NORTH BETHESDA, Md., Feb. 13, 2025 -- Federal Realty Investment Trust (NYSE: FRT) today announced its operating results for the fourth quarter and full year ended December 31, 2024. Net income available for common shareholders was $3.42 per diluted share for the full year 2024 and $0.75 per diluted share for the fourth quarter, compared to $2.80 and $0.76 per diluted share for the same periods in 2023, respectively. Operating income for 2024 totaled $472.4 million, with $109.3 million in the fourth quarter, compared to $406.5 million and $108.8 million, respectively, in 2023.
Highlights for the full year, fourth quarter and subsequent to quarter-end include:
- Generated funds from operations available to common shareholders (FFO) per diluted share of $6.77 for the year, compared to $6.55 in 2023. For the fourth quarter, generated FFO per diluted share of $1.73, compared to $1.64 for the fourth quarter 2023.
- Generated comparable property operating income (POI) excluding lease termination fees and prior period rents collected growth of 3.4% for the year 2024 and 4.2% for the fourth quarter.
- Record-breaking leasing in 2024:
- Achieved the highest annual comparable leasing volume on record with 452 signed comparable leases for 2.4 million square feet at an 11% cash basis rollover, and
- Achieving the highest quarterly comparable leasing volume on record with 100 signed comparable retail leases totaling 649,372 square feet in the fourth quarter at a 10% cash basis rollover.
- As of December 31, 2024, Federal Realty's commercial portfolio was:
- 94.1% occupied, a +190 basis point increase year-over-year, and
- 96.2% leased, a +200 basis point increase year-over-year.
- Continued strong small shop leasing, ending the quarter at 93.6% leased representing an increase of +290 basis points year-over-year.
- Subsequent to quarter end, announced two new redevelopment projects:
- Residential redevelopment in Hoboken, NJ at a projected cost of $45 - $48 million and projected return on investment (ROI) of 6% - 7%, and
- Redevelopment of Andorra Shopping Center in Philadelphia, PA at a projected cost of $32 million and projected incremental ROI of 7% - 8%.
- Under contract to purchase an approximately 673,000 square foot shopping center in Northern California for $124 million which is expected to close in late February 2025.
- Introduced 2025 earnings per diluted share guidance of $3.00 to $3.12 and 2025 FFO per diluted share guidance of $7.10 to $7.22.
"2024 was a record-shattering year, with unprecedented leasing momentum leading the way," said Donald C. Wood, Federal Realty's Chief Executive Officer. "We achieved all-time highs in leasing volume, revenue, and earnings, surpassing previous records by a significant margin, and occupancy reached its highest level in almost a decade. Our portfolio remains strong, anchored by resilient operators, supported by favorable supply-demand dynamics, and bolstered by strong demographics. With this momentum, we are well-positioned for even stronger growth in 2025 and beyond."
Financial Results
Net Income
For the full year 2024, Federal Realty reported net income available for common shareholders of $287.2 million and earnings per diluted share of $3.42. This compares to net income available for common shareholders of $229.0 million and earnings per diluted share of $2.80 for the full year 2023.
For the fourth quarter 2024, net income available for common shareholders was $63.5 million and earnings per diluted share was $0.75 versus $62.1 million and $0.76, respectively, for the fourth quarter 2023.
FFO
For the full year 2024, Federal Realty generated funds from operations available for common shareholders (FFO) of $570.2 million, or $6.77 per diluted share. This compares to FFO of $537.3 million, or $6.55 per diluted share for the full year 2023.
For the fourth quarter 2024, FFO was $147.6 million, or $1.73 per diluted share, compared to $134.9 million, or $1.64 per diluted share for the fourth quarter 2023.
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 94.1% occupied as of December 31, 2024, an increase of +190 basis points year-over-year. Federal Realty's portfolio was 96.2% leased as of December 31, 2024, an increase of +200 basis points year-over-year.
Small shop leased rate was 93.6% as of December 31, 2024, an increase of +290 basis points year-over-year. The anchor tenant leased rate was 97.5%, reflecting an increase of +150 basis points year-over-year.
Additionally, Federal Realty's residential properties were 95.2% leased as of December 31, 2024.
Leasing Activity
For the full year 2024, Federal Realty signed 467 leases for 2,434,394 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 452 leases for 2,391,575 square feet at an average rent of $35.80 per square foot compared to the average contractual rent of $32.29 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 11%, 22% on a straight-line basis. Comparable leases represented 97% of total comparable and non-comparable leases signed during 2024.
During the fourth quarter 2024, Federal Realty signed 103 leases for 653,869 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 649,372 square feet at an average rent of $34.29 per square foot compared to the average contractual rent of $31.18 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 10%, 21% on a straight-line basis. Comparable leases represented 97% of total comparable and non-comparable leases signed during the fourth quarter 2024.
Redevelopment
Subsequent to quarter end, Federal Realty announced a residential development at 301 Washington Street in Hoboken, NJ. The project is a 5-story residential building on a highly visible corner which will include 45 residential units and 10,200 square feet of ground floor retail space in the prime retail corridor of Washington Street. The project has a projected cost of $45- $48 million and projected return on investment (ROI) of 6% - 7%.
Additionally, Federal Realty announced the redevelopment of Andorra Shopping Center in Philadelphia, PA. The redevelopment will include the demolition of existing anchor and small shop spaces to construct a 50,000 square foot turnkey building for a national grocer tenant and the redevelopment of existing space at the north end of the property to construct an anchor and multiple small-shop spaces. The redevelopment has a projected cost of $32 million and projected incremental ROI of 7% - 8%.
Acquisitions
Federal Realty is under contract to purchase an approximately 673,000 square foot shopping center in Northern California for $124 million which is expected to close in late February 2025.
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.10 per common share, resulting in an indicated annual rate of $4.40 per common share. The regular common dividend will be payable on April 15, 2025 to common shareholders of record as of April 1, 2025.
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 April 15, 2025 to shareholders of record as of April 1, 2025.
2025 Initial Guidance
2025 Earnings per diluted share | $3.00 - $3.12 |
2025 FFO per diluted share | $7.10 - $7.22 |
The company's initial 2025 guidance is based on the following assumptions:
Comparable properties growth(1) | 3% - 4% |
Acquisitions | $124 million |
Lease termination fees | $4 - $5 million |
Incremental redevelopment / expansion POI (2) | $3 - $5 million |
General and administrative expenses | $45 - $48 million |
Development / redevelopment capital | $175 - $225 million |
Capitalized interest | $12 - $14 million |
Tax credit transaction income, net | ~$13 million |
Disposed properties – 2024 POI | $5 million |
(1) | Includes a 0.4% negative impact from lower collection of prior period rents which were contractually deferred, specifically related to the COVID-19 pandemic. |
(2) | Includes the expected additional POI to be recognized in 2025 compared to the amount recognized in 2024 from all of the redevelopments listed on page 16 of our supplemental disclosure except those labeled as "stabilized." Does not include any additional POI from "Active Property Improvement Projects." |
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its fourth quarter 2024 earnings conference call, which is scheduled for Thursday, February 13, 2025 at 5:00 PM ET. To participate, please call 844-826-3035 or 412-317-5195 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 February 27, 2025 by dialing 844-512-2921 or 412-317-6671; Passcode: 10195673.
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 Northern and Southern California. 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 3,500 tenants, in 27 million commercial square feet, and approximately 3,100 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 57 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 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 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.
Federal Realty Investment Trust | |||
Consolidated Balance Sheets | |||
December 31, 2024 | |||
December 31, | |||
2024 | 2023 | ||
(in thousands, except share and | |||
ASSETS | |||
Real estate, at cost | |||
Operating (including $1,825,656 and $2,021,622 of consolidated variable interest | $ 10,363,961 | $ 9,932,891 | |
Construction-in-progress (including $9,939 and $8,677 of consolidated variable interest | 539,752 | 613,296 | |
10,903,713 | 10,546,187 | ||
Less accumulated depreciation and amortization (including $424,044 and $416,663 of | (3,152,799) | (2,963,519) | |
Net real estate | 7,750,914 | 7,582,668 | |
Cash and cash equivalents | 123,409 | 250,825 | |
Accounts and notes receivable, net | 229,080 | 201,733 | |
Mortgage notes receivable, net | 9,144 | 9,196 | |
Investment in partnerships | 33,458 | 34,870 | |
Operating lease right of use assets, net | 85,806 | 86,993 | |
Finance lease right of use assets, net | 6,630 | 6,850 | |
Prepaid expenses and other assets | 286,316 | 263,377 | |
TOTAL ASSETS | $ 8,524,757 | $ 8,436,512 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Liabilities | |||
Mortgages payable, net (including $186,643 and $189,286 of consolidated variable | $ 514,378 | $ 516,936 | |
Notes payable, net | 601,414 | 601,945 | |
Senior notes and debentures, net | 3,357,840 | 3,480,296 | |
Accounts payable and accrued expenses | 183,564 | 174,714 | |
Dividends payable | 96,743 | 92,634 | |
Security deposits payable | 30,941 | 30,482 | |
Operating lease liabilities | 74,837 | 75,870 | |
Finance lease liabilities | 12,783 | 12,670 | |
Other liabilities and deferred credits | 227,827 | 225,443 | |
Total liabilities | 5,100,327 | 5,210,990 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 180,286 | 183,363 | |
Shareholders' equity | |||
Preferred shares, authorized 15,000,000 shares, $0.01 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, $0.01 par, 200,000,000 shares authorized, | 862 | 833 | |
Additional paid-in capital | 4,248,824 | 3,959,276 | |
Accumulated dividends in excess of net income | (1,242,654) | (1,160,474) | |
Accumulated other comprehensive income | 4,740 | 4,052 | |
Total shareholders' equity of the Trust | 3,171,594 | 2,963,509 | |
Noncontrolling interests | 72,550 | 78,650 | |
Total shareholders' equity | 3,244,144 | 3,042,159 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 8,524,757 | $ 8,436,512 | |
Federal Realty Investment Trust | |||||||
Consolidated Income Statements | |||||||
December 31, 2024 | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
REVENUE | |||||||
Rental income | $ 303,878 | $ 283,796 | $ 1,170,078 | $ 1,101,439 | |||
Other property income | 7,286 | 7,736 | 31,258 | 29,602 | |||
Mortgage interest income | 280 | 280 | 1,116 | 1,113 | |||
Total revenue | 311,444 | 291,812 | 1,202,452 | 1,132,154 | |||
EXPENSES | |||||||
Rental expenses | 65,121 | 62,256 | 249,569 | 231,666 | |||
Real estate taxes | 36,828 | 33,437 | 142,230 | 131,429 | |||
General and administrative | 14,819 | 13,100 | 49,739 | 50,707 | |||
Depreciation and amortization | 87,117 | 82,421 | 342,598 | 321,763 | |||
Total operating expenses | 203,885 | 191,214 | 784,136 | 735,565 | |||
Gain on sale of real estate | 1,760 | 8,179 | 54,040 | 9,881 | |||
OPERATING INCOME | 109,319 | 108,777 | 472,356 | 406,470 | |||
OTHER INCOME/(EXPENSE) | |||||||
Other interest income | 782 | 912 | 4,294 | 4,687 | |||
Interest expense | (43,234) | (42,974) | (175,476) | (167,809) | |||
Income from partnerships | 1,335 | 375 | 3,160 | 3,869 | |||
NET INCOME | 68,202 | 67,090 | 304,334 | 247,217 | |||
Net income attributable to noncontrolling interests | (2,665) | (2,987) | (9,126) | (10,232) | |||
NET INCOME ATTRIBUTABLE TO THE TRUST | 65,537 | 64,103 | 295,208 | 236,985 | |||
Dividends on preferred shares | (2,008) | (2,008) | (8,032) | (8,032) | |||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ 63,529 | $ 62,095 | $ 287,176 | $ 228,953 | |||
EARNINGS PER COMMON SHARE, BASIC: | |||||||
Net income available for common shareholders | $ 0.75 | $ 0.76 | $ 3.42 | $ 2.80 | |||
Weighted average number of common shares | 84,685 | 81,617 | 83,559 | 81,313 | |||
EARNINGS PER COMMON SHARE, DILUTED: | |||||||
Net income available for common shareholders | $ 0.75 | $ 0.76 | $ 3.42 | $ 2.80 | |||
Weighted average number of common shares | 84,692 | 81,617 | 83,566 | 81,313 | |||
Federal Realty Investment Trust | ||||||||
Funds From Operations | ||||||||
December 31, 2024 | ||||||||
Three Months Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in thousands, except per share data) | ||||||||
Funds from Operations available for common shareholders (FFO) | ||||||||
Net income | $ 68,202 | $ 67,090 | $ 304,334 | $ 247,217 | ||||
Net income attributable to noncontrolling interests | (2,665) | (2,987) | (9,126) | (10,232) | ||||
Gain on sale of real estate | (1,760) | (8,179) | (54,040) | (9,881) | ||||
Depreciation and amortization of real estate assets | 76,779 | 72,897 | 302,455 | 285,689 | ||||
Amortization of initial direct costs of leases | 8,704 | 7,740 | 33,377 | 31,208 | ||||
Funds from operations | 149,260 | 136,561 | 577,000 | 544,001 | ||||
Dividends on preferred shares (1) | (1,875) | (1,875) | (7,500) | (7,500) | ||||
Income attributable to downREIT operating partnership units | 675 | 693 | 2,743 | 2,767 | ||||
Income attributable to unvested shares | (481) | (474) | (2,004) | (1,955) | ||||
FFO | $ 147,579 | $ 134,905 | $ 570,239 | $ 537,313 | ||||
Weighted average number of common shares, diluted (1)(2) | 85,402 | 82,346 | 84,286 | 82,044 | ||||
FFO per diluted share (2) | $ 1.73 | $ 1.64 | $ 6.77 | $ 6.55 | ||||
Notes: | |
(1) | For the three months and year ended December 31, 2024 and 2023, 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) | 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, but is anti-dilutive for the computation of dilutive EPS for the three months and year ended December 31, 2024 and 2023. |
Investor Inquiries: Leah Andress Brady Vice President, Investor Relations 301.998.8265 | Media Inquiries: Brenda Pomar Senior Director, Corporate Communications 301.998.8316 |
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