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Federal Realty Investment Trust FRT

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Economic Moat




Drop in Rent Collection Causes Significant Q2 Decline for Federal Realty

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Federal Realty saw a significant impact to second-quarter results because of the ongoing coronavirus pandemic. However, we didn't see anything surprising from the quarter that would materially change our $100 fair value estimate for the no-moat company. Comparable occupancy fell 80 basis points sequentially to 91.4%, the lowest point in at least two decades for the company. However, re-leasing spreads were resilient as they were up 11.3%, the first double-digit gain in a year and a half, due to a 31.6% increase on lease signed with new tenants. Still, the company collected only 68% of its billed rent, which caused same-store net operating income to decline 33.8%. The loss of revenue in the quarter caused the company to report funds from operations of just $0.77, slightly less than half of the $1.60 the company reported in the second quarter of 2019.

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Company Profile

Business Description

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 104 properties, which includes 24.1 million square feet of retail space and over 2,600 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.

1626 East Jefferson Street
Rockville, MD, 20852
T +1 301 998-8100
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 313