Federal Realty Beats Q1 FFO & Revenue Estimates, Raises 2025 View

Federal Realty Investment Trust’s FRT first-quarter 2025 funds from operations (FFO) per share of $1.70 surpassed the Zacks Consensus Estimate by a cent. This also marked a rise of 3.7% from the year-ago quarter’s tally of $1.64. Reflecting positive sentiments, shares were up more than 1% in pre-market trading.

Results reflect healthy leasing activity and occupancy levels at its properties. Following better-than-expected first results, Federal Realty has raised its 2025 FFO outlook slightly.

Quarterly revenues of $309.2 million exceeded the consensus mark of $306.9 million and improved 6.1% from the year-ago quarter’s tally. Federal Realty generated 2.8% comparable property operating income (POI), excluding lease termination fees and prior-period rents collected. 

Per Donald C. Wood, chief executive officer, "We started the year with strong operating results and are encouraged to see continuing elevated foot traffic across our properties.” 

Behind FRT’s Headlines

In terms of leasing, during the reported quarter, Federal Realty signed 91 leases for 429,865 square feet of retail space. On a comparable space basis, the company signed 87 leases for 368,759 square feet of space at an average rent of $40.63 per square foot. This denotes cash-basis rollover growth of 6% and 17% on a straight-line basis. 

On the operational front, the comparable portfolio occupancy rate was up 180 basis points (bps) year over year to 93.6% as of March 31, 2025. The portfolio was 95.9% leased as of the same date, reflecting an increase of 160 bps year over year. It was ahead of our estimate of 95.7%. Moreover, Federal Realty’s residential properties were 94.9% leased as of the same date.

Sustained robust leasing activity for small shops resulted in a quarter-ending lease rate of 93.5%, marking an increase of 210 bps year over year. The anchor tenant leased rate was 96.8%, up 100 bps year over year.

Federal Realty extended its $600 million unsecured term loan maturity date to March 2028, plus two one-year extension options, and increased the potential size to $750 million. It ended the quarter with nearly $1.5 billion of total liquidity. It exited the first quarter of 2025 with cash and cash equivalents of $109.2 million, down from $123.4 million recorded at the end of 2024.

Portfolio Activity of FRT

Federal Realty closed on the prior announced $123.5 million acquisition of Del Monte Shopping Center in Monterey, CA, on Feb. 25, 2025.

FRT’s Guidance

For 2025, Federal Realty expects its FFO per share in the range of $7.11-$7.23, up from $7.10-$7.22 guided earlier. This represents about 6% growth at the increased midpoint of $7.17. The Zacks Consensus Estimate of $7.16 also lies within this range.

The retail REIT’s full-year guidance is backed by assumptions for comparable properties growth of 3%-4%, incremental redevelopment/expansion POI of $3-$5 million, disposed properties 2024 POI of $5 million and lease termination fees of $4-$5 million. The company anticipates occupancy to remain stable in the second quarter, with growth resuming in the second half of the year, reaching the mid-94% range on a comparable basis by the end of 2025.

FRT Announces Dividend

Concurrent with the first-quarter earnings release, Federal Realty announced a regular quarterly cash dividend of $1.10 per share, indicating an annual rate of $4.40 per share. The dividend will be paid out on July 15 to shareholders of record as of July 1, 2025.

Federal Realty currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Federal Realty Investment Trust Price, Consensus and EPS Surprise

Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote

Upcoming Earnings Releases

We now look forward to the earnings release of other retail REITs — Simon Property Group SPG and The Macerich Company MAC — which are slated to report on May 12.

The Zacks Consensus Estimate for Simon Property’s first-quarter 2025 FFO per share has been revised a cent upward over the past month to $2.91 on revenues of $1.48 billion. SPG currently has a Zacks Rank #3. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Zacks Consensus Estimate for Macerich’s first-quarter 2025 FFO per share stands at 31 cents, indicating no increase year over year, on revenues of $218.9 million. MAC currently has a Zacks Rank #3. 

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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