Federal Realty Earnings: Double-Digit Re-Leasing Spreads and Solid Growth in Line With Expectations

Federal Realty reported first-quarter results were in line with our expectations, leading us to reaffirm our $139 fair value estimate for the no-moat company. Same-store occupancy fell 30 basis points sequentially to 94.0%, in line with our estimate, but was still up 20 basis points year over year. Total re-leasing spreads for the company were up 11.3% as tenants renewing their leases saw rent terms increase 13.6% in the quarter. While same-store revenues only increased 2.0% in the first quarter, same-store operating expenses fell 1.4%, leading to same-store net operating income growth of 3.6% that was in line with our 3.7% estimate. Funds from operations increased 5.9% year over year to $1.59 per share, relatively in line with our $1.60 estimate.