Federal Realty Earnings: Double-Digit Re-Leasing Spreads Support Continued Rent and NOI Growth

Federal Realty Investment Trust's fourth-quarter results were slightly better than we anticipated, giving us confidence in our $142 fair value estimate for the no-moat company. Same-store occupancy improved 20 basis points sequentially to 94.0%, in line with our estimate. Re-leasing spreads were 11.5% in the fourth quarter, slightly better than our estimate of new rent being 9.9% higher than prior rent terms. Same-store revenue grew 2.5% while same-store operating expenses declined 0.4%, leading to same-store net operating income growth of 4.0%, ahead of our 2.3% estimate. Federal Realty reported funds from operations of $1.64 per share in the fourth quarter, $0.02 better than our $1.62 estimate and $0.06 better than the $1.58 the company reported in the year-ago quarter.