ROCKVILLE, Md., Feb. 9, 2016 /PRNewswire/ -- Federal Realty
Investment Trust (NYSE: FRT) today reported operating results for
its fourth quarter and year ended December
31, 2015. Highlights of the quarter and year end recent
activity include:
- Generated FFO per diluted share of $1.37 for the quarter, an increase of 7.0% over
fourth quarter 2014. For the year, generated FFO per diluted share
(excluding prepayment premiums) of $5.32, an increase of 7.7% over 2014.
- Generated same center property operating income growth of 3.8%
for the year (or 2.4% when properties under redevelopment are
excluded). For the fourth quarter, same center growth was
2.6% (or 1.0% when properties under redevelopment are excluded),
reflecting lower occupancy due to the recapture of significant
anchor spaces in the same center pool.
- Federal Realty's same-center portfolio was 95.4% leased on
December 31, 2015, compared to 96.0%
on September 30, 2015 and 96.5% on
December 31, 2014.
- Signed leases for 380,714 sf of comparable space at an average
rent of $31.88 psf and achieved cash
basis rollover growth on comparable spaces of 23%.
- Sold Courtyard Shops in Wellington, Florida, for $52.8
million and, subsequent to year-end, acquired our JV
partner's 70% interest in our unconsolidated real estate
partnership for $153.7
million.
- Affirmed 2016 FFO per diluted share guidance range of
$5.65 to $5.71.
"The fourth quarter and the full year represented yet another
record for the Trust in terms of FFO per share" commented
Donald C. Wood, President and Chief
Executive Officer of Federal Realty. "We are excited about the
opportunity to gain control of below market anchor space within the
core portfolio and drive value through redevelopment and
releasing. In addition, with the first phases of our mixed
use developments delivering and the next phases well underway,
infill acquisitions that will drive future growth opportunities,
and strong leasing and rollover results, we continue to drive
successfully all facets of our long term strategic plan."
Financial Results
In the fourth quarter 2015, Federal Realty generated funds from
operations available for common shareholders (FFO) of $96.5 million, or $1.37 per diluted share. This compares to FFO of
$77.7 million, or $1.13 per diluted share, in fourth quarter 2014.
Excluding the early extinguishment of debt charge in fourth quarter
2014, FFO per diluted share was $1.28. For the full year 2015, Federal
Realty reported FFO of $352.9 million, or $5.05 per diluted share, which includes the early
extinguishment of debt. Excluding the early extinguishment of debt
charges in both years, FFO would have been $371.9 million, or $5.32 per diluted share in 2015, compared to
$338.1 million, or $4.94 per diluted share in 2014.
Net income available for common shareholders was $67.8 million and earnings per diluted share was
$0.97 for fourth quarter 2015 versus
$35.0 million and $0.51, respectively, for fourth quarter
2014. For the full year 2015, Federal Realty reported net
income available for common shareholders of $209.7 million and earnings per diluted share of
$3.03. This compares to net
income available for common shareholders of $164.0 million and earnings per diluted share of
$2.41 for the full year
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 in addition to Form 8-K that was filed.
Portfolio Results
Same-center property operating income for full year 2015
increased 3.8% including redevelopments and expansions, and 2.4%
excluding redevelopments and expansions compared to 2014. On a
quarterly-basis, same-center property operating income in fourth
quarter 2015 increased 2.6% including redevelopment and
expansion properties, and 1.0% excluding redevelopment and
expansion properties, which reflects lower occupancy due to
the recapture of significant anchor spaces in the same center
pool.
The overall portfolio was 94.3% leased as of December 31, 2015, compared to 95.5% on
September 30, 2015 and 95.6% on
December 31, 2014. Federal
Realty's same-center portfolio was 95.4% leased on December 31, 2015, compared to 96.0% on
September 30, 2015 and 96.5% on
December 31, 2014.
During fourth quarter 2015, the Trust signed 99 leases for
439,061 square feet of retail space. On a comparable space
basis (i.e., spaces for which there was a former tenant),
the Trust leased 380,714 square feet at an average cash-basis
contractual rent increase per square foot (i.e., excluding
the impact of straight-line rents) of 23%. The average
contractual rent on this comparable space for the first year of the
new lease is $31.88 per square foot
compared to the average contractual rent of $26.00 per square foot for the last year of the
prior lease. The previous average contractual rent is
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 35% for fourth quarter 2015.
For all of 2015, Federal Realty signed 316 leases representing
1.4 million square feet of comparable retail space at an average
cash-basis contractual rent increase per square foot of 17%, and
29% on a GAAP-basis. The average cash-basis contractual rent on
this comparable space for the first year of the new lease is
$30.90 per square foot compared to
the average cash-basis contractual rent of $26.32 per square foot for the last year of the
prior lease. As of December 31,
2015, Federal Realty's average contractual minimum rent for
retail and commercial space in its portfolio is $26.28 per square foot, as compared to
$25.59 per square foot on
December 31, 2014.
Summary of Other Quarterly Activities and Recent
Developments
- October 1, 2015 – Federal Realty
acquired an 85% interest in The Shops at Sunset Place, a
515,000-square-foot mixed-use center in South Miami, Florida, based on a gross value
of $110.2 million. The transaction
includes the assumption of an existing $70.8
million mortgage with an interest rate of 5.6 percent and
maturity date of September 2020.
- November 19, 2015 – Federal
Realty closed on the sale of Courtyard Shops, a grocery anchored
shopping center located in Wellington, Florida for $52.8
million and realized a gain of $16.8
million.
- January 13, 2016 –Federal Realty
acquired the 70% interest owned by affiliates of a discretionary
fund advised by Clarion Partners in a joint venture that owns six
neighborhood and community centers. Federal Realty purchased the
70% interest in the venture for $153.7
million, consisting of $130
million of cash and assumption of the allocable share of
mortgage debt. With this acquisition, Federal Realty successfully
concluded the venture that was formed in 2004 and increased its
ownership of the 820,000 square foot portfolio from 30% to 100%.
The portfolio includes two properties near Boston, Massachusetts (Atlantic Plaza and
Campus Plaza); one asset in the New
York Metro region (Greenlawn Plaza on Long Island) and three centers in the
Washington DC market (Free State
Shopping Center and Plaza del Mercado in Suburban Maryland, and
Barcroft Plaza in Northern
Virginia).
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees
left the regular dividend rate on its common shares unchanged,
declaring a regular quarterly cash dividend of $0.94 per share on its common shares, resulting
in an indicated annual rate of $3.76
per share. The regular common dividend will be payable on
April 15, 2016 to common shareholders
of record on March 18, 2016.
Guidance
We have affirmed our 2016 guidance for FFO per diluted share of
$5.65 to $5.71, and updated our
earnings per diluted share guidance to $3.47
to $3.54.
Conference Call Information
Federal Realty's management team will present an in-depth
discussion of the Trust's operating performance on its fourth
quarter and year-end 2015 earnings conference call, which is
scheduled for February 10, 2016, at
11 a.m. Eastern Standard Time.
To participate, please call (877) 445-3230 five to ten minutes
prior to the call start time and use the passcode 20889236
(required). Federal Realty will also provide an online
webcast on the Company's website, www.federalrealty.com, which will
remain available for 30 days following the call. A telephone
recording of the call will also be available through February 17, 2016 by dialing (855) 859-2056 and
using the passcode 20889236.
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 2,700 tenants, in approximately 21
million square feet, and over 1,700 residential units.
Federal Realty has paid quarterly dividends to its shareholders
continuously since its founding in 1962, and has increased its
dividend rate for 48 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 9, 2016, 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 9, 2016.
Investor
Inquiries
|
Media
Inquiries
|
Leah
Andress
|
Andrea
Simpson
|
Investor Relations
Associate
|
Director,
Marketing
|
301/998-8265
|
617/684-1511
|
landress@federalrealty.com
|
asimpson@federalrealty.com
|
Federal Realty
Investment Trust
|
Summarized Balance
Sheets
|
December 31,
2015
|
|
December
31,
|
|
2015
|
|
2014
|
|
(in
thousands)
|
|
|
|
|
ASSETS
|
|
|
|
Real estate, at
cost
|
|
|
|
Operating (including
$485,971 and $282,303 of consolidated variable interest entities,
respectively)
|
$
|
5,630,771
|
|
|
$
|
5,128,757
|
|
Construction-in-progress
|
433,635
|
|
|
480,241
|
|
|
6,064,406
|
|
|
5,608,998
|
|
Less accumulated
depreciation and amortization (including $35,782 and $26,618 of
consolidated variable interest entities, respectively)
|
(1,574,041)
|
|
|
(1,467,050)
|
|
Net real
estate
|
4,490,365
|
|
|
4,141,948
|
|
Cash and cash
equivalents
|
21,046
|
|
|
47,951
|
|
Accounts and notes
receivable, net
|
110,402
|
|
|
93,291
|
|
Mortgage notes
receivable, net
|
41,618
|
|
|
50,988
|
|
Investment in real
estate partnerships
|
41,546
|
|
|
37,457
|
|
Prepaid expenses and
other assets
|
206,732
|
|
|
175,235
|
|
TOTAL
ASSETS
|
$
|
4,911,709
|
|
|
$
|
4,546,870
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Liabilities
|
|
|
|
Mortgages and capital
lease obligations (including $254,241 and $187,632 of consolidated
variable interest entities, respectively)
|
$
|
554,442
|
|
|
$
|
635,345
|
|
Notes
payable
|
343,600
|
|
|
290,519
|
|
Senior notes and
debentures
|
1,744,324
|
|
|
1,483,813
|
|
Accounts payable and
other liabilities
|
350,096
|
|
|
325,584
|
|
Total
liabilities
|
2,992,462
|
|
|
2,735,261
|
|
Redeemable
noncontrolling interests
|
137,316
|
|
|
119,053
|
|
Shareholders'
equity
|
|
|
|
Preferred shares
|
9,997
|
|
|
9,997
|
|
Common shares and other shareholders' equity
|
1,653,752
|
|
|
1,594,404
|
|
Total shareholders'
equity of the Trust
|
1,663,749
|
|
|
1,604,401
|
|
Noncontrolling interests
|
118,182
|
|
|
88,155
|
|
Total shareholders'
equity
|
1,781,931
|
|
|
1,692,556
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
4,911,709
|
|
|
$
|
4,546,870
|
|
Federal Realty
Investment Trust
|
Summarized Income
Statements
|
December 31,
2015
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(in thousands,
except per share data)
|
|
|
Revenue
|
|
|
|
|
|
|
|
Rental
income
|
$
|
189,200
|
|
|
$
|
171,634
|
|
|
$
|
727,812
|
|
|
$
|
666,322
|
|
Other property
income
|
2,446
|
|
|
3,411
|
|
|
11,810
|
|
|
14,758
|
|
Mortgage interest
income
|
861
|
|
|
1,332
|
|
|
4,390
|
|
|
5,010
|
|
Total
revenue
|
192,507
|
|
|
176,377
|
|
|
744,012
|
|
|
686,090
|
|
Expenses
|
|
|
|
|
|
|
|
Rental
expenses
|
39,092
|
|
|
34,974
|
|
|
147,593
|
|
|
135,417
|
|
Real estate
taxes
|
22,959
|
|
|
18,268
|
|
|
85,824
|
|
|
76,506
|
|
General and
administrative
|
8,119
|
|
|
8,114
|
|
|
35,645
|
|
|
32,316
|
|
Depreciation and
amortization
|
46,423
|
|
|
43,411
|
|
|
174,796
|
|
|
170,814
|
|
Total operating
expenses
|
116,593
|
|
|
104,767
|
|
|
443,858
|
|
|
415,053
|
|
Operating
income
|
75,914
|
|
|
71,610
|
|
|
300,154
|
|
|
271,037
|
|
Other interest
income
|
40
|
|
|
49
|
|
|
149
|
|
|
94
|
|
Interest
expense
|
(23,207)
|
|
|
(24,169)
|
|
|
(92,553)
|
|
|
(93,941)
|
|
Early extinguishment
of debt
|
—
|
|
|
(10,545)
|
|
|
(19,072)
|
|
|
(10,545)
|
|
Income from real
estate partnerships
|
430
|
|
|
334
|
|
|
1,416
|
|
|
1,243
|
|
Income from
continuing operations
|
53,177
|
|
|
37,279
|
|
|
190,094
|
|
|
167,888
|
|
Gain on sale of real
estate
|
16,821
|
|
|
—
|
|
|
28,330
|
|
|
4,401
|
|
Net income
|
69,998
|
|
|
37,279
|
|
|
218,424
|
|
|
172,289
|
|
Net income attributable to
noncontrolling interests
|
(2,044)
|
|
|
(2,117)
|
|
|
(8,205)
|
|
|
(7,754)
|
|
Net income
attributable to the Trust
|
67,954
|
|
|
35,162
|
|
|
210,219
|
|
|
164,535
|
|
Dividends on
preferred shares
|
(135)
|
|
|
(135)
|
|
|
(541)
|
|
|
(541)
|
|
Net income available
for common shareholders
|
$
|
67,819
|
|
|
$
|
35,027
|
|
|
$
|
209,678
|
|
|
$
|
163,994
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE, BASIC
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.74
|
|
|
$
|
0.51
|
|
|
$
|
2.63
|
|
|
$
|
2.35
|
|
Gain on sale of real
estate
|
0.24
|
|
|
—
|
|
|
0.41
|
|
|
0.07
|
|
|
$
|
0.98
|
|
|
$
|
0.51
|
|
|
$
|
3.04
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares, basic
|
69,272
|
|
|
67,997
|
|
|
68,797
|
|
|
67,322
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE, DILUTED
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.73
|
|
|
$
|
0.51
|
|
|
$
|
2.62
|
|
|
$
|
2.34
|
|
Gain on sale of real
estate
|
0.24
|
|
|
—
|
|
|
0.41
|
|
|
0.07
|
|
|
$
|
0.97
|
|
|
$
|
0.51
|
|
|
$
|
3.03
|
|
|
$
|
2.41
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares, diluted
|
69,456
|
|
|
68,179
|
|
|
68,981
|
|
|
67,492
|
|
Federal Realty
Investment Trust
|
Funds From
Operations
|
December 31,
2015
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(in thousands,
except per share data)
|
Funds from Operations
available for common shareholders (FFO)
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
69,998
|
|
|
$
|
37,279
|
|
|
$
|
218,424
|
|
|
$
|
172,289
|
|
Net income
attributable to noncontrolling interests
|
|
(2,044)
|
|
|
(2,117)
|
|
|
(8,205)
|
|
|
(7,754)
|
|
Gain on sale of real
estate
|
|
(16,821)
|
|
|
—
|
|
|
(28,330)
|
|
|
(4,401)
|
|
Depreciation and
amortization of real estate assets
|
|
40,293
|
|
|
38,493
|
|
|
152,888
|
|
|
152,505
|
|
Amortization of
initial direct costs of leases
|
|
4,222
|
|
|
3,420
|
|
|
15,026
|
|
|
12,391
|
|
Depreciation of joint
venture real estate assets
|
|
326
|
|
|
353
|
|
|
1,344
|
|
|
1,555
|
|
Funds from
operations
|
|
95,974
|
|
|
77,428
|
|
|
351,147
|
|
|
326,585
|
|
Dividends on
preferred shares
|
|
(135)
|
|
|
(135)
|
|
|
(541)
|
|
|
(541)
|
|
Income attributable
to operating partnership units
|
|
878
|
|
|
798
|
|
|
3,398
|
|
|
3,027
|
|
Income attributable
to unvested shares
|
|
(243)
|
|
|
(346)
|
|
|
(1,147)
|
|
|
(1,474)
|
|
FFO
|
|
96,474
|
|
|
77,745
|
|
|
352,857
|
|
|
327,597
|
|
Early extinguishment
of debt, net of allocation to unvested shares
|
|
—
|
|
|
10,499
|
|
|
19,006
|
|
|
10,498
|
|
FFO excluding early
extinguishment of debt
|
|
$
|
96,474
|
|
|
$
|
88,244
|
|
|
$
|
371,863
|
|
|
$
|
338,095
|
|
Weighted average
number of common shares, diluted
|
|
70,391
|
|
|
69,096
|
|
|
69,920
|
|
|
68,410
|
|
|
|
|
|
|
|
|
|
|
FFO per diluted
share
|
|
$
|
1.37
|
|
|
$
|
1.13
|
|
|
$
|
5.05
|
|
|
$
|
4.79
|
|
|
|
|
|
|
|
|
|
|
FFO excluding early
extinguishment of debt, per diluted share
|
|
$
|
1.37
|
|
|
$
|
1.28
|
|
|
$
|
5.32
|
|
|
$
|
4.94
|
|
|
|
|
|
|
|
|
|
|
Federal Realty
Investment Trust
|
|
|
|
Reconciliation of
FFO Guidance
|
|
|
|
December 31,
2015
|
|
|
|
|
|
|
|
The following table
provides a reconciliation of the range of estimated earnings per
diluted share to estimated FFO per diluted share for the full year
2016. Estimates do not include the impact from potential
acquisitions or dispositions which have not closed as of February
9, 2016.
|
|
|
|
|
|
2016
Guidance
|
|
|
|
Low
|
|
High
|
Net income available
to common shareholders, per diluted share
|
$
|
3.47
|
|
|
$
|
3.54
|
|
Adjustments:
|
|
|
|
Gain on change in
control of interests
|
(0.34)
|
|
|
(0.34)
|
|
Depreciation and
amortization of real estate & joint venture real estate
assets
|
2.30
|
|
|
2.30
|
|
Amortization of
initial direct costs of leases
|
0.22
|
|
|
0.22
|
|
All other
amounts
|
0.00
|
|
|
0.00
|
|
FFO per diluted
share
|
$
|
5.65
|
|
|
$
|
5.71
|
|
|
Note:
|
Individual items may
not add up to total due to rounding.
|
Logo - http://photos.prnewswire.com/prnh/20050907/DCW070LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/federal-realty-investment-trust-announces-fourth-quarter-and-full-year-2015-operating-results-300217615.html
SOURCE Federal Realty Investment Trust