PR Newswire
NORTH BETHESDA, Md., July 31, 2026 /PRNewswire/ — Federal Realty Investment Trust (NYSE: FRT) today reported its results for the second quarter ended June 30, 2026. For the three months ended June 30, 2026 and 2025, net income available for common shareholders per diluted share was $0.97 and $1.78, respectively, with the year-over-year decline primarily driven by a lower gain on the sale of real estate compared to the prior year period, as well as the absence of a one-time tax credit benefit recognized in the second quarter of 2025. Operating income for the same periods was $138.7 million and $202.7 million, respectively.
Highlights for the second quarter include:
- Generated Core funds from operations available to common shareholders (Core FFO) per diluted share of $1.88 for the quarter, a 6.8% increase year-over-year.
- Signed 124 leases for 819,273 square feet of comparable retail space — an all-time volume record — with rent growth of 15% on a cash basis and 28% on a straight-line basis.
- Generated Adjusted Comparable Property Operating Income (POI) growth (excluding straight-line rents and amortization of in-place leases) of 4.2%.
- Comparable POI growth was 2.8%.
- Reported overall portfolio occupancy of 93.8% and a leased rate of 96.1% at quarter end, with:
- Occupancy and leased rate both flat sequentially.
- Occupancy up 20 basis points and leased rate up 70 basis points year-over-year.
- Continued strong small shop leased rate, ending the quarter at 93.9% leased — representing an increase of 50 basis points year-over-year and 10 basis points sequentially.
- Acquired an adjacent retail parcel at Kingstowne Towne Center in Alexandria, VA for $19.7 million on April 17, 2026, completing the retail assemblage at the center.
- Sold two properties during the second quarter for a combined $66.1 million.
- Increased the regular quarterly cash dividend by 3% to $1.16 per common share, resulting in an indicated annual rate of $4.64 per common share. This marks the 59th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.
- Hosted an Investor Day at Federal Realty’s flagship Santana Row property, where management introduced a framework for long-term FFO and AFFO per share growth targets through 2028.
- Raised and tightened guidance for 2026 earnings per diluted share to $4.22 to $4.30.
- Raised and tightened guidance for both 2026 Nareit FFO and Core FFO per diluted share to $7.48 to $7.56, representing 6.5% Core FFO growth at the midpoint year-over-year.
“This was another quarter of record leasing activity and outsized FFO growth, extending a trend we’ve sustained for several quarters now, and it’s exactly why we’re confident executing against the long-term plan we shared with investors at Santana Row,” said Donald C. Wood, President and Chief Executive Officer of Federal Realty. “It all comes back to productivity — getting more out of the exceptional real estate we already own — and that discipline is what’s translating into durable growth for our shareholders.”
Financial Results
Net Income
For the second quarter of 2026, net income available for common shareholders was $83.7 million and earnings per diluted share was $0.97 versus $153.9 million and $1.78, respectively, for the second quarter of 2025, with the year-over-year decline primarily driven by a lower gain on the sale of real estate this quarter ($20.6 million compared to $76.5 million in the prior year period) and, to a lesser extent, the absence of a one-time tax credit benefit recognized in the second quarter of 2025.
FFO
Nareit FFO was $162.8 million, or $1.88 per diluted share, for the second quarter of 2026, compared to $165.5 million, or $1.91 per diluted share, in the second quarter of 2025, a 1.6% per share decline. The year-over-year decline is due to a one-time $13.0 million, or $0.15 per share, of new market tax credit transaction income recognized in the second quarter of 2025.
Core FFO was $162.8 million, or $1.88 per diluted share, for the second quarter of 2026, compared to $152.5 million, or $1.76 per diluted share, in the second quarter of 2025, a 6.8% per-share increase.
Nareit FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. Core FFO adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the company’s ongoing operating and financial performance. See attachments for a reconciliation of Nareit FFO and Core FFO and a full definition of Core FFO.
Operational Update
Occupancy
The following operational metrics for the commercial portfolio are as of June 30, 2026:
- Overall portfolio occupancy was 93.8%, flat sequentially and up 20 basis points year-over-year.
- Overall portfolio leased rate was 96.1%, flat sequentially and up 70 basis points year-over-year.
- Small shop leased rate was 93.9%, up 10 basis points sequentially and up 50 basis points year-over-year.
The residential leased rate for comparable properties was 97.0% as of June 30, 2026, down 20 basis points year-over-year.
Leasing Activity
During the second quarter of 2026, Federal Realty signed 131 leases totaling 852,051 square feet of retail space. On a comparable space basis, the company signed 124 leases for 819,273 square feet — an all-time volume record — at an average rent of $33.68 per square foot, compared to $29.23 under prior leases, representing a 15% increase on a cash basis and 28% increase on a straight-line basis.
On a trailing twelve-month basis, Federal Realty signed 453 comparable leases totaling 2,796,064 square feet — also a volume record for any 12-month period — representing 17% rent spreads on a cash basis and 29% on a straight-line basis.
Transaction Activity
- April 17, 2026 — acquired an adjacent 88,000-square-foot retail parcel at Kingstowne Towne Center in Alexandria, VA for $19.7 million, completing the retail assemblage at the center, which Federal Realty originally acquired in 2022.
- May 8, 2026 — sold 3131 Commodore Plaza in Coconut Grove, FL for $8.1 million.
- May 21, 2026 — sold Barcroft Plaza in Falls Church, VA for $58.0 million.
Development Activity
Fully delivered the residential units at Blayr, a mixed-use development on City Avenue in Bala Cynwyd, PA, featuring 217 residential units, 19,000 square feet of ground-floor retail, and on-site parking.
Other Activity*
- Hosted an Investor Day on May 21, 2026 at the company’s flagship Santana Row property, where management provided an update on the company’s long-term growth strategy and introduced a framework for long-term FFO and AFFO per share growth targets through 2028. A replay of the webcast, along with the presentation and tour books, is available at: https://www.federalrealty.com/investor-day-2026
- Released the company’s 2025 Sustainability Report, available at: https://www.federalrealty.com/sustainability-report-2025
* The contents of our website are not included in or incorporated by reference into this press release.
Financing Activity
- On April 14, 2026, the company amended and restated the $1.25 billion revolving credit facility, increasing the borrowing capacity to $1.4 billion, reducing the SOFR spread to 72.5 basis points, and extending the maturity date to April 12, 2030, plus two optional six-month extensions.
- During the second quarter, the company issued 493,374 common shares under its at-the-market (ATM) equity offering program at a weighted average price of $123.92 per share, generating gross proceeds of $61.1 million.
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees increased the regular quarterly cash dividend to $1.16 per common share, resulting in an indicated annual rate of $4.64 per common share. The regular common dividend will be payable on October 15, 2026 to common shareholders of record as of October 1, 2026. This increase represents the 59th 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, 2026 to shareholders of record as of October 1, 2026.
2026 Guidance
Federal Realty has raised and tightened its 2026 earnings per diluted share, Nareit FFO, and Core FFO guidance, as summarized in the table below:
|
|
|
|
|
Net income available for common shareholders per diluted share |
$4.22 to $4.30 |
$3.94 to $4.03 |
|
Nareit FFO per diluted share |
$7.48 to $7.56 |
$7.46 to $7.55 |
|
Core FFO per diluted share |
$7.48 to $7.56 |
$7.46 to $7.55 |
|
Comparable Property POI Growth1 |
3.25% to 3.75% |
3.125% to 3.625% |
|
|
|
|
|
|
||
Conference Call Information
Federal Realty’s management team will present an in-depth discussion of Federal Realty’s operating performance on its second quarter 2026 earnings conference call, which is scheduled for Friday, July 31, 2026 at 9:00 AM ET. To participate, please call 833-821-4548 or 412-652-1258 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 14, 2026 by dialing 844-512-2921 or 412-317-6671; Passcode: 10209822.
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 103 properties include approximately 3,700 tenants in 28.8 million commercial square feet, and approximately 2,500 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 59 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 12, 2026 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 12, 2026 and subsequent quarterly reports on Form 10-Q.
|
Investor Inquiries: |
Media Inquiries: |
|---|
|
|
|||
|
|
|||
|
|
|||
|
|
|
||
|
|
|
||
|
|
|||
|
|
|||
|
ASSETS |
|||
|
Real estate, at cost |
|||
|
Operating (including $1,901,302 and $1,832,190 of consolidated variable interest |
$ 11,348,512 |
$ 11,265,167 |
|
|
Construction-in-progress (including $37,695 and $28,418 of consolidated variable |
329,803 |
374,735 |
|
|
11,678,315 |
11,639,902 |
||
|
Less accumulated depreciation and amortization (including $487,052 and $468,725 of |
(3,444,324) |
(3,351,881) |
|
|
Net real estate |
8,233,991 |
8,288,021 |
|
|
Cash and cash equivalents |
107,246 |
107,415 |
|
|
Accounts and notes receivable, net |
262,108 |
249,755 |
|
|
Mortgage notes receivable, net |
— |
9,091 |
|
|
Investment in partnerships |
30,571 |
31,881 |
|
|
Operating lease right of use assets, net |
81,644 |
83,120 |
|
|
Finance lease right of use assets, net |
6,301 |
6,410 |
|
|
Prepaid expenses and other assets |
337,258 |
354,767 |
|
|
TOTAL ASSETS |
$ 9,059,119 |
$ 9,130,460 |
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||
|
Liabilities |
|||
|
Mortgages payable, net (including $190,863 and $194,176 of consolidated variable |
$ 518,371 |
$ 521,759 |
|
|
Notes payable, net |
1,282,856 |
1,057,331 |
|
|
Senior notes and debentures, net |
2,966,685 |
3,364,010 |
|
|
Accounts payable and accrued expenses |
217,548 |
219,678 |
|
|
Dividends payable |
100,490 |
99,792 |
|
|
Security deposits payable |
32,809 |
31,548 |
|
|
Operating lease liabilities |
70,943 |
72,304 |
|
|
Finance lease liabilities |
12,966 |
12,903 |
|
|
Other liabilities and deferred credits |
238,760 |
250,494 |
|
|
Total liabilities |
5,441,428 |
5,629,819 |
|
|
Commitments and contingencies |
|||
|
Redeemable noncontrolling interests |
183,119 |
181,655 |
|
|
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, |
876 |
869 |
|
|
Additional paid-in capital |
4,374,872 |
4,310,365 |
|
|
Accumulated dividends in excess of net income |
(1,179,380) |
(1,224,372) |
|
|
Accumulated other comprehensive income |
8,340 |
2,047 |
|
|
Total shareholders’ equity of the Trust |
3,364,530 |
3,248,731 |
|
|
Noncontrolling interests |
70,042 |
70,255 |
|
|
Total shareholders’ equity |
3,434,572 |
3,318,986 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ 9,059,119 |
$ 9,130,460 |
|
|
|
|||||||
|
|
|||||||
|
|
|||||||
|
|
|
||||||
|
|
|
||||||
|
|
|
|
|
||||
|
|
|||||||
|
|
|||||||
|
REVENUE |
|||||||
|
Rental income |
$ 325,896 |
$ 302,477 |
$ 658,554 |
$ 604,771 |
|||
|
Other property income |
9,797 |
8,769 |
17,687 |
15,354 |
|||
|
Mortgage interest income |
13 |
277 |
549 |
552 |
|||
|
Total revenue |
335,706 |
311,523 |
676,790 |
620,677 |
|||
|
EXPENSES |
|||||||
|
Rental expenses |
64,491 |
61,609 |
139,188 |
129,413 |
|||
|
Real estate taxes |
39,077 |
36,681 |
78,048 |
73,248 |
|||
|
General and administrative |
13,470 |
11,925 |
25,395 |
22,800 |
|||
|
Depreciation and amortization |
100,623 |
89,241 |
199,840 |
176,187 |
|||
|
Total operating expenses |
217,661 |
199,456 |
442,471 |
401,648 |
|||
|
Gain on sale of real estate |
20,617 |
76,501 |
113,328 |
77,672 |
|||
|
New market tax credit transaction income |
— |
14,176 |
— |
14,176 |
|||
|
OPERATING INCOME |
138,662 |
202,744 |
347,647 |
310,877 |
|||
|
OTHER INCOME/(EXPENSE) |
|||||||
|
Other interest income |
563 |
905 |
1,603 |
1,648 |
|||
|
Interest expense |
(50,008) |
(44,598) |
(99,124) |
(87,073) |
|||
|
(Loss) income from partnerships |
(664) |
905 |
(503) |
1,082 |
|||
|
NET INCOME |
88,553 |
159,956 |
249,623 |
226,534 |
|||
|
Net income attributable to noncontrolling interests |
(2,851) |
(4,040) |
(4,822) |
(6,850) |
|||
|
NET INCOME ATTRIBUTABLE TO THE TRUST |
85,702 |
155,916 |
244,801 |
219,684 |
|||
|
Dividends on preferred shares |
(2,008) |
(2,008) |
(4,016) |
(4,016) |
|||
|
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS |
$ 83,694 |
$ 153,908 |
$ 240,785 |
$ 215,668 |
|||
|
EARNINGS PER COMMON SHARE, BASIC |
|||||||
|
Net income available for common shareholders |
$ 0.97 |
$ 1.78 |
$ 2.79 |
$ 2.51 |
|||
|
Weighted average number of common shares |
86,183 |
85,969 |
86,112 |
85,722 |
|||
|
EARNINGS PER COMMON SHARE, DILUTED |
|||||||
|
Net income available for common shareholders |
$ 0.97 |
$ 1.78 |
$ 2.78 |
$ 2.51 |
|||
|
Weighted average number of common shares |
86,183 |
86,611 |
86,639 |
86,300 |
|||
|
|
||||||||
|
|
||||||||
|
|
||||||||
|
|
|
|||||||
|
|
|
|||||||
|
|
|
|
|
|||||
|
|
||||||||
|
|
||||||||
|
Net income |
$ 88,553 |
$ 159,956 |
$ 249,623 |
$ 226,534 |
||||
|
Net income attributable to noncontrolling interests |
(2,851) |
(4,040) |
(4,822) |
(6,850) |
||||
|
Gain on sale of real estate |
(20,617) |
(76,501) |
(113,328) |
(77,672) |
||||
|
Depreciation and amortization of real estate assets |
86,531 |
78,598 |
171,309 |
155,096 |
||||
|
Amortization of initial direct costs of leases |
13,027 |
9,358 |
26,260 |
18,435 |
||||
|
Funds from operations |
164,643 |
167,371 |
329,042 |
315,543 |
||||
|
Dividends on preferred shares (2) |
(1,875) |
(1,875) |
(3,750) |
(3,750) |
||||
|
Income attributable to downREIT operating partnership units |
595 |
603 |
1,191 |
1,272 |
||||
|
Income attributable to unvested shares |
(569) |
(559) |
(1,135) |
(1,049) |
||||
|
Nareit FFO |
$ 162,794 |
$ 165,540 |
$ 325,348 |
$ 312,016 |
||||
|
Weighted average number of common shares, diluted (2)(3) |
86,803 |
86,611 |
86,733 |
86,393 |
||||
|
Nareit FFO per diluted share (3) |
$ 1.88 |
$ 1.91 |
$ 3.75 |
$ 3.61 |
||||
|
|
||||||||
|
Nareit FFO |
$ 162,794 |
$ 165,540 |
$ 325,348 |
$ 312,016 |
||||
|
Adjustments: |
||||||||
|
New market tax credit transaction income, net |
— |
(13,004) |
— |
(13,004) |
||||
|
Collection of prior period rents deferred during COVID |
— |
(69) |
— |
(136) |
||||
|
Core FFO |
$ 162,794 |
$ 152,467 |
$ 325,348 |
$ 298,876 |
||||
|
Core FFO per diluted share (3) |
$ 1.88 |
$ 1.76 |
$ 3.75 |
$ 3.46 |
||||
|
|
|||
|
|
|||
|
Low |
High |
||
|
Estimated net income available for common shareholders per diluted share |
$ 4.22 |
$ 4.30 |
|
|
Adjustments: |
|||
|
Estimated gain on sale of real estate |
(1.30) |
(1.30) |
|
|
Estimated depreciation and amortization |
4.56 |
4.56 |
|
|
Estimated Nareit FFO and Core FFO per diluted share |
$ 7.48 |
$ 7.56 |
|
|
See Glossary of Terms. Individual items may not add up to total due to rounding. |
|||
|
|
|||||
|
|
|||||
|
|
|||||
|
The following information is being provided for “Comparable Properties.” Comparable Properties represents our consolidated property portfolio |
|||||
|
|
|||||
|
|
|||||
|
|
|||||
|
|
|
||||
|
|
|||||
|
Operating income |
$ 138,662 |
$ 202,744 |
|||
|
Add: |
|||||
|
Depreciation and amortization |
100,623 |
89,241 |
|||
|
General and administrative |
13,470 |
11,925 |
|||
|
Gain on sale of real estate |
(20,617) |
(76,501) |
|||
|
New market tax credit transaction income |
— |
(14,176) |
|||
|
Property operating income (POI) |
232,138 |
213,233 |
|||
|
Less: Non-comparable POI – acquisitions/dispositions |
(15,681) |
(6,277) |
|||
|
Less: Non-comparable POI – redevelopment, development & other |
(10,179) |
(6,296) |
|||
|
Comparable Property POI |
$ 206,278 |
$ 200,660 |
|||
|
Less: Straight-line rents |
(2,846) |
(4,162) |
|||
|
Less: Amortization of in-place leases |
(2,700) |
(3,815) |
|||
|
Adjusted Comparable Property POI |
$ 200,732 |
$ 192,683 |
|||
Glossary of Terms
Nareit-defined Funds From Operations (Nareit FFO): Nareit FFO is a supplemental measure of real estate companies’ operating performances. NAREIT defines FFO as follows: net income, computed in accordance with GAAP plus real estate related depreciation and amortization, gains and losses on sale of real estate, and impairment write-downs of depreciable real estate. Nareit developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, Nareit FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider Nareit FFO a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of Nareit FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the Nareit definition used by such REITs.
Core Funds From Operations (Core FFO): Core FFO is a supplemental non-GAAP financial measure of performance that adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the Company’s ongoing operating and financial performance. These adjustments include, when applicable, (1) gains or losses on early extinguishment of debt, (2) new market tax credit transaction income, (3) executive transition costs, (4) collection of prior period rents which were contractually deferred or payments renegotiated related to the COVID-19 pandemic, and (5) other items as determined by management. Management believes Core FFO provides enhanced comparability across periods and additional insight into the Company’s underlying operating results, by excluding items that may reflect short-term fluctuations in net income and Nareit FFO. Core FFO is not intended to be a substitute for net income or Nareit FFO. Comparison of our presentation of Core FFO to similarly titled measures for other REITs may not be meaningful due to possible differences in the way Core FFO is defined or applied by other REITs.
View original content to download multimedia:https://www.prnewswire.com/news-releases/federal-realty-investment-trust-reports-second-quarter-2026-results-and-guidance-raise-302839726.html
SOURCE Federal Realty Investment Trust
