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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 8-K

 

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CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) November 3, 2004

 

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Federal Realty Investment Trust

(Exact name of registrant as specified in its charter)

 

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Maryland		1-07533		52-0782497
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1626 East Jefferson Street, Rockville, Maryland		20852-4041
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number including area code: 301/998-8100

 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02. Results of Operations and Financial Condition.

 

The following information is being furnished under Item 12-Results of Operations and Financial Condition. This information, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, regardless of any general incorporation language in such filing.

 

On November 3, 2004, Federal Realty Investment Trust issued supplemental data pertaining to its operations, as well as a press release, to report its financial results for the quarter ended September 30, 2004. The supplemental data and press release are furnished as Exhibit 99.1 hereto.

 

Item 9.01. Financial Statements and Exhibits.

 

(c)

Exhibits

 

99.1

Supplemental portfolio information at September 30, 2004 (including press release dated November 3, 2004)

 

 

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: November 3, 2004		/s/ Larry E. Finger
		Larry E. Finger
		Senior Vice President,
		Chief Financial Officer and Treasurer

 

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EXHIBIT INDEX

 

Exh No.		Exhibit
99.1		Supplemental Information at September 30, 2004

 

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Table of Contents

Exhibit 99.1

 

FEDERAL REALTY INVESTMENT TRUST

 

Supplemental Information

September 30, 2004

 

TABLE OF CONTENTS

 

1.		Third Quarter 2004 Earnings Press Release		3
2.		Financial Highlights
		Summarized Operating Results		8
		Summarized Balance Sheet		9
		Funds From Operations / Summary of Capital Expenditures		10
		Market Data / Capital Availability		11
		Components of Rental Income		12
3.		Summary of Debt
		Summary of Outstanding Debt		13
		Summary of Debt Maturities		14
4.		Summary of Redevelopment Opportunities and Santana Row		15
5.		2004 Acquisitions and Dispositions		16
6.		Real Estate Status Report		17
7.		Shopping Center / Street Retail Summary		19
8.		Leasing Summary
		Retail Leasing Summary – Comparable		20
		Retail Leasing Summary – Non-comparable		21
9.		Lease Expirations		22
10.		Portfolio Leasing Statistics		23
11.		Summary of Top 25 Tenants		24
12.		Reconciliation of Net Income to FFO Guidance		25
13.		Joint Venture Disclosure
		Summarized Operating Results		26
		Summarized Balance Sheet		27
		Summary of Outstanding Debt		28
		2004 Acquisitions and Dispositions		29
		Real Estate Status Report		30
14.		Glossary of Terms		31

 

1626 East Jefferson Street

Rockville, Maryland 20852-4041

301/998-8100

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Safe Harbor Language

 

Certain matters discussed within this Supplemental Information may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Current Report on Form 8-K filed on March 11, 2004, and include the following:

 

•

risks that our tenants will not pay rent or that we may be unable to renew leases or re-let space at favorable rents as leases expire;

 

•

risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that any redevelopment or renovation project that we do pursue may not perform as anticipated;

 

•

risks that the number of properties we acquire for our own account, and therefore the amount of capital we invest in acquisitions, may be impacted by our real estate partnership;

 

•

risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that we may have environmental risks at our properties, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;

 

•

risks that our growth will be limited if we cannot obtain additional capital;

 

•

risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and

 

•

risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT.

 

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Supplemental Information. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our annual report on Form 10-K (as amended), our quarterly reports on Form 10-Q, and the risks contained in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 11, 2004.

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FOR IMMEDIATE RELEASE

 

Investor and Media Inquiries
Andrew Blocher		Suzanne O’Neill
Vice President, Capital Markets & Investor Relations		Manager, Investor Relations
301/998-8166		301/998-8358
ablocher@federalrealty.com		soneill@federalrealty.com

 

FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

THIRD QUARTER 2004 OPERATING RESULTS

 

ROCKVILLE, Md. (November 3, 2004) – Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2004.

 

¨

For the third quarter 2004, Funds from Operations available for common shareholders (FFO) per diluted share was $0.72 and net income available for common shareholders per diluted share was $0.30.

¨

When compared to third quarter 2003, same-center property operating income increased 4.5% including redevelopments and expansions, and 3.3% excluding redevelopment and expansion properties.

¨

Cash-basis contractual rent increases on lease rollovers were 22% for the third quarter on over 400,000 square feet of retail space for which there was a prior tenant.

¨

The Trust’s portfolio was 94.2% leased at September 30, 2004.

 

Financial Results

 

Federal Realty reported FFO per diluted share of $0.72 in third quarter 2004, a 9.1% increase over the $0.66 of FFO per diluted share reported in third quarter 2003. Total FFO available for common shareholders was $38.3 million for the third quarter of 2004 compared to $33.3 million for last year’s third quarter. For the nine months ended September 30, 2004, Federal Realty reported FFO of $111.7 million, or $2.14 per diluted share, compared to $89.9 million, or $1.87 per diluted share for the nine months ended September 30, 2003. Federal Realty’s FFO results for the nine months ended September 30, 2003, include a $3.4 million ($0.07 per diluted share) charge relating to the redemption of the Trust’s 7.95% Series A Cumulative Redeemable Preferred Shares.

 

Net income available for common shareholders was $15.8 million, and net income available for common shareholders per diluted share was $0.30 for the quarter ended September 30, 2004, versus $21.7 million and

 

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

THIRD QUARTER 2004 OPERATING RESULTS

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$0.44, respectively, for the third quarter of 2003. Net income available for common shareholders increased 23.2% from $43.5 million for the nine months ended September 30, 2003, to $53.6 million, for the nine months ended September 30, 2004. Year to date, net income available for common shareholders per diluted share improved from $0.92 in 2003 to $1.04 in 2004. Net income available for common shareholders and net income available for common shareholders per diluted share for the nine months ended September 30, 2003, include the impact of the preferred share redemption charge discussed above.

 

FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO available for common shareholders and FFO per diluted share to net income available for common shareholders and net income available for common shareholders per diluted share, respectively, is attached to this press release.

 

“Careful execution of the Trust’s business plan has resulted in consistently improving operating results,” commented Donald Wood, Federal Realty’s President and Chief Executive Officer. “By focusing our attention on continually improving our high quality existing portfolio, through leasing and redevelopment, and by opportunistically capitalizing on external growth opportunities, we have uniquely positioned ourselves to improve on our success to date.”

 

Portfolio Results

 

On a same-center basis, including redevelopment and expansion properties, property operating income increased 4.5% over third quarter 2003. When redevelopment and expansion properties are excluded, same-center property operating income increased 3.3% from third quarter 2003.

 

Overall, the Trust’s portfolio was 94.2% leased as of September 30, 2004, an improvement of 110 basis points from December 31, 2003. As of September 30, 2004, Federal Realty’s same-center portfolio was 96.5% leased, a 50 basis point improvement over year-end 2003.

 

During the third quarter of 2004, the Trust signed 79 leases for 418,000 square feet of retail space. On a comparable space basis (i.e. spaces for which there was a former tenant), the Trust leased 409,000 square feet at a weighted-average cash-basis contractual rent increase per square foot (i.e. excluding the impact of straight-line rents) of 22%. The weighted-average contractual rent on this comparable space for the first year of the new leases is $22.82 per square foot compared to the weighted-average contractual rent of $18.69 per square foot for the last year of the prior leases. The weighted-average contractual rent for the last year of the

 

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

THIRD QUARTER 2004 OPERATING RESULTS

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prior leases is calculated by including both the minimum rent and the percentage rent actually paid during the last year of those leases. Year to date, the Trust has signed 233 leases for 1.3 million square feet of comparable space, a record for the first three quarters of any year, at a weighted-average cash-basis contractual rent increase per square foot of 18%. On a GAAP basis (i.e. including the impact of straight-line rents), weighted-average rent increases per square foot for comparable space were 33% for the third quarter of 2004. As of September 30, 2004, Federal Realty’s weighted-average contractual rent for retail and commercial space in its portfolio was $18.47 per square foot.

 

At Santana Row, Federal Realty’s mixed-use community in San Jose, Calif., 92% of the retail space was leased to 115 tenants, with 101 stores open and operating as of September 30, 2004. Phase III (CinéArts Theatre) opened as planned during third quarter 2004. The 255 existing residential units at Santana Row were 98% leased as of September 30, 2004, and the development of the 256 Phase IV residential units remains on schedule and on budget.

 

Guidance

 

Federal Realty today narrowed its guidance for 2004 FFO per diluted share to a range of $2.83 to $2.84, and increased guidance for net income per diluted share to a range of $1.30 to $1.31. In addition, management provided initial guidance for 2005 FFO per diluted share of $3.00 to $3.03, and net income per diluted share of $1.24 to $1.27.

 

“Our guidance for 2004 and 2005 projects real FFO per share growth of 7% in 2004 and 8% to 9% for 2005, after adjusting for Santana Row insurance proceeds and the impact of the 2003 preferred share redemption charge,” commented Larry Finger, Federal Realty’s Senior Vice President and Chief Financial Officer. “Through our internal growth and redevelopment focused operating strategy, we are confident of our ability to produce top tier FFO per share growth while subjecting our investors to the least amount of risk in the sector.”

 

Summary of Other Quarterly Activities and Recent Developments

 

Ø

July 12, 2004 – Federal Realty announced that it formed a joint venture with Clarion Lion Properties Fund, a discretionary fund created and advised by ING Clarion Partners. The joint venture intends to acquire up to $350 million of stabilized, supermarket-anchored shopping centers in the Trust’s strategic East Coast and California markets.

 

Ø	September 7, 2004 – Federal Realty announced that its Board of Trustees increased the dividend on the Trust’s common shares by $0.06 annually, resulting in an annualized rate of $2.02 per share. This

 

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

THIRD QUARTER 2004 OPERATING RESULTS

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increase represented the 37^th consecutive year that Federal Realty had increased its common dividend, the longest consecutive record in the REIT sector.

 

Ø

September 21, 2004 – Federal Realty announced the acquisition of two supermarket-anchored shopping centers in the Boston metropolitan area for $38 million. The two properties, Campus Plaza in Bridgewater, Mass., and Pleasant Shops in Weymouth, Mass., were acquired for the Trust’s joint venture with Clarion Lion Properties Fund.

 

Conference Call Information

 

Federal Realty’s management team will present an in-depth discussion of the Trust’s operating performance on its third quarter earnings conference call, which is scheduled for November 4, 2004, at 11 a.m. Eastern Standard Time. To participate, please call (888) 566-5771 five to ten minutes prior to the call’s start time and use the Passcode EARNINGS (required). The conference leader is Andrew Blocher. Federal Realty will also provide an online Web Simulcast on the Company’s Web site, www.federalrealty.com, which will remain available for 30 days following the call. A telephone recording of the call will also be available for 30 days by dialing (800) 679-9654.

 

About Federal Realty

 

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development, and redevelopment of shopping centers and Street Retail properties. Federal Realty’s portfolio (excluding joint venture properties) contains approximately 16.8 million square feet located primarily in strategic metropolitan markets in the Northeast, Mid-Atlantic, and California. In addition, the Trust has an ownership interest in approximately 350,000 square feet of retail space through its joint venture with Clarion Lion Properties Fund. Our operating portfolio (excluding joint venture properties) was 94.2% leased to approximately 2,200 national, regional, and local retailers as of September 30, 2004, with no single tenant accounting for more than 2.3% of rental revenue. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 37 consecutive years, the longest consecutive record in the REIT industry. Shares of Federal Realty are traded on the NYSE under the symbol FRT.

 

Safe Harbor Language

 

Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Current Report on Form 8-K filed on March 11, 2004, and include the following:

 

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

THIRD QUARTER 2004 OPERATING RESULTS

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¨

risks that our tenants will not pay rent or that we may be unable to renew leases or re-let space at favorable rents as leases expire;

 

¨

risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that any redevelopment or renovation project that we do pursue may not perform as anticipated;

 

¨

risks that the number of properties we acquire for our own account, and therefore the amount of capital we invest in acquisitions, may be impacted by our real estate partnership;

 

¨

risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that we may have environmental risks at our properties, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;

 

¨

risks that our growth will be limited if we cannot obtain additional capital;

 

¨

risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and

 

¨

risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT.

 

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our annual report on Form 10-K (as amended), our quarterly reports on Form 10-Q, and the risks contained in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 11, 2004.

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Federal Realty Investment Trust

Summarized Operating Results

September 30, 2004

 

Financial Highlights

(in thousands, except per share data)

(unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2004				2003				2004				2003
OPERATING RESULTS
Revenues
Rental income		$	91,599			$	80,424			$	271,975			$	238,563
Other property income			7,416				4,626				19,030				12,885
Mortgage interest income			1,142				886				3,385				3,018
			100,157				85,936				294,390				254,466
Expenses
Rental			22,624				18,952				67,167				59,366
Real estate taxes			10,033				8,897				28,655				25,312
Administrative			4,673				3,221				13,443				9,642
Depreciation and amortization			23,666				18,576				67,148				53,820
			60,996				49,646				176,413				148,140
Operating income			39,161				36,290				117,977				106,326
Interest income			548				316				1,350				1,057
Interest expense			(21,125	)			(18,719	)			(63,835	)			(54,550	)
Income from real estate partnership			19				—				19				—
Minority interests			(936	)			(1,053	)			(3,317	)			(3,257	)
Income from continuing operations			17,667				16,834				52,194				49,576
Discontinued operations
Operating income from discontinued operations			(4	)			589				713				1,798
Gain on sale of real estate			997				7,172				9,331				7,723
Results from operations of discontinued assets			993				7,761				10,044				9,521
Net Income			18,660				24,595				62,238				59,097
Dividends on preferred stock			(2,869	)			(2,869	)			(8,607	)			(12,215	)
Preferred stock redemption fee			—				—				—				(3,423	)
Net income available for common shareholders		$	15,791			$	21,726			$	53,631			$	43,459
FUNDS FROM OPERATIONS AVAILABLE FOR COMMON SHAREHOLDERS
Net income		$	18,660			$	24,595			$	62,238			$	59,097
Gain on sale of real estate			(997	)			(7,172	)			(9,331	)			(7,723	)
Depreciation and amortization of real estate assets			21,376				16,974				61,145				49,146
Depreciation on JV real estate assets			50				—				50				—
Amortization of initial direct costs of leases			1,882				1,427				5,170				4,173
Funds from operations			40,971				35,824				119,272				104,693
Dividends on preferred stock			(2,869	)			(2,869	)			(8,607	)			(12,215	)
Income attributable to operating partnership units			242				375				1,032				816
Preferred stock redemption fee			—				—				—				(3,423	)
Funds from operations available for common shareholders			38,344				33,330				111,697				89,871
Weighted average number of common shares, diluted			52,934				50,216				52,074				48,004
Funds from operations per share available for common shareholders		$	0.72			$	0.66			$	2.14			$	1.87
EARNINGS PER COMMON SHARE, BASIC
Income from continuing operations available for common shareholders		$	0.28			$	0.28			$	0.86			$	0.73
Income from discontinued operations			0.02				0.16				0.20				0.20
Net income available for common shareholders, basic		$	0.30			$	0.44			$	1.06			$	0.93
Weighted average number of common shares, basic			51,640				48,935				50,722				46,810
EARNINGS PER COMMON SHARE, DILUTED
Income from continuing operations available for common shareholders		$	0.28			$	0.29			$	0.85			$	0.72
Income from discontinued operations			0.02				0.15				0.19				0.20
Net income available for common shareholders, diluted		$	0.30			$	0.44			$	1.04			$	0.92
Weighted average number of common shares, diluted			52,934				50,216				51,273				48,004

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Federal Realty Investment Trust

Summarized Balance Sheet

September 30, 2004

 

Financial Highlights

(in thousands, except per share data)

 

CONSOLIDATED BALANCE SHEETS

 

		September 30, 2004				December 31, 2003
		(unaudited)
ASSETS
Real estate, at cost		$	2,659,903			$	2,470,149
Less accumulated depreciation and amortization			(573,246	)			(514,177	)
Net real estate investments			2,086,657				1,955,972
Cash and cash equivalents			23,437				34,968
Mortgage notes receivable			45,079				41,500
Accounts and notes receivable			34,748				31,207
Other assets			77,021				79,788
Investment in real estate partnership			14,078				—
TOTAL ASSETS		$	2,281,020			$	2,143,435
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Obligations under capital leases and mortgage loans		$	411,831			$	414,357
Notes payable			320,090				361,323
Senior notes and debentures			567,980				535,000
Other liabilities			156,106				111,799
Total liabilities			1,456,007				1,422,479
Minority interests			35,250				29,582
Shareholders’ equity
Preferred stock			135,000				135,000
Common shares and other shareholders’ equity			654,763				556,374
Total shareholders’ equity			789,763				691,374
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	2,281,020			$	2,143,435

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Federal Realty Investment Trust

Funds From Operations / Summary of Capital Expenditures

September 30, 2004

 

		Three Months Ended
		September 30, 2004				September 30, 2003
		(in thousands, except per share data)
Funds from Operations available for common shareholders (FFO) (1)
Net income		$	18,660			$	24,595
(Gain) on sale of real estate			(997	)			(7,172	)
Depreciation and amortization of real estate assets			21,376				16,974
Depreciation of joint venture real estate assets			50				—
Amortization of initial direct costs of leases			1,882				1,427
Funds from Operations			40,971				35,824
Dividends on preferred stock			(2,869	)			(2,869	)
Income attributable to operating partnership units			242				375
Preferred stock redemption fee			—				—
Funds from operations available for common shareholders		$	38,344			$	33,330
Weighted average number of common shares, diluted			52,934				50,216
Funds from operations per share, diluted		$	0.72			$	0.66
Summary of Capital Expenditures
Non-maintenance capital expenditures
Acquisition related (2)		$	1,747			$	50
Capital expenditures related to new square footage			1,539				—
Development, redevelopment and expansions			22,058				27,029
Tenant improvements			6,151				4,745
Total non-maintenance capital expenditures			31,495				31,824
Maintenance capital expenditures			2,007				1,665
Total capital expenditures		$	33,502			$	33,489
Dividends and Payout Ratios
Common dividends declared		$	26,151			$	24,090
Dividend payout ratio % - FFO			68	%			72	%

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Notes:

(1)	See Glossary of Terms.

(2)	Capital expenditures related to properties acquired in the last two years for which non-maintenance expenditures were planned at the time of the acquisition underwriting.

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Federal Realty Investment Trust

Market Data / Capital Availability

September 30, 2004

 

		As of
		September 30, 2004				September 30, 2003
		(in thousands, except per share data)
Market data
Common shares outstanding (1)			51,908				49,164
Market price per common share		$	44.00			$	36.86
Common equity market capitalization		$	2,283,952			$	1,812,185
Series B preferred shares outstanding			5,400				5,400
Market price per Series B preferred share		$	27.17			$	27.00
Preferred equity market capitalization		$	146,718			$	145,800
Equity market capitalization		$	2,430,670			$	1,957,985
Total debt (2)			1,299,901				1,120,317
Total market capitalization		$	3,730,571			$	3,078,302
Total debt to market capitalization			35	%			36	%
Capital availability:
Cash on hand		$	23,437			$	33,656
Available capacity under line of credit			250,000				102,000
Available for issuance under shelf registration statement			225,000				400,000
		$	498,437			$	535,656

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Notes:

(1)

Consists of 53,387,604 shares issued net of 1,479,383 shares held in Treasury as of September 30, 2004. As of September 30, 2003, consists of 50,629,782 shares issued net of 1,466,013 shares held in Treasury. Amounts do not include 449,325 and 839,828 Operating Units outstanding at September 30, 2004 and September 30, 2003, respectively.

(2)	Total debt includes capital leases and mortgages payable, notes payable, and senior notes and debentures. It does not include the Trust’s 30% share of the $13.3 million debt of the partnership with Clarion Lion Properties Fund.

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Federal Realty Investment Trust

Components of Rental Income

September 30, 2004

 

		Nine months ended September 30,						Three months ended September 30,
		2004			2003			2004			2003
Components of Rental Income (1)
Minimum Rents
Retail and commercial properties		$	209,654		$	184,822		$	71,086		$	63,082
Residential			9,295			6,056			3,149			2,593
Cost Reimbursements			49,190			41,588			16,520			13,488
Percentage Rents			3,836			6,097			844			1,261
Total Rental Income		$	271,975		$	238,563		$	91,599		$	80,424

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Notes:

(1)

For the nine months ended September 30, 2004 and September 30, 2003, minimum rents include $2.6 million and $1.0 million, respectively, to recognize rent on a straight-line basis and includes $1.1 million and $0.1 million, respectively, to recognize income for market lease adjustments on acquired properties in accordance with SFAS 141. For the three months ended September 30, 2004 and September 30, 2003, minimum rents include $0.7 million and $0.2 million, respectively, to recognize rent on a straight-line basis and includes $0.5 million and $0.1 million, respectively, to recognize income for market lease adjustments on acquired properties in accordance with SFAS 141. Residential minimum rents comprise the rents at Rollingwood Apartments, The Crest at Congressional Plaza Apartments and the residential rents at Santana Row.

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Table of Contents

Federal Realty Investment Trust

Summary of Outstanding Debt

September 30, 2004

 

		Maturity		Interest Rate as of September 30, 2004					Balance
									(in thousands)
Mortgage Loans (a)
Secured Fixed Rate
Leesburg Plaza		10/01/08		6.510	%				$	9,900
164 E Houston Street		10/06/08		7.500	%					200
Mercer Mall		09/01/09		8.375	%					4,653
Federal Plaza		06/01/11		6.750	%					35,230
Tyson’s Station		09/01/11		7.400	%					6,664
Barracks Road		11/01/15		7.950	%					43,855
Brick Plaza		11/01/15		7.415	%					32,636
Hauppauge		11/01/15		7.950	%					16,532
Lawrence Park		11/01/15		7.950	%					31,084
Wildwood		11/01/15		7.950	%					27,323
Wynnewood		11/01/15		7.950	%					31,678
Mount Vernon		04/15/28		5.660	%		(b)			12,894
									$	252,649
Notes payable
Unsecured Fixed Rate
Perring Plaza Renovation		01/31/13		10.00	%				$	2,016
Other		various		various						45
Unsecured Variable Rate
Revolving credit facility		10/08/06		LIBOR + .75	%		(c)			50,000
Term note with banks		10/08/06		LIBOR + .95	%					100,000
Term note with banks		10/08/08		LIBOR + .95	%		(d)			150,000
Escondido (Municipal bonds)		10/01/16		2.710	%		(e)			9,400
Secured Fixed Rate
Loehmann’s Redemption Note		09/27/06		2.34	%		(f)			8,629
									$	320,090
Notes and Debentures
Unsecured Fixed Rate
6.625% Notes (fixed)		12/01/05		6.625	%				$	40,000
6.99% Medium Term Notes		03/10/06		6.894	%		(g)			40,500
6.125% Notes		11/15/07		6.325	%		(h)			150,000
8.75% Notes		12/01/09		8.750	%					175,000
4.50% Notes		02/15/11		4.500	%					75,000
7.48% Debentures		08/15/26		7.480	%					50,000
6.82% Medium Term Notes		08/01/27		6.820	%					40,000
Subtotal										570,500
Less: Unamortized Discount										(2,520	)
									$	567,980
Capital lease obligations
Various through 2077 (i)									$	159,182
Total Fixed and Variable Rate Debt										1,299,901
																Average annualized interest rate
Total fixed rate debt									$	1,140,501			87.74	%		6.89	%
Total variable rate debt (j)										159,400			12.26	%		2.23	%
TOTAL DEBT AND CAPITAL LEASES									$	1,299,901			100.00	%		6.31	%

 

 

		Nine months ended September 30,				Three months ended September 30,
		2004		2003		2004		2003
Operational statistics
Ratio of EBITDA to combined fixed charges and preferred share dividends (k)		2.37x		2.01x		2.43x		2.24x

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Notes:

(a)	Mortgage loans do not include the Trust’s 30% share of the $13.3 million debt of the partnership with Clarion Lion Properties Fund.

(b)	The lender has the option to call the loan on April 15, 2013 or anytime thereafter.

(c)	A $300 million three-year revolving credit facility, with a one-year extension option.

(d)	In January, 2004, the Trust purchased an interest rate swap on this note thereby locking in the LIBOR portion of the interest rate at 2.401% through October 2006.

(e)	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. The weighted average interest rate for the nine months ended September 30, 2004 was 2.71%.

(f)	The note bears interest at the Applicable Federal Rate established by the Internal Revenue Service for short-term debt instruments for the month of September, 2004.

(g)	The Trust purchased interest rate swaps at issuance, thereby reducing the effective interest on these notes.

(h)	The Trust purchased an interest rate lock to hedge this note offering. A loss of $1.5 million associated with this hedge is being amortized into the note offering thereby increasing the effective interest rate on these notes to 6.325%.

(i)	The average annualized interest rate on capital lease obligations as of September 30, 2004 is 8.74% on a basis of minimum rent and 11.24% including performance based participation rent paid by the Trust.

(j)	Average annualized interest rate on variable rate debt as of September 30, 2004.

(k)

Earnings consist of income before gain (loss) on sale of real estate and fixed charges. Fixed charges consist of interest on borrowed funds (including capitalized interest). amortization of debt discount and expense and the portion of rent expense representing an interest factor. Preferred share dividends consist of dividends paid on outstanding Series A preferred shares (during the period ended September 30, 2003) and Series B preferred shares.

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Table of Contents

Federal Realty Investment Trust

Summary of Debt Maturities

September 30, 2004

 

DEBT MATURITIES

(in thousands)

 

Year		Scheduled Amortization			Maturities			Total				Percent of Debt Expiring			Cumulative Percent of Debt Expiring
2004		$	802		$	—		$	802			0.1	%		0.1	%
2005			4,539			40,000			44,539			3.4	%		3.5	%
2006			5,037			199,129			204,166	(1)		15.7	%		19.2	%
2007			5,436			149,216			154,652			11.9	%		31.1	%
2008			5,828			159,542			165,370			12.7	%		43.8	%
2009			6,164			178,278			184,442			14.2	%		58.0	%
2010			6,639			—			6,639			0.5	%		58.5	%
2011			6,670			111,606			118,276			9.1	%		67.6	%
2012			6,178			—			6,178			0.5	%		68.1	%
2013			4,672			—			4,672			0.4	%		68.5	%
Thereafter			164,959			245,206			410,165			31.5	%		100.0	%
Total		$	216,924		$	1,082,977		$	1,299,901			100.00	%

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Note:

(1)	Includes a $100 million term loan and $50 million drawn under the Trust’s $300 million three year revolving credit facility.

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Table of Contents

Federal Realty Investment Trust

Summary of Redevelopment Opportunities and Santana Row

September 30, 2004

 

Current Redevelopment Opportunities (1) ($ millions)

 

Property		Location		Opportunity		Projected ROI (2)			Projected Cost (1)			Cost to Date
Projects Anticipated to Stabilize in 2004 (3)
Santana Row Phase II		San Jose, CA		Two new pad sites (Best Buy and The Container Store) and additional parking		17	%		$	26.6		$	25.2
Santana Row Phase III		San Jose, CA		Pad site (theater building)		10	%		$	4.4		$	2.6
Garden Market		Western Springs, IL		Expansion, re-tenanting (new grocer) and new pad site (existing drug store)		10	%		$	2.6		$	2.6
Bethesda Row		Bethesda, MD		New pad site (fitness equipment)		15	%		$	0.8		$	0.5
Old Town Center		Los Gatos, CA		Re-tenanting (office) and site improvements		12	%		$	0.8		$	0.8
Shops at Willow Lawn		Richmond, VA		Grocer expansion		6	%		$	0.6		$	0.6
Laurel		Laurel, MD		Grocer expansion		>20	%		$	0.4		$	0.4
Wildwood		Bethesda, MD		Pad expansion and re-tenanting (bank)		>20	%		$	0.4		$	0.4
Lawrence Park		Broomall, PA		Grocer expansion		10	%		$	0.3		$	0.3
Subtotal: Projects Anticipated to Stabilize in 2004 (3) (4)						15	%		$	36.8		$	33.3
Projects Anticipated to Stabilize in 2005 (3)
Houston Street		San Antonio, TX		Retail and ground lease to Hotel Valencia		7	%		$	11.5		$	12.0
Bala Cynwyd		Philadelphia, PA		Grocer re-location and expansion and re-tenanting (new health club)		>20	%		$	5.7		$	4.0
Andorra		Philadelphia, PA		Re-tenanting (new health club)		12	%		$	4.5		$	2.4
Leesburg Plaza - Peebles		Leesburg, VA		Re-tenanting (office supply & auto supply)		20	%		$	2.7		$	1.2
Pan Am		Fairfax, VA		Grocer expansion, small shop re-tenanting and site improvements		6	%		$	2.3		$	0.8
Brick Plaza		Brick, NJ		Re-tenanting (electronics)		9	%		$	2.3		$	1.6
Greenlawn Plaza		Greenlawn, NY		Re-tenanting and new pad site (child care)		>20	%		$	2.2		$	2.0
Bristol Plaza		Bristol, CT		Grocer relocation, canopy and façade renovation		10	%		$	1.9		$	0.1
Brunswick		North Brunswick, NJ		Re-tenanting (new health club)		7	%		$	1.5		$	1.5
Rutgers Plaza		Franklin, NJ		Grocer re-location and expansion and backfill of existing grocer space		20	%		$	1.4		$	0.0
Perring Plaza		Baltimore, MD		Re-tenanting (sporting goods and small shops)		6	%		$	1.3		$	0.9
Hauppauge Shopping Center		Hauppauge, NY		Pad site re-tenanting (restaurant)		16	%		$	0.3		$	0.1
Subtotal: Projects Anticipated to Stabilize in 2005 (3) (4)						13	%		$	37.6		$	26.6
Total: Projects Anticipated to Stabilize in 2004 and 2005 (3) (4)						14	%		$	74.4		$	59.9

 

Anticipated future redevelopments stabilizing after 2005 include Bethesda Row (final phase), Mercer Mall, Fresh Meadows, Mount Vernon/South Valley, Leesburg Plaza (Kmart), Hollywood Boulevard, Houston Street, Rockville Town Square, Santana Row Phase IV and future phases, the Village at Shirlington and Shops at Willow Lawn. (3) (5)

 

Santana Row Summary (as of Sept 30, 2004)

 

		Retail Summary							Residential Summary								Financial Summary ($ millions)
Description		Total Stores		Square Feet		% Leased			Total Units		Rent (6)			% Leased			Projected Cost			Cost to Date			Anticipated Stabilized Yield (8)			Anticipated Stabilization (3)
Phase I – Retail, residential and Hotel Valencia(7)		110		445,212		90	%		255		$	1.67 - $2.96		98	%		$	443		$	435		5	%		2005
Phase II – Best Buy and The Container Store		3		83,991		100	%		0			n/a		n/a			$	27		$	25		17	%		2004
Phase III – CineArts theater building & restaurant		2		28,525		100	%		0			n/a		n/a			$	4		$	3		10	%		2004
Phase IV – Building 7 residential re-build		—		—		n/a			256		$	1.94 – 2.47		n/a			$	58		$	21		11	%		2006
Total		115		557,728		92	%		511					98	%		$	531		$	484		6.2	%

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Notes:

(1)

There is no guaranty that the Trust will ultimately complete any or all of these redevelopment opportunities, that the Projected Return on Investment (ROI) or Projected Costs will be the amounts shown or that stabilization will occur as anticipated. The projected ROI and Projected Cost are management’s best estimate based on current information and may change over time.

(2)

Projected ROI reflects only the deal specific cash, unleveraged Incremental Property Operating Income (POI) generated by the redevelopment and is calculated as Incremental POI divided by cost. Incremental POI is the POI generated by the redevelopment after deducting rent previously being paid for the redevelopment space or space taken out of service as a result of the redevelopment. Projected ROI does NOT include peripheral impacts, such as the impact on future lease rollovers at the property or the impact on the long-term value of the property.

(3)	Anticipated Stabilization is the year in which 95% occupancy of the redeveloped space is anticipated to be achieved.

(4)	All subtotals and totals reflect cost weighted-average ROIs.

(5)	These future redevelopment opportunities are being explored by the Trust. There is no guaranty that the Trust will ultimately pursue or complete any or all of these opportunities.

(6)

Range of gross rents. Market conditions have generally not required concessions on renewals, but have required concessions of up to one month on new 12 month leases. Overall average gross rent for Phase I is $2.03 per square foot per month and $2.28 per square foot per month for Phase IV. The range of rents above reflect the size and type of residential offerings for each phase.

(7)	Santana Row Phase I and Total Projected Cost and Cost to Date are net of $129 million of insurance proceeds, $11 million has been, or will be, recognized as income in 2003 and 2004.

(8)	Calculated as stabilized Property Operating Income (POI) divided by cost.

 

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Table of Contents

Federal Realty Investment Trust

2004 Acquisitions and Dispositions

Through September 30, 2004

 

Acquisitions

 

Date

Property

City / State

GLA

Purchase price

Anchor tenants

(in thousands)

March 31, 2004

Westgate Mall

San Jose, CA

637,211

$

97,000

Target, Safeway, Burlington Coat Factory, Ross Dress for Less, Nordstrom Rack

Dispositions

Date

Property

City / State

GLA

Sales price

(in thousands)

June 3, 2004

Village at Shirlington (land parcel)

Arlington, VA

n/a

$

4,934

June 14, 2004

Magruder’s Center

Rockville, MD

109,000

14,350

(1)

July 1, 2004

Plaza del Mercado (contribution to joint venture)

Silver Spring, MD

96,000

20,578

(2)

September 16, 2004

Village at Shirlington (land parcels)

Arlington, VA

n/a

2,796

(3)

Total

205,000

$

42,658

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Notes:

(1)	On June 14, 2004 the Magruders Center was conveyed to the City of Rockville in lieu of condemnation in order to facilitate the redevelopment of Rockville Town Center.

(2)	On July 1, 2004, we contributed Plaza del Mercado to a newly formed joint venture in which we own 30% of the equity.

(3)	On September 16, 2004, we sold two unimproved parcels of land at the Village at Shirlington in conjunction with the redevelopment of the property.

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Table of Contents

Federal Realty Investment Trust

Real Estate Status Report

September 30, 2004

 

																			Mortgage or Capital Lease Obligation		Grocery Anchor GLA (3)
Property Name		Type(1)		MSA Description		Year Acquired		Total Investment			Ownership Percentage			GLA (2)		% Leased							Grocery Anchor (3)		Other Principal Tenants
								(in thousands)											(in thousands)
Mid-Atlantic Region
Washington Metropolitan Area
Bethesda Row		SR		Washington, DC-MD-VA		1993-98		80,743				(4)		440,000		98	%		12,576		40,000		Giant Food		Barnes & Noble / Landmark Theater
Congressional Plaza		SC		Washington, DC-MD-VA		1965		66,967	(5)		64.1	%		337,000		100	%				28,000		Whole Foods		Buy Buy Baby / Container Store / Tower Records
Courthouse Center		SC		Washington, DC-MD-VA		1997		7,564				(6)		38,000		100	%
Falls Plaza		SC		Washington, DC-MD-VA		1967		8,154			100.0	%		73,000		100	%				51,000		Giant Food
Falls Plaza-East		SC		Washington, DC-MD-VA		1972		3,333			100.0	%		71,000		96	%								CVS / Staples
Federal Plaza		SC		Washington, DC-MD-VA		1989		62,078			100.0	%		247,000		98	%		35,230						TJ Maxx / CompUSA / Ross
Friendship Center		SR		Washington, DC-MD-VA		2001		33,314			100.0	%		119,000		100	%								Borders / Linens ‘n Things / Maggiano’s
Gaithersburg Square		SC		Washington, DC-MD-VA		1993		23,947			100.0	%		215,000		90	%								Bed, Bath & Beyond / Borders / Ross
Idylwood Plaza		SC		Washington, DC-MD-VA		1994		15,023			100.0	%		73,000		100	%				30,000		Whole Foods
Laurel		SC		Washington, DC-MD-VA		1986		45,863			99.9	%		383,000		98	%				61,000		Giant Food		Marshalls / Toys R Us
Leesburg Plaza		SC		Washington, DC-MD-VA		1998		24,245				(6)		247,000		77	%		9,900		55,000		Giant Food		Pier One
Loehmann’s Plaza		SC		Washington, DC-MD-VA		1983		45,540			100.0	%		250,000		100	%								Bally’s / Linens ‘n Things / Loehmann’s
Mid-Pike Plaza		SC		Washington, DC-MD-VA		1982		17,210				(7)		304,000		100	%		10,041						Linens ‘n Things / Toys R Us / Bally’s / AC Moore
Mount Vernon		SC		Washington, DC-MD-VA		2003		21,528				(6)		254,000		76	%		12,894		54,000		Shoppers Food Warehouse
Old Keene Mill		SC		Washington, DC-MD-VA		1976		5,158			100.0	%		92,000		100	%				24,000		Whole Foods
Pan Am		SC		Washington, DC-MD-VA		1993		25,542			100.0	%		218,000		99	%				33,000		Safeway		Micro Center / Michaels
Pentagon Row		SR		Washington, DC-MD-VA		1999		87,248			100.0	%		296,000		99	%				45,000		Harris Teeter		Bally’s / Bed, Bath & Beyond / DSW / Cost Plus
Pike 7		SC		Washington, DC-MD-VA		1997		33,461			100.0	%		164,000		97	%								Staples / TJ Maxx / Tower Records
Quince Orchard		SC		Washington, DC-MD-VA		1993		19,759			100.0	%		252,000		100	%				24,000		Magruders		Circuit City / Staples
Rockville Town Square		SR		Washington, DC-MD-VA		N/A		2,584				(8)		N/A		N/A							Magruders (signed)
Rollingwood Apartments		SR		Washington, DC-MD-VA		1971		6,706			100.0	%		N/A		93	%
Sam’s Park & Shop		SR		Washington, DC-MD-VA		1995		12,098			100.0	%		51,000		100	%								Petco
South Valley		SC		Washington, DC-MD-VA		2003		14,741				(6)		218,000		85	%								Home Depot / TJ Maxx
Tower		SC		Washington, DC-MD-VA		1998		18,775			100.0	%		109,000		100	%								Virginia Fine Wine / Talbots
Tyson’s Station		SC		Washington, DC-MD-VA		1978		3,356			100.0	%		50,000		100	%		6,664						Trader Joes
Village at Shirlington		SR		Washington, DC-MD-VA		1995		33,533			100.0	%		204,000		98	%								Cineplex Odeon / Carlyle Grand Café
Wildwood		SC		Washington, DC-MD-VA		1969		17,498			100.0	%		86,000		100	%		27,323		20,000		Balducci’s		CVS
								735,968						4,791,000		96	%
Mid-Atlantic Region - Other
Governor Plaza		SC		Baltimore, MD		1985		18,876			99.9	%		269,000		80	%								Bally’s / Comp USA / Office Depot
Perring Plaza		SC		Baltimore, MD		1985		25,020			99.9	%		401,000		96	%				58,000		Shoppers Food Warehouse		Home Depot / Burlington Coat Factory / Jo-Ann Stores
Barracks Road		SC		Charlottesville, VA		1985		39,837			100.0	%		483,000		97	%		43,855		91,000		Harris Teeter / Kroger		Bed, Bath & Beyond / Barnes & Noble / Old Navy
Winter Park		SR		Orlando, FL		1996		6,972			100.0	%		28,000		100	%
Eastgate		SC		Raleigh-Durham-Chapel Hill, NC		1986		16,466			100.0	%		159,000		83	%				23,000		Earth Fare		Stein Mart
Shops at Willow Lawn		SC		Richmond-Petersburg, VA		1983		61,093			99.9	%		488,000		71	%				60,000		Kroger		Old Navy / Tower Records / Staples
								168,264						1,828,000		86	%
				Total Mid-Atlantic Region				904,232						6,619,000		93	%
Northeast Region
Philadelphia Metropolitan Area
Andorra		SC		Philadelphia, PA-NJ		1988		21,734			99.9	%		259,000		100	%				24,000		Acme Markets		Kohl’s / Staples
Bala Cynwyd		SC		Philadelphia, PA-NJ		1993		24,933			100.0	%		281,000		100	%				45,000		Acme Markets		Lord & Taylor
Ellisburg Circle		SC		Philadelphia, PA-NJ		1992		28,946			100.0	%		268,000		100	%				47,000		Genuardi’s		Bed, Bath & Beyond / Stein Mart
Feasterville		SC		Philadelphia, PA-NJ		1980		11,653			100.0	%		111,000		91	%				53,000		Genuardi’s		OfficeMax
Flourtown		SC		Philadelphia, PA-NJ		1980		9,025			100.0	%		187,000		54	%				42,000		Genuardi’s
Langhorne Square		SC		Philadelphia, PA-NJ		1985		17,793			100.0	%		216,000		88	%				55,000		Redner’s Warehouse Mkts.		Marshalls
Lawrence Park		SC		Philadelphia, PA-NJ		1980		25,886			100.0	%		348,000		100	%		31,084		53,000		Acme Markets		CHI / TJ Maxx / CVS
Northeast		SC		Philadelphia, PA-NJ		1983		22,014			100.0	%		292,000		92	%								Burlington Coat / Marshalls / Tower Records
Willow Grove		SC		Philadelphia, PA-NJ		1984		26,308			100.0	%		215,000		100	%								Barnes & Noble / Marshalls / Toys R Us
Wynnewood		SC		Philadelphia, PA-NJ		1996		35,292			100.0	%		255,000		99	%		31,678		98,000		Genuardi’s		Bed, Bath & Beyond / Borders / Old Navy
								223,584						2,432,000		94	%
New York / New Jersey
Allwood		SC		Bergen-Passaic, NJ		1988		4,295				(7)		52,000		100	%		3,492		25,000		Stop & Shop		Mandee Shop
Clifton		SC		Bergen-Passaic, NJ		1988		5,034				(7)		80,000		66	%		3,247						Drug Fair / Dollar Express
Blue Star		SC		Middlesex-Somerset-Hunterdon, NJ		1988		39,561				(7)		407,000		97	%		26,651		43,000		Shop Rite		Kohl’s / Michaels / Toys R Us / Marshalls
Brunswick		SC		Middlesex-Somerset-Hunterdon, NJ		1988		24,010				(7)		303,000		97	%		11,095		55,000		A&P		A.J. Wright / L.A. Fitness
Rutgers		SC		Middlesex-Somerset-Hunterdon, NJ		1988		15,944				(7)		217,000		99	%		12,852		44,000		Stop & Shop		Kmart
Brick Plaza		SC		Monmouth-Ocean, NJ		1989		55,202			100.0	%		409,000		95	%		32,636		66,000		A&P		Loews Theatre / Barnes&Noble / Sports Authority
Greenlawn Plaza		SC		Nassau-Suffolk, NY		2000		11,979			100.0	%		102,000		100	%				46,000		Waldbaum’s
Hauppauge		SC		Nassau-Suffolk, NY		1998		26,380			100.0	%		131,000		100	%		16,532		61,000		Shop Rite		AC Moore

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Table of Contents

Federal Realty Investment Trust

Real Estate Status Report

September 30, 2004

 

Property Name		Type(1)		MSA Description		Year Acquired		Total Investment		Ownership Percentage			GLA (2)		% Leased			Mortgage or Capital Lease Obligation		Grocery Anchor GLA (3)		Grocery Anchor (3)		Other Principal Tenants
								(in thousands)										(in thousands)
Huntington		SC		Nassau- Suffolk, NY		1988		22,456		(7	)		279,000		100	%		14,258						Buy Buy Baby / Toys R Us / Bed, Bath & Beyond / Barnes & Noble
Forest Hills		SR		New York, NY		1997		23,969		100.0	%		86,000		98	%								Midway Theatre / Duane Reade / Gap
Fresh Meadows		SC		New York, NY		1997		64,920		100.0	%		403,000		96	%						Pathmark (signed)		Value City / Kohl’s / Cineplex Odeon
Troy		SC		Newark, NJ		1980		20,606		100.0	%		202,000		99	%				64,000		Pathmark		AC Moore / Comp USA / Toys R Us
Hamilton		SC		Trenton, NJ		1988		8,123		(7	)		190,000		100	%		4,814		53,000		Shop Rite		AC Moore / Stevens Furniture
Mercer Mall		SC		Trenton, NJ		2003		86,169		(7	)		435,000		93	%		59,902		74,900		Shop Rite		Bed, Bath & Beyond / DSW / TJ Maxx
								408,648					3,296,000		96	%
New England
Dedham Plaza		SC		Boston- Worcester- Lawrence- Lowell- Brockton, MA		1993		29,961		100.0	%		243,000		98	%				80,000		Star Market		Pier One
Queen Anne Plaza		SC		Boston- Worcester- Lawrence- Lowell- Brockton, MA		1994		14,803		100.0	%		149,000		100	%				50,000		Victory Supermarket		TJ Maxx
Saugus Plaza		SC		Boston- Worcester- Lawrence- Lowell- Brockton, MA		1996		13,307		100.0	%		171,000		100	%				55,000		Super Stop & Shop		Kmart
Bristol Plaza		SC		Hartford, CT		1995		22,127		100.0	%		277,000		96	%				57,000		Stop & Shop		TJ Maxx
West Hartford		SR		Hartford, CT		1994-1996		8,051		100.0	%		62,000		89	%
Greenwich Avenue		SR		New Haven- Bridgeport- Stamford- Waterbury		1994-1996		15,993		100.0	%		42,000		100	%								Saks Fifth Avenue
								104,242					944,000		98	%
Chicago
Crossroads		SC		Chicago, IL		1993		22,240		100.0	%		173,000		97	%								Comp USA / Golfsmith / Guitar Center
Finley Square		SC		Chicago, IL		1995		28,684		100.0	%		313,000		100	%								Bed, Bath & Beyond / Sports Authority
Garden Market		SC		Chicago, IL		1994		11,121		100.0	%		140,000		100	%				63,000		Dominick’s		Walgreens
North Lake Commons		SC		Chicago, IL		1994		13,032		100.0	%		129,000		93	%				77,000		Dominick’s
Evanston		SR		Chicago, IL		1995		3,220		100.0	%		12,000		100	%								Gap
								78,297					767,000		98	%
Northeast Region - Other
Gratiot Plaza		SC		Detroit, MI		1973		17,461		100.0	%		218,000		100	%				69,000		Farmer Jack’s		Bed, Bath & Beyond / Best Buy / DSW
Lancaster		SC		Lancaster, PA		1980		10,137		(7	)		107,000		97	%		4,907		39,000		Giant Food		Michaels
								27,598					325,000		99	%
				Total Northeast Region				842,369					7,764,000		96	%
West Region
California
Colorado Blvd		SR		Los Angeles- Long Beach, CA		1996-1998		16,580		100	%		69,000		98	%								Pottery Barn / Banana Republic
Hermosa Ave		SR		Los Angeles- Long Beach, CA		1997		4,722		90.0	%		23,000		100	%
Hollywood Blvd		SR		Los Angeles- Long Beach, CA		1999		24,729		90.0	%		150,000		78	%								Hollywood Entertainment Museum
Third St Promenade		SR		Los Angeles- Long Beach, CA		1996-2000		73,818		(9	)		209,000		99	%								J. Crew / Banana Republic / Old Navy / Abercrombie & Fitch
Escondido		SC		San Diego, CA		1996		24,924		70.0	%		222,000		97	%								Cost Plus / TJ Maxx / Toys R Us
Fifth Ave		SR		San Diego, CA		1996-1997		12,335		(10	)		51,000		82	%								Urban Outfitters
150 Post Street		SR		San Francisco, CA		1997		32,344		100.0	%		102,000		61	%								Brooks Brothers
Kings Court		SC		San Jose, CA		1998		11,410		(6	)		79,000		98	%				25,000		Lunardi’s Super Market		Longs Drug Store
Old Town Center		SR		San Jose, CA		1997		33,712		100.0	%		95,000		96	%								Borders / Gap Kids / Banana Republic
Westgate		SC		San Jose, CA		2004		113,651		100.0	%		640,000		96	%				38,000		Safeway		Target / Burlington Coat Factory / Barnes & Noble / Ross
Santana Row		SR		San Jose, CA		1997		490,237		100.0	%		558,000		92	%								Crate & Barrel / Container Store / Best Buy / Borders / CineArts Theatre
								838,462					2,198,000		92	%
West Region - Other
Mill Avenue		SR		Phoenix- Mesa, AZ		1998		11,195		(11	)		39,000		100	%								Gordon Biersch
Houston St		SR		San Antonio, TX		1998		63,645		100.0	%		171,000		82	%		200
								74,840					210,000		86	%
				Total West Region				913,302					2,408,000		92	%
Total								2,659,903					16,791,000		94	%		411,831

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Notes:

(1)	SR - Street Retail; SC - Shopping Center

(2)	Excludes redevelopment square footage not yet in service, Santana Row residential, future phases of Santana Row, Rollingwood and The Crest at Congressional Apartments.

(3)	Grocery anchor is defined as a grocery tenant leasing 15,000 square feet or more.

(4)	Portion of property subject to capital lease obligation.

(5)	Total investment includes dollars associated with the 146 units of The Crest at Congressional.

(6)	Property owned in a “downreit” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units.

(7)	Property subject to capital lease obligation.

(8)	Currently under contract to acquire the retail square footage upon completion of development.

(9)	Consists of nine properties, seven at 100% and two at 90%.

(10)	Consists of four properties, three at 100% and one at 90%.

(11)	Consists of two properties, one at 100% and one at 85%. On October 1, 2004 we acquired the remaining 15% interest on the one.

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Table of Contents

Federal Realty Investment Trust

Shopping Center / Street Retail Summary

September 30, 2004

 

Shopping Center Summary
(in thousands, except square footage data)
		For the nine months ended September 30,
		2004			2003
Real Estate Assets, at cost		$	1,584,743		$	1,328,345
Rental Income (1)		$	187,987		$	169,491
Other Property Income			7,248			6,530
Interest Income			1,018			684
Total Revenues			196,253			176,705
Rental Expense			37,296			32,876
Real Estate Tax Expense			21,238			19,081
Total Property Operating Expenses			58,534			51,957
Property Operating Income (2)		$	137,719		$	124,748
Square Feet (3)			13,985,000			13,015,000
Street Retail Summary
(in thousands, except square footage data)
		For the nine months ended September 30,
		2004			2003
Real Estate Assets, at cost		$	1,075,161		$	1,025,018
Rental Income (4)		$	83,988		$	69,073
Other Property Income			11,782			6,355
Interest Income			3,716			3,391
Total Revenues			99,486			78,819
Rental Expense			29,871			26,491
Real Estate Tax Expense			7,416			6,231
Total Property Operating Expenses			37,287			32,722
Property Operating Income (2)		$	62,199		$	46,097
Square Feet (3)			2,806,000			2,765,000

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Notes:

(1)	Includes rent revenue from residential units of $1.6 million in 2004 and $0.6 million in 2003.

(2)	All components of property operating income for the periods ended September 30, 2004 and 2003 have been restated for discontinued operations.

(3)	Excludes redevelopment square footage not yet in service. Does not include any future phases of Santana Row or residential square footage at Santana Row, Rollingwood Apartments or The Crest at Congressional Apartments.

(4)	Includes rent revenue from residential units of $7.7 million in 2004 and $5.4 million in 2003.

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Table of Contents

Federal Realty Investment Trust

Retail Leasing Summary (1) - Comparable Basis

September 30, 2004

 

Renewal Lease Summary - Comparable (2) (7)

 

Quarter		Number of Leases Signed		% of Total Leases Signed			GLA Signed		Contractual Rent (3) Per Sq. Ft.			Prior Rent (4) Per Sq. Ft.			Annual Increase in Rent			Cash Basis % Increase Over Prior Rent			Straight-lined Basis % Increase Over Prior Rent			Weighted Average Lease Term (5)		Tenant Improvements (6)			Tenant Improvements Per Sq. Ft.
3rd Quarter 2004		42		55	%		183,428		$	24.44		$	19.56		$	893,800		25	%		39	%		6.8		$	190,135		$	1.04
2nd Quarter 2004		52		63	%		219,919		$	20.83		$	18.35		$	544,693		13	%		22	%		5.3		$	529,924		$	2.41
1st Quarter 2004		32		43	%		102,220		$	27.45		$	24.98		$	252,272		10	%		22	%		5.7		$	70,000		$	0.68
4th Quarter 2003		40		55	%		124,683		$	26.95		$	25.59		$	169,950		5	%		19	%		4.8		$	47,000		$	0.38
Total - 12 months		166		54	%		630,250		$	24.16		$	21.21		$	1,860,715		14	%		26	%		5.7		$	837,059		$	1.33
New Lease Summary - Comparable (2)
Quarter		Number of Leases Signed		% of Total Leases Signed			GLA Signed		Contractual Rent (3) Per Sq. Ft.			Prior Rent (4) Per Sq. Ft.			Annual Increase in Rent			Cash Basis % Increase Over Prior Rent			Straight-lined Basis% Increase Over Prior Rent			Weighted Average Lease Term (5)		Tenant Improvements (6)			Tenant Improvements Per Sq. Ft.
3rd Quarter 2004		35		45	%		225,497		$	21.50		$	17.99		$	791,958		20	%		28	%		10.3		$	5,302,465		$	23.51
2nd Quarter 2004		30		37	%		261,186		$	19.10		$	16.74		$	617,736		14	%		21	%		9.5		$	3,694,856		$	14.15
1st Quarter 2004		42		57	%		272,835		$	19.93		$	16.46		$	948,063		21	%		30	%		9.9		$	2,754,080		$	10.09
4th Quarter 2003		33		45	%		124,333		$	23.90		$	18.88		$	623,990		27	%		38	%		7.8		$	3,700,718		$	29.76
Total - 12 months		140		46	%		883,851		$	20.64		$	17.27		$	2,981,747		20	%		28	%		9.5		$	15,452,119		$	17.48
Total Lease Summary - Comparable (2)
Quarter		Number of Leases Signed		% of Total Leases Signed			GLA Signed		Contractual Rent (3) Per Sq. Ft.			Prior Rent (4) Per Sq. Ft.			Annual Increase in Rent			Cash Basis % Increase Over Prior Rent			Straight-lined Basis % Increase Over Prior Rent			Weighted Average Lease Term (5)		Tenant Improvements (6)			Tenant Improvements Per Sq. Ft.
3rd Quarter 2004		77		100	%		408,925		$	22.82		$	18.69		$	1,685,758		22	%		33	%		8.6		$	5,492,600		$	13.43
2nd Quarter 2004		82		100	%		481,105		$	19.89		$	17.47		$	1,162,429		14	%		21	%		7.5		$	4,224,780		$	8.78
1st Quarter 2004		74		100	%		375,055		$	21.98		$	18.78		$	1,200,335		17	%		27	%		8.5		$	2,824,080		$	7.53
4th Quarter 2003		73		100	%		249,016		$	25.43		$	22.24		$	793,940		14	%		27	%		6.2		$	3,747,718		$	15.05
Total - 12 months		306		100	%		1,514,101		$	22.11		$	18.91		$	4,842,462		17	%		27	%		7.8		$	16,289,178		$	10.76

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Notes:

(1)	Leases on this report represent retail activity only; office and residential leases are not included.

(2)	Comparable leases represent those leases signed on spaces for which there was a former tenant.

(3)	Contractual Rent represents contractual Minimum Rent under the new lease for the first 12 months of the term.

(4)	Prior Rent represents Minimum Rent and Percentage Rent paid by the prior tenant in the final 12 months of the term.

(5)	Weighted average is determined on the basis of square footage.

(6)	See Glossary of Terms.

(7)	Renewal leases represent expiring leases rolling over with the same tenant. All other leases are categorized as new.

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Table of Contents

Federal Realty Investment Trust

Retail Leasing Summary (1) - Non-Comparable Basis (cash, non-straight-lined basis)

September 30, 2004

 

Total Lease Summary - Non-Comparable (2)

 

Quarter		Number of Leases Signed		GLA Signed		Contractual Rent (3) Per Sq. Ft.			Weighted Average Lease Term (4)		Tenant Improvements (5)			Tenant Improvements Per Sq. Ft.
3rd Quarter 2004		2		8,609		$	58.41		10.0		$	—		$	—
2nd Quarter 2004		5		14,816		$	29.23		7.8		$	196,052		$	13.23
1st Quarter 2004		10		78,843		$	24.69		13.7		$	25,000		$	0.32
4th Quarter 2003		6		21,867		$	36.64		8.9		$	84,425		$	3.86
Total - 12 months		23		124,135		$	29.68		11.4		$	305,477		$	2.46

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Notes:

(1)	Leases on this report represent retail activity only; office and residential leases are not included.

(2)	Non-comparable leases represent those leases signed on spaces for which there was no former tenant, or expansion footage for leases rolling over for which there was no former tenant.

(3)	Contractual Rent represents contractual Minimum Rent under the new lease for the first 12 months of the term.

(4)	Weighted average is determined on the basis of square footage.

(5)	See Glossary of Terms.

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Table of Contents

Federal Realty Investment Trust

Lease Expirations

September 30, 2004

 

Assumes no exercise of lease options

 

		Anchor Tenants (1)								Small Shop Tenants								Total
Year		Expiring SF (2)		% of Anchor SF			Minimum Rent PSF			Expiring SF (2)		% of Small Shop SF			Minimum Rent PSF			Expiring SF (2)		% of Total SF			Minimum Rent PSF
2004		58,000		1	%		$	7.69		187,000		3	%		$	21.12		245,000		2	%		$	17.92
2005		273,000		3	%		$	13.43		750,000		11	%		$	21.98		1,023,000		7	%		$	19.70
2006		461,000		5	%		$	9.82		867,000		13	%		$	24.38		1,328,000		9	%		$	19.33
2007		884,000		10	%		$	8.47		978,000		15	%		$	23.93		1,862,000		12	%		$	16.59
2008		746,000		9	%		$	11.27		899,000		13	%		$	22.90		1,645,000		11	%		$	17.63
2009		1,167,000		14	%		$	11.02		874,000		13	%		$	26.20		2,041,000		13	%		$	17.52
2010		454,000		5	%		$	12.46		456,000		7	%		$	23.75		910,000		6	%		$	18.12
2011		376,000		4	%		$	18.32		461,000		7	%		$	29.48		837,000		5	%		$	24.47
2012		540,000		6	%		$	12.68		400,000		6	%		$	33.75		940,000		6	%		$	21.64
2013		680,000		8	%		$	14.55		259,000		4	%		$	30.84		939,000		6	%		$	19.04
Thereafter		2,995,000		35	%		$	14.86		579,000		9	%		$	30.79		3,574,000		23	%		$	17.44
Total (3)		8,634,000		100	%		$	12.88		6,710,000		100	%		$	25.66		15,344,000		100	%		$	18.47
Assumes lease options are exercised
		Anchor Tenants (1)								Small Shop Tenants								Total
Year		Expiring SF (2)		% of Anchor SF			Minimum Rent PSF			Expiring SF (2)		% of Small Shop SF			Minimum Rent PSF			Expiring SF (2)		% of Total SF			Minimum Rent PSF
2004		23,000		0	%		$	19.43		149,000		2	%		$	20.79		172,000		1	%		$	20.61
2005		19,000		0	%		$	16.00		491,000		7	%		$	23.66		509,000		3	%		$	23.38
2006		54,000		1	%		$	12.34		502,000		7	%		$	26.77		556,000		4	%		$	25.37
2007		155,000		2	%		$	7.73		559,000		8	%		$	23.99		714,000		5	%		$	20.45
2008		150,000		2	%		$	11.88		551,000		8	%		$	23.47		701,000		5	%		$	20.99
2009		244,000		3	%		$	11.35		537,000		8	%		$	27.73		782,000		5	%		$	22.61
2010		158,000		2	%		$	13.42		387,000		6	%		$	24.62		546,000		4	%		$	21.37
2011		114,000		1	%		$	15.02		496,000		7	%		$	23.75		610,000		4	%		$	22.12
2012		215,000		2	%		$	13.35		431,000		6	%		$	28.50		646,000		4	%		$	23.47
2013		256,000		3	%		$	12.34		341,000		5	%		$	24.63		597,000		4	%		$	19.36
Thereafter		7,246,000		84	%		$	13.00		2,266,000		34	%		$	26.84		9,511,000		62	%		$	16.29
Total (3)		8,634,000		100	%		$	12.88		6,710,000		100	%		$	25.66		15,344,000		100	%		$	18.47

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Notes:

(1)	Anchor is defined as a tenant leasing 15,000 square feet or more.

(2)	Minimum Rent reflects in-place contractual rent as of September 30, 2004.

(3)	Represents occupied square footage as of September 30, 2004.

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Table of Contents

Federal Realty Investment Trust

Portfolio Leasing Statistics

September 30, 2004

 

Overall Portfolio Statistics (1)

 

		At September 30, 2004							At September 30, 2003
Type		Size		Leased		Leased%			Size		Leased		Leased%
Retail Properties (2):		16,791,000		15,818,000		94.2	%		15,780,000		14,821,000		93.9	%
Residential Properties (3):		683		636		93.1	%		683		623		91.2	%
Same Center Statistics (1)
		At September 30, 2004							At September 30, 2003
Type		Size		Leased		Leased%			Size		Leased		Leased%
Retail Properties (2)(4):		12,277,000		11,852,000		96.5	%		12,262,000		11,851,000		96.7	%
Residential Properties (3):		683		636		93.1	%		683		623		91.2	%

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Notes:

(1)	See Glossary of Terms.

(2)	Leasable square feet; excludes redevelopment square footage not yet placed in service.

(3)	Includes Rollingwood, Santana Row residential and The Crest at Congressional Apartments.

(4)	Excludes properties purchased, sold or under redevelopment.

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Table of Contents

Federal Realty Investment Trust

Summary of Top 25 Tenants

September 30, 2004

 

Rank		Tenant Name		Annualized Base Rent				Percentage of Total Annualized Base Rent			Tenant GLA			Percentage of Total GLA			Number of Stores Leased
1		Safeway, Inc.		$	6,510,000			2.30	%		472,000			2.81	%		8
2		Gap, Inc.		$	6,290,000			2.22	%		232,000			1.38	%		12
3		Ahold USA, Inc.		$	6,130,000			2.16	%		502,000			2.99	%		10
4		Bed, Bath & Beyond, Inc.		$	5,620,000			1.98	%		396,000			2.36	%		9
5		Barnes & Noble, Inc.		$	4,240,000			1.50	%		194,000			1.16	%		20
6		TJX Companies		$	3,960,000			1.40	%		454,000			2.70	%		14
7		Best Buy Stores, L.P.		$	3,480,000			1.23	%		101,000			0.60	%		3
8		CVS Corporation		$	3,460,000			1.22	%		142,000			0.85	%		13
9		Wakefern Food Corporation		$	3,080,000			1.09	%		232,000			1.38	%		4
10		Borders Group, Inc.		$	2,780,000			0.98	%		129,000			0.77	%		5
11		Michaels Stores, Inc.		$	2,480,000			0.88	%		165,000			0.98	%		8
12		OPNET Technologies, Inc.		$	2,480,000			0.88	%		60,000			0.36	%		1
13		MTS, Inc.		$	2,400,000			0.85	%		91,000			0.54	%		5
14		Great Atlantic & Pacific Tea Co		$	2,380,000			0.84	%		236,000			1.41	%		4
15		CompUSA, Inc.		$	2,370,000			0.84	%		134,000			0.80	%		5
16		Retail Ventures, Inc.		$	2,370,000			0.84	%		117,000			0.70	%		4
17		Office Depot, Inc.		$	2,270,000			0.80	%		149,000			0.89	%		6
18		Home Depot, Inc.		$	2,210,000			0.78	%		218,000			1.30	%		3
19		The Container Store, Inc.		$	2,190,000			0.77	%		52,000			0.31	%		2
20		Dress Barn, Inc.		$	2,120,000			0.75	%		109,000			0.65	%		15
21		Toys R Us, Inc.		$	2,080,000			0.73	%		259,000			1.54	%		7
22		Dollar Tree Stores, Inc.		$	2,060,000			0.73	%		162,000			0.96	%		16
23		Bally’s Health & Tennis		$	2,040,000			0.72	%		156,000			0.93	%		5
24		Staples, Inc.		$	2,000,000			0.71	%		106,000			0.63	%		6
25		Kohl’s Corporation		$	1,900,000			0.67	%		356,000			2.12	%		3
		Totals - Top 25 Tenants		$	78,900,000			27.84	%		5,224,000			31.11	%		188
		Total Annualized Base Rent:		$	283,400,000	(1)
		Total Portfolio Square Footage:									16,791,000	(2)

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Note:

(1)	Reflects annual in-place contractual rent as of September 30, 2004.

(2)	Excludes redevelopment square footage not yet placed in service.

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Federal Realty Investment Trust

Reconciliation of Net Income to FFO Guidance

September 30, 2004

 

Reconciliation of 2004 Net Income to 2004 FFO Guidance ($ millions except per share amounts)		Forecast
Net income		$	78			to		$	79
Gain on sale of real estate			(9	)					(9	)
Depreciation and amortization of real estate assets			83						83
Amortization of initial direct costs of leases			7						7
Funds from Operations			159						160
Income attributable to operating partnership units			2						2
Dividends on preferred stock			(11	)					(11	)
Funds from operations available for common shareholders(1)			150			to			151
Weighted Average Shares (diluted)			52.9
Funds from operations available for common shareholders per share		$	2.83			to		$	2.84
Reconciliation of 2005 Net Income to 2005 FFO Guidance ($ millions except per share amounts)
		Forecast
Net income		$	75			to		$	77
Gain on sale of real estate			—						—
Depreciation and amortization of real estate assets			86						86
Amortization of initial direct costs of leases			7						7
Funds from Operations			168						170
Income attributable to operating partnership units			2						2
Dividends on preferred stock			(11	)					(11	)
Funds from operations available for common shareholders(1)			159			to			161
Weighted Average Shares (diluted)			53.1
Funds from operations available for common shareholder per share		$	3.00			to		$	3.03

 

Note:

 

(1)	Individual items may not add up to total as a result of rounding.

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Federal Realty Investment Trust

Summarized Operating Results - Joint Venture

September 30, 2004

 

Financial Highlights

(in thousands, except per share data)

(unaudited)

 

OPERATING RESULTS

 

		Three months ended September 30, 2004
Revenues
Rental income		$	612
Other property income			1
			613
Expenses
Rental			130
Real estate taxes			53
Depreciation and amortization			168
			351
Operating income			262
Interest expense			(197	)
Net Income			65

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Federal Realty Investment Trust

Summarized Balance Sheet - Joint Venture

September 30, 2004

 

Financial Highlights

(in thousands, except per share data)

 

CONSOLIDATED BALANCE SHEETS

 

		September 30, 2004
		(unaudited)
ASSETS
Real estate, at cost		$	63,986
Less accumulated depreciation and amortization			(168	)
Net real estate investments			63,818
Cash and cash equivalents			1,020
Accounts receivable			71
Other assets			2,036
TOTAL ASSETS		$	66,945
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities
Mortgages		$	13,325
Other liabilities			6,692
Total liabilities			20,017
Partners’ Capital
Capital - Clarion Lion Properties Fund			32,850
Capital - Federal Realty Investment Trust			14,078
Total partners’ capital			46,928
TOTAL LIABILITIES AND PARTNERS’ CAPITAL		$	66,945

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Federal Realty Investment Trust

Summary of Outstanding Debt - Joint Venture

September 30, 2004

 

		Maturity		Interest Rate as of September 30, 2004			Balance
							(in thousands)
Mortgage Loans
Secured Fixed Rate
Plaza del Mercado		07/05/14		5.770	%		$	13,325
Total Fixed Rate Debt							$	13,325

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Federal Realty Investment Trust

2004 Acquisitions and Dispositions - Joint Venture

Through September 30, 2004

 

Acquisitions

 

Date		Property		City /State		GLA		Purchase price			Anchor tenants
								(in thousands)
July 1, 2004		Plaza del Mercado(1)		Silver Spring, MD		96,000		$	20,578		Giant Food, CVS
September 20, 2004		Campus Plaza		Bridgewater, MA		121,000			17,725		Roche Brothers Supermarket, Burlington Coat Factory
September 20, 2004		Pleasant Shops		Weymouth, MA		128,000			20,275		Foodmaster Supermarket, Marshalls
		Total				345,000		$	58,578

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Notes:

(1)	On July 1, 2004, we contributed Plaza del Mercado to a newly formed joint venture in which we own 30% of the equity.

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Federal Realty Investment Trust

Real Estate Status Report - Joint Venture

September 30, 2004

 

Property Name		MSA Description		Year Acquired		Total Investment		GLA		% Leased			Mortgage or Capital Lease Obligation		Grocery Anchor GLA (1)		Grocery Anchor (1)		Other Principal Tenants
						(in thousands)							(in thousands)
Mid-Atlantic Region
Washington Metropolitan Area
Plaza del Mercado		Washington, DC-MD-VA		2004		20,728		96,000		96	%		13,325		25,000		Giant Food		CVS
								96,000		96	%
		Total Mid- Atlantic Region						96,000		96	%
Northeast Region
New England
Campus Plaza		Boston- Worcester- Lawrence- Lowell- Brockton, MA		2004		20,847		121,000		95	%		0		46,000		Roche Brothers		Burlington Coat Factory
Pleasant Shops		Boston- Worcester- Lawrence- Lowell- Brockton, MA		2004		22,411		128,000		100	%		0		38,000		Foodmaster		Marshalls
								249,000		97	%
		Total Northeast Region						249,000
Total						63,986		345,000		97	%		13,325

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Notes:

(1)	Grocery anchor is defined as a grocery tenant leasing 15,000 square feet or more.

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Glossary of Terms

 

EBITDA: EBITDA is a non-GAAP measure that means net income or loss plus interest expense, income taxes, depreciation and amortization; adjusted for gain or loss on sale of assets, impairment provisions, provision for loss on equity securities and other nonrecurring expenses. EBITDA is presented because it provides useful information regarding our ability to service debt. EBITDA should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of EBITDA, adjusted for discontinued operations, to net income for the nine months ended September 30, 2004 and 2003 is as follows:

 

		For the Nine Months Ended September 30,
		(in thousands)
		2004				2003
Net income		$	62,238			$	59,097
Depreciation and amortization			67,148				54,317
Interest			63,835				54,550
(Gain) on sale of real estate			(9,331	)			(7,723	)
EBITDA		$	183,890			$	160,241

 

Funds From Operations (FFO): FFO is a supplemental measure of real estate companies’ operating performances. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: income available for common shareholders before depreciation and amortization of real estate assets and before extraordinary items less gains and losses on sale of real estate. NAREIT developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider FFO a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.

 

Property Operating Income: Gross revenues, including interest income, less rental expenses and real estate taxes.

 

Overall Portfolio: Includes all operating properties owned in reporting period.

 

Same Center: Excludes centers purchased or sold.

 

Tenant improvements: Represents not only the total dollars committed for the improvement (fit-out) of a space as it relates to a specific lease but may also include base building costs (i.e. expansion, escalators or new entrances) which are required to make the space leasable.