SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30, 1998
Federal Realty Investment Trust
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(Exact name of registrant as specified in its charter)
District of Columbia 1-7533 52-0782497
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1626 East Jefferson Street, Rockville, Maryland 20852-4041
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 301/998-8100
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Exhibit Index appears on Page 3.
Item 5. Other Events
Federal Realty Investment Trust hereby files as exhibit 99 the following
supplemental data pertaining to its portfolio of properties at September 30,
1998.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99 Supplemental portfolio information at September 30, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FEDERAL REALTY INVESTMENT TRUST
Date: October 29, 1998 /s/ Cecily A. Ward
______________________________________________
Cecily A. Ward
Vice President, Controller
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EXHIBIT INDEX
Exh No. Exhibit Page No.
- ------- ------- --------
99 Supplemental portfolio information at September 30, 1998 4
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EXHIBIT 99
FEDERAL REALTY INVESTMENT TRUST
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Supplemental Information
September 30, 1998
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TABLE OF CONTENTS
1. Debt Summary........................................................ E-2
2. Occupancy
Percentage Leased.............................................. E-3
Economic Occupancy............................................. E-4
Regional Breakdown............................................. E-5
3. Leases Signed Analysis
Comparable and Non-Comparable.................................. E-6
4. Press Release....................................................... E-7
5. Glossary of Terms................................................... E-10
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1626 East Jefferson Street
Rockville, Maryland 20852-4041
301/998-8100
FEDERAL REALTY INVESTMENT TRUST
DEBT ANALYSIS (excluding capital leases and interest rate swaps)
SEPTEMBER 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Balance
Maturity Rate (in thousands)
Mortgages
Leesburg Plaza 10/01/08 6.10% 9,900
Federal Plaza 03/10/01 8.95% 27,747
Tysons Station 09/01/01 9.875% 4,158
Escondido (Municipal bonds) purchased 12/31/96 10/01/16 Variable ## 9,400
$51,205
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Notes payable
Revolving credit facilities libor +.65% $230,800
Note issued in connection with
tenant buyout at Queen Anne Plaza 01/15/06 8.875% 1,112
Note issued in connection with
renovation of Perring Plaza 01/31/13 10.00% 2,717
Other various various 217
-----------
$234,846
Unsecured Public Debt
5 1/4% Convertible subordinated 04/30/02 5.250% $289
debentures
5 1/4% Convertible subordinated 10/28/03 5.250% 75,000
debentures
8 7/8% Notes (fixed) 01/15/00 8.875% 75,000
8 7/8% Notes (fixed) * 01/15/00 7.530% 25,000
8% Notes (fixed) 04/21/02 8.000% 25,000
6 5/8% Notes (fixed) 12/01/05 6.625% 40,000
7.48% Debentures 08/15/26 7.480% 50,000
6.82% Medium Term Notes 08/01/27 6.820% 40,000
6.74% Medium Term Notes * 03/10/06 6.370% 39,500
6.99% Medium Term Notes * 03/10/06 6.894% 40,500
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$410,289
===========
Total fixed rate debt $456,140 65.51%
Total variable rate debt 240,200 34.49%
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Total debt $696,340 100.00%
=========== =======
Weighted average interest rate:
Fixed rate debt 7.19%
Variable on revolving facilities 6.20%**
Variable on municipal bonds ##
* The Trust purchased interest rate swaps or hedges on these notes, thereby decreasing the effective interest.
**Weighted average interest rate on revolving credit facilities for nine months ended September 30,1998.
##The bonds bear interest at a variable rate determined weekly to be the interest rate which would enable the bonds to be remarketed
at 100% of their principal amount.
FEDERAL REALTY INVESTMENT TRUST
Percentage Leased Analysis
September 30, 1998
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Overall Occupancy
(Quarter to Quarter Analysis) September 30, 1998 September 30, 1997
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 14,419,458 13,739,610 95% 12,856,798 12,202,952 95%
Rollingwood Apartments (# of units) 282 282 100% 282 282 100%
Overall Occupancy
(Rolling 12 Months) September 30, 1998 June 30, 1998
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 14,419,458 13,739,610 95% 13,658,940 12,989,036 95%
Rollingwood Apartments (# of units) 282 282 100% 282 281 99%
March 31, 1998 December 31, 1997
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 13,518,261 12,923,203 96% 13,518,197 12,919,532 96%
Rollingwood Apartments (# of units) 282 280 99% 282 279 99%
- ------------------------------------------------------------------------------------------------------------------------------------
Same Center Occupancy
(Quarter to Quarter Comparison) September 30, 1998 September 30, 1997
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 12,056,443 11,459,514 95% 12,016,185 11,467,976 95%
Rollingwood Apartments (# of units) 282 282 100% 282 282 100%
Same Center Occupancy
(Rolling 12 Months) At September 30, 1998 At June 30, 1998
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 12,056,443 11,459,514 95% 11,938,810 11,358,594 95%
Rollingwood Apartments (# of units) 282 282 100% 282 281 99%
At March 31, 1998 At December 31, 1997
--------------------------------- ---------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 11,652,173 11,119,804 95% 12,188,308 11,639,769 95%
Rollingwood Apartments (# of units) 282 280 99% 282 279 99%
Federal Realty Investment Trust
Economic Occupancy Analysis
September 30, 1998
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Overall Economic Occupancy
(Quarter to Quarter Analysis) September 30, 1998 September 30, 1997
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 14,419,458 13,578,116 94% 12,856,798 12,056,781 94%
Rollingwood Apartments (# of units) 282 282 100% 282 276 98%
Overall Economic Occupancy
(Rolling 12 Months) September 30, 1998 June 30, 1998
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 14,419,458 13,578,116 94% 13,658,940 12,778,700 94%
Rollingwood Apartments (# of units) 282 282 100% 282 274 97%
March 31, 1998 December 31, 1997
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 13,518,261 12,619,318 93% 13,518,197 12,757,485 94%
Rollingwood Apartments (# of units) 282 280 99% 282 279 99%
- ------------------------------------------------------------------------------------------------------------------------------------
Same Center Economic Occupancy
(Quarter to Quarter Comparison) September 30, 1998 September 30, 1997
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 12,056,443 11,315,875 94% 12,016,185 11,323,148 94%
Rollingwood Apartments (# of units) 282 282 100% 282 276 98%
Same Center Economic Occupancy
(Rolling 12 Months) At September 30, 1998 At June 30, 1998
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 12,056,443 11,315,875 94% 11,938,810 11,167,083 94%
Rollingwood Apartments (# of units) 282 282 100% 282 274 97%
At March 31, 1998 At December 31, 1997
--------------------------------- ---------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ---------------------------------------- ---------- ---------- --------- ---------- ---------- ---------
Retail Properties (leasable square feet) 11,652,173 10,819,572 93% 12,188,308 11,486,609 94%
Rollingwood Apartments (# of units) 282 280 99% 282 279 99%
FEDERAL REALTY INVESTMENT TRUST
Regional Occupancy Analysis
September 30, 1998
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Total Square Occupancy
Region Footage 09/30/98
- --------------------- ----------------- -----------
Northeast 6,229,875 96%
Mid-Atlantic 5,655,841 97%
Mid-West 915,314 94%
Southeast 635,890 76%
West Coast 942,963 95%
Southwest 39,575 95%
=======================================================
Total Square Occupancy
Region Footage 09/30/98
- --------------------- ----------------- -----------
Northeast 6,229,875 96%
Anchor 3,726,999 97%
Small Shops 2,502,876 94%
Mid-Atlantic 5,655,841 97%
Anchor 2,889,349 100%
Small Shops 2,766,492 94%
Mid-West 915,314 94%
Anchor 585,314 98%
Small Shops 330,000 88%
Southeast 635,890 76%
Anchor 302,245 67%
Small Shops 333,645 85%
West Coast 942,963 95%
Anchor 128,141 100%
Small Shops 814,822 94%
Southwest 39,575 95%
Anchor 0 0%
Small Shops 39,575 95%
Federal Realty Investment Trust
Leasing Activity
September 30, 1998
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Comparable
Weighted Average Prior Average Current
Number of Square Average Lease Rent Per Rent Per
Rolling 12 Months Leases Signed Feet Term (Years) Square Foot Square Foot
- -------------------- ------------- --------- ------------- ------------ ---------------
3rd Quarter 1998 59 230,114 5.9 $14.04 $15.47
2nd Quarter 1998 68 241,132 7.8 $15.33 $20.14
1st Quarter 1998 78 304,204 7.0 $15.38 $17.43
4th Quarter 1997 72 272,820 9.2 $17.07 $19.60
Total 277 1,048,270 7.6 $15.51 $18.19
Estimated
Percentage Tenant
Annualized Increase Improvement
Rolling 12 Months Increase in Rent over Prior Rent Costs
- -------------------- ---------------- --------------- -----------
3rd Quarter 1998 $330,680 10% $333,000
2nd Quarter 1998 $1,160,247 31% $933,000
1st Quarter 1998 $623,425 13% $990,000
4th Quarter 1997 $690,291 15% $923,000
Total $2,804,643 17% $3,179,000
Non-Comparable
Weighted Estimated
Average Annualized Tenant
Number of Square Lease Average Rent Current Improvement
Rolling 12 Months Leases Signed Feet Term (Years) Per Square Foot Rent Costs
- -------------------- ------------- ------- ------------ --------------- ----------- ------------
3rd Quarter 1998 7 57,613 16.9 $22.15 $1,276,091 $121,000
2nd Quarter 1998 15 63,474 9.3 $14.30 $907,455 $78,000
1st Quarter 1998 10 55,877 12.1 $22.49 $1,256,594 $585,000
4th Quarter 1997 10 40,744 11.9 $21.03 $857,046 $90,000
Total 42 217,708 12.9 $19.74 $4,297,186 $874,000
[LETTERHEAD OF FEDERAL REALTY INVESTMENT TRUST APPEARS HERE]
Kathy Klein
Vice President
Corporate Communications
301/998-8211
FEDERAL REALTY INVESTMENT TRUST ANNOUNCES THIRD QUARTER 1998 OPERATING RESULTS
AND ANNOUNCES A COMPREHENSIVE REENGINEERING INITIATIVE
October 28, 1998
Rockville, Maryland
Federal Realty Investment Trust (NYSE:FRT) reported today its third quarter
1998 operating results and announced a comprehensive reengineering initiative.
Funds from operations for the third quarter of 1998 increased 7% to $21.4
million from $20.0 million in the third quarter of 1997. On a per share basis,
funds from operations rose 6% to $.54 in the third quarter of 1998 from $.51 in
the comparable quarter of 1997. This increase was achieved despite the changes
in accounting policies effective earlier this year (EITF 97-11) that require
the expensing of certain internal acquisition costs. If the 1997 results were
adjusted for the accounting change, funds from operations per share would have
increased 8% in the third quarter of 1998.
A comparison of property operations for the third quarter of 1998 versus
the third quarter of 1997 shows the following:
. Rental income increased 20% to $55.4 million in 1998 from $46.1 million in
1997. When adjusted to exclude properties acquired and sold during 1997 and
1998, rental income increased 8% to $46.8 million in 1998 from $43.4
million in 1997.
. Net operating income increased 21% to $39.9 million in 1998 from $33.0
million in 1997. When adjusted to exclude properties acquired and sold
during 1997 and 1998, net operating income increased 9% to $33.9 million in
1998 from $31.1 million in 1997.
. During the third quarter of 1998, the Trust signed leases for a total
288,000 square feet of retail space. On a same space basis, the Trust re-
leased 230,000 square feet of retail space at an average increase in rent
per square foot of 10%. The weighted average rent on these leases was
$15.47 per square foot compared to the previous average rent of $14.04 per
square foot.
. Same property occupancy stood at 95% at both September 30, 1998 and 1997.
The Trust's overall portfolio was also 95% leased at both September 30, 1998
and 1997.
Funds from operations also improved for the first nine months of 1998
increasing 8% to $63.6 million from $58.9 million in the first nine months of
1997. On a per share basis, funds from operations advanced 5% to $1.59 per share
for the first nine months of 1998 compared to $1.52 for the comparable period of
1997. If 1997 results were adjusted to include the impact of accounting changes,
funds from operations per share for the first nine months of 1998 would have
increased 7%.
The Trust also announced today a comprehensive reengineering initiative
aimed at streamlining the company's operating model and improving profitability.
The reengineering efforts, including the downsizing of the acquisition team,
resulted in a reduction in the Trust's workforce of approximately 15%. As a
result of the restructuring, the Trust incurred a $4.7 million one-time charge
in the third quarter of 1998. The charge includes a provision for employee
severance and related costs, office closing and downsizing expenses, as well as
legal and consulting fees related to the restructuring program.
Commenting on the results, Steven Guttman, President and Chief Executive
Officer stated, "We remain optimistic about our long-term growth prospects. Our
ability to generate consistent core portfolio growth throughout the many
economic cycles during our 36 year history underscores the quality of our
properties and the strength of their unique locations. We are confident that
our reengineering efforts will yield cost and revenue opportunities throughout
1999 and hope to experience additional funds from operations growth as our
development projects come on stream in 2000 and 2001."
Federal Realty is an equity real estate investment trust specializing in
the ownership, management and redevelopment of prime retail properties. The
Trust's real estate portfolio contains 120 retail properties, consisting of
neighborhood and community shopping centers and main street retail properties,
located in strategic metropolitan markets across the United States. These
markets include Boston, New York, Philadelphia, Washington D.C., Chicago, San
Antonio, Portland, San Francisco, Los Angeles, San Jose and San Diego.
Federal Realty has paid quarterly dividends to its shareholders
continuously since its founding in 1962 and has increased its dividend rate for
31 consecutive years. Shares of the Trust are traded on the New York Stock
Exchange under the symbol:FRT.
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
Three Months Ended Ended Nine Months Ended
September 30, September 30,
OPERATING RESULTS 1998 1997 1998 1997
- ----------------- ------- ------- ---------- ----------
REVENUES
Rental income $55,433 $46,109 $ 162,041 $ 137,090
Other property income 2,577 1,992 7,613 7,512
Interest and other income 993 1,712 3,928 4,660
------- ------- ---------- ----------
59,003 49,813 173,582 149,262
EXPENSES
Rental 12,005 10,191 35,274 31,196
Real estate taxes 6,058 4,936 17,275 14,402
Interest 13,639 11,964 39,736 35,952
Administrative 2,900 1,968 8,736 6,562
Depreciation and amortization 11,412 10,325 33,384 30,853
------- ------- ---------- ----------
46,014 39,384 134,405 118,965
------- ------- ---------- ----------
12,989 10,429 39,177 30,297
Provision for restructuring (4,665) - (4,665) -
------- ------- ---------- ----------
OPERATING INCOME BEFORE INVESTORS' SHARE OF
OPERATIONS AND LOSS ON SALE OF REAL ESTATE 8,324 10,429 34,512 30,297
Investor's share of operations (804) (281) (2,335) (862)
------- ------- ---------- ----------
Income before loss on sale of real estate 7,520 10,148 32,177 29,435
( Loss)/gain on sale of real estate - (659) - 6,375
------- ------- ---------- ----------
Net income $ 7,520 $ 9,489 $ 32,177 $ 35,810
Dividends on preferred stock (1,988) - (5,963) -
------- ------- ---------- ----------
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 5,532 $ 9,489 $ 26,214 $ 35,810
======= ======= ========== ==========
Earnings per common share, basic $0.14 $0.24 $0.67 $0.93
======= ======= ========== ==========
Earnings per common share, diluted $0.14 $0.24 $0.67 $0.92
======= ======= ========== ==========
Weighted average shares outstanding, basic 39,233 38,801 39,115 38,352
Weighted average shares outstanding, diluted 40,067 39,225 39,953 38,821
FUNDS FROM OPERATIONS
Net income available for common shareholders $ 5,532 $ 9,489 $ 26,214 $ 35,810
Less: loss/(gain) on sale of real estate - 659 - (6,375)
Add: nonrecurring charge 4,665 - 4,665 -
Add: depreciation and amortization
of real estate assets 10,323 9,316 30,229 27,734
Add: amortization of initial direct
costs of leases 646 545 1,827 1,693
Add: income attributable to operating
partnership units 268 - 682 -
------- ------- ---------- ----------
FUNDS FROM OPERATIONS, DILUTED $21,434 $20,009 $ 63,617 $ 58,862
======= ======= ========== ==========
FUNDS FROM OPERATIONS PER SHARE, DILUTED $0.54 $0.51 $1.59 $1.52
======= ======= ========== ==========
September 30, December 31,
BALANCE SHEET DATA 1998 1997
- ------------------ ---------- ----------
ASSETS
Real estate, at cost $1,616,271 $1,453,639
Accumulated depreciation and amortization (275,054) (247,497)
---------- ----------
1,341,217 1,206,142
Mortgage notes receivable 47,059 38,360
Cash and investments 9,952 17,043
Receivables 19,428 18,794
Other assets 39,651 36,234
---------- ----------
TOTAL ASSETS $1,457,307 $1,316,573
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Obligations under capital leases & mortgages payable $ 173,693 $ 221,573
Notes payable 234,846 119,028
Senior Notes 335,000 255,000
5 1/4% Convertible subordinated debentures 75,289 75,289
Other liabilities 103,451 91,873
SHAREHOLDERS' EQUITY 535,028 553,810
---------- ----------
$1,457,307 $1,316,573
========== ==========
GLOSSARY OF TERMS
AVERAGE OCCUPANCY COSTS: Includes rent, common area maintenance expense, real
estate taxes, merchant association dues and other charges
Economic occupancy: The square footage generating rental income expressed as a
percentage of its total rentable square feet.
LEASES SIGNED - COMPARABLE: Represents leases signed on spaces for which there
was a former tenant.
LEASES SIGNED - NONCOMPARABLE: Represents leases signed on spaces for which
there was no previous tenant, i.e. expansion space or space that was previously
non-leasable.
LEASES SIGNED - PRIOR RENT: Total rent paid by the previous tenant; includes
minimum and percentage rent.
OCCUPANCY: The currently leased portion of a property expressed as a percentage
of its total rentable square feet; includes square feet covered by leases for
stores not yet opened.
OVERALL OCCUPANCY: Occupancy for the entire portfolio -- includes all centers
owned in reporting period.
SAME CENTER OCCUPANCY: Occupancy for only those centers owned and operating in
the periods being compared. Excludes centers purchased or sold as well as
properties under redevelopment.
TENANT IMPROVEMENT COSTS: Represents the total dollars committed for the
improvement (fit-out) of a space as relates to a specific lease. The amounts
shown represent not only the estimated cost to fit-out the tenant space, but may
also include base building costs (i.e. expansion, escalators or new entrances)
which are required to make the space leasable.
