Federal Realty Investment Trust
) posted first-quarter 2014 funds from operations (FFO) per share
of $1.21, surpassing the Zacks Consensus Estimate of $1.19 by 1.7%
and the year-ago quarter figure of $1.14 by 6.1%. Higher revenues,
rent escalations and improved same-store portfolio performance
aided the results.
Total revenue escalated 8.7% year over year to $170.8 million
and also exceeded the Zacks Consensus Estimate of $163 million.
Quarterly in Details
Federal Realty inked 78 lease deals for 364,034 square feet of
space. As of Mar 31, 2014, the company's overall portfolio was
95.6% leased, up 50 basis points (bps) on a year-over-year
Same-center property operating income (excluding assets under
redevelopments and expansions) escalated 2.9% year over year. As of
Mar 31, 2014, Federal Realty's same-center portfolio was 95.5%
leased, up 30 bps year over year.
On a comparable space basis (spaces for which a former tenant
was there), Federal Realty leased 328,355 square feet at an average
cash-basis contractual rent escalation of 18% per square foot. Rent
increases (GAAP basis) for comparable retail space averaged 29% per
square foot, compared to 38% in the prior quarter.
Federal Realty disclosed the buyout of a controlling stake in
two shopping centers -The Grove at Shrewsbury and Brook 35 - in New
Jersey for $161 million. These properties serve the flourishing NY
Metro area and boast outlets of some renowned national and regional
retailers such as
Federal Realty exited the first quarter with cash and cash
equivalents of approximately $75.7 million, compared to $88.9
million at the end of 2013.
2014 Outlook Reiterated
Federal Realty reaffirmed its guidance for full-year 2014 FFO
per share in the range of $4.86 - $4.93. The Zacks Consensus
Estimate of $4.92 for the same falls within this range.
Concurrent with the earnings release, Federal Realty declared a
quarterly dividend of 78 cents per share. The dividend is payable
on Jul 15, 2014 to shareholders of record as of Jun 23.
Federal Realty bounced back with its earnings surprise streak
this season, after posting in line results in the prior quarter,
thanks to strong core operating portfolio performance. In
particular, 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, the acquisition of New Jersey-based premium
assets and the leasing and development progress at 3 properties -
Pike & Rose, Assembly Row and The Point - bodes well for this
Zacks Rank #3 (Hold) stock.
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.
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