Federal Realty Investment Trust Q1 FY2026 earnings call

• Don Woods mentioned combination of stepped-up capital recycling, strong incremental cash flow from near-record leasing, and contributions from previous years' development spend led to FFO per share growth. Lease termination fees were higher, but offset by some higher expenses. Capital recycling closed sales and made an acquisition. Leasing was strong with over 100 leases and 649,000 feet of deals done. Residential development adding units and operating income. Office portfolio highly leased. - Wendy Sears said strong quarter across board, record leasing, strong comparable POI growth despite winter conditions, lease rate held firm, foot traffic up, pipeline robust. - Dan Gugliamone talked about FFO per share growth, drivers of outperformance, balance sheet including recast of revolving credit facility, asset sales, and guidance.

FFO per share was $1.88, besting a year ago's quarter by 10.6%. Lease termination fees were higher by $2.8 million this quarter compared to a year ago. Capital recycling saw closing of sales of Missouri Apartments at Santana Row and Courthouse Shopping Center for combined proceeds of $159 million and acquisition of Congressional North Shopping Center for $72 million. Overall portfolio was 96.1% leased and 93.8% occupied. Comparable POI growth was 4.7% for the quarter. Cash basis comparable growth was 5.1% for the quarter. Cash basis min rent increased 3.6% of the quarter. Residential development: Blair at Ballot Kenwood is 34% leased, 301 Washington Street and Hoboken under construction, Lot 12 at Santana Row under construction, 261 units at Willow Grove Shopping Center outside of Philadelphia with demolition happening. Office portfolio 99% overall leased.

Raising guidance for both NERI and Core FFO to $746 to $755 per share. Comparable POI growth outlook improving to 3.8% to 3.5% from previous range. Expect occupancy trajectory in first three quarters of 2026 in mid to upper 93% range, climbing to mid to upper 94% range by year end. Expected incremental POI for redevelopment to $14 to $15 million, outlook on term fees to $8 to $9 million. Quarterly FFO cadence: second quarter 183 to 186, third quarter 184 to 187, fourth quarter in low to mid-190s per share.

Discussion of risk factors that may affect financial condition and operational results are in the earnings release and supplemental reporting package, annual report filed on Form 10-K, and other financial disclosure documents. Weather-related expenses like snow removal and energy were higher this quarter due to rough winter.

Q: Samir Canal asked about K-shaped economy and relative strength vs peers.

A: Don Woods talked about high-quality real estate, purchasing power around shopping centers.

Q: Michael Goldsmith asked about capital recycling inning and contribution to POI.

A: Don Woods and Dan Gugliamone talked about continuous capital recycling, core portfolio growth, acquisitions and redevelopment as drivers.

Q: Juan Sanabria asked about SAMHSA NOI trajectory and occupancy cadence.

A: Response about occupancy levels and comparable growth cadence.

Q: Cooper Clark asked about multifamily DISPO pipeline and acquisition front.

A: Don Woods and Jan Sweetnam talked about residential property disposition, joint ventures, acquisition pipeline.

Q: Michael Griffin asked about acquisitions at Kingstown and Congressional and acquisition pipeline.

A: Don Woods and Jan Sweetnam talked about strategic acquisitions, skill set in identifying tenant demand.

Q: Greg McGinnis asked about starting ground-up office development.

A: Don Woods said no spec basis, only bill to suit.

Q: Craig Mailman asked about bridging FFO and quarterly cadence.

A: Dan Gugliamone talked about seasonality, refinancing headwinds, leasing up residential product.

Q: Hendel St. Just asked about earnings trajectory and green bond refinancing.

A: Don Woods mentioned investor day for earnings trajectory, and green bond refinancing opportunistic.

Q: Alexander Goldfarb asked about Virginia governor and impact.

A: Don Woods talked about diversified geographies and assets.

Q: Ometeo Akosanya asked about occupancy rates.

A: Dan Gugliamone talked about occupancy expectations.

Q: Floris Van Dykem asked about Assembly Row.

A: Don Woods talked about Assembly Row's status, remaining lots, and power center entitlement.

Q: Mike Muller asked about selling Courthouse Center.

A: Don Woods said it was a small unanchored strip not part of critical mass.

Q: Follow-up from Samir Cano asked about pulled forward items.

A: Dan Gugliamone said it was FAS 141 benefits pulled forward.

Q: Follow-up from Omoteo Akosanya asked about cost reimbursement rates.

A: Dan Gugliamone said it was due to weather impact.

Q: Follow-up from Alexander Goldfarb asked about guidance revision.

A: Dan Gugliamone said he didn't refer to forecasting positive revision going forward.