---

---

---

•	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.

---

•	Generated earnings per diluted share of $0.78 for the quarter compared to $0.63 in second quarter 2015.

•	Generated FFO per diluted share of $1.42 for the quarter compared to $1.06 in second quarter 2015 ($1.33 excluding prepayment premiums in second quarter 2015).

•	Generated same center property operating income growth of 3.5% (or 2.9% when properties under redevelopment are excluded).

•	Signed leases for 372,778 sf of comparable space at an average rent of $38.21 psf and achieved cash basis rollover growth on comparable spaces of 12%.

•	Named Dan Guglielmone as Executive Vice President, Chief Financial Officer and Treasurer effective August 15, 2016.

•	Increased the regular quarterly dividend rate on common shares to $0.98 per share, representing the 49th consecutive year of common dividend increases.

•	Subsequent to quarter end, opportunistically issued $250 million aggregate principal amount of 3.625% senior unsecured notes due August 1, 2046.

---

---

•	July 12, 2016 - Federal Realty closed on the public offering of $250 million aggregate principal amount of 3.625% senior unsecured notes due August 1, 2046. The notes were offered at 97.756% of the principal amount with a yield to maturity of 3.750%

•

July 13, 2016 - Federal Realty announced the appointment of Dan Guglielmone to the position of Executive Vice President, Chief Financial Officer and Treasurer effective August 15, 2016. Mr. Guglielmone will be a member of the Firm's Executive and Investment Committees and will be responsible for all capital markets activity along with east coast acquisitions. In addition, he will be responsible for the oversight of the accounting, financial reporting and investor relations functions. Dan will be based at Federal's headquarters in Rockville, Md.

---

•	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.

---

---

---

1)	See Glossary of Terms.

2)

If the $19.1 million early extinguishment of debt charge in 2015 was excluded, our FFO for the three and six months ended June 30, 2015 would have been $92.9 million and $180.2 million, respectively, and FFO per diluted share would have been $1.33 and $2.59, respectively. Additionally, the dividend payout ratio as a percentage of FFO for the three and six months ended June 30, 2015 would have been 65% and 66%, respectively.

---

1)	Amounts include 768,765 and 934,405 operating partnership units outstanding at June 30, 2016 and 2015, 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 debt issuance costs from our consolidated balance sheet. The June 30, 2016 and 2015 balances are net of debt issuance costs of $14.0 million and $13.6 million, respectively, reflecting our January 1, 2016 adoption of ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs." See Note 2 of our June 30, 2016 Form 10-Q for additional information regarding the adoption.

4)	Fixed rate debt includes our $275.0 million term loan as the rate is effectively fixed by two interest rate swap agreements.

---

1)

Minimum rents include $2.7 million and $1.8 million for the three months ended June 30, 2016 and 2015, respectively, and $4.7 million and $3.1 million for the six months ended June 30, 2016 and 2015, respectively, to recognize minimum rents on a straight-line basis. In addition, minimum rents include $0.4 million and $0.6 million for the three months ended June 30, 2016 and 2015, respectively, and $0.7 million and $1.3 million for the six months ended June 30, 2016 and 2015, respectively, to recognize income from the amortization of in-place leases.

---

---

1)	We entered into two interest rate swap agreements to fix the variable rate portion of our $275.0 million term loan at 1.72% 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.

2)	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 Escondido Promenade property is not encumbered by a lien.

3)

The maximum amount drawn under our revolving credit facility during the three and six months ended June 30, 2016 was $171.0 million and $251.5 million, respectively. The weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, for the three and six months ending June 30, 2016, was 1.26% and 1.29%, respectively. On April 20, 2016, we upsized our existing $600.0 million revolving credit facility to $800.0 million and extended the maturity date to April 20, 2020. We also lowered the spread over LIBOR to 82.5 basis points, from 90 basis points.

4)	The weighted average effective interest rate includes the amortization of any deferred financing fees, discounts and premiums, and debt issuance costs, if applicable, except as described in Note 6.

5)

The weighted average effective interest rate excludes $0.6 million in quarterly financing fees and quarterly debt fee amortization on our revolving credit facility which had a $95.0 million balance on June 30, 2016. 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 1. The term loan is included in fixed rate debt.

6)

Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount/premium and debt costs and the portion of rent expense representing an interest factor. EBITDA includes a gain on the sale of real estate of $1.8 million for the three months ended June 30, 2016, and a gain on change in control of interests and sale of real estate of $27.5 million for the six months ended June 30, 2016. For the three and six months ended June 30, 2015, EBITDA includes a gain on sale of real estate of $11.5 million. Adjusted EBITDA is reconciled to net income in the Glossary of Terms.

7)	Fixed charges for the three and six months ended June 30, 2015 exclude the $19.1 million early extinguishment of debt charge related to the make-whole premium paid as part of the early redemption of the 6.20% senior notes.

---

1)	As of June 30, 2016, there was $95.0 million outstanding on our $800.0 million revolving credit facility.

2)	The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized net premium and debt issuance costs on certain mortgage loans, notes payable, and senior notes as of June 30, 2016.

3)	The weighted average rate reflects the weighted average interest rate on debt maturing in the respective year.

4)	The weighted average rate excludes $0.6 million in quarterly financing fees and quarterly debt fee amortization on our revolving credit facility.

5)	On July 12, 2016, we issued $250.0 million of fixed rate senior notes that mature on August 1, 2046 and bear interest at 3.625%. The net proceeds from this note offering were used to repay the outstanding balance on our revolving credit facility, as well as other general expenses.

---

(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 generally the year in which 95% occupancy of the redeveloped space is achieved.

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

---

---

---

---

---

---

---

---

---

---

---

---

---