Federal Realty Investment Trust Reports Second Quarter 2026 Results and Guidance Raise

Federal Realty Investment Trust Reports Second Quarter 2026 Results and Guidance Raise

PR Newswire

NORTH BETHESDA, Md., July 31, 2026

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 ResultsNet IncomeFor 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.FFONareit 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 UpdateOccupancyThe 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 ActivityDuring 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 ActivityApril 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 ActivityFully 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-2026Released 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 ActivityOn 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 DividendsFederal 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 GuidanceFederal Realty has raised and tightened its 2026 earnings per diluted share, Nareit FFO, and Core FFO guidance, as summarized in the table below:Full Year 2026 GuidanceRevised GuidancePrior GuidanceNet income available for common shareholders per diluted share$4.22 to $4.30$3.94 to $4.03Nareit FFO per diluted share$7.48 to $7.56$7.46 to $7.55Core FFO per diluted share$7.48 to $7.56$7.46 to $7.55Comparable Property POI Growth13.25% to 3.75%3.125% to 3.625%% Core FFO growth over the prior year5.9% - 7.1%5.7% - 6.9%1Adjusted Comparable Property POI growth estimated to be approximately 75 basis points higher than Comparable Property POI growth in 2026 (see appendix).Conference Call InformationFederal 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 RealtyFederal 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; andrisks 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:Jill SawyerSenior Vice President, Investor Relations301.998.8265jsawyer@federalrealty.comMedia Inquiries:Brenda PomarSenior Director, Corporate Communications301.998.8316bpomar@federalrealty.comFederal Realty Investment TrustConsolidated Balance SheetsJune 30, 2026June 30,December 31,20262025(in thousands, except share and per share data)(unaudited)ASSETSReal estate, at costOperating (including $1,901,302 and $1,832,190 of consolidated variable interestentities, respectively)$ 11,348,512$ 11,265,167Construction-in-progress (including $37,695 and $28,418 of consolidated variableinterest entities, respectively)329,803374,73511,678,31511,639,902Less accumulated depreciation and amortization (including $487,052 and $468,725 ofconsolidated variable interest entities, respectively)(3,444,324)(3,351,881)Net real estate8,233,9918,288,021Cash and cash equivalents107,246107,415Accounts and notes receivable, net262,108249,755Mortgage notes receivable, net—9,091Investment in partnerships30,57131,881Operating lease right of use assets, net81,64483,120Finance lease right of use assets, net6,3016,410Prepaid expenses and other assets337,258354,767TOTAL ASSETS$ 9,059,119$ 9,130,460LIABILITIES AND SHAREHOLDERS' EQUITYLiabilitiesMortgages payable, net (including $190,863 and $194,176 of consolidated variableinterest entities, respectively)$ 518,371$ 521,759Notes payable, net1,282,8561,057,331Senior notes and debentures, net2,966,6853,364,010Accounts payable and accrued expenses217,548219,678Dividends payable100,49099,792Security deposits payable32,80931,548Operating lease liabilities70,94372,304Finance lease liabilities12,96612,903Other liabilities and deferred credits238,760250,494Total liabilities5,441,4285,629,819Commitments and contingenciesRedeemable noncontrolling interests183,119181,655Shareholders' equityPreferred shares, authorized 15,000,000 shares, $0.01 par:5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidationpreference $25,000 per share), 6,000 shares issued and outstanding150,000150,0005.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidationpreference $25 per share), 392,878 shares issued and outstanding9,8229,822Common shares of beneficial interest, $0.01 par, 200,000,000 shares authorized,86,883,595 and 86,266,009 shares issued and outstanding, respectively876869Additional paid-in capital4,374,8724,310,365Accumulated dividends in excess of net income(1,179,380)(1,224,372)Accumulated other comprehensive income8,3402,047Total shareholders' equity of the Trust3,364,5303,248,731Noncontrolling interests70,04270,255Total shareholders' equity3,434,5723,318,986TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 9,059,119$ 9,130,460Federal Realty Investment TrustConsolidated Income StatementsJune 30, 2026Three Months EndedSix Months EndedJune 30,June 30,2026202520262025(in thousands, except per share data)(unaudited)REVENUERental income$ 325,896$ 302,477$ 658,554$ 604,771Other property income9,7978,76917,68715,354Mortgage interest income13277549552Total revenue335,706311,523676,790620,677EXPENSESRental expenses64,49161,609139,188129,413Real estate taxes39,07736,68178,04873,248General and administrative13,47011,92525,39522,800Depreciation and amortization100,62389,241199,840176,187Total operating expenses217,661199,456442,471401,648Gain on sale of real estate20,61776,501113,32877,672New market tax credit transaction income—14,176—14,176OPERATING INCOME138,662202,744347,647310,877OTHER INCOME/(EXPENSE)Other interest income5639051,6031,648Interest expense(50,008)(44,598)(99,124)(87,073)(Loss) income from partnerships(664)905(503)1,082NET INCOME88,553159,956249,623226,534 Net income attributable to noncontrolling interests(2,851)(4,040)(4,822)(6,850)NET INCOME ATTRIBUTABLE TO THE TRUST85,702155,916244,801219,684Dividends on preferred shares(2,008)(2,008)(4,016)(4,016)NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS$ 83,694$ 153,908$ 240,785$ 215,668EARNINGS PER COMMON SHARE, BASICNet income available for common shareholders$ 0.97$ 1.78$ 2.79$ 2.51Weighted average number of common shares86,18385,96986,11285,722EARNINGS PER COMMON SHARE, DILUTEDNet income available for common shareholders$ 0.97$ 1.78$ 2.78$ 2.51Weighted average number of common shares86,18386,61186,63986,300Federal Realty Investment TrustFunds From OperationsJune 30, 2026Three Months EndedSix Months EndedJune 30,June 30,2026202520262025(in thousands, except per share data)Nareit Funds from Operations available for common shareholders (Nareit FFO) (1)Net income$ 88,553$ 159,956$ 249,623$ 226,534Net 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 assets86,53178,598171,309155,096Amortization of initial direct costs of leases13,0279,35826,26018,435Funds from operations164,643167,371329,042315,543Dividends on preferred shares (2)(1,875)(1,875)(3,750)(3,750)Income attributable to downREIT operating partnership units5956031,1911,272Income attributable to unvested shares(569)(559)(1,135)(1,049)Nareit FFO$ 162,794$ 165,540$ 325,348$ 312,016Weighted average number of common shares, diluted (2)(3)86,80386,61186,73386,393Nareit FFO per diluted share (3)$ 1.88$ 1.91$ 3.75$ 3.61Core Funds from Operations (Core FFO) (1)Nareit FFO$ 162,794$ 165,540$ 325,348$ 312,016Adjustments: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$ 298,876Core FFO per diluted share (3)$ 1.88$ 1.76$ 3.75$ 3.46Reconciliation of the range of estimated earnings per diluted share to estimated Nareit FFO and Core FFO per diluted share forthe full year 2026:Full Year 2026 Guidance RangeLowHighEstimated net income available for common shareholders per diluted share$ 4.22$ 4.30Adjustments:Estimated gain on sale of real estate(1.30)(1.30)Estimated depreciation and amortization4.564.56Estimated Nareit FFO and Core FFO per diluted share$ 7.48$ 7.56See Glossary of Terms. Individual items may not add up to total due to rounding.Federal Realty Investment TrustComparable Property InformationJune 30, 2026The following information is being provided for "Comparable Properties." Comparable Properties represents our consolidated property portfolioother than those properties that distort comparability between periods in two primary categories: (1) assets that were not owned for the full quarterin both periods presented and (2) assets currently under development or being repositioned for significant redevelopment and investment. The assetsexcluded from Comparable Properties in Q2 include: Bala Cynwyd on City Avenue residential - Blayr, Friendship Center, Grossmont Center, Pike& Rose Phase IV, Santana West, Willow Grove Shopping Center, and all properties acquired, disposed of, or not consolidated from Q2 2025 to Q22026. Comparable Property property operating income ("Comparable Property POI") and Adjusted Comparable Property POI are non-GAAPmeasures used by management in evaluating the operating performance of our properties period over period. Adjusted Comparable Property POI excludes the impact of straight-line rents and amortization of in-place leases from Comparable Property POI.Reconciliation of GAAP operating income to Comparable Property POI and Adjusted Comparable Property POIThree Months EndedJune 30,20262025(in thousands)Operating income$ 138,662$ 202,744Add: Depreciation and amortization100,62389,241General and administrative13,47011,925Gain on sale of real estate(20,617)(76,501)New market tax credit transaction income—(14,176)Property operating income (POI)232,138213,233Less: 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$ 200,660Less: Straight-line rents(2,846)(4,162)Less: Amortization of in-place leases(2,700)(3,815)Adjusted Comparable Property POI$ 200,732$ 192,683Glossary of TermsNareit-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.