Rule No. 424(b)(5)
                                                       Registration No. 33-51029



                             SUBJECT TO COMPLETION
             PRELIMINARY PROSPECTUS SUPPLEMENT DATED MARCH 18, 1994
 
PROSPECTUS SUPPLEMENT
- --------------------- 
(TO PROSPECTUS DATED DECEMBER 13, 1993)
 
                                 800,000 SHARES
 
 
                     LOGO OF FEDERAL REALTY INVESTMENT TRUST
 
                                 COMMON SHARES
 
                                 ------------
 
  Founded in 1962, Federal Realty Investment Trust (the "Trust") is an owner,
operator and redeveloper of community and neighborhood shopping centers. At
February 28, 1994, the Trust owned 47 community and neighborhood shopping
centers, one enclosed mall and one apartment complex. The Trust is offering
800,000 common shares of beneficial interest, no par or stated value (the
"Shares") to an institutional investor. The Trust's Shares are listed on the
New York Stock Exchange under the symbol "FRT." The last reported sale price
for the Shares on March 17, 1994 was $27 3/4.
 
  Concurrently with the delivery of the Shares offered hereby, the Trust will
deliver to certain underwriters 2,500,000 Shares in a public offering.
 
                                 ------------
 
THESE  SECURITIES  HAVE NOT  BEEN  APPROVED OR  DISAPPROVED BY  THE  SECURITIES
 AND  EXCHANGE  COMMISSION   OR  ANY  STATE  SECURITIES   COMMISSION  NOR  HAS
  THE SECURITIES AND  EXCHANGE COMMISSION OR ANY  STATE SECURITIES COMMISSION
   PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
   ACCOMPANYING  PROSPECTUS.  ANY   REPRESENTATION  TO  THE  CONTRARY  IS  A
    CRIMINAL OFFENSE.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO INVESTOR DISCOUNT TRUST(1) - -------------------------------------------------------------------------------- Per Share.................................... $ $0 $ - -------------------------------------------------------------------------------- Total........................................ $ $0 $
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Before deducting expenses payable by the Trust estimated at $ . ------------ THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ------------ The date of this Prospectus Supplement is March , 1994. --------------- IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OF THE TRUST AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-2 PROSPECTUS SUPPLEMENT SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the detailed information and consolidated financial information appearing elsewhere in this Prospectus Supplement and the accompanying Prospectus or incorporated herein and therein by reference. As used herein, the term "offering" refers to the Shares to be offered and sold through certain underwriters in a public offering and the term "concurrent offering" refers to the Shares to be offered and sold to an institutional investor in this offering. THE TRUST Federal Realty Investment Trust is an owner, operator and redeveloper of community and neighborhood shopping centers. Founded in 1962, the Trust is a self-administered real estate investment trust ("REIT") that manages, leases and supervises renovation of its properties. At February 28, 1994, the Trust owned 47 community and neighborhood shopping centers and one enclosed mall that together had approximately 10.6 million rentable square feet and 1,500 tenants. As of December 31, 1993, the shopping center portfolio had an occupancy rate of 95%. An important part of the Trust's investment strategy is to acquire older, well-located centers and to enhance their operating performance through a program of renovation, expansion, re-configuration, re-leasing and re- merchandising. The Trust's properties are located in twelve states with approximately 77% of the Trust's rental income for the year ended December 31, 1993 generated by the properties located in three major metropolitan areas: New York/New Jersey, Philadelphia and Baltimore/Washington, D.C. The Trust's strategy is to acquire centers located in well-established, densely populated communities with attractive retailing demographics and limited opportunities for new competing developments. The typical Trust property is located on a major traffic artery, with good visibility and access. The Trust has made 125 consecutive quarterly distributions and has increased its distribution rate for each of the last 26 years. This is the longest record of annual distribution increases in the REIT industry. The current annual indicated distribution rate is $1.56 per Share. THE OFFERINGS(1) Shares Of- 800,000 Shares in this concurrent fered..... offering and 2,500,000 in the offering Shares to be Out- standing After the Offerings. 31,394,402 Shares Use of Pro- ceeds..... Principally to repay debt New York Stock Ex- change Symbol.... FRT
SUMMARY FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, ----------------------------------------- 1989 1990 1991 1992 1993 ------- ------- ------- -------- -------- OPERATING DATA Revenues............................. $82,852 $90,949 $97,652 $100,197 $115,337 Net income........................... 11,997 5,841 4,800 9,430 18,130 Net cash provided by operating activ- ities(2)............................ 18,696 23,484 26,111 28,236 35,183 Distributions made................... 19,174 23,688 25,426 33,319 40,611 Distributions made per share......... 1.36 1.42 1.49 1.525 1.545 OTHER DATA Funds from operations(3)............. 20,956 23,985 26,246 30,020 41,489
DECEMBER 31, 1993 AS ADJUSTED(1) (4) ----------------- ------------------ BALANCE SHEET DATA Real estate assets, at cost................ $758,088 $758,088 Notes payable.............................. 30,519 30,519 Long-term debt............................. 333,712 293,545 Shareholders' equity....................... 284,199
- -------- (1) Assumes no exercise of Underwriters' over-allotment option. (2) Determined in accordance with Financial Accounting Standards Board Statement No. 95. (3) Defined as income before depreciation and amortization and extraordinary items less gain on sale of real estate. Funds from operations differs from net cash provided by operating activities primarily because funds from operations does not include changes in operating assets and liabilities. Funds from operations is a supplemental measure of performance that does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional discussion. (4) Adjusted to give effect to the application of approximately $40.2 million of the net proceeds to repay debt. See "Use of Proceeds." S-3 THE TRUST Federal Realty Investment Trust is an owner, operator and redeveloper of community and neighborhood shopping centers. Founded in 1962, the Trust is a self-administered real estate investment trust that manages, leases and supervises renovation of its properties. At February 28, 1994, the Trust owned 47 community and neighborhood shopping centers, one enclosed mall, and one apartment complex. The shopping center portfolio has approximately 10.6 million rentable square feet and 1,500 tenants. At December 31, 1993, the occupancy rate of the shopping centers, excluding centers acquired in the previous twelve months, was 96%. Including all shopping centers owned at December 31, 1993, the occupancy rate was 95%. An important part of the Trust's strategy is to acquire older, well-located centers and to enhance their operating performance through a program of renovation, expansion, re-configuration, re-leasing and re-merchandising. The Trust has focused primarily on community and neighborhood shopping centers that are anchored by supermarkets, drug stores or high volume, value oriented retailers that provide consumer necessities. The Trust's shopping center leases typically are structured to include minimum rents and percentage rents based on tenants' sales volumes and reimbursement of operating and real estate tax expenses. The Trust continually evaluates its properties for renovation, re-tenanting and expansion opportunities. Similarly, the Trust regularly reviews its portfolio and from time to time considers selling certain of its properties. The Trust's operating results are affected by general economic and real estate conditions, including conditions specific to the markets where the Trust's properties are located. The Trust's management believes that now is an opportune time to expand the Trust's portfolio of properties. In its view, many property owners are in the market to sell properties, often as a result of the owners' financial distress or pressure from their real estate lenders. Consequently, in 1993 the Trust raised equity and partially restructured its debt in order to position itself to acquire additional properties. The Trust, a District of Columbia business trust of unlimited duration, maintains its offices at 4800 Hampden Lane, Bethesda, Maryland 20814 (telephone 301/652-3360). ACQUISITIONS AND REDEVELOPMENT UPDATE In 1993 the Trust acquired seven shopping centers totalling 1.5 million square feet. The Trust spent $101.8 million to acquire six of the centers and $6.2 million was incurred in connection with the long-term lease of the seventh shopping center. The average occupancy rate of the properties at the time of their purchase was 94%. The centers are pictured on the inside front cover of this Prospectus Supplement and include Pan Am Shopping Center in Fairfax, Virginia; Gaithersburg Square and Quince Orchard Plaza in Gaithersburg, Maryland; Crossroads Shopping Center in Highland Park, Illinois; Bala Cynwyd Shopping Center in suburban Philadelphia, Pennsylvania; Dedham Plaza in suburban Boston, Massachusetts; and Bethesda Row in Bethesda, Maryland. During 1993 the Trust spent $34.3 million for improvements to its properties. These improvements included $6.5 million to purchase and renovate a department store building at the Shops at Willow Lawn in Richmond, Virginia, $4.6 million to begin renovation and retenanting of Ellisburg Circle in Cherry Hill, New Jersey, $1.5 million for the first phase of the redevelopment at Huntington Shopping Center in Huntington, New York, and $2.3 million to begin the renovation and retenanting at Troy Shopping Center in Troy, New Jersey. The Trust intends to continue its acquisition and redevelopment activities in 1994. Acquisitions are targeted for the Trust's core major metropolitan markets of New York/New Jersey, Philadelphia S-4 and Baltimore/Washington, D.C. as well as the Chicago, Illinois and Boston, Massachusetts markets. In addition, the Trust is targeting for acquisition newer centers in its core markets which meet the Trust's demographic and credit-quality criteria. The Trust is also exploring site acquisitions in its core markets to permit the Trust to develop new shopping centers. Planned redevelopment and re-merchandising activities in 1994 include the renovation and redevelopment of Congressional Plaza in Rockville, Maryland, the first phase of redevelopment of Brick Plaza in Brick, New Jersey, the renovation and re-merchandising of Gaithersburg Square as well as the completion of the Ellisburg Circle Shopping Center and Huntington Shopping Center renovations begun in 1993. In total, capital improvements planned for the Trust's properties in 1994 are budgeted at $49.0 million. FINANCING UPDATE In 1993 the Trust sought to strengthen its capital structure, reduce its cost of funds and improve its access to capital. The Trust accomplished these objectives through a combination of key financial transactions which are described below. In April 1993 the Trust sold 2.8 million Shares in a public offering, raising net proceeds of $72.8 million. In May 1993 $50.5 million of the proceeds were used to redeem the Trust's 8.65% Senior Notes. In 1993 the Trust purchased $3.7 million of its 5 1/4% convertible subordinated debentures due 2002 (the "Debentures"), so that at December 31, 1993 there was $40.2 million of the original $100 million outstanding. At the debenture holders' request, the Debentures are required to be redeemed by the Trust on April 30, 1994 at 120% of their principal amount. To record the premium, the Trust has recorded interest at 7.53% on the Debentures. A portion of the proceeds of this concurrent offering and the offering are expected to be used to meet this obligation. In October 1993 the Trust took advantage of favorable financing rates and issued in Europe $75.0 million of 5 1/4% convertible subordinated debentures, realizing cash proceeds of approximately $73.0 million. The debentures, which mature in 2003, are convertible into Shares at $36 per Share. The debentures are redeemable by the Trust, in whole, at any time after October 28, 1998 at 100% of the principal amount plus accrued interest. During 1993 the Trust prepaid $34.9 million of mortgage obligations which had a weighted average interest rate of 9.6%. To further position itself to acquire additional properties, during 1993 the Trust arranged $70.0 million of unsecured medium-term revolving credit facilities with three banks. The Trust uses these facilities to fund acquisitions and other cash requirements until conditions are favorable for issuing equity or long-term debt. The weighted average interest rate on borrowings during 1993 on these facilities was 4.2%. Reflecting the successful results of the Trust's efforts to restructure its debt and increase its equity, in June 1993 Standard and Poor's raised the ratings on the Trust's convertible subordinated debentures from BBB- to BBB. In September 1993 Moody's Investors Service also upgraded the Trust's subordinated debt, from Ba1 to Baa2. The Trust is continuing its debt restructuring program in 1994. In February 1994 the Trust borrowed $22.5 million, which was used to pay down the December 1993 balance on the revolving credit facilities. The loan, which is secured by Northeast Plaza Shopping Center, bears interest at 150 basis points over the London Interbank Offered Rate (currently 5.25%) and replaces a loan, prepaid S-5 in 1993, which was secured by this property and as of January 1994 would have borne interest at 9.75%. In addition, the Trust obtained an additional unsecured revolving credit facility of $15.0 million in February 1994, bringing its total availability to $85.0 million. USE OF PROCEEDS The net proceeds to the Trust from the sale of the Shares offered hereby and in the offering are approximately $ ($ if the underwriters' over-allotment option is exercised in full). The Trust intends to use the majority of the proceeds of these offerings to repay debt, principally to meet the potential $48.2 million refinancing requirement of the Debentures (the Trust's 5 1/4% convertible subordinated debentures due 2002 which have an effective interest rate of 7.53%) and to repay the Trust's revolving credit facilities. The remaining net proceeds from these offerings are expected to be used for property acquisitions and improvements. PRICE RANGE OF THE SHARES AND DISTRIBUTIONS The Trust's Shares are listed on the New York Stock Exchange under the symbol FRT. The following table sets forth the high and low sale prices of the Shares for the periods indicated and the distributions made per Share in such periods.
DISTRIBUTIONS HIGH LOW MADE ---- ---- ------------- 1992 1st Quarter............. $22 1/2 $18 3/4 $ .380 2nd Quarter............. 21 3/4 20 .380 3rd Quarter............. 25 21 3/8 .380 4th Quarter............. 25 1/4 22 .385 ------ 1.525 1993 1st Quarter............. 29 23 7/8 .385 2nd Quarter............. 28 7/8 24 3/4 .385 3rd Quarter............. 30 1/4 25 1/2 .385 4th Quarter............. 29 7/8 24 1/8 .390 ------ 1.545 1994 1st Quarter (through March 17, 1994)........ 29 1/2 23 .390
The last reported sale price of the Shares on the New York Stock Exchange on March 17, 1994 was $27 3/4 per Share. As of December 31, 1993, there were 4,564 registered holders of Shares. The Trust has made 125 consecutive quarterly distributions and has increased its distribution rate every year for each of the last 26 years. The current indicated annual distribution rate is $1.56 per Share. On March 3, 1994 the Trust declared a cash dividend of $.39 per Share, payable on April 15, 1994 to shareholders of record on March 25, 1994. The Trust's ability to make distributions depends on a number of factors, including its net cash provided by operating activities, capital commitments and debt repayment schedules. For federal income tax purposes, distributions made to shareholders may consist of ordinary income, capital gains distributions, non-taxable return of capital or a combination thereof. S-6 Distributions that exceed the Trust's current and accumulated earnings and profits constitute a return of capital and reduce the shareholder's basis in his Shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the shareholder's basis in his Shares, it will generally be treated as gain from the sale or exchange of that shareholder's Shares. If the Trust designates certain distributions as capital gains distributions in accordance with Section 857(b)(3)(B) and (C) of the Internal Revenue Code of 1986, as amended (the "Code"), such distributions will be taxable as long-term capital gains to the shareholder, regardless of the length of time the shareholder has held his Shares. Under Section 291 of the Code, however, a corporate shareholder may be required to treat up to 20% of a capital gains distribution as ordinary income. Any loss upon the sale or exchange of Shares held for six months or less will be treated as long-term capital loss to the extent of any capital gains distributions received by the shareholder. The Trust annually notifies shareholders as to the taxability of distributions made during the preceding year. Since 1989, cash distributions per Share made to shareholders have been taxable as set forth below.
1989 1990 1991 1992 1993 ----- ----- ----- ------ ------ Ordinary income................................. $1.03 $1.05 $ .83 $ .610 $1.095 Capital gains................................... -- .06 -- -- -- Return of capital............................... .33 .31 .66 .915 .450 ----- ----- ----- ------ ------ Total distributions made........................ $1.36 $1.42 $1.49 $1.525 $1.545 ===== ===== ===== ====== ======
The Trust offers a dividend reinvestment plan which allows its shareholders to automatically reinvest distributions, as well as make voluntary cash payments towards the purchase of additional Shares. S-7 SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected consolidated financial data for the Trust and should be read in conjunction with the Consolidated Financial Statements and Notes incorporated by reference herein.
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1989 1990 1991 1992 1993 -------- -------- -------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE DATA) OPERATING DATA Revenues Rental income......... $ 72,771 $ 80,698 $ 88,350 $ 89,971 $105,948 Interest.............. 6,588 6,545 4,675 5,514 3,894 Other property income. 3,493 3,706 4,627 4,712 5,495 -------- -------- -------- -------- -------- 82,852 90,949 97,652 100,197 115,337 Expenses Interest.............. 33,129 34,709 38,147 35,201 31,550 Depreciation and amor- tization............. 16,174 19,091 21,922 23,033 25,375 Property expenses..... 24,817 26,751 29,254 29,795 36,843 General and adminis- trative.............. 3,569 5,005 3,364 4,744 4,675 -------- -------- -------- -------- -------- 77,689 85,556 92,687 92,773 98,443 -------- -------- -------- -------- -------- Income before investors' share of operations, gain on sale of real estate and extraordi- nary item.............. 5,163 5,393 4,965 7,424 16,894 Investors' share of op- erations............... (381) (499) (641) (437) (780) -------- -------- -------- -------- -------- Income before gain on sale of real estate and extraordinary item..... 4,782 4,894 4,324 6,987 16,114 Gain on sale of real es- tate................... 7,215 947 61 2,501 -- -------- -------- -------- -------- -------- Income before extraordi- nary item.............. 11,997 5,841 4,385 9,488 16,114 Extraordinary item...... -- -- 415 (58) 2,016 -------- -------- -------- -------- -------- Net income.............. $11,997 $ 5,841 $ 4,800 $ 9,430 $ 18,130 ======== ======== ======== ======== ======== Earnings per share Income before gain on sale of real estate and extraordinary item................. $ .33 $ .29 $ .25 $ .30 $ .60 Gain on sale of real estate............... .49 .06 -- .11 -- Extraordinary item.... -- -- .03 -- .07 -------- -------- -------- -------- -------- Net income............ $ .82 $ .35 $ .28 $ .41 $ .67 ======== ======== ======== ======== ======== Weighted average out- standing shares........ 14,672 16,695 17,304 22,767 27,009 Net cash provided by op- erating activities(1).. $ 18,696 $ 23,484 $ 26,111 $ 28,236 $ 35,183 Distributions made...... 19,174 23,688 25,426 33,319 40,611 Distributions made per share.................. 1.36 1.42 1.49 1.525 1.545 OTHER DATA Funds from opera- tions(2)............... 20,956 23,985 26,246 30,020 41,489 BALANCE SHEET DATA Cash and investments.... 65,107 33,792 51,631 71,910 13,643 Real estate assets, at cost................... 514,552 555,879 566,056 598,867 758,088 Total assets............ 565,779 553,396 566,062 603,811 690,943 Mortgages and capital lease obligations...... 204,616 203,287 225,859 245,694 218,545 Notes payable........... 29,357 31,222 11,665 6,117 30,519 Senior notes............ 50,000 50,000 50,000 50,000 -- 8 3/4% Convertible sub- ordinated debentures... 5,630 4,576 4,338 2,371 -- 5 1/4% Convertible sub- ordinated debentures due 2002............... 100,000 100,000 87,665 43,847 40,167 5 1/4% Convertible sub- ordinated debentures due 2003............... -- -- -- -- 75,000 Total liabilities....... 419,665 424,050 414,582 380,933 406,744 Shareholders' equity.... 146,114 129,346 151,480 222,878 284,199
- -------- (1) Determined in accordance with Financial Accounting Standards Board Statement No. 95. (2) Defined as income before depreciation and amortization and extraordinary items less gain on sale of real estate. Funds from operations differs from net cash provided by operating activities primarily because funds from operations does not include changes in operating assets and liabilities. Funds from operations is a supplemental measure of performance that does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional discussion. S-8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES The Trust meets its liquidity requirements through net cash provided by operating activities, long-term borrowing through debt offerings and mortgages, medium and short-term borrowing under lines of credit, and equity offerings. Because all or a significant portion of the Trust's net cash provided by operating activities is distributed to shareholders, capital outlays for property acquisitions, renovation projects and debt repayments require funding from borrowing or equity offerings. In order to improve its capital structure and to finance and expand its real estate portfolio, the Trust raised equity and debt during 1992 and 1993. The Trust took advantage of the favorable interest rate environment by replacing higher rate debt with lower rate debt and replaced near term maturing debt with longer term debt. Equity has increased to $284.2 million at December 1993, while total debt was $364.2 million at December 31, 1993. The Trust's debt to equity ratio has consequently dropped from 2.5 to 1 at December 31, 1991 to 1.28 to 1 at December 31, 1993. In June 1992 the Trust sold 3.4 million Shares in a public offering, raising net proceeds of $66.5 million. In April 1993 another 2.8 million Shares were issued in a public offering, netting proceeds of $72.8 million. In December 1993 another 220,000 Shares were issued for $5.4 million in a private placement in connection with the long-term lease of a property. In March 1992 the Trust exchanged $22.6 million principal amount of its 5 1/4% convertible subordinated debentures due 2002 for 1.3 million Shares. Another $21.2 million principal amount of these debentures were retired in 1992 when they were repurchased by the Trust with proceeds from the public offerings. The Trust purchased an additional $3.7 million of these debentures in 1993, so that at December 31, 1993 there were $40.2 million of the original $100.0 million outstanding. The Trust called its 8 3/4% convertible subordinated debentures and its 8.65% Senior Notes forredemption in 1993. The Trust redeemed $173,000 principal amount of the 8 3/4% debentures at a price of $1017.50 per debenture on March 15; the balance of the debentures that had been outstanding or $2.2 million were converted into Shares. The Senior Notes were redeemed on May 14, at a price of $1010 per note for a total redemption price of $50.5 million. In October 1993 the Trust took advantage of favorable financing rates and issued in Europe $75.0 million of 5 1/4% convertible subordinated debentures, realizing cash proceeds of approximately $73.0 million. The debentures, which mature in 2003, are convertible into Shares at $36 per Share. The debentures are redeemable by the Trust, in whole, at any time after October 28, 1998 at 100% of the principal amount plus accrued interest. The Trust placed a $30.0 million mortgage on Federal Plaza in 1992; the mortgage bears interest beginning at 8 1/4%, resetting every three years, and matures in 2001. During 1992 the Trust prepaid $6.3 million of mortgage obligations and then in 1993 the Trust prepaid another $34.9 million of mortgage obligations; the interest rates on these mortgages were higher than current rates. At December 31, 1993 the Trust had $70.0 million of unsecured, medium-term revolving credit facilities with three banks. All three facilities require fees and have covenants requiring a minimum shareholders' equity and a maximum ratio of debt to net worth. The Trust uses these facilities to fund acquisitions and other cash requirements until conditions are favorable for issuing equity or long-term debt. The maximum drawn under these facilities during 1993 was $64.1 million; at December 31, 1993 the Trust had $24.4 million outstanding under these facilities. The average weighted interest S-9 rate on borrowings during 1993 on these facilities was 4.2%. These medium-term facilities replace a $20.0 million unsecured line of credit which was available at December 1992. The increase in the Trust's revolving credit facilities is indicative of the improvement since 1991 in the credit environment. The Trust obtained an additional unsecured revolving credit facility of $15.0 million in February 1994, bringing its total availability to $85.0 million. In February 1994 the Trust borrowed $22.5 million, which was used to pay down the December 1993 balances on the revolving credit facilities. The loan, which is secured by the Northeast Plaza Shopping Center, bears interest at 150 basis points over LIBOR, the London Interbank Offered Rate, and is due on January 31, 1995. In June 1993 Standard and Poor's raised the ratings on the Trust's convertible subordinated debentures from BBB- to BBB, reflecting the successful results of the Trust's restructuring of its debt and increasing of its equity. In September 1993 Moody's Investors Service also upgraded the Trust's subordinated debt, from Ba1 to Baa2. The Trust's long-term debt has varying maturity dates and in a number of instances includes balloon payments or other contractual provisions that could require significant repayments during a particular period. The earliest balloon repayment is in April 1994, when the holders of the Trust's 5 1/4% convertible subordinated debentures due 2002 may require the Trust to redeem the debentures for $48.2 million (120% of the principal amount). The next balloon repayment is in 1998 when approximately $41.3 million of mortgages are due. Major expenditures of capital by the Trust during 1993 included the following: (1) $101.8 million to acquire six shopping centers; (2) $6.2 million incurred in connection with the long-term lease of a seventh shopping center; (3) $32.5 million to prepay mortgages; (4) $50.5 million to redeem the Senior Notes; (5) $4.6 million to redeem portions of the convertible subordinated debt; and (6) $34.3 million in improvements to properties. These improvements included $6.5 million to purchase and renovate a department store building at The Shops at Willow Lawn, $4.6 million to begin renovation and retenanting of Ellisburg Circle Shopping Center, $1.5 million for the first phase of the redevelopment at Huntington Shopping Center, $2.3 million to begin the renovation and retenanting at Troy Shopping Center and $9.5 million in tenant work. Cash requirements for these expenditures were met by the net proceeds of the recent equity and debt offerings and from borrowings on the revolving credit facilities. Major expenditures of capital by the Trust during 1992 included the following: (1) $15.3 million to purchase Ellisburg Circle Shopping Center; (2) $9.1 million to purchase the land underlying Wildwood Shopping Center which had been subject to a long-term ground lease; (3) $8.5 million to repay short- term borrowings; (4) $23.6 million to repurchase 5 1/4% convertible subordinated debentures due 2002; (5) $8.0 million to prepay mortgages; and (6) $15.2 million in improvements to properties. Cash requirements for these expenditures were met by the net proceeds from the sale of Sargent Road and 25th Street Shopping Centers, the net proceeds from the mortgage on Federal Plaza and the proceeds of public offerings. The Trust has budgeted $49.0 million for capital improvements to its properties in 1994. These improvements include: (1) $14.0 million to begin the renovation and redevelopment of Congressional Plaza; (2) $4.0 million to begin renovation at Brick Plaza; (3) $6.0 million to begin renovation of Gaithersburg Square; and (4) approximately $9.0 million for tenant work. In addition the Trust has budgeted $48.2 million to redeem the 5 1/4% convertible subordinated debentures due 2002, which the holders may require the Trust to redeem in April 1994, and $4.1 million to exercise an option to purchase the land at Northeast Shopping Center in December 1994. These expenditures will be paid from proceeds from borrowings under its medium-term revolving credit facilities and from the proceeds of this concurrent offering and the offering. S-10 The State of New Jersey Division of Taxation has assessed the Trust $364,000 in taxes, penalty and interest for the years 1985 through 1990, since the State has disallowed the dividends paid deduction in computing New Jersey taxable income. The Trust has filed a complaint in the Tax Court of New Jersey contesting the assessment since the Trust believes that it is entitled to the deduction. At this time, the outcome of this matter is unknown. The North Carolina Department of the Environment, Health and Natural Resources issued a Notice of Violation ("NOV") against a dry cleaner tenant at Eastgate Shopping Center in Chapel Hill, North Carolina concerning a spill at the shopping center. As owner of the shopping center, the Trust was named in and received a copy of the NOV. Estimates to remediate the spill range from $300,000 to $500,000. An agreement is being drawn with two previous owners of the shopping center to share the costs to remediate. The Trust has recorded a liability of $120,000 as its estimated share of the cleanup costs. Contaminants at levels in excess of New Jersey cleanup standards were identified at a shopping center in New Jersey. The Trust has retained an environmental consultant to investigate the contamination. The Trust is also evaluating whether it has insurance coverage for this matter. At this time, the Trust is unable to determine what the range of remediation costs might be. The Trust has also identified chlorinated solvent contamination at two other properties. In each case, the contamination appears to be linked to the current and/or previous dry cleaner. The Trust intends to look to the responsible parties for any remediation effort. Evaluation of these situations is preliminary and it is impossible to estimate the range of remediation costs, if any. The Trust reserved at closing $2.25 million for environmental issues principally associated with the recently acquired Gaithersburg Square. Pursuant to an indemnity agreement entered into with the seller at closing, the Trust agreed to take certain actions with respect to identified chlorinated solvent contamination. The seller indemnified the Trust for certain third party claims and government requirements related to contamination at adjacent properties. Management believes that the combination of cash available at December 31, 1993, the revolving credit facilities, and the unencumbered value of the Trust's properties provide the Trust with adequate capital resources and liquidity for operating purposes in the near future. The Trust, however, continues to renovate its existing centers and seeks to acquire more shopping centers. The Trust will need to raise additional equity or issue additional debt in order to fund its planned renovations in 1994 and to purchase any additional shopping centers. The Trust believes that it has the ability to raise this needed capital through the offering of equity and debt securities so that it may pursue its growth plans as well as to meet its longer term capital and debt financing needs, including scheduled loan payments and contractual repayment obligations. RESULTS OF OPERATIONS Funds from operations is defined as income before depreciation and amortization and extraordinary items less gains on sale of real estate. Management believes that funds from operations is an appropriate supplemental measure of the Trust's operating performance because it believes that reductions for depreciation and amortization charges are not meaningful in evaluating income-producing real estate, which have historically been appreciating assets. The Trust acquires, evaluates and sells income-producing properties based upon operating income without taking into account property depreciation and amortization charges and utilizes funds from operations, together with S-11 other factors, in setting shareholder distribution levels. Gains on sale of real estate and extraordinary items are also excluded from this supplemental measure of performance because such amounts are not part of the ongoing operations of the Trust's portfolio. Funds from operations does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. Funds from operations increased 38% in 1993 to $41.5 million from $30.0 million in 1992. Funds from operations increased 14% in 1992 to $30.0 million from $26.2 million in 1991. The Trust's shopping center leases generally provide for minimum rents, with periodic increases. Most shopping center tenants pay a majority of on-site operating expenses. Many leases also contain a percentage rent clause which calls for additional rents based on tenant sales, so that at a given sales volume if prices increase, so does rental income. These features in the Trust leases reduce the Trust's exposure to higher costs caused by inflation, although inflation has not been significant in recent years. Rental income, which consists of minimum rent, percentage rent, and cost recoveries, increased from $90.0 million in 1992 to $105.9 million in 1993. If centers acquired and sold in 1992 and 1993 are excluded, rental income increased 8.8% from $88.5 million in 1992 to $96.3 million in 1993. Perring Plaza, whose redevelopment was completed late in 1992, and Huntington Shopping Center, whose first phase of retenanting and redevelopment was completed in 1993, contributed 39% of this increase. Rental income increased from $88.4 million in 1991 to $90.0 million in 1992; if centers acquired and sold in 1992 and 1991 are excluded, rental income increased 3.5% from $85.5 million to $88.8 million. Minimum rents increased from $66.9 million in 1991 to $68.8 million in 1992 to $81.3 million in 1993. If centers acquired and sold during these years are excluded, minimum rents increased from $64.7 million in 1991 to $67.8 million in 1992 to $73.6 million in 1993. Forty-eight percent of the increase from 1992 to 1993 was contributed by Perring Plaza and Huntington Shopping Center. Of the 1992 increase, $400,000 was contributed by Perring Plaza and $1.2 million was contributed by Federal Plaza which was under redevelopment until May 1991. Cost reimbursements, which generally increase as expenses increase, rose from $14.7 million in 1991 to $14.9 million in 1992 to $18.2 million in 1993. Excluding centers acquired and sold during the three-year period, cost reimbursements increased from $14.3 million in 1991 to $14.6 million in 1992 to $16.4 million in 1993. The increase in 1993 recoveries relates to a corresponding increase in expense in 1993 as discussed below, while the small increase in 1992 from 1991 relates to the corresponding slight increase in expense in 1992 as compared to 1991. Percentage rents are a fluctuating source of revenue based on tenant sales volume and lease rollovers. When leases are renewed the Trust seeks to set minimum rent at levels that include the past year's percentage rents. Percentage rents have decreased from $4.6 million in 1991 to $4.2 million in 1992 to $4.1 million in 1993. Excluding centers sold and acquired during the three-year period, percentage rents have decreased from $4.3 million in 1991 to $4.0 million in 1992 to $3.9 million in 1993. The decreases resulted primarily from rolling percentage rent into minimum rents as leases renew and from the expiration of certain leases. Other property income, which includes items which tend to fluctuate from period to period, such as utility reimbursements, telephone income, merchant association dues, lease termination fees and temporary occupant income, has risen from $4.6 million in 1991 to $4.7 million in 1992 to $5.5 million in 1993. Excluding centers bought and sold during the three-year period, other property income increased from $4.4 million in 1991 to $4.6 million in 1992 to $4.8 million in 1993. The increase in 1993 was due primarily to an increase in lease termination fees. S-12 Rental expenses have increased from year-to-year in dollar amount, especially in 1993 where $2.1 million of the increase is due to newly acquired centers. However, rental expenses have remained fairly stable as a percentage of property income (rental income plus other income); 21.9% in 1991, 22.1% in 1992 and 23.8% in 1993. Of the expenses included in rental expense, the greatest changes have been in repairs and maintenance and other operating expenses. Snow removal expense is the primary reason for the increase in repairs and maintenance. Other operating expenses have increased due to an increase in bad debt, environmental expense and marketing expenses for the centers. Real estate taxes have remained stable as a percentage of property income, at approximately 9.3%. Depreciation and amortization charges have increased from $21.9 million in 1991 to $23.0 million in 1992 to $25.4 million in 1993. The increase in 1993 is due to depreciation on the recent acquisitions and renovations, while in 1992 the increase was primarily due to increased depreciation on Federal Plaza, depreciation on renovations and increased amortization of lease costs. Interest income decreased from $5.5 million in 1992 to $3.9 million in 1993 due primarily to lower cash balances, as cash was used for acquisitions, renovations, and debt repayments. Interest income increased from $4.7 million in 1991 to $5.5 million in 1992, despite lower interest rates in 1992 since average cash balances were higher in 1992 due to the temporary investment of the proceeds of public offerings. Interest expense has decreased from $35.2 million in 1992 to $31.6 million in 1993, reflecting the redemption of the Senior Notes and the 8 3/4% convertible subordinated debentures, the reduction in the 5 1/4% convertible subordinated debentures due 2002 and the prepayment of various mortgages, partially offset by interest expense of the revolving credit facilities and interest on the 5 1/4% convertible subordinated debentures due 2003. Interest expense decreased from $38.1 million in 1991 to $35.2 million in 1992 due primarily to the exchange and repurchase of $56.2 million of the Trust's 5 1/4% convertible subordinated debentures due 2002 in 1991 and 1992. Administrative expenses have ranged from 3.6% of property income (rental income plus other income) in 1991 to 4.3% in 1992 to 4.2% in 1993. During the worst of the recession in 1991 the Trust reduced overhead expenses by reducing the number of employees and freezing or reducing many salaries. Employment practices have now returned to normal. Other charges of $682,000 in 1992 is comprised of two items. One is the $960,000 writedown of an investment in Olympia and York notes, partially offset by the recovery of $278,000 of a legal settlement. Income before gain on sale of real estate and extraordinary item increased $9.1 million from 1992 to 1993, primarily because of increased revenues from recent acquisitions and redevelopments and because of the decrease in interest expense. Income before gain on sale of real estate and extraordinary item increased $2.7 million in 1992 from 1991 due to an increase in revenue coupled with a decrease in interest expense partially offset by higher depreciation and amortization, administrative expense and net other charges. Gain on sale of real estate is dependent on the extent and timing of sales. The 1992 gain was primarily due to the sale of Sargent Road and 25th Street Shopping Centers. The 1991 gain was on the sale of Lawrence Village Shopping Center. In 1993 the Trust had a net gain of $2.0 million on the early extinguishment of debt, resulting from a $3.1 million gain on the extinguishment of the mortgage at Northeast Plaza, offset by losses on the redemption of the Senior Notes, convertible subordinated debentures and two mortgages. In 1992 the Trust had a net loss of $58,000 on the early extinguishment of debt, resulting from the prepayment of two mortgages and the exchange and repurchase of its 5 1/4% convertible subordinated debentures due 2002. In 1991 the Trust had a net gain of $415,000 on the early extinguishment of debt, consisting of a gain on the repurchase of the Trust's 5 1/4% convertible subordinated debentures due 2002 partially offset by $587,000 in prepayment fees on the early extinguishment of three mortgages. As a result of the foregoing items, net income was $18.1 million in 1993, $9.4 million in 1992 and $5.8 million in 1991. S-13 IMPACT OF NEW ACCOUNTING STANDARDS In May 1993 the Financial Accounting Standards Board (FASB) issued FASB No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This standard will be effective for 1994 financial statements and requires the classification of debt and equity investments into one of three categories: held-to-maturity, trading or available-for-sale. The Trust does not believe that the implementation of the standard in 1994 will have a material effect on the Trust's financial statements since the Trust's current accounting for debt and equity investments does not differ materially from the standard. PROPERTIES The Trust currently owns or has leasehold interests in 47 neighborhood and community shopping centers, one enclosed mall (Willow Lawn) and one apartment complex. The following table sets forth information concerning the Trust's properties as of December 31, 1993.
CAPITAL PERCENT IMPROVEMENTS LEASED AT YEAR RENTABLE ACQUISITION SINCE TOTAL DECEMBER 31, PRINCIPAL ACQUIRED SQUARE FEET COST ACQUISITION COST 1993 TENANTS -------- ----------- ------------ ------------ ------------ ------------ ----------------------- SHOPPING CENTERS Allwood 1988 52,000 $ 3,920,000 $ 94,000 $ 4,014,000 97% Grand Union Clifton, N.J.(1) Mandee Shop Andorra 1988 252,000 14,778,000 1,235,000 16,013,000 98 Clover Philadelphia, Pa. Andorra Theater Acme Markets Bala Cynwyd 1993 228,000 16,986,000 298,000 17,284,000 94 Lord & Taylor Bala Cynwyd, Pa. Olive Garden Barracks Road 1985 450,000 20,822,000 8,121,000 28,943,000 99 Rose's Charlottesville, Va. Safeway The Grocery Store Bethesda Row 1993 223,000 18,823,000 -- 18,823,000 94 Giant Food Bethesda, Md.(1) Giant Pharmacy Blue Star 1988 398,000 29,922,000 680,000 30,602,000 100 Caldor Watchung, N.J.(1) Shop Rite Toys R Us Brainerd Village 1987 216,000 9,926,000 1,707,000 11,633,000 68 Office Depot Chattanooga, Tn. 50 Off Brick Plaza 1989 314,000 24,715,000 2,459,000 27,174,000 100 A&P Supermarkets Brick Township, N.J.(1) Steinbach's Brunswick 1988 261,000 12,456,000 529,000 12,985,000 100 Caldor New Brunswick, N.J.(1) Grand Union Clifton 1988 80,000 3,646,000 69,000 3,715,000 100 Acme Markets Clifton, N.J.(1) Channel Home Congressional Plaza 1965 247,000 10,217,000 2,857,000 13,074,000 72 Fresh Fields Rockville, Md.(2) Tower Records Crossroads 1993 197,000 16,246,000 187,000 16,433,000 97 Gold Standard Liquors Highland Park, Il. TJ Maxx Dedham Plaza 1993 255,000 25,287,000 -- 25,287,000 99 Ames Dedham, Ma. Workout Plus Eastgate 1986 159,000 7,383,000 4,040,000 11,423,000 98 Southern Season Chapel Hill, N.C. Food Lion Ellisburg Circle 1992 255,000 15,337,000 5,021,000 20,358,000 98 Shop Rite Cherry Hill, N.J. Ross Dress for Less Falls Plaza 1967 67,000 1,265,000 1,179,000 2,444,000 100 Giant Food Falls Church, Va. Peoples Drug Feasterville 1980 98,000 1,600,000 2,144,000 3,744,000 96 Genuardi Markets Feasterville, Pa.(1) Eric Theater Office Max Federal Plaza 1989 243,000 28,111,000 31,046,000 59,157,000 98 Bed, Bath & Beyond Rockville, Md. CompUSA T.J. Maxx Flourtown 1980 106,000 2,153,000 788,000 2,941,000 98 Channel Home Flourtown, Pa. Genuardi Markets Gaithersburg Square 1993 162,000 12,972,000 219,000 13,191,000 88 Peoples Drug Gaithersburg, Md. Superfresh Food Markets Governor Plaza 1985 269,000 6,973,000 9,817,000 16,790,000 97 Office Depot Glen Burnie, Md. Frank's Nursery Syms Hamilton 1988 180,000 5,405,000 1,105,000 6,510,000 100 Steven's Furniture Hamilton, N.J.(1) Shop Rite
S-14
CAPITAL PERCENT IMPROVEMENTS LEASED AT YEAR RENTABLE ACQUISITION SINCE TOTAL DECEMBER 31, PRINCIPAL ACQUIRED SQUARE FEET COST ACQUISITION COST 1993 TENANTS -------- ----------- ------------ ------------ ------------ ------------ ----------------------- SHOPPING CENTERS Huntington 1988 275,000 $ 16,008,000 $ 2,871,000 $ 18,879,000 100% Service Merchandise Huntington, N.Y.(1) Bed, Bath & Beyond Toys R Us Lancaster 1980 106,000 2,103,000 1,850,000 3,953,000 93 Giant Eagle Lancaster, Pa.(1) Langhorne Square 1985 189,000 3,694,000 8,060,000 11,754,000 98 Marshalls Langhorne, Pa. Luxury Linens Laurel Centre 1986 379,000 29,983,000 10,248,000 40,231,000 95 Giant Food Laurel, Md. Marshalls Toys R Us Lawrence Park 1980 334,000 7,160,000 4,534,000 11,694,000 98 Best Products Broomall, Pa.(1) Acme Markets Rickel Home Center Loehmann's Plaza 1983 245,000 16,333,000 4,099,000 20,432,000 95 Holiday Spa Fairfax, Va.(3) Linens N Things Mid-Pike Plaza 1982 301,000 10,335,000 4,670,000 15,005,000 100 Syms Rockville, Md.(1) Toys R Us North City Plaza 1987 111,000 2,500,000 455,000 2,955,000 92 Kmart New Castle, Pa.(4) Joseph's Supermarket Northeast 1983 303,000 11,748,000 6,710,000 18,458,000 96 Burlington Coat Factory Philadelphia, Pa. Marshalls Northeast Plaza 1986 446,000 33,166,000 5,085,000 38,251,000 92 Levitz Furniture Atlanta, Ga. Sportstown Publix Old Keene Mill 1976 92,000 1,636,000 1,806,000 3,442,000 95 Fresh Fields Springfield, Va. Sassafras Pan Am 1993 218,000 21,623,000 1,051,000 22,674,000 91 Micro Center Fairfax, Va. Safeway Perring Plaza 1985 413,000 9,261,000 13,583,000 22,844,000 96 Metro Foods Baltimore, Md. Home Depot Quince Orchard Plaza 1993 241,000 11,146,000 644,000 11,790,000 91 Circuit City Gaithersburg, Md. MJ Design U.S. Dept. of Energy Roseville 1973 140,000 2,126,000 1,958,000 4,084,000 100 F&M Distributors Roseville, Mi. Handy Andy Rutgers 1988 217,000 14,429,000 95,000 14,524,000 100 Foodtown Franklin, N.J.(1) Kmart Shillington 1980 74,000 1,387,000 1,566,000 2,953,000 81 Rite Aid Shillington, Pa.(1) Homestyle Buffet Town & Country Plaza 1990 214,000 4,766,000 506,000 5,272,000 81 Winn-Dixie Hammond, La.(5) Weiner's Department Store Town & Country 1973 236,000 3,387,000 4,913,000 8,300,000 100 Burlington Coat Factory Springfield, Il. National Supermarkets Troy 1980 205,000 5,193,000 4,506,000 9,699,000 97 Kmart Parsippany-Troy, Pathmark N.J.(1) CompUSA Tysons Station 1978 50,000 841,000 2,237,000 3,078,000 100 Sassafras Falls Church, Va. Linens N Things Westfalls 1972 60,000 1,073,000 1,781,000 2,854,000 100 Staples Falls Church, Va. Wildwood 1969 84,000 10,196,000 4,669,000 14,865,000 100 Sutton Place Gourmet Bethesda, Md. Peoples Drug Williamsburg 1986 239,000 9,918,000 1,935,000 11,853,000 96 Rose's Williamsburg, Va. Peebles Food Lion Willow Grove 1984 220,000 8,243,000 15,127,000 23,370,000 100 Toys R Us Willow Grove, Pa. Marshalls Willow Lawn 1983 451,000 10,915,000 35,641,000 46,556,000 95 Leggett Stores Richmond, Va.(5) J.C. Penney ---------- ------------ ------------ ------------ Total or Average 10,555,000 $538,113,000 $214,195,000 $752,308,000 96%(6) ========== ============ ============ ============ === APARTMENT COMPLEX Rollingwood Apartments 1971 282 units $ 2,798,000 $ 2,982,000 $ 5,780,000 95% Silver Spring, Md.
- ------- (1) The Trust has a leasehold interest in this center. (2) The Trust owns a 49% equity interest in this center. (3) The Trust owns a 1% general partnership interest and manages the partnership. (4) The Trust owns an 88% general partnership interest in this center. (5) The Trust owns this center subject to a ground lease. (6) Does not include shopping centers acquired during the past 12 months. S-15 MANAGEMENT The Trustees and Officers of the Trust are as follows:
PRINCIPAL OCCUPATION AND NAME AGE OTHER DIRECTORSHIPS ---- --- ------------------------------------------------ Dennis L. Berman........... 43 Trustee; General Partner, GDR Partnerships and Vingarden Associates, builders/developers, Berman Enterprises A. Cornet de Ways Ruart.... 60 Trustee; Director, SIPEF S.A., an international holding company principally of agricultural interests; Director of Interbrew S.A. Samuel J. Gorlitz.......... 76 Trustee and Founder; President, Gorlitz Associates, real estate developers Steven J. Guttman.......... 47 Trustee; President and Chief Executive Officer; Trustee, International Council of Shopping Centers Ron D. Kaplan.............. 31 Vice President, Capital Markets Arnold M. Kronstadt........ 74 Trustee; Founding Partner, Collins & Kronstadt- Leahy Hogan Collins Draper, architects and planners; Director, Carl M. Freeman Associates, Inc., real estate builders-developers Morton S. Lerner........... 66 Trustee; Retired President and Chief Executive Officer of Lerner Shoes, Inc.; Director, Wachovia Bank Walter F. Loeb............. 69 Trustee; President, Loeb Associates, management consulting firm; Publisher, Loeb Retail Letter; Director, Intertan, Inc., a holding company for foreign retailers; Director, Color Tile, Inc., a retailer; Retired Principal and Senior Retail Analyst, Morgan Stanley & Co., Inc. Catherine R. Mack.......... 49 Vice President, General Counsel; Secretary Donald H. Misner........... 59 Trustee; Employee of the Trust Mary Jane Morrow........... 41 Senior Vice President, Finance; Treasurer George L. Perry............ 60 Trustee; Senior Fellow, Brookings Institution; Director, State Farm Insurance Company and various mutual funds managed by the Dreyfus Corporation Hal A. Vasvari............. 50 Executive Vice President, Management Robert S. Wennett.......... 33 Senior Vice President, Acquisitions
The Trustees and Officers as a group beneficially own approximately 5.6% of the outstanding Shares of the Trust. S-16 [GRAPHIC APPEARS HERE] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN- FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO- RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNEC- TION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICI- TATION OF AN OFFER TO BUY, THE SHARES IN ANY JURISDICTION WHERE, OR TO ANY PER- SON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DE- LIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HERE- UNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT AND PRO- SPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF. ------------ TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Prospectus Supplement Summary............................................. S-3 The Trust................................................................. S-4 Use of Proceeds........................................................... S-6 Price Range of the Shares and Distributions............................... S-6 Selected Consolidated Financial Data...................................... S-8 Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................... S-9 Properties................................................................ S-14 Management................................................................ S-16
PROSPECTUS Available Information....................................................... 2 Incorporation of Certain Documents by Reference............................. 2 The Trust................................................................... 3 Use of Proceeds............................................................. 4 Ratios of Earnings to Fixed Charges......................................... 4 Description of Debt Securities.............................................. 4 Description of Preferred Shares............................................. 15 Description of Common Shares................................................ 20 Plan of Distribution........................................................ 22 Legal Opinions.............................................................. 23 Experts..................................................................... 23
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 800,000 SHARES LOGO OF FEDERAL REALTY INVESTMENT TRUST COMMON SHARES ---------------- PROSPECTUS SUPPLEMENT ---------------- MARCH , 1994 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- GRAPHICS APPENDIX LIST PAGE WHERE GRAPHIC APPEARS DESCRIPTION OF GRAPHIC OR CROSS REFERENCE - -------------------------------------------------------------------------------- TX2 Above Typeset Language: In two columns of four boxes each-The upper left-hand corner box reads "1993 Property Acquisitions" - other seven boxes are actual photos of the acquired properties. Each property is identified. - -------------------------------------------------------------------------------- IBC A map of the USA from Mississippi River east w/ dots to indicate Federal Realty property locations. 3-Areas are magnified to the right of the USA map. They are: -- New York/New Jersey Metropolitan Area -- Philadelphia Metropolitan Area -- Washington D.C./Baltimore Metropolitan Area In each magnified area there are dots to indicate property locations.