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.
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Funds from operations (FFO) increased 6.3% to $0.68 per diluted share
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Rental income increased 7.3% on a same-center basis
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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
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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
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$1,735,093 $1,621,079
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CONTACT:
Federal Realty Investment Trust, Rockville
Andrew Blocher, 301/998-8166
