Original source text
, /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported its results for the third quarter ended September 30, 2026. For the three months ended September 30, 2026 and 2025, net income available for common shareholders per diluted share was $0.74 and $0.69, respectively. Operating income for the same periods was $116.9 million and $110.7 million, respectively.
Highlights for the third quarter include:
Generated Nareit-defined funds from operations available to common shareholders (Nareit FFO) and Core funds from operations available to common shareholders (Core FFO) per diluted share of $1.87 each for the quarter, a 5.6% increase year-over-year.Signed 117 leases for 532,220 square feet of comparable retail space with rent growth of 14% on a cash basis and 25% on a straight-line basis.On a trailing twelve-month basis, signed 447 leases for 2,601,255 square feet of comparable retail space with rent growth of 14% on a cash basis and 25% on a straight-line basis.Generated Comparable Property property operating income ("Comparable Property POI") growth of 2.5% and Adjusted Comparable Property POI growth (excluding straight-line rents and amortization of in-place leases) of 4.0%.Reported overall portfolio occupancy of 93.8% and a leased rate of 96.5% at quarter end, with:Occupancy flat and leased rate up 40 basis points sequentially.Occupancy flat and leased rate up 110 basis points year-over-year.Continued strong small shop leased rate, ending the quarter at 94.1% leased, representing an increase of 20 basis points sequentially and 80 basis points year-over-year.Issued $460.0 million of 3.50% exchangeable senior notes due August 15, 2031.Repurchased 869,748 shares at a weighted average share price of $108.82 for approximately $95 million through October 9, 2026.Subsequent to quarter end, acquired The Summit, an 870,000-square-foot dominant retail center in Birmingham, AL, with a diverse mix of approximately 120 tenants for $508.0 million.Tightened guidance for 2026 earnings per diluted share to $4.23 to $4.27.Raised and tightened guidance for both 2026 Nareit FFO and Core FFO per diluted share to $7.54 to $7.58, representing over 7% Core FFO growth at the midpoint year-over-year."This was a really powerful quarter from a company that uses all the tools in its toolbox to make its portfolio more and more valuable," said Donald C. Wood, President and Chief Executive Officer of Federal Realty. "On the operating side, we delivered strong leasing with materially higher new rents, higher leased occupancy and healthy cash POI growth. On the capital allocation side, we stayed disciplined: share repurchases, incremental development on our existing land and an irreplaceable acquisition," Mr. Wood continued. "The established skill sets of our team and the strength of our balance sheet were on full display this quarter."
Financial Results
Net Income
For the third quarter of 2026, net income available for common shareholders was $64.2 million and earnings per diluted share was $0.74 versus $59.6 million and $0.69, respectively, for the third quarter of 2025.
FFO
Nareit FFO and Core FFO were each $163.0 million, or $1.87 per diluted share, for the third quarter of 2026, compared to $153.0 million, or $1.77 per diluted share, in the third quarter of 2025, a 5.6% per share increase.
Nareit FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. Core FFO adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the company's ongoing operating and financial performance. See attachments for a reconciliation of Nareit FFO and Core FFO and a full definition of Core FFO.
Operational Update
Occupancy
The following operational metrics for the commercial portfolio are as of September 30, 2026:
Overall portfolio occupancy was 93.8%, flat sequentially and year-over-year.Overall portfolio leased rate was 96.5%, up 40 basis points sequentially and up 110 basis points year-over-year.Small shop leased rate was 94.1%, up 20 basis points sequentially and up 80 basis points year-over-year.The residential leased rate for comparable properties was 95.7% as of September 30, 2026.
Leasing Activity
During the third quarter of 2026, Federal Realty signed 123 leases totaling 589,726 square feet of retail space. On a comparable space basis, the company signed 117 leases for 532,220 square feet at an average rent of $40.01 per square foot, compared to $35.07 under prior leases, representing a 14% increase on a cash basis and a 25% increase on a straight-line basis.
On a trailing twelve-month basis, Federal Realty signed 447 comparable leases totaling 2,601,255 square feet, representing 14% rent spreads on a cash basis and 25% on a straight-line basis.
Transaction Activity
On October 1, 2026, the company acquired The Summit, Alabama's premier retail destination, an approximately 870,000-square-foot open-air property in Birmingham, AL, for $508.0 million.Acquired from the original developer, The Summit is a 100-acre property developed over more than 30 years. It is the most-visited retail destination in Alabama, drawing nearly 9 million visits annually from a trade area reaching 100 miles in every direction, according to Placer.ai.The tenant roster includes Apple, Trader Joe's, RH, Nordstrom Rack, ALO, Sephora and North Italia, many of which operate their only Alabama location at the property. Recent commitments from Aritzia, Reformation and LoveShackFancy reinforce The Summit's position as the entry point for retailers expanding into Alabama.Additional information is available in the Investors section of www.federalrealty.com, including the company's October 1, 2026 press release and a detailed acquisition overview.** The contents of Federal Realty's website are not included in or incorporated by reference into this press release.
Financing Activity
On August 11, 2026, the company issued $460.0 million of 3.50% exchangeable senior notes due August 15, 2031, with net proceeds of approximately $451 million.The notes are initially exchangeable into common shares at approximately $138.54 per share.To offset potential share dilution from an exchange, the company used $21.7 million of the proceeds to purchase capped calls, which provide protection up to a share price of approximately $165.07, a 40% premium to the August 6, 2026 closing price.See the company's Form 8-K filed on August 11, 2026 for more detail.During the third quarter ended September 30, 2026, and year-to-date through October 9, 2026, the company repurchased and retired a total of 869,748 common shares for $94.7 million, at a weighted average purchase price per share of $108.82.Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.16 per common share, resulting in an indicated annual rate of $4.64 per common share. The regular common dividend will be payable on January 15, 2027 to common shareholders of record as of January 4, 2027.
Federal Realty's Board of Trustees also declared a quarterly cash dividend on its Class C depositary shares, each representing 1/1000 of a 5.000% Series C Cumulative Preferred Share of Beneficial Interest, of $0.3125 per depositary share. All dividends on the depositary shares will be payable on January 15, 2027 to shareholders of record as of January 4, 2027.
2026 Guidance
Federal Realty has tightened its 2026 earnings per diluted share guidance, and raised and tightened its Nareit FFO and Core FFO guidance, as summarized in the table below:
Full Year 2026 Guidance
Revised Guidance
Prior Guidance
Net income available for common shareholders per diluted share
$4.23 to $4.27
$4.22 to $4.30
Nareit FFO per diluted share
$7.54 to $7.58
$7.48 to $7.56
Core FFO per diluted share
$7.54 to $7.58
$7.48 to $7.56
Comparable Property POI Growth
3.375% to 3.625%
3.25% to 3.75%
Adjusted Comparable Property POI Growth
4.375% to 4.625%
4.00% to 4.50%
% Core FFO growth over the prior year
6.8% - 7.4%
5.9% - 7.1%
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its third quarter 2026 earnings conference call, which is scheduled for Friday, October 30, 2026 at 9:00 AM ET. To participate, please call 833-821-4548 or 412-652-1258 prior to the call start time. The teleconference can also be accessed via a live webcast at www.federalrealty.com in the Investors section. A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through November 13, 2026 by dialing 844-512-2921 or 412-317-6671; Passcode: 10211075.
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 and select underserved regions with strong economic and demographic fundamentals. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. This includes a portfolio of open-air shopping centers and mixed-use destinations—such as Santana Row, Pike & Rose, and Assembly Row—which together reflect the company's ability to create distinctive, high-performing environments that serve as vibrant destinations for their communities. Federal Realty's 102 properties include approximately 3,700 tenants in 28.8 million commercial square feet, and approximately 2,700 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 59 consecutive years, the longest record in the REIT industry. The company is an S&P 500 index member and its 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 12, 2026 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 or to fill existing vacancy;risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;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, or if the costs of capital we obtain are significantly higher than historical levels;risks associated with general economic conditions, including inflation, tariffs, and local economic conditions in our geographic markets;risks of 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;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; andrisks related to natural disasters, climate change and public health crises (such as worldwide pandemics), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.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 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 12, 2026 and subsequent quarterly reports on Form 10-Q.
Investor Inquiries:
Jill Sawyer
Senior Vice President, Investor Relations
301.998.8265
[email protected]
Media Inquiries:
Brenda Pomar
Senior Director, Corporate Communications
301.998.8316
[email protected]
Federal Realty Investment Trust
Consolidated Balance Sheets
September 30, 2026
September 30,
December 31,
2026
2025
(in thousands, except share and per
share data)
(unaudited)
ASSETS
Real estate, at cost
Operating (including $2,132,453 and $1,832,190 of consolidated variable interest entities, respectively)
$11,369,346
$11,265,167
Construction-in-progress (including $47,661 and $28,418 of consolidated variable interest entities, respectively)
382,154
374,735
11,751,500
11,639,902
Less accumulated depreciation and amortization (including $519,866 and $468,725 of consolidated variable interest entities, respectively)
(3,521,614)
(3,351,881)
Net real estate
8,229,886
8,288,021
Cash and cash equivalents
109,728
107,415
Accounts and notes receivable, net
269,791
249,755
Mortgage notes receivable, net
—
9,091
Investment in partnerships
32,370
31,881
Operating lease right of use assets, net
81,049
83,120
Finance lease right of use assets, net
6,246
6,410
Prepaid expenses and other assets
367,962
354,767
TOTAL ASSETS
$ 9,097,032
$ 9,130,460
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable, net (including $169,228 and $194,176 of consolidated variable interest entities, respectively)
$ 496,694
$ 521,759
Notes payable, net
997,121
1,057,331
Senior notes and debentures, net
3,389,769
3,364,010
Accounts payable and accrued expenses
248,407
219,678
Dividends payable
102,492
99,792
Security deposits payable
33,552
31,548
Operating lease liabilities
70,396
72,304
Finance lease liabilities
12,999
12,903
Other liabilities and deferred credits
237,859
250,494
Total liabilities
5,589,289
5,629,819
Commitments and contingencies
Redeemable noncontrolling interests
188,478
181,655
Shareholders' equity
Preferred shares, authorized 15,000,000 shares, $0.01 par:
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding
150,000
150,000
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 392,878 shares issued and outstanding
9,822
9,822
Common shares of beneficial interest, $0.01 par, 200,000,000 shares authorized, 86,296,537 and 86,266,009 shares issued and outstanding, respectively
870
869
Additional paid-in capital
4,292,652
4,310,365
Accumulated dividends in excess of net income
(1,215,383)
(1,224,372)
Accumulated other comprehensive income
13,354
2,047
Total shareholders' equity of the Trust
3,251,315
3,248,731
Noncontrolling interests
67,950
70,255
Total shareholders' equity
3,319,265
3,318,986
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 9,097,032
$ 9,130,460
Federal Realty Investment Trust
Consolidated Income Statements
September 30, 2026
Three Months Ended
Nine Months Ended
September 30,
September 30,
2026
2025
2026
2025
(in thousands, except per share data)
(unaudited)
REVENUE
Rental income
$ 329,644
$ 313,183
$ 988,198
$ 917,954
Other property income
9,352
8,789
27,039
24,143
Mortgage interest income
28
281
577
833
Total revenue
339,024
322,253
1,015,814
942,930
EXPENSES
Rental expenses
69,317
67,481
208,505
196,894
Real estate taxes
39,811
38,178
117,859
111,426
General and administrative
13,254
11,649
38,649
34,449
Depreciation and amortization
100,260
94,277
300,100
270,464
Total operating expenses
222,642
211,585
665,113
613,233
Gain on sale of real estate
473
—
113,801
77,672
New market tax credit transaction income
—
—
—
14,176
OPERATING INCOME
116,855
110,668
464,502
421,545
OTHER INCOME/(EXPENSE)
Other interest income
1,069
845
2,672
2,493
Interest expense
(49,740)
(47,619)
(148,864)
(134,692)
Income from partnerships
801
605
298
1,687
NET INCOME
68,985
64,499
318,608
291,033
Net income attributable to noncontrolling interests
(2,816)
(2,850)
(7,638)
(9,700)
NET INCOME ATTRIBUTABLE TO THE TRUST
66,169
61,649
310,970
281,333
Dividends on preferred shares
(2,008)
(2,008)
(6,024)
(6,024)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS
$ 64,161
$ 59,641
$ 304,946
$ 275,309
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders
$ 0.74
$ 0.69
$ 3.52
$ 3.20
Weighted average number of common shares
86,558
85,978
86,262
85,808
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders
$ 0.74
$ 0.69
$ 3.52
$ 3.20
Weighted average number of common shares
86,558
85,978
86,789
85,808
Federal Realty Investment Trust
Funds From Operations
September 30, 2026
Three Months Ended
Nine Months Ended
September 30,
September 30,
2026
2025
2026
2025
(in thousands, except per share data)
Nareit Funds from Operations available for common shareholders (Nareit FFO)
Net income
$ 68,985
$ 64,499
$ 318,608
$ 291,033
Net income attributable to noncontrolling interests
(2,816)
(2,850)
(7,638)
(9,700)
Gain on sale of real estate
(473)
—
(113,801)
(77,672)
Depreciation and amortization of real estate assets
86,499
81,155
257,808
236,251
Amortization of initial direct costs of leases
12,628
12,029
38,888
30,464
Funds from operations
164,823
154,833
493,865
470,376
Dividends on preferred shares
(1,875)
(1,875)
(5,625)
(5,625)
Income attributable to downREIT operating partnership units
610
596
1,801
1,868
Income attributable to unvested shares
(563)
(509)
(1,698)
(1,558)
Nareit FFO
$ 162,995
$ 153,045
$ 488,343
$ 465,061
Weighted average number of common shares, diluted
87,178
86,599
86,883
86,463
Nareit FFO per diluted share
$ 1.87
$ 1.77
$ 5.62
$ 5.38
Core Funds from Operations (Core FFO) (1)
Nareit FFO
$ 162,995
$ 153,045
$ 488,343
$ 465,061
Adjustments:
New market tax credit transaction income, net
—
—
—
(13,004)
Collection of prior period rents deferred during COVID
—
(73)
—
(209)
Core FFO
$ 162,995
$ 152,972
$ 488,343
$ 451,848
Core FFO per diluted share
$ 1.87
$ 1.77
$ 5.62
$ 5.23
Reconciliation of the range of estimated earnings per diluted share to estimated Nareit FFO and Core FFO per diluted share for the full year 2026:
Full Year 2026 Guidance Range
Low
High
Estimated net income available for common shareholders per diluted share
$ 4.23
$ 4.27
Adjustments:
Estimated gain on sale of real estate
(1.31)
(1.31)
Estimated depreciation and amortization
4.62
4.62
Estimated Nareit FFO and Core FFO per diluted share
$ 7.54
$ 7.58
See Glossary of Terms. Individual items may not add up to total due to rounding.
Federal Realty Investment Trust
Comparable Property Information
September 30, 2026
The following information is being provided for "Comparable Properties." Comparable Properties represents our consolidated property portfolio other than those properties that distort comparability between periods in two primary categories: (1) assets that were not owned for the full quarter in both periods presented and (2) assets currently under development or being repositioned for significant redevelopment and investment. The assets excluded from Comparable Properties in Q3 include: Bala Cynwyd on City Avenue residential - Blayr, Friendship Center, Grossmont Center, Pike & Rose Phase IV, Santana West, Willow Grove Shopping Center, and all properties acquired, disposed of, or not consolidated from Q3 2025 to Q3 2026. Comparable Property property operating income ("Comparable Property POI") and Adjusted Comparable Property POI are non-GAAP measures used by management in evaluating the operating performance of our properties period over period. Adjusted Comparable Property POI excludes the impact of straight-line rents and amortization of in-place leases from Comparable Property POI.
Reconciliation of GAAP operating income to Comparable Property POI and Adjusted Comparable Property POI
Three Months Ended
September 30,
2026
2025
(in thousands)
Operating income
$ 116,855
$ 110,668
Add:
Depreciation and amortization
100,260
94,277
General and administrative
13,254
11,649
Gain on sale of real estate
(473)
—
Property operating income (POI)
229,896
216,594
Less: Non-comparable POI - acquisitions/dispositions
(9,272)
(4,991)
Less: Non-comparable POI - redevelopment, development & other
(9,841)
(5,993)
Comparable Property POI
$ 210,783
$ 205,610
Less: Straight-line rents
(3,343)
(5,828)
Less: Amortization of in-place leases
(2,783)
(3,011)
Adjusted Comparable Property POI
$ 204,657
$ 196,771
Glossary of Terms
Nareit-defined Funds From Operations (Nareit FFO): Nareit FFO is a supplemental measure of real estate companies' operating performance. Nareit defines FFO as follows: net income, computed in accordance with GAAP plus real estate related depreciation and amortization, gains and losses on sale of real estate, and impairment write-downs of depreciable 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, Nareit 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 Nareit 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 Nareit 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.
Core Funds From Operations (Core FFO): Core FFO is a supplemental non-GAAP financial measure of performance that adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the Company's ongoing operating and financial performance. These adjustments include, when applicable, (1) gains or losses on early extinguishment of debt, (2) new market tax credit transaction income, (3) executive transition costs, (4) collection of prior period rents which were contractually deferred or payments renegotiated related to the COVID-19 pandemic, and (5) other items as determined by management. Management believes Core FFO provides enhanced comparability across periods and additional insight into the Company's underlying operating results, by excluding items that may reflect short-term fluctuations in net income and Nareit FFO. Core FFO is not intended to be a substitute for net income or Nareit FFO. Comparison of our presentation of Core FFO to similarly titled measures for other REITs may not be meaningful due to possible differences in the way Core FFO is defined or applied by other REITs.
SOURCE Federal Realty Investment Trust
