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News Release

Federal Realty Investment Trust Announces First Quarter 2001 Operating Results

ROCKVILLE, Md.--(BUSINESS WIRE)--May 8, 2001--Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its first quarter ended March 31, 2001.

  • Funds from operations (FFO) increased 6.5% to $0.66 per diluted share

  • Continued progress at both Pentagon Row and Santana Row

Financial Results

Funds from operations for the quarter ended March 31, 2001 increased 5.2 % to $26.4 million from $25.1 million for the first quarter of 2000. On a per diluted share basis, funds from operations increased 6.5% from $0.62 in 2000 to $0.66 in 2001.

Net operating income, which includes interest income from mortgage notes receivable, was $50.0 million, a 4.2% increase from the $48.0 million reported for 2000.

"We're pleased with the strong operating performance we continue to see from our core properties; both shopping centers and main street assets," commented Steven J. Guttman, Chairman and Chief Executive Officer of Federal Realty. "In addition, we made significant progress in the financing, construction and leasing of our main street development properties so far this year. We are well on our way to meeting analyst consensus FFO expectations of $2.65 per share in 2001."

Portfolio Results

For the first quarter, rental income increased from $64.2 million in 2000 to $67.1 million in 2001, a 4.5% increase. On a same-center basis, which ignores the impact of properties acquired, developed or sold during the analyzed periods, rental income increased 6.5% from $62.0 million to $66.0 million.

The strong growth of same-center rental income was the leading factor driving improvements in both net operating income and funds from operations.

During the first quarter, the Trust signed leases for nearly 400,000 square feet of retail and office space. On a comparable space basis, the Trust re-leased 280,916 square feet at an average increase in rent per square foot of 19%. The weighted-average rent on these same space leases was $20.97 per square foot compared to the previous average rent of $17.64 per square foot.

At March 31, 2001, overall occupancy remained strong at 95.4%, versus 95.3% reported for March 31, 2000.

Development Activities

At Pentagon Row, in Arlington, Virginia, the Trust continues to make progress with construction. Bed, Bath and Beyond, an anchor for the development, opened for business on April 6, 2001. Current expectations call for Building A's other retail tenant, a state-of-the art Harris Teeter grocery store, to open this summer.

Buildings B and C are scheduled to open in the third quarter, and a fourth quarter opening is currently expected for Building D.

Leasing remains strong at Santana Row, the Trust's pedestrian-friendly, mixed-use community in the heart of San Jose, California. To date, executed leases and signed letters of intent account for approximately 250,000 square feet of Phase I retail space.

In addition, the Trust recently announced a signed ground lease with Hotel Valencia Group who will build a 214-room boutique hotel at the center of Santana Row, and the closing of a $295 million construction loan for the first phase of the project. Construction at Santana Row continues on schedule, with Phase I expected to begin opening in mid-2002.

Conference Call

Federal Realty's first quarter earnings conference call is scheduled for 4:00 PM ET, Wednesday May 9, 2001. To participate, please call 800/665-0430 five to ten minutes prior to the start time. Federal Realty will also provide an online Web Simulcast on the company's web site, www.federalrealty.com.

For those interested parties who are unable to participate in the conference call, a re-broadcast will be available online at www.federalrealty.com beginning on May 10. A telephone recording of the call can also be heard by dialing 888/203-1112. The passcode for this replay is 770370.

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development and re-development of high quality retail and mixed-use properties.

The Trust owns or has an interest in 153 real estate assets consisting of community and neighborhood shopping centers and retail and urban mixed-use properties located in strategic metropolitan markets across the United States. The Trust is nationally recognized for its main street revitalization programs as well as the development of urban mixed-use, pedestrian-friendly communities.

Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 33 consecutive years. Shares of Federal Realty are traded on the New York Stock Exchange under the symbol FRT. Additional information about Federal Realty can be found on the Internet at 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 Private Securities Litigation Reform Act of 1995. Although Federal Realty Investment Trust believes the expectations reflected in such forward looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.

Factors that could cause actual results to differ materially from Federal's expectations are detailed from time to time in the Company's SEC reports and filings, including its annual report on Form 10-K. Federal Realty assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

                         Financial Highlights
                 (in thousands, except per share data)
                                                  Three Months Ended
                                                       March 31,
OPERATING RESULTS                                  2001         2000
                                                   ----         ----
  Rental income                                 $ 67,136     $ 64,232
  Other property income                            2,710        2,765
  Interest and other income                        1,857        2,107
                                                --------     --------
                                                  71,703       69,104

  Rental                                          15,045       14,620
  Real estate taxes                                6,620        6,457
  Interest                                        17,150       16,493
  Administrative                                   3,133        2,922
  Depreciation and amortization                   14,144       12,655
                                                --------     --------
                                                  56,092       53,147
                                                --------     --------

  Operating income before investors'
   share of operations                            15,611       15,957
  Investor's share of operations                  (1,378)      (1,818)
                                                --------     --------
  Net Income                                    $ 14,233     $ 14,139
  Dividends on preferred stock                    (1,988)      (1,988)
                                                --------     --------
  Net income available for common
   shareholders                                 $ 12,245     $ 12,151
                                                ========     ========
  Earnings per common share, basic              $   0.32     $   0.31
                                                ========     ========
  Earnings per common share, diluted            $   0.32     $   0.31
                                                ========     ========
  Weighted average shares outstanding,
   basic                                          38,822       39,444
  Weighted average shares outstanding,
   diluted                                        39,856       40,595

  Funds from Operations
    Net income available for common
     shareholders                               $ 12,245     $ 12,151
    Add: depreciation and amortization
     of real estate assets                        12,866       11,487
    Add: amortization of initial direct
     costs of leases                                 969          830
    Add: income attributable to
     operating partnership units                     299          613
                                                --------     --------

  Funds from operations                         $ 26,379     $ 25,081
                                                ========     ========
  Funds from operations per share,
   diluted                                      $   0.66     $   0.62
                                                ========     ========

                                             March 31,    December 31,
BALANCE SHEET DATA                             2001           2000
                                               ----           ----
Assets                                      (Unaudited)
 Real estate, at cost                      $ 1,925,568    $ 1,854,913
 Accumulated depreciation and
  amortization                                (364,214)      (351,258)
                                           -----------    -----------
                                             1,561,354      1,503,655
 Mortgage notes receivable                      43,457         47,360
 Cash and investments                           11,143         11,357
 Receivables                                    13,214         13,092
 Other assets                                   46,524         45,615
                                           -----------    -----------
Total assets                               $ 1,675,692    $ 1,621,079
                                           ===========    ===========

Liabilities and Shareholders' Equity
 Obligations under capital leases &
  mortgages payable                        $   302,276    $   323,911
 Notes payable                                 302,404        225,246
 Senior Notes                                  410,000        410,000
 5 1/4% Convertible subordinated
  debentures                                    75,289         75,289
 Other liabilities                             121,440        118,979
Shareholders' Equity                           464,283        467,654
                                           -----------    -----------
                                           $ 1,675,692    $ 1,621,079
                                           ===========    ===========

Federal Realty Investment Trust, Rockville
Andrew Blocher, 301/998-8166