FEDERAL REALTY INVESTMENT TRUST ROCKVILLE, Md., May 7, 2015 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2015.
Financial Results
In the first quarter 2015, Federal Realty generated funds from operations available for common shareholders (FFO) of $87.3 million, or $1.26 per diluted share. This compares to FFO of $81.8 million, or $1.21 per diluted share, in first quarter 2014. Net income available for common shareholders was $46.1 million and earnings per diluted share was $0.67 for first quarter 2015, versus $38.6 million and $0.57, respectively, for first quarter 2014.
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
In first quarter 2015, same-center property operating income increased 3.7% over the prior year, excluding properties that are being redeveloped and 3.6% when including those properties.
The overall portfolio was 95.4% leased as of March 31, 2015, compared to 95.6% on both December 31, 2014 and March 31, 2014. Federal Realty's same center portfolio was 96.0% leased on March 31, 2015, compared to 95.8% on December 31, 2014 and 95.9% on March 31, 2014.
During first quarter 2015, Federal Realty signed 86 leases for 279,586 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty leased 249,295 square feet at an average cash basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 11%. The average contractual rent on this comparable space for the first year of the new leases is $37.50 per square foot compared to the average contractual rent of $33.70 per square foot for the last year of the prior leases. The previous average contractual rent was calculated by including both the minimum rent and any percentage rent actually paid during the last year of the lease term for the re-leased space. On a GAAP basis (i.e., including the impact of straight-line rents), rent increases per square foot for comparable retail space averaged 22% for first quarter 2015. As of March 31, 2015, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio was $25.55 per square foot.
Summary of Other Quarterly Activities and Recent Developments
-- May 7, 2015--Federal Realty today announced it is proceeding with Phase
II of Assembly Row, which will include 167,000 square feet of new retail
space, 447 high-end apartments, 117 luxury condominium residences and a
155 room boutique hotel to be owned in a joint venture partnership.
Phase II also includes the 700,000 square foot office building being
constructed by Partners HealthCare.
-- May 4, 2015--Federal Realty acquired an 80% interest in a 198,000 square
foot lifestyle center in South Florida, based on a total value of $87.5
million. Situated in the resurgent Coconut Grove District, at the
prominent intersection of Main Highway and Grand Avenue, CocoWalk is
well located to serve the affluent, year round residents of Miami-Dade.
-- April 24, 2015--Federal Realty closed on the sale of its Houston St.
property in San Antonio, Texas, for a sales price of $46.1 million.
-- March 16, 2015--Federal Realty issued $200 million aggregate principal
amount of 4.50% senior unsecured notes due December 1, 2044. The notes
were offered at 105.379% of the principal amount with a yield to
maturity of 4.179%. The notes have the same terms and are of the same
series as the $250 million senior notes issued in November 2014. The
proceeds were used to redeem its 6.20% senior unsecured notes due 2017
for an aggregate principal of $200 million. The redemption was completed
on April 11, 2015 and included a prepayment premium of $19 million.
"We are pleased with yet another quarter of strong performance, driven by our core portfolio and bolstered by deliveries from our development and redevelopment pipelines," commented Donald C. Wood, President and Chief Executive Officer of Federal Realty. "There's a lot to be excited about this quarter, and there's a lot to be excited about going forward. With the ongoing, successful deliveries of the initial phases of Pike & Rose and Assembly Row, our recent acquisition of CocoWalk, and our decision to proceed with Phase II at Assembly Row, we continue to execute very well on our long-term business plan."
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend on its common shares of $0.87 per share, resulting in an indicated annual rate of $3.48 per share. The regular common dividend will be payable on July 15, 2015 to common shareholders of record on June 22, 2015.
Guidance
We have maintained our 2015 guidance for FFO per diluted share excluding early extinguishment of debt of $5.26 to $5.34, and updated earnings per diluted share to $2.75 to $2.83.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2015 earnings conference call, which is scheduled for May 8, 2015, at 10 a.m. Eastern Daylight Time. To participate, please call (877) 445-3230 five to ten minutes prior to the call start time and use the passcode 16324379 (required). Federal Realty will also provide an online webcast on the Company's web site, http://www.federalrealty.com, which will remain available for 30 days following the call. A telephone recording of the call will also be available through May 15, 2015, by dialing (855) 859-2056 and using the passcode 16324379.
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, our mission is to deliver long term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Our 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 90 properties include over 2,600 tenants, in approximately 21 million square feet, and 1500 residential units.
Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 47 consecutive years, the longest record in the REIT industry. Federal Realty 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 10, 2015, 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 redevelopments or
renovation projects that we do pursue may cost more, take more time to
complete, or fail to perform as expected;
-- risks 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, such as our ability to consummate additional
financings or obtain replacement 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; and
-- 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.
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 may be 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 carefully review the risks and risk factors included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 10, 2015.
Investor Inquiries Media Inquiries
------------------ ---------------
Brittany Schmelz Andrea Simpson
Investor Relations Coordinator Director, Marketing
301/998-8265 617/684-1511
bschmelz@federalrealty.com asimpson@federalrealty.com
Federal Realty Investment Trust
Summarized Balance Sheets
March 31, 2015
March 31, December 31,
2015 2014
---- ----
(in thousands)
(unaudited)
ASSETS
Real estate, at cost
Operating
(including
$266,198
and
$282,303
of
consolidated
variable
interest
entities,
respectively) $5,208,904 $5,128,757
Construction-
in-
progress 466,469 480,241
Asset held
for sale 61,987 -
------
5,737,360 5,608,998
Less
accumulated interest
depreciation entities,
and respectively)
amortization
(including
$27,873
and
$26,618 of
consolidated
variable (1,500,976) (1,467,050)
---------- ----------
Net real
estate 4,236,384 4,141,948
Cash and
cash
equivalents 171,437 47,951
Accounts
and notes
receivable,
net 100,981 93,291
Mortgage
notes
receivable,
net 50,911 50,988
Investment
in real
estate
partnerships 37,538 37,457
Prepaid
expenses
and other
assets 183,499 175,235
TOTAL
ASSETS $4,780,750 $4,546,870
========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Mortgages
and variable
capital interest
lease entities,
obligations respectively)
(including
$179,789
and
$187,632
of
consolidated $651,392 $635,345
Notes
payable 290,577 290,519
Senior
notes and
debentures 1,694,764 1,483,813
Accounts
payable
and other
liabilities 332,946 325,584
Total
liabilities 2,969,679 2,735,261
Redeemable
noncontrolling
interests 119,145 119,053
Shareholders' equity
Preferred
shares 9,997 9,997
Common
shares and
other
shareholders'
equity 1,581,572 1,594,404
Total
shareholders'
equity of
the Trust 1,591,569 1,604,401
Noncontrolling
interests 100,357 88,155
------- ------
Total
shareholders'
equity 1,691,926 1,692,556
TOTAL
LIABILITIES
AND
SHAREHOLDERS'
EQUITY $4,780,750 $4,546,870
========== ==========
Federal Realty
Investment Trust
Summarized Income
Statements
March 31, 2015
Three Months Ended
March 31,
---------
2015 2014
---- ----
(in thousands, except per share data)
(unaudited)
Revenue
Rental income $181,166 $166,193
Other property
income 2,465 3,400
Mortgage interest
income 1,161 1,235
----- -----
Total revenue 184,792 170,828
------- -------
Expenses
Rental expenses 41,439 37,130
Real estate taxes 20,394 18,700
General and
administrative 8,853 7,704
Depreciation and
amortization 41,984 43,850
------ ------
Total operating
expenses 112,670 107,384
------- -------
Operating income 72,122 63,444
Other interest
income 29 25
Interest expense (24,168) (23,137)
Income from real
estate
partnerships 220 213
--- ---
Net income 48,203 40,545
Net income
attributable to
noncontrolling
interests (2,017) (1,792)
------ ------
Net income
attributable to
the Trust 46,186 38,753
Dividends on
preferred shares (135) (135)
---- ----
Net income
available for
common
shareholders $46,051 $38,618
======= =======
EARNINGS PER
COMMON SHARE,
BASIC $0.67 $0.58
===== =====
Weighted average
number of common
shares, basic 68,368 66,615
====== ======
EARNINGS PER
COMMON SHARE,
DILUTED $0.67 $0.57
===== =====
Weighted average
number of common
shares, diluted 68,563 66,773
====== ======
Federal
Realty
Investment
Trust
Funds From Operations
March 31,
2015
Three Months Ended
March 31,
---------
2015 2014
---- ----
(in thousands, except per share data)
Funds from
Operations
available
for
common
shareholders
(FFO)
-------------
Net income $48,203 $40,545
Net income
attributable
to
noncontrolling
interests (2,017) (1,792)
Depreciation
and
amortization
of real
estate
assets 36,953 39,549
Amortization
of
initial
direct
costs of
leases 3,440 2,831
Depreciation
of joint
venture
real
estate
assets 331 409
--- ---
Funds from
operations 86,910 81,542
Dividends
on
preferred
shares (135) (135)
Income
attributable
to
operating
partnership
units 833 716
Income
attributable
to
unvested
shares (320) (369)
FFO $87,288 $81,754
======= =======
FFO per
diluted
share $1.26 $1.21
===== =====
Weighted
average
number of
common
shares,
diluted 69,515 67,691
====== ======
Federal Realty Investment Trust
Reconciliation of Net Income to FFO
Guidance
March 31, 2015
2015 Guidance
-------------
(Dollars in millions except
per share amounts) (1)
Funds from Operations available for
common shareholders (FFO)
-----------------------------------
Net income $200 $206
Net income attributable to
noncontrolling interests (8) (8)
Gain on sale of real
estate (11) (11)
Depreciation and
amortization of real
estate & joint venture
real estate assets 155 155
Amortization of initial
direct costs of leases 13 13
Funds from operations 349 354
Dividends on preferred
shares (1) (1)
Income attributable to
operating partnership
units 3 3
Income attributable to
unvested shares (1) (1)
FFO $350 $356
Early extinguishment of
debt, net of allocation
to unvested shares 19 19
FFO excluding early
extinguishment of debt $369 $375
==== ====
Weighted average number of
common shares, diluted 70.2 70.2
FFO excluding early
extinguishment of debt,
per diluted share $5.26 $5.34
===== =====
Note:
-----
(1) - Individual items may not add up to total due to rounding.
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SOURCE Federal Realty Investment Trust
