UNITED STATES

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) December 31, 2008

 

 

Federal Realty Investment Trust

(Exact name of registrant as specified in its charter)

 

 

 

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

 

 

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 February 18, 2009, 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 December 31, 2008. 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 information at December 31, 2008 (including press release dated February 18, 2009)

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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: February 18, 2009				/s/ Andrew P. Blocher
				Andrew P. Blocher
				Senior Vice President, Chief Financial Officer and Treasurer

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EXHIBIT INDEX

 

Exh No.		Exhibit
99.1		Supplemental Information at December 31, 2008

Exhibit 99.1

FEDERAL REALTY INVESTMENT TRUST

SUPPLEMENTAL INFORMATION

December 31, 2008

TABLE OF CONTENTS

 

1.		Fourth Quarter 2008 Earnings Press Release				3
2.		Financial Highlights
				Summarized Income Statements		7
				Summarized Balance Sheets		8
				Funds From Operations / Summary of Capital Expenditures		9
				Market Data		10
				Components of Rental Income		11
3.		Summary of Debt
				Summary of Outstanding Debt and Capital Lease Obligations		12
				Summary of Debt Maturities		13
4.		Summary of Redevelopment Opportunities				14
5.		2008 Significant Acquisitions and Dispositions				15
6.		Real Estate Status Report				16
7.		Retail Leasing Summary				18
8.		Lease Expirations				19
9.		Portfolio Leased Statistics				20
10.		Summary of Top 25 Tenants				21
11.		Reconciliation of Net Income to FFO Guidance				22
12.		Joint Venture Disclosure
				Summarized Income Statements and Balance Sheets		23
				Summary of Outstanding Debt and Debt Maturities		24
				Real Estate Status Report		25
13.		Glossary of Terms				26

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 Annual Report on Form 10-K filed on February 27, 2008, 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 completion of anticipated or ongoing property redevelopments or renovations may cost more, take more time to complete, or fail to perform as expected;

 

•

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 environmental issues may develop at our properties and result in unanticipated costs, 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, filed with the Securities and Exchange Commission on February 27, 2008.

 

2

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FOR IMMEDIATE RELEASE

 

Investor and Media Inquiries
Gina Birdsall				Janelle Stevenson
Investor Relations				Corporate Communications
301/998-8265				301/998-8185
gbirdsall@federalrealty.com				jmstevenson@federalrealty.com

FEDERAL REALTY INVESTMENT TRUST ANNOUNCES

FOURTH QUARTER AND YEAR-END 2008 OPERATING RESULTS

ROCKVILLE, Md. (February 18, 2009) – Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its fourth quarter and year-ended December 31, 2008.

Financial Results

Federal Realty generated funds from operations available for common shareholders (FFO) of $58.8 million, or $0.99 per diluted share, in fourth quarter 2008 and FFO of $229.2 million, or $3.87 per diluted share, for the year ended December 31, 2008. Excluding a $1.6 million charge associated with the settlement of a litigation matter relating to a shopping center in New Jersey, FFO was $1.02 per diluted share for fourth quarter 2008 and $3.89 per diluted share for year-end 2008. This compares to FFO of $52.8 million, or $0.92 per diluted share, in fourth quarter 2007 and FFO of $206.8 million, or $3.63 per diluted share, for the year ended December 31, 2007.

Net income available for common shareholders was $33.6 million and earnings per diluted share was $0.57 for the quarter ended December 31, 2008 versus $122.0 million and $2.14, respectively, for fourth quarter 2007. Fourth quarter 2007 earnings included a gain on sale of $95.8 million ($1.68 per diluted share) primarily from the sale of leasehold interests in six properties in October 2007. For the full year 2008, Federal Realty reported net income available for common shareholders of $129.2 million, or $2.19 per diluted share. This compares to net income available for common shareholders of $195.1 million, or $3.45 per diluted share, for the year ended December 31, 2007.

FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO to net income is attached to this press release.

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND

YEAR-END 2008 OPERATING RESULTS

February 18, 2009

Page 2

 

Portfolio Results

In fourth quarter 2008, same-center property operating income, including redevelopment and expansion properties, increased 5.5% over fourth quarter 2007. When redevelopment and expansion properties are excluded from same-center results, property operating income for fourth quarter 2008 increased 1.7% compared over fourth quarter 2007. On an annual basis, same-center property operating income in 2008 increased 4.2% including redevelopments and expansions, and 1.2% excluding redevelopments and expansions.

The overall portfolio was 95.0% leased as of December 31, 2008, compared to 95.5% on September 30, 2008 and 96.7% on December 31, 2007. Federal Realty’s same-center portfolio was 95.4% leased on December 31, 2008, compared to 96.0% on September 30, 2008 and 97.0% on December 31, 2007.

During fourth quarter 2008, the Trust signed 78 leases for 334,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 330,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 13%. The average contractual rent on this comparable space for the first year of the new lease is $21.62 per square foot compared to the average contractual rent of $19.18 per square foot for the last year of the prior lease. The previous average contractual rent is calculated by including both the minimum rent and any percentage rent actually paid during the last year of the lease term for the re-leased space. On a GAAP basis (i.e., including the impact of straight-line rents), rent increases per square foot for comparable retail space averaged 24% for fourth quarter 2008.

For all of 2008, Federal Realty signed 300 leases representing 1.2 million square feet of comparable retail space at an average cash-basis contractual rent increase per square foot of 21%, and 36% on a GAAP-basis. The average cash-basis contractual rent on this comparable space for the first year of the new lease is $27.33 per square foot compared to the average cash-basis contractual rent of $22.55 per square foot for the last year of the prior lease. As of December 31, 2008, Federal Realty’s average contractual minimum rent for retail and commercial space in its portfolio is $21.75 per square foot.

“We are very pleased with our performance in fourth quarter and for full year 2008, particularly given the recessionary environment,” commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust. “The retail landscape has clearly continued to deteriorate in 2009, making predictions about the near future particularly difficult. We are, however, confident that the work we’ve done over the past several years in strengthening our balance sheet and focusing internally puts us in the best possible position to work our way through this difficult economic time.”

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND

YEAR-END 2008 OPERATING RESULTS

February 18, 2009

Page 3

 

Regular Quarterly Dividends

Federal Realty also announced today that its Board of Trustees left the regular dividend rate on its common shares unchanged, declaring a regular quarterly cash dividend of $0.65 per share on its common shares, resulting in an indicated annual rate of $2.60 per share. The regular common dividend will be payable on April 15, 2009 to common shareholders of record on March 19, 2009.

Guidance

Federal Realty established guidance for 2009 FFO per diluted share at a range of $3.80 to $3.92, and announced 2009 earnings per diluted share guidance of $1.93 to $2.05. Guidance for 2009 assumes an $8 million to $9 million ($0.13 to $0.15 diluted per share) impact of addressing our fourth quarter 2009 debt maturities significantly prior to the actual maturity dates. The Trust’s 2009 guidance does not include potential damages associated with the lawsuit related to a property adjacent to Santana Row as further described in Note E (Commitments and Contingencies) of the Trust’s most recent Form 10-Q.

Conference Call Information

Federal Realty’s management team will present an in-depth discussion of the Trust’s operating performance on its fourth quarter and year-end 2008 earnings conference call, which is scheduled for February 19, 2009, at 11 a.m. Eastern Standard Time. To participate, please call (866) 783-2138 five to ten minutes prior to the call start time and use the Passcode FRT EARNINGS (required). 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 through March 19, 2009, by dialing (888) 286-8010 and using the Passcode 58226734.

About Federal Realty

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development, and redevelopment of high quality retail assets. Federal Realty’s portfolio (excluding joint venture properties) contains approximately 18.1 million square feet located primarily in strategically selected metropolitan markets in the Northeast, Mid-Atlantic, and California. In addition, the Trust has an ownership interest in approximately 1.0 million square feet of retail space through a joint venture in which the Trust has a 30% interest. Our operating portfolio (excluding joint venture properties) was 95.0% leased to national, regional, and local retailers as of December 31, 2008, with no single tenant accounting for more than approximately 2.6% of annualized base rent. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 41 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P MidCap 400 company and its shares are traded on the NYSE under the symbol FRT.

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FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND

YEAR-END 2008 OPERATING RESULTS

February 18, 2009

Page 4

 

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 Annual Report on Form 10-K filed on February 27, 2008 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 completion of anticipated or ongoing property redevelopments or renovations may cost more, take more time to complete, or fail to perform as expected;

 

¿

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 environmental issues may develop at our properties and result in unanticipated costs, 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 may be 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 carefully review the risks and risk factors included in our Annual Report on Form 10-K filed February 27, 2008.

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Federal Realty Investment Trust

Summarized Income Statements

December 31, 2008

 

 

 

		Three months ended December 31,								Year ended December 31,
		2008				2007				2008				2007
		(in thousands, except per share data)
		(unaudited)
Revenue
Rental income		$	130,432			$	122,128			$	501,964			$	465,728
Other property income			1,998				3,284				14,013				12,834
Mortgage interest income			1,206				1,174				4,548				4,560
Total revenue			133,636				126,586				520,525				483,122
Expenses
Rental expenses			28,724				26,354				109,718				99,363
Real estate taxes			14,408				13,154				55,714				46,897
General and administrative			7,281				7,687				26,732				26,581
Depreciation and amortization			29,218				26,215				111,022				101,633
Total operating expenses			79,631				73,410				303,186				274,474
Operating income			54,005				53,176				217,339				208,648
Other interest income			254				298				916				921
Interest expense			(24,997	)			(27,118	)			(99,163	)			(111,365	)
Income from real estate partnership			432				275				1,612				1,395
Income from continuing operations before minority interests			29,694				26,631				120,704				99,599
Minority interests			(1,310	)			(1,281	)			(5,366	)			(5,590	)
Income from continuing operations			28,384				25,350				115,338				94,009
Discontinued operations
Income from discontinued operations			207				999				1,877				6,760
Gain on sale of real estate from discontinued operations			5,134				95,819				12,572				94,768
Results from discontinued operations			5,341				96,818				14,449				101,528
Net income			33,725				122,168				129,787				195,537
Dividends on preferred stock			(135	)			(135	)			(541	)			(442	)
Net income available for common shareholders		$	33,590			$	122,033			$	129,246			$	195,095
EARNINGS PER COMMON SHARE, BASIC
Continuing operations		$	0.48			$	0.45			$	1.96			$	1.67
Discontinued operations			0.09				1.71				0.24				1.81
		$	0.57			$	2.16			$	2.20			$	3.48
Weighted average number of common shares, basic			58,789				56,526				58,665				56,108
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations		$	0.48			$	0.44			$	1.95			$	1.65
Discontinued operations			0.09				1.70				0.24				1.80
		$	0.57			$	2.14			$	2.19			$	3.45
Weighted average number of common shares, diluted			58,951				56,955				58,914				56,543

 

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Federal Realty Investment Trust

Summarized Balance Sheets

December 31, 2008

 

 

 

		December 31,
		2008				2007
		(in thousands)
		(unaudited)
ASSETS
Real estate, at cost
Operating		$	3,567,035			$	3,265,020
Construction-in-progress			106,650				147,925
Assets held for sale (discontinued operations)			—				39,902
			3,673,685				3,452,847
Less accumulated depreciation and amortization			(846,258	)			(756,703	)
Net real estate			2,827,427				2,696,144
Cash and cash equivalents			15,223				50,691
Accounts and notes receivable			73,688				61,108
Mortgage notes receivable			45,780				40,638
Investment in real estate partnership			29,252				29,646
Prepaid expenses and other assets			101,406				111,070
TOTAL ASSETS		$	3,092,776			$	2,989,297
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable and capital lease obligations		$	452,810			$	450,084
Notes payable			336,391				210,820
Senior notes and debentures			956,584				977,556
Accounts payable and other liabilities			200,037				204,387
Total liabilities			1,945,822				1,842,847
Minority interests			32,352				31,818
Shareholders’ equity
Preferred stock			9,997				9,997
Common shares and other shareholders’ equity			1,104,605				1,104,635
Total shareholders’ equity			1,114,602				1,114,632
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	3,092,776			$	2,989,297

 

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Federal Realty Investment Trust

Funds From Operations / Summary of Capital Expenditures

December 31, 2008

 

 

 

		Three months ended December 31,								Year ended December 31,
		2008				2007				2008				2007
		(in thousands, except per share data)
Funds from Operations available for common shareholders (FFO) (1)
Net income		$	33,725			$	122,168			$	129,787			$	195,537
Gain on sale of real estate			(5,134	)			(95,819	)			(12,572	)			(94,768	)
Depreciation and amortization of real estate assets			27,413				23,656				101,450				95,565
Amortization of initial direct costs of leases			2,330				2,361				8,771				8,473
Depreciation of joint venture real estate assets			339				326				1,331				1,241
Funds from operations			58,673				52,692				228,767				206,048
Dividends on preferred stock			(135	)			(135	)			(541	)			(442	)
Income attributable to operating partnership units			243				232				950				1,156
FFO		$	58,781			$	52,789			$	229,176			$	206,762
FFO per diluted share (2)		$	0.99			$	0.92			$	3.87			$	3.63
Weighted average number of common shares, diluted			59,325				57,336				59,292				56,999
Summary of Capital Expenditures
Non-maintenance capital expenditures
Development, redevelopment and expansions		$	29,432			$	27,009			$	105,512			$	102,929
Tenant improvements and incentives			3,254				3,048				18,227				17,855
Total non-maintenance capital expenditures			32,686				30,057				123,739				120,784
Maintenance capital expenditures			5,753				4,667				14,716				11,054
Total capital expenditures		$	38,439			$	34,724			$	138,455			$	131,838
Dividends and Payout Ratios
Regular common dividends declared		$	38,340			$	35,774			$	148,444			$	135,102
Dividend payout ratio as a percentage of FFO			65	%			68	%			65	%			65	%

 

Notes:

(1)	See Glossary of Terms.

(2)	Excluding a $1.6 million charge associated with the settlement of a litigation matter, FFO per diluted share for the three months and year ended December 31, 2008 was $1.02 and $3.89, respectively.

 

9

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Federal Realty Investment Trust

Market Data

December 31, 2008

 

 

 

		December 31,
		2008				2007
		(in thousands, except per share data)
Market data
Common shares outstanding (1)			58,986				58,646
Market price per common share		$	62.08			$	82.15
Common equity market capitalization		$	3,661,851			$	4,817,769
Series 1 preferred shares outstanding (2)			400				400
Liquidation price per Series 1 preferred share		$	25.00			$	25.00
Series 1 preferred equity market capitalization		$	10,000			$	10,000
		$	3,671,851			$	4,827,769
Total debt (3)			1,745,785				1,638,460
Total market capitalization		$	5,417,636			$	6,466,229
Total debt to market capitalization at then current market price			32	%			25	%
Total debt to market capitalization at constant common share price of $82.15			26	%			25	%
Fixed rate debt ratio:
Fixed rate debt and capital lease obligations			81	%			87	%
Variable rate debt			19	%			13	%
			100	%			100	%

 

Notes:

(1)

Consists of 60,487,244 shares issued net of 1,501,566 shares held in Treasury as of December 31, 2008. As of December 31, 2007, consists of 60,133,270 shares issued net of 1,487,605 shares held in Treasury. Amounts do not include 373,260 and 380,938 Operating Partnership Units outstanding at December 31, 2008 and 2007, respectively.

(2)	These shares, issued March 8, 2007, are unregistered.

(3)

Total debt includes capital leases, mortgages payable, notes payable, senior notes and debentures, net of premiums and discounts from our consolidated balance sheet. It does not include the $24.4 million which is the Trust's 30% share of the total $81.4 million debt of the partnership with a discretionary fund created and advised by ING Clarion Partners.

 

10

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Federal Realty Investment Trust

Components of Rental Income

December 31, 2008

 

 

 

		Three months ended December 31,						Year ended December 31,
		2008			2007			2008			2007
		(in thousands)						(in thousands)
Minimum rents
Retail and commercial (1)		$	93,494		$	89,046		$	366,380		$	345,486
Residential (2)			5,356			4,035			18,326			15,312
Cost reimbursements			27,321			24,283			103,381			91,164
Percentage rents			2,986			3,192			8,415			7,884
Other			1,275			1,572			5,462			5,882
Total rental income		$	130,432		$	122,128		$	501,964		$	465,728

 

Notes:

(1)

Minimum rents include $1.6 million and $2.0 million for the three months ended December 31, 2008 and 2007, respectively, and $5.8 million and $8.1 million for the year ended December 31, 2008 and 2007, respectively, to recognize minimum rents on a straight-line basis. In addition, minimum rents include $0.3 million and $0.7 million for the three months ended December 31, 2008 and 2007, respectively, and $2.2 million and $2.9 million for the year ended December 31, 2008 and 2007, respectively, to recognize income from the amortization of in-place leases in accordance with SFAS No. 141.

(2)

Residential minimum rents consist of the rental amounts for residential units at Rollingwood Apartments, the Crest at Congressional Plaza Apartments, Santana Row, and for 2008, Arlington East (Bethesda Row). The first rental units at Arlington East were delivered and became rent paying in May 2008. Lease-up of these rental units continued through 2008.

 

11

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Federal Realty Investment Trust

Summary of Outstanding Debt and Capital Lease Obligations

December 31, 2008

 

		Maturity date		Stated interest rate as of December 31, 2008			Balance as of December 31, 2008							Weighted average effective rate at December 31, 2008 (k)
							(in thousands)
Mortgage loans (a)
Secured fixed rate
Mercer Mall (b)		04/01/09		8.375	%		$	4,370
Federal Plaza		06/01/11		6.750	%			33,128
Tysons Station		09/01/11		7.400	%			6,070
Courtyard Shops		07/01/12		6.870	%			7,731
Bethesda Row		01/01/13		5.370	%			19,996
Bethesda Row		02/01/13		5.050	%			4,437
White Marsh Plaza (c)		04/01/13		6.040	%			10,122
Crow Canyon		08/11/13		5.400	%			21,214
Melville Mall (d)		09/01/14		5.250	%			24,456
THE AVENUE at White Marsh		01/01/15		5.460	%			60,016
Barracks Road		11/01/15		7.950	%			41,368
Hauppauge		11/01/15		7.950	%			15,595
Lawrence Park		11/01/15		7.950	%			29,322
Wildwood		11/01/15		7.950	%			25,773
Wynnewood		11/01/15		7.950	%			29,882
Brick Plaza		11/01/15		7.415	%			30,633
Shoppers’ World		01/31/21		5.910	%			5,865
Mount Vernon (e)		04/15/28		5.660	%			11,640
Chelsea		01/15/31		5.360	%			8,101
Subtotal								389,719
Net unamortized discount								(401	)
Total mortgage loans								389,318						6.80	%
Notes payable
Unsecured fixed rate
Other		04/01/12		6.500	%			2,296
Perring Plaza renovation		01/31/13		10.000	%			1,195
Unsecured variable rate
Term loan (f)		11/06/09		LIBOR + 0.575	%			200,000
Revolving credit facility (g)		07/27/10		LIBOR + 0.425	%			123,500
Escondido (Municipal bonds) (h)		10/01/16		1.878	%			9,400
Total notes payable								336,391						2.64	%      (l)
Senior notes and debentures
Unsecured fixed rate
8.75% notes (i)		12/01/09		8.750	%			175,000
4.50% notes		02/15/11		4.500	%			75,000
6.00% notes		07/15/12		6.000	%			175,000
5.40% notes		12/01/13		5.400	%			135,000
5.65% notes		06/01/16		5.650	%			125,000
6.20% notes		01/15/17		6.200	%			200,000
7.48% debentures (j)		08/15/26		7.480	%			29,200
6.82% medium term notes		08/01/27		6.820	%			40,000
Subtotal								954,200
Net unamortized premium								2,384
Total senior notes and debentures								956,584						6.42	%
Capital lease obligations
Various		Various through 2106		Various				63,492						6.94	%
Total debt and capital lease obligations							$	1,745,785
Total fixed rate debt and capital lease obligations							$	1,412,885			81	%		6.55	%
Total variable rate debt								332,900			19	%		2.59	%      (l)
TOTAL DEBT AND CAPITAL LEASES OBLIGATIONS							$	1,745,785			100	%		5.80	%

 

		Three months ended December 31,				Year ended December 31,
		2008		2007		2008		2007
Operational Statistics
Ratio of EBITDA to combined fixed charges and preferred share dividends (m)		3.29x		5.84x		3.17x		3.26x
Ratio of adjusted EBITDA to combined fixed charges and preferred share dividends (m)		3.09x		2.66x		3.05x		2.52x

 

Notes:

(a)	Mortgage loans do not include our 30% share ($24.4 million) of the $81.4 million debt of the partnership with a discretionary fund created and advised by ING Clarion Partners.

(b)	On January 5, 2009, we repaid the $4.4 million mortgage with funds borrowed on our $300 million revolving credit facility.

(c)	The interest rate of 6.04% represents the weighted average interest rate for two mortgage loans secured by this property. The loan balance represents an interest-only loan of $4.35 million at a stated rate of 6.18% and the remaining balance at a stated rate of 5.96%.

(d)

We acquired control of Melville Mall through a 20-year master lease and secondary financing. Because we control this property and retain substantially all of the economic benefit and risk associated with it, this property is consolidated and the mortgage loan is reflected on the balance sheet though it is not our legal obligation.

(e)	The interest rate is fixed at 5.66% for the first ten years and then will be reset to a market rate in 2013. The lender has the option to call the loan on April 15, 2013 or anytime thereafter.

(f)

In July 2008, we exercised our option and extended the maturity date to November 6, 2009. On February 21, 2008, we entered into two interest rate swap agreements to fix the variable portion of this debt through November 6, 2008. The first swap fixed the variable rate at 2.725% on a notional amount of $100 million and the second swap fixed the variable rate at 2.852% on a notional amount of $100 million for a combined fixed rate of 2.789% through November 6, 2008. The weighted average effective rate, before amortization of debt fees, was 3.21% and 3.56% for the three months and year ended December 31, 2008, respectively.

(g)	The weighted average effective interest rate, before amortization of debt fees, was 3.07% and 3.04% for the three months and year ended December 31, 2008, respectively. This credit facility matures on July 27, 2010, subject to a one-year extension at our option.

(h)	The bonds bear interest at a variable rate determined weekly which would enable the bonds to be remarketed at 100% of their principal amount.

(i)	On January 12, 2009 and February 5, 2009, we purchased and retired $5.0 million and $0.9 million, respectively, of the outstanding $175.0 million balance using funds borrowed on our $300 million revolving credit facility.

(j)	On August 15, 2008, one of the holders redeemed $20.8 million of the outstanding $50.0 million balance. The notice period for additional redemptions has expired.

(k)	The weighted average effective interest rate includes the amortization of any deferred financing fees, discounts and premiums, if applicable.

(l)	The weighted average effective interest rate excludes $0.1 million in quarterly financing fees on our revolving credit facility which had a $123.5 million balance on December 31, 2008.

(m)

Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount or premium and expense and the portion of rent expense representing an interest factor. EBITDA includes $5.1 million and $12.6 million in gain on sale for the three months and year ended December 31, 2008, and $95.8 million and $94.8 million in gain on sale for the three months and year ended December 31, 2007, respectively. Adjusted EBITDA is reconciled to net income in the Glossary of Terms.

 

12

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Federal Realty Investment Trust

Summary of Debt Maturities

December 31, 2008

 

DEBT MATURITIES
(in thousands)
Year		Scheduled Amortization			Maturities				Total				Percent of Debt Maturing			Cumulative Percent of Debt Maturing
2009		$	9,414		$	379,348	(1)		$	388,762			22.3	%		22.3	%
2010			9,880			123,500				133,380	(2)		7.6	%		29.9	%
2011			9,906			112,252				122,158			7.0	%		36.9	%
2012			9,973			181,916				191,889			11.0	%		47.9	%
2013			9,215			186,884				196,099			11.2	%		59.1	%
2014			9,164			20,127				29,291			1.7	%		60.8	%
2015			6,924			198,391				205,315			11.8	%		72.6	%
2016			2,976			134,400				137,376			7.9	%		80.5	%
2017			3,184			200,000				203,184			11.7	%		92.2	%
2018			3,400			—				3,400			0.2	%		92.4	%
Thereafter			60,072			72,876				132,948			7.6	%		100.0	%
Total		$	134,108		$	1,609,694			$	1,743,802	(3)		100.0	%

 

Notes:

(1)

On January 5, 2009, we repaid the $4.4 million mortgage loan on Mercer Mall. On January 12, 2009 and February 5, 2009, we purchased and retired $5.0 million and $0.9 million, respectively, of the outstanding $175.0 million balance on our 8.75% notes. All repayments were made using funds borrowed on our $300 million revolving credit facility.

(2)	Our $300 million four-year revolving credit facility matures on July 27, 2010, subject to a one-year extension at our option. As of December 31, 2008, there was $123.5 million drawn under this credit facility.

(3)	The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized net discount or premium on certain mortgage loans, senior notes and debentures as of December 31, 2008.

 

13

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Federal Realty Investment Trust

Summary of Redevelopment Opportunities

December 31, 2008

 

 

Current Redevelopment Opportunities (1) ($ millions)

 

Property		Location		Opportunity		Projected ROI (2)			Projected Cost (1)			Cost to Date
Projects Stabilized in 2008 (3)
Bethesda Row (Arlington East)		Bethesda, MD		Ground floor retail, four levels of residential units above retail, two levels of below grade parking		8	%		$	83		$	81
Eastgate		Chapel Hill, NC		Center redevelopment including new grocery anchor, façade renovation and site improvements		11	%		$	9		$	8
Subtotal: Projects Stabilized in 2008 (3) (4)						8	%		$	92		$	89
Projects Anticipated to Stabilize in 2009 (3) (5)
Santana Row		San Jose, CA		5-story building with 15,000 square feet of ground level retail and 65,000 square feet of office space		8	%		$	42		$	14
Hollywood Galaxy Building		Hollywood, CA		Re-tenanting three level entertainment center and converting project into urban neighborhood community center		12	%		$	16		$	14
Houston Street		San Antonio, TX		Construction of a new building with ground level leased to Walgreen’s pharmacy and office above		10	%		$	8		$	6
Village of Shirlington—Phase III & IV		Arlington, VA		Ground lease to hotel operator and ground floor retail as part of office building development (by others)		16	%		$	7		$	4
Subtotal: Projects Anticipated to Stabilize in 2009 (3) (4) (5)						10	%		$	73		$	38
Projects Anticipated to Stabilize in 2010 (3)
Lancaster		Lancaster, PA		Renovation and expansion of existing grocer, new bank pad, and façade renovation		10	%		$	2		$	—
Bethesda Row (Hampden Lane)		Bethesda, MD		Construction of new three level building leased to fitness center, and 2 additional ground level retail spaces.		10	%		$	14		$	1
Subtotal: Projects Anticipated to Stabilize in 2010 (3) (4)						10	%		$	16		$	1
Total: Projects Anticipated to Stabilize in 2008, 2009 and 2010 (3) (4)						9	%		$	181		$	128
Potential future redevelopment pipeline includes (6):
Property		Location		Opportunity
Assembly Square		Somerville, MA		Potential substantial transit oriented mixed-use development
Bala Cynwyd		Bala Cynwyd, PA		Redevelopment of nine acres of land for a transit oriented mixed-use project or retail center
Barracks Road		Charlottesville, VA		Anchor re-tenanting, pad re-tenanting, and site improvements
Bethesda Row		Bethesda, MD		Acquire and develop ground floor retail space in a new Class A office building
Brick Plaza		Brick, NJ		Redevelopment and expansion of existing pad site, plus additional pad site
Courthouse Center		Rockville, MD		Center redevelopment adjacent to Rockville Town Square
Federal Plaza		Rockville, MD		Pad building opportunities
Flourtown		Flourtown, PA		Anchor re-tenanting, small shop renovation, and site improvements
Hollywood Peterson Building		Hollywood, CA		Co-terminus leases create potential for property redevelopment and expansion
Huntington		Huntington, NY		Pad site additions
Langhorne		Levittown, PA		Pad site addition
Linden Square		Wellesley, MA		Additional phases of infill redevelopment
Mercer Mall		Lawrenceville, NJ		Construction of new outparcel
Mid-Pike Plaza		Rockville, MD		Co-terminus leases create potential for retail redevelopment or transit oriented mixed-use development
Pike 7		Vienna, VA		Co-terminus leases create potential for retail redevelopment or mixed-use development
Santana Row		San Jose, CA		Future phases of mixed-use development
Town Center of New Britain		New Britain, PA		Renovation and expansion of existing grocer
Troy		Parsippany, NJ		Pad site addition
Westgate		San Jose, CA		Convert 30,000 square feet of basement space to leasable area

 

Notes:

(1)

These current redevelopment opportunities are being pursued by the Trust. There is no guaranty that the Trust will ultimately complete any or all of these 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 being paid for the redevelopment space and any other space taken out of service to accommodate 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)	Stabilization is the year in which 95% occupancy of the redeveloped space is achieved.

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

(5)	Excludes $55 million of development capital at Linden Square, anticipated at acquisition of this in-process development.

(6)	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.

 

14

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Federal Realty Investment Trust

2008 Significant Acquisitions and Dispositions

Through December 31, 2008

 

Federal Realty Investment Trust Significant Acquisitions

Date

Property

City / State

GLA

Purchase price

Anchor tenants

(in square feet)

(in millions)

May 30, 2008

Del Mar Village

Boca Raton, FL

154,000

$

41.7

Winn Dixie & CVS

July 11, 2008

7015 & 7045 Beracasa Way (Del Mar Village)

Boca Raton, FL

24,000

6.7

July 16, 2008

Chelsea Commons Phase II (Chelsea Commons)

Chelsea, MA

26,000

8.0

September 4, 2008

Courtyard Shops

Wellington, FL

127,000

37.9

Publix

September 25 and 30, 2008

Bethesda Row

Bethesda, MD

N/A

38.8

(1)

331,000

$

133.1

Federal Realty Investment Trust Significant Dispositions

Date

Property

City / State

GLA

Sales price

September 25 and 30, 2008

Four Land Parcels:

$

38.8

(1)

The Shoppes at Nottingham Square

White Marsh, MD

134,000

White Marsh Other

White Marsh, MD

3,000

White Marsh Other (2)

White Marsh, MD

N/A

North Dartmouth

North Dartmouth, MA

135,000

December 29, 2008

Greenwich Avenue

Greenwich, CT

7,000

7.2

(3)

279,000

$

46.0

 

(1)

On September 25 and 30, 2008, we completed exchange transactions whereby we sold our fee interest in four land parcels that were subject to long-term ground leases with tenants and acquired the fee interest in two land parcels under our Bethesda Row property. Three of the land parcels sold were in White Marsh, MD, and one parcel was in North Dartmouth, MA. Prior to the transactions, the land parcels at Bethesda Row were encumbered by capital lease obligations which were extinguished as part of the transactions.

(2)	This land parcel was subject to a ground lease covering 50,000 square feet of office space not included in our gross leasable area.

(3)	We sold one of two retail buildings located in Greenwich, CT.

 

15

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Federal Realty Investment Trust

Real Estate Status Report

December 31, 2008

 

 

 

Property Name					MSA Description		Year Acquired		Real Estate at Cost			Mortgage and/or Capital Lease Obligation (1)			GLA (2)		% Leased			% Occupied (3)			Average Rent PSF (4)			Grocery Anchor GLA (5)		Grocery Anchor (5)		Other Principal Tenants
									(in thousands)			(in thousands)
East Region
Washington Metropolitan Area
Bethesda Row		(6	)		Washington, DC-MD-VA		1993-2006/2008		$	189,477		$	25,465		521,000		95	%		91	%		$	41.13		40,000		Giant Food		Barnes & Noble / Landmark Theater
Congressional Plaza		(7	)		Washington, DC-MD-VA		1965			70,281					334,000		95	%		92	%			29.78		28,000		Whole Foods		Buy Buy Baby / Container Store
Courthouse Center					Washington, DC-MD-VA		1997			4,223					37,000		77	%		77	%			19.12
Falls Plaza/Falls Plaza-East					Washington, DC-MD-VA		1967-1972			11,954					143,000		99	%		97	%			26.74		51,000		Giant Food		CVS / Staples
Federal Plaza					Washington, DC-MD-VA		1989			62,147			33,128		248,000		96	%		96	%			29.15						TJ Maxx / Micro Center / Ross
Friendship Center					Washington, DC-MD-VA		2001			33,344					119,000		66	%		66	%			33.15						Borders / Maggiano's
Gaithersburg Square					Washington, DC-MD-VA		1993			24,003					209,000		93	%		93	%			22.35						Bed, Bath & Beyond / Borders / Ross
Idylwood Plaza					Washington, DC-MD-VA		1994			15,649					73,000		100	%		100	%			42.80		30,000		Whole Foods
Laurel					Washington, DC-MD-VA		1986			47,820					386,000		99	%		99	%			17.54		61,000		Giant Food		Marshalls
Leesburg Plaza		(8	)		Washington, DC-MD-VA		1998			34,234					236,000		99	%		99	%			21.33		55,000		Giant Food		Petsmart / Pier One / Office Depot
Loehmann's Plaza					Washington, DC-MD-VA		1983			32,409					268,000		97	%		97	%			25.96		58,000		Giant Food		Bally Total Fitness / Loehmann's
Mid-Pike Plaza					Washington, DC-MD-VA		1982/2007			44,298					308,000		100	%		100	%			22.50						Toys R Us / Bally Total Fitness / AC Moore / Filene's Basement
Mount Vernon/South Valley/ 7770 Richmond Hwy		(8	)		Washington, DC-MD-VA		2003-2006			77,078			11,640		565,000		95	%		95	%			15.07		62,000		Shoppers Food Warehouse		Bed, Bath & Beyond / Michaels / Home Depot / TJ Maxx / Gold's Gym
Old Keene Mill					Washington, DC-MD-VA		1976			6,087					92,000		99	%		99	%			27.31		24,000		Whole Foods
Pan Am					Washington, DC-MD-VA		1993			28,225					227,000		100	%		100	%			17.76		63,000		Safeway		Micro Center / Michaels
Pentagon Row					Washington, DC-MD-VA		1998			87,802					296,000		99	%		99	%			33.44		45,000		Harris Teeter		Bally Total Fitness / Bed, Bath & Beyond / DSW / Cost Plus World Market
Pike 7					Washington, DC-MD-VA		1997			34,835					164,000		100	%		100	%			31.13						DSW / Staples / TJ Maxx
Quince Orchard					Washington, DC-MD-VA		1993			20,990					248,000		85	%		85	%			20.05		24,000		Magruders		Staples
Rockville Town Square					Washington, DC-MD-VA		2006-2007			37,278					182,000		99	%		99	%			32.09						CVS / Gold's Gym
Rollingwood Apartments					Washington, DC-MD-VA		1971			7,228					N/A		96	%		96	%			N/A
Sam's Park & Shop					Washington, DC-MD-VA		1995			12,314					49,000		94	%		94	%			35.90						Petco
Tower					Washington, DC-MD-VA		1998			19,767					112,000		69	%		69	%			25.43						Talbots
Tyson's Station					Washington, DC-MD-VA		1978			3,667			6,070		49,000		98	%		98	%			37.89						Trader Joes
Village at Shirlington		(6	)		Washington, DC-MD-VA		1995			50,318			6,259		244,000		98	%		98	%			30.59		28,000		Harris Teeter		AMC Loews / Carlyle Grand Café
Wildwood					Washington, DC-MD-VA		1969			17,686			25,773		85,000		100	%		100	%			69.19		20,000		Balducci's		CVS
					Total Washington Metropolitan Area					973,114					5,195,000		95	%		95	%			27.13
New York / New Jersey
Brick Plaza					Monmouth-Ocean, NJ		1989			56,390			30,633		409,000		100	%		100	%			15.11		66,000		A&P		AMC Loews / Barnes & Noble / Sports Authority
Forest Hills					New York, NY		1997			8,089					46,000		100	%		100	%			24.49						Midway Theatre
Fresh Meadows					New York, NY		1997			68,768					403,000		99	%		99	%			24.41		15,000		Island of Gold		Filene's Basement / Kohl's / AMC Loews
Hauppauge					Nassau-Suffolk, NY		1998			27,793			15,595		133,000		98	%		98	%			24.05		61,000		Shop Rite		AC Moore
Huntington					Nassau-Suffolk, NY		1988/2007			38,563					279,000		100	%		100	%			19.06						Buy Buy Baby / Toys R Us / Bed, Bath & Beyond / Barnes & Noble
Melville Mall		(9	)		Nassau-Suffolk, NY		2006			68,605			24,456		248,000		100	%		100	%			16.45		54,000		Waldbaum's		Kohl's / Marshalls
Mercer Mall		(6	)		Trenton, NJ		2003			105,067			55,664		501,000		99	%		99	%			19.80		75,000		Shop Rite		Bed, Bath & Beyond / DSW / TJ Maxx / Raymour & Flanigan
Troy					Newark, NJ		1980			23,739					207,000		86	%		86	%			17.13		64,000		Pathmark
					Total New York / New Jersey					397,014					2,226,000		98	%		98	%			19.51
Philadelphia Metropolitan Area
Andorra					Philadelphia, PA-NJ		1988			23,060					267,000		94	%		94	%			13.58		24,000		Acme Markets		Kohl's / Staples / L.A. Fitness
Bala Cynwyd					Philadelphia, PA-NJ		1993			34,211					280,000		100	%		100	%			17.01		45,000		Acme Markets		Lord & Taylor / L.A. Fitness
Ellisburg Circle					Philadelphia, PA-NJ		1992			27,706					268,000		99	%		99	%			14.51		47,000		Genuardi's		Buy Buy Baby / Stein Mart
Feasterville					Philadelphia, PA-NJ		1980			11,889					111,000		89	%		89	%			13.71		53,000		Genuardi's		OfficeMax
Flourtown					Philadelphia, PA-NJ		1980			15,397					191,000		87	%		43	%			20.69		42,000		Genuardi's
Langhorne Square					Philadelphia, PA-NJ		1985			18,963					216,000		97	%		97	%			14.14		55,000		Redner's Warehouse Mkts.		Marshalls
Lawrence Park					Philadelphia, PA-NJ		1980			29,626			29,322		353,000		100	%		100	%			17.83		53,000		Acme Markets		CHI / TJ Maxx / HomeGoods
Northeast					Philadelphia, PA-NJ		1983			22,524					285,000		92	%		92	%			10.62						Burlington Coat / Marshalls
Town Center of New Britain					Philadelphia, PA-NJ		2006			14,125					124,000		87	%		87	%			9.86		36,000		Giant Food		Rite Aid
Willow Grove					Philadelphia, PA-NJ		1984			27,152					216,000		99	%		99	%			19.21						Barnes & Noble / Marshalls / Toys R Us
Wynnewood					Philadelphia, PA-NJ		1996			36,213			29,882		255,000		97	%		97	%			23.88		98,000		Genuardi's		Bed, Bath & Beyond / Borders / Old Navy
					Total Philadelphia Metropolitan Area					260,866					2,566,000		96	%		92	%			16.09
New England
Assembly Square					Boston-Cambridge-Quincy, MA-NH		2005-2008			137,237					332,000		100	%		100	%			16.25						AC Moore / Bed, Bath & Beyond / Christmas Tree Shops / Kmart / Staples / Sports Authority / TJ Maxx
Chelsea Commons					Boston-Cambridge-Quincy, MA-NH		2006-2008			29,019			8,101		222,000		91	%		91	%			10.16		16,000		Sav-A-Lot		Home Depot
Dedham Plaza					Boston-Cambridge-Quincy, MA-NH		1993			31,228					242,000		89	%		88	%			14.69		80,000		Star Market
Linden Square					Boston-Cambridge-Quincy, MA-NH		2006-2007			141,291					214,000		83	%		83	%			41.34		50,000		Roche Brothers Supermarkets		CVS / Fitness Club for Women / Wellesley Volkswagen, Buick
North Dartmouth					Boston-Cambridge-Quincy, MA-NH		2006			9,368					48,000		100	%		100	%			13.80		48,000		Stop & Shop
Queen Anne Plaza					Boston-Cambridge-Quincy, MA-NH		1994			15,650					149,000		100	%		100	%			15.03		50,000		Hannaford		TJ Maxx
Saugus Plaza					Boston-Cambridge-Quincy, MA-NH		1996			13,693					171,000		94	%		94	%			10.53		55,000		Super Stop & Shop		Kmart
					Total New England					377,486					1,378,000		93	%		93	%			17.72
Baltimore
Governor Plaza					Baltimore, MD		1985			22,009					269,000		100	%		100	%			15.10		16,500		Aldi		Bally Total Fitness / Office Depot
Perring Plaza					Baltimore, MD		1985			26,609					402,000		98	%		98	%			12.07		58,000		Shoppers Food Warehouse		Home Depot / Burlington Coat Factory / Jo-Ann Stores
THE AVENUE at White Marsh		(10	)		Baltimore, MD		2007			94,411			60,016		298,000		100	%		98	%			20.48						AMC Loews / Old Navy / Barnes & Noble / AC Moore
The Shoppes at Nottingham Square					Baltimore, MD		2007			27,570					52,000		100	%		100	%			36.26
White Marsh Plaza					Baltimore, MD		2007			24,927			10,122		80,000		98	%		98	%			18.97		54,000		Giant Food
White Marsh Other					Baltimore, MD		2007			31,926					49,000		100	%		92	%			21.84
					Total Baltimore					227,452					1,150,000		99	%		98	%			16.94

 

16

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Federal Realty Investment Trust

Real Estate Status Report

December 31, 2008

 

 

 

Property Name					MSA Description		Year Acquired		Real Estate at Cost			Mortgage and/or Capital Lease Obligation (1)			GLA (2)		% Leased			% Occupied (3)			Average Rent PSF (4)			Grocery Anchor GLA (5)		Grocery Anchor (5)		Other Principal Tenants
									(in thousands)			(in thousands)
Chicago
Crossroads					Chicago, IL		1993			23,915					173,000		71	%		71	%			19.24						Golfsmith /Guitar Center
Finley Square					Chicago, IL		1995			31,290					315,000		98	%		98	%			10.05						Bed, Bath & Beyond / Buy Buy Baby / Petsmart
Garden Market					Chicago, IL		1994			11,524					140,000		100	%		100	%			12.64		63,000		Dominick's		Walgreens
North Lake Commons					Chicago, IL		1994			13,690					129,000		92	%		92	%			13.59		77,000		Dominick's
					Total Chicago					80,419					757,000		91	%		91	%			12.84
South Florida
Courtyard Shops		(11	)		Miami-Ft Lauderdale		2008			38,789			7,731		130,000		92	%		92	%			18.48		49,000		Publix
Del Mar Village					Miami-Ft Lauderdale		2008			53,861					178,000		89	%		86	%			18.41		44,000		Winn Dixie		CVS
					Total South Florida					92,650					308,000		90	%		89	%			18.44
East Region - Other
Barracks Road					Charlottesville, VA		1985			45,314			41,368		488,000		94	%		94	%			20.17		99,000		Harris Teeter / Kroger		Bed, Bath & Beyond / Barnes & Noble / Old Navy
Bristol Plaza					Hartford, CT		1995			26,614					272,000		86	%		86	%			12.06		74,000		Stop & Shop		TJ Maxx
Eastgate					Raleigh-Durham-Chapel Hill, NC		1986			25,046					153,000		97	%		97	%			19.59						Stein Mart
Gratiot Plaza					Detroit, MI		1973			18,726					217,000		99	%		99	%			11.28		69,000		Kroger		Bed, Bath & Beyond / Best Buy / DSW
Greenwich Avenue					New Haven-Bridgeport-Stamford-Waterbury		1995			13,936					36,000		100	%		100	%			53.00						Saks Fifth Avenue
Lancaster		(12	)		Lancaster, PA		1980			10,840			4,907		107,000		94	%		94	%			15.24		39,000		Giant Food		Michaels
Shoppers’ World					Charlottesville, VA		2007			29,522			5,865		169,000		97	%		97	%			11.43		28,000		Whole Foods		Staples
Shops at Willow Lawn					Richmond-Petersburg, VA		1983			75,967					476,000		87	%		87	%			16.09		60,000		Kroger		Old Navy / Staples / Ross
					Total East Region - Other					245,965					1,918,000		92	%		92	%			16.60
					Total East Region					2,654,966					15,498,000		95	%		94	%			20.49
West Region
California
Colorado Blvd					Los Angeles-Long Beach, CA		1996-1998			16,672					68,000		99	%		99	%			36.63						Pottery Barn / Banana Republic
Crow Canyon					San Ramon, CA		2005-2007			64,995			21,214		242,000		92	%		92	%			19.40		58,000		Save Mart		Loehmann's / Rite Aid
Escondido		(13	)		San Diego, CA		1996			28,364					222,000		95	%		95	%			23.09						Cost Plus World Market / TJ Maxx / Toys R Us
Fifth Ave					San Diego, CA		1996-1997			12,969					51,000		100	%		100	%			26.64						Urban Outfitters
Hermosa Ave					Los Angeles-Long Beach, CA		1997			5,416					22,000		100	%		100	%			32.49
Hollywood Blvd		(14	)		Los Angeles-Long Beach, CA		1999			39,103					153,000		85	%		85	%			21.30						DSW / L.A. Fitness
Kings Court		(8	)		San Jose, CA		1998			11,576					79,000		99	%		99	%			25.83		25,000		Lunardi's Super Market		Longs Drug Store
Old Town Center					San Jose, CA		1997			34,053					95,000		95	%		95	%			30.65						Borders / Gap Kids / Banana Republic
Santana Row					San Jose, CA		1997			507,681					563,000		98	%		98	%			44.07						Crate & Barrel / Container Store / Best Buy / Borders / CineArts Theatre
Third St Promenade					Los Angeles-Long Beach, CA		1996-2000			76,807					211,000		99	%		99	%			58.70						J. Crew / Banana Republic / Old Navy / Abercrombie & Fitch
Westgate					San Jose, CA		2004			116,164					645,000		96	%		96	%			13.31		38,000		Safeway		Target / Burlington Coat Factory / Barnes & Noble / Ross
150 Post Street					San Francisco, CA		1997			37,509					102,000		98	%		98	%			39.72						Brooks Brothers / H & M
					Total California					951,309					2,453,000		96	%		96	%			29.71
West Region - Other
Houston St					San Antonio, TX		1998			67,410					168,000		76	%		76	%			19.68						Hotel Valencia
					Total West Region					1,018,719					2,621,000		95	%		95	%			29.13
Grand Total									$	3,673,685		$	453,211		18,119,000		95	%		94	%		$	21.75

 

Notes:

(1)	The mortgage or capital lease obligations differ from the total reported on the consolidated balance sheet due to the unamortized discount or premium on certain mortgage payables.

(2)	Excludes newly created redevelopment square footage not yet in service, as well as residential and hotel square footage.

(3)	For purposes of this schedule, "occupied" refers to spaces where the lease term and obligation to pay rent have commenced.

(4)	Calculated as the aggregate, annualized in-place contractual (cash basis) minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces.

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

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

(7)	The Trust has a 64.1% ownership interest in the property.

(8)	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.

(9)	On October 16, 2006, the Trust acquired control of Melville Mall through a 20 year master lease and secondary financing. Since the Trust controls this property and retains substantially all of the economic benefit and risks associated with it, we consolidate this property and its operations.

(10)	50% of the ownership of this property is 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.

(11)

In connection with the acquisition of this property, we entered into a Reverse Section 1031 like-kind exchange agreement with third party intermediaries. Since we control the respective property and retain all of the economic benefits and risks associated with it, we consolidate the property and its operations.

(12)	Property subject to capital lease obligation.

(13)	The Trust has a 70% ownership interest in the property.

(14)	The Trust has a 90% ownership interest in the property.

 

17

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Federal Realty Investment Trust

Retail Leasing Summary (1)

December 31, 2008

 

 

Total Lease Summary - Comparable (2)

 

Quarter		Number of Leases Signed		% of Comparable 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 & Incentives (6)			Tenant Improvements & Incentives Per Sq. Ft.
4th Quarter 2008		74		100	%		329,622		$	21.62		$	19.18		$	803,054		13	%		24	%		5.0		$	1,733,441		$	5.26
3rd Quarter 2008		68		100	%		351,310		$	25.03		$	20.28		$	1,669,056		23	%		42	%		7.8		$	2,728,958		$	7.77
2nd Quarter 2008		84		100	%		239,207		$	36.39		$	29.21		$	1,717,881		25	%		42	%		7.3		$	2,316,197		$	9.68
1st Quarter 2008		74		100	%		268,608		$	29.29		$	23.73		$	1,494,431		23	%		37	%		6.3		$	2,209,591		$	8.23
Total -12 months		300		100	%		1,188,747		$	27.33		$	22.55		$	5,684,422		21	%		36	%		6.7		$	8,988,187		$	7.56

New Lease Summary - Comparable (2)

 

Quarter		Number of Leases Signed		% of Comparable 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 & Incentives (6)			Tenant Improvements & Incentives Per Sq. Ft.
4th Quarter 2008		15		20	%		67,903		$	28.76		$	24.20		$	309,272		19	%		37	%		8.7		$	1,583,441		$	23.32
3rd Quarter 2008		26		38	%		93,768		$	43.16		$	29.76		$	1,257,073		45	%		65	%		9.0		$	2,224,958		$	23.73
2nd Quarter 2008		31		37	%		115,097		$	34.23		$	26.46		$	894,253		29	%		47	%		8.5		$	1,770,940		$	15.39
1st Quarter 2008		28		38	%		106,860		$	36.64		$	28.39		$	880,956		29	%		44	%		7.9		$	2,204,591		$	20.63
Total -12 months		100		33	%		383,628		$	36.12		$	27.41		$	3,341,553		32	%		49	%		8.5		$	7,783,930		$	20.29

Renewal Lease Summary - Comparable (2) (7)

 

Quarter		Number of Leases Signed		% of Comparable 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 & Incentives (6)			Tenant Improvements & Incentives Per Sq. Ft.
4th Quarter 2008		59		80	%		261,719		$	19.76		$	17.88		$	493,783		11	%		20	%		3.6		$	150,000		$	0.57
3rd Quarter 2008		42		62	%		257,542		$	18.43		$	16.83		$	411,983		10	%		25	%		6.7		$	504,000		$	1.96
2nd Quarter 2008		53		63	%		124,110		$	38.40		$	31.76		$	823,628		21	%		38	%		6.2		$	545,257		$	4.39
1st Quarter 2008		46		62	%		161,748		$	24.44		$	20.65		$	613,475		18	%		30	%		4.7		$	5,000		$	0.03
Total - 12 months		200		67	%		805,119		$	23.15		$	20.24		$	2,342,869		14	%		28	%		5.3		$	1,204,257		$	1.50

Total Lease Summary - Comparable and Non-comparable (2)

 

Quarter		Number of Leases Signed		GLA Signed		Contractual Rent (3) Per Sq. Ft.			Weighted Average Lease Term (5)		Tenant Improvements & Incentives (6)			Tenant Improvements & Incentives Per Sq. Ft.
4th Quarter 2008		78		334,127		$	21.92		5.0		$	1,898,706		$	5.68
3rd Quarter 2008		76		369,323		$	26.12		8.1		$	3,721,035		$	10.08
2nd Quarter 2008		90		253,048		$	36.40		7.5		$	2,940,855		$	11.62
1st Quarter 2008		85		295,646		$	30.61		6.4		$	3,005,202		$	10.16
Total - 12 months		329		1,252,144		$	28.14		6.9		$	11,565,798		$	9.24

 

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, if any, 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 in the same location. All other leases are categorized as new.

 

18

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Federal Realty Investment Trust

Lease Expirations

December 31, 2008

 

 

Assumes no exercise of lease options

 

Year		Anchor Tenants (1)								Small Shop Tenants								Total
		Expiring SF		% of Anchor SF			Minimum Rent PSF (2)			Expiring SF		% of Small Shop SF			Minimum Rent PSF (2)			Expiring SF		% of Total SF			Minimum Rent PSF (2)
2009		329,000		3	%		$	13.04		799,000		11	%		$	26.59		1,128,000		7	%		$	22.64
2010		617,000		6	%		$	12.99		970,000		13	%		$	27.40		1,587,000		9	%		$	21.80
2011		830,000		9	%		$	13.84		1,142,000		15	%		$	30.48		1,972,000		12	%		$	23.48
2012		1,028,000		11	%		$	12.88		1,081,000		15	%		$	31.13		2,109,000		12	%		$	22.24
2013		1,054,000		11	%		$	15.02		1,016,000		14	%		$	31.46		2,070,000		12	%		$	23.09
2014		1,349,000		14	%		$	15.26		512,000		7	%		$	34.13		1,862,000		11	%		$	20.44
2015		467,000		5	%		$	15.60		447,000		6	%		$	28.22		914,000		5	%		$	21.77
2016		384,000		4	%		$	17.85		416,000		6	%		$	30.86		800,000		5	%		$	24.61
2017		623,000		7	%		$	17.18		433,000		6	%		$	30.86		1,056,000		6	%		$	22.79
2018		619,000		6	%		$	11.26		322,000		4	%		$	33.76		941,000		6	%		$	18.96
Thereafter		2,260,000		24	%		$	16.67		306,000		3	%		$	37.74		2,565,000		15	%		$	19.19
Total (3)		9,560,000		100	%		$	14.95		7,444,000		100	%		$	30.49		17,004,000		100	%		$	21.75

Assumes all lease options are exercised

 

Year		Anchor Tenants (1)								Small Shop Tenants								Total
		Expiring SF		% of Anchor SF			Minimum Rent PSF (2)			Expiring SF		% of Small Shop SF			Minimum Rent PSF (2)			Expiring SF		% of Total SF			Minimum Rent PSF (2)
2009		203,000		2	%		$	11.34		481,000		6	%		$	27.48		684,000		4	%		$	22.69
2010		136,000		1	%		$	10.25		522,000		7	%		$	30.16		658,000		4	%		$	26.05
2011		163,000		3	%		$	7.98		664,000		9	%		$	29.06		827,000		5	%		$	24.90
2012		268,000		3	%		$	14.53		625,000		8	%		$	32.25		893,000		5	%		$	26.93
2013		127,000		1	%		$	15.27		529,000		7	%		$	31.29		657,000		4	%		$	28.14
2014		274,000		3	%		$	12.72		461,000		6	%		$	33.37		735,000		4	%		$	25.67
2015		189,000		2	%		$	17.17		424,000		6	%		$	25.98		613,000		4	%		$	23.27
2016		125,000		1	%		$	20.50		413,000		6	%		$	31.67		538,000		3	%		$	29.07
2017		127,000		1	%		$	26.65		540,000		7	%		$	30.20		667,000		4	%		$	29.52
2018		310,000		3	%		$	14.85		479,000		6	%		$	34.42		789,000		5	%		$	26.73
Thereafter		7,638,000		80	%		$	15.03		2,306,000		32	%		$	30.24		9,943,000		58	%		$	18.56
Total (3)		9,560,000		100	%		$	14.95		7,444,000		100	%		$	30.49		17,004,000		100	%		$	21.75

 

Notes:

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

(2)	Minimum Rent reflects in-place contractual (cash-basis) rent as of December 31, 2008.

(3)	Represents occupied square footage as of December 31, 2008.

 

19

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Federal Realty Investment Trust

Portfolio Leased Statistics

December 31, 2008

 

 

Overall Portfolio Statistics (1)

 

Type		At December 31, 2008							At December 31, 2007
		Size		Leased		Leased %			Size		Leased		Leased %
Retail Properties (2) (sf)		18,119,000		17,220,000		95.0	%		18,195,000		17,595,000		96.7	%
Residential Properties (3) (units)		903		857		94.9	%		723		685		94.7	%

Same Center Statistics (1)

 

Type		At December 31, 2008							At December 31, 2007
		Size		Leased		Leased %			Size		Leased		Leased %
Retail Properties (2) (4) (sf)		16,804,000		16,039,000		95.4	%		17,086,000		16,569,000		97.0	%
Residential Properties (3) (units)		723		687		95.0	%		723		685		94.7	%

 

Notes:

(1)	See Glossary of Terms.

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

(3)

Overall portfolio and Same Center statistics at December 31, 2008 and 2007 include Rollingwood, The Crest at Congressional and the residential rental units at Santana Row. Overall portfolio statistics as of December 31, 2008, include the 180 residential units at Arlington East (Bethesda Row) which were first delivered in May 2008 and continued to be delivered through 2008.

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

 

20

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Federal Realty Investment Trust

Summary of Top 25 Tenants

December 31, 2008

 

 

 

Rank		Tenant Name		Annualized Base Rent				Percentage of Total Annualized Base Rent			Tenant GLA			Percentage of Total GLA			Number of Stores Leased
1		Bed, Bath & Beyond, Inc.		$	9,640,000			2.61	%		647,000			3.57	%		15
2		Ahold USA, Inc.		$	8,369,000			2.26	%		571,000			3.15	%		11
3		TJX Companies		$	6,984,000			1.89	%		540,000			2.98	%		15
4		Safeway, Inc.		$	6,719,000			1.82	%		481,000			2.65	%		9
5		Gap, Inc.		$	6,438,000			1.74	%		220,000			1.21	%		11
6		CVS Corporation		$	5,643,000			1.53	%		179,000			0.99	%		16
7		Barnes & Noble, Inc.		$	4,725,000			1.28	%		201,000			1.11	%		8
8		OPNET Technologies, Inc.		$	3,645,000			0.99	%		83,000			0.46	%		2
9		Best Buy Stores, L.P.		$	3,457,000			0.93	%		99,000			0.55	%		3
10		Staples, Inc.		$	3,376,000			0.91	%		187,000			1.03	%		9
11		DSW, Inc		$	3,263,000			0.88	%		125,000			0.69	%		5
12		Supervalu Inc.(Acme/Sav-A-Lot/Star Mkt/Shoppers Food)		$	3,213,000			0.87	%		338,000			1.87	%		7
13		Wells Fargo Bank, N.A. (includes Wachovia Corporation)		$	3,144,000			0.85	%		73,000			0.40	%		16
14		Borders Group, Inc.		$	2,901,000			0.78	%		129,000			0.71	%		5
15		Home Depot, Inc.		$	2,832,000			0.77	%		335,000			1.85	%		4
16		Kohl’s Corporation		$	2,793,000			0.76	%		322,000			1.78	%		3
17		Wakefern Food Corporation		$	2,693,000			0.73	%		136,000			0.75	%		2
18		Ross Stores, Inc.		$	2,672,000			0.72	%		149,000			0.82	%		5
19		Bank of America, N.A.		$	2,526,000			0.68	%		64,000			0.35	%		18
20		Container Store, Inc.		$	2,496,000			0.67	%		52,000			0.29	%		2
21		A.C. Moore, Inc.		$	2,483,000			0.67	%		141,000			0.78	%		6
22		L.A. Fitness International LLC		$	2,388,000			0.65	%		117,000			0.65	%		3
23		AMC Entertainment Inc.		$	2,378,000			0.64	%		166,000			0.92	%		4
24		Dollar Tree Stores, Inc.		$	2,357,000			0.64	%		158,000			0.87	%		14
25		PETsMART, Inc.		$	2,240,000			0.61	%		130,000			0.72	%		5
		Totals - Top 25 Tenants		$	99,375,000			26.88	%		5,643,000			31.15	%		198
		Total: (1)		$	369,894,000	(2)					18,119,000	(3)					2,449

 

Notes:

(1)	Does not include amounts related to leases these tenants have with our partnership with a discretionary fund created and advised by ING Clarion Partners.

(2)	Reflects annual in-place contractual (cash-basis) rent as of December 31, 2008.

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

 

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Federal Realty Investment Trust

Reconciliation of Net Income to FFO Guidance

December 31, 2008

 

 

 

		2008 Guidance
		($ millions except per share amounts) (1)(2)
Net income		$	114			to		$	122
Gain on sale of real estate			0						0
Depreciation and amortization of real estate & real estate partnership assets			103						103
Amortization of initial direct costs of leases			8						8
Funds from operations			226						233
Dividends on preferred stock			(1	)					(1	)
Income attributable to operating partnership units			1						1
Funds from operations available for common shareholders			226			to			233
Weighted Average Shares (diluted)			59.6
Funds from operations available for common shareholders per diluted share		$	3.80					$	3.92

 

Note:

(1)	Individual items may not add up to total due to rounding.

(2)

Guidance for 2009 assumes an $8 million to $9 million ($0.13 to $0.15 diluted per share) impact of addressing our fourth quarter 2009 debt maturities significantly prior to the actual maturity dates. The Trust’s 2009 guidance does not include potential damages associated with the lawsuit related to a property adjacent to Santana Row as further described in Note E (Commitments and Contingencies) of the Trust’s most recent Form 10-Q.

 

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Federal Realty Investment Trust

Summarized Income Statements and Balance Sheets - Joint Venture

December 31, 2008

 

 

CONSOLIDATED INCOME STATEMENTS

 

		Three months ended December 31,								Year ended December 31,
		2008				2007				2008				2007
		(in thousands) (unaudited)								(in thousands)
Revenues
Rental income		$	4,789			$	4,566			$	18,896			$	17,233
Other property income			49				97				215				333
			4,838				4,663				19,111				17,566
Expenses
Rental			917				911				3,181				2,864
Real estate taxes			521				431				2,004				1,614
Depreciation and amortization			1,222				1,171				4,792				4,471
			2,660				2,513				9,977				8,949
Operating income			2,178				2,150				9,134				8,617
Interest expense			(1,133	)			(1,135	)			(4,537	)			(4,478	)
Net income		$	1,045			$	1,015			$	4,597			$	4,139

CONSOLIDATED BALANCE SHEETS

 

		December 31,
		2008				2007
		(in thousands)
ASSETS
Real estate, at cost		$	202,519				201,641
Less accumulated depreciation and amortization			(14,609	)			(9,894	)
Net real estate			187,910				191,747
Cash and cash equivalents			2,604				1,453
Other assets			7,066				7,173
TOTAL ASSETS		$	197,580			$	200,373
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities
Mortgages payable		$	81,365			$	81,540
Other liabilities			7,363				8,691
Total liabilities			88,728				90,231
Partners’ capital			108,852				110,142
TOTAL LIABILITIES AND PARTNERS’ CAPITAL		$	197,580			$	200,373

 

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Federal Realty Investment Trust

Summary of Outstanding Debt and Debt Maturities - Joint Venture

December 31, 2008

 

 

OUTSTANDING DEBT

 

		Maturity		Stated Interest Rate as of December 31, 2008			Balance
							(in thousands)
Mortgage Loans
Secured Fixed Rate
Campus Plaza		12/01/09		4.530	%(a)		$	11,000
Pleasant Shops		12/01/09		4.530	%(a)			12,400
Plaza del Mercado		07/05/14		5.770	%(b)			13,080
Atlantic Plaza		12/01/14		5.120	%(a)			10,500
Barcroft Plaza		07/01/16		5.990	%(a)(c)			20,785
Greenlawn Plaza		07/01/16		5.900	%(a)			13,600
		Total Fixed Rate Debt					$	81,365

Debt Maturities

(in thousands)

 

Year		Scheduled Amortization			Maturities			Total			Percent of Debt Maturing			Cumulative Percent of Debt Maturing
2009			185			23,400			23,585		28.9	%		28.9	%
2010			196			—			196		0.2	%		29.1	%
2011			208			—			208		0.3	%		29.4	%
2012			220			—			220		0.3	%		29.7	%
2013			233			—			233		0.3	%		30.0	%
2014			142			22,396			22,538		27.7	%		57.7	%
2015			—			—			—		0.0	%		57.7	%
2016			—			34,385			34,385		42.3	%		100.0	%
Total		$	1,184		$	80,181		$	81,365		100.0	%

 

Notes:

(a)	Interest only until maturity.

(b)	Effective July 5, 2007, principal and interest payments are due based on a 30-year amortization schedule.

(c)	The stated interest rate represents the weighted average interest rate for two mortgage loans secured by this property. The loan balance represents a note of $16.6 million at a stated rate of 6.06% and a note of $4.2 million at a stated rate of 5.71%.

 

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Federal Realty Investment Trust

Real Estate Status Report - Joint Venture

December 31, 2008

 

 

 

Property Name		MSA Description		Year Acquired		Real Estate at Cost			Mortgage or Capital Lease Obligation			GLA		% Leased			% Occupied			Average Rent PSF			Grocery Anchor GLA (1)		Grocery Anchor (1)		Other Principal Tenants
						(in thousands)			(in thousands)
East Region
Washington Metropolitan Area
Barcroft Plaza		Washington, DC-MD-VA		2006-2007			34,059		$	20,785		100,000		94	%		94	%		$	20.96		46,000		Harris Teeter		Bank of America
Free State Shopping Center		Washington, DC-MD-VA		2007			65,842					279,000		99	%		99	%			13.78		73,000		Giant Food		TJ Maxx / Ross / Office Depot
Plaza del Mercado		Washington, DC-MD-VA		2004			21,078			13,080		96,000		92	%		92	%			17.67		25,000		Giant Food		CVS
		Total Washington Metropolitan Area					120,979					475,000		97	%		97	%			15.97
New York / New Jersey
Greenlawn Plaza		Nassau-Suffolk, NY		2006			19,983			13,600		106,000		100	%		100	%			15.74		46,000		Waldbaum's		Tuesday Morning
		Total New York / New Jersey					19,983					106,000		100	%		100	%			15.74
New England
Atlantic Plaza		Boston-Worcester-Lawrence-Lowell-Brockton, MA		2004			16,513			10,500		124,000		96	%		96	%			12.90		63,000		Shaw's Supermarket		Sears
Campus Plaza		Boston-Worcester-Lawrence-Lowell-Brockton, MA		2004			22,127			11,000		116,000		100	%		100	%			12.22		46,000		Roche Brothers		Burlington Coat Factory
Pleasant Shops		Boston-Worcester-Lawrence-Lowell-Brockton, MA		2004			22,917			12,400		129,000		97	%		97	%			11.87		38,000		Foodmaster		Marshalls
		Total New England					61,557					369,000		98	%		98	%			12.32
		Total East Region					202,519					950,000		97	%		97	%			14.53
Grand Totals						$	202,519		$	81,365		950,000		97	%		97	%		$	14.53

 

Note:

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

 

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Glossary of Terms

Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure that means net income or loss plus depreciation and amortization, net interest expense, income taxes, gain or loss on sale of real estate and impairments of real estate, if any. Adjusted EBITDA is presented because we believe that it provides useful information to investors regarding our ability to service debt and because it approximates a key covenant in material notes. Adjusted 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 Adjusted EBITDA to net income for the three months and year ended December 31, 2008 and 2007 is as follows:

 

		Three Months Ended December 31,								Year Ended December 31,
		2008				2007				2008				2007
		(in thousands)								(in thousands)
Net income		$	33,725			$	122,168			$	129,787			$	195,537
Depreciation and amortization			29,230				26,509				111,068				105,966
Interest expense			24,997				27,642				99,163				117,394
Other interest income			(253	)			(333	)			(919	)			(1,337	)
EBITDA			87,699				175,986				339,099				417,560
Gain on sale of real estate			(5,134	)			(95,819	)			(12,572	)			(94,768	)
Adjusted EBITDA		$	82,565			$	80,167			$	326,527			$	322,792

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 excluding extraordinary items and 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: Rental income, other property income and mortgage interest income, less rental expenses and real estate taxes and excluding operating results from discontinued operations.

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

Same Center: Information provided on a same center basis is provided for only those properties that were owned and operated for the entirety of both periods being compared, excludes properties that were redeveloped, expanded or under development and properties purchased or sold at any time during the periods being compared.

Tenant Improvements and Incentives: 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. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements.

 

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