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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Federal Realty Investment Trust | NYSE:FRT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.01 | 0.01% | 102.47 | 103.26 | 102.13 | 103.00 | 440,447 | 22:05:12 |
NORTH BETHESDA, Md., Nov. 2, 2023 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2023. For the three months ended September 30, 2023 and 2022, net income available for common shareholders was $0.67 per diluted share and $1.89 per diluted share, respectively. For the three months ended September 30, 2023 and 2022, operating income was $100.1 million and $191.7 million, respectively.
Highlights for the third quarter and subsequent to quarter-end include:
"In the first nine months of 2023, we achieved a Federal Realty record by leasing over 1.6 million square feet of comparable space," said Donald C. Wood, Federal Realty's Chief Executive Officer. "Our business's strength lies in superior demographics, fueling active leasing at our premium retail destinations. We remain focused on continuing to grow occupancy over the coming quarters."
Financial Results
Net Income
For the third quarter 2023, net income available for common shareholders was $55.0 million and earnings per diluted share was $0.67 versus $154.1 million and $1.89, respectively, for the third quarter 2022.
FFO
For the third quarter 2023, FFO was $135.3 million, or $1.65 per diluted share, compared to $129.3 million, or $1.59 per diluted share for the third quarter 2022.
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 portfolio was 92.3% occupied as of September 30, 2023, an increase of 20 basis points year-over-year. The portfolio was 94.0% leased as of September 30, 2023. Both the occupied and leased metrics reflect a negative impact of approximately 100 basis points resulting from the vacating of the final Bed Bath & Beyond leases.
Small shop leased rate was 90.7% as of September 30, 2023, an increase of 50 basis points quarter-over-quarter and 80 basis points year-over-year.
Additionally, our residential properties were 97.8% leased as of September 30, 2023.
Leasing Activity
During the third quarter 2023, Federal Realty signed 105 leases for 565,496 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 100 leases for 552,765 square feet at an average rent of $34.51 per square foot compared to the average contractual rent of $31.17 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 11%, 21% on a straight-line basis.
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.09 per common share, resulting in an indicated annual rate of $4.36 per common share. The regular common dividend will be payable on January 16, 2024 to common shareholders of record as of January 2, 2024.
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 January 16, 2024 to shareholders of record as of January 2, 2024.
Summary of Other Activities
Guidance
Federal Realty tightened and raised its 2023 guidance for earnings per diluted share to $2.65 to $2.73 from $2.64 to $2.76 and its 2023 FFO per diluted share to $6.50 to $6.58 from $6.46 to $6.58.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its third quarter 2023 earnings conference call, which is scheduled for Thursday, November 2, 2023 at 5:00 PM ET. To participate, please call 1-844-826-3035 five to ten minutes prior to the call start time and use the passcode 3535271 (required). 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 November 16, 2023 by dialing 1-844-512-2921; Passcode: 10182801.
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 from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 102 properties include approximately 3,300 tenants, in 26 million square feet, and approximately 3,100 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry. Federal Realty 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 8, 2023, and include the following:
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 8, 2023 and subsequent quarterly reports on Form 10-Q.
Federal Realty Investment Trust | |||
Consolidated Balance Sheets | |||
September 30, 2023 | |||
September 30, | December 31, | ||
2023 | 2022 | ||
(in thousands, except share and | |||
(unaudited) | |||
ASSETS | |||
Real estate, at cost | |||
Operating (including 2,013,166 and $1,997,583 of consolidated variable interest | $ 9,848,565 | $ 9,441,945 | |
Construction-in-progress (including $11,030 and $8,477 of consolidated variable | 619,964 | 662,554 | |
10,468,529 | 10,104,499 | ||
Less accumulated depreciation and amortization (including $402,929 and $362,921 of | (2,901,879) | (2,715,817) | |
Net real estate | 7,566,650 | 7,388,682 | |
Cash and cash equivalents | 98,210 | 85,558 | |
Accounts and notes receivable, net | 192,066 | 197,648 | |
Mortgage notes receivable, net | 9,209 | 9,456 | |
Investment in partnerships | 35,463 | 145,205 | |
Operating lease right of use assets, net | 87,597 | 94,569 | |
Finance lease right of use assets, net | 44,762 | 45,467 | |
Prepaid expenses and other assets | 259,736 | 267,406 | |
TOTAL ASSETS | $ 8,293,693 | $ 8,233,991 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Liabilities | |||
Mortgages payable, net (including $189,928 and $191,827 of consolidated variable | $ 318,501 | $ 320,615 | |
Notes payable, net | 652,203 | 601,077 | |
Senior notes and debentures, net | 3,479,821 | 3,407,701 | |
Accounts payable and accrued expenses | 209,854 | 190,340 | |
Dividends payable | 91,372 | 90,263 | |
Security deposits payable | 30,180 | 28,508 | |
Operating lease liabilities | 76,413 | 77,743 | |
Finance lease liabilities | 67,813 | 67,660 | |
Other liabilities and deferred credits | 229,948 | 237,699 | |
Total liabilities | 5,156,105 | 5,021,606 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 176,539 | 178,370 | |
Shareholders' equity | |||
Preferred shares, authorized 15,000,000 shares, $.01 par: | |||
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation | 150,000 | 150,000 | |
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation | 9,822 | 9,822 | |
Common shares of beneficial interest, $.01 par, 200,000,000 and 100,000,000 shares | 821 | 818 | |
Additional paid-in capital | 3,846,845 | 3,821,801 | |
Accumulated dividends in excess of net income | (1,132,350) | (1,034,186) | |
Accumulated other comprehensive income | 6,773 | 5,757 | |
Total shareholders' equity of the Trust | 2,881,911 | 2,954,012 | |
Noncontrolling interests | 79,138 | 80,003 | |
Total shareholders' equity | 2,961,049 | 3,034,015 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,293,693 | $ 8,233,991 |
Federal Realty Investment Trust | |||||||
Consolidated Income Statements | |||||||
September 30, 2023 | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
REVENUE | |||||||
Rental income | $ 286,323 | $ 273,179 | $ 839,509 | $ 793,516 | |||
Mortgage interest income | 281 | 272 | 833 | 805 | |||
Total revenue | 286,604 | 273,451 | 840,342 | 794,321 | |||
EXPENSES | |||||||
Rental expenses | 58,595 | 58,809 | 169,410 | 166,189 | |||
Real estate taxes | 33,045 | 32,803 | 97,992 | 94,628 | |||
General and administrative | 13,149 | 13,100 | 37,607 | 39,046 | |||
Depreciation and amortization | 81,731 | 77,109 | 239,342 | 223,244 | |||
Total operating expenses | 186,520 | 181,821 | 544,351 | 523,107 | |||
Gain on deconsolidation of VIE | — | 70,374 | — | 70,374 | |||
Gain on sale of real estate | — | 29,723 | 1,702 | 29,723 | |||
OPERATING INCOME | 100,084 | 191,727 | 297,693 | 371,311 | |||
OTHER INCOME/(EXPENSE) | |||||||
Other interest income | 721 | 234 | 3,775 | 487 | |||
Interest expense | (42,726) | (35,060) | (124,835) | (98,707) | |||
Income from partnerships | 1,313 | 1,873 | 3,494 | 4,878 | |||
NET INCOME | 59,392 | 158,774 | 180,127 | 277,969 | |||
Net income attributable to noncontrolling interests | (2,344) | (2,636) | (7,245) | (8,171) | |||
NET INCOME ATTRIBUTABLE TO THE TRUST | 57,048 | 156,138 | 172,882 | 269,798 | |||
Dividends on preferred shares | (2,008) | (2,008) | (6,024) | (6,026) | |||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ 55,040 | $ 154,130 | $ 166,858 | $ 263,772 | |||
EARNINGS PER COMMON SHARE, BASIC: | |||||||
Net income available for common shareholders | $ 0.67 | $ 1.90 | $ 2.04 | $ 3.31 | |||
Weighted average number of common shares | 81,274 | 80,765 | 81,210 | 79,480 | |||
EARNINGS PER COMMON SHARE, DILUTED: | |||||||
Net income available for common shareholders | $ 0.67 | $ 1.89 | $ 2.04 | $ 3.31 | |||
Weighted average number of common shares | 81,274 | 81,511 | 81,210 | 80,137 |
Federal Realty Investment Trust | ||||||||
Funds From Operations | ||||||||
September 30, 2023 | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
(in thousands, except per share data) | ||||||||
Funds from Operations available for common shareholders (FFO) | ||||||||
Net income | $ 59,392 | $ 158,774 | $ 180,127 | $ 277,969 | ||||
Net income attributable to noncontrolling interests | (2,344) | (2,636) | (7,245) | (8,171) | ||||
Gain on deconsolidation of VIE | — | (70,374) | — | (70,374) | ||||
Gain on sale of real estate | — | (29,723) | (1,702) | (29,723) | ||||
Depreciation and amortization of real estate assets | 71,802 | 67,455 | 212,792 | 196,159 | ||||
Amortization of initial direct costs of leases | 8,116 | 7,454 | 23,468 | 19,129 | ||||
Funds from operations | 136,966 | 130,950 | 407,440 | 384,989 | ||||
Dividends on preferred shares (1) | (1,875) | (1,875) | (5,625) | (5,625) | ||||
Income attributable to downREIT operating partnership units | 693 | 704 | 2,074 | 2,111 | ||||
Income attributable to unvested shares | (494) | (449) | (1,481) | (1,353) | ||||
FFO | $ 135,290 | $ 129,330 | $ 402,408 | $ 380,122 | ||||
Weighted average number of common shares, diluted (1)(2) | 82,004 | 81,511 | 81,942 | 80,232 | ||||
FFO per diluted share (2) | $ 1.65 | $ 1.59 | $ 4.91 | $ 4.74 |
Notes:
(1) | For the three and nine months ended September 30, 2023 and 2022, 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 common shares, diluted." |
(2) | 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. 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 dilutive EPS for the three and nine months ended September 30, 2023. |
Investor Inquiries: Leah Andress Brady Vice President, Investor Relations 301.998.8265 lbrady@federalrealty.com | Media Inquiries: Brenda Pomar Senior Director, Corporate Communications 301.998.8316 bpomar@federalrealty.com |
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SOURCE Federal Realty Investment Trust
Copyright 2023 PR Newswire
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