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
