FEDERAL REALTY INVESTMENT TRUST 10-K

ITEM 9A. CONTROLS AND PROCEDURES Management's Evaluation of Disclosure Controls and Procedures The Trust maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Trust’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met. Our management, with the participation of the Trust’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust’s disclosure controls and procedures as of December 31, 2020. Based on that evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2020, the Trust’s disclosure controls and procedures were effective at a reasonable assurance level. Internal Control over Financial Reporting The Trust’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Trust’s principal executive and principal financial officers and effected by our Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (GAAP) and includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of management and our Trustees; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of any of our assets in circumstances that could have a material adverse effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2020. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) . Based on that assessment and criteria, management concluded that the Trust's internal control over financial reporting was effective as of December 31, 2020. Grant Thornton LLP, the independent registered public accounting firm that audited the Trust's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust's internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting during our fourth fiscal quarter of 2020 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 52 Table of Contents ITEM 9B. OTHER INFORMATION None. 53 Table of Contents PART III Certain information required in Part III is omitted from this Report but is incorporated herein by reference from our Proxy Statement for the 2021 Annual Meeting of Shareholders (as amended or supplemented, the “Proxy Statement”). ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The tables and narrative in the Proxy Statement identifying our Trustees and Board committees under the caption “Election of Trustees” and “Corporate Governance”, the sections of the Proxy Statement entitled “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” and other information included in the Proxy Statement required by this Item 10 are incorporated herein by reference. We have adopted a Code of Ethics, which is applicable to our Chief Executive Officer and senior financial officers. The Code of Ethics is available in the Corporate Governance section of the Investors section of our website at www.federalrealty.com . ITEM 11. EXECUTIVE COMPENSATION The sections of the Proxy Statement entitled “Summary Compensation Table,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report,” “Trustee Compensation” and “Compensation Discussion and Analysis” and other information included in the Proxy Statement required by this Item 11 are incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The sections of the Proxy Statement entitled “Share Ownership” and “Equity Compensation Plan Information” and other information included in the Proxy Statement required by this Item 12 are incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE The sections of the Proxy Statement entitled “Certain Relationship and Related Transactions” and “Independence of Trustees” and other information included in the Proxy Statement required by this Item 13 are incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The sections of the Proxy Statement entitled “Ratification of Independent Registered Public Accounting Firm” and “Relationship with Independent Registered Public Accounting Firm” and other information included in the Proxy Statement required by this Item 14 are incorporated herein by reference. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements Our consolidated financial statements and notes thereto, together with Reports of Independent Registered Public Accounting Firm are included as a separate section of this Annual Report on Form 10-K commencing on page F- 1 . (2) Financial Statement Schedules Our financial statement schedules are included in a separate section of this Annual Report on Form 10-K commencing on page F- 32 . (3) Exhibits (b) The following documents are filed as exhibits are filed as part of, or incorporated by reference info, this report: 54 Table of Contents EXHIBIT INDEX Exhibit No. Description 3.1 Declaration of Trust of Federal Realty Investment Trust dated May 5, 1999 as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6, 2004, as corrected by the Certificate of Correction of Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated June 17, 2004, as amended by the Articles of Amendment of Declaration of Trust of Federal Realty Investment Trust dated May 6, 2009 (previously filed as Exhibit 3.1 to the Trust’s Registration Statement on Form S-3 (File No. 333-160009) and incorporated herein by reference) 3.2 Amended and Restated Bylaws of Federal Realty Investment Trust dated February 12, 2003, as amended October 29, 2003, May 5, 2004, February 17, 2006, May 6, 2009, November 2, 2016, February 5, 2019, and April 2, 2020 (previously filed as Exhibit 3.2 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 1-07533) and incorporated herein by reference) 4.1 Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-07533) and incorporated herein by reference) 4.2 Articles Supplementary relating to the 5.417% Series 1 Cumulative Convertible Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.1 to the Trust’s Current Report on Form 8-K filed on March 13, 2007, (File No. 1-07533) and incorporated herein by reference) 4.3 ** Indenture dated December 1, 1993 related to the Trust’s 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 33-51029), and amended on Form S-3 (File No. 33-63687), filed on December 13, 1993 and incorporated herein by reference) 4.4 ** Indenture dated September 1, 1998 related to the Trust’s 3.00% Notes due 2022; 2.75% Notes due 2023; 3.95% Notes due 2024; 4.50% Notes due 2044; 2.55% Notes due 2021; 3.625% Notes due 2046; 3.25% Notes due 2027; 3.20% Notes due 2029; 3.50% Notes due 2030; 1.25% Notes due 2026 (previously filed as Exhibit 4(a) to the Trust’s Registration Statement on Form S-3 (File No. 333-63619) filed on September 17, 1998 and incorporated herein by reference) 4.5 Articles Supplementary relating to the 5.000% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest (previously filed as Exhibit 3.2 to the Trust's Registration Statement on Form 8-A (File No. 1-07533), filed on September 29, 2017 and incorporated herein by reference) 4.6 Deposit Agreement, dated as of September 29, 2017, by and among Federal Realty Investment Trust, American Stock Transfer and Trust Company, LLC, as Depositary, and all holders from time to time of Receipt (previously filed as Exhibit 4.1 to the Trust's Registration Statement on Form 8-A (File No. 1-07533), filed on September 29, 2017 and incorporated herein by reference) 4.7 Specimen certificate relating to the 5.000% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.3 to the Trust's Registration Statement on Form 8-A (File No. 1-07533), filed on September 29, 2017 and incorporated herein by reference) 4.8 Description of Securities (previously filed as Exhibit 4.8 to the Trust's Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-07533 and incorporated here by reference) 10.1 * Severance Agreement between the Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (File No. 1-07533) (the "1999 1Q Form 10-Q") and incorporated herein by reference) 10.2 * Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the 1999 1Q Form 10-Q and incorporated herein by reference) 10.3 * Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 1-07533) (the “2004 Form 10-K”) and incorporated herein by reference) 10.4 2001 Long-Term Incentive Plan (previously filed as Exhibit 99.1 to the Trust’s S-8 Registration Number 333-60364 filed on May 7, 2001 and incorporated herein by reference) 10.5 * Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the 2004 Form 10-K and incorporated herein by reference) 10.6 * Severance Agreement between the Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Trust’s 2005 2Q Form 10-Q and incorporated herein by reference) 10.7 * Amendment to Severance Agreement between the Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the 2004 Form 10-K and incorporated herein by reference) 55 Table of Contents Exhibit No. Description 10.8 Form of Restricted Share Award Agreement for long term vesting and retention awards for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Trust's Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-07533) (the "2010 Form 10-K") and incorporated herein by reference) 10.9 * Amendment to Severance Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.26 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-07533) (“the 2008 Form 10-K”) and incorporated herein by reference) 10.10 * Second Amendment to Executive Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.27 to the Trust’s 2008 Form 10-K and incorporated herein by reference) 10.11 * Amendment to Health Coverage Continuation Agreement between the Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.28 to the Trust’s 2008 Form 10-K and incorporated herein by reference) 10.12 * Second Amendment to Severance Agreement between the Trust and Dawn M. Becker dated January 1, 2009 (previously filed as Exhibit 10.30 to the Trust’s 2008 Form 10-K and incorporated herein by reference) 10.13 2010 Performance Incentive Plan (previously filed as Appendix A to the Trust’s Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders (File No. 01-07533) and incorporated herein by reference) 10.14 Amendment to 2010 Performance Incentive Plan (“the 2010 Plan”) (previously filed as Appendix A to the Trust’s Proxy Statement for the 2010 Annual Meeting of Shareholders (File No. 01-07533) and incorporated herein by reference) 10.15 * Restricted Share Award Agreement between the Trust and Donald C. Wood dated October 12, 2010 (previously filed as Exhibit 10.36 to the Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 01-07533) and incorporated herein by reference) 10.16 Form of Restricted Share Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.34 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.17 Form of Option Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.18 Form of Option Award Agreement for front loaded awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.39 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.19 Form of Option Award Agreement for basic options awarded out of the 2010 Plan (previously filed as Exhibit 10.40 to the Trust’s 2010 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.20 Credit Agreement dated as of July 7, 2011, by and among the Trust, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, PNC Bank, National Association, as Syndication Agent, Wells Fargo Securities, LLC, as a Lead Arranger and Book Manager, and PNC Capital Markets LLC, as a Lead Arranger and Book Manager (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K (File No. 1-07533), filed on July 11, 2011 and incorporated herein by reference) 10.21 Revised Form of Restricted Share Award Agreement for front loaded awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Trust's Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 1-07533) (the "2012 Form 10-K") and incorporated herein by reference) 10.22 Revised Form of Restricted Share Award Agreement for long-term vesting and retention awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.36 to the Trust's 2012 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.23 Revised Form of Performance Share Award Agreement for shares awarded out of the 2010 Plan (previously filed as Exhibit 10.37 to the Trust's 2012 Form 10-K (File No. 1-07533) and incorporated herein by reference) 10.24 Revised Form of Restricted Share Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Trust's 2012 Form 10-K (File No. 1-07533) and incorporated herein by reference) 56 Table of Contents Exhibit No. Description 10.25 First Amendment to the Credit Agreement, dated as of April 22, 2013, by and among Federal Realty Investment Trust, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K (File No. 1-07533), filed on April 26, 2013 and incorporated herein by reference) 10.26 Second Amendment to Credit Agreement, dated as of April 20, 2016, by and among Federal Realty Investment Trust, each of the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8K (File No. 1-07533), filed on April 26, 2016 and incorporated herein by reference) 10.27 Severance Agreement between the Trust and Daniel Guglielmone dated August 15, 2016 (previously filed as Exhibit 10.36 to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 1-07533 and incorporated herein by reference) 10.28 Amended and Restated Credit Agreement, dated as of July 25, 2019, by and among Federal Realty Investment Trust, each of the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K (File No. 1-07533), filed on July 29, 2019 and incorporated herin by reference) 10.29 2020 Performance Incentive Plan (previously filed as Appendix B to the Trust’s Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders (File No. 01-07533) and incorporated herein by reference) 10.30 Term Loan Agreement dated as of May 6, 2020, by and among the Trust, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, PNC Bank, National Association, as Administrative Agent, Regions Bank, Truist Bank, and U.S. Bank National Bank Association as Co-Syndication Agents, PNC Capital Markets, LLC, Regions Capital Markets, Suntrust Robinson Humphrey, Inc., and U.S. Bank National Association, as Joint Lead Arrangers and Book Managers (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K (File No. 1-07533), filed on May 6, 2020 and incorporated herein by reference) 10.31 First Amendment to the Credit Agreement, dated as of May 6, 2020, by and among Federal Realty Investment Trust, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.2 to the Trust's Current Report on Form 8-K (File No. 1-07533), filed on May 6, 2020, and incorporated herein by reference) 10.32 Form of Restricted Share Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2020 Plan (filed herewith) 10.33 Form of Option Award Agreement for awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (filed herewith) 10.34 Form of Restricted Share Award Agreement for long-term vesting and retention awards made under the Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (filed herewith) 10.35 Form of Performance Share Award Agreement for shares awarded out of the 2020 Plan (filed herewith) 10.36 Form of Option Award Agreement for basic options awarded out of the 20 2 0 Plan (filed herewith) 21.1 S ubsidiaries of Federal Realty Investment Trust (filed herewith) 23.1 Consent of Grant Thornton LLP (filed herewith) 31.1 Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith) 31.2 Rule 13a-14(a) Certification of Chief Financial Officer (filed herewith) 32.1 Section 1350 Certification of Chief Executive Officer (filed herewith) 32.2 Section 1350 Certification of Chief Financial Officer (filed herewith) 101 The following materials from Federal Realty Investment Trust’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged. 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) _____________________ * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K. ** Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust. 57 Table of Contents ITEM 16. FORM 10-K SUMMARY None. 58 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February 11, 2021. Federal Realty Investment Trust By: / S / D ONALD C. W OOD Donald C. Wood Chief Executive Officer and Trustee Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of Donald C. Wood and Dawn M. Becker as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof. Signature Title Date / S / D ONALD C. W OOD Chief Executive Officer and Trustee February 11, 2021 Donald C. Wood (Principal Executive Officer) / S / D ANIEL G UGLIELMONE Executive Vice President - Chief Financial February 11, 2021 Daniel Guglielmone Officer and Treasurer (Principal Financial and Accounting Officer) / S / J OSEPH S. V ASSALLUZZO Non-Executive Chairman February 11, 2021 Joseph S. Vassalluzzo / S / J ON E. B ORTZ Trustee February 11, 2021 Jon E. Bortz / S / D AVID W. F AEDER Trustee February 11, 2021 David W. Faeder /S/ E LIZABETH I. H OLLAND Trustee February 11, 2021 Elizabeth I. Holland /S/ N ICOLE Y. L AMB-HALE Trustee February 11, 2021 Nicole Y. Lamb-Hale /S/ A NTHONY P. N ADER, III Trustee February 11, 2021 Anthony P. Nader, III /S/ MARK S. ORDAN Trustee February 11, 2021 Mark S. Ordan / S / G AIL P. S TEINEL Trustee February 11, 2021 Gail P. Steinel 59 Table of Contents Item 8 and Item 15(a)(1) and (2) Index to Consolidated Financial Statements and Schedules Consolidated Financial Statements Page No. Report of Independent Registered Public Accounting Firm F- 2 Report of Independent Registered Public Accounting Firm F- 3 Consolidated Balance Sheets F- 5 Consolidated Statements of Comprehensive Income F- 6 Consolidated Statement of Shareholders’ Equity F- 7 Consolidated Statements of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 9 Financial Statement Schedules Schedule III—Summary of Real Estate and Accumulated Depreciation F- 32 Schedule IV—Mortgage Loans on Real Estate F- 40 All other schedules have been omitted either because the information is not applicable, not material, or is disclosed in our consolidated financial statements and related notes. F-1 Table of Contents Report of Independent Registered Public Accounting Firm Trustees and Shareholders Federal Realty Investment Trust Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Trust as of and for the year ended December 31, 2020, and our report dated February 11, 2021 expressed an unqualified opinion on those financial statements. Basis for opinion The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Disclosure Controls and Procedures. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP New York, New York February 11, 2021 F-2 Table of Contents Report of Independent Registered Public Accounting Firm Trustees and Shareholders Federal Realty Investment Trust Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Trust’s internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 11, 2021 expressed an unqualified opinion. Basis for opinion These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Lease Collectibility Assessment In order to recognize rental revenue on an accrual basis, the Trust must determine whether substantially all of the rents due under a lease arrangement are collectible. If the Trust reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental revenue under that arrangement can only be recognized when cash payment from the tenant is received. Significant judgment is exercised by the Trust when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures: • Creditworthiness of the tenant. • Current economic conditions. • Historical experience with the tenant and other tenants operating in the same industry. Our audit procedures related to the collectibility assessment included the following: F-3 Table of Contents • We assessed the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process. • We evaluated management’s accounting policies related to this assessment. • We verified the completeness of the population of tenants that management evaluated. • We researched recent publicly available information such as bankruptcy filings, industry journals, and periodicals, and for any of the Trust’s tenants identified in our research we evaluated whether such information was considered in management’s collectibility assessment. • For a sample of tenant receivables where collectibility was deemed as probable, we inspected and evaluated management’s documentation supporting the collectibility assessment. • We selected a sample of tenant receivable balances to verify they are accurately aged. • We selected a sample of leases to evaluate the collectibility assessment conclusion reached by management and performed the following procedures for each selection: ◦ Verified that management’s accounting policies related to the collectibility assessment were followed. ◦ Obtained from management documentation such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached. ◦ Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment. /s/ GRANT THORNTON LLP We have served as the Trust’s auditor since 2002. New York, New York February 11, 2021 F-4 Table of Contents Federal Realty Investment Trust Consolidated Balance Sheets December 31, 2020 2019 (In thousands, except share and per share data) ASSETS Real estate, at cost Operating (including $1,703,202 and $1,676,866 of consolidated variable interest entities, respectively) $ 7,771,981 $ 7,535,983 Construction-in-progress (including $44,896 and $102,583 of consolidated variable interest entities, respectively) 810,889 760,420 Assets held for sale — 1,729 8,582,870 8,298,132 Less accumulated depreciation and amortization (including $335,735 and $296,165 of consolidated variable interest entities, respectively) ( 2,357,692 ) ( 2,215,413 ) Net real estate 6,225,178 6,082,719 Cash and cash equivalents 798,329 127,432 Accounts and notes receivable 159,780 152,572 Mortgage notes receivable, net 39,892 30,429 Investment in partnerships 22,128 28,604 Operating lease right of use assets 92,248 93,774 Finance lease right of use assets 51,116 52,402 Prepaid expenses and other assets 218,953 227,060 TOTAL ASSETS $ 7,607,624 $ 6,794,992 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Mortgages payable, net (including $413,681 and $469,184 of consolidated variable interest entities, respectively) $ 484,111 $ 545,679 Notes payable, net 402,776 3,781 Senior notes and debentures, net 3,404,488 2,807,134 Accounts payable and accrued expenses 228,641 255,503 Dividends payable 83,839 81,676 Security deposits payable 20,388 21,701 Operating lease liabilities 72,441 73,628 Finance lease liabilities 72,049 72,062 Other liabilities and deferred credits 152,424 157,938 Total liabilities 4,921,157 4,019,102 Commitments and contingencies (Note 7) Redeemable noncontrolling interests 137,720 139,758 Shareholders’ equity Preferred shares, authorized 15,000,000 shares, $.01 par: 5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding 150,000 150,000 5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding 9,997 9,997 Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 76,727,394 and 75,540,804 shares issued and outstanding, respectively 771 759 Additional paid-in capital 3,297,305 3,166,522 Accumulated dividends in excess of net income ( 988,272 ) ( 791,124 ) Accumulated other comprehensive loss ( 5,644 ) ( 813 ) Total shareholders’ equity of the Trust 2,464,157 2,535,341 Noncontrolling interests 84,590 100,791 Total shareholders’ equity 2,548,747 2,636,132 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 7,607,624 $ 6,794,992 The accompanying notes are an integral part of these consolidated statements. F-5 Table of Contents Federal Realty Investment Trust Consolidated Statements of Comprehensive Income Year Ended December 31, 2020 2019 2018 (In thousands, except per share data) REVENUE Rental income $ 832,171 $ 932,738 $ 912,287 Mortgage interest income 3,323 3,050 3,149 Total revenue 835,494 935,788 915,436 EXPENSES Rental expenses 170,920 187,831 173,094 Real estate taxes 119,242 110,927 114,776 General and administrative 41,680 42,754 33,600 Depreciation and amortization 255,027 239,758 244,245 Total operating expenses 586,869 581,270 565,715 Impairment charge ( 57,218 ) — — Gain on sale of real estate, net of tax 98,117 116,393 11,915 OPERATING INCOME 289,524 470,911 361,636 OTHER INCOME/(EXPENSE) Other interest income 1,894 1,266 942 Interest expense ( 136,289 ) ( 109,623 ) ( 110,154 ) Early extinguishment of debt ( 11,179 ) — — Loss from partnerships ( 8,062 ) ( 2,012 ) ( 3,398 ) NET INCOME 135,888 360,542 249,026 Net income attributable to noncontrolling interests ( 4,182 ) ( 6,676 ) ( 7,119 ) NET INCOME ATTRIBUTABLE TO THE TRUST 131,706 353,866 241,907 Dividends on preferred shares ( 8,042 ) ( 8,042 ) ( 8,042 ) NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 123,664 $ 345,824 $ 233,865 EARNINGS PER COMMON SHARE, BASIC Net income available for common shareholders $ 1.62 $ 4.61 $ 3.18 Weighted average number of common shares 75,515 74,766 73,274 EARNINGS PER COMMON SHARE, DILUTED Net income available for common shareholders $ 1.62 $ 4.61 $ 3.18 Weighted average number of common shares 75,515 74,766 73,302 NET INCOME $ 135,888 $ 360,542 $ 249,026 Other comprehensive loss - change in value of interest rate swaps ( 5,302 ) ( 397 ) ( 438 ) COMPREHENSIVE INCOME 130,586 360,145 248,588 Comprehensive income attributable to noncontrolling interests ( 3,711 ) ( 6,676 ) ( 7,119 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST $ 126,875 $ 353,469 $ 241,469 The accompanying notes are an integral part of these consolidated statements. F-6 Table of Contents Federal Realty Investment Trust Consolidated Statement of Shareholders’ Equity Shareholders’ Equity of the Trust Preferred Shares Common Shares Additional Paid-in Capital Accumulated Dividends in Excess of Net Income Accumulated Other Comprehensive Income/(Loss) Noncontrolling Interests Total Shareholders' Equity Shares Amount Shares Amount (In thousands, except share data) BALANCE AT DECEMBER 31, 2017 405,896 $ 159,997 73,090,877 $ 733 $ 2,855,321 $ ( 749,367 ) $ 22 $ 124,808 $ 2,391,514 January 1, 2018 adoption of new accounting standard — — — — — ( 6,028 ) — — ( 6,028 ) Net income, excluding $3,865 attributable to redeemable noncontrolling interests — — — — — 241,907 — 3,254 245,161 Other comprehensive loss - change in value of interest rate swaps — — — — — — ( 438 ) — ( 438 ) Dividends declared to common shareholders ($4.04 per share) — — — — — ( 297,347 ) — — ( 297,347 ) Dividends declared to preferred shareholders — — — — — ( 8,042 ) — — ( 8,042 ) Distributions declared to noncontrolling interests — — — — — — — ( 5,175 ) ( 5,175 ) Common shares issued, net — — 987,461 10 126,061 — — — 126,071 Exercise of stock options — — 105,803 1 4,571 — — — 4,572 Shares issued under dividend reinvestment plan — — 17,952 — 2,159 — — — 2,159 Share-based compensation expense, net of forfeitures — — 55,223 1 12,735 — — — 12,736 Shares withheld for employee taxes — — ( 8,432 ) — ( 958 ) — — — ( 958 ) Conversion and redemption of OP units — — 749 — ( 544 ) — — ( 5,468 ) ( 6,012 ) Contributions from noncontrolling interests — — — — — — — 4,020 4,020 Adjustment to redeemable noncontrolling interests — — — — 5,097 — — — 5,097 BALANCE AT DECEMBER 31, 2018 405,896 $ 159,997 74,249,633 $ 745 $ 3,004,442 $ ( 818,877 ) $ ( 416 ) $ 121,439 $ 2,467,330 January 1, 2019 adoption of new accounting standard - See Note 2 — — — — — ( 7,098 ) — — ( 7,098 ) Net income, excluding $3,430 attributable to redeemable noncontrolling interests — — — — — 353,866 — 3,246 357,112 Other comprehensive loss - change in value of interest rate swaps — — — — — — ( 397 ) — ( 397 ) Dividends declared to common shareholders ($4.14 per share) — — — — — ( 310,973 ) — — ( 310,973 ) Dividends declared to preferred shareholders — — — — — ( 8,042 ) — — ( 8,042 ) Distributions declared to noncontrolling interests — — — — — — — ( 9,961 ) ( 9,961 ) Common shares issued, net — — 1,069,740 11 142,705 — — — 142,716 Shares issued under dividend reinvestment plan — — 15,909 — 2,095 — — — 2,095 Share-based compensation expense, net of forfeitures — — 111,555 1 13,329 — — — 13,330 Shares withheld for employee taxes — — ( 34,320 ) — ( 4,626 ) — — — ( 4,626 ) Conversion and redemption of OP units — — 128,287 2 14,102 — — ( 14,176 ) ( 72 ) Contributions from noncontrolling interests — — — — — — — 243 243 Adjustment to redeemable noncontrolling interests — — — — ( 5,525 ) — $ — — ( 5,525 ) BALANCE AT DECEMBER 31, 2019 405,896 $ 159,997 75,540,804 $ 759 $ 3,166,522 $ ( 791,124 ) $ ( 813 ) $ 100,791 $ 2,636,132 January 1, 2020 adoption of new accounting standard - See Note 2 — — — — — ( 510 ) — — ( 510 ) Net income, excluding $2,228 attributable to redeemable noncontrolling interests — — — — — 131,706 — 1,954 133,660 Other comprehensive loss - change in value of interest rate swaps, excluding $471 attributable to redeemable noncontrolling interest — — — — — — ( 4,831 ) — ( 4,831 ) Dividends declared to common shareholders ($4.22 per share) — — — — — ( 320,302 ) — — ( 320,302 ) Dividends declared to preferred shareholders — — — — — ( 8,042 ) — — ( 8,042 ) Distributions declared to noncontrolling interests — — — — — — — ( 8,874 ) ( 8,874 ) Common shares issued, net — — 1,080,882 11 98,828 — — — 98,839 Shares issued under dividend reinvestment plan — — 24,491 — 2,072 — — — 2,072 Share-based compensation expense, net of forfeitures — — 114,251 1 13,242 — — — 13,243 Shares withheld for employee taxes — — ( 33,034 ) — ( 4,052 ) — — — ( 4,052 ) Redemption of OP units — — — — ( 30 ) — — ( 3,290 ) ( 3,320 ) Contributions from noncontrolling interests — — — — — — — 120 120 Purchase of noncontrolling interest — — — — ( 1,210 ) — — ( 6,111 ) ( 7,321 ) Adjustment to redeemable noncontrolling interests — — — — 21,933 — — — 21,933 BALANCE AT DECEMBER 31, 2020 405,896 $ 159,997 76,727,394 $ 771 $ 3,297,305 $ ( 988,272 ) $ ( 5,644 ) $ 84,590 $ 2,548,747 The accompanying notes are an integral part of these consolidated statements. F-7 Table of Contents Federal Realty Investment Trust Consolidated Statements of Cash Flows Year Ended December 31, 2020 2019 2018 (In thousands) OPERATING ACTIVITIES Net income $ 135,888 $ 360,542 $ 249,026 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 255,027 239,758 244,245 Impairment charge 57,218 — — Gain on sale of real estate, net of tax ( 98,117 ) ( 116,393 ) ( 11,915 ) Early extinguishment of debt 11,179 — — Loss from partnerships 8,062 2,012 3,398 Other, net 6,142 169 4,147 Changes in assets and liabilities, net of effects of acquisitions and dispositions: Proceeds from new market tax credit transaction, net of deferred costs — — 12,353 (Increase) decrease in accounts receivable, net ( 6,032 ) ( 16,128 ) 917 Increase in prepaid expenses and other assets ( 3,260 ) ( 10,253 ) ( 2,070 ) Increase in accounts payable and accrued expenses 5,621 2,327 2,650 (Decrease) increase in security deposits and other liabilities ( 1,799 ) ( 115 ) 13,937 Net cash provided by operating activities 369,929 461,919 516,688 INVESTING ACTIVITIES Acquisition of real estate ( 9,589 ) ( 204,516 ) ( 13,503 ) Capital expenditures - development and redevelopment ( 433,872 ) ( 327,074 ) ( 302,120 ) Capital expenditures - other ( 68,064 ) ( 82,836 ) ( 66,138 ) Costs associated with property sold under threat of condemnation, net ( 12,924 ) — — Proceeds from sale of real estate 183,461 321,997 177,775 Proceeds from partnership formation — — 37,998 Investment in partnerships ( 3,348 ) ( 1,052 ) ( 1,037 ) Distribution from partnerships in excess of earnings 1,301 2,765 275 Leasing costs ( 15,080 ) ( 25,459 ) ( 25,430 ) Increase in mortgage and other notes receivable, net ( 10,268 ) ( 357 ) ( 67 ) Net cash used in investing activities ( 368,383 ) ( 316,532 ) ( 192,247 ) FINANCING ACTIVITIES Net repayments under revolving credit facility, including costs ( 638 ) ( 4,012 ) ( 41,000 ) Issuance of senior notes, net of costs 1,094,283 399,913 — Redemption and retirement of senior notes ( 510,360 ) — — Issuance of notes payable, net of costs 398,722 — — Repayment of mortgages, finance leases, and notes payable ( 70,237 ) ( 301,029 ) ( 16,620 ) Issuance of common shares, net of costs 99,177 143,027 130,918 Dividends paid to common and preferred shareholders ( 324,596 ) ( 313,649 ) ( 301,194 ) Shares withheld for employee taxes ( 4,052 ) ( 4,626 ) ( 958 ) Contributions from noncontrolling interests — 404 2,838 Distributions to and redemptions of noncontrolling interests ( 20,563 ) ( 20,133 ) ( 15,293 ) Net cash provided by (used in) financing activities 661,736 ( 100,105 ) ( 241,309 ) Increase in cash, cash equivalents, and restricted cash 663,282 45,282 83,132 Cash, cash equivalents, and restricted cash at beginning of year 153,614 108,332 25,200 Cash, cash equivalents, and restricted cash at end of year $ 816,896 $ 153,614 $ 108,332 The accompanying notes are an integral part of these consolidated statements. F-8 Table of Contents Federal Realty Investment Trust Notes to Consolidated Financial Statements December 31, 2020, 2019 and 2018 NOTE 1— BUSINESS AND ORGANIZATION Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties. Our properties are located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of December 31, 2020, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 101 predominantly retail real estate projects. We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90 % of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Impacts of COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease ("COVID-19") as a pandemic. While we currently expect the impact to our properties is temporary in nature, the extent of the future effects of COVID-19 on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty. NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. Revenue Recognition and Accounts Receivable Policy beginning January 1, 2019, with our adoption of Accounting Standards Codification (ASC) 842, "Leases" Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. Lease payments are recognized on a straight-line basis from the point in time when the tenant controls the space through the term of the related lease. Variable lease payments relating to percentage rent are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent. For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement. Lease termination fees are generally recognized on the termination date if the tenant has relinquished control of the space. When a lease is terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is generally recognized evenly over the remaining term of the modified lease agreement. Lease concessions (unrelated to the COVID-19 pandemic) are evaluated to determine whether the concession represents a modification of the original lease contract. Modifications generally result in a reassessment of the lease term and lease classification, and remeasurement of lease payments received. Remeasured lease payments are recognized on a straight-line basis over the remaining term of the modified lease contract. F-9 Table of Contents In April 2020, the Financial Accounting Standards Board ("FASB") issued interpretive guidance relating to the accounting for lease concessions provided as a result of the COVID-19 pandemic that allows entities to treat the concession as if it was a part of the existing contract instead of applying lease modification accounting. This guidance is only applicable to the COVID-19 pandemic related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected this option relating to qualifying rent deferral and rent abatement agreements. For qualifying lease modifications with rent deferrals, this results in no change to our revenue recognition but an increase in the lease receivable balance until the deferred rent has been repaid. For qualifying lease modifications that include rent abatement concessions, this results in a direct reduction of rental income in the current period. As of December 31, 2020, we have entered into rent deferral agreements and rent abatement agreements related to the COVID-19 pandemic representing approximately $ 36 million and $ 35 million, respectively, of rent otherwise owed during the year ended December 31, 2020, and continue negotiations with other tenants. When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income. Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19. This includes initially ordering closures of nonessential business and ordering residents to generally stay at home, subsequent phased re-openings, and during the fourth quarter of 2020, additional closures and capacity limitations as infection levels increased in certain areas. These actions, along with the general concern over the spread of COVID-19, have resulted in many of our tenants temporarily or even permanently closing their businesses, and for some, it has impacted their ability to pay rent. As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19. Accordingly, during the year ended December 31, 2020, we recognized collectibility related adjustments of $ 106.6 million. This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $ 12.7 million of straight-line rent receivables related to tenants changed to a cash basis of revenue recognition during the year ended December 31, 2020. As of December 31, 2020, the revenue from approximately 35 % of our tenants (based on total commercial leases) is being recognized on a cash basis. As of December 31, 2020 and 2019, our straight-line rent receivables balance was $ 103.3 million and $ 100.3 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet. Policy prior to January 1, 2019 Prior to January 1, 2019, management estimates of collectability were considered when reserving for billed and accrued lease receivables and straight-line rent receivables. Full and partial reserves were recorded when determined to be appropriate with a corresponding charge to bad debt expense. The primary impact of the adoption of ASC 842, “Leases,” on our recognition of lease revenue relates to the upfront and ongoing assessment of the collectability of substantially all lease payments required by the new standard. Other revenue recognition policies Sales of real estate are recognized generally upon the transfer of control, which usually occurs when the real estate is legally sold. When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment. Real Estate Land, buildings and improvements are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range generally from 35 years to a maximum of 50 years on buildings and major improvements. Minor F-10 Table of Contents improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 2 to 20 years. Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as incurred. Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter. If a tenant vacates its space prior to contractual termination of its lease, the undepreciated balance of any tenant improvements are written off if they are replaced or have no future value. In 2020, 2019 and 2018, real estate depreciation expense was $ 227.9 million, $ 215.4 million and $ 216.0 million, respectively, including amounts from real estate sold. Our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and/or appraised values. When we acquire operating real estate properties, the purchase price is allocated to land, building, improvements, leasing costs, intangibles such as in-place leases, assumed debt, if any, and to current assets and liabilities acquired, if any. The value allocated to in-place leases is amortized over the related lease term and reflected as rental income in the consolidated statements of comprehensive income. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any in-place lease value is written off to rental income. Transaction costs related to asset acquisitions, such as broker fees, transfer taxes, legal, accounting, valuation, and other professional and consulting fees, are capitalized as part of the acquisition cost. The acquisition of an operating shopping center typically qualifies as an asset acquisition. Prior to the adoption of ASU 2016-02, "Leases," when applicable, as lessee, we classified our leases of land and building as operating or capital leases. We were required to use judgment and make estimates in determining the lease term, the estimated economic life of the property and the interest rate to be used in determining whether or not the lease meets the qualification of a capital lease. Subsequently, capital leases are now considered "finance leases." We capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved, are capitalized. Additionally, we capitalize interest costs related to development and redevelopment activities. Capitalization of these costs begin when the activities and related expenditures commence and cease when the project is substantially complete and ready for its intended use at which time the project is placed in service and depreciation commences. Additionally, we make estimates as to the probability of certain development and redevelopment projects being completed. If we determine the development or redevelopment is no longer probable of completion, we expense all capitalized costs which are not recoverable. Long-Lived Assets and Impairment There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. Cash and Cash Equivalents We define cash and cash equivalents as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity, when purchased, under three months. Cash balances in individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation (the “FDIC”). At December 31, 2020, we had $ 803.6 million in excess of the FDIC insured limit. F-11 Table of Contents Prepaid Expenses and Other Assets Prepaid expenses and other assets consist primarily of lease costs, prepaid property taxes and acquired above market leases. Capitalized lease costs are incremental direct costs incurred which were essential to originate a successful leasing arrangement and would not have been incurred had the leasing transaction not taken place. These costs include third party commissions related to obtaining a lease. Capitalized lease costs are amortized over the initial life of the related lease which generally ranges from three to ten years. We view these lease costs as part of the up-front initial investment we made in order to generate a long-term cash inflow and therefore, we classify cash outflows related to leasing costs as an investing activity in our consolidated statements of cash flows. If a tenant vacates its space prior to the contractual termination of its lease, the unamortized balance of any previously capitalized lease costs are written off. See the "Leases" section in this note for further discussion regarding the change in accounting for lease costs. Debt Issuance Costs Costs related to the issuance of debt instruments are deferred and are amortized as interest expense over the estimated life of the related issue using the straight-line method which approximates the effective interest method. If a debt instrument is paid off prior to its original maturity date, the unamortized balance of debt issuance costs are written off to interest expense or, if significant, included in “early extinguishment of debt.” Debt issuance costs related to our revolving credit facility are classified as an asset and are included in "prepaid expenses and other assets" in our consolidated balance sheets. All other debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability. Derivative Instruments We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes. Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in accumulated other comprehensive income (loss) on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected. At December 31, 2020, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken acquisition at 3.67 %. Both swaps were designated and qualify for cash flow hedge accounting. As of December 31, 2020, our Assembly Row hotel joint venture is a party to two interest rate swap agreements that effectively fix the interest rate on the joint venture's mortgage debt at 5.206 %. Both swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2020, 2019 and 2018. Mortgage Notes Receivable We have invested in certain mortgage loans that, because of their nature, qualify as loan receivables. At the time of investment, we did not intend for the arrangement to be anything other than a financing and did not contemplate a real estate investment. We evaluate each investment to determine whether the loan arrangement qualifies as a loan, joint venture or real estate investment and the appropriate accounting thereon. Such determination affects our balance sheet classification of these investments and the recognition of interest income derived therefrom. In one of our mortgage loan arrangements, we receive additional interest, however, we never receive in excess of 50 % of the residual profit in the project, and because the borrower has either a substantial investment in the project or has guaranteed all or a portion of our loan (or a combination thereof), the loans qualify for loan accounting. The amounts under these arrangements are presented as mortgage notes receivable at December 31, 2020 and 2019. Mortgage notes receivable are recorded at cost, net of any valuation adjustments. Effective January 1, 2020, (upon the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," as amended and interpreted), we account for mortgage notes receivable using the "expected credit loss" model, and accordingly impairment losses are estimated and recorded for the entire life of the loan. Prior to the implementation of ASC 326, we recognized impairment losses as incurred. Interest income is accrued as earned. Mortgage notes receivable are considered past due based on the contractual terms of the note agreement. On F-12 Table of Contents a quarterly basis, we evaluate the collectability of each mortgage note receivable and update our expected credit loss model based on various factors which may include payment history, expected fair value of the collateral securing the loan, internal and external credit information and/or economic trends. A loan is considered impaired when it is probable that we will be unable to collect all amounts due under the existing contractual terms. When a loan is considered impaired, the amount of the loss accrual is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows. Since two loans are collateralized by a first mortgage, these loans have risk characteristics similar to the risks in owning commercial real estate. At December 31, 2020, we had four mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments of $ 39.9 million, and a weighted average interest rate of 10.0 %. Approximately $ 30.3 million of the loans are secured by first mortgages on retail buildings at December 31, 2020. Share Based Compensation We grant share based compensation awards to employees and trustees typically in the form of restricted common shares, common shares, and options. We measure share based compensation expense based on the grant date fair value of the award and recognize the expense ratably over the requisite service period, which is typically the vesting period. See Note 12 for further discussion regarding our share based compensation plans and policies. Variable Interest Entities Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Our equity method investments in the Pike & Rose hotel joint venture, the Assembly Row hotel joint venture, and the La Alameda shopping center are also considered variable interests in a VIE. As we do not control the activities that most significantly impact the economic performance of the joint ventures, we are not the primary beneficiary and do not consolidate. As of December 31, 2020 and 2019, our investment in these joint ventures and maximum exposure to loss was $ 18.7 million and $ 23.4 million, respectively. On January 4, 2021, we acquired our partner's interest in the Pike & Rose hotel joint venture. See footnote 15 to the consolidated financial statements for additional details of this transaction. In addition, we have 17 entities that meet the criteria of a VIE in which we hold a variable interest. For each of these entities, we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of the entities. As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for each of these entities, all are consolidated in our financial statements. Net real estate assets related to VIEs included in our consolidated balance sheets were approximately $ 1.4 billion and $ 1.5 billion as of December 31, 2020 and 2019, respectively, and mortgages related to VIEs included in our consolidated balance sheets were approximately $ 413.7 million and $ 469.2 million, as of December 31, 2020 and 2019, respectively. We have also evaluated our mortgage notes receivable investments and determined that the entities obligated under the mortgage notes are not VIEs. Our equity method investments and mortgage notes receivable balances are presented separately in our consolidated balance sheets. Redeemable Noncontrolling Interests We have certain noncontrolling interests that are redeemable for cash upon the occurrence of an event that is not solely in our control and therefore are classified outside of permanent equity. We adjust the carrying amounts of these noncontrolling interests that are currently redeemable to redemption value at the balance sheet date. Adjustments to the carrying amount to reflect changes in redemption value are recorded as adjustments to additional paid-in capital in shareholders' equity. These amounts are classified within the mezzanine section of the consolidated balance sheets. F-13 Table of Contents The following table provides a rollforward of the redeemable noncontrolling interests: Year Ended December 31, 2020 2019 (In thousands) Beginning balance $ 139,758 $ 136,208 Contributions 19,335 9,961 Net income 2,228 3,430 Distributions & redemptions ( 1,197 ) ( 15,366 ) Other comprehensive loss - change in value of interest rate swaps ( 471 ) — Change in redemption value ( 21,933 ) 5,525 Ending balance $ 137,720 $ 139,758 On August 2, 2019, we acquired the 10.1 % redeemable noncontrolling interest in the partnership that owns our Montrose Crossing Shopping Center for $ 10.0 million, bringing our ownership interest to 100 %. Leases We adopted ASC 842 effective January 1, 2019 under the modified retrospective approach and elected the optional transition method to apply the provisions of ASC 842 as of the adoption date, rather than the earliest period presented. We elected to apply certain adoption related practical expedients for all leases that commenced prior to the election date. These practical expedients included not reassessing whether any expired or existing contracts were or contained leases; not reassessing the lease classification for any expired or existing leases; and not reassessing initial direct costs for any existing leases. We also elected the practical expedient for lessors to combine our lease and non-lease components (primarily impacts common area maintenance recoveries). Lessor We recorded a charge to the opening accumulated dividends in excess of net income of $ 7.1 million in 2019 as a result of the adoption of ASC 842. This charge was attributable to the write off certain direct leasing costs recorded under the previous lease accounting rules for leases which had not commenced as well as the write off of unreserved receivables (including straight-line receivables) for leases where we had determined the collection of substantially all the lease payments required for the term is not probable. Also upon adoption of ASC 842 and reflected in our 2019 and 2020 financial statements, we do not record a gross up of revenue and expense for costs (such as real estate taxes) paid directly by lessees on our behalf. Lessee We have ground leases at 12 properties which are accounted for as operating leases. The operating lease right of use ("ROU") assets and related liabilities are shown separately on the face of our consolidated balance sheet and reflect the present value of the minimum lease payments. A key input in the calculation is the discount rate. As the rate implied in the lease agreements is not readily determinable, we utilize our incremental borrowing rate that correspond to the remaining term of the lease, our credit spread, and and adjustment to reflect the collateralized payment terms present in the lease. Our operating lease agreements may include options to extend the lease term or terminate it early. We include options to extend or terminate leases in the ROU operating lease asset and liability when it is reasonably certain we will exercise these options. Operating lease expense is recognized on a straight-line basis over the non-cancellable lease term and is included in rental expenses in our consolidated statements of operations. We elected to apply the short-term lease exemption within ASC 842, and as such we have not recorded an ROU asset or lease liability for leases with terms of less than 12 months. Income Taxes We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90 % of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material. We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal F-14 Table of Contents Revenue Code of 1986, as amended (the “Code”). A TRS is subject to federal and state income taxes. Our TRS activities have not been material. With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2016. As of December 31, 2020 and 2019, we had no material unrecognized tax benefits. While we currently have no material unrecognized tax benefits, as a policy, we recognize penalties and interest accrued related to unrecognized tax benefits as income tax expense. Segment Information Our primary business is the ownership, management, and redevelopment of retail and mixed-use properties. We review operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. We evaluate financial performance using property operating income, which consists of rental income, other property income and mortgage interest income, less rental expenses and real estate taxes. No individual commercial or residential property constitutes more than 10% of our revenues or property operating income and we have no operations outside of the United States of America. Therefore, we have aggregated our properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes. F-15 Table of Contents Recent Accounting Pronouncements Standard Description Effect on the financial statements or significant matters Adopted on January 1, 2020: Financial Instruments - Credit Losses (Topic 326) and related updates: ASU 2016-13, June 2016, Financial Instruments - Credit Losses (Topic 326) ASU 2018-19, November 2018, Codification improvements to Topic 326, Financial Instruments - Credit Losses This ASU changes the impairment model for most financial assets and certain other instruments, requiring the use of an "expected credit loss" model and adding more disclosure requirements. ASU 2018-19 clarifies that impairment of of receivables arising from operating leases should accounted for in accordance with Topic 842, Leases. Upon adoption of this standard, we recorded expected losses of $0.5 million in opening accumulated dividends in excess of net income. During the year ended December 31, 2020, we recorded additional expected losses of $0.4 million, which are included in rental expenses. ASU 2018-15, August 2018, Intangibles - Goodwill and Other Internal Use Software: Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This ASU requires a customer in a cloud computing arrangement (i.e. hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement. Entities will expense costs during the preliminary project and post-implementation stages as they are incurred. The guidance can be applied prospectively to all implementation costs incurred after the date of adoption or retrospectively in accordance with ASC 250-10-45-5 through ASC 250-10-45-10. The adoption of this standard did not have a significant impact to our consolidated financial statements. Issued in 2020: ASU 2020-04, March 2020, Reference Rate Reform (Topic 848) This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform. For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied. For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract. This guidance can be applied immediately, however, is generally only available through December 31, 2022. We are still evaluating the impact of reference rate reform and whether we will apply any of these practical expedients. ASU 2020-06, August 2020, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity This ASU simplifies the accounting for convertible instruments by removing the requirements to separately present certain conversion features in equity, simplifying the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification, and generally requiring use of the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive). The guidance is effective for annual periods beginning after December 15, 2021, and interim periods therein. The adoption of this standard is not expected to have a significant impact to our consolidated financial statements. F-16 Table of Contents Consolidated Statements of Cash Flows—Supplemental Disclosures The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows: Year Ended December 31, 2020 2019 2018 (In thousands) SUPPLEMENTAL DISCLOSURES: Total interest costs incurred $ 159,718 $ 130,110 $ 129,001 Interest capitalized ( 23,429 ) ( 20,487 ) ( 18,847 ) Interest expense $ 136,289 $ 109,623 $ 110,154 Cash paid for interest, net of amounts capitalized $ 130,248 $ 106,180 $ 107,494 Cash paid for income taxes $ 580 $ 483 $ 675 NON-CASH INVESTING AND FINANCING TRANSACTIONS (1): DownREIT operating partnership units issued with acquisition $ 18,920 $ — $ — Mortgage loans assumed with acquisition $ 8,903 $ 98,041 $ — DownREIT operating partnership units redeemed for common shares $ — $ 14,105 $ 101 Settlement of partner loan receivable via dilution of partner interests $ — $ 5,379 $ — Shares issued under dividend reinvestment plan $ 1,734 $ 1,784 $ 1,884 Contribution from noncontrolling interest $ — $ — $ 1,435 (1) See Note 5 for additional disclosures relating to the mortgages entered into and assumed as a result of the Hoboken acquisition. December 31, 2020 2019 (In thousands) RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Cash and cash equivalents $ 798,329 $ 127,432 Restricted cash (1) 18,567 26,182 Total cash, cash equivalents, and restricted cash $ 816,896 $ 153,614 (1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets. NOTE 3— REAL ESTATE 2020 Property Acquisitions Date Acquired Property City/State Gross Leasable Area (GLA) Purchase Price (in square feet) (in millions) January 10, 2020 Fairfax Junction Fairfax, Virginia 49,000 $ 22.3 (1) February 12, 2020 Hoboken (2 mixed-use buildings) Hoboken, New Jersey 12,000 $ 14.3 (2) (1) This property is adjacent to, and will be operated as part of the property acquired in 2019. The purchase price was paid with a combination of cash and the issuance of 163,322 downREIT operating partnership units. Approximately $ 0.5 million and $ 0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. (2) The purchase price includes the assumption of $ 8.9 million of mortgage debt, and is in addition to the 37 buildings previously acquired in 2019, and was completed through the same joint venture. Less than $ 0.1 million and approximately $ 3.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. F-17 Table of Contents 2020 Impairment On September 1, 2020, the $ 60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured. The mortgage was not repaid, and thus the lender declared the loan in default. We evaluated our long-term plans for the property, taking into account current market conditions and prospective development and redevelopment returns, as well as the impact of COVID-19 on the revenue prospects for the property, and concluded we did not expect to move forward with the planned redevelopment or repay the mortgage balance, and thus, did not expect to be long term holders of the asset. Given these expectations, we recorded an impairment charge of $ 57.2 million during the third quarter of 2020. The fair value estimate used to determine the impairment charge was determined by market comparable data and discounted cash flow analyses. The cash flows utilized in such analyses are comprised of unobservable inputs which include forecasted rental revenue and expenses based upon market conditions and future expectations. The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that we believe to be within a reasonable range of current market rates for the property. Based on these inputs, we have determined that the $ 57 million estimated valuation of the property is classified within Level 3 of the fair value hierarchy. On December 31, 2020, we sold The Shops at Sunset Place for $ 65.5 million and repaid the mortgage loan. The resulting gain of $ 9.2 million is included in the cumulative 2020 gain of $ 98.1 million noted in the 2020 Property Dispositions section below. 2020 Property Dispositions During the year ended December 31, 2020, we sold three properties (including The Shops at Sunset Place discussed above) and one building for a total sales price of $ 186.1 million, which resulted in a gain of $ 98.1 million. During the year ended December 31, 2020, we closed on the sale of the remaining two condominium units at our Pike & Rose property, receiving proceeds net of closing costs of $ 2.1 million. 2019 Property Acquisitions Date Acquired Property City/State Gross Leasable Area (GLA) Purchase Price (in square feet) (in millions) February 8, 2019 Fairfax Junction Fairfax, Virginia 75,000 $ 22.5 (1) September 13, 2019 San Antonio Center Mountain View, California 6,000 $ 6.5 November 15, 2019 Georgetowne Shopping Center Brooklyn, New York 147,000 $ 83.7 (2) Various 2019 Hoboken (37 mixed-use buildings) Hoboken, New Jersey 158,000 $ 189.2 (3) (1) Approximately $ 0.6 million and $ 0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. (2) Approximately $ 2.0 million and $ 0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. (3) These acquisitions were completed through a newly formed joint venture, for which we own a 90 % interest. The purchase price includes new and assumptions of mortgage debt totaling approximately $ 98.0 million. This property includes 123 residential units in addition to the GLA in the table above. Approximately $ 3.6 million and $ 8.1 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. 2019 Property Dispositions On December 11, 2019, w e received $ 154.7 million in net proceeds related to the sale under the threat of condemnation of 11.7 acres of San Antonio Center to a local school district ("the condemning authority"). As part of the transaction, the condemning authority will commence condemnation proceedings in order to terminate all existing leases they assumed at closing. We have indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and expect the process will take several years to complete. The consideration in the transaction is considered variable because we have agreed to indemnify the condemning authority for these costs. Consequently, at December 31, 2019, we recorded a liability of $ 45.5 million to reflect our estimate of the final consideration, net of estimated condemnation proceeding costs and other transaction related costs. The resulting net gain on sale was approximately $ 85.1 million. During the year ended December 31, 2019, we sold three properties and one land parcel for a net sales price of $ 149.0 million, which resulted in a net gain of $ 28.3 million. F-18 Table of Contents During the year ended December 31, 2019, we closed on the sale of 43 condominium units at our Assembly Row and Pike & Rose properties (combined), received proceeds net of closing costs of $ 20.1 million, and recognized a gain of $ 2.6 million, net of income taxes. The cost basis for the remaining condominium units as of December 31, 2019 is $ 1.7 million, and is included in "assets held for sale" on our consolidated balance sheet. NOTE 4— ACQUIRED IN-PLACE LEASES Acquired lease assets comprise above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities comprise below market leases where we are the lessor and above market leases where we are the lessee. As a lessor, acquired above market leases are included in prepaid expenses and other assets, and acquired below market leases are included in other liabilities and deferred credits. In accordance with our adoption of ASC Topic 842, acquired below market leases and acquired above market leases where we are the lessee are included in right of use assets. The following is a summary of our acquired lease assets and liabilities: December 31, 2020 December 31, 2019 Cost Accumulated Amortization Cost Accumulated Amortization (in thousands) Above market leases, lessor $ 43,560 $ ( 31,661 ) $ 48,530 $ ( 32,833 ) Below market leases, lessee 34,604 ( 4,190 ) 34,604 ( 3,362 ) Total $ 78,164 $ ( 35,851 ) $ 83,134 $ ( 36,195 ) Below market leases, lessor $ ( 174,582 ) $ 68,286 $ ( 177,512 ) $ 66,419 Above market leases, lessee ( 9,084 ) 2,116 ( 9,084 ) 1,590 Total $ ( 183,666 ) $ 70,402 $ ( 186,596 ) $ 68,009 The value allocated to in-place leases where we are the lessor is amortized over the related lease term and reflected as additional rental income for below market leases or a reduction of rental income for above market leases in the consolidated statements of comprehensive income. The related amortization of in-place leases where we are the lessee is reflected as additional rental expense for below market leases or a reduction of rental expenses for above market leases in the consolidated statements of comprehensive income. The following is a summary of acquired lease amortization: Year Ended December 31, 2020 2019 2018 (in thousands) Amortization of above market leases, lessor $ ( 4,060 ) $ ( 3,239 ) $ ( 5,608 ) Amortization of below market leases, lessor 8,406 9,623 12,445 Net increase in rental income $ 4,346 $ 6,384 $ 6,837 Amortization of below market leases, lessee $ 828 $ 828 $ 828 Amortization of above market leases, lessee ( 525 ) ( 525 ) ( 505 ) Net increase in rental expense $ 303 $ 303 $ 323 The following is a summary of the remaining weighted average amortization period for our acquired lease assets and acquired lease liabilities: December 31, 2020 Above market leases, lessor 3.5 years Below market leases, lessee 38.6 years Below market leases, lessor 17.8 years Above market leases, lessee 13.4 years The amortization for acquired in-place leases during the next five years and thereafter, assuming no early lease terminations, is as follows: F-19 Table of Contents Acquired Lease Assets Acquired Lease Liabilities (In thousands) Year ending December 31, 2021 $ 3,302 $ 7,738 2022 2,637 7,501 2023 2,439 7,253 2024 2,189 6,784 2025 1,911 6,300 Thereafter 29,835 77,688 $ 42,313 $ 113,264 F-20 Table of Contents NOTE 5— DEBT The following is a summary of our total debt outstanding as of December 31, 2020 and 2019: Principal Balance as of December 31, Stated Interest Rate as of Stated Maturity Date as of Description of Debt 2020 2019 December 31, 2020 December 31, 2020 Mortgages payable (Dollars in thousands) The Shops at Sunset Place $ — $ 61,987 5.62 % September 1, 2020 29th Place — 3,878 5.91 % January 31, 2021 Sylmar Towne Center 16,236 16,630 5.39 % June 6, 2021 Plaza Del Sol 8,041 8,230 5.23 % December 1, 2021 THE AVENUE at White Marsh 52,705 52,705 3.35 % January 1, 2022 Montrose Crossing 65,596 67,492 4.20 % January 10, 2022 Azalea 40,000 40,000 3.73 % November 1, 2025 Bell Gardens 12,408 12,677 4.06 % August 1, 2026 Plaza El Segundo 125,000 125,000 3.83 % June 5, 2027 The Grove at Shrewsbury (East) 43,600 43,600 3.77 % September 1, 2027 Brook 35 11,500 11,500 4.65 % July 1, 2029 Hoboken (24 Buildings) 56,450 56,450 LIBOR + 1.95% December 15, 2029 Various Hoboken (14 Buildings) 32,705 24,627 Various (1) Various through 2029 Chelsea 5,234 5,597 5.36 % January 15, 2031 Hoboken (1 Building) 16,560 16,874 3.75 % July 1, 2042 Subtotal 486,035 547,247 Net unamortized premium and debt issuance costs ( 1,924 ) ( 1,568 ) Total mortgages payable 484,111 545,679 Notes payable Term loan 400,000 — LIBOR + 1.35% May 6, 2021 Revolving credit facility — — LIBOR + 0.775% January 19, 2024 Various 3,270 3,843 11.31 % Various through 2028 Subtotal 403,270 3,843 Net unamortized debt issuance costs ( 494 ) ( 62 ) Total notes payable 402,776 3,781 Senior notes and debentures 2.55% notes — 250,000 2.55 % January 15, 2021 3.00% notes — 250,000 3.00 % August 1, 2022 2.75% notes 275,000 275,000 2.75 % June 1, 2023 3.95% notes 600,000 300,000 3.95 % January 15, 2024 1.25% notes 400,000 — 1.25 % February 15, 2026 7.48% debentures 29,200 29,200 7.48 % August 15, 2026 3.25% notes 475,000 475,000 3.25 % July 15, 2027 6.82% medium term notes 40,000 40,000 6.82 % August 1, 2027 3.20% notes 400,000 400,000 3.20 % June 15, 2029 3.50% notes 400,000 — 3.50 % June 1, 2030 4.50% notes 550,000 550,000 4.50 % December 1, 2044 3.625% notes 250,000 250,000 3.625 % August 1, 2046 Subtotal 3,419,200 2,819,200 Net unamortized discount and debt issuance costs ( 14,712 ) ( 12,066 ) Total senior notes and debentures 3,404,488 2,807,134 Total debt $ 4,291,375 $ 3,356,594 _____________________ 1) The interest rates on these mortgages range from 3.91 % to 5.00 %. In connection with the two buildings we acquired in Hoboken, New Jersey on February 12, 2020, we assumed two mortgage loans with a net face amount of $ 8.9 million and a fair value of $ 9.0 million. The mortgage loans bear interest at 4.00 % and mature on July 27, 2027. F-21 Table of Contents In March 2020, in order to strengthen our financial position and balance sheet, to maximize our liquidity, and to provide maximum financial flexibility to continue our business initiatives as the effects of COVID-19 continue to evolve, we borrowed $ 990.0 million under our revolving credit facility, representing a draw-down of almost the entirety of our $ 1.0 billion revolving credit facility. This amount was subsequently repaid when we entered into a $ 400.0 million unsecured term loan on May 6, 2020 and issued $ 700.0 million of fixed rate unsecured senior notes on May 11, 2020. The unsecured term loan matures on May 6, 2021, plus one twelve month extension at our option, and bears interest at LIBOR plus 135 basis points based on our current credit rating. Our net proceeds from this transaction after underwriting fees and other costs were $ 398.7 million. The $ 700.0 million of unsecured senior notes issued in May 2020 comprise a $ 300.0 million reopening of our 3.95 % senior notes maturing on January 15, 2024 and a $ 400.0 million issuance of 3.50 % senior notes maturing on June 1, 2030. The 3.95 % senior notes were offered at 103.257 % of the principal amount with a yield to maturity of 2.944 %, and have the same terms and are of the same series as the $ 300.0 million senior notes issued on December 9, 2013. The 3.50 % senior notes were offered at 98.911 % of the principal amount with a yield to maturity of 3.630 %. Our net proceeds from these transactions after the net issuance premium, underwriting fees, and other costs were $ 700.1 million. On September 1, 2020, the $ 60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured and was not repaid. The lender declared the loan in default until the non-recourse loan was repaid as part of the sale of the property on December 31, 2020. The default did not trigger a cross default with any other indebtedness. The repayment amount including accrued interest and fees, net of $ 4.5 million of escrows held by the lender was $ 58.5 million. On October 13, 2020, we issued $ 400.0 million of fixed rate senior unsecured notes that mature on February 15, 2026 and bear interest at 1.25 %. The notes were offered at 99.339 % of the principal amount with a yield to maturity of 1.379 %. The net proceeds of the notes, or "green bonds," after issuance discount, underwriting fees, and other costs were approximately $ 394.2 million, and will be allocated to the financing and refinancing of recently completed and future eligible green projects, which includes (i) investments in acquisitions of buildings; (ii) building developments or redevelopments; (iii) renovations in existing buildings; and (iv) tenant improvement projects, in each case that have received, or are expected to receive, in the three years prior to the issuance of the notes or during the term of the notes, a LEED Silver, Gold, or Platinum certification (or environmentally equivalent successor standards). Net proceeds allocated to previously incurred costs associated with eligible green projects will be available for repayment of indebtedness. On December 15, 2020, we repaid our $ 250.0 million 2.55 % notes prior to the original maturity date of January 15, 2021 at par. The redemption price of $ 252.7 million included accrued but unpaid interest of $ 2.7 million. On December 31, 2020, we repaid our $ 250.0 million 3.00 % notes prior to the original maturity date of August 1, 2022. The redemption price of $ 263.5 million included a make-whole premium of $ 10.4 million and accrued but unpaid interest of $ 3.1 million. The "early extinguishment of debt" charge in 2020 of $ 11.2 million includes the make-whole premium and the write off of the unamortized discount and debt issuance fees. On December 31, 2020, we also repaid the $ 3.6 million mortgage loan on 29th Place, at par, prior to its original maturity date. During 2020, 2019 and 2018, the maximum amount of borrowings outstanding under our revolving credit facility was $ 990.0 million, $ 116.5 million and $ 177.0 million, respectively. The weighted average amount of borrowings outstanding was $ 138.5 million, $ 26.8 million and $ 83.1 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 1.5 %, 3.2 % and 2.7 %, respectively. The revolving credit facility requires an annual facility fee of $ 1.0 million. At December 31, 2020 and 2019, our revolving credit facility had no balance outstanding. Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2020, we were in compliance with all default related debt covenants. F-22 Table of Contents Scheduled principal payments on mortgages payable, notes payable, senior notes and debentures as of December 31, 2020 are as follows: Mortgages Payable Notes Payable Senior Notes and Debentures Total Principal (In thousands) Year ending December 31, 2021 $ 28,101 $ 400,676 (1) $ — $ 428,777 2022 119,706 751 — 120,457 2023 3,549 765 275,000 279,314 2024 3,688 656 (2) 600,000 604,344 2025 48,033 333 — 48,366 Thereafter 282,958 89 2,544,200 2,827,247 $ 486,035 $ 403,270 $ 3,419,200 $ 4,308,505 (3) _____________________ (1) Our $ 400.0 million term loan matures on May 6, 2021 plus one twelve month extension, at our option. (2) Our $ 1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option. As of December 31, 2020, there was no outstanding balance under this credit facility. (3) The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net premium/discount and debt issuance costs on mortgage loans, notes payable, and senior notes as of December 31, 2020 . NOTE 6—FAIR VALUE OF FINANCIAL INSTRUMENTS A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows: 1. Level 1 Inputs—quoted prices in active markets for identical assets or liabilities 2. Level 2 Inputs—observable inputs other than quoted prices in active markets for identical assets and liabilities 3. Level 3 Inputs—prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows: December 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Mortgages and notes payable $ 886,887 $ 879,390 $ 549,460 $ 562,049 Senior notes and debentures $ 3,404,488 $ 3,761,465 $ 2,807,134 $ 3,001,216 As of December 31, 2020, we have two interest rate swap agreements with notional amounts of $ 56.5 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the interest rate on $ 56.5 million of mortgage payables at 3.67 % through December 15, 2029. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at December 31, 2020 was a liability of $ 4.7 million and is included in "prepaid expenses and other assets" on our consolidated balance sheet. During 2020, the value of our interest rate F-23 Table of Contents swaps decreased $ 4.8 million (including $ 0.7 million reclassified from other comprehensive loss to interest expense). A summary of our financial (liabilities) assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows: December 31, 2020 December 31, 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In thousands) Interest rate swaps $ — $ ( 4,711 ) $ — $ ( 4,711 ) $ — $ 130 $ — $ 130 One of our equity method investees has two interest rate swaps which qualify as cash flow hedges. At December 31, 2020 and December 31, 2019, our share of the decrease in fair value of the related swaps included in "accumulated other comprehensive loss" was $ 0.5 million and $ 0.9 million, respectively. NOTE 7— COMMITMENTS AND CONTINGENCIES We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. Other than as described below, we do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us. We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability. We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts. Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported. Management considers a number of factors, including third-party actuarial analysis, previous experience in our portfolio, and future increases in costs of claims, when making these determinations. If our liability costs exceed these accruals, it will reduce our net income. We reserve for estimated losses, if any, associated with warranties given to a buyer at the time real estate is sold or other potential liabilities relating to that sale, taking any insurance policies into account. These warranties may extend up to ten years and require significant judgment. If changes in facts and circumstances indicate that warranty reserves are understated, we will accrue additional reserves at such time a liability has been incurred and the costs can be reasonably estimated. Warranty reserves are released once the legal liability period has expired or all related work has been substantially completed. On December 17, 2020, we acquired one of our partner's preferred and common interests in the partnership that owns our Plaza El Segundo property for $ 7.3 million, bringing our ownership to approximately 78.2 %. On December 11, 2019, w e received proceeds related to the sale under the threat of condemnation at San Antonio Center as discussed in Note 3 to the consolidated financial statements. We have indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and expect the process will take several years to complete. During 2020, we incurred $ 12.9 million of net payments to tenants, and consequently , at December 31, 2020, we have a liability of $ 32.6 million to reflect our estimate of the remaining consideration. At December 31, 2020 and 2019, our reserves for general liability costs were $ 4.6 million and $ 3.0 million, respectively, and are included in “accounts payable and accrued expenses” in our consolidated balance sheets. Any potential losses which exceed our estimates would result in a decrease in our net income. During 2020 and 2019, we made payments from these reserves of $ 0.8 million and $ 1.3 million, respectively. Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over-time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses. At December 31, 2020, we had letters of credit outstanding of approximately $ 4.7 million. F-24 Table of Contents As of December 31, 2020 in connection with capital improvement, development, and redevelopment projects, the Trust has contractual obligations of approximately $ 356.1 million. We are obligated under operating lease agreements on several shopping centers and one office lease requiring minimum annual payments as follows, as of December 31, 2020: (In thousands) Year ending December 31, 2021 $ 5,077 2022 5,197 2023 5,243 2024 5,213 2025 5,084 Thereafter 175,387 Total future minimum operating lease payments $ 201,201 Less amount representing interest ( 128,760 ) Operating lease liabilities $ 72,441 Future minimum lease payments and their present value for properties under finance leases as of December 31, 2020, are as follows: (In thousands) Year ending December 31, 2021 $ 5,800 2022 5,810 2023 60,013 2024 1,013 2025 1,013 Thereafter 80,837 Total future minimum finance lease payments 154,486 Less amount representing interest ( 82,437 ) Finance lease liabilities $ 72,049 A master lease for Mercer Mall includes a fixed purchase price option for $ 55 million in 2023. If we fail to exercise our purchase option, the owner of Mercer Mall has a put option which would require us to purchase Mercer Mall for $ 60 million in 2025. Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63 % interest in Congressional Plaza at the interest’s then-current fair market value. If the okother minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2020, our estimated maximum liability upon exercise of the put option would range from approximately $ 69 million to $ 72 million. A master lease for Melville Mall includes a fixed purchase price option in 2021 for $ 5 million. If we fail to exercise our purchase option, the owner of Melville Mall has a put option which would require us to purchase Melville Mall in 2023 for $ 5 million. Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0 % and 11.8 % ownership interests at the interests' then-current fair market value. If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value. Based on management’s current estimate of fair market value as of December 31, 2020, our estimated maximum liability upon exercise of the put option would range from approximately $ 28 million to $ 35 million. F-25 Table of Contents The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1 % interest in The Grove at Shrewsbury and approximately 6.5 % interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2020, our estimated maximum liability upon exercise of the put option would range from $ 6 million to $ 7 million. Effective September 18, 2023, the other member in Hoboken has the right to require us to purchase all of its 10.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2020, our estimated maximum liability upon exercise of the put option would range from $ 5 million to $ 6 million. Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. A total of 744,617 downREIT operating partnership units are outstanding which have a total fair value of $ 63.4 million, based on our closing stock price on December 31, 2020. NOTE 8— SHAREHOLDERS’ EQUITY We have a Dividend Reinvestment Plan (the “Plan”), whereby shareholders may use their dividends and optional cash payments to purchase shares. In 2020, 2019 and 2018, 24,491 shares, 15,909 shares and 17,952 shares, respectively, were issued under the Plan. As of December 31, 2020, 2019, and 2018, we had 6,000,000 Depositary Shares outstanding, each representing 1/1000th interest of 5.0 % Series C Cumulative Redeemable Preferred Share, par value $ 0.01 per share ("Series C Preferred Shares"), at the liquidation preference of $ 25.00 per depositary share (or $ 25,000 per Series C Preferred share). The Series C Preferred Shares accrue dividends at a rate of 5.0 % of the $ 25,000 liquidation preference per year and are redeemable at our option on or after September 29, 2022. Additionally, they are not convertible and holders of these shares generally have no voting rights, unless we fail to pay dividends for six or more quarters. As of December 31, 2020, 2019, and 2018, we had 399,896 shares of 5.417 % Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) outstanding that have a liquidation preference of $ 25 per share and par value $ 0.01 per share. The Series 1 Preferred Shares accrue dividends at a rate of 5.417 % per year and are convertible at any time by the holders to our common shares at a conversion rate of $ 104.69 per share. The Series 1 Preferred Shares are also convertible under certain circumstances at our election. The holders of the Series 1 Preferred Shares have no voting rights. On May 7, 2018, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $ 400.0 million. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay amounts of outstanding under our revolving credit facility and/or for general corporate purposes. For the year ended December 31, 2020, we issued 1,080,804 common shares at a weighted average price per share of $ 92.51 for net cash proceeds of $ 98.8 million including paying $ 1.0 million in commissions and $ 0.1 million in additional offering expenses related to the sales of these common shares. For the year ended December 31, 2019, we issued 1,069,699 common shares at a weighted average price per share of $ 134.71 for net cash proceeds of $ 142.7 million and paid $ 1.2 million in commissions and $ 0.2 million in additional offering expenses related to the sales of these common shares. As of December 31, 2020, we had the capacity to issue up to $ 28.4 million in common shares under our ATM equity program. NOTE 9— DIVIDENDS The following table provides a summary of dividends declared and paid per share: Year Ended December 31, 2020 2019 2018 Declared Paid Declared Paid Declared Paid Common shares $ 4.220 $ 4.210 $ 4.140 $ 4.110 $ 4.040 $ 4.020 5.417% Series 1 Cumulative Convertible Preferred shares $ 1.354 $ 1.354 $ 1.354 $ 1.354 $ 1.354 $ 1.354 5.0% Series C Cumulative Redeemable Preferred shares (1) $ 1.250 $ 1.250 $ 1.250 $ 1.250 $ 1.250 $ 1.306 (1) Amount represents dividends per depositary share, each representing 1/1000th of a share. F-26 Table of Contents A summary of the income tax status of dividends per share paid is as follows: Year Ended December 31, 2020 2019 2018 Common shares Ordinary dividend $ 3.452 $ 4.110 $ 3.859 Return of capital 0.758 — — Ordinary dividend eligible for 15% rate — — 0.161 $ 4.210 $ 4.110 $ 4.020 5.417% Series 1 Cumulative Convertible Preferred shares Ordinary dividend $ 1.354 $ 1.354 $ 1.300 Ordinary dividend eligible for 15% rate — — 0.054 $ 1.354 $ 1.354 $ 1.354 5.0% Series C Cumulative Redeemable Preferred shares Ordinary dividend $ 1.250 $ 1.250 1.254 Ordinary dividend eligible for 15% rate — — 0.052 $ 1.250 $ 1.250 $ 1.306 On November 5, 2020, the Trustees declared a quarterly cash dividend of $ 1.06 per common share, payable January 15, 2021 to common shareholders of record on January 4, 2021. NOTE 10— LEASES At December 31, 2020, our 101 predominantly retail shopping center and mixed-use properties are located in 11 states and the District of Columbia. There are approximately 2,800 commercial leases and 2,700 residential leases. Our commercial tenants range from sole proprietorships to national retailers and corporations. At December 31, 2020, no one tenant or corporate group of tenants accounted for more than 3.6 % of annualized base rent. Our leases with commercial property and residential tenants are classified as operating leases. Commercial property leases generally range from three to ten years (certain leases with anchor tenants may be longer), and in addition to minimum rents, may provide for percentage rents based on the tenant’s level of sales achieved and cost recoveries for the tenant’s share of certain operating costs. Leases on apartments are generally for a period of 1 year or less. As of December 31, 2020, future minimum rentals from noncancelable commercial operating leases (excluding both tenant reimbursements of operating expenses and percentage rent based on tenants' sales) are as follows: (In thousands) Year ending December 31, 2021 $ 586,082 2022 549,529 2023 486,269 2024 421,945 2025 349,671 Thereafter 1,493,377 $ 3,886,873 F-27 Table of Contents The following table provides additional information on our operating and finance leases where we are the lessee: Year Ended December 31, 2020 2019 (In thousands) LEASE COST: Finance lease cost: Amortization of right-of-use assets $ 1,284 $ 1,284 Interest on lease liabilities 5,826 5,824 Operating lease cost 5,946 6,063 Variable lease cost 353 487 Total lease cost $ 13,409 $ 13,658 OTHER INFORMATION: ROU assets obtained in exchange for operating lease liabilities 855 — ROU assets obtained in exchange for finance lease liabilities — — Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases 5,736 5,759 Operating cash flows for operating leases 5,498 5,561 Financing cash flows for finance leases 46 47 Year Ended December 31, 2020 2019 Weighted-average remaining term - finance leases 17.3 years 18.2 years Weighted-average remaining term - operating leases 53.4 years 53.7 years Weighted-average discount rate - finance leases 8.0 % 8.0 % Weighted-average discount rate - operating leases 4.4 % 4.5 % NOTE 11— COMPONENTS OF RENTAL EXPENSE The principal components of rental expenses are as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Repairs and maintenance $ 66,845 $ 73,179 $ 67,745 Utilities 25,065 27,729 27,635 Management fees and costs 23,752 24,930 24,024 Payroll 16,691 16,485 16,140 Insurance 12,439 9,036 7,547 Marketing 6,432 7,427 7,935 Ground rent 4,595 4,803 4,697 Bad debt (1) — — 4,708 Other operating (2) 15,101 24,242 12,663 Total rental expenses $ 170,920 $ 187,831 $ 173,094 _____________________ (1) Collectibility adjustments are now presented as a reduction of rental income rather than rental expense in accordance with our adoption of the new lease standard in 2019. (2) Other operating for the year ended December 31, 2019 includes an $ 11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace . F-28 Table of Contents NOTE 12— SHARE-BASED COMPENSATION PLANS A summary of share-based compensation expense included in net income is as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Grants of common shares and options $ 13,243 $ 13,330 $ 12,736 Capitalized share-based compensation ( 1,319 ) ( 1,054 ) ( 1,017 ) Share-based compensation expense $ 11,924 $ 12,276 $ 11,719 As of December 31, 2020, we have grants outstanding under two share-based compensation plans. In May 2020, our shareholders approved the 2020 Performance Incentive Plan ("the 2020 Plan"), which authorized the grant of share options, common shares, and other share-based awards for up to 1,750,000 common shares of beneficial interest. Our 2010 Long Term Incentive Plan, as amended (the "2010 Plan”), which expired in May 2020, authorized the grant of share options, common shares and other share-based awards for up to 2,450,000 common shares of beneficial interest. Option awards under the plans are required to have an exercise price at least equal to the closing trading price of our common shares on the date of grant. Options and restricted share awards under the plan generally vest over three to seven years and option awards typically have a ten-year contractual term. We pay dividends on unvested shares. Certain options and share awards provide for accelerated vesting if there is a change in control. Additionally, the vesting on certain option and share awards can accelerate in part or in full upon retirement based on the age of the retiree or upon termination without cause. The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities, term, dividend yields, employee exercises and estimated forfeitures are primarily based on historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each share award is determined based on the closing trading price of our common shares on the grant date. No options were granted in 2020 and 2019. The following table provides a summary of the assumptions used to value options granted in 2018: Year Ended December 31, 2018 Volatility 18.0 % Expected dividend yield 3.6 % Expected term (in years) 7.5 Risk free interest rate 2.8 % The following table provides a summary of option activity for 2020: Shares Under Option Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2019 682 $ 152.34 Granted — — Exercised — — Forfeited or expired — — Outstanding at December 31, 2020 682 $ 152.34 5.1 $ — Exercisable at December 31, 2020 546 $ 152.34 5.1 $ — The weighted-average grant-date fair value of options granted in 2018 was $ 14.42 per share, which were later forfeited during 2018. The total cash received from options exercised during 2018 was $ 4.6 million. The total intrinsic value of options exercised during the year ended December 31, 2018 was $ 8.2 million. The following table provides a summary of restricted share activity for 2020: F-29 Table of Contents Shares Weighted-Average Grant-Date Fair Value Unvested at December 31, 2019 220,578 $ 129.78 Granted 116,351 124.55 Vested ( 101,651 ) 129.39 Forfeited ( 2,100 ) 131.78 Unvested at December 31, 2020 233,178 $ 127.32 The weighted-average grant-date fair value of stock awarded in 2020, 2019 and 2018 was $ 124.55 , $ 133.30 and $ 112.88 , respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2020, 2019 and 2018, was $ 12.4 million, $ 13.0 million and $ 9.7 million, respectively. As of December 31, 2020, there was $ 17.0 million of total unrecognized compensation cost related to unvested share-based compensation arrangements (i.e. options and unvested shares) granted under our plans. This cost is expected to be recognized over the next 5.3 years with a weighted-average period of 2.1 years. Subsequent to December 31, 2020, common shares were awarded under various compensation plans as follows: Date Award Vesting Term Beneficiary January 4, 2021 9,928 Shares Immediate Trustees February 10, 2021 137,210 Restricted Shares 3-5 years Officers and key employees February 10, 2021 3,658 Options 5 years Officers and key employees Additionally, on February 10, 2021, 10,441 restricted stock units were awarded to an officer that vest at the end of four years. The final awards earned are based on meeting certain market based performance criteria, and may vary from 0% to 200% of the original award. NOTE 13— SAVINGS AND RETIREMENT PLANS We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Code. Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $ 19,500 for 2020, $ 19,000 for 2019, and 18,500 for 2018. Under the plan, we contribute 50 % of each employee’s elective deferrals up to 5 % of eligible earnings. In addition, we may make discretionary contributions within the limits of deductibility set forth by the Code. Our full-time employees are immediately eligible to become plan participants. Employees are eligible to receive matching contributions immediately on their participation; however, these matching payments will not vest until their third anniversary of employment. Our expense for the years ended December 31, 2020, 2019 and 2018 was approximately $ 813,000 , $ 764,000 and $ 688,000 , respectively. A non-qualified deferred compensation plan for our officers and certain other employees was established in 1994 that allows the participants to defer a portion of their income. As of December 31, 2020 and 2019, we are liable to participants for approximately $ 18.0 million and $ 14.7 million, respectively, under this plan. Although this is an unfunded plan, we have purchased certain investments to match this obligation. Our obligation under this plan and the related investments are both included in the accompanying consolidated financial statements. NOTE 14— EARNINGS PER SHARE We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For 2020, 2019, and 2018 we had 0.2 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below. In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options in 2020, 2019, and 2018, respectively. The conversions of downREIT operating partnership units and 5.417 % Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS. F-30 Table of Contents Year Ended December 31, 2020 2019 2018 (In thousands, except per share data) NUMERATOR Net income $ 135,888 $ 360,542 $ 249,026 Less: Preferred share dividends ( 8,042 ) ( 8,042 ) ( 8,042 ) Less: Income from operations attributable to noncontrolling interests ( 4,182 ) ( 6,676 ) ( 7,119 ) Less: Earnings allocated to unvested shares ( 992 ) ( 1,007 ) ( 930 ) Net income available for common shareholders, basic and diluted $ 122,672 $ 344,817 $ 232,935 DENOMINATOR Weighted average common shares outstanding—basic 75,515 74,766 73,274 Stock options — — 28 Weighted average common shares outstanding—diluted 75,515 74,766 73,302 EARNINGS PER COMMON SHARE, BASIC AND DILUTED Net income available for common shareholders $ 1.62 $ 4.61 $ 3.18 NOTE 15— SUBSEQUENT EVENTS On January 4, 2021, we acquired our partner's 20 % interest in our joint venture arrangement related to the Pike & Rose hotel for $ 2.3 million, and repaid the $ 31.5 million mortgage loan. As a result of the transaction, we gained control of the hotel portion of this property, and effective January 4, 2021, we have consolidated this asset. On February 5, 2021, we repaid the $ 16.2 million mortgage loan on Sylmar Town Center, at par, prior to its original maturity date. F-31 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total 29TH PLACE (Virginia) $ 10,211 $ 18,863 $ 9,588 $ 10,195 $ 28,467 $ 38,662 $ 14,173 1975 - 2001 5/30/2007 (1) ANDORRA (Pennsylvania) 2,432 12,346 16,148 2,432 28,494 30,926 21,200 1953 1/12/1988 (1) ASSEMBLY ROW/ASSEMBLY SQUARE MARKETPLACE (Massachusetts) 93,252 34,196 832,881 69,421 890,908 960,329 88,384 2005, 2012-2020 2005-2013 (1) AZALEA (California) 39,750 40,219 67,117 ( 7 ) 40,219 67,110 107,329 8,550 2014 8/2/2017 (1) BALA CYNWYD (Pennsylvania) 3,565 14,466 46,447 2,683 61,795 64,478 24,619 1955/2020 9/22/1993 (1) BARCROFT PLAZA (Virginia) 12,617 29,603 7,235 12,617 36,838 49,455 5,904 1963, 1972, 1990, & 2000 1/13/16 & 11/7/16 (1) BARRACKS ROAD (Virginia) 4,363 16,459 48,774 4,363 65,233 69,596 48,945 1958 12/31/1985 (1) BELL GARDENS (California) 12,082 24,406 85,947 671 24,406 86,618 111,024 14,425 1990, 2003, 2006 8/2/17 & 11/29/18 (1) BETHESDA ROW (Maryland) 46,579 35,406 162,367 43,904 200,448 244,352 92,357 1945-2008 12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10 (1) BRICK PLAZA (New Jersey) — 24,715 78,133 4,094 98,754 102,848 56,240 1958 12/28/1989 (1) BRISTOL PLAZA (Connecticut) 3,856 15,959 12,230 3,856 28,189 32,045 19,549 1959 9/22/1995 (1) BROOK 35 (New Jersey) 11,325 7,128 38,355 3,103 7,128 41,458 48,586 9,853 1986/2004 1/1/2014 (1) CAMPUS PLAZA (Massachusetts) 16,710 13,412 326 16,710 13,738 30,448 2,952 1970 1/13/2016 (1) CHELSEA COMMONS (Massachusetts) 5,057 8,689 19,466 2,410 8,669 21,896 30,565 9,040 1962/1969/ 2008 8/25/06, 1/30/07, & 7/16/08 (1) COCOWALK (Florida) 34,406 72,123 73,504 50,838 129,195 180,033 12,333 1990/1994, 1922-1973, 2018-2019 5/4/15, 7/1/15, 12/16/15, 7/26/16, 6/30/17, & 8/10/17 (1) COLORADO BLVD (California) 2,415 3,964 6,905 2,415 10,869 13,284 9,397 1905-1988 8/14/98 (1) F-32 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total CONGRESSIONAL PLAZA (Maryland) 2,793 7,424 95,605 2,793 103,029 105,822 59,967 1965/2003/ 2016 4/1/1965 (1) COURTHOUSE CENTER (Maryland) 1,750 1,869 3,445 1,750 5,314 7,064 2,768 1975 12/17/1997 (1) CROSSROADS (Illinois) 4,635 11,611 19,649 4,635 31,260 35,895 20,191 1959 7/19/1993 (1) CROW CANYON COMMONS (California) 27,245 54,575 8,911 27,245 63,486 90,731 28,124 Late 1970's/ 1998/2006 12/29/05 & 2/28/07 (1) DEDHAM PLAZA (Massachusetts) 16,658 13,964 16,521 16,658 30,485 47,143 18,282 1959 12/31/93, 12/14/16, 1/29/19, & 3/12/19 (1) DEL MAR VILLAGE (Florida) 15,624 41,712 16,427 15,587 58,176 73,763 26,043 1982/1994/ 2007 5/30/08, 7/11/08, & 10/14/14 (1) EAST BAY BRIDGE (California) 29,069 138,035 12,123 29,069 150,158 179,227 41,377 1994-2001, 2011/2012 12/21/2012 (1) ELLISBURG (New Jersey) 4,028 11,309 18,872 4,013 30,196 34,209 21,740 1959 10/16/1992 (1) ESCONDIDO PROMENADE (California) 19,117 15,829 18,627 19,117 34,456 53,573 20,066 1987 12/31/96 & 11/10/10 (1) FAIRFAX JUNCTION (Virgina) 16,768 23,825 575 16,768 24,400 41,168 1,647 1981/1986/ 2000 2/8/19 & 1/10/20 (1) FALLS PLAZA (Virginia) 1,798 1,270 13,044 1,819 14,293 16,112 9,477 1960/1962 9/30/67 & 10/05/72 (1) FEDERAL PLAZA (Maryland) 10,216 17,895 42,735 10,216 60,630 70,846 48,440 1970 6/29/1989 (1) FINLEY SQUARE (Illinois) 9,252 9,544 22,603 9,252 32,147 41,399 23,198 1974 4/27/1995 (1) FLOURTOWN (Pennsylvania) 1,345 3,943 11,645 1,507 15,426 16,933 7,369 1957 4/25/1980 (1) FOURTH STREET (California) 13,978 9,909 3,085 13,978 12,994 26,972 1,752 1948,1975 5/19/2017 (1) FREEDOM PLAZA (California) — 3,255 37,242 — 40,497 40,497 761 2018-2020 6/15/2018 (1) FRESH MEADOWS (New York) 24,625 25,255 43,873 24,633 69,120 93,753 46,378 1946-1949 12/5/1997 (1) FRIENDSHIP CENTER (District of Columbia) 12,696 20,803 4,719 12,696 25,522 38,218 14,998 1998 9/21/2001 (1) GAITHERSBURG SQUARE (Maryland) 7,701 5,271 16,697 5,973 23,696 29,669 19,442 1966 4/22/1993 (1) GARDEN MARKET (Illinois) 2,677 4,829 7,370 2,677 12,199 14,876 9,241 1958 7/28/1994 (1) F-33 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total GEORGETOWNE SHOPPING CENTER (New York) 32,202 49,586 1,469 32,202 51,055 83,257 2,047 1969/2006/ 2015 11/15/19 (1) GOVERNOR PLAZA (Maryland) 2,068 4,905 19,272 2,068 24,177 26,245 21,399 1963 10/1/1985 (1) GRAHAM PARK PLAZA (Virginia) 1,237 15,096 20,319 1,169 35,483 36,652 28,815 1971 7/21/1983 (1) GRATIOT PLAZA (Michigan) 525 1,601 17,963 525 19,564 20,089 17,985 1964 3/29/1973 (1) GREENLAWN PLAZA (New York) 10,590 20,869 813 10,590 21,682 32,272 4,326 1975/2004 1/13/2016 (1) GREENWICH AVENUE (Connecticut) 7,484 5,445 10,819 7,484 16,264 23,748 5,472 1968 4/12/1995 (1) HASTINGS RANCH PLAZA (California) 2,257 22,393 616 2,257 23,009 25,266 3,013 1958, 1984, 2006, 2007 2/1/2017 (1) HAUPPAUGE (New York) 8,791 15,262 5,829 8,419 21,463 29,882 13,729 1963 8/6/1998 (1) HOBOKEN (New Jersey) 105,939 47,460 167,835 546 47,460 168,381 215,841 6,006 1887-2006 9/18/19, 11/26/19, 12/19/19, & 2/12/20 (1) HOLLYWOOD BLVD (California) 8,300 16,920 36,159 8,370 53,009 61,379 18,599 1929/1991 3/22/99 & 6/18/99 (1) HUNTINGTON (New York) 12,194 16,008 19,604 12,194 35,612 47,806 18,564 1962 12/12/88, 10/26/07, & 11/24/15 (1) HUNTINGTON SQUARE (New York) — 10,075 3,537 506 13,106 13,612 4,751 1980/2004-2007 8/16/2010 (1) IDYLWOOD PLAZA (Virginia) 4,308 10,026 3,089 4,308 13,115 17,423 10,100 1991 4/15/1994 (1) KINGS COURT (California) — 10,714 894 — 11,608 11,608 9,979 1960 8/24/1998 (1) LANCASTER (Pennsylvania) — 2,103 5,951 432 7,622 8,054 6,009 1958 4/24/1980 (1) LANGHORNE SQUARE (Pennsylvania) 720 2,974 18,968 720 21,942 22,662 17,239 1966 1/31/1985 (1) LAUREL (Maryland) 7,458 22,525 30,662 7,503 53,142 60,645 42,119 1956 8/15/1986 (1) LAWRENCE PARK (Pennsylvania) 6,150 8,491 26,556 6,161 35,036 41,197 23,922 1972 7/23/1980 & 4/3/17 (1) LEESBURG PLAZA (Virginia) 8,184 10,722 18,416 8,184 29,138 37,322 16,976 1967 9/15/1998 (1) LINDEN SQUARE (Massachusetts) 79,382 19,247 51,727 79,346 71,010 150,356 29,105 1960-2008 8/24/2006 (1) MELVILLE MALL (New York) 35,622 32,882 35,161 35,622 68,043 103,665 19,630 1974 10/16/2006 (1) F-34 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total MERCER MALL (New Jersey) 5,917 18,358 47,690 5,869 66,096 71,965 34,954 1975 10/14/03 & 1/31/17 (1) MONTROSE CROSSING (Maryland) 65,596 48,624 91,819 24,539 48,624 116,358 164,982 35,861 1960s, 1970s, 1996 & 2011 12/27/11 & 12/19/13 (1) MOUNT VERNON/SOUTH VALLEY/7770 RICHMOND HWY. (Virginia) 10,068 33,501 43,397 10,150 76,816 86,966 41,890 1966/1972/ 1987/2001 3/31/03, 3/21/03, & 1/27/06 (1) NORTH DARTMOUTH (Massachusetts) 9,366 — 3 9,366 3 9,369 2 2004 8/24/2006 (1) NORTHEAST (Pennsylvania) 938 8,779 23,919 939 32,697 33,636 19,880 1959 8/30/1983 (1) OLD KEENE MILL (Virginia) 638 998 11,425 638 12,423 13,061 6,466 1968 6/15/1976 (1) OLD TOWN CENTER (California) 3,420 2,765 31,684 3,420 34,449 37,869 23,745 1962, 1997-1998 10/22/1997 (1) OLIVO AT MISSION HILLS (California) 15,048 46,732 19,503 15,048 66,235 81,283 4,706 2017-2018 8/2/2017 (1) PAN AM (Virginia) 8,694 12,929 8,424 8,695 21,352 30,047 16,906 1979 2/5/1993 (1) PENTAGON ROW (Virginia) — 2,955 104,222 — 107,177 107,177 54,974 1999 - 2002 1998 & 11/22/10 (1) PERRING PLAZA (Maryland) 2,800 6,461 22,637 2,800 29,098 31,898 24,646 1963 10/1/1985 (1) PIKE & ROSE (Maryland) 31,471 10,335 608,663 27,929 622,540 650,469 65,962 1963, 2012-2020 5/18/82, 10/26/07, & 7/31/12 (1) PIKE 7 PLAZA (Virginia) 14,970 22,799 11,775 14,914 34,630 49,544 19,814 1968 3/31/97 & 7/8/15 (1) PLAZA DEL MERCADO (Maryland) 10,305 21,553 15,037 10,305 36,590 46,895 7,234 1969 1/13/2016 (1) PLAZA DEL SOL (California) 8,072 5,605 12,331 ( 26 ) 5,605 12,305 17,910 1,546 2009 8/2/2017 (1) PLAZA EL SEGUNDO/THE POINT (California) 124,429 62,127 153,556 81,203 64,788 232,098 296,886 61,152 2006/2007/ 2016 12/30/11, 6/14/13, 7/26/13, & 12/27/13 (1) QUEEN ANNE PLAZA (Massachusetts) 3,319 8,457 6,654 3,319 15,111 18,430 10,991 1967 12/23/1994 (1) QUINCE ORCHARD (Maryland) 3,197 7,949 29,958 2,928 38,176 41,104 24,574 1975 4/22/1993 (1) RIVERPOINT CENTER (Illinois) 15,422 104,572 1,930 15,422 106,502 121,924 12,907 1989, 2012 3/31/2017 (1) F-35 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total ROCKVILLE TOWN SQUARE (Maryland) — 8,092 37,191 — 45,283 45,283 18,838 2005 - 2007 2006 - 2007 (1) ROLLINGWOOD APTS. (Maryland) 552 2,246 8,805 774 10,829 11,603 10,237 1960 1/15/1971 (1) SAN ANTONIO CENTER (California) 26,400 18,462 1,714 26,400 20,176 46,576 4,584 1958, 1964-1965, 1974-1975, 1995-1997 1/9/2015, 9/13/19 (1) SANTANA ROW (California) 66,682 7,502 1,076,914 57,592 1,093,506 1,151,098 243,734 1999-2006, 2009, 2011, 2014, 2016-2020 3/5/97, 7/13/12, 9/6/12, 4/30/13 & 9/23/13 (1) SAUGUS PLAZA (Massachusetts) 4,383 8,291 4,580 4,383 12,871 17,254 8,135 1976 10/1/1996 (1) SYLMAR TOWNE CENTER (California) 16,238 18,522 24,637 2,501 18,522 27,138 45,660 3,062 1973 8/2/2017 (1) THE AVENUE AT WHITE MARSH (Maryland) 52,651 20,682 72,432 29,339 20,685 101,768 122,453 42,152 1997 3/8/2007 (1) THE COMMONS AT DARIEN (Connecticut) 30,368 19,523 26,037 30,368 45,560 75,928 5,051 1920-2009 4/3/13 & 7/20/18 (1) THE GROVE AT SHREWSBURY (New Jersey) 42,972 18,016 103,115 6,002 18,021 109,112 127,133 24,453 1988/1993/ 2007 1/1/2014 & 10/6/14 (1) THE SHOPPES AT NOTTINGHAM SQUARE (Maryland) 4,441 12,849 1,054 4,441 13,903 18,344 6,416 2005 - 2006 3/8/2007 (1) THIRD STREET PROMENADE (California) 22,645 12,709 43,667 25,125 53,896 79,021 34,458 1888-2000 1996-2000 (1) TOWER SHOPPNG CENTER (Virginia) 7,170 10,518 5,038 7,280 15,446 22,726 10,514 1953-1960 8/24/1998 (1) TOWER SHOPS (Florida) 29,940 43,390 24,934 29,962 68,302 98,264 23,599 1989, 2017 1/19/11 & 6/13/14 (1) TOWN CENTER OF NEW BRITAIN (Pennsylvania) 1,282 12,285 3,015 1,693 14,889 16,582 6,487 1969 6/29/2006 (1) TOWSON RESIDENTIAL (FLATS @703) (Maryland) 2,328 — 20,063 2,328 20,063 22,391 2,075 2016-2017 3/8/2007 (1) TROY HILLS (New Jersey) 3,126 5,193 32,700 5,865 35,154 41,019 24,180 1966 7/23/1980 (1) TYSON'S STATION (Virginia) 388 453 4,891 493 5,239 5,732 4,046 1954 1/17/1978 (1) VILLAGE AT SHIRLINGTON (Virginia) 9,761 14,808 39,325 4,234 59,660 63,894 32,191 1940, 2006-2009 12/21/1995 (1) F-36 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2020 (Dollars in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Descriptions Encumbrance Initial cost to company Cost Capitalized Subsequent to Acquisition Gross amount at which carried at close of period Accumulated Depreciation and Amortization Date of Construction Date Acquired Life on which depreciation in latest income statements is computed Land Building and Improvements Land Building and Improvements Total WESTGATE CENTER (California) 6,319 107,284 43,851 6,319 151,135 157,454 66,806 1960-1966 3/31/2004 (1) WHITE MARSH PLAZA (Maryland) 3,478 21,413 1,497 3,488 22,900 26,388 10,402 1987 3/8/2007 (1) WHITE MARSH OTHER (Maryland) 29,724 1,843 148 29,754 1,961 31,715 968 1985 3/8/2007 (1) WILDWOOD (Maryland) 9,111 1,061 17,271 9,111 18,332 27,443 9,723 1958 5/5/1969 (1) WILLOW GROVE (Pennsylvania) 1,499 6,643 21,131 1,499 27,774 29,273 26,734 1953 11/20/1984 (1) WILLOW LAWN (Virginia) 3,192 7,723 93,859 7,790 96,984 104,774 65,247 1957 12/5/1983 (1) WYNNEWOOD (Pennsylvania) 8,055 13,759 20,822 8,055 34,581 42,636 26,423 1948 10/29/1996 (1) TOTALS $ 484,111 $ 1,387,748 $ 2,493,283 $ 4,701,839 $ 1,374,797 $ 7,208,073 $ 8,582,870 $ 2,357,692 (1) Depreciation of building and improvements is calculated based on useful lives ranging from the life of the lease to 50 years. F-37 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2020 Reconciliation of Total Cost (in thousands) Balance, December 31, 2017 $ 7,635,061 Additions during period Acquisitions 14,940 Improvements 407,225 Deduction during period—dispositions and retirements of property ( 237,754 ) Balance, December 31, 2018 7,819,472 January 1, 2019 adoption of new accounting standard - See Note 2 ( 71,859 ) Additions during period Acquisitions 309,921 Improvements 441,703 Deduction during period—dispositions and retirements of property ( 201,105 ) Balance, December 31, 2019 8,298,132 Additions during period Acquisitions 39,440 Improvements 473,679 Deductions during period Impairment of property ( 68,484 ) Dispositions and retirement of property ( 159,897 ) Balance, December 31, 2020 (1) $ 8,582,870 _____________________ (1) For Federal tax purposes, the aggregate cost basis is approximately $ 7.7 billion as of December 31, 2020. F-38 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2020 Reconciliation of Accumulated Depreciation and Amortization (in thousands) Balance, December 31, 2017 $ 1,876,544 Additions during period—depreciation and amortization expense 215,969 Deductions during period—dispositions and retirements of property ( 33,370 ) Balance, December 31, 2018 2,059,143 January 1, 2019 adoption of new accounting standard - See Note 2 ( 18,173 ) Additions during period—depreciation and amortization expense 215,382 Deductions during period—dispositions and retirements of property ( 40,939 ) Balance, December 31, 2019 2,215,413 Additions during period—depreciation and amortization expense 229,199 Deductions during period Impairment of property ( 11,631 ) Dispositions and retirements of property ( 75,289 ) Balance, December 31, 2020 $ 2,357,692 F-39 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE Year Ended December 31, 2020 (Dollars in thousands) Column A Column B Column C Column D Column E Column F Column G Column H Description of Lien Interest Rate Maturity Date Periodic Payment Terms Prior Liens Face Amount of Mortgages Carrying Amount of Mortgages(1) Principal Amount of Loans Subject to delinquent Principal or Interest Mortgage on retail buildings in Philadelphia, PA 8% or 10% based on timing of draws, plus participation May 2021 Interest only monthly; balloon payment due at maturity $ — $ 21,872 $ 21,082 (2) $ 21,082 (3) Mortgage on retail buildings in Philadelphia, PA 10% plus participation May 2021 Interest only monthly; balloon payment due at maturity — 9,250 9,250 9,250 (3) Second mortgage on a retail shopping center in Rockville, MD 11.5 % February 2026 Interest only monthly; balloon payment due at maturity 58,750 (4) 5,075 5,075 — Second mortgage on a retail shopping center in Rockville, MD 10.75 % February 2026 Interest only monthly; balloon payment due at maturity 58,750 (4) 4,500 4,485 — $ 58,750 $ 40,697 $ 39,892 $ 30,332 _____________________ (1) For Federal tax purposes, the aggregate tax basis is approximately $ 40.7 million as of December 31, 2020. Upon the adoption of ASU 2016-13, we recorded expected losses related to these loans, and are required to do so going forward. See note 2 to the consolidated financial statements. (2) This mortgage is available for up to $ 25.0 million. (3) The borrower was notified in October 2020 that these mortgages were in default. No interest payments were made from April through July, and partial payments from August through December 31, 2020. (4) These mortgages are both subordinate to a first mortgage of $ 58.8 million in total. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2020 is estimated. F-40 Table of Contents FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - CONTINUED Three Years Ended December 31, 2020 Reconciliation of Carrying Amount (in thousands) Balance, December 31, 2017, 2018, and 2019 $ 30,429 January 1, 2020 adoption of new accounting standard - See Note 2 ( 790 ) Additions during period: Acquisition of loans, net of valuation adjustments 9,560 Issuance of loans 693 Balance, December 31, 2020 $ 39,892 F-41