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News Release

Federal Realty Investment Trust Announces Third Quarter 2001 Operating Results

ROCKVILLE, Md.--(BUSINESS WIRE)--Nov. 1, 2001--Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2001.

  • Funds from operations (FFO) increased 8% to $0.70 per diluted share

  • Rental income increased 6% on a same-center basis

  • Retail leasing progresses at Santana Row

Financial Results

Funds from operations for the quarter ended September 30, 2001 increased 10 % to $28.3 million from $25.8 million reported for the third quarter of 2000. On a per diluted share basis, funds from operations increased 8% from $0.65 in 2000 to $0.70 in 2001, beating consensus First Call expectations by $0.03. Net operating income, which includes interest income from mortgage notes receivable, was $52.7 million, an 8% increase from the $48.8 million reported for the third quarter of 2000.

Portfolio Results

Rental income increased from $64.1 million in 2000 to $69.5 million in 2001, an 8% increase. On a same-center basis, which ignores the impact of properties acquired, developed or sold during the analyzed periods, rental income increased 6% from $63.6 million to $67.5 million. Strong core operating performance, higher lease termination fees and low interest rates on variable rate debt were the primary force behind improvements in both net operating income and funds from operations.

During the third quarter, the Trust signed leases for over 300,000 square feet of retail and office space. On a comparable retail space basis, the Trust re-leased 200,388 square feet at an average increase in rent per square foot of 11%. The weighted-average new rent on these same space leases was $25.57 per square foot compared to the previous average rent of $23.03 per square foot. At September 30, 2001, overall occupancy remained strong at 95.8%, compared to 95.6% for June 30, 2001 and 96.2% for September 30, 2000.

"Federal Realty's core portfolio has a long history of performing well through difficult economic times," Donald C. Wood, president and chief operating officer of Federal Realty Investment Trust stated, "While the impact of a recession results in uncertainty, the necessity-based nature of our shopping centers combined with superior demographics helps to insulate our core portfolio during economic downturns."

Development Activities

At Pentagon Row, in Arlington, Virginia, several retail tenants comprising Buildings B and C opened for business during the third quarter; including Hudson Trail Outfitters, Home Elements, Sur La Table and a variety of restaurants, lifestyle stores and service operations. The Trust anticipates additional store openings in Buildings B and C in the fourth quarter and Building D in the first quarter of 2002. On an aggregate basis, Pentagon Row is currently 92% leased.

At Santana Row, Federal Realty's mixed-use community in San Jose, California, construction continues on schedule and on budget. Retail leasing progress remains steady as the Trust has executed 16 leases since the end of the second quarter. To date, the Trust has approximately 270,000 square feet either leased or under signed letter of intent. As a result of the Trust's retail leasing progress to date, more than two-thirds of the first floor space directly on Santana Row, the development's main street, is leased or under signed letter of intent.

Commenting on the development, Steven J. Guttman, Federal Realty's chairman and chief executive officer stated, "We have made significant progress with respect to construction and retail leasing at Santana Row, even in the face of this difficult economy. Weakness in the northern California residential market will negatively impact our short-term returns; however, we have reached a critical mass of retail tenancy to ensure a successful opening in August 2002."

Guidance and Conference Call Information

Federal Realty's management team will present a more in depth discussion of the Trust's operating performance and provide 2001 and 2002 earnings guidance on it's third quarter earnings conference call, which is scheduled for 1:00 P.M ET, Friday November 2, 2001. To participate, please call 800/474-8920 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 November 5, 2001. A telephone recording of the call can also be heard by dialing 888/203-1112. The passcode for this replay is 593716.

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. Federal Realty owns or has an interest in 56 community and neighborhood shopping centers comprising over 11 million square feet, primarily located in densely populated communities throughout the Northeast and Mid-Atlantic United States. The Trust's predominately grocery-anchored shopping center portfolio is one of the best-leased and most productive necessity-based portfolios in the industry. In addition, Federal Realty owns or has an interest in 97 retail and urban mixed-use properties comprising almost 3 million square feet 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 34 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    Nine Months Ended
                            Sept. 30,            Sept. 30,
OPERATING RESULTS        2001       2000       2001       2000
                       --------   --------   --------   --------

 Revenues
  Rental income        $ 69,543   $ 64,101   $205,137   $192,584
  Other property
   income                 4,303      2,683     10,213      8,148
  Interest and
   other income           1,678      1,797      5,275      5,759
                       --------   --------   --------   --------
                         75,524     68,581    220,625    206,491
 Expenses
  Rental                 15,410     13,015     45,632     41,057
  Real estate taxes       7,398      6,741     20,877     19,720
  Interest               17,680     15,992     52,360     49,521
  Administrative          3,516      3,245      9,971      9,035
  Depreciation and
   amortization          15,153     13,440     44,110     39,433
                       --------   --------   --------   --------
                         59,157     52,433    172,950    158,766
                       --------   --------   --------   --------
  Operating income
   before
   investors' share
   of operations         16,367     16,148     47,675     47,725
  Investor's share
   of operations         (1,185)    (1,727)    (3,991)    (4,772)
                       --------   --------   --------   --------
  Income before
   gain on sale of
   real estate          15,182     14,421     43,684     42,953
  Gain on sale of
   real estate                0          0      7,898      3,681
                       --------   --------   --------   --------
  Net Income             15,182     14,421     51,582     46,634
  Dividends on
   preferred stock       (1,988)    (1,988)    (5,963)    (5,963)
                       --------   --------   --------   --------
  Net income
   available for
   common
   shareholders        $ 13,194   $ 12,433   $ 45,619   $ 40,671
                       ========   ========   ========   ========
  Earnings per
   common share,
   basic                  $0.34      $0.32      $1.17      $1.05
                       ========   ========   ========   ========
  Earnings per
   common share,
   diluted                $0.33      $0.32      $1.16      $1.04
                       ========   ========   ========   ========
  Weighted average
   shares
   outstanding,
   basic                 39,347     38,695     39,061     38,812
  Weighted average
   shares
   outstanding,
   diluted               40,492     39,774     40,136     39,949

  Funds from
   Operations
   Net income
    available for
    common
    shareholders       $ 13,194   $ 12,433   $ 45,619   $ 40,671
    Less: (gain)
     on sale of
     real estate              0          0     (7,898)    (3,681)
    Add : depreciation
     and amortization
     of real estate
     assets              13,764     12,229     40,139     35,852
    Add : amortization
     of initial direct
     costs of leases      1,039        897      3,015      2,597
    Add : income
     attributable to
     operating
     partnership units      289        278      1,049      1,022
                       --------   --------   --------   --------
     Funds from
      operations       $ 28,286   $ 25,837   $ 81,924   $ 76,461
                       ========   ========   ========   ========
     Funds from
     operations per
     share, diluted    $   0.70   $   0.65   $   2.04   $   1.91
                       ========   ========   ========   ========


                                       Sept. 30,        Dec. 31,
BALANCE SHEET DATA                       2001             2000
                                       ----------      ----------
 Assets                               (unaudited)
  Real estate, at cost
  Operating                            $1,778,561      $1,679,289
  Development                             286,841         175,624
                                       ----------      ----------
                                        2,065,402       1,854,913
  Accumulated
   depreciation and
   amortization                          (386,381)       (351,258)
                                       ----------      ----------
                                        1,679,021       1,503,655
  Mortgage notes receivable                35,505          47,360
  Cash and investments                     14,636          11,357
  Receivables                              13,718          13,092
  Other assets                             52,070          45,615
                                       ----------      ----------
 Total assets                          $1,794,950      $1,621,079
                                       ==========      ==========

   Liabilities and
    Shareholders' Equity

    Obligations under capital
     leases, mortgages and
     construction loans                  $410,663        $340,152
    Notes payable                         295,884         209,005
    Senior Notes                          410,000         410,000
    5 1/4% Convertible
    subordinated
    debentures                             75,289          75,289
    Other liabilities                     138,308         118,979

       Shareholders' Equity               464,806         467,654
                                       ----------      ----------
                                       $1,794,950      $1,621,079
                                       ==========      ==========

CONTACT:
Federal Realty Investment Trust
Investor Inquiries
Andrew Blocher, 301/998-8166
ablocher@federalrealty.com
or
Media Inquiries
Melissa Macchiavelli, 301/998-8168
mmacchiavelli@federalrealty.com