NORTH BETHESDA, Md., May 5, 2021 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its first quarter ended March 31, 2021. For the three months ended March 31, 2021 and 2020, net income available for common shareholders was $0.60 per diluted share and $0.70 per diluted share, respectively.
Highlights for the quarter and subsequent events include:
- Generated funds from operations available to common shareholders (FFO) per diluted share of $1.17 for the quarter compared to $1.50 for the first quarter 2020.
- Signed leases for 506,307 square feet of comparable space in the first quarter at an average rent of $36.58 psf and achieved cash basis rollover growth of 9%.
- Ended the quarter with $780 million of cash on hand, $1 billion of availability on its undrawn revolving credit facility and no public bonds maturing until 2023.
- Acquired an 80% interest in Chesterbrook, a grocery-anchored shopping center, in McLean, Virginia subsequent to quarter end based on a gross value of $32.1 million.
- Declared a regular quarterly cash dividend of $1.06 per common share, resulting in an indicated annual rate of $4.24 per common share payable on July 15, 2021 to common shareholders of record as of June 22, 2021.
- Provided 2021 earnings per diluted share guidance of $1.54 to $1.70 and an FFO per diluted share guidance range of $4.54 to $4.70.
- Provided 2022 earnings per diluted share guidance of $1.74 to $1.94 and an updated 2022 FFO per diluted share guidance range of $5.05 to $5.25.
"A strong quarter on all fronts as our markets continue the re-opening process," said Donald C. Wood, Chief Executive Officer. "We saw another quarter of strong leasing demand from a broad base of high-quality tenants with first quarter 2021 leasing over 37% higher than our 10-year first quarter average. Federal's high-quality open-air shopping centers and mixed-use communities remain at the top of the list as tenants look to relocate and expand their real estate presence."
Financial Results
Net income available for common shareholders was $46.2 million and earnings per diluted share was $0.60 for first quarter 2021 versus $52.8 million and $0.70, respectively, for first quarter 2020.
In the first quarter 2021, Federal Realty generated FFO of $91.1 million, or $1.17 per diluted share. This compares to FFO of $114.3 million, or $1.50 per diluted share, in first quarter 2020.
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.
Portfolio Results
The portfolio was 91.8% leased as of March 31, 2021, and the comparable portfolio was 91.7% leased.
During the first quarter 2021, Federal Realty signed 110 leases for 514,636 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty leased 506,307 square feet at an average rent of $36.58 per square foot compared to the average contractual rent of $33.64 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 9%, 17% on a straight-line basis.
COVID-19 Operational Update
All 101 properties remain open and operating. Approximately 98% of our retail tenants based on annualized base rent were open and operating as of April 30, 2021. Annualized base rent reflects the aggregate, annualized in-place contractual (defined as rents billed on a cash basis without taking the impact of rent abatements into account) minimum rent for all occupied commercial spaces.
As of April 27, 2021, the Company has collected approximately 90% of total first quarter 2021 billed recurring rents. Including rent deferral and abatement agreements, total addressed recurring rent was 96%.
With $780 million of cash and cash equivalents as of March 31, 2021, Federal Realty has approximately $1.8 billion of liquidity in cash and undrawn availability under its $1 billion revolving credit facility.
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.06 per common share, resulting in an indicated annual rate of $4.24 per common share. The regular common dividend will be payable on July 15, 2021 to common shareholders of record as of June 22, 2021.
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 July 15, 2021 to shareholders of record as of July 1, 2021.
Summary of Other Quarterly Activities and Recent Developments
March 19, 2021 – Federal Realty sold an 8-acre portion of Graham Park Plaza in Falls Church, Virginia for gross proceeds of $20.3 million.
April 16, 2021 – Federal Realty amended its term loan subsequent to quarter end extending the term to April 16, 2024 plus two one-year extensions, reducing the spread over LIBOR from 135 bps to 80 bps and repaying $100.0 million of the existing loan for a remaining balance of $300.0 million.
April 30, 2021 – Federal Realty acquired Chesterbrook, a 90,000 square foot shopping center anchored by Safeway and Rite Aid located in McLean, Virginia. The acquisition closed subsequent to quarter end based on a gross value of $32.1 million. This acquisition was completed through a newly formed joint venture, in which Federal Realty owns an 80% interest.
Guidance
Federal Realty provided 2021 guidance for earnings per diluted share of $1.54 to $1.70 and 2021 FFO per diluted share guidance of $4.54 to $4.70.
Additionally, Federal Realty provided 2022 guidance for earnings per diluted share of $1.74 to $1.94 and 2021 FFO per diluted share guidance of $5.05 to $5.25.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its first quarter 2021 earnings conference call, which is scheduled for Wednesday, May 5, 2021 at 5:00 PM ET. To participate, please call 877.407.9208 five to ten minutes prior to the call start time and use the passcode 13718245 (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 May 19, 2021 by dialing 844.512.2921; Passcode: 13718245.
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 101 properties include approximately 2,800 tenants, in 23 million square feet, and approximately 2,900 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 53 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 11, 2021, 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;
- risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that completion of anticipated or ongoing property redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
- risk that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but not entirely funded;
- 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;
- risks associated with general economic conditions, including 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 the outbreak and worldwide spread of COVID-19), 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 11, 2021 and subsequent quarterly reports on Form 10-Q.
Federal Realty Investment Trust |
Consolidated Balance Sheets |
March 31, 2021 |
| March 31, |
| December 31, |
| 2021 |
| 2020 |
| (in thousands, except share and per share data) |
| (unaudited) |
|
|
ASSETS |
|
|
|
Real estate, at cost |
|
|
|
Operating (including $1,731,961 and $1,703,202 of consolidated variable interest entities, respectively) | $ | 7,840,664 |
|
| $ | 7,771,981 |
|
Construction-in-progress (including $35,359 and $44,896 of consolidated variable interest entities, respectively) | 868,193 |
|
| 810,889 |
|
| 8,708,857 |
|
| 8,582,870 |
|
Less accumulated depreciation and amortization (including $347,041 and $335,735 of consolidated variable interest entities, respectively) | (2,393,380) |
|
| (2,357,692) |
|
Net real estate | 6,315,477 |
|
| 6,225,178 |
|
Cash and cash equivalents | 779,901 |
|
| 798,329 |
|
Accounts and notes receivable, net | 161,249 |
|
| 159,780 |
|
Mortgage notes receivable, net | 39,879 |
|
| 39,892 |
|
Investment in partnerships | 12,148 |
|
| 22,128 |
|
Operating lease right of use assets | 82,721 |
|
| 92,248 |
|
Finance lease right of use assets | 50,795 |
|
| 51,116 |
|
Prepaid expenses and other assets | 227,431 |
|
| 218,953 |
|
TOTAL ASSETS | $ | 7,669,601 |
|
| $ | 7,607,624 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Liabilities |
|
|
|
Mortgages payable, net (including $397,084 and $413,681 of consolidated variable interest entities, respectively) | $ | 466,950 |
|
| $ | 484,111 |
|
Notes payable, net | 403,081 |
|
| 402,776 |
|
Senior notes and debentures, net | 3,404,879 |
|
| 3,404,488 |
|
Accounts payable and accrued expenses | 254,515 |
|
| 228,641 |
|
Dividends payable | 84,872 |
|
| 83,839 |
|
Security deposits payable | 20,867 |
|
| 20,388 |
|
Operating lease liabilities | 63,023 |
|
| 72,441 |
|
Finance lease liabilities | 72,045 |
|
| 72,049 |
|
Other liabilities and deferred credits | 156,227 |
|
| 152,424 |
|
Total liabilities | 4,926,459 |
|
| 4,921,157 |
|
Commitments and contingencies |
|
|
|
Redeemable noncontrolling interests | 138,182 |
|
| 137,720 |
|
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), 399,896 shares issued and outstanding | 9,997 |
|
| 9,997 |
|
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 77,706,466 and 76,727,394 shares issued and outstanding, respectively | 781 |
|
| 771 |
|
Additional paid-in capital | 3,386,917 |
|
| 3,297,305 |
|
Accumulated dividends in excess of net income | (1,024,417) |
|
| (988,272) |
|
Accumulated other comprehensive loss | (2,300) |
|
| (5,644) |
|
Total shareholders' equity of the Trust | 2,520,978 |
|
| 2,464,157 |
|
Noncontrolling interests | 83,982 |
|
| 84,590 |
|
Total shareholders' equity | 2,604,960 |
|
| 2,548,747 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 7,669,601 |
|
| $ | 7,607,624 |
|
Federal Realty Investment Trust |
|
|
|
Consolidated Income Statements |
|
|
|
March 31, 2021 |
|
|
|
| Three Months Ended |
| March 31, |
| 2021 |
| 2020 |
| (in thousands, except per share data) |
| (unaudited) |
REVENUE |
|
|
|
Rental income | $ | 217,135 |
|
| $ | 230,798 |
|
Mortgage interest income | 1,026 |
|
| 759 |
|
Total revenue | 218,161 |
|
| 231,557 |
|
EXPENSES |
|
|
|
Rental expenses | 49,238 |
|
| 44,312 |
|
Real estate taxes | 29,420 |
|
| 29,064 |
|
General and administrative | 10,258 |
|
| 10,251 |
|
Depreciation and amortization | 63,874 |
|
| 62,188 |
|
Total operating expenses | 152,790 |
|
| 145,815 |
|
|
|
|
|
Gain on sale of real estate and change in control of interest | 17,428 |
|
| — |
|
|
|
|
|
OPERATING INCOME | 82,799 |
|
| 85,742 |
|
|
|
|
|
OTHER INCOME/(EXPENSE) |
|
|
|
Other interest income | 363 |
|
| 308 |
|
Interest expense | (32,085) |
|
| (28,445) |
|
Loss from partnerships | (1,338) |
|
| (1,164) |
|
NET INCOME | 49,739 |
|
| 56,441 |
|
Net income attributable to noncontrolling interests | (1,503) |
|
| (1,678) |
|
NET INCOME ATTRIBUTABLE TO THE TRUST | 48,236 |
|
| 54,763 |
|
Dividends on preferred shares | (2,010) |
|
| (2,010) |
|
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ | 46,226 |
|
| $ | 52,753 |
|
|
|
|
|
EARNINGS PER COMMON SHARE, BASIC AND DILUTED: |
|
|
|
Net income available for common shareholders | $ | 0.60 |
|
| $ | 0.70 |
|
Weighted average number of common shares | 76,842 |
|
| 75,360 |
|
Federal Realty Investment Trust |
|
|
|
|
Funds From Operations |
March 31, 2021 |
|
|
|
|
|
| Three Months Ended |
|
| March 31, |
|
| 2021 |
| 2020 |
|
| (in thousands, except per share data) |
Funds from Operations available for common shareholders (FFO) |
|
|
Net income |
| $ | 49,739 |
|
| $ | 56,441 |
|
Net income attributable to noncontrolling interests |
| (1,503) |
|
| (1,678) |
|
Gain on sale of real estate and change in control of interest |
| (17,428) |
|
| — |
|
Depreciation and amortization of real estate assets |
| 57,103 |
|
| 56,046 |
|
Amortization of initial direct costs of leases |
| 4,744 |
|
| 4,900 |
|
Funds from operations |
| 92,655 |
|
| 115,709 |
|
Dividends on preferred shares (1) |
| (2,010) |
|
| (1,875) |
|
Income attributable to operating partnership units (2) |
| 785 |
|
| 790 |
|
Income attributable to unvested shares |
| (325) |
|
| (356) |
|
FFO |
| $ | 91,105 |
|
| $ | 114,268 |
|
Weighted average number of common shares, diluted (1)(2) |
| 77,582 |
|
| 76,208 |
|
FFO per diluted share |
| $ | 1.17 |
|
| $ | 1.50 |
|
|
|
|
|
|
Notes:
- For the three months ended March 31, 2020, 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 included in "weighted average common shares, diluted."
- For the three months ended March 31, 2021 and 2020, the weighted average common shares used to compute FFO per diluted common share includes 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 these periods.
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SOURCE Federal Realty Investment Trust
