025, Federal Realty signed 122 leases for 653,366 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 119 leases for 643,810 square feet at an average rent of $37.98 per square foot, compared to the average contractual rent of $34.39 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 10%, and 21% on a straight-line basis. Comparable leases represented 98% of total comparable and non-comparable retail leases signed during the second quarter 2025. Transaction Activity July 1, 2025 – acquired Town Center Plaza and Town Center Crossing, two dominant open-air retail centers in Leawood, KS totaling approximately 550,000 square feet, for $289 million. June 23, 2025 – completed the sale of its 181,000 square feet Hollywood Boulevard retail property in Los Angeles, CA for $69 million. May 12, 2025 – completed the sale of Levare, a 108-unit residential building located on the periphery of Santana Row (link to supplemental visuals) in San Jose, CA for $74 million. Development Federal Realty commenced construction on Lot 12 at Santana Row, a 258-unit residential project with an expected total investment of approximately $145 million. Other Activity Announced a first-of-its-kind agreement with Mercedes-Benz High-Power Charging (HPC), naming the automaker its preferred electric vehicle (EV) charging provider. The collaboration establishes the foundation for a scalable rollout, expected to bring more than 500 ultra-fast charging stalls to at least 50 of Federal Realty's premier open-air retail destinations in its national portfolio. Released the company's 2024 Sustainability Report. Regular Quarterly Dividends Federal Realty announced today that its Board of Trustees increased the regular quarterly cash dividend to $1.13 per common share, resulting in an indicated annual rate of $4.52 per common share. The regular common dividend will be payable on October 15, 2025 to common shareholders of record as of October 1, 2025. This increase represents the 58th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector. Federal Realty's Board of Trustees also declared a quarterly cash dividend on its Class C depositary shares, each representing 1/1000 of a 5.000% Series C Cumulative Preferred Share of Beneficial Interest, of $0.3125 per depositary share. All dividends on the depositary shares will be payable on October 15, 2025 to shareholders of record as of October 1, 2025. 2025 Guidance Federal Realty has raised and tightened its 2025 guidance, as summarized in the table below: Full Year 2025 Guidance Revised Guidance Prior Guidance 2025 Earnings per diluted share $3.91 to $4.01 $3.00 to $3.12 2025 FFO per diluted share $7.16 to $7.26 $7.11 to $7.23 2025 FFO per diluted share, excluding NMTC transaction income $7.01 to $7.11 $6.96 to $7.08 Conference Call Information Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its second quarter 2025 earnings conference call, which is scheduled for Wednesday, August 6, 2025 at 5:00 PM ET. To participate, please call 833-821-4548 or 412-652-1258 five to ten minutes prior to the call start time. The teleconference can also be accessed via a live webcast at www.federalrealty.com in the Investors section. A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through August 20, 2025 by dialing 844-512-2921 or 412-317-6671; Passcode: 10201012. About Federal Realty Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets and select underserved regions with strong economic and demographic fundamentals. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. This includes a portfolio of open-air shopping centers and mixed-use destinations—such as Santana Row, Pike & Rose and Assembly Row—which together reflect the company's ability to create distinctive, high-performing environments that serve as vibrant destinations for their communities. Federal Realty's 102 properties include approximately 3,500 tenants in 27 million commercial square feet, and approximately 3,000 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 58 consecutive years, the longest record in the REIT industry. The company is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com. Safe Harbor Language Certain matters discussed within this Press Release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K filed on February 13, 2025 and include the following: risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire or to fill existing vacancy; risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected; risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate; risks that our growth will be limited if we cannot obtain additional capital, or if the costs of capital we obtain are significantly higher than historical levels; risks associated with general economic conditions, including inflation, tariffs, and local economic conditions in our geographic markets; risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT; and risks related to natural disasters, climate change and public health crises (such as worldwide pandemics), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Press Release. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 13, 2025 and subsequent quarterly reports on Form 10-Q. Federal Realty Investment Trust Consolidated Balance Sheets June 30, 2025 June 30, December 31, 2025 2024 (in thousands, except share and per share data) (unaudited) ASSETS Real estate, at cost Operating (including $1,824,341 and $1,825,656 of consolidated variable interest entities, respectively) $ 10,721,587 $ 10,363,961 Construction-in-progress (including $20,665 and $9,939 of consolidated variable interest entities, respectively) 324,435 539,752 11,046,022 10,903,713 Less accumulated depreciation and amortization (including $445,556 and $424,044 of consolidated variable interest entities, respectively) (3,250,219) (3,152,799) Net real estate 7,795,803 7,750,914 Cash and cash equivalents 177,003 123,409 Accounts and notes receivable, net 225,936 229,080 Mortgage notes receivable, net 9,118 9,144 Investment in partnerships 33,133 33,458 Operating lease right of use assets, net 84,517 85,806 Finance lease right of use assets, net 6,520 6,630 Prepaid expenses and other assets 291,764 286,316 TOTAL ASSETS $ 8,623,794 $ 8,524,757 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgages payable, net (including $184,155 and $186,643 of consolidated variable interest entities, respectively) $ 511,951 $ 514,378 Notes payable, net 614,631 601,414 Senior notes and debentures, net 3,360,925 3,357,840 Accounts payable and accrued expenses 192,122 183,564 Dividends payable 97,186 96,743 Security deposits payable 34,032 30,941 Operating lease liabilities 73,618 74,837 Finance lease liabilities 12,842 12,783 Other liabilities and deferred credits 225,196 227,827 Total liabilities 5,122,503 5,100,327 Commitments and contingencies Redeemable noncontrolling interests 181,191 180,286 Shareholders' equity Preferred shares, authorized 15,000,000 shares, $.01 par: 5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding 150,000 150,000 5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 392,878 shares issued and outstanding 9,822 9,822 Common shares of beneficial interest, $.01 par, 200,000,000 shares authorized, respectively, 86,261,214 and 85,666,220 shares issued and outstanding, respectively 869 862 Additional paid-in capital 4,302,220 4,248,824 Accumulated dividends in excess of net income (1,216,794) (1,242,654) Accumulated other comprehensive income 2,912 4,740 Total shareholders' equity of the Trust 3,249,029 3,171,594 Noncontrolling interests 71,071 72,550 Total shareholders' equity 3,320,100 3,244,144 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,623,794 $ 8,524,757 Federal Realty Investment Trust Consolidated Income Statements June 30, 2025 Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands, except per share data) (unaudited) REVENUE Rental income $ 302,477 $ 287,095 $ 604,771 $ 571,081 Other property income 8,769 8,680 15,354 15,739 Mortgage interest income 277 277 552 555 Total revenue 311,523 296,052 620,677 587,375 EXPENSES Rental expenses 61,609 58,891 129,413 120,550 Real estate taxes 36,681 35,289 73,248 69,349 General and administrative 11,925 12,092 22,800 24,098 Depreciation and amortization 89,241 85,049 176,187 168,453 Total operating expenses 199,456 191,321 401,648 382,450 Gain on sale of real estate 76,501 52,280 77,672 52,280 New market tax credit transaction income 14,176 — 14,176 — OPERATING INCOME 202,744 157,011 310,877 257,205 OTHER INCOME/(EXPENSE) Other interest income 905 1,051 1,648 2,534 Interest expense (44,598) (44,312) (87,073) (88,005) Income from partnerships 905 905 1,082 937 NET INCOME 159,956 114,655 226,534 172,671 Net income attributable to noncontrolling interests (4,040) (2,673) (6,850) (3,953) NET INCOME ATTRIBUTABLE TO THE TRUST 155,916 111,982 219,684 168,718 Dividends on preferred shares (2,008) (2,008) (4,016) (4,016) NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 153,908 $ 109,974 $ 215,668 $ 164,702 EARNINGS PER COMMON SHARE, BASIC: Net income available for common shareholders $ 1.78 $ 1.32 $ 2.51 $ 1.98 Weighted average number of common shares 85,969 82,932 85,722 82,768 EARNINGS PER COMMON SHARE, DILUTED: Net income available for common shareholders $ 1.78 $ 1.32 $ 2.51 $ 1.98 Weighted average number of common shares 86,611 83,563 86,300 82,768 Federal Realty Investment Trust Funds From Operations June 30, 2025 Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 (in thousands, except per share data) Funds from Operations available for common shareholders (FFO) Net income $ 159,956 $ 114,655 $ 226,534 $ 172,671 Net income attributable to noncontrolling interests (4,040) (2,673) (6,850) (3,953) Gain on sale of real estate (76,501) (52,280) (77,672) (52,280) Depreciation and amortization of real estate assets 78,598 75,157 155,096 149,095 Amortization of initial direct costs of leases 9,358 8,179 18,435 15,916 Funds from operations 167,371 143,038 315,543 281,449 Dividends on preferred shares (1) (1,875) (1,875) (3,750) (3,750) Income attributable to downREIT operating partnership units 603 688 1,272 1,380 Income attributable to unvested shares (559) (514) (1,049) (1,017) FFO (2) $ 165,540 $ 141,337 $ 312,016 $ 278,062 Weighted average number of common shares, diluted (1)(3) 86,611 83,657 86,393 83,495 FFO per diluted share (2)(3) $ 1.91 $ 1.69 $ 3.61 $ 3.33 Notes: (1) For the three and six months ended June 30, 2025 and 2024, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and are included in "weighted average number of common shares, diluted." (2) FFO available for common shareholders includes new market tax credit transaction income, net of noncontrolling interest of $13.0 million. Excluding this income, FFO for the three and six months ended June 30, 2025 would have been $152.6 million and $299.1 million, respectively, and FFO per diluted share would have been $1.76 per share and $3.46 per share, respectively. (3) The weighted average common shares used to compute FFO per diluted common share includes downREIT operating partnership units that were excluded from the computation of diluted EPS for the six months ended June 30, 2024. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted share for all periods presented, but is anti-dilutive for the computation of diluted EPS for the six months ended June 30, 2024. Investor Inquiries: Jill Sawyer Senior Vice President, Investor Relations 301.998.8265 [email protected] Media Inquiries: Brenda Pomar Senior Director, Corporate Communications 301.998.8316 [email protected] SOURCE Federal Realty Investment Trust WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Federal Realty Investment Trust Reports Second Quarter 2025 Results

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