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News Release

Federal Realty Investment Trust Announces Second Quarter 2001 Operating Results

ROCKVILLE, Md.--(BUSINESS WIRE)--July 30, 2001--Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its second quarter ended June 30, 2001.

  • Funds from operations (FFO) increased 6.3% to $0.68 per diluted share

  • Rental income increased 7.3% on a same-center basis

  • Continued progress at both Pentagon Row and Santana Row

Financial Results

Funds from operations for the quarter ended June 30, 2001 increased 6.7 % to $27.3 million from $25.5 million for the second quarter of 2000. On a per diluted share basis, funds from operations increased 6.3% from $0.64 in 2000 to $0.68 in 2001, beating First Call consensus expectations by $0.02.

Net operating income, which includes interest income from mortgage notes receivable, was $51.4 million, a 5.1% increase from the $48.9 million reported for the second quarter of 2000.

Steven J. Guttman, chairman and chief executive officer of Federal Realty Investment Trust stated, "Active management of our core operating assets, from both our shopping center and street retail business lines, continues to drive strong operating performance, despite softness in the national economy.

"We're proud of our ability to generate above average growth from these well-positioned properties."

Portfolio Results

Rental income increased from $64.3 million in 2000 to $68.5 million in 2001, a 6.5% increase. On a same-center basis, which ignores the impact of properties acquired, developed or sold during the analyzed periods, rental income increased 7.3% from $62.2 million to $66.8 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 second quarter, the Trust signed leases for over 370,000 square feet of retail and office space. On a comparable space basis, the Trust re-leased 229,607 square feet at an average increase in rent per square foot of 24%.

The weighted-average new rent on these same space leases was $24.06 per square foot compared to the previous average rent of $19.33 per square foot, reflecting strong lease rollovers for both shopping center and street retail properties. At June 30, 2001, overall occupancy remained strong at 95.6%, versus 96.1% reported for June 30, 2000.

Donald C. Wood, president and chief operating officer of the Trust stated, "Based on our outlook for the balance of the year, our expectations for 2001 performance are now somewhat above current consensus estimates. Specifically, we would anticipate 2001 funds from operations of between $2.69 and $2.70 per share."

Development Activities

At Pentagon Row, in Arlington, Virginia, the two retail tenants comprising Building A opened for business during the second quarter; Harris Teeter grocery store on June 13, 2001 and Bed, Bath and Beyond on April 6, 2001.

The Trust continues to anticipate the openings of Buildings B and C in the third quarter and Building D in the fourth quarter. On an aggregate basis, Pentagon Row is currently over 92% leased.

At Santana Row, Federal Realty's mixed-use community in San Jose, California, construction continues on schedule and on budget, with the $475 million first phase expected to begin opening in August 2002.

Based on anticipated construction and leasing progress, the Trust expects to begin drawing on the Santana Row construction loan before the end of the third quarter. To date, Federal Realty has executed leases and signed letters of intent comprising over 250,000 square feet of retail space in addition to the lease with the Valencia Group for the boutique hotel at the center of Santana Row.

Conference Call

Federal Realty's second quarter earnings conference call is scheduled for 1:30 PM ET, Tuesday July 31, 2001. To participate, please call (800) 967-7140 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 August 1, 2001. A telephone recording of the call can also be heard by dialing (888) 203-1112. The passcode for this replay is 481223.

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 152 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)
                              (Unaudited)


                        Three Months Ended        Six Months Ended
                             June 30,                  June 30,
OPERATING RESULTS      2001         2000          2001         2000
-----------------  ----------    ----------  ----------    ----------

 Revenues
  Rental income    $   68,458    $   64,251  $  135,594    $  128,483
  Other property 
   income               3,200         2,700       5,910         5,465
  Interest and 
   other income         1,740         1,855       3,597         3,962
                   ----------    ----------  ----------    ----------
                       73,398        68,806     145,101       137,910

 Expenses
  Rental               15,177        13,422      30,222        28,042
  Real estate 
   taxes                6,859         6,522      13,479        12,979
  Interest             17,530        17,036      34,680        33,529
  Administrative        3,322         2,868       6,455         5,790
  Depreciation and
   amortization        14,813        13,338      28,957        25,993
                   ----------    ----------  ----------    ----------
                       57,701        53,186     113,793       106,333
                   ----------    ----------  ----------    ----------

  Operating income 
   before investors'
   share of 
   operations          15,697        15,620      31,308        31,577
  Investor's share 
   of operations       (1,428)       (1,227)     (2,806)       (3,045)
                   ----------    ----------  ----------    ----------

  Income before 
   gain on sale 
   of real 
   estate              14,269        14,393      28,502        28,532
  Gain on sale 
   of real 
   estate               7,898         3,681       7,898         3,681
                   ----------    ----------  ----------    ----------

  Net Income           22,167        18,074      36,400        32,213
  Dividends on 
   preferred 
   stock               (1,987)       (1,987)     (3,975)       (3,975)
                   ----------    ----------  ----------    ----------
  Net income 
   available 
   for common
   shareholders    $   20,180    $   16,087  $   32,425    $   28,238 
                   ==========    ==========  ==========    ==========

  Earnings per 
   common share, 
   basic           $     0.51    $     0.42  $     0.83    $     0.73
                   ==========    ==========  ==========    ==========

  Earnings per 
   common share, 
   diluted         $     0.51    $     0.41  $     0.83    $     0.72
                   ==========    ==========  ==========    ==========

  Weighted average 
   shares 
   outstanding,
   basic               38,984        38,601      38,908        38,871

  Weighted average 
   shares 
   outstanding,
   diluted             40,027        39,782      39,946        40,037

  Funds from Operations
    Net income 
     available for 
     common
     shareholders  $   20,180    $   16,087  $   32,425    $   28,238
    Less:  (gain) on 
     sale of 
     real estate       (7,898)       (3,681)     (7,898)       (3,681)
    Add: depreciation 
     and amortization
     of real 
     estate assets     13,509        12,136      26,375        23,623
    Add: amortization 
     of initial direct
     costs of 
     leases             1,007           870       1,976         1,700
    Add: income 
     attributable to
     operating 
     partnership 
     units                461           131         760           744
                   ----------    ----------  ----------    ----------

  Funds from 
   operations      $   27,259    $   25,543  $   53,638    $   50,624
                   ==========    ==========  ==========    ==========
  Funds from 
   operations 
   per share,
   diluted         $     0.68    $     0.64  $     1.34    $     1.26
                   ==========    ==========  ==========    ==========


                                              June 30,    December 31,
BALANCE SHEET DATA                              2001          2000
------------------                           ----------    ----------
 Assets                                      (Unaudited)

  Real estate, at cost                       
  Operating                                  $1,706,583    $1,679,289 
  Development                                   274,419       175,624
                                             ----------    ----------
                                              1,981,002     1,854,913

  Accumulated 
   depreciation and
   amortization                               (372,567)      (351,258)
                                             ----------    ----------
                                             1,608,435      1,503,655
  Mortgage notes receivable                     35,405         47,360
  Cash and investments                          31,475         11,357
  Receivables                                   12,777         13,092
  Other assets                                  47,001         45,615
                                             ----------    ----------
 Total assets                                $1,735,093    $1,621,079
                                             ==========    ==========


 Liabilities and Shareholders' Equity
  Obligations under capital leases &
   mortgages payable                         $  345,058    $  323,911
  Notes payable                                 310,646       225,246
  Senior Notes                                  410,000       410,000
  5 1/4% Convertible subordinated
  debentures                                     75,289        75,289
  Other liabilities                             120,515       118,979

 Shareholders' Equity                           473,585       467,654
                                             ----------    ----------
                                             $1,735,093    $1,621,079
                                             ==========    ==========

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