Federal Realty Investment Trust
) posted third-quarter 2013 core FFO (funds from operations) per
share of $1.16, beating the Zacks Consensus Estimate by a whisker
and the year-ago quarter figure by 4 cents.
The decent results came on the back of improved performance in
the same-store portfolio and notable top-line growth. Prompted by
the quarterly performance, Federal Realty raised its 2013 FFO per
share outlook for the third time this year.
Total revenue during the reported quarter upped 1.1% year over
year to $159.0 million and came in line with the Zacks Consensus
Federal Realty executed healthy leasing activities in the
quarter. The company signed 102 leases for 398,637 square feet of
retail space. As of Sep 30, 2013, Federal Realty's overall
portfolio was 95.3% leased, up 20 basis points (bps) year over
On a comparable space basis (spaces for which a former tenant
was there), Federal Realty leased 273,505 square feet at an
average cash-basis contractual rent increase of 20% per square
foot. Rent increases (GAAP basis) for comparable retail space
averaged 34% per square foot in the quarter under review.
Same-center property operating income (excluding assets under
redevelopment) escalated 5.7% year over year. As of Sep 30, 2013,
the company's same-center portfolio was 95.4% leased, up 20 bps
year over year.
Portfolio Restructuring Activities
During the third-quarter, Federal Realty accomplished the
disposition of its assets in San Diego, California and Forest
Hills, N.Y. for $36 million in total. The dispositions were part
of a reverse 1031 exchange related to the Darien, Conn.-based
shopping center acquisition in April this year.
Subsequent to quarter end, on Oct 1, Federal Realty bought the
12 acre land parcel, which is adjacent to Assembly Row, in Boston
for $18 million.
Federal Realty exited the quarter with cash and cash equivalents
of approximately $127.8 million, up from $108.4 million as of Jun
Federal Realty raised its guidance for 2013 FFO per share
(excluding the debt prepayment charge) to the range of $4.60 -
$4.61, from $4.56 - $4.60 forecasted earlier. This reflects the
full-year guidance increase for the third time by this retail
real estate investment trust (REIT) this year.
Also, Federal Realty provided guidance for full-year 2014 FFO
per share in the range of $4.84 - $4.92.
Concurrent with the earnings release, Federal Realty declared
a quarterly dividend of 78 cents per share. The dividend is
payable on Jan 15, 2014, to common stockholders of record as of
We are encouraged by Federal Realty's decent performance for
the second consecutive quarter. The company's portfolio of Class
A shopping centers along with the diversified tenant base,
comprising grocery stores and low-end discount retailers,
position it well to maintain the upward trend. Moreover, Federal
Realty's successful expansion strategy has long-term value
potential and promises steady income growth. Also, a raise in the
outlook boosts investors' confidence in the stock and is thus
Yet, a significant development pipeline and rising online
purchases remain concerns for this Zacks Rank #3 (Hold)
Other better performing retail REITs include
Regency Centers Corporation
Simon Property Group Inc.
Weingarten Realty Investors
), all carrying a Zacks Rank #2 (Buy).
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
FED RLTY INV (FRT): Free Stock Analysis
REGENCY CTRS CP (REG): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
WEINGARTEN RLTY (WRI): Free Stock Analysis
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