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FRT-12.31.2014 8-K Document


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, 2014
 
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))







Item 2.02. Results of Operations and Financial Condition.

The following information is being furnished under Item 2.02-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 10, 2015, 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, 2014. 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, 2014 (including press release dated February 10, 2015)

    

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 10, 2015
 
 /s/ James M. Taylor, Jr.
 
 
 
 
 
 
 
James M. Taylor, Jr.
 
 
 
Executive Vice President-
 
 
 
Chief Financial Officer and Treasurer




EXHIBIT INDEX


Exh No.    Exhibit                                    
99.1        Supplemental Information at December 31, 2014    




FRT-12.31.2014-EX 99.1


FEDERAL REALTY INVESTMENT TRUST
SUPPLEMENTAL INFORMATION
December 31, 2014
 
 
 
 
TABLE OF CONTENTS
 
 
 
 
1
Fourth Quarter and Year End 2014 Earnings Press Release
 
 
 
 
2
Financial Highlights
 
 
 
Summarized Income Statements
 
 
Summarized Balance Sheets
 
 
Funds From Operations / Summary of Capital Expenditures
 
 
Market Data
 
 
Components of Rental Income
 
 
 
 
3
Summary of Debt
 
 
 
Summary of Outstanding Debt and Capital Lease Obligations
 
 
Summary of Debt Maturities
 
 
 
 
4
Summary of Redevelopment Opportunities
 
 
 
 
5
Pike & Rose and Assembly Row
 
 
 
 
6
Future Redevelopment Opportunities
 
 
 
 
7
Significant Acquisitions and Disposition
 
 
 
 
8
Real Estate Status Report
 
 
 
 
9
Retail Leasing Summary
 
 
 
 
10
Lease Expirations
 
 
 
 
11
Portfolio Leased Statistics
 
 
 
 
12
Summary of Top 25 Tenants
 
 
 
 
13
Reconciliation of Net Income to FFO Guidance
 
 
 
 
14
30% Owned Joint Venture Disclosure
 
 
 
Summarized Income Statements and Balance Sheets
 
 
Summary of Outstanding Debt and Debt Maturities
 
 
Real Estate Status Report
 
 
 
 
15
Glossary of Terms
 
 
 
 
 
 
 
 
1626 East Jefferson Street
Rockville, Maryland 20852-4041
301/998-8100

1



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 10, 2015, and include the following:

•
risks that our tenants will not pay rent, may vacate early or may file for bankruptcy 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 redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
•
risk that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but not entirely funded;
•
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 costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, 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 associated with general economic conditions, including local economic conditions in our geographic markets;
•
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 10, 2015.



2


FOR IMMEDIATE RELEASE
Investor Inquiries
Media Inquiries
Brittany Schmelz
Andrea Simpson
Investor Relations Coordinator
Director, Marketing
301/998-8265
617/684-1511
bschmelz@federalrealty.com
asimpson@federalrealty.com

FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND
YEAR-END 2014 OPERATING RESULTS

ROCKVILLE, Md. (February 10, 2015) - Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its fourth quarter and year-ended December 31, 2014.

Financial Results
Federal Realty generated funds from operations available for common shareholders (FFO) of $77.7 million, or $1.13 per diluted share for fourth quarter 2014, which was negatively impacted by a charge for early extinguishment of debt. Without the charges for early extinguishment of debt in 2014 and 2013, FFO would have been $88.2 million or $1.28 per diluted share; this compares to $78.2 million, or $1.18 per diluted share, in fourth quarter 2013. For the year ending December 31, 2014, Federal Realty reported FFO of $327.6 million, or $4.79 per diluted share, which includes the early extinguishment of debt. Excluding the early extinguishment of debt charges in both years, FFO would have been $338.1 million, or $4.94 per diluted share in 2014, compared to $303.2 million, or $4.61 per diluted share in 2013.

Net income available for common shareholders was $35.0 million and earnings per diluted share was $0.51 for fourth quarter 2014 versus $28.3 million and $0.42, respectively, for fourth quarter 2013. For the year ending December 31, 2014, Federal Realty reported net income available for common shareholders of $164.0 million and earnings per diluted share of $2.41. This compares to net income available for shareholders of $162.1 million and earnings per diluted share of $2.46 for the year ending December 31, 2013.

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 in addition to Form 8-K that was filed.



3


FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND
YEAR-END 2014 OPERATING RESULTS
February 10, 2015
Page 2

Portfolio Results
Same-center property operating income in 2014 increased 4.1% including redevelopments and expansions, and 3.3% excluding redevelopments and expansions compared to 2013. On a quarterly-basis, same-center property operating income in fourth quarter 2014 increased 4.5% including redevelopment and expansion properties, and 3.0% excluding redevelopment and expansion properties, compared to fourth quarter 2013.

The overall portfolio was 95.6% leased as of December 31, 2014, compared to 95.6% on September 30, 2014 and 95.8% on December 31, 2013. Federal Realty’s same-center portfolio was 95.8% leased on December 31, 2014, compared to 95.9% on September 30, 2014 and 95.8% on December 31, 2013.

During fourth quarter 2014, the Trust signed 83 leases for 343,896 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 306,860 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 20%. The average contractual rent on this comparable space for the first year of the new lease is $33.27 per square foot compared to the average contractual rent of $27.76 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 32% for fourth quarter 2014.

For all of 2014, Federal Realty signed 340 leases representing 1.5 million square feet of comparable retail space at an average cash-basis contractual rent increase per square foot of 16%, and 29% on a GAAP-basis. The average cash-basis contractual rent on this comparable space for the first year of the new lease is $34.12 per square foot compared to the average cash-basis contractual rent of $29.34 per square foot for the last year of the prior lease. As of December 31, 2014, Federal Realty’s average contractual minimum rent for retail and commercial space in its portfolio is $25.59 per square foot, as compared to $24.54 per square foot on December 31, 2013.

“Our bottom line results for the year represent yet another record for the Trust,” commented Donald C. Wood, President and Chief Executive Officer of Federal Realty Investment Trust. “Importantly, we achieved these results while continuing to execute our long term business plan through successfully delivering the initial phases of Pike & Rose and Assembly Row, executing and expanding our redevelopment pipeline, acquiring strategic assets such as San Antonio Center, and capitalizing our balance sheet for the long term. We are pleased with the value creation we are delivering today and how our balanced business plan enhances our prospects for continued growth and value creation.”




4


FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND
YEAR-END 2014 OPERATING RESULTS
February 10, 2015
Page 3

Summary of Other Quarterly Activities and Recent Developments
•
November 14, 2014 - Federal Realty issued $250 million aggregate principal amount of 4.50% senior unsecured notes due December 1, 2044. 
•
December 16, 2014 - In December 2014, Federal Realty redeemed its 5.65% senior unsecured notes due 2016 for an aggregate principal of $125 million and also repaid its $61 million mortgage loan on East Bay Bridge due 2016. The total prepayment premium incurred in the fourth quarter 2014 was $10.5 million.
•
January 12, 2015 - Federal Realty announced the acquisition of a controlling interest in a 376,000-square-foot shopping center in Mountain View, California, based on a total value of $62.2 million. San Antonio Shopping Center is located immediately southeast of the intersection of El Camino Real and San Antonio Road - two major and important thoroughfares serving the Bay Area’s affluent, tech and academic driven communities of Mountain View, Palo Alto and Los Altos. The acquisition was made using a combination of approximately 58,000 downREIT units, $27 million of cash ($18 million in one closing and $9 million in a second) and the assumption of $18.7 million of fixed rate debt secured by the property. Federal incurred approximately $1.5 million of transaction related costs associated with the acquisition. 

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 $0.87 per share on its common shares, resulting in an indicated annual rate of $3.48 per share. The regular common dividend will be payable on April 15, 2015 to common shareholders of record on March 20, 2015.

Guidance
We have maintained our 2015 guidance for FFO per diluted share of $5.26 to $5.34, and earnings per diluted share of $2.86 to $2.94.

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 2014 earnings conference call, which is scheduled for February 11, 2015, at 11 a.m. Eastern Standard Time. To participate, please call (877) 445-3230 five to ten minutes prior to the call start time and use the passcode 50846004 (required). Federal Realty will also provide an online webcast on the Company’s website, www.federalrealty.com, which will remain available for 30 days following the call. A telephone recording of the call will also be available through February 18, 2015, by dialing (855) 859-2056 and using the passcode 50846004.

About Federal Realty
Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, our mission is to deliver long term, sustainable growth through investing in densely

5


FEDERAL REALTY INVESTMENT TRUST ANNOUNCES FOURTH QUARTER AND
YEAR-END 2014 OPERATING RESULTS
February 10, 2015
Page 4

populated, affluent communities where retail demand exceeds supply. Our expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty’s 89 properties include over 2,600 tenants, in approximately 20.2 million square feet of retail space, and 1,500 residential units.

Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 47 consecutive years, the longest record in the REIT industry. Federal Realty shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.FederalRealty.com

Safe Harbor Language
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the 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 10, 2015, and include the following:

•
risks that our tenants will not pay rent, may vacate early or may file for bankruptcy 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 renovation projects that we do pursue may cost more, take more time to complete, or fail to perform as expected;
•
risks that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but not entirely funded;
•
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 costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, 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 associated with general economic conditions, including local economic conditions in our geographic markets;
•
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 with the Securities and Exchange Commission on February 10, 2015.





6


Federal Realty Investment Trust
Summarized Income Statements
December 31, 2014
 
Three Months Ended

Year Ended
 
December 31,

December 31,
 
2014

2013

2014

2013
 
(in thousands, except per share data)
 
 
Revenue
 
 
 
 
 
 
 
Rental income
$
171,634

 
$
159,953

 
$
666,322

 
$
620,089

Other property income
3,411

 
2,508

 
14,758

 
12,169

Mortgage interest income
1,332

 
1,385

 
5,010

 
5,155

Total revenue
176,377

 
163,846

 
686,090

 
637,413

Expenses
 
 
 
 
 
 
 
Rental expenses
34,974

 
31,940

 
135,417

 
118,695

Real estate taxes
18,268

 
18,155

 
76,506

 
71,759

General and administrative
8,114

 
9,068

 
32,316

 
31,970

Depreciation and amortization
43,411

 
41,213

 
170,814

 
160,828

Total operating expenses
104,767

 
100,376

 
415,053

 
383,252

Operating income
71,610

 
63,470

 
271,037

 
254,161

Other interest income
49

 
268

 
94

 
433

Interest expense
(24,169
)
 
(24,663
)
 
(93,941
)
 
(104,977
)
Early extinguishment of debt
(10,545
)
 
(9,905
)
 
(10,545
)
 
(13,304
)
Income from real estate partnerships
334

 
433

 
1,243

 
1,498

Income from continuing operations
37,279

 
29,603

 
167,888

 
137,811

Discontinued operations
 
 
 
 
 
 
 
Discontinued operations - income
—

 
—

 
—

 
942

Discontinued operations - gain on sale of real estate
—

 
—

 
—

 
23,861

Results from discontinued operations
—

 
—

 
—

 
24,803

Income before gain on sale of real estate
37,279

 
29,603

 
167,888

 
162,614

Gain on sale of real estate
—

 
—

 
4,401

 
4,994

Net income
37,279

 
29,603

 
172,289

 
167,608

     Net income attributable to noncontrolling interests
(2,117
)
 
(1,147
)
 
(7,754
)
 
(4,927
)
Net income attributable to the Trust
35,162

 
28,456

 
164,535

 
162,681

Dividends on preferred shares
(135
)
 
(135
)
 
(541
)
 
(541
)
Net income available for common shareholders
$
35,027

 
$
28,321

 
$
163,994

 
$
162,140

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE, BASIC
 
 
 
 
 
 
 
Continuing operations
$
0.51

 
$
0.43

 
$
2.35

 
$
2.01

Discontinued operations
—

 
—

 
—

 
0.38

Gain on sale of real estate
—

 
—

 
0.07

 
0.08

 
$
0.51

 
$
0.43

 
$
2.42

 
$
2.47

 
 
 
 
 
 
 
 
Weighted average number of common shares, basic
67,997

 
65,965

 
67,322

 
65,331

 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE, DILUTED
 
 
 
 
 
 
 
Continuing operations
$
0.51

 
$
0.42

 
$
2.34

 
$
2.00

Discontinued operations
—

 
—

 
—

 
0.38

Gain on sale of real estate
—

 
—

 
0.07

 
0.08

 
$
0.51

 
$
0.42

 
$
2.41

 
$
2.46

 
 
 
 
 
 
 
 
Weighted average number of common shares, diluted
68,179

 
66,113

 
67,492

 
65,483



7



Federal Realty Investment Trust
Summarized Balance Sheets
December 31, 2014
 
December 31,
 
2014
 
2013
 
(in thousands)
 
 
 
 
ASSETS
 
 
 
Real estate, at cost
 
 
 
Operating (including $282,303 and $265,138 of consolidated variable interest entities, respectively)
$
5,128,757

 
$
4,618,258

Construction-in-progress
480,241

 
531,205

 
5,608,998

 
5,149,463

Less accumulated depreciation and amortization (including $26,618 and $19,086 of consolidated variable interest entities, respectively)
(1,467,050
)
 
(1,350,471
)
Net real estate
4,141,948

 
3,798,992

Cash and cash equivalents
47,951

 
88,927

Accounts and notes receivable, net
93,291

 
84,838

Mortgage notes receivable, net
50,988

 
55,155

Investment in real estate partnerships
37,457

 
32,264

Prepaid expenses and other assets
175,235

 
159,118

TOTAL ASSETS
$
4,546,870

 
$
4,219,294

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Liabilities
 
 
 
Mortgages and capital lease obligations (including $187,632 and $202,782 of consolidated variable interest entities, respectively)
$
635,345

 
$
660,127

Notes payable
290,519

 
300,822

Senior notes and debentures
1,483,813

 
1,360,913

Accounts payable and other liabilities
325,584

 
321,710

Total liabilities
2,735,261

 
2,643,572

Redeemable noncontrolling interests
119,053

 
104,425

Shareholders' equity
 
 
 
    Preferred shares
9,997

 
9,997

    Common shares and other shareholders' equity
1,594,404

 
1,438,163

Total shareholders' equity of the Trust
1,604,401

 
1,448,160

    Noncontrolling interests
88,155

 
23,137

Total shareholders' equity
1,692,556

 
1,471,297

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
4,546,870

 
$
4,219,294




8


Federal Realty Investment Trust
Funds From Operations / Summary of Capital Expenditures
December 31, 2014
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
December 31,
 
December 31,
 
 
2014
 
2013
 
2014
 
2013
 
 
(in thousands, except per share data)
Funds from Operations available for common shareholders (FFO) (1)
 
 
 
 
 
 
 
 
Net income
 
$
37,279

 
$
29,603

 
$
172,289

 
$
167,608

Net income attributable to noncontrolling interests
 
(2,117
)
 
(1,147
)
 
(7,754
)
 
(4,927
)
Gain on sale of real estate
 
—

 
—

 
(4,401
)
 
(28,855
)
Depreciation and amortization of real estate assets
 
38,493

 
37,143

 
152,505

 
144,873

Amortization of initial direct costs of leases
 
3,420

 
2,607

 
12,391

 
10,694

Depreciation of joint venture real estate assets
 
353

 
384

 
1,555

 
1,504

Funds from operations
 
77,428

 
68,590

 
326,585

 
290,897

Dividends on preferred shares
 
(135
)
 
(135
)
 
(541
)
 
(541
)
Income attributable to operating partnership units
 
798

 
223

 
3,027

 
888

Income attributable to unvested shares
 
(346
)
 
(305
)
 
(1,474
)
 
(1,306
)
FFO
 
77,745

 
68,373

 
327,597

 
289,938

Early extinguishment of debt, net of allocation to unvested shares
 
10,499

 
9,861

 
10,498

 
13,244

FFO excluding early extinguishment of debt
 
$
88,244

 
$
78,234

 
$
338,095

 
$
303,182

Weighted average number of common shares, diluted
 
69,096

 
66,399

 
68,410

 
65,778

 
 
 
 
 
 
 
 
 
FFO per diluted share
 
$
1.13

 
$
1.03

 
$
4.79

 
$
4.41

 
 
 
 
 
 
 
 
 
FFO excluding early extinguishment of debt, per diluted share
 
$
1.28

 
$
1.18

 
$
4.94

 
$
4.61

 
 
 
 
 
 
 
 
 
Summary of Capital Expenditures
 
 
 
 
 
 
 
 
Non-maintenance capital expenditures
 
 
 
 
 
 
 
 
Development, redevelopment and expansions
 
$
61,304

 
$
81,258

 
$
283,862

 
$
281,228

Tenant improvements and incentives
 
6,895

 
6,910

 
28,471

 
27,660

Total non-maintenance capital expenditures
 
68,199

 
88,168

 
312,333

 
308,888

Maintenance capital expenditures
 
8,887

 
9,869

 
18,414

 
21,372

Total capital expenditures
 
$
77,086

 
$
98,037

 
$
330,747

 
$
330,260

 
 
 
 
 
 
 
 
 
Dividends and Payout Ratios
 
 
 
 
 
 
 
 
Regular common dividends declared
 
$
59,684

 
$
52,025

 
$
224,190

 
$
198,965

 
 
 
 
 
 
 
 
 
Dividend payout ratio as a percentage of FFO
 
77
%
 
76
%
 
68
%
 
69
%
Dividend payout ratio as a percentage of FFO excluding early extinguishment of debt
 
68
%
 
66
%
 
66
%
 
66
%

Notes:
1)    See Glossary of Terms.

9


Federal Realty Investment Trust
Market Data
December 31, 2014
 
 
 
December 31,
 
 
 
2014
 
2013
 
 
 
(in thousands, except per share data)
Market Data
 
 
 
 
 
Common shares outstanding and operating partnership units (1)
 
69,523

 
66,987

 
Market price per common share
 
$
133.46

 
$
101.41

 
Common equity market capitalization including operating partnership units
 
$
9,278,540

 
$
6,793,152

 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
Equity market capitalization
 
$
9,288,540

 
$
6,803,152

 
 
 
 
 
 
 
Total debt (3)
 
2,409,677

 
2,321,862

 
 
 
 
 
 
 
Total market capitalization
 
$
11,698,217

 
$
9,125,014

 
 
 
 
 
 
 
Total debt to market capitalization
 
21%
 
25%
 
 
 
 
 
 
 
Fixed rate debt ratio:
 
 
 
 
 
Fixed rate debt and capital lease obligations (4)
 
100%
 
100%
 
Variable rate debt
 
<1%
 
<1%
 
 
 
100%
 
100%
Notes:
1)
Amounts include 917,255 and 285,722 operating partnership units outstanding at December 31, 2014 and 2013, 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 $10.3 million and $17.1 million at December 31, 2014 and 2013, respectively, which is the Trust's 30% share of the total mortgages payable, of $34.4 million and $56.9 million at December 31, 2014 and 2013, respectively, of the partnership with a discretionary fund created and advised by ING Clarion Partners.
4)
Fixed rate debt includes our $275.0 million term loan as the rate is effectively fixed by two interest rate swap agreements.



10


Federal Realty Investment Trust
 
 
 
 
 
 
 
Components of Rental Income
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
 
(in thousands)
Minimum rents
 
 
 
 
 
 
 
Retail and commercial (1)
$
121,285

 
$
113,430

 
$
472,602

 
$
448,058

Residential
10,105

 
7,377

 
36,099

 
28,902

Cost reimbursements
33,133

 
32,728

 
135,592

 
122,578

Percentage rents
3,638

 
3,323

 
10,169

 
9,359

Other
3,473

 
3,095

 
11,860

 
11,192

Total rental income
$
171,634

 
$
159,953

 
$
666,322

 
$
620,089


Notes:
1)
Minimum rents include $1.6 million and $1.7 million for the three months ended December 31, 2014 and 2013, respectively, and $5.1 million and $5.4 million for the year ended December 31, 2014 and 2013, respectively, to recognize minimum rents on a straight-line basis. In addition, minimum rents include $0.6 million and $0.8 million for the three months ended December 31, 2014 and 2013, respectively, and $2.4 million and $3.1 million for the year ended December 31, 2014 and 2013, respectively, to recognize income from the amortization of in-place leases.





11


Federal Realty Investment Trust
Summary of Outstanding Debt and Capital Lease Obligations
December 31, 2014
 
 
As of December 31, 2014
 
 
Stated maturity date
 
Stated interest rate
 
Balance
 
 
 
Weighted average effective rate (5)
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
Mortgages Payable (1)
 
 
 
 
 
 
 
 
 
 
 
Secured fixed rate
 
 
 
 
 
 
 
 
 
 
 
Barracks Road
11/1/2015
 
7.95%
 
$
35,985

 
 
 
 
 
 
Hauppauge
11/1/2015
 
7.95%
 
13,566

 
 
 
 
 
 
Lawrence Park
11/1/2015
 
7.95%
 
25,507

 
 
 
 
 
 
Wildwood
11/1/2015
 
7.95%
 
22,420

 
 
 
 
 
 
Wynnewood
11/1/2015
 
7.95%
 
25,994

 
 
 
 
 
 
Brick Plaza
11/1/2015
 
7.42%
 
26,415

 
 
 
 
 
 
Plaza El Segundo
8/5/2017
 
6.33%
 
175,000

 
 
 
 
 
 
The Grove at Shrewsbury (East)
10/1/2017
 
5.82%
 
44,519

 
 
 
 
 
 
The Grove at Shrewsbury (West)
3/1/2018
 
6.38%
 
11,242

 
 
 
 
 
 
Rollingwood Apartments
5/1/2019
 
5.54%
 
22,130

 
 
 
 
 
 
29th Place
1/31/2021
 
5.91%
 
4,941

 
 
 
 
 
 
THE AVENUE at White Marsh
1/1/2022
 
3.35%
 
52,705

 
 
 
 
 
 
Montrose Crossing
1/10/2022
 
4.20%
 
75,867

 
 
 
 
 
 
Brook 35
7/1/2029
 
4.65%
 
11,500

 
 
 
 
 
 
Chelsea
1/15/2031
 
5.36%
 
7,074

 
 
 
 
 
 
Subtotal
 
 
 
 
554,865

 
 
 
 
 
 
Net unamortized premium
 
 
 
 
8,833

 
 
 
 
 
 
Total mortgages payable
 
 
 
 
563,698

 
 
 
5.47
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
 
 
 
 
 
 
 
 
 
 
 
Unsecured fixed rate
 
 
 
 
 
 
 
 
 
 
 
Term Loan (2)
11/21/2018
 
LIBOR + 0.90%
 
275,000

 
 
 
 
 
 
Various
Various through 2028
 
11.31%
 
6,119

 
 
 
 
 
 
Unsecured variable rate
 
 
 
 
 
 
 
 
 
 
 
Escondido (Municipal bonds) (3)
10/1/2016
 
0.06%
 
9,400

 
 
 
 
 
 
Revolving Credit Facility (4)
4/21/2017
 
LIBOR + 0.90%
 
—

 
 
 
 
 
 
Total notes payable
 
 
 
 
290,519

 
 
 
2.96
%
(6)
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes and debentures
 
 
 
 
 
 
 
 
 
 
 
Unsecured fixed rate
 
 
 
 
 
 
 
 
 
 
 
6.20% notes
1/15/2017
 
6.20%
 
200,000

 
 
 
 
 
 
5.90% notes
4/1/2020
 
5.90%
 
150,000

 
 
 
 
 
 
3.00% notes
8/1/2022
 
3.00%
 
250,000

 
 
 
 
 
 
2.75% notes
6/1/2023
 
2.75%
 
275,000

 
 
 
 
 
 
3.95% notes
1/15/2024
 
3.95%
 
300,000

 
 
 
 
 
 
7.48% debentures
8/15/2026
 
7.48%
 
29,200

 
 
 
 
 
 
6.82% medium term notes
8/1/2027
 
6.82%
 
40,000

 
 
 
 
 
 
4.50% notes
12/1/2044
 
4.50%
 
250,000

 
 
 
 
 
 
Subtotal
 
 
 
 
1,494,200

 
 
 
 
 
 
Net unamortized discount
 
 
 
(10,387
)
 
 
 
 
 
 
Total senior notes and debentures
 
 
 
1,483,813

 
 
 
4.46
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital lease obligations
 
 
 
 
 
 
 
 
 
 
 
Various
Various through 2106
 
Various
 
71,647

 
 
 
8.04
%
 
Total debt and capital lease obligations
 
 
 
 
$
2,409,677

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed rate debt and capital lease obligations
 
 
 
$
2,400,277

 
100
%
 
4.63%
 
Total variable rate debt
 
 
 
9,400

 
<1%

 
1.28%
(6)
Total debt and capital lease obligations
 
 
 
$
2,409,677

 
100
%
 
4.62%
(6)

12


 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2014
2013
 
2014
2013
Operational Statistics
 
 
 
 
 
 
 
 
 
Excluding early extinguishment of debt:
 
 
 
 
 
 
 
 
 
Ratio of EBITDA to combined fixed charges and preferred share dividends (7)(8)
3.91

x
3.48

x
 
3.85

x
3.65

x
Ratio of adjusted EBITDA to combined fixed charges and preferred share dividends (7)(8)
3.91

x
3.48

x
 
3.82

x
3.41

x
Including early extinguishment of debt:
 
 
 
 
 
 
 
 
 
Ratio of EBITDA to combined fixed charges and preferred share dividends (7)
2.88

x
2.62

x
 
3.53

x
3.29

x
Ratio of adjusted EBITDA to combined fixed charges and preferred share dividends (7)
2.88

x
2.62

x
 
3.50

x
3.08

x

Notes:
1)
Mortgages payable do not include our 30% share ($10.3 million) of the $34.4 million debt of the partnership with a discretionary fund created and advised by ING Clarion Partners.
2)
We entered into two interest rate swap agreements to fix the variable rate portion of our $275.0 million term loan at 1.72% from December 1, 2011 through November 1, 2018. The swap agreements effectively fix the rate on the term loan at 2.62% and thus the loan is included in fixed rate debt.
3)
The bonds require monthly interest only payments through maturity. The bonds bear interest at a variable rate determined weekly, which would enable the bonds to be remarketed at 100% of their principal amount. The property is not encumbered by a lien.
4)
The maximum amount drawn under our revolving credit facility was $79.5 million for the three months and year ended December 31, 2014, and the weighted average effective interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 1.07% for the three months and year ended December 31, 2014.
5)
The weighted average effective interest rate includes the amortization of any deferred financing fees, discounts and premiums, if applicable, except as described in Note 6.
6)
The weighted average effective interest rate excludes $0.5 million in quarterly financing fees and quarterly debt fee amortization on our revolving credit facility which had no balance on December 31, 2014. In addition, the weighted average effective interest rate is calculated using the fixed rate on our term loan of 2.62% as the result of the interest rate swap agreements discussed in Note 2. The term loan is included in fixed rate debt.
7)
Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount/premium and debt costs, costs related to the early extinguishment of debt, and the portion of rent expense representing an interest factor. EBITDA includes a gain on sale of real estate of $4.4 million and $28.9 million for the year ended December 31, 2014 and 2013, respectively. Adjusted EBITDA is reconciled to net income in the Glossary of Terms.
8)
Fixed charges for the three months and year ended December 31, 2014 exclude the $10.5 million early extinguishment of debt charge related to the make-whole premium paid as part of the early redemption of our 5.65% senior notes and the prepayment premium paid as part of the early payoff of our East Bay Bridge mortgage loan. Fixed charges for the three months and year ended December 31, 2013 exclude the $9.9 million and $13.3 million, respectively, early extinguishment of debt charges related to the make-whole premiums paid as part of the early redemptions of our 5.40% and 5.95% senior notes, and the prepayment premium paid as part of the early payoff of our 7.50% mortgage loans.


13


Federal Realty Investment Trust
Summary of Debt Maturities
December 31, 2014
Year
Scheduled Amortization
 
Maturities
 
Total
 
Percent of Debt Maturing
 
Cumulative Percent of Debt Maturing
 
Weighted Average Rate (3)
 
 
(in thousands)
 
 
 
 
 
 
 
2015
$
7,988

 
$
145,807

 
$
153,795

 
6.4
%
 
6.4
%
 
8.0
%
 
2016
4,210

 
9,400

 
13,610

 
0.6
%
 
7.0
%
 
1.3
%
 
2017
4,191

 
416,732

(1)
420,923

 
17.5
%
 
24.5
%
 
5.4
%
(4)
2018
3,361

 
285,502

 
288,863

 
12.0
%
 
36.5
%
 
2.9
%
 
2019
3,166

 
20,160

 
23,326

 
1.0
%
 
37.5
%
 
5.7
%
 
2020
3,168

 
150,000

 
153,168

 
6.3
%
 
43.8
%
 
6.0
%
 
2021
3,091

 
3,625

 
6,716

 
0.3
%
 
44.1
%
 
6.1
%
 
2022
1,216

 
366,323

 
367,539

 
15.2
%
 
59.3
%
 
3.5
%
 
2023
1,276

 
330,010

 
331,286

 
13.7
%
 
73.0
%
 
3.9
%
 
2024
1,052

 
300,000

 
301,052

 
12.5
%
 
85.5
%
 
4.2
%
 
Thereafter
20,253

 
330,700

 
350,953

 
14.5
%
 
100.0
%
 
5.3
%
 
Total
$
52,972

 
$
2,358,259

 
$
2,411,231

(2)
100.0
%
 
 
 
 
 
Notes:
1)
Our $600.0 million unsecured revolving credit facility matures on April 21, 2017, subject to a one-year extension at our option. As of December 31, 2014, there was no balance outstanding on our revolving credit facility.
2)
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 and senior notes as of December 31, 2014.
3)
The weighted average rate reflects the weighted average interest rate on debt maturing in the respective year.
4)
The weighted average rate excludes $0.5 million in quarterly financing fees and quarterly debt fee amortization on our revolving credit facility.



14



Federal Realty Investment Trust
 
 
 
 
 
Summary of Redevelopment Opportunities
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
The following redevelopment opportunities have received or will shortly receive all necessary approvals to proceed and are actively being worked on by the Trust (1)
Property
Location
Opportunity
Projected
ROI (2)
Projected
Cost (1)
Cost to
Date
Anticipated Stabilization (3)
 
 
 
 
(in millions)
(in millions)
 
Projects Stabilized in 2014
 
 
 
 
Santana Row - Lot 8B
San Jose, CA
Addition of a 5-story rental apartment building, which includes 212 residential units and associated parking
8
%

$76


$76

Stabilized
Hollywood Blvd - Petersen Building
Hollywood, CA
Redevelop/retenant building including conversion of 2nd floor parking to retail space
20
%

$8


$7

Stabilized
Ellisburg
Cherry Hill, NJ
Property repositioning through retenanting, including new grocer and façade renovation
18
%

$4


$3

Stabilized
Barracks Road
Charlottesville, VA
11,800 square foot multi-tenant pad building
14
%

$4


$4

Stabilized
Huntington Square
East Northport, NY
Infrastructure investment to create additional restaurant capacity
9
%

$1


$1

Stabilized
Total Projects Stabilized in 2014 (3) (4)
9
%

$93


$91

 
 
 
 
 
 
Active Redevelopment Projects
 
 
 
 
Santana Row - Lot 11
San Jose, CA
Addition of 6-story building with 225,500 square feet of office space, 1,500 square feet of retail space, and 670 parking spaces
7.5% - 8.5%

 $110 - $120


$10

2017
The Point
El Segundo, CA
Addition of 90,000 square feet of retail, and 25,000 square feet of office space
8
%

$80


$57

2015/2016
Westgate Center
San Jose, CA
Façade and interior mall renovation, addition of food court and pad site
9
%

$21


$19

2014/2015
Tower Shops
Davie, FL
Addition of 50,000 square foot pad building
12
%

$14


$2

2016
Congressional Plaza
Rockville, MD
New 48 unit rental apartment building
7
%

$14


$1

2016
Willow Lawn
Richmond, VA
Demo interior mall, relocate mall tenants, construct new exterior GLA, and gas station
10
%

$13


$11

2014/2015
Mercer Mall
Lawrenceville, NJ
Addition of 27,000 square feet of space including new in-line space, addition of bank pad and reconfiguration of existing pad site and anchor box
12
%

$12


$8

2015
Quince Orchard
Gaithersburg, MD
Property repositioning through demo of non-functional small shop space, creation of new anchor box, rightsizing of national office products tenant, and creation of new visible small shop space
23
%

$6


$5

2015
East Bay Bridge
Emeryville, CA
Reconfigure two existing spaces consisting of 48,000 square feet to accommodate two new tenants, add two new restaurant tenants, and courtyard renovations
10
%

$4


$2

2015
Flourtown
Flourtown, PA
New 75,000 square foot grocer and new 38,000 square foot movie theater
15
%

$3


$2

2015
The AVENUE at White Marsh
White Marsh, MD
Addition of two new pad sites totaling 13,000 square feet and a drive up ATM
11
%

$3


$0

2016
Pentagon Row
Arlington, VA
Ice rink expansion and 1,500 square feet of new retail space
9
%

$2


$2

2015
Wynnewood
Wynnewood, PA
Conversion of obsolete 2nd floor office space to residential
8
%

$2


$1

2015
Third Street Promenade
Santa Monica, CA
Building modified to convert second floor space to office to accommodate new first floor retail and second floor office tenants
25
%

$1


$1

2015
Troy
Parsippany, NY
New 4,000 square foot pad building
18
%

$1


$0

2015
Brick
Brick, NJ
New restaurant pad building
29
%

$1


$0

2015
Finley Square
Downers Grove, IL
New 2,000 square foot pad building
17
%

$1


$0

2015
Total Active Redevelopment projects (4)
9
%
 $288 - $298


$121

 
Notes:
(1)
There is no guarantee 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 for redevelopment projects generally reflects only the deal specific cash, unleveraged incremental Property Operating Income (POI) generated by the redevelopment and is calculated as Incremental POI divided by incremental cost. Incremental POI is the POI generated by the redevelopment after deducting rent being paid or management's estimate of rent to be paid for the redevelopment space and any other space taken out of service to accommodate the redevelopment. Projected ROI for redevelopment projects 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.

15


Federal Realty Investment Trust
 
 
 
 
 
 
 
 
 
Pike & Rose and Assembly Row
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property (1)
Location
Opportunity
Projected ROI (2)
 
Total Cost (3)
Costs to Date
 
Anticipated Stabilization
Expected Opening Timeframe
Anchor and other significant tenants
Pike & Rose - Phase I
North Bethesda, MD
Ground up mixed use development. Phase I consists of 493 residential units, 151,000 square feet of retail, and 79,000 square feet of office space.
7% - 8%
 
$255 - $265

$217

 
2015/2016
•174 unit residential building now open
•Grand Opening of Retail in Fall 2014
•Office and 319 unit residential building to deliver in 2015
iPic Theater, Sport & Health, Del Frisco's Grille, Summer House
Pike & Rose - Phase II
North Bethesda, MD
Ground up mixed use development. Phase II consists of approximately 185,000 square feet of retail, 264 residential units, and a 177 room hotel.
7% - 8%
 
$195 - $200

$20

 
2018/2019
Projected opening - 2017
Pinstripes, Canopy by Hilton
 
North Bethesda, MD
104 for-sale condominium units
-
(4)
$50 - $53

$4

 
 
 
 
 
 
Total Pike & Rose - Initial Phases
7% - 8%
(4)
$500 - $518

$241

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assembly Row - Phase I
Somerville, MA
Ground up mixed use development. Initial phase consists of 450 residential units (by AvalonBay), in addition to 98,000 square feet of office space and approximately 326,000 square feet of retail space (including a restaurant pad site). A new Orange Line T-Stop will also be constructed by Massachusetts Bay Transit Authority, as part of Phase I.
5% - 6%
 
$190 - $200

$189

(5)
2015/2016
•Opened
•T Station opened September 2014
•Office to deliver in 2015
AMC Theatre, LEGOLAND Discovery Center, Saks Fifth Avenue Off 5th, Nike, Brooks Brothers, Legal on the Mystic, Earl's, Papagayo
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Assembly Row and Pike & Rose
7%
(4)
$690 - $718

$430

 
 
 
 


Notes:
(1)
Anticipated opening dates, total cost, projected return on investment (ROI), anticipated stabilization, and significant tenants for centers under development are subject to adjustment as a result of factors inherent in the development process, some of which may not be under the direct control of the Company. Refer to the Company's filings with the Securities and Exchange Commission on Form 10-K and Form 10-Q for other risk factors.
(2)
Projected ROI for development projects reflects the deal specific cash, unleveraged Property Operating Income (POI) generated by the development and is calculated as POI divided by cost.
(3)
Projected costs include an allocation of infrastructure costs for the entire project.
(4)
Condos shown at cost; the projected ROI for Phase II does not assume any incremental profit on the sale of condominium units; condominiums are assumed to be sold at cost.
(5)
Costs to date include amounts to be reimbursed by third parties.


16


Federal Realty Investment Trust
Future Redevelopment Opportunities
December 31, 2014
 
We have identified the following potential opportunities to create future shareholder value. Executing these opportunities could be subject to government approvals, tenant consents, market conditions, etc. Work on many of these new opportunities is in its preliminary stages and may not ultimately come to fruition. This list will change from time to time as we identify hurdles that cannot be overcome in the near term, and focus on those opportunities that are most likely to lead to the creation of shareholder value over time.
 
 
 
 
 
 
 
Pad Site Opportunities - Opportunities to add both single tenant and multi-tenant stand alone pad buildings at existing retail properties. Many of these opportunities are "by right" and construction is awaiting appropriate retailer demand.
 
Bethesda Row
Bethesda, MD
 
Fresh Meadows
Queens, NY
 
 
Dedham Plaza
Dedham, MA
 
Melville Mall
Huntington, NY
 
 
Eastgate
Chapel Hill, NC
 
Mercer Mall
Lawrenceville, NJ
 
 
Escondido
Escondido, CA
 
Pan Am
Fairfax, VA
 
 
Federal Plaza
Rockville, MD
 
Wildwood
Bethesda, MD
 
 
Flourtown
Flourtown, PA
 
 
 
 
 
 
 
 
 
 
 
Property Expansion or Conversion - Opportunities at successful retail properties to convert previously underutilized land into new GLA and to convert other existing uses into additional retail GLA.
 
Assembly Row
Somerville, MA
 
Mercer Mall
Lawrenceville, NJ
 
 
Barracks Road
Charlottesville, VA
 
Melville Mall
Huntington, NY
 
 
Bethedsa Row
Bethesda, MD
 
Montrose Crossing
Rockville, MD
 
 
Crossroads
Highland Park, IL
 
Third Street Promenade
Santa Monica, CA
 
 
Darien
Darien, CT
 
Wildwood
Bethesda, MD
 
 
Fresh Meadows
Queens, NY
 
 
 
 
 
 
 
 
 
 
 
Residential Opportunities - Opportunity to add residential units to existing retail and mixed-use properties.
 
Barracks Road
Charlottesville, VA
 
Village at Shirlington
Arlington, VA
 
 
Del Mar Village
Boca Raton, FL
 
Towson land parcel
Towson, MD
 
 
Leesburg Plaza
Leesburg, VA
 


 
 
 
 
 
 
 
 
Longer Term Mixed-Use Opportunities
 
Assembly Row (1)
Somerville, MA
 
Pike & Rose (2)
North Bethesda, MD
 
 
Bala Cynwyd
Bala Cynwyd, PA
 
Santana Row (3)
San Jose, CA
 
 
Pike 7
Vienna, VA
 
Santana Row - Winchester Theater site
San Jose, CA
 
 
 
 
 
 
 
 
(1
)
Assembly Row
Remaining entitlements after Phase I include approximately 3.0 million square feet of commercial-use buildings, 1,393 residential units, and a 170 room hotel.
(2
)
Pike & Rose
Remaining entitlements after Phase II include 1 million square feet of commercial-use buildings, and 744 residential units.
(3
)
Santana Row
Current remaining entitlements for this property include 348 residential units and 69,000 square feet of commercial space for retail and office; we are currently seeking additional entitlements.

17



Federal Realty Investment Trust
 
Significant Acquisitions and Disposition
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
2014 and 2015 Significant Acquisitions
 
 
 
 
 
 
 
Date
Property
City/State
GLA
 
Total Gross Value
 
Principal Tenants
 
 
 
 
(in square feet)
 
(in millions)
 
 
 
January 1, 2014
The Grove at Shrewsbury/ Brook 35
Shrewsbury, NJ/ Sea Girt, NJ
286,000
 
$
161.0

(1)
Anthropologie / Banana Republic / Brooks Brothers / Coach / Pottery Barn / Williams-Sonoma
January 2015
San Antonio Center
Mountain View, CA
376,000
 
$
62.2

(2)
Walmart / Kohl's / Trader Joe's / 24 Hour Fitness
 
 
 
 
 
 
 
 
 
(1) Our effective economic interest approximates 84% and was funded by the assumption of our share of $68 million of mortgage debt, 632,000 downREIT operating partnership units, and $13 million of cash.
(2) Our effective interest approximates 80% and was funded by the assumption of our share of $19 million of mortgage debt, 58,000 downREIT operating partnership units, and approximately $27 million of cash ($18 million in one closing and $9 million in a second closing). The mortgage debt assumed has a stated interest rate of 5.27% and matures on January 1, 2016.

2014 Disposition - 30% Owned Joint Venture
 
 
 
 
 
 
Date
Property
City/State
GLA
 
Sales Price
 
Total Gain
Federal Realty Share of Gain
 
 
 
(in square feet)
 
(in millions)
 
(in millions)
(in millions)
July 24, 2014
Pleasant Shops
Weymouth, MA
131,000
 
$
34.3

 
$
14.5

$
4.4




18


Federal Realty Investment Trust
Real Estate Status Report
December 31, 2014
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
 
Grocery Anchor
Other Principal Tenants
 
 
 
 
(in thousands)
 (in thousands)
 
 
 
 
 
 
 
 
  Washington Metropolitan Area
 
 
 
 
 
 
 
 
 
 
 
Bethesda Row

Washington, DC-MD-VA
1993-2006/2008/2010
$
223,211

$
—

533,000

97
%
97
%

$48.08

40,000

 
Giant Food
Apple Computer / Barnes & Noble / Equinox / Landmark Theater
Congressional Plaza
(5)
Washington, DC-MD-VA
1965
80,018


328,000

100
%
99
%
35.73

25,000

 
The Fresh Market
Buy Buy Baby / Container Store / Last Call Studio by Neiman Marcus
Courthouse Center

Washington, DC-MD-VA
1997
4,761


35,000

67
%
67
%
23.53


 


Falls Plaza/Falls Plaza-East

Washington, DC-MD-VA
1967/1972
12,855


144,000

100
%
100
%
33.13

51,000

 
Giant Food
CVS / Staples
Federal Plaza

Washington, DC-MD-VA
1989
65,810



248,000

100
%
100
%
33.78

14,000

 
Trader Joe's
TJ Maxx / Micro Center / Ross Dress For Less
Friendship Center

Washington, DC-MD-VA
2001
37,498


119,000

100
%
100
%
28.12


 

DSW / Maggiano's / Nordstrom Rack / Marshalls
Gaithersburg Square

Washington, DC-MD-VA
1993
25,782


207,000

91
%
91
%
26.55


 

Bed, Bath & Beyond / Ross Dress For Less / Ashley Furniture HomeStore
Graham Park Plaza

Washington, DC-MD-VA
1983
33,869



261,000

92
%
92
%
27.39

58,000

 
Giant Food
L.A. Fitness / Stein Mart
Idylwood Plaza

Washington, DC-MD-VA
1994
16,724


73,000

100
%
100
%
45.04

30,000

 
Whole Foods

Laurel

Washington, DC-MD-VA
1986
52,957



389,000

80
%
79
%
22.11

61,000

 
Giant Food
L.A. Fitness / Marshalls
Leesburg Plaza

Washington, DC-MD-VA
1998
35,635



236,000

93
%
93
%
22.86

55,000

 
Giant Food
Petsmart / Pier 1 Imports / Office Depot
Montrose Crossing
(5)
Washington, DC-MD-VA
2011/2013
153,106

75,867

363,000

99
%
99
%
24.55

73,000

 
Giant Food
Marshalls / Sports Authority / Barnes & Noble / A.C. Moore
Mount Vernon/South Valley/7770 Richmond Hwy
(7)
Washington, DC-MD-VA
2003/2006
82,270



569,000

97
%
95
%
17.23

62,000

 
Shoppers Food Warehouse
Bed, Bath & Beyond / Michaels / Home Depot / TJ Maxx / Gold's Gym / Staples
Old Keene Mill

Washington, DC-MD-VA
1976
6,380


92,000

84
%
84
%
36.35

24,000

 
Whole Foods
Walgreens
Pan Am

Washington, DC-MD-VA
1993
28,801


227,000

100
%
100
%
21.95

65,000

 
Safeway
Micro Center / Michaels
Pentagon Row

Washington, DC-MD-VA
1998/2010
98,480



299,000

97
%
97
%
36.93

45,000

 
Harris Teeter
L.A. Fitness / Bed, Bath & Beyond / DSW
Pike & Rose
(6)
Washington, DC-MD-VA
1982/2007/2012
282,801


92,000

100
%
100
%
44.96


 

iPic Theaters / Gap / Gap Kids
Pike 7 Plaza

Washington, DC-MD-VA
1997
36,228


164,000

100
%
100
%
42.52


 

DSW / Staples / TJ Maxx
Quince Orchard

Washington, DC-MD-VA
1993
33,024



265,000

92
%
84
%
21.86


 

L.A. Fitness / HomeGoods / Staples
Rockville Town Square
(8)
Washington, DC-MD-VA
2006-2007
49,950

4,508

187,000

88
%
87
%
29.82


 

CVS / Gold's Gym
Rollingwood Apartments

Washington, DC-MD-VA
1971
9,844

22,130

N/A

94
%
93
%
N/A


 


Sam's Park & Shop

Washington, DC-MD-VA
1995
12,497


49,000

79
%
79
%
40.60


 

Petco
Tower Shopping Center

Washington, DC-MD-VA
1998
21,403



109,000

92
%
92
%
25.04

26,000

 
L.A. Mart
Talbots / Total Wine
Tyson's Station

Washington, DC-MD-VA
1978
4,520



49,000

95
%
95
%
42.27

11,000

 
Trader Joe's

Village at Shirlington
(8)
Washington, DC-MD-VA
1995
59,933

6,491

261,000

95
%
95
%
34.66

28,000

 
Harris Teeter
AMC Loews / Carlyle Grand Café
Wildwood
 
Washington, DC-MD-VA
1969
18,526

22,420

84,000

87
%
87
%
90.51

20,000

 
Balducci's
CVS
 

Total Washington Metropolitan Area
1,486,883


5,383,000

95
%
94
%
31.51


 
 
 
  Philadelphia Metropolitan Area





 
 
 
 
 
 
Andorra

Philadelphia, PA-NJ
1988
25,653


265,000

96
%
95
%
15.64

24,000

 
Acme Markets
Kohl's / Staples / L.A. Fitness
Bala Cynwyd

Philadelphia, PA-NJ
1993
40,218


295,000

96
%
96
%
23.18

45,000

 
Acme Markets
Lord & Taylor / L.A. Fitness / Michaels
Ellisburg

Philadelphia, PA-NJ
1992
34,155


268,000

97
%
93
%
15.35

47,000

 
Whole Foods
Buy Buy Baby / Stein Mart
Flourtown

Philadelphia, PA-NJ
1980
14,298


160,000

97
%
97
%
20.67

75,000

 
Giant Food

Langhorne Square

Philadelphia, PA-NJ
1985
21,776


219,000

99
%
99
%
15.93

55,000

 
Redner's Warehouse Mkts.
Marshalls
Lawrence Park

Philadelphia, PA-NJ
1980
31,961

25,507

355,000

97
%
97
%
18.65

53,000

 
Acme Markets
Kaplan Career Institute / TJ Maxx / HomeGoods
Northeast

Philadelphia, PA-NJ
1983
24,864


288,000

89
%
89
%
12.56


 

Burlington Coat Factory / Home Gallery / Marshalls
Town Center of New Britain

Philadelphia, PA-NJ
2006
14,631


123,000

85
%
85
%
9.60

36,000

 
Giant Food
Rite Aid
Willow Grove

Philadelphia, PA-NJ
1984
29,961


212,000

99
%
99
%
19.42


 

HomeGoods / Marshalls / Barnes & Noble
Wynnewood

Philadelphia, PA-NJ
1996
40,622

25,994

251,000

98
%
98
%
26.88

98,000

 
Giant Food
Bed, Bath & Beyond / Old Navy / DSW


Total Philadelphia Metropolitan Area
278,139


2,436,000

96
%
95
%
18.25


 
 
 
  California





 
 
 
 
 
 
Colorado Blvd

Los Angeles-Long Beach, CA
1996/1998
18,120


69,000

100
%
100
%
39.48




Pottery Barn / Banana Republic
Crow Canyon Commons

San Ramon, CA
2005/2007
86,735



241,000

98
%
86
%
22.12

31,000


Sprouts
Rite Aid / Sports Authority

19


Federal Realty Investment Trust
Real Estate Status Report
December 31, 2014
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
 
Grocery Anchor
Other Principal Tenants
 
 
 
 
(in thousands)
 (in thousands)
 
 
 
 
 
 
 
 
East Bay Bridge
 
San Francisco-Oakland-Fremont, CA
2012
168,509


438,000

100
%
89
%
15.71

59,000

 
Pak-N-Save
Home Depot / Michaels / Target
Escondido Promenade
(5)
San Diego, CA
1996/2010
47,064


298,000

98
%
98
%
23.58




TJ Maxx / Toys R Us / Dick’s Sporting Goods / Ross Dress For Less
Hermosa Avenue

Los Angeles-Long Beach, CA
1997
5,881


24,000

100
%
100
%
36.92





Hollywood Blvd
(5)
Los Angeles-Long Beach, CA
1999
46,949


187,000

99
%
99
%
30.53

15,000


Fresh & Easy
DSW / L.A. Fitness / Marshalls / La La Land
Kings Court
(7)
San Jose, CA
1998
11,608


80,000

100
%
100
%
31.11

25,000


Lunardi's Super Market
CVS
Old Town Center

San Jose, CA
1997
37,822


95,000

98
%
97
%
37.26




Anthropologie / Banana Republic / Gap
Plaza El Segundo
(5)(9)
Los Angeles-Long Beach, CA
2011
252,559

175,000

380,000

99
%
99
%
37.88

66,000


Whole Foods
Anthropologie / Best Buy / Container Store / Dick's Sporting Goods / H&M / HomeGoods
Santana Row

San Jose, CA
1997
693,563


649,000

98
%
97
%
49.44




Crate & Barrel / Container Store / Best Buy / CineArts Theatre / Hotel Valencia / H&M
Third Street Promenade

Los Angeles-Long Beach, CA
1996-2000
78,348


209,000

100
%
99
%
69.57




J. Crew / Banana Republic / Old Navy / Abercrombie & Fitch
Westgate Center

San Jose, CA
2004
141,881


637,000

98
%
98
%
16.11

38,000


Walmart Neighborhood Market
Target / Burlington Coat Factory / Ross Dress For Less / Michaels / Nordstrom Rack / Nike Factory / J. Crew / Gap Factory Store
150 Post Street
 
San Francisco, CA
1997
37,216

 
104,000

98
%
97
%
44.73

 
 

H&M


Total California

1,626,255


3,411,000

99
%
96
%
32.64



 
 
  NY Metro / New Jersey





 
 
 
 
 
 
Brick Plaza

Monmouth-Ocean, NJ
1989
60,485

26,415

422,000

89
%
89
%
17.12

66,000


A&P
AMC Loews / Barnes & Noble / Sports Authority
Brook 35
(5)(7)
New York-Northern New Jersey-Long Island, NY-NJ-PA
2014
46,056

11,500

98,000

94
%
94
%
33.31


 
 
Ann Taylor / Banana Republic / Coach / Williams-Sonoma
Darien
 
New Haven-Bridgeport-Stamford-Waterbury
2013
48,132

 
95,000

95
%
95
%
28.04

45,000

 
Stop & Shop
Equinox
Fresh Meadows

New York, NY
1997
79,995


404,000

100
%
100
%
29.56

15,000


Island of Gold
AMC Loews / Kohl's / Michaels / Modell's
Greenwich Avenue

New Haven-Bridgeport-Stamford-Waterbury
1995
13,969



36,000

100
%
100
%
61.00




Saks Fifth Avenue
Hauppauge

Nassau-Suffolk, NY
1998
28,113

13,566

134,000

99
%
99
%
27.77

61,000


Shop Rite
A.C. Moore
Huntington

Nassau-Suffolk, NY
1988/2007
43,763


279,000

100
%
100
%
25.66




Buy Buy Baby / Bed, Bath & Beyond / Michaels / Nordstrom Rack
Huntington Square

Nassau-Suffolk, NY
2010
12,382


74,000

93
%
93
%
26.67




Barnes & Noble
Melville Mall

Nassau-Suffolk, NY
2006
69,905



246,000

63
%
63
%
22.49

54,000


Waldbaum's
Dick’s Sporting Goods / Marshalls
Mercer Mall
(8)
Trenton, NJ
2003
115,724

55,741

501,000

98
%
95
%
24.25

75,000


Shop Rite
Bed, Bath & Beyond / DSW / TJ Maxx / Raymour & Flanigan
The Grove at Shrewsbury
(5)(7)
New York-Northern New Jersey-Long Island, NY-NJ-PA
2014
121,537

55,761

192,000

98
%
98
%
41.94

 
 
 
Lululemon / Brooks Brothers / Anthropologie / Pottery Barn / J. Crew / Banana Republic / Williams-Sonoma
Troy

Newark, NJ
1980
29,972


207,000

99
%
99
%
21.17

64,000


Pathmark
L.A. Fitness


Total NY Metro/New Jersey

670,033


2,688,000

94
%
93
%
26.42



 
 
  New England







 
 
 
 
 
 
Assembly Row / Assembly Square Marketplace
(6)
Boston-Cambridge-Quincy, MA-NH
2005-2011/ 2013
433,302


657,000

99
%
97
%
22.49




AMC Theatres / LEGOLAND Discovery Center / Saks Fifth Avenue Off 5th / J. Crew / Nike Factory / Bed, Bath & Beyond / TJ Maxx / Legal on the Mystic
Chelsea Commons

Boston-Cambridge-Quincy, MA-NH
2006-2008
42,708

7,074

222,000

100
%
100
%
11.41

16,000


Sav-A-Lot
Home Depot / Planet Fitness
Dedham Plaza

Boston-Cambridge-Quincy, MA-NH
1993
35,039


241,000

97
%
97
%
15.92

80,000


Star Market

Linden Square

Boston-Cambridge-Quincy, MA-NH
2006
146,734


223,000

96
%
96
%
45.64

50,000


Roche Bros.
CVS
North Dartmouth

Boston-Cambridge-Quincy, MA-NH
2006
9,368


48,000

100
%
100
%
15.71

48,000


Stop & Shop

Queen Anne Plaza

Boston-Cambridge-Quincy, MA-NH
1994
18,050


149,000

99
%
99
%
16.44

50,000


Hannaford
TJ Maxx / HomeGoods

20


Federal Realty Investment Trust
Real Estate Status Report
December 31, 2014
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
 
Grocery Anchor
Other Principal Tenants
 
 
 
 
(in thousands)
 (in thousands)
 
 
 
 
 
 
 
 
Saugus Plaza

Boston-Cambridge-Quincy, MA-NH
1996
14,901


168,000

100
%
100
%
11.66

55,000


Super Stop & Shop
Kmart


Total New England

700,102


1,708,000

99
%
98
%
21.22



 
 
  Baltimore







 
 
 
 
 
 
Governor Plaza

Baltimore, MD
1985
26,717


242,000

97
%
97
%
18.39

16,500


Aldi
Dick’s Sporting Goods
Perring Plaza

Baltimore, MD
1985
29,836


395,000

96
%
96
%
14.23

58,000


Shoppers Food Warehouse
Home Depot / Burlington Coat Factory / Jo-Ann Stores / Micro Center
THE AVENUE at White Marsh
(7)
Baltimore, MD
2007
97,628

52,705

298,000

100
%
100
%
24.07




AMC Loews / Old Navy / Barnes & Noble / A.C. Moore
The Shoppes at Nottingham Square

Baltimore, MD
2007
17,438


32,000

100
%
100
%
46.75





White Marsh Plaza

Baltimore, MD
2007
25,139



80,000

100
%
100
%
21.70

54,000


Giant Food

White Marsh Other

Baltimore, MD
2007
36,526


73,000

100
%
100
%
29.62







Total Baltimore

233,284


1,120,000

98
%
98
%
20.30



 
 
  Chicago







 
 
 
 
 
 
Crossroads

Chicago, IL
1993
31,143


168,000

93
%
93
%
21.39




Golfsmith / Guitar Center / L.A. Fitness
Finley Square

Chicago, IL
1995
32,625


314,000

91
%
90
%
11.58




Bed, Bath & Beyond / Buy Buy Baby / Petsmart
Garden Market

Chicago, IL
1994
12,687


140,000

95
%
95
%
12.68

63,000


Mariano's Fresh Market
Walgreens
North Lake Commons

Chicago, IL
1994
16,570


129,000

89
%
89
%
12.18

77,000


Jewel Osco



Total Chicago

93,025


751,000

92
%
91
%
14.14



 
 
  South Florida







 
 
 
 
 
 
Courtyard Shops

Miami-Ft Lauderdale
2008
40,738



130,000

99
%
99
%
20.62

49,000


Publix

Del Mar Village

Miami-Ft Lauderdale
2008/2014
59,830


194,000

75
%
75
%
15.53

44,000


Winn Dixie
CVS
Tower Shops

Miami-Ft Lauderdale
2011/2014
83,924


374,000

99
%
99
%
18.83




Best Buy / DSW / Old Navy / Ross Dress For Less / TJ Maxx / Ulta


Total South Florida

184,492


698,000

92
%
92
%
18.44



 
 
  Other







 
 
 
 
 
 
Barracks Road

Charlottesville, VA
1985
60,465

35,985

497,000

97
%
97
%
24.01

99,000


Harris Teeter / Kroger
Anthropologie / Bed, Bath & Beyond / Barnes & Noble / Old Navy / Michaels / Ulta
Bristol Plaza

Hartford, CT
1995
29,417


267,000

91
%
91
%
12.89

74,000


Stop & Shop
TJ Maxx
Eastgate

Raleigh-Durham-Chapel Hill, NC
1986
27,712


153,000

97
%
97
%
24.15

13,000


Trader Joe's
Stein Mart
Gratiot Plaza

Detroit, MI
1973
19,218


217,000

99
%
99
%
11.59

69,000


Kroger
Bed, Bath & Beyond / Best Buy / DSW
Houston Street

San Antonio, TX
1998
62,075


172,000

93
%
93
%
24.49




Hotel Valencia / Walgreens
Lancaster
(8)
Lancaster, PA
1980
13,544

4,907

127,000

97
%
97
%
17.03

75,000


Giant Food
Michaels
29th Place

Charlottesville, VA
2007
40,296

4,941

169,000

98
%
98
%
17.31




DSW / HomeGoods / Staples / Stein Mart
Willow Lawn

Richmond-Petersburg, VA
1983
84,058


445,000

92
%
91
%
17.53

66,000


Kroger
Old Navy / Staples / Ross Dress For Less


Total Other

336,785


2,047,000

95
%
95
%
18.93



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grand Total



$
5,608,998

$
626,512

20,242,000

96
%
95
%
$
25.59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 has 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)
The Trust has a controlling financial interest in this property.
(6)
Portion of property is currently under development. See further discussion in the Pike & Rose and Assembly Row schedule.
(7)
All or a portion of the property is 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.
(8)
All or a portion of the property subject to capital lease obligation.
(9)
Includes a 100% owned, 8.1 acre land parcel being used for The Point redevelopment.

21


Federal Realty Investment Trust
 
Retail Leasing Summary (1)
 
December 31, 2014
 
 
 
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 2014
70

 
100
%
 
306,860

 
$
33.27

 
$
27.76

 
$
1,691,334

 
20
%
 
32
%
 
6.9

 
$
3,414,377

 
$
11.13

(7)
3rd Quarter 2014
90

 
100
%
 
372,693

 
$
35.69

 
$
31.55

 
$
1,542,966

 
13
%
 
23
%
 
7.4

 
$
11,381,523

 
$
30.54

(7)
2nd Quarter 2014
109

 
100
%
 
536,819

 
$
34.93

 
$
30.13

 
$
2,572,606

 
16
%
 
30
%
 
7.3

 
$
9,774,179

 
$
18.21

(7)
1st Quarter 2014
71

 
100
%
 
328,355

 
$
31.84

 
$
27.01

 
$
1,583,057

 
18
%
 
29
%
 
7.3

 
$
7,815,348

 
$
23.80

(7)
Total - 12 months
340

 
100
%
 
1,544,727

 
$
34.12

 
$
29.34

 
$
7,389,963

 
16
%
 
29
%
 
7.3

 
$
32,385,427

 
$
20.97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 2014
16

 
23
%
 
125,838

 
$
24.62

 
$
15.62

 
$
1,131,869

 
58
%
 
65
%
 
10.7

 
$
3,323,715

 
$
26.41

(7)
3rd Quarter 2014
38

 
42
%
 
177,145

 
$
33.16

 
$
28.85

 
$
763,753

 
15
%
 
22
%
 
9.0

 
$
11,087,445

 
$
62.59

(7)
2nd Quarter 2014
37

 
34
%
 
224,858

 
$
32.65

 
$
25.06

 
$
1,706,360

 
30
%
 
50
%
 
9.0

 
$
9,260,234

 
$
41.18

(7)
1st Quarter 2014
26

 
37
%
 
176,649

 
$
25.73

 
$
22.16

 
$
629,580

 
16
%
 
27
%
 
10.2

 
$
7,649,978

 
$
43.31

(7)
Total - 12 months
117

 
34
%
 
704,490

 
$
29.61

 
$
23.60

 
$
4,231,562

 
25
%
 
38
%
 
9.5

 
$
31,321,372

 
$
44.46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Lease Summary - Comparable (2) (8)
 
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 2014
54

 
77
%
 
181,022

 
$
39.28

 
$
36.19

 
$
559,465

 
9
%
 
22
%
 
5.3

 
$
90,662

 
$
0.50

 
3rd Quarter 2014
52

 
58
%
 
195,548

 
$
37.98

 
$
33.99

 
$
779,213

 
12
%
 
25
%
 
6.2

 
$
294,078

 
$
1.50

 
2nd Quarter 2014
72

 
66
%
 
311,961

 
$
36.56

 
$
33.79

 
$
866,246

 
8
%
 
20
%
 
6.2

 
$
513,945

 
$
1.65

 
1st Quarter 2014
45

 
63
%
 
151,706

 
$
38.95

 
$
32.66

 
$
953,477

 
19
%
 
31
%
 
5.1

 
$
165,370

 
$
1.09

 
Total - 12 months
223

 
66
%
 
840,237

 
$
37.91

 
$
34.15

 
$
3,158,401

 
11
%
 
23
%
 
5.8

 
$
1,064,055

 
$
1.27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Lease Summary - Comparable and Non-comparable (2) (9)
 
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 2014
 
 
 
 
 
 
 
 
83

 
343,896
 
 
$
34.55

 
7.4

 
$
7,636,392

 
$
22.21

 
3rd Quarter 2014
 
 
 
 
 
 
 
 
108

 
434,165
 
 
$
36.22

 
7.7

 
$
14,045,241

 
$
32.35

 
2nd Quarter 2014
 
 
 
 
 
 
 
 
128

 
622,916
 
 
$
35.83

 
7.7

 
$
11,584,637

 
$
18.60

 
1st Quarter 2014
 
 
 
 
 
 
 
 
78

 
364,034
 
 
$
31.62

 
7.6

 
$
8,445,438

 
$
23.20

 
Total - 12 months
 
 
 
 
 
 
 
 
397

 
1,765,011
 
 
$
34.81

 
7.6

 
$
41,711,708

 
$
23.63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 contractual rent for the first 12 months of the term.
(6)
See Glossary of Terms.
(7)
Approximately $0.4 million ($0.86 per square foot) in 4th Quarter 2014, $6.1 million ($11.89 per square foot) in 3rd Quarter 2014, $5.6 million ($7.30 per square foot) in 2nd Quarter 2014, and $5.1 million ($12.38 per square foot) in 1st Quarter 2014 of the Tenant Improvements & Incentives are for properties under active redevelopment (e.g. Westgate Center, Willow Lawn, Hollywood Boulevard) and are included in the Projected Cost for those projects on the Summary of Redevelopment Opportunities.
(8)
Renewal leases represent expiring leases rolling over with the same tenant in the same location. All other leases are categorized as new.
(9)
The Number of Leases Signed, GLA Signed, Contractual Rent Per Sq Ft and Weighted Average Lease Term columns include information for leases signed at our Assembly Row and Pike & Rose projects. The Tenant Improvements & Incentives and Tenant Improvements & Incentives Per Sq Ft columns do not include tenant improvements and incentives on leases signed for those projects; these amounts for leases signed for Assembly Row and Pike & Rose are included in the Projected Cost column for those projects shown on the Pike & Rose and Assembly Row schedule.

22


Federal Realty Investment Trust
Lease Expirations
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Assumes no exercise of lease options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anchor Tenants (1)
 
Small Shop Tenants
 
Total
Year
 Expiring SF
 % of Anchor SF
 Minimum Rent PSF (2)
 
 Expiring SF
 % of Small Shop SF
 Minimum Rent PSF (2)
 
 Expiring SF (4)
 % of Total SF
 Minimum Rent PSF (2)
2015
368,000

3
%
$
15.28

 
835,000

10
%
$
30.22

 
1,203,000

6
%
$
25.65

2016
836,000

8
%
$
17.31

 
1,071,000

13
%
$
34.86

 
1,907,000

10
%
$
27.17

2017
1,413,000

13
%
$
16.97

 
1,188,000

15
%
$
35.98

 
2,602,000

14
%
$
25.65

2018
1,443,000

13
%
$
14.80

 
982,000

12
%
$
39.28

 
2,425,000

13
%
$
24.71

2019
1,761,000

16
%
$
18.26

 
858,000

11
%
$
36.18

 
2,619,000

14
%
$
24.13

2020
818,000

8
%
$
17.22

 
653,000

8
%
$
36.12

 
1,471,000

8
%
$
25.61

2021
706,000

6
%
$
18.89

 
523,000

6
%
$
39.73

 
1,230,000

6
%
$
27.76

2022
815,000

7
%
$
16.56

 
442,000

5
%
$
39.74

 
1,257,000

6
%
$
24.71

2023
444,000

4
%
$
21.85

 
465,000

6
%
$
37.60

 
909,000

5
%
$
29.91

2024
519,000

5
%
$
17.25

 
483,000

6
%
$
41.51

 
1,002,000

5
%
$
28.95

Thereafter
1,892,000

17
%
$
19.07

 
656,000

8
%
$
34.98

 
2,547,000

13
%
$
23.17

Total (3)
11,015,000

100
%
$
17.54

 
8,156,000

100
%
$
36.46

 
19,172,000

100
%
$
25.59

 
 
 
 
 
 
 
 
 
 
 
 
Assumes all lease options are exercised
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anchor Tenants (1)
 
Small Shop Tenants
 
Total
Year
 Expiring SF
 % of Anchor SF
 Minimum Rent PSF (2)
 
 Expiring SF
 % of Small Shop SF
 Minimum Rent PSF (2)
 
 Expiring SF (4)
 % of Total SF
 Minimum Rent PSF (2)
2015
78,000

1
%
$
31.58

 
583,000

7
%
$
29.11

 
661,000

4
%
$
29.40

2016
62,000

1
%
$
21.19

 
523,000

6
%
$
37.45

 
585,000

3
%
$
35.74

2017
210,000

2
%
$
23.63

 
620,000

8
%
$
38.69

 
831,000

5
%
$
34.88

2018
297,000

3
%
$
15.32

 
491,000

6
%
$
43.24

 
788,000

4
%
$
32.72

2019
429,000

4
%
$
20.41

 
487,000

6
%
$
39.00

 
916,000

5
%
$
30.29

2020
143,000

1
%
$
19.89

 
491,000

6
%
$
35.48

 
634,000

3
%
$
31.96

2021
185,000

2
%
$
12.54

 
629,000

8
%
$
37.64

 
815,000

4
%
$
31.93

2022
135,000

1
%
$
24.11

 
517,000

6
%
$
33.84

 
652,000

3
%
$
31.83

2023
348,000

3
%
$
16.81

 
455,000

6
%
$
38.31

 
803,000

4
%
$
29.00

2024
283,000

2
%
$
16.40

 
472,000

6
%
$
38.30

 
754,000

4
%
$
30.09

Thereafter
8,845,000

80
%
$
17.22

 
2,888,000

35
%
$
35.48

 
11,733,000

61
%
$
21.71

Total (3)
11,015,000

100
%
$
17.54

 
8,156,000

100
%
$
36.46

 
19,172,000

100
%
$
25.59

 
 
 
 
 
 
 
 
 
 
 
 
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, 2014.
(3)
Represents occupied square footage as of December 31, 2014.
(4)
Individual items may not add up to total due to rounding.



23


Federal Realty Investment Trust
 
 
 
 
 
 
 
Portfolio Leased Statistics
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Overall Portfolio Statistics (1)
At December 31, 2014
 
At December 31, 2013
 
 
 
 
 
 
 
 
 
Type
 
Size

Leased

Leased %

 
Size

Leased

Leased %

 
 
 
 
 
 
 
 
 
Retail Properties (2) (3) (4) (sf)
20,242,000

19,353,000

95.6
%
 
19,544,000

18,714,000

95.8
%
 
 
 
 
 
 
 
 
 
Residential Properties (units)
1,500

1,416

94.4
%
 
1,169

1,108

94.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same Center Statistics (1)
At December 31, 2014
 
At December 31, 2013
 
 
 
 
 
 
 
 
 
Type
 
Size

Leased

Leased %

 
Size

Leased

Leased %

 
 
 
 
 
 
 
 
 
Retail Properties (2) (4) (5) (sf)
16,866,000

16,166,000

95.8
%
 
16,887,000

16,176,000

95.8
%
 
 
 
 
 
 
 
 
 
Residential Properties (units)
1,058

1,007

95.2
%
 
1,058

997

94.2
%
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
(1)
See Glossary of Terms.
(2)
Leasable square feet excludes redevelopment square footage not yet placed in service.
(3)
At December 31, 2014 leased percentage was 98.6% for anchor tenants and 91.8% for small shop tenants.
(4)
Occupied percentage was 94.7% and 95.1% at December 31, 2014 and 2013, respectively and same center occupied percentage was 95.4% and 95.3% at December 31, 2014 and 2013, respectively.
(5)
Excludes properties purchased, sold or under redevelopment or development.



24


Federal Realty Investment Trust
Summary of Top 25 Tenants
December 31, 2014
 
 
 
 
 
 
 
 
Rank

 
Tenant Name
Annualized Base Rent

Percentage of Total Annualized Base Rent (4)

Tenant GLA

Percentage of Total GLA (4)

Number of Stores Leased

 
 
 
 
 
 
 
 
1

 
Ahold USA, Inc.
$
15,258,000

3.11
%
898,000

4.44
%
15

2

 
Bed, Bath & Beyond, Inc.
$
12,754,000

2.60
%
736,000

3.64
%
20

3

 
TJX Companies, The
$
12,350,000

2.52
%
767,000

3.79
%
23

4

 
Gap, Inc., The
$
10,815,000

2.20
%
321,000

1.59
%
22

5

 
L.A. Fitness International LLC
$
8,332,000

1.70
%
371,000

1.83
%
9

6

 
CVS Corporation
$
6,780,000

1.38
%
189,000

0.93
%
16

7

 
DSW, Inc.
$
5,816,000

1.18
%
200,000

0.99
%
9

8

 
Home Depot, Inc.
$
5,435,000

1.11
%
438,000

2.16
%
5

9

 
Best Buy Stores, L.P.
$
5,427,000

1.11
%
188,000

0.93
%
5

10

 
Barnes & Noble, Inc.
$
5,117,000

1.04
%
214,000

1.06
%
8

11

 
Michaels Stores, Inc.
$
4,636,000

0.94
%
266,000

1.31
%
11

12

 
Whole Foods Market, Inc.
$
4,425,000

0.90
%
167,000

0.83
%
4

13

 
Dick's Sporting Goods, Inc.
$
4,375,000

0.89
%
206,000

1.02
%
5

14

 
AMC Entertainment Inc.
$
4,277,000

0.87
%
229,000

1.13
%
5

15

 
Staples, Inc.
$
3,800,000

0.77
%
178,000

0.88
%
9

16

 
Riverbed Technology, Inc.
$
3,705,000

0.75
%
83,000

0.41
%
2

17

 
Nordstrom, Inc.
$
3,654,000

0.74
%
135,000

0.67
%
4

18

 
Ross Stores, Inc.
$
3,581,000

0.73
%
208,000

1.03
%
7

19

 
Kroger Co., The
$
3,528,000

0.72
%
311,000

1.54
%
7

20

 
Sports Authority Inc., The
$
3,418,000

0.70
%
194,000

0.96
%
5

21

 
Wells Fargo Bank, N.A.
$
3,298,000

0.67
%
51,000

0.25
%
14

22

 
PETsMART, Inc.
$
3,246,000

0.66
%
150,000

0.74
%
6

23

 
Dress Barn, Inc., The
$
3,222,000

0.66
%
133,000

0.66
%
19

24

 
Bank of America, N.A.
$
3,194,000

0.65
%
64,000

0.32
%
19

25

 
A.C. Moore, Inc.
$
3,107,000

0.63
%
161,000

0.80
%
7

 
 
Totals - Top 25 Tenants
$
143,550,000

29.24
%
6,858,000

33.88
%
256

 
 
 
 
 
 
 
 
 
 
Total: (1)
$
490,882,000

(2)
20,242,000

(3)
2,650

 
 
 
 
 
 
 
 
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 aggregate, annualized in-place contractual (defined as cash-basis including adjustments for concessions) minimum rent for all occupied spaces as of December 31, 2014.
(3
)
 
Excludes redevelopment square footage not yet placed in service.
(4
)
 
Individual items may not add up to total due to rounding.



25


Federal Realty Investment Trust
 
 
 
Reconciliation of Net Income to FFO Guidance
 
 
 
December 31, 2014
 
 
 
 
 
 
 
 
2015 Guidance
 
(Dollars in millions except
 
 per share amounts) (1)
Funds from Operations available for common shareholders (FFO)
 
 
 
Net income
$
209

 
$
214

Net income attributable to noncontrolling interests
(9
)
 
(9
)
Gain on sale of real estate
—

 
—

Depreciation and amortization of real estate & joint venture real estate assets
155

 
155

Amortization of initial direct costs of leases
13

 
13

Funds from operations
367

 
373

Dividends on preferred shares
(1
)
 
(1
)
Income attributable to operating partnership units
4

 
4

Income attributable to unvested shares
(1
)
 
(1
)
FFO
$
369

 
$
375

 
 
 
 
Weighted average number of common shares, diluted
70.2

 
70.2

 
 
 
 
FFO per diluted share
$
5.26

 
$
5.34

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



26


Federal Realty Investment Trust
Summarized Income Statements and Balance Sheets - 30% Owned Joint Venture
December 31, 2014
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
 
(in thousands)
CONSOLIDATED INCOME STATEMENTS
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
   Rental income
$
4,369

 
$
4,955

 
$
18,190

 
$
19,030

   Other property income
39

 
39

 
139

 
179

 
4,408

 
4,994

 
18,329

 
19,209

Expenses
 
 
 
 
 
 
 
   Rental
790

 
907

 
3,701

 
3,516

   Real estate taxes
500

 
636

 
2,247

 
2,483

   Depreciation and amortization
1,297

 
1,407

 
5,678

 
5,506

 
2,587

 
2,950

 
11,626

 
11,505

   Operating income
1,821

 
2,044

 
6,703

 
7,704

Interest expense
(522
)
 
(840
)
 
(2,759
)
 
(3,363
)
Net income before gain on sale of real estate
1,299

 
1,204

 
3,944

 
4,341

Gain on sale of real estate
—

 
—

 
14,507

 
—

Net income
$
1,299

 
$
1,204

 
$
18,451

 
$
4,341

 
 
 
 
 
 
 
 
 
December 31,
 
 
 
 
 
2014
 
2013
 
 
 
 
 
(in thousands)
 
 
 
 
CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
Real estate, at cost
$
187,507

 
$
210,703

 
 
 
 
  Less accumulated depreciation and amortization
(38,304
)
 
(39,836
)
 
 
 
 
Net real estate
149,203

 
170,867

 
 
 
 
Cash and cash equivalents
2,864

 
2,210

 
 
 
 
Other assets
5,346

 
5,668

 
 
 
 
TOTAL ASSETS
$
157,413

 
$
178,745

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND PARTNERS' CAPITAL
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
    Mortgages payable
$
34,385

 
$
56,922

 
 
 
 
    Other liabilities
3,673

 
4,100

 
 
 
 
Total liabilities
38,058

 
61,022

 
 
 
 
Partners' capital
119,355

 
117,723

 
 
 
 
TOTAL LIABILITIES AND PARTNERS' CAPITAL
$
157,413

 
$
178,745

 
 
 
 

 

27


Federal Realty Investment Trust
Summary of Outstanding Debt and Debt Maturities - 30% Owned Joint Venture
December 31, 2014
 
 
 
Stated Interest Rate as of December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturity
 
Balance
 
 
 
 
 
 
(in thousands)
 
 
Mortgage Loans
 
 
 
 
 
 
Secured Fixed Rate
 
 
 
 
 
 
Barcroft Plaza
7/1/2016
5.99
%
(a)
20,785

 
 
Greenlawn Plaza
7/1/2016
5.90
%
 
13,600

 
 
 
 
Total Fixed Rate Debt
 
 
$
34,385

 
 
 
 
 
 
 
 
 
 
Debt Maturities
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
Year

Scheduled Amortization
Maturities
Total
 
Percent of Debt Maturing
 
Cumulative Percent of Debt Maturing
2015

$
—

$
—

$
—

 
—
%
 
—
%
2016

—

34,385

34,385

 
100.0
%
 
100.0
%
Total

$
—

$
34,385

$
34,385

 
100.0
%
 
 

Notes:
(a)
The stated interest rate represents the weighted average interest rate for two mortgage loans secured by this property. The loan balance represents the 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%.

28



Federal Realty Investment Trust
Real Estate Status Report - 30% Owned Joint Venture
December 31, 2014
Property Name
 
MSA Description
 Year Acquired
Real Estate at Cost
Mortgage Obligation
GLA
% Leased
% Occupied (1)
Avg Rent PSF (2)
 Grocery Anchor GLA
 
Grocery Anchor
Other Principal Tenants
 
 
 
 
(in thousands)
 (in thousands)
 
 
 
 
 
 
 
 
  Washington Metropolitan Area
 
 
 
 
 
 
 
 
 
 
 
Barcroft Plaza
 
Washington, DC-MD-VA
2006-2007
$
34,797

$
20,785

100,000

79
%
79
%
$
24.14

46,000

 
Harris Teeter
Bank of America
Free State Shopping Center
 
Washington, DC-MD-VA
2007
66,833


279,000

87
%
85
%
16.54

73,000

 
Giant Food
TJ Maxx / Ross Dress For Less / Office Depot
Plaza del Mercado
 
Washington, DC-MD-VA
2004
21,905


96,000

62
%
62
%
35.56


 

CVS
 
 
Total Washington Metropolitan Area
123,535


475,000

80
%
80
%
21.15


 


  New York / New Jersey
 
 
 
 
 
 
 
 
 
 
 
 
 
Greenlawn Plaza
 
Nassau-Suffolk, NY
2006
20,761

13,600

106,000

95
%
95
%
17.38

46,000

 
Waldbaum's
Tuesday Morning

 
Total New York / New Jersey

20,761


106,000

95
%
95
%
17.38


 


 New England
 
 
 
 
 
 
 
 
 
 
 
 
 
Atlantic Plaza
 
Boston-Worcester-Lawrence-Lowell-Brockton, MA
2004
20,182


123,000

88
%
70
%
17.10

64,000

 
Stop & Shop

Campus Plaza
 
Boston-Worcester-Lawrence-Lowell-Brockton, MA
2004
23,029


116,000

100
%
100
%
14.70

46,000

 
Roche Bros.
Burlington Coat Factory

 
Total New England

43,211


239,000

94
%
85
%
15.74


 
 
 
Grand Totals
 
 
 
$
187,507

$
34,385

820,000

86
%
83
%
$
18.99


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) For purposes of this schedule, "occupied" refers to spaces where the lease term has commenced.
 
 
 
(2) 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.
 
 
 


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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 it approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDA and Adjusted EBITDA for the three months and year ended December 31, 2014 and 2013 is as follows:

 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2014
 
2013
 
2014
 
2013
 
(in thousands)
 
(in thousands)
Net income
$
37,279

 
$
29,603

 
$
172,289

 
$
167,608

Depreciation and amortization
43,411

 
41,213

 
170,814

 
161,099

Interest expense
24,169

 
24,663

 
93,941

 
104,977

Early extinguishment of debt
10,545

 
9,905

 
10,545

 
13,304

Other interest income
(49
)
 
(268
)
 
(94
)
 
(433
)
EBITDA
115,355

 
105,116

 
447,495

 
446,555

Gain on sale of real estate
—

 
—

 
(4,401
)
 
(28,855
)
Adjusted EBITDA
$
115,355

 
$
105,116

 
$
443,094

 
$
417,700


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: net income, computed in accordance with GAAP plus real estate related depreciation and amortization 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 primarily because it 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.

In addition to FFO, we have also included FFO excluding the "early extinguishment of debt" charges which relate to the early redemption of our 5.65% senior notes and East Bay Bridge mortgage loan in 2014, and our 5.40% senior notes, 5.95% senior notes, and 7.50% mortgage loans in 2013. We believe the unusual nature of these charges, being make-whole payments on the remaining principal and interest on the redeemed notes/mortgages, is worthy of separate evaluation and consequently have provided both relevant metrics.

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 and, except for redevelopments, 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.

30