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Federal Realty Investment Trust FRT

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

The Retail Environment Improvement in Q1 Encourages Federal Realty to Provide 2021-22 Outlook

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Federal Realty outperformed our expectations of a retail recovery in the first quarter, giving us confidence in our $113 fair value estimate for the no-moat company. Same-store occupancy slipped 40 basis points sequentially to 91.7% in the first quarter, though that is a little better than our estimate of 91.5%. Meanwhile, FRT was able to push new rents up 8.7% over the expiring rate thanks to 18.1% re-leasing spreads on new leases, though even lease renewals saw positive spreads with 1.6% growth. First-quarter rent collection reached 90%, a slight improvement over the 89% level achieved in the fourth quarter of 2020, and increases to 96% of rent when including rent deferral and abatements agreements. While the uncollected rent led to a same-store revenue decline of 5.9% year over year, that is better than the double-digit declines seen over the prior three quarters and the resulting 12.5% same-store net operating income decline is also a significant improvement over prior periods. So while funds from operations fell 21.7% to $1.17 in the first quarter, that is an 18% improvement over the fourth quarter of 2020 figure and 9 cents better than our estimate.

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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 101 properties, which includes 23.4 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.

Contact
909 Rose Avenue, Suite 200
North Bethesda, MD, 20852
T +1 301 998-8100
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 311

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