On August 1, 2024, Federal Realty Investment Trust (FRT, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Federal Realty Investment Trust is a shopping center-focused retail real estate investment trust that owns high-quality properties in eight of the largest metropolitan markets. Its portfolio includes an interest in 102 properties, which includes 26.0 million square feet of retail space and over 3,100 multifamily units. Federal's retail portfolio includes grocery-anchored centers, superregional centers, power centers, and mixed-use urban centers. Federal Realty has focused on owning assets in highly desirable areas with significant growth, and as a result, the average population density and average median household income are higher for its portfolio than for any other retail REIT.
Performance Highlights
Federal Realty Investment Trust (FRT, Financial) reported net income available for common shareholders of $1.32 per diluted share for Q2 2024, significantly higher than the $0.72 per diluted share reported in Q2 2023. This performance surpassed the analyst estimate of $1.30 per share. The company also reported total revenue of $296.05 million, exceeding the analyst estimate of $293.60 million.
Key financial achievements for the quarter include:
- Funds from operations (FFO) per diluted share of $1.69, compared to $1.67 in Q2 2023.
- Signed 122 leases for 594,361 square feet of comparable retail space, achieving a record level of comparable square footage signed in any second quarter.
- Reported portfolio occupancy of 93.1% and a leased rate of 95.3% at quarter end.
- Increased the regular quarterly cash dividend to $1.10 per common share, marking the 57th consecutive year of dividend increases.
Financial Statements Overview
Federal Realty's consolidated income statement for Q2 2024 shows a total revenue of $296.05 million, up from $280.68 million in Q2 2023. Operating income increased to $157.01 million from $101.80 million in the same period last year. Net income available for common shareholders was $109.97 million, compared to $58.49 million in Q2 2023.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $296.05 million | $280.68 million |
| Operating Income | $157.01 million | $101.80 million |
| Net Income Available for Common Shareholders | $109.97 million | $58.49 million |
| Earnings Per Diluted Share | $1.32 | $0.72 |
Operational and Strategic Developments
Federal Realty's portfolio occupancy stood at 93.1%, with a leased rate of 95.3% as of June 30, 2024. The company also reported strong small shop leasing, ending the quarter at 92.5% leased, an increase of 110 basis points quarter-over-quarter and 230 basis points year-over-year.
During the quarter, Federal Realty made significant acquisitions, including two assets totaling 880,000 square feet on 129 acres for a total purchase price of $275 million. The company also completed the sale of its remaining assets on Third Street Promenade in Santa Monica, CA, for $103 million.
Dividend and Guidance
Federal Realty increased its regular quarterly cash dividend to $1.10 per common share, resulting in an indicated annual rate of $4.40 per common share. This marks the 57th consecutive year of dividend increases, the longest record in the REIT sector.
The company also updated its 2024 guidance, raising its earnings per diluted share to $3.33 - $3.51 and FFO per diluted share to $6.70 - $6.88.
Conclusion
Federal Realty Investment Trust (FRT, Financial) has demonstrated robust performance in Q2 2024, surpassing analyst estimates and achieving significant growth in leasing activity and strategic acquisitions. The company's strong financial results and consistent dividend increases highlight its resilience and commitment to delivering long-term value to shareholders.
"Another record quarter for Federal Realty, starting with funds from operations per share of $1.69, to continued record leasing volume, to furthering our REIT industry record with the 57th consecutive year of increased common dividends," said Donald C. Wood, Chief Executive Officer. "The robust leasing demand we continue to see is a clear indicator of the value and attractiveness of our properties, setting a solid foundation for strong future earnings growth."
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Federal Realty Investment Trust for further details.
