Federal Realty Investment Trust’s FRT fourth-quarter 2024 funds from operations (FFO) per share of $1.73 came in line with the Zacks Consensus Estimate. This also marked a rise of 5.5% from the year-ago quarter’s tally of $1.64.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Results reflect healthy leasing activity and significant occupancy gains at its properties. FRT has also provided its initial guidance for 2025.
Quarterly revenues of $311.4 million narrowly missed the consensus mark of $311.8 million but improved 6.7% from the year-ago quarter’s tally. Federal Realty generated 4.2% comparable property operating income (POI), excluding lease termination fees and prior-period rents collected.
Per Donald C. Wood, chief executive officer, "We achieved all-time highs in leasing volume, revenue, and earnings, surpassing previous records by a significant margin, and occupancy reached its highest level in almost a decade.”
For full-year 2024, FRT reported FFO per share of $6.77, reflecting an increase of 3.4% year over year from $6.55 and in line with the Zacks Consensus Estimate. Revenues increased 6.2% year over year to $1.20 billion and met the consensus mark. For the full year, it achieved the highest annual comparable leasing volume on record, with 452 signed comparable leases for 2.4 million square feet at an 11% cash basis rollover.
Behind FRT’s Headlines
In terms of leasing, during the reported quarter, Federal Realty signed 103 leases for 653,869 square feet of retail space. On a comparable space basis, the company signed 100 leases for 649,372 square feet of space at an average rent of $34.29 per square foot. This denotes cash-basis rollover growth of 10% and 21% on a straight-line basis. This marked the highest quarterly comparable leasing volume on record.
On the operational front, the portfolio occupancy rate increased 10 basis points (bps) quarter over quarter and 190 basis points year over year to 94.1% as of Dec. 31, 2024. The portfolio was 96.2% leased as of the same date, a 30 bps increase quarter over quarter and 200 bps year over year. It was slightly ahead of our estimate of 96.1%. Moreover, Federal Realty’s residential properties were 95.2% leased as of the same date.
Sustained robust leasing activity for small shops resulted in a quarter-ending lease rate of 93.6%, marking an increase of 50 bps quarter over quarter and 290 basis points year over year. Moreover, the anchor tenant leased rate was 97.5%, denoting a rise of 20 bps quarter over quarter and 150 bps year over year.
Moreover, Federal Realty registered comparable property operating income growth of 4.2% for the fourth quarter. This is exclusive of lease termination fees and prior-period rents collected. Our estimate for the growth was 5.2%.
Federal Realty exited 2024 with cash and cash equivalents of $123.4 million, up from $97.0 million recorded at the end of the third quarter of 2024.
Portfolio Activity of FRT
Federal Realty is presently under contract to purchase a 673,000-square-foot shopping center in Northern California for $124 million. This is expected to close in late February 2025.
On the redevelopment front, subsequent to quarter end, Federal Realty announced a residential development at 301 Washington Street in Hoboken, NJ, at a projected cost of $45-$48 million and projected return on investment (ROI) of 6%-7%.
FRT also announced the redevelopment of Andorra Shopping Center in Philadelphia, PA, at a projected cost of $32 million and a projected incremental ROI of 7%-8%.
FRT’s Guidance
For 2025, Federal Realty expects its FFO per share in the range of $7.10-$7.22. The Zacks Consensus Estimate of $7.13 also lies within this range.
The retail REIT’s full-year guidance is backed by assumptions for comparable properties growth of 3%-4%, acquisitions worth $124 million, disposed properties 2024 POI of $5 million and lease termination fees of $4-$5 million.
FRT Announces Dividend
Concurrent with the fourth-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 April 15 to shareholders of record as of April 1, 2025.
Federal Realty currently carries a Zacks Rank #4 (Sell).
Federal Realty Investment Trust Price, Consensus and EPS Surprise
Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Retail REITs
Simon Property Group, Inc.’s SPG fourth-quarter 2024 FFO per share of $3.68 surpassed the Zacks Consensus Estimate of $3.40. Results reflected an increase in revenues, backed by a rise in the base minimum rent per square foot and occupancy levels. SPG issued its guidance for 2025 FFO per share. SPG currently has a Zacks Rank #3 (Hold).
Kimco Realty Corp. KIM has reported a fourth-quarter 2024 FFO per share of 42 cents, which met the Zacks Consensus Estimate. The metric grew 7.7% from the year-ago quarter. Results reflected better-than-expected growth in revenues, though a rise in interest expenses acted as a dampener. This retail REIT clocked in revenues of $525.4 million, which topped the consensus mark of $513.1 million. The figure improved 16.3% year over year. KIM currently carries 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.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpSimon Property Group, Inc. (SPG) : Free Stock Analysis Report
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
Federal Realty Investment Trust (FRT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
