Federal Realty Investment Trust’s FRT third-quarter 2024 funds from operations (FFO) per share of $1.71 narrowly missed the Zacks Consensus Estimate of $1.72. However, this marked a rise of 3.6% from the year-ago quarter’s tally of $1.65.
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Results reflect healthy leasing activity and significant occupancy gains at its properties. FRT has also tightened and increased its guidance for 2024 FFO per share.
Quarterly revenues of $303.6 million exceeded the consensus mark of $301.2 million and improved 5.9% from the year-ago quarter’s tally. Federal Realty generated 2.9% comparable property operating income growth.
Per Donald C. Wood, chief executive officer, "The demographics of our properties continue to be our greatest asset. Looking ahead, we are confident that Federal Realty is well-positioned for continued success, thanks to our exposure to affluent and resilient shoppers who frequent our best-in-class properties."
Behind FRT’s Headlines
In terms of leasing, during the reported quarter, Federal Realty signed 129 leases for 592,527 square feet of retail space. On a comparable space basis, the company signed 126 leases for 580,977 square feet of space at an average rent of $34.94 per square foot. This denotes cash-basis rollover growth of 14% and 26% on a straight-line basis.
On the operational front, the portfolio occupancy rate increased 90 bps quarter over quarter and 170 basis points year over year to 94% as of Sept. 30, 2024.
The portfolio was 95.9% leased as of the same date, a 60 bps increase quarter over quarter and 190 basis points year over year. Our estimate for the metric was 95.4%. Moreover, Federal Realty’s residential properties were 97.5% leased as of the same date.
Sustained robust leasing activity for small shops resulted in a quarter-ending lease rate of 93.1%, marking an increase of 60 bps quarter over quarter and 240 basis points year over year. Moreover, the anchor tenant leased rate was 97.3%, denoting a rise of 60 bps quarter over quarter and 150 bps year over year.
Moreover, Federal Realty registered comparable property operating income growth of 2.9% for the third quarter. This is exclusive of lease termination fees and prior-period rents collected.
During the third quarter, Federal Realty acquired Pinole Vista Crossing in Pinole, CA, a grocery-anchored shopping center comprising 216,000 square feet on 19 acres of land, for a purchase price of $60 million. The move expands the company's presence in Northern California's East Bay sub-market.
Federal Realty exited the third quarter of 2024 with cash and cash equivalents of $97.0 million, down from $103.2 million recorded at the end of the second quarter of 2024.
FRT’s Guidance
For 2024, Federal Realty revised its guidance for FFO per share in the range of $6.76-$6.86 from the $6.70-$6.88 range guided earlier. The Zacks Consensus Estimate of $6.81 also lies within this range.
FRT Announces Dividend
Concurrent with the third-quarter earnings release, Federal Realty announced a regular quarterly cash dividend of $1.10 per share, indicating an annual rate of $4.40 per share. The dividend will be paid out on Jan. 15 to shareholders of record as of Jan. 2, 2025.
Federal Realty currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Federal Realty Investment Trust Price, Consensus and EPS Surprise
Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other retail REITs like Simon Property Group, Inc. SPG and The Macerich Company MAC, which are slated to report on Nov. 1 and Nov. 6, respectively.
The Zacks Consensus Estimate for Simon Property Group’s third-quarter 2024 FFO per share stands at $3.00, indicating a 6.3% decrease year over year. SPG currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Macerich’s third-quarter 2024 FFO per share is pegged at 40 cents, implying a 9.1% year-over-year decline. MAC currently carries a Zacks Rank #4 (Sell).
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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