Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Management's Evaluations of Disclosure Controls and Procedures
The Trust and the Operating Partnership maintain 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 and the Operating Partnership'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 and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust and the Operating Partnership’s disclosure controls and procedures as of December 31, 2024. Based on that evaluation, the Trust and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, the Trust and the Operating Partnership’s disclosure controls and procedures were effective at a reasonable assurance level.
Management's Evaluations of Internal Control over Financial Reporting
The Trust and the Operating Partnership’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 and the Operating Partnership’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 and the Operating Partnership’s internal control over financial reporting as of December 31, 2024. 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 and the Operating Partnership's internal control over financial reporting was effective as of December 31, 2024.
Grant Thornton LLP, the independent registered public accounting firm that audited the Trust and the Operating Partnership's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust and the Operating Partnership'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 2024 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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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 2025 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,” the section of the Proxy Statement entitled "Equity Grant Practices," 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 .
We have adopted an insider trading policy and related procedures governing the purchase, sale, and other dispositions of our securities that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations and any NYSE listing standards applicable to us.
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- 39 .
(3) Exhibits
(b) The following documents are filed as exhibits are filed as part of, or incorporated by reference info, this report:
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EXHIBIT INDEX
Exhibit
No. Description
2.1 Merger Agreement and Plan of Reorganization, dated December 2, 2021, by and among the Predecessor, the Parent Company, and Merger Sub (previously filed as Exhibit 2.1 to the Predecessor's Current Report on Form 8-K filed on December 2, 2021 and incorporated herein by reference) ‡
3.1 Amended and Restated Declaration of Trust of the Parent Company dated January 1, 2022, as amended by the Articles of Amendment effective as of January 1, 2022 and Articles of Amendment effective as of May 4, 2023 (previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on August 2, 2023 and incorporated herein by reference)
3.2 Amended and Restated Bylaws of the Parent Company dated January 1, 2022, as amended February 7, 2023 (previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on May 4, 2023 and incorporated herein by reference)
3.3 Articles of Merger, dated December 8, 2021, by and among Merger Sub and the Predecessor (previously filed as Exhibit 3.4 to the Parent Company's Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)
3.4 Certificate of Limited Partnership of Federal Realty OP LP (previously filed as Exhibit 3.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)
3.5 Agreement of Limited Partnership of Federal Realty OP LP, dated as of January 5, 2022, by and between Federal Realty GP LLC and the Parent Company (Previously filed as Exhibit 3.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)
4.1 Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference)
4.2 † Indenture dated December 1, 1993 related to the Partnership’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 Predecessor’s Registration Statement on Form S-3, and amended on Form S-3, filed on December 13, 1993 and incorporated herein by reference) ‡
4.3 † Indenture dated September 1, 1998 related to the Partnership’s 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 Predecessor’s Registration Statement on Form S-3 filed on September 17, 1998 and incorporated herein by reference) ‡
4.4 † First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated December 1, 1993 related to the Partnership's 7.48% Debentures due August 15, 2026 and 6.82% Medium Term Notes due August 1, 2027 (previously filed as Exhibit 4.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)
4.5 † First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated September 1, 1998 related to the Partnership's 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; 5.375% Notes due 2028 (previously filed as Exhibit 4.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)
4.6 Deposit Agreement, dated as of September 29, 2017, by and among Federal Realty Investment Trust, Equiniti Trust Company, LLC (successor to 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 Predecessor's Registration Statement on Form 8-A, 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 Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference)
4.8 † Indenture dated January 11, 2024 related to the 3.25% Exchangeable Senior Notes due 2029, by and between Federal Realty OP LP and U.S. Bank National Association (previously filed as Exhibit 4.1 to our current report on Form 8-K filed on January 11, 2023 and incorporated herein by reference)
4.9 Description of Securities (previously filed as Exhibit 4.9 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference)
10.1 * Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "1999 1Q Form 10-Q") and incorporated herein by reference)
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Exhibit
No. Description
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 Predecessor's 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 Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2004 (the “2004 Form 10-K”) and incorporated herein by reference)
10.4 * 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 Predecessor's 2004 Form 10-K and incorporated herein by reference)
10.5 * Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Predecessor’s 2005 2Q Form 10-Q and incorporated herein by reference)
10.6 * Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the Predecessor's 2004 Form 10-K and incorporated herein by reference)
10.7 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 Predecessor's Annual Report on Form 10-K for the year ended December 31, 2010 (the "2010 Form 10-K") and incorporated herein by reference)
10.8 * Amendment to Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.26 to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2008 (“the 2008 Form 10-K”) and incorporated herein by reference)
10.9 * Second Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.27 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference)
10.10 * Amendment to Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.28 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference)
10.11 * Second Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated January 1, 2009 (previously filed as Exhibit 10.30 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference)
10.12 2010 Performance Incentive Plan (previously filed as Appendix A to the Predecessor’s Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference)
10.13 Amendment to 2010 Performance Incentive Plan (“the 2010 Plan”) (previously filed as Appendix A to the Predecessor’s Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference)
10.14 Form of Restricted Share Award Agreement for awards made under Federal Realty Investment 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 Predecessor’s 2010 Form 10-K and incorporated herein by reference)
10.15 Revised Form of Restricted Share Award Agreement for front loaded awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K") and incorporated herein by reference)
10.16 Revised Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.36 to the Predecessor's 2012 Form 10-K and incorporated herein by reference)
10.17 Revised Form of Performance Share Award Agreement for shares awarded out of the 2010 Plan (previously filed as Exhibit 10.37 to the Predecessor's 2012 Form 10-K and incorporated herein by reference)
10.18 Revised Form of Restricted Share Award Agreement for awards made under Federal Realty Investment 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 Predecessor's 2012 Form 10-K and incorporated herein by reference)
10.19 Severance Agreement between Federal Realty Investment Trust and Daniel Guglielmone dated August 15, 2016 (previously filed as Exhibit 10.36 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and incorporated herein by reference)
10.20 2020 Performance Incentive Plan (previously filed as Appendix B to the Predecessor’s Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders and incorporated herein by reference)
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Exhibit
No. Description
10.21 Term Loan Agreement dated as of May 6, 2020, by and among the Predecessor, 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 Predecessor's Current Report on Form 8-K, filed on May 6, 2020 and incorporated herein by reference) ‡
10.22 Form of Restricted Share Award Agreement for awards made under Federal Realty Investment 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 the 2020 Plan (previously filed as Exhibit 10.32 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021 and incorporated herein by reference)
10.23 Form of Option Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.33 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference)
10.24 Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.34 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference)
10.25 Form of Performance Share Award Agreement for shares awarded out of the 2020 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on From 10-K, filed on February 11, 2021, and incorporated herein by reference)
10.26 Form of Option Award Agreement for basic options awarded out of the 2020 Plan (previously filed as Exhibit 10.36 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference)
10.27 Form of Performance Award Agreement for Jeffrey S. Berkes, dated February 10, 2021 (previously filed as Exhibit 10.1 to the Predecessor’s Current Report on Form 8-K, filed on February 12, 2021, and incorporated herein by reference)
10.28 Amended and Restated Severance Agreement between Federal Realty Investment Trust and Jeffery S. Berkes, dated February 10, 2021 (previously filed as Exhibit 10.2 to the Predecessor's Current Report on Form 8-K, filed on February 12, 2021 and incorporated herein by reference)
10.29 First Amendment to Term Loan Agreement, dated as of April 16, 2021, by and among the Predecessor, as borrower, the Lenders, New Lenders, Departing Lenders (as each such term is defined therein) and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on From 8-K, filed on April 19, 2021, and incorporated herein by reference) ‡
10.30 Omnibus Assignment, Assumption and Amendment entered into between the Predecessor and the Parent Company (previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on January 3, 2022 and incorporated herein by reference)
10.31 Second Amendment to Term Loan Agreement and Consent, dated as of January 1, 2022, by and among the Predecessor, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed as Exhibit 10.3 to the Trust’s Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference) ‡
10.32 Second Amended and Restated Credit Agreement, dated as of October 5, 2022, by and among the Partnership, as borrower, 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 filed on October 11, 2022 and incorporated herein by reference)
10.33 Third Amendment to Term Loan Agreement, dated as of October 5, 2022, by and among the Partnership, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed as Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed on October 11, 2022 and incorporated herein by reference)
10.34 First Amendment to Second Amended and Restated Credit Agreement, dated as of August 25, 2023, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed a Exhibit 10.34 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference)
10.35 Fourth Amendment to Term Loan Agreement, dated as of August 25, 2023, by and among the Partnership, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed a Exhibit 10.3 5 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference)
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Exhibit
No. Description
10.36 Second Amendment to Second Amended and Restated Credit Agreement, dated as of January 2, 2024, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed a Exhibit 10.36 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference)
10.37 Fifth Amendment to Term Loan Agreement, dated as of January 2, 2024, by and among the Partnership, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed a Exhibit 10.3 7 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference)
10.38 Registration Rights Agreement dated January 11, 2024 among the Issuer, the Parent and the Representatives (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on January 11, 2024 and incorporated herein by reference)
10.39 Third Amendment to Second Amended and Restated Credit Agreement, dated as of March 14, 2024, by and among the Partnership, as borrower, each of the lenders arty thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed as Exhibit 10.1 to the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference)
10.40 ₸ Consulting Agreement between Federal Realty OP LP and Jeffrey S. Berkes, dated January 1, 2025 ( filed herewith )
19.1 Policy on Insider Information and Trading in Federal Realty Shares and other Securities (previously filed as Exhibit 19.1 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference)
21.1 Subsidiaries of Federal Realty Investment Trust and Federal Realty OP LP (filed herewith)
23.1 Consent of Grant Thornton LLP (filed herewith)
31.1 Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)
31.2 Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)
31.3 Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)
31.4 Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith)
32.1 Section 1350 Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)
32.2 Section 1350 Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)
32.3 Section 1350 Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)
32.4 Section 1350 Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith)
97 Federal Realty Investment Trust and Federal Realty OP LP Clawback Policy (previously filed as Exhibit 97 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference)
101 The following materials from this Annual Report on Form 10-K for the year ended December 31, 2024, 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 and the Partnership by this filing agree, 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 and the Partnership.
‡ In this Exhibit Index, the term "Predecessor" refers to Federal Realty Investment Trust before the effectiveness of our UPREIT conversion as described in our Current Reports on Form 8-K filed on January 3 and 5, 2022. Upon completion of the UPREIT conversion, the Partnership became the successor to the Predecessor's rights and obligations under this instrument.
₸ Portions of this exhibit have been redacted because (i) the registrants customarily and actually treat that information as private or confidential and (ii) the omitted information is not material.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, each of the Registrants have duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February 13, 2025.
Federal Realty Investment Trust
Federal Realty OP LP
By: /S/ DONALD C. WOOD
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 each of the Registrants 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/ DONALD C. WOOD Chief Executive Officer and Trustee February 13, 2025
Donald C. Wood (Principal Executive Officer)
/S/ DANIEL GUGLIELMONE Executive Vice President - Chief Financial February 13, 2025
Daniel Guglielmone Officer and Treasurer (Principal
Financial and Accounting Officer)
/S/ DAVID W. FAEDER Non -Executive Chairman February 13, 2025
David W. Faeder
/S/ ELIZABETH I. HOLLAND
Trustee February 13, 2025
Elizabeth I. Holland
/S/ NICOLE Y. LAMB-HALE Trustee February 13, 2025
Nicole Y. Lamb-Hale
/S/ THOMAS A. MCEACHIN Trustee February 13, 2025
Thomas A. McEachin
/S/ ANTHONY P. NADER, III Trustee February 13, 2025
Anthony P. Nader, III
/S/ GAIL P. STEINEL Trustee February 13, 2025
Gail P. Steinel
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Item 8 and Item 15(a)(1) and (2)
Index to Consolidated Financial Statements and Schedules
Page No.
Report of Independent Registered Public Accounting Firm ( PCAOB ID Number 248 )
F- 2
Federal Realty Investment Trust:
Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 8
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023, and 2022 F- 9
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2024, 2023, and 2022 F- 10
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022 F- 11
Federal Realty OP LP:
Consolidated Balance Sheets as of December 31, 2024 and 2023 F-12
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023, and 2022 F-13
Consolidated Statements of Capital for the Years Ended December 31, 2024, 2023, and 2022 F-14
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022 F-15
Notes to Consolidated Financial Statements F- 16
Financial Statement Schedules
Schedule III—Summary of Real Estate and Accumulated Depreciation F- 39
Schedule IV—Mortgage Loans on Real Estate F- 47
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, 2024, 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, 2024, 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, 2024, and our report dated February 13, 2025 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 Internal Control over Financial Reporting. 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
Jacksonville, Florida
February 13, 2025
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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, 2024 and 2023, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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, 2024, 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 13, 2025 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s consolidated 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 matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Lease Collectibility Assessment
In order to recognize rental income on an accrual basis, the Trust must determine whether substantially all 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 income 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:
• We tested the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.
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• 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, including information for the 10 tenants with the highest rental income recognized in the year ended December 31, 2024, 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.
• We recalculated the aging for a selection of tenant receivable balances using supporting documentation.
• For a selection of tenant receivables where collectibility was deemed as probable, we evaluated 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.
◦ Inspected documentation from management 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.
Jacksonville, Florida
February 13, 2025
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Report of Independent Registered Public Accounting Firm
Trustees and Unitholders
Federal Realty OP LP
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the “Operating Partnership”) as of December 31, 2024, 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 Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, 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 Operating Partnership as of and for the year ended December 31, 2024, and our report dated February 13, 2025 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Operating Partnership’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 Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’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 Operating Partnership 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
Jacksonville, Florida
February 13, 2025
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Report of Independent Registered Public Accounting Firm
Trustees and Unitholders
Federal Realty OP LP
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the "Operating Partnership") as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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 Operating Partnership’s internal control over financial reporting as of December 31, 2024, 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 13, 2025 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s consolidated 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 Operating Partnership 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 matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Lease Collectibility Assessment
In order to recognize rental income on an accrual basis, the Operating Partnership must determine whether substantially all the rents due under a lease arrangement are collectible. If the Operating Partnership reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental income under that arrangement can only be recognized when cash payment from the tenant is received.
Significant judgment is exercised by the Operating Partnership 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:
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• We tested 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, including information for the 10 tenants with the highest rental income recognized in the year ended December 31, 2024, such as bankruptcy filings, industry journals, and periodicals, and for any of the Operating Partnership’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.
• We recalculated the aging for a selection of tenant receivable balances using supporting documentation.
• For a selection of tenants where collectibility was deemed as probable, we evaluated 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.
◦ Inspected documentation from management 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 Operating Partnership's auditor since 2022.
Jacksonville, Florida
February 13, 2025
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Federal Realty Investment Trust
Consolidated Balance Sheets
December 31,
2024 2023
(In thousands, except share and per share data)
ASSETS
Real estate, at cost
Operating (including $ 1,825,656 and $ 2,021,622 of consolidated variable interest entities, respectively)
$ 10,363,961 $ 9,932,891
Construction-in-progress (including $ 9,939 and $ 8,677 of consolidated variable interest entities, respectively)
539,752 613,296
10,903,713 10,546,187
Less accumulated depreciation and amortization (including $ 424,044 and $ 416,663 of consolidated variable interest entities, respectively)
( 3,152,799 ) ( 2,963,519 )
Net real estate 7,750,914 7,582,668
Cash and cash equivalents 123,409 250,825
Accounts and notes receivable, net 229,080 201,733
Mortgage notes receivable, net 9,144 9,196
Investment in partnerships 33,458 34,870
Operating lease right of use assets, net 85,806 86,993
Finance lease right of use assets, net 6,630 6,850
Prepaid expenses and other assets 286,316 263,377
TOTAL ASSETS $ 8,524,757 $ 8,436,512
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable, net (including $ 186,643 and $ 189,286 of consolidated variable interest entities, respectively)
$ 514,378 $ 516,936
Notes payable, net 601,414 601,945
Senior notes and debentures, net 3,357,840 3,480,296
Accounts payable and accrued expenses 183,564 174,714
Dividends payable 96,743 92,634
Security deposits payable 30,941 30,482
Operating lease liabilities 74,837 75,870
Finance lease liabilities 12,783 12,670
Other liabilities and deferred credits 227,827 225,443
Total liabilities 5,100,327 5,210,990
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests 180,286 183,363
Shareholders’ equity
Preferred shares, authorized 15,000,000 shares, $ 0.01 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), 392,878 shares issued and outstanding
9,822 9,822
Common shares of beneficial interest, $ 0.01 par, 200,000,000 shares authorized, 85,666,220 and 82,775,286 shares issued and outstanding, respectively
862 833
Additional paid-in capital 4,248,824 3,959,276
Accumulated dividends in excess of net income ( 1,242,654 ) ( 1,160,474 )
Accumulated other comprehensive income 4,740 4,052
Total shareholders’ equity of the Trust 3,171,594 2,963,509
Noncontrolling interests 72,550 78,650
Total shareholders’ equity 3,244,144 3,042,159
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 8,524,757 $ 8,436,512
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Consolidated Statements of Comprehensive Income
Year Ended December 31,
2024 2023 2022
(In thousands, except per share data)
REVENUE
Rental income $ 1,170,078 $ 1,101,439 $ 1,047,793
Other property income 31,258 29,602 25,499
Mortgage interest income 1,116 1,113 1,086
Total revenue 1,202,452 1,132,154 1,074,378
EXPENSES
Rental expenses 249,569 231,666 228,958
Real estate taxes 142,230 131,429 127,824
General and administrative 49,739 50,707 52,636
Depreciation and amortization 342,598 321,763 302,409
Total operating expenses 784,136 735,565 711,827
Gain on deconsolidation of VIE — — 70,374
Gain on sale of real estate 54,040 9,881 93,483
OPERATING INCOME 472,356 406,470 526,408
OTHER INCOME/(EXPENSE)
Other interest income 4,294 4,687 1,072
Interest expense ( 175,476 ) ( 167,809 ) ( 136,989 )
Income from partnerships 3,160 3,869 5,170
NET INCOME 304,334 247,217 395,661
Net income attributable to noncontrolling interests ( 9,126 ) ( 10,232 ) ( 10,170 )
NET INCOME ATTRIBUTABLE TO THE TRUST 295,208 236,985 385,491
Dividends on preferred shares ( 8,032 ) ( 8,032 ) ( 8,034 )
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $ 287,176 $ 228,953 $ 377,457
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders $ 3.42 $ 2.80 $ 4.71
Weighted average number of common shares 83,559 81,313 79,854
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders $ 3.42 $ 2.80 $ 4.71
Weighted average number of common shares 83,566 81,313 80,508
NET INCOME $ 304,334 $ 247,217 $ 395,661
Other comprehensive income (loss) - change in value of interest rate swaps 711 ( 1,824 ) 8,569
COMPREHENSIVE INCOME 305,045 245,393 404,230
Comprehensive income attributable to noncontrolling interests ( 9,149 ) ( 10,113 ) ( 10,935 )
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST $ 295,896 $ 235,280 $ 393,295
The accompanying notes are an integral part of these consolidated statements.
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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
(Loss) Income Noncontrolling Interests Total Shareholders' Equity
Shares Amount Shares Amount
(In thousands, except share data)
BALANCE AT DECEMBER 31, 2021 405,896 $ 159,997 78,603,305 $ 790 $ 3,488,794 $ ( 1,066,932 ) $ ( 2,047 ) $ 82,546 $ 2,663,148
Net income, excluding $ 6,613 attributable to redeemable noncontrolling interests
— — — — — 385,491 — 3,557 389,048
Other comprehensive income - change in value of interest rate swaps, excluding $ 765 attributable to redeemable noncontrolling interest
— — — — — — 7,804 — 7,804
Dividends declared to common shareholders ($ 4.30 per share)
— — — — — ( 344,711 ) — — ( 344,711 )
Dividends declared to preferred shareholders — — — — — ( 8,034 ) — — ( 8,034 )
Distributions declared to noncontrolling interests, excluding $ 8,090 attributable to redeemable noncontrolling interests
— — — — — — — ( 5,007 ) ( 5,007 )
Common shares issued, net — — 2,634,223 26 306,828 — — — 306,854
Exercise of stock options — — 366 — 35 — — — 35
Shares issued under dividend reinvestment plan — — 19,502 — 2,104 — — — 2,104
Share-based compensation expense, net of forfeitures — — 110,395 2 15,016 — — — 15,018
Shares withheld for employee taxes — — ( 41,105 ) — ( 4,900 ) — — — ( 4,900 )
Conversion of preferred shares ( 7,018 ) ( 175 ) 1,675 — 175 — — — —
Conversion and redemption of downREIT OP units — — 14,598 — 1,367 — — ( 2,065 ) ( 698 )
Deconsolidation of VIE — — — — — — — 972 972
Adjustment to redeemable noncontrolling interests — — — — 12,382 — — — 12,382
BALANCE AT DECEMBER 31, 2022 398,878 $ 159,822 81,342,959 $ 818 $ 3,821,801 $ ( 1,034,186 ) $ 5,757 $ 80,003 $ 3,034,015
Net income, excluding $ 7,253 attributable to redeemable noncontrolling interests
— — — — — 236,985 — 2,979 239,964
Other comprehensive loss - change in value of interest rate swaps, excluding $ 119 attributable to redeemable noncontrolling interest
— — — — — — ( 1,705 ) — ( 1,705 )
Dividends declared to common shareholders ($ 4.34 per share)
— — — — — ( 355,241 ) — — ( 355,241 )
Dividends declared to preferred shareholders — — — — — ( 8,032 ) — — ( 8,032 )
Distributions declared to noncontrolling interests, excluding $ 9,539 attributable to redeemable noncontrolling interests
— — — — — — — ( 4,541 ) ( 4,541 )
Common shares issued, net — — 1,310,118 13 131,716 — — — 131,729
Shares issued under dividend reinvestment plan — — 19,847 — 1,870 — — — 1,870
Share-based compensation expense, net of forfeitures — — 139,248 2 15,425 — — — 15,427
Shares withheld for employee taxes — — ( 46,009 ) — ( 5,019 ) — — — ( 5,019 )
Conversion and redemption of downREIT OP units — — 9,123 — 883 — — ( 883 ) —
Contributions from noncontrolling interests — — — — — — — 1,092 1,092
Adjustment to redeemable noncontrolling interests — — — — ( 7,400 ) — — — ( 7,400 )
BALANCE AT DECEMBER 31, 2023 398,878 $ 159,822 82,775,286 $ 833 $ 3,959,276 $ ( 1,160,474 ) $ 4,052 $ 78,650 $ 3,042,159
Net income, excluding $ 7,022 attributable to redeemable noncontrolling interests
— — — — — 295,208 — 2,104 297,312
Other comprehensive income - change in value of interest rate swaps, excluding $ 23 attributable to redeemable noncontrolling interest
— — — — — — 688 — 688
Dividends declared to common shareholders ($ 4.38 per share)
— — — — — ( 369,232 ) — — ( 369,232 )
Dividends declared to preferred shareholders — — — — — ( 8,032 ) — — ( 8,032 )
Dividend equivalent rights — — — — — ( 124 ) ( 124 )
Distributions declared to noncontrolling interests, excluding $ 8,854 attributable to redeemable noncontrolling interests
— — — — — — — ( 4,239 ) ( 4,239 )
Common shares issued, net — — 2,769,747 28 303,903 — — — 303,931
Shares issued under dividend reinvestment plan — — 18,101 — 1,784 — — — 1,784
Share-based compensation expense, net of forfeitures — — 149,510 1 17,378 — — — 17,379
Shares withheld for employee taxes — — ( 64,635 ) — ( 6,709 ) — — — ( 6,709 )
Conversion and redemption of downREIT OP units — — 18,211 — 1,636 — — ( 2,596 ) ( 960 )
Purchase of capped calls — — — — ( 19,448 ) — — — ( 19,448 )
Purchase of noncontrolling interest — — — — ( 10,264 ) — — ( 2,094 ) ( 12,358 )
Contributions from noncontrolling interests — — — — — — — 725 725
Adjustment to redeemable noncontrolling interests — — — — 1,268 — — — 1,268
BALANCE AT DECEMBER 31, 2024 398,878 $ 159,822 85,666,220 $ 862 $ 4,248,824 $ ( 1,242,654 ) $ 4,740 $ 72,550 $ 3,244,144
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Consolidated Statements of Cash Flows
Year Ended December 31,
2024 2023 2022
(In thousands)
OPERATING ACTIVITIES
Net income $ 304,334 $ 247,217 $ 395,661
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 342,598 321,763 302,409
Gain on deconsolidation of VIE — — ( 70,374 )
Gain on sale of real estate ( 54,040 ) ( 9,881 ) ( 93,483 )
Income from partnerships ( 3,160 ) ( 3,869 ) ( 5,170 )
Straight-line rent ( 26,833 ) ( 11,576 ) ( 18,326 )
Share-based compensation expense 16,357 14,308 13,704
Other, net ( 2,158 ) ( 4,959 ) ( 4,812 )
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
(Increase) decrease in accounts receivable, net ( 796 ) 3,468 ( 12,071 )
Increase in prepaid expenses and other assets ( 5,030 ) ( 6,881 ) ( 1,219 )
Increase in accounts payable and accrued expenses 1,550 6,005 77
Increase in security deposits and other liabilities 1,741 235 10,373
Net cash provided by operating activities 574,563 555,830 516,769
INVESTING ACTIVITIES
Acquisition of real estate ( 273,927 ) ( 60,628 ) ( 438,494 )
Capital expenditures - development and redevelopment ( 139,534 ) ( 214,062 ) ( 309,046 )
Capital expenditures - other ( 107,226 ) ( 97,058 ) ( 107,655 )
Costs associated with property sold under threat of condemnation — ( 1,378 ) ( 18,031 )
Proceeds from sale of real estate 99,928 28,451 133,717
Change in cash from deconsolidation of VIE — — ( 4,192 )
Investment in partnerships — — ( 23,155 )
Distribution from partnerships in excess of earnings 4,742 9,860 6,864
Leasing costs ( 30,809 ) ( 23,510 ) ( 22,541 )
Issuance of mortgage and other notes receivable, net — — ( 3,465 )
Net cash used in investing activities ( 446,826 ) ( 358,325 ) ( 785,998 )
FINANCING ACTIVITIES
Costs to amend revolving credit facility — — ( 6,375 )
Issuance of senior notes, net of costs 471,507 345,698 —
Repayment of senior notes ( 600,000 ) ( 275,000 ) —
Issuance and extension of mortgages and notes payable, net of costs ( 902 ) 199,237 298,568
Repayment of mortgages, finance leases, and notes payable ( 3,496 ) ( 58,472 ) ( 19,443 )
Purchase of capped calls ( 19,448 ) — —
Issuance of common shares, net of costs 304,045 131,895 307,275
Dividends paid to common and preferred shareholders ( 371,586 ) ( 359,194 ) ( 347,284 )
Shares withheld for employee taxes ( 6,709 ) ( 5,019 ) ( 4,900 )
Contributions from noncontrolling interests 725 1,092 —
Distributions to and redemptions of noncontrolling interests ( 26,434 ) ( 14,086 ) ( 37,427 )
Net cash (used in) provided by financing activities ( 252,298 ) ( 33,849 ) 190,414
(Decrease) increase in cash, cash equivalents, and restricted cash ( 124,561 ) 163,656 ( 78,815 )
Cash, cash equivalents, and restricted cash at beginning of year 260,004 96,348 175,163
Cash, cash equivalents, and restricted cash at end of year $ 135,443 $ 260,004 $ 96,348
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Balance Sheets
December 31,
2024 2023
(In thousands, except unit data)
ASSETS
Real estate, at cost
Operating (including $ 1,825,656 and $ 2,021,622 of consolidated variable interest entities, respectively)
$ 10,363,961 $ 9,932,891
Construction-in-progress (including $ 9,939 and $ 8,677 of consolidated variable interest entities, respectively)
539,752 613,296
10,903,713 10,546,187
Less accumulated depreciation and amortization (including $ 424,044 and $ 416,663 of consolidated variable interest entities, respectively)
( 3,152,799 ) ( 2,963,519 )
Net real estate 7,750,914 7,582,668
Cash and cash equivalents 123,409 250,825
Accounts and notes receivable, net 229,080 201,733
Mortgage notes receivable, net 9,144 9,196
Investment in partnerships 33,458 34,870
Operating lease right of use assets, net 85,806 86,993
Finance lease right of use assets, net 6,630 6,850
Prepaid expenses and other assets 286,316 263,377
TOTAL ASSETS $ 8,524,757 $ 8,436,512
LIABILITIES AND CAPITAL
Liabilities
Mortgages payable, net (including $ 186,643 and $ 189,286 of consolidated variable interest entities, respectively)
$ 514,378 $ 516,936
Notes payable, net 601,414 601,945
Senior notes and debentures, net 3,357,840 3,480,296
Accounts payable and accrued expenses 183,564 174,714
Dividends payable 96,743 92,634
Security deposits payable 30,941 30,482
Operating lease liabilities 74,837 75,870
Finance lease liabilities 12,783 12,670
Other liabilities and deferred credits 227,827 225,443
Total liabilities 5,100,327 5,210,990
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests 180,286 183,363
Partner capital
Preferred units, 398,878 units issued and outstanding
154,788 154,788
Common units, 85,666,220 and 82,775,286 units issued and outstanding, respectively
3,012,066 2,804,669
Accumulated other comprehensive income 4,740 4,052
Total partner capital 3,171,594 2,963,509
Noncontrolling interests in consolidated partnerships 72,550 78,650
Total capital 3,244,144 3,042,159
TOTAL LIABILITIES AND CAPITAL $ 8,524,757 $ 8,436,512
The accompanying notes are an integral part of these consolidated statements.
F-12
Table of Contents
Federal Realty OP LP
Consolidated Statements of Comprehensive Income
Year Ended December 31,
2024 2023 2022
(In thousands, except per unit data)
REVENUE
Rental income $ 1,170,078 $ 1,101,439 $ 1,047,793
Other property income 31,258 29,602 25,499
Mortgage interest income 1,116 1,113 1,086
Total revenue 1,202,452 1,132,154 1,074,378
EXPENSES
Rental expenses 249,569 231,666 228,958
Real estate taxes 142,230 131,429 127,824
General and administrative 49,739 50,707 52,636
Depreciation and amortization 342,598 321,763 302,409
Total operating expenses 784,136 735,565 711,827
Gain on deconsolidation of VIE — — 70,374
Gain on sale of real estate 54,040 9,881 93,483
OPERATING INCOME 472,356 406,470 526,408
OTHER INCOME/(EXPENSE)
Other interest income 4,294 4,687 1,072
Interest expense ( 175,476 ) ( 167,809 ) ( 136,989 )
Income from partnerships 3,160 3,869 5,170
NET INCOME 304,334 247,217 395,661
Net income attributable to noncontrolling interests ( 9,126 ) ( 10,232 ) ( 10,170 )
NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP 295,208 236,985 385,491
Dividends on preferred units ( 8,032 ) ( 8,032 ) ( 8,034 )
NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS $ 287,176 $ 228,953 $ 377,457
EARNINGS PER COMMON UNIT, BASIC
Net income available for common unit holders $ 3.42 $ 2.80 $ 4.71
Weighted average number of common units 83,559 81,313 79,854
EARNINGS PER COMMON UNIT, DILUTED
Net income available for common unit holders $ 3.42 $ 2.80 $ 4.71
Weighted average number of common units 83,566 81,313 80,508
NET INCOME $ 304,334 $ 247,217 $ 395,661
Other comprehensive income (loss) - change in value of interest rate swaps 711 ( 1,824 ) 8,569
COMPREHENSIVE INCOME 305,045 245,393 404,230
Comprehensive income attributable to noncontrolling interests ( 9,149 ) ( 10,113 ) ( 10,935 )
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP $ 295,896 $ 235,280 $ 393,295
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Statements of Capital
Preferred Units Common Units Accumulated
Other
Comprehensive
(Loss) Income Total Partner Capital Noncontrolling Interests in Consolidated Partnerships Total Capital
BALANCE AT DECEMBER 31, 2021 $ 154,963 $ 2,427,686 $ ( 2,047 ) $ 2,580,602 $ 82,546 $ 2,663,148
Net income, excluding $ 6,613 attributable to redeemable noncontrolling interests
8,034 377,457 — 385,491 3,557 389,048
Other comprehensive income - change in fair value of interest rate swaps, excluding $ 765 attributable to redeemable noncontrolling interest
— — 7,804 7,804 — 7,804
Distributions declared to common unit holders — ( 344,711 ) — ( 344,711 ) — ( 344,711 )
Distributions declared to preferred unit holders ( 8,034 ) — — ( 8,034 ) — ( 8,034 )
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 8,090 attributable to redeemable noncontrolling interests
— — — — ( 5,007 ) ( 5,007 )
Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 306,854 — 306,854 — 306,854
Exercise of stock options — 35 — 35 — 35
Common units issued under dividend reinvestment plan — 2,104 — 2,104 — 2,104
Share-based compensation expense, net of forfeitures — 15,018 — 15,018 — 15,018
Common units withheld for employee taxes — ( 4,900 ) — ( 4,900 ) — ( 4,900 )
Conversion of preferred units ( 175 ) 175 — — — —
Conversion and redemption of downREIT OP units — 1,367 — 1,367 ( 2,065 ) ( 698 )
Deconsolidation of VIE — — — — 972 972
Adjustment to redeemable noncontrolling interests — 12,382 — 12,382 — 12,382
BALANCE AT DECEMBER 31, 2022 $ 154,788 $ 2,793,467 $ 5,757 $ 2,954,012 $ 80,003 $ 3,034,015
Net income, excluding $ 7,253 attributable to redeemable noncontrolling interests
8,032 228,953 — 236,985 2,979 239,964
Other comprehensive loss - change in fair value of interest rate swaps, excluding $ 119 attributable to redeemable noncontrolling interest
— — ( 1,705 ) ( 1,705 ) — ( 1,705 )
Distributions declared to common unit holders — ( 355,241 ) — ( 355,241 ) — ( 355,241 )
Distributions declared to preferred unit holders ( 8,032 ) — — ( 8,032 ) — ( 8,032 )
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 9,539 attributable to redeemable noncontrolling interests
— — — — ( 4,541 ) ( 4,541 )
Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 131,729 — 131,729 — 131,729
Common units issued under dividend reinvestment plan — 1,870 — 1,870 — 1,870
Share-based compensation expense, net of forfeitures — 15,427 — 15,427 — 15,427
Common units withheld for employee taxes — ( 5,019 ) — ( 5,019 ) — ( 5,019 )
Conversion and redemption of downREIT OP units — 883 — 883 ( 883 ) —
Contributions from noncontrolling interests — — — — 1,092 $ 1,092
Adjustment to redeemable noncontrolling interests — ( 7,400 ) — ( 7,400 ) — ( 7,400 )
BALANCE AT DECEMBER 31, 2023 $ 154,788 $ 2,804,669 $ 4,052 $ 2,963,509 $ 78,650 $ 3,042,159
Net income, excluding $ 7,022 attributable to redeemable noncontrolling interests
8,032 287,176 — 295,208 2,104 297,312
Other comprehensive income - change in fair value of interest rate swaps, excluding $ 23 attributable to redeemable noncontrolling interest
— — 688 688 — 688
Distributions declared to common unit holders — ( 369,232 ) — ( 369,232 ) — ( 369,232 )
Distributions declared to preferred unit holders ( 8,032 ) — — ( 8,032 ) — ( 8,032 )
Distribution equivalent rights — ( 124 ) — ( 124 ) — ( 124 )
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 8,854 attributable to redeemable noncontrolling interests
— — — — ( 4,239 ) ( 4,239 )
Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 303,931 — 303,931 — 303,931
Common units issued under dividend reinvestment plan — 1,784 — 1,784 — 1,784
Share-based compensation expense, net of forfeitures — 17,379 — 17,379 — 17,379
Common units withheld for employee taxes — ( 6,709 ) — ( 6,709 ) — ( 6,709 )
Conversion and redemption of downREIT OP units — 1,636 — 1,636 ( 2,596 ) ( 960 )
Purchase of capped calls — ( 19,448 ) — ( 19,448 ) — ( 19,448 )
Purchase of noncontrolling interest — ( 10,264 ) — ( 10,264 ) ( 2,094 ) ( 12,358 )
Contributions from noncontrolling interests — — — — 725 725
Adjustment to redeemable noncontrolling interests — 1,268 — 1,268 — 1,268
BALANCE AT DECEMBER 31, 2024 $ 154,788 $ 3,012,066 $ 4,740 $ 3,171,594 $ 72,550 $ 3,244,144
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Statements of Cash Flows
Year Ended December 31,
2024 2023 2022
(In thousands)
OPERATING ACTIVITIES
Net income $ 304,334 $ 247,217 $ 395,661
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 342,598 321,763 302,409
Gain on deconsolidation of VIE — — ( 70,374 )
Gain on sale of real estate ( 54,040 ) ( 9,881 ) ( 93,483 )
Income from partnerships ( 3,160 ) ( 3,869 ) ( 5,170 )
Straight-line rent ( 26,833 ) ( 11,576 ) ( 18,326 )
Share-based compensation expense 16,357 14,308 13,704
Other, net ( 2,158 ) ( 4,959 ) ( 4,812 )
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
(Increase) decrease in accounts receivable, net ( 796 ) 3,468 ( 12,071 )
Increase in prepaid expenses and other assets ( 5,030 ) ( 6,881 ) ( 1,219 )
Increase in accounts payable and accrued expenses 1,550 6,005 77
Increase in security deposits and other liabilities 1,741 235 10,373
Net cash provided by operating activities 574,563 555,830 516,769
INVESTING ACTIVITIES
Acquisition of real estate ( 273,927 ) ( 60,628 ) ( 438,494 )
Capital expenditures - development and redevelopment ( 139,534 ) ( 214,062 ) ( 309,046 )
Capital expenditures - other ( 107,226 ) ( 97,058 ) ( 107,655 )
Costs associated with property sold under threat of condemnation — ( 1,378 ) ( 18,031 )
Proceeds from sale of real estate 99,928 28,451 133,717
Change in cash from deconsolidation of VIE — — ( 4,192 )
Investment in partnerships — — ( 23,155 )
Distribution from partnerships in excess of earnings 4,742 9,860 6,864
Leasing costs ( 30,809 ) ( 23,510 ) ( 22,541 )
Issuance of mortgage and other notes receivable, net — — ( 3,465 )
Net cash used in investing activities ( 446,826 ) ( 358,325 ) ( 785,998 )
FINANCING ACTIVITIES
Costs to amend revolving credit facility — — ( 6,375 )
Issuance of senior notes, net of costs 471,507 345,698 —
Repayment of senior notes ( 600,000 ) ( 275,000 ) —
Issuance and extension of mortgages and notes payable, net of costs ( 902 ) 199,237 298,568
Repayment of mortgages, finance leases, and notes payable ( 3,496 ) ( 58,472 ) ( 19,443 )
Purchase of capped calls ( 19,448 ) — —
Issuance of common units, net of costs 304,045 131,895 307,275
Dividends paid to common and preferred unit holders ( 371,586 ) ( 359,194 ) ( 347,284 )
Common units withheld for employee taxes ( 6,709 ) ( 5,019 ) ( 4,900 )
Contributions from noncontrolling interests 725 1,092 —
Distributions to and redemptions of noncontrolling interests ( 26,434 ) ( 14,086 ) ( 37,427 )
Net cash (used in) provided by financing activities ( 252,298 ) ( 33,849 ) 190,414
(Decrease) increase in cash, cash equivalents, and restricted cash ( 124,561 ) 163,656 ( 78,815 )
Cash, cash equivalents, and restricted cash at beginning of year 260,004 96,348 175,163
Cash, cash equivalents, and restricted cash at end of year $ 135,443 $ 260,004 $ 96,348
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Federal Realty OP LP
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022
NOTE 1— BUSINESS AND ORGANIZATION
Federal Realty Investment Trust (the “Parent Company” and "Trust") is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operating and owns all of its assets. The Parent Company owns 100 % of the limited liability company interests of, is sole member of, and exercises control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole general partner of the Operating Partnership. The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership. Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of December 31, 2024, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 102 predominantly retail real estate projects.
We operate in a manner intended to enable the Trust 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.
General Economic Conditions
The economy continues to face several issues including inflation risk, high interest rates, and potentially worsening economic conditions, which presents risks for our business and tenants. We continue to monitor and address risks related to the general state of the economy. The extent of the future effects on our business, results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future developments, none of which can be predicted.
NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In January 2022, we completed a reorganization into an umbrella partnership real estate investment trust, or "UPREIT." Immediately following the reorganization, the Parent Company had the same consolidated assets and liabilities as Federal Realty Investment Trust immediately before the reorganization. The Parent Company exercises exclusive control over the General Partner and does not have assets or liabilities other than its investment in the Operating Partnership. As a result, the UPREIT reorganization represented a merger of entities under common control in accordance with accounting principles generally accepted in the United States ("GAAP"). Accordingly, the accompanying consolidated financial statements including the notes thereto, are presented as if the UPREIT reorganization had occurred at the earliest period presented.
Principles of Consolidation
As discussed in the Explanatory Note, we have combined the Annual Reports on Form 10-K of the Parent Company and the Operating Partnership into this single report. As a result, we present two sets of consolidated financial statements. Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to the primary beneficiary of a variable interest entity (“VIE”). The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent, and through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership. 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.
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Revenue Recognition and Accounts Receivable
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 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.
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.
As of December 31, 2024 and 2023, our straight-line rent receivables balance was $ 164.6 million and $ 138.4 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet.
Other revenue recognition policies
Sales of real estate are recognized 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.
Other property income includes revenue for our Pike & Rose hotel, parking income and other incidental income from the properties and is generally recognized at the point in time that the performance obligation is met.
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 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 2024, 2023 and 2022, real estate depreciation expense was $ 302.4 million, $ 282.0 million and $ 265.7 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 acquired leases, assumed debt, if any, and to
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current assets acquired and current liabilities assumed, if any. The value allocated to acquired 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 acquired 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 acquired 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.
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, 2024, we had $ 129.3 million in excess of the FDIC insured limit.
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.
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
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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 SOFR 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, 2024, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken property at 3.67 %, and three interest rate swap agreements that effectively fix the interest rate on a mortgage payable secured by our Bethesda Row property at a weighted average interest rate of 5.03 % through the initial maturity date. As of December 31, 2024, our Assembly Row hotel joint venture is a party to two interest rate swap agreements that effectively fix the interest rate on 100 % of the joint venture's mortgage debt through May 2025 at 6.39 %, and 50 % of its outstanding debt from June 2025 through May 2028 at 6.03 %. All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2024, 2023 and 2022.
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.
Mortgage notes receivable are recorded at cost, net of any valuation adjustments. 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. Interest income is accrued as earned. Mortgage notes receivable are considered past due based on the contractual terms of the note agreement. On 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. As our loans are collateralized by mortgages, these loans have risk characteristics similar to the risks in owning commercial real estate.
At December 31, 2024, we had three mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments of $ 9.1 million, and a weighted average interest rate of 11.0 %.
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 to the consolidated financial statements for further discussion regarding our share based compensation plans and policies.
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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 Assembly Row hotel joint venture, the La Alameda shopping center, the Chandler Festival and Chandler Gateway shopping centers, and our mortgage notes receivable are considered variable interests in a VIE. As we do not control the activities that most significantly impact the economic performance of our equity method joint ventures or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate. As of December 31, 2024 and 2023, our investment in the equity method joint ventures and maximum exposure to loss was $ 29.4 million and $ 30.9 million, respectively. As of December 31, 2024 and 2023, our investment in mortgage notes receivable and maximum exposure to loss was $ 9.1 million and $ 9.2 million, respectively.
In addition, we have 18 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 $ 1.6 billion, as of December 31, 2024 and 2023, respectively, and mortgages related to VIEs included in our consolidated balance sheets were approximately $ 186.6 million and $ 189.3 million, as of December 31, 2024 and 2023, respectively.
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.
The following table provides a rollforward of the redeemable noncontrolling interests:
Year Ended
December 31,
2024 2023
(In thousands)
Beginning balance $ 183,363 $ 178,370
Net income 7,022 7,253
Contributions — —
Other comprehensive income (loss) - change in value of interest rate swaps 23 ( 119 )
Distributions & redemptions ( 8,854 ) ( 9,541 )
Change in redemption value ( 1,268 ) 7,400
Ending balance $ 180,286 $ 183,363
Leases
For operating leases where we are the lessee, the related operating lease right of use ("ROU") assets and lease 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 corresponds to the remaining term of the lease, our credit spread, and an 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 recognize variable lease payments as expense in the period in which they are incurred. We do not record a ROU asset or lease liability for leases with terms of less than 12 months.
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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 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 2019. As of December 31, 2024 and 2023, 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. Our chief executive officer is our chief operating decision maker ("CODM"), who regularly reviews operating and financial information for commercial and, as applicable, residential components for each property on an individual basis. As a result, each commercial and, as applicable, residential component for each property represents an individual operating segment. We evaluate financial performance using property operating income ("POI"), a non-GAAP measure which consists of rental income and mortgage interest income, less rental expenses and real estate taxes.
Reconciliation of property operating income to consolidated net income:
Year Ended December 31,
2024 2023 2022
(In thousands)
Property operating income $ 810,653 $ 769,059 $ 717,596
General and administrative expense ( 49,739 ) ( 50,707 ) ( 52,636 )
Depreciation and amortization ( 342,598 ) ( 321,763 ) ( 302,409 )
Gain on deconsolidation of VIE — — 70,374
Gain on sale of real estate 54,040 9,881 93,483
Other interest income 4,294 4,687 1,072
Interest expense ( 175,476 ) ( 167,809 ) ( 136,989 )
Income from partnerships 3,160 3,869 5,170
Net income 304,334 247,217 395,661
Net income attributable to noncontrolling interests ( 9,126 ) ( 10,232 ) ( 10,170 )
Net income attributable to the trust $ 295,208 $ 236,985 $ 385,491
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. We do not distinguish or group our operations on a geographical basis for purposes of allocation of resources or capital. 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 and are typically located in major metropolitan areas.
We do not present significant expense disclosures for our reportable segment as operating segment level expenses are not regularly provided to our CODM. However, a breakout of the principal components of rental expense can be found in Note 11 to the consolidated financial statements and real estate tax expense is presented on the face of the consolidated statement of comprehensive income.
We do not present a reconciliation of our reportable segment's assets to consolidated assets, as asset information by operating segment is not used by our CODM to allocate resources and capital or assess performance.
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Forward Equity Sales
Our at-the-market (“ATM”) equity program allows shares to be sold through forward sales contracts. Our forward sales contracts currently meet all the conditions for equity classification; and therefore, we record common stock on the settlement date at the purchase price contemplated by the contract. Furthermore, we consider the potential dilution resulting from forward sales contracts in our earnings per share calculations. We use the treasury stock method to determine the dilution, if any, from the forward sales contracts during the period of time prior to settlement. See Note 8 to the consolidated financial statements for details of our forward sales transactions.
Exchangeable Senior Notes
On January 11, 2024, our Operating Partnership issued $ 485.0 million aggregate principal amount of 3.25 % Exchangeable Senior Notes due 2029 (the "Notes") in a private placement (see Note 5 for additional information). We account for our Notes in accordance with ASC 470-20, Debt with Conversion and Other Options (after the adoption of ASU 2020-06, Debt - Debt and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Contracts in an Entity's Own Equity (ASU 2020-06)). The embedded exchange feature is eligible for an exception from derivative accounting because it is indexed to our own stock and meets the equity classification under ASC 815-40; therefore, the exchange feature is not bifurcated. At each reporting period, we calculate the effect of the Notes on our dilutive earnings per common share and per common unit using the if-converted method. In connection with the Notes, we entered into privately negotiated capital call transactions with certain of the initial purchasers of the notes or their affiliates or other financial institutions. Similar to the exchange feature embedded in the Notes, the capped call transactions meet all the conditions for equity classification, and therefore, the related premiums paid are recorded in shareholders' equity for the Trust and capital for the Operating Partnership.
Recent Accounting Pronouncements
Standard Description Effect on the financial statements or significant matters
Adopted during 2024:
ASU 2023-01, March 2023, Leases (Topic 842) Common Control Arrangements
This ASU requires all lessees in a lease with a lessor under common control to (1) amortize leasehold improvements over their useful life to the common control group, as long as the lessee controls the use of the underlying asset through a lease and (2) account for the leasehold improvements as a transfer of assets between entities under common control through an adjustment to equity when the lessee no longer controls the use of the underlying asset.
The guidance may be applied prospectively to new and existing leasehold improvements, with the remaining balance of existing leasehold improvements amortized over their remaining useful life to the common control group or retrospectively, through a cumulative-effect adjustment to opening retained earnings.
The guidance is effective in fiscal years beginning after December 15, 2023, and interim periods withing those fiscal years. Early adoption is permitted. We adopted this ASU as of January 1, 2024. The implementation of this ASU did not have an impact on our consolidated financial statements.
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Standard Description Effect on the financial statements or significant matters
ASU 2023-07, November 2023, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures
This ASU requires public entities to provide disclosures of significant segment expense and other significant segment items, as well as provide in interim period all disclosures about a reportable segments's profit or loss and assets that are currently required annually. Additionally, public entities with a single reportable segment have to provide all of the disclosures required by ASC 280, including the significant segment expense disclosures.
The guidance is applied retrospectively to all periods presented in financial statements, unless it is impracticable. The guidance applies to all public entities and is effective for fiscal years beginning after December 15, 2023, and for interim period beginning after December 15, 2024. Early adoption is permitted. For the year ended December 31, 2024, we have provided disclosures as required by ASC 280 in Note 2 to the consolidated financial statements.
Issued in 2024 and 2025:
ASU 2024-03, November 2024, and ASU 2025-01, January 2025, Income Statement—Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)
This ASU requires the disaggregation of specific natural expense categories within relevant income statement captions. Public business entities are required to provide tabular disclosures which disaggregate expenses such as purchases of inventory, employee compensation, depreciation and amortization. A separate total of an entity's selling expenses is also required, along with the disclosure of how the company determines them.
The guidance is required to be applied prospectively, but may be applied retrospectively for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15 2027. Early adoption is permitted. We are assessing the impact of this ASU on our consolidated financial statements.
ASU 2024-04, November 2024, Debt—Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments
This ASU clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions. The guidance requires that an induced conversion include the issuance of all consideration issuable under the conversion privileges provided in the terms of the existing instrument. An entity that doesn't meet all of the criteria applies extinguishment accounting and recognizes a gain or loss for the difference between the fair value of the entire consideration transferred and the net carrying amount of the debt.
Entities have the option to apply the guidance either (1) prospectively to settlements of convertible debt instruments that occur during fiscal years (and interim periods within those fiscal years) beginning after the effective date or (2) retrospectively. Under the retrospective transition approach, the entity recasts prior periods and recognizes a cumulative-effect adjustment to equity as of the later of the beginning of the earliest period presented or the date the entity adopted ASU 2020-06. This is effective for all entities for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. We are assessing the impact of this ASU on our consolidated financial statements.
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Standard Description Effect on the financial statements or significant matters
Issued in 2023:
ASU 2023-06, October 2023, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative
This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standard Codification (the "Codification"). The new guidance is intended to align U.S. GAAP requirements with those of the SEC and to facilitate the application of U.S. GAAP for all entities. These disclosure requirements are currently included in either SEC Regulation S-X or SEC Regulation S-K.
The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited and the amendments should be applied prospectively. If the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K by June 30, 2027, the amendments will be removed from the Codification and will not be effective. We do not expect this ASU to have a material impact on our consolidated financial statements.
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,
2024 2023 2022
(In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred $ 195,958 $ 190,409 $ 155,659
Interest capitalized ( 20,482 ) ( 22,600 ) ( 18,670 )
Interest expense $ 175,476 $ 167,809 $ 136,989
Cash paid for interest, net of amounts capitalized $ 169,333 $ 158,796 $ 130,912
Cash paid for income taxes $ 177 $ 284 $ 624
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
DownREIT operating partnership units redeemed for common shares $ 1,715 $ 883 $ 1,385
Shares issued under dividend reinvestment plan $ 1,670 $ 1,704 $ 1,718
5.417% Series 1 Cumulative Convertible Preferred Shares redeemed for common shares $ — $ — $ 175
December 31,
2024 2023
(In thousands)
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Cash and cash equivalents $ 123,409 $ 250,825
Restricted cash (1) 12,034 9,179
Total cash, cash equivalents, and restricted cash $ 135,443 $ 260,004
(1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets, and is primarily related to escrow accounts.
NOTE 3— REAL ESTATE
2024 Property Acquisitions
On May 31, 2024, we acquired the fee interest in Virginia Gateway, which is comprised of five adjacent shopping centers in Gainesville, Virginia, totaling 664,000 square feet, for $ 215.0 million. Approximately $ 21.1 million and $ 0.4 million of net
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assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $ 13.3 million of net assets acquired were allocated to other liabilities for "below market leases."
On July 31, 2024, we acquired the fee interest in Pinole Vista Crossing, a 216,000 square foot retail shopping center in Pinole, California for $ 60.0 million. Approximately $ 5.7 million of net assets acquired were allocated to other assets for "acquired lease costs," and $ 4.0 million of net assets acquired were allocated to other liabilities for "below market leases."
2024 Property Disposition
During the year ended December 31, 2024, we sold our Third Street Promenade property and a portion of our White Marsh Other property for sales prices totaling $ 106.8 million, resulting in a gain on sale of $ 53.8 million.
2023 Property Acquisitions
On January 31, 2023, we acquired the 168,000 square foot portion of Huntington Square shopping center that was not previously owned, as well as the fee interest in the land underneath the portion of the shopping center which we controlled under a long-term ground lease for $ 35.5 million. As a result of this transaction, we now own the entire fee interest in this 243,000 square foot property and the "operating lease right of use assets, net" on our consolidated balance sheet decreased by $ 5.3 million. Approximately $ 4.1 million and $ 1.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively.
On May 26, 2023, we exercised our option and acquired the 22.3 % tenancy in common ("TIC") interest from our co-owner at Escondido Promenade, as discussed in our 2023 Form 10-K, for $ 30.5 million, bringing our ownership interest to 100 %. As a result of the transaction, we gained control of this property, and effective May 26, 2023, we have consolidated this property. Approximately $ 1.8 million and $ 0.2 million of net assets associated with the 22.3 % interest acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $ 1.1 million of net assets associated with the 22.3 % interest acquired were allocated to other liabilities for "below market leases."
On October 12, 2023, we acquired the fee interest under a portion of our Mercer on One (formerly Mercer Mall) shopping center for $ 55.0 million pursuant to the purchase option included in the master lease. As a result of this transaction, "finance lease right of use assets, net" of $ 37.8 million were allocated to "operating real estate" and "finance lease liabilities" decreased by $ 55.0 million.
2023 Property Dispositions
During the year ended December 31, 2023, we sold our Town Center of New Britain property and a portion of our Third Street Promenade property for sales prices totaling $ 30.4 million, resulting in net gains totaling approximately $ 9.7 million.
NOTE 4— ACQUIRED LEASES
Acquired lease assets comprise of above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities comprise of 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, 2024 December 31, 2023
Cost Accumulated Amortization Cost Accumulated Amortization
(in thousands)
Above market leases, lessor $ 42,171 $ ( 34,046 ) $ 45,726 $ ( 35,209 )
Below market leases, lessee 28,101 ( 6,145 ) 28,101 ( 5,411 )
Total $ 70,272 $ ( 40,191 ) $ 73,827 $ ( 40,620 )
Below market leases, lessor $ ( 277,883 ) $ 111,719 $ ( 269,268 ) $ 104,072
Above market leases, lessee ( 11,127 ) 4,333 ( 11,127 ) 3,771
Total $ ( 289,010 ) $ 116,052 $ ( 280,395 ) $ 107,843
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The value allocated to acquired 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 acquired 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,
2024 2023 2022
(in thousands)
Amortization of above market leases, lessor $ ( 2,799 ) $ ( 3,254 ) $ ( 3,437 )
Amortization of below market leases, lessor 16,290 15,864 14,543
Net increase in rental income $ 13,491 $ 12,610 $ 11,106
Amortization of below market leases, lessee $ 734 $ 742 $ 828
Amortization of above market leases, lessee ( 562 ) ( 563 ) ( 554 )
Net increase in rental expense $ 172 $ 179 $ 274
The following is a summary of the remaining weighted average amortization period for our acquired lease assets and acquired lease liabilities:
December 31, 2024
Above market leases, lessor 2.5 years
Below market leases, lessee 30.0 years
Below market leases, lessor 16.6 years
Above market leases, lessee 17.1 years
The amortization for acquired leases during the next five years and thereafter, assuming no early lease terminations, is as follows:
Acquired Lease Assets Acquired Lease Liabilities
(In thousands)
Year ending December 31,
2025 $ 2,497 $ 12,868
2026 2,232 12,423
2027 1,937 11,924
2028 1,558 11,104
2029 1,332 10,120
Thereafter 20,525 114,519
$ 30,081 $ 172,958
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NOTE 5— DEBT
The following is a summary of our total debt outstanding as of December 31, 2024 and 2023:
Principal Balance as of December 31, Stated Interest Rate as of Stated Maturity Date as of
Description of Debt 2024 2023 December 31, 2024 December 31, 2024
Mortgages payable (Dollars in thousands)
Azalea $ 40,000 $ 40,000 3.73 % November 1, 2025
Bethesda Row (1) 200,000 200,000 SOFR + 0.95 %
December 28, 2025
Bell Gardens 11,215 11,531 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) (2) 52,123 53,617 SOFR + 1.95 %
December 15, 2029
Various Hoboken (14 Buildings)(3) 28,838 29,878 Various Various through 2029
Chelsea 3,568 4,018 5.36 % January 15, 2031
Subtotal 515,844 519,144
Net unamortized debt issuance costs and discount ( 1,466 ) ( 2,208 )
Total mortgages payable, net 514,378 516,936
Notes payable
Term Loan (4)(6) 600,000 600,000 SOFR + 0.85 %
April 16, 2025
Revolving credit facility (4)(5)(6) — — SOFR + 0.775 %
April 5, 2027
Various 1,680 2,387 Various Various through 2059
Subtotal 601,680 602,387
Net unamortized debt issuance costs ( 266 ) ( 442 )
Total notes payable, net 601,414 601,945
Senior notes and debentures (6)
3.95% notes — 600,000 3.95 % January 15, 2024
1.25% notes 400,000 400,000 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
5.375% notes 350,000 350,000 5.375 % May 1, 2028
3.25% exchangeable notes 485,000 — 3.25 % January 15, 2029
3.20% notes 400,000 400,000 3.20 % June 15, 2029
3.50% notes 400,000 400,000 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 3,379,200 3,494,200
Net unamortized debt issuance costs and premium ( 21,360 ) ( 13,904 )
Total senior notes and debentures, net 3,357,840 3,480,296
Total debt $ 4,473,632 $ 4,599,177
_____________________
(1) The interest rate on this mortgage loan is fixed at a weighted average interest rate of 5.03 % through the initial maturity date through three interest rate swap agreements. We have two one-year extensions, at our option to extend the maturity date of this mortgage loan to December 28, 2027.
(2) The interest rate on this mortgage loan is fixed at 3.67 % through two interest rate swap agreements.
(3) The interest rates on these mortgages range from 3.91 % to 5.00 %.
(4) Our revolving credit facility SOFR loans bear interest at Daily Simple SOFR or Term SOFR and our term loan bears interest at Term SOFR as defined in the respective credit agreements, plus 0.10 %, plus a spread, based on our current credit rating.
(5) The maximum amount drawn under our revolving credit facility during the year ended December 31, 2024 was $ 202.7 million and the weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 6.1 %.
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(6) The Operating Partnership is the obligor under our revolving credit facility, term loan, and senior notes and debentures. Effective April 1, 2024, a wholly owned subsidiary of the Operating Partnership guarantees the term loan.
On January 11, 2024, our Operating Partnership issued $ 485.0 million aggregate principal amount of 3.25 % Exchangeable Senior Notes due 2029 (the “Notes”) in a private placement. The notes bear interest at an annual rate of 3.25 %, payable semiannually in arrears on January 15 th and July 15 th of each year, beginning July 15, 2024. The notes mature on January 15, 2029, unless earlier exchanged, purchased, or redeemed. Net proceeds after the initial purchaser's discount and offering costs were approximately $ 471.5 million. Interest expense, including $ 2.6 million of debt issuance cost amortization, was $ 17.9 million related to these Notes for the year ended December 31, 2024. Including the debt issuance cost amortization, the current effective interest rate on these notes is approximately 3.9 %. The unamortized debt issuance costs related to the Notes were $ 10.9 million at December 31, 2024.
Prior to the close of business on July 15, 2028, the Notes will be exchangeable at the option of the holders only upon certain circumstances and during certain periods. On or after July 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes, holders may exchange their Notes at any time. The Operating Partnership will settle exchanges of the Notes by delivering cash up to the principal amount of the Notes exchanged, and if applicable, cash, common shares of the Trust, or a combination thereof at our option, in respect of the remainder, if any, of the exchange obligation in excess of the principal amount. If we elect to settle any portion of the exchange obligation in excess of the principal amount with shares of the Trust, an equivalent number of common units will be issued by the Operating Partnership to the Trust. The exchange rate initially equals 8.1436 common shares per $ 1,000 principal amount of the Notes (which is equivalent to an exchange price of approximately $ 122.80 per common share and reflects an exchange premium of approximately 20 % based on the closing price of $ 102.33 on January 8, 2024). The initial exchange rate is subject to adjustment upon the occurrence of certain events, including in the event of a payment of a quarterly common dividend in excess of $ 1.09 per share, but will not be adjusted for any accrued and unpaid interest. While our quarterly common dividend per share currently exceeds $ 1.09 , the exchange rate has not materially changed.
The Operating Partnership may redeem the Notes, at its option, in whole or in part, on or after January 20, 2027 if the last reported sales price of the common shares has been at least 130 % of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 day consecutive trading period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Operating Partnership provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date.
In connection with the Notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes or their affiliates or other financial institutions. The capped call transactions cover, subject to customary adjustments, the number of our common shares that initially underlie the Notes. The capped call transactions are expected generally to reduce the potential dilution to our common shares upon exchange of any Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Notes, with such reduction and/or offset subject to a cap. The cap price of the capped call transaction initially is approximately $ 143.26 per share, which represents a premium of approximately 40 % over the last reported sale price of our common shares of $ 102.33 on the New York Stock Exchange on January 8, 2024, and is subject to certain adjustments under the terms of the capped call transactions. A portion of the proceeds from the Notes were used to pay the capped call premium of $ 19.4 million, which will be recorded in shareholders' equity for the Trust and capital for the Operating Partnership.
On January 16, 2024, we repaid the $ 600.0 million 3.95 % senior unsecured notes at maturity.
On February 6, 2024, we exercised our first option and extended the maturity date of our $ 600.0 million unsecured term loan to April 16, 2025, with an additional one year extension at our option still available to further extend the loan to April 16, 2026.
During 2024, 2023 and 2022, the maximum amount of borrowings outstanding under our revolving credit facility was $ 202.7 million, $ 115.5 million and $ 330.0 million, respectively. The weighted average amount of borrowings outstanding was $ 33.5 million, $ 44.7 million and $ 80.3 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 6.1 %, 5.9 % and 3.2 %, respectively. The revolving credit facility requires an annual facility fee which is $ 1.9 million under the amended credit agreement. At December 31, 2024 and December 31, 2023, 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, 2024, we were in compliance with all default related debt covenants.
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Scheduled principal payments on mortgages payable, notes payable, senior notes and debentures as of December 31, 2024 are as follows:
Mortgages
Payable Notes
Payable Senior Notes and
Debentures Total
Principal
(In thousands)
Year ending December 31,
2025 $ 247,592 (1) $ 600,538 (2) $ — $ 848,130
2026 26,282 99 429,200 455,581
2027 178,282 43 (3) 515,000 693,325
2028 2,511 — 350,000 352,511
2029 60,434 — 885,000 945,434
Thereafter 743 1,000 1,200,000 1,201,743
$ 515,844 $ 601,680 $ 3,379,200 $ 4,496,724 (4)
_____________________
(1) Our $ 200.0 million mortgage loan secured by Bethesda Row matures on December 28, 2025 plus two one-year extensions, at our option to December 28, 2027.
(2) Our $ 600.0 million term loan matures on April 16, 2025, plus one one-year extension at our option to April 16, 2026.
(3) Our $ 1.25 billion revolving credit facility matures on April 5, 2027 plus two six-month extensions, at our option to April 5, 2028. As of December 31, 2024, there was no balance outstanding under this credit facility.
(4) The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2024 .
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, 2024 December 31, 2023
Carrying
Value Fair Value Carrying
Value Fair Value
(In thousands)
Mortgages and notes payable $ 1,115,792 $ 1,098,271 $ 1,118,881 $ 1,101,479
Senior notes and debentures $ 2,883,713 $ 2,645,097 $ 3,480,296 $ 3,201,174
Exchangeable senior notes $ 474,127 $ 495,510 $ — $ —
As of December 31, 2024, we have five interest rate swap agreements with total notional amounts of $ 252.1 million that are measured at fair value on a recurring basis. We have two interest rate swap agreements associated with our Hoboken portfolio that fix the interest rate on $ 52.1 million of mortgage payables at 3.67 % through December 15, 2029. We also have three interest rate swap agreements associated with our Bethesda Row property that fix the interest rate on a $ 200.0 million mortgage payable at a weighted average interest rate of 5.03 % through December 28, 2025.
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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, 2024 was an asset of $ 5.2 million and is included in "prepaid expenses and other assets" on our consolidated balance sheet. During 2024, the value of our interest rate swaps increased $ 0.5 million (including $ 4.1 million reclassified from other comprehensive income as a decrease to interest expense). A summary of our financial assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:
December 31, 2024 December 31, 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(In thousands)
Interest rate swaps $ — $ 5,208 $ — $ 5,208 $ — $ 4,668 $ — $ 4,668
One of our equity method investees has two interest rate swaps which qualify as cash flow hedges. At December 31, 2024 and December 31, 2023, our share of the change in fair value of the related swaps included in "accumulated other comprehensive income (loss)" was income of $ 0.2 million and a loss of $ 0.3 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. 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.
At December 31, 2024 and 2023, our reserves for general liability costs were $ 4.4 million and $ 3.5 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 2024 and 2023, we made payments from these reserves of $ 2.1 million and $ 2.0 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.
On April 1, 2024, we acquired the approximately 10 % noncontrolling interest in the partnership that owns our CocoWalk property for $ 12.4 million, bringing our ownership to 100 %.
During the third quarter of 2024, the term of our ground lease for our Kings Court property expired.
On December 11, 2019, we received proceeds related to the sale under threat of condemnation at San Antonio Center as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. We indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and recorded a corresponding liability for our estimate of these costs. During 2022, we recorded a net reduction of our liability for condemnation and transaction costs to reflect the impact of tenant settlement and our current estimate of remaining costs. As a result, for the year ended December 31, 2022, we recognized a gain of $ 9.3 million. During 2023 and 2022, we
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incurred $ 1.4 million and $ 18.0 million, respectively, of payments to tenants. We incurred no costs during 2024. At December 31, 2024, we have a liability of $ 3.6 million to reflect our estimate of the remaining costs.
In 2018, we formed a new joint venture to develop Freedom Plaza, a grocery anchored shopping center in Los Angeles County, California. We own approximately 92 % of the venture. The development generated income tax credits under the New Market Tax Credit Program ("NMTC"), which was provided for in the Community Renewal Tax Relief Act of 2000 ("the Act") and is intended to induce investment in underserved areas in the United States. The Act permits taxpayers to claim credits against their Federal income taxes for qualified investments. A third party bank contributed $ 13.9 million in 2018 to the development, and is entitled to the related tax credit benefits, but they do not have an interest in the underlying economics of the property. The transaction also includes a put/call provision whereby we may be obligated or entitled to purchase the third party bank's interest. We believe the put will be exercised at its $ 1,000 strike price. Based on our assessment of control, we concluded that the project and certain other transaction related entities should be consolidated. The $ 13.9 million received in exchange for the transfer of the tax credits was deferred and will be recognized when the tax benefits are delivered to the third party bank without risk of recapture. Direct and incremental costs of $ 1.6 million incurred in structuring the NMTC transaction have also been deferred. The Trust anticipates recognizing the net cash received as revenue upon completion of the seven-year NMTC compliance period.
At December 31, 2024, we had letters of credit outstanding of approximately $ 5.9 million.
As of December 31, 2024 in connection with capital improvement, development, and redevelopment projects, we have contractual obligations of approximately $ 252.4 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, 2024:
(In thousands)
Year ending December 31,
2025 $ 5,895
2026 5,602
2027 5,325
2028 5,389
2029 5,422
Thereafter 189,447
Total future minimum operating lease payments 217,080
Less amount representing interest ( 142,243 )
Operating lease liabilities $ 74,837
Future minimum lease payments and their present value for properties under finance leases as of December 31, 2024, are as follows:
(In thousands)
Year ending December 31,
2025 $ 713
2026 713
2027 748
2028 801
2029 801
Thereafter 67,074
Total future minimum finance lease payments 70,850
Less amount representing interest ( 58,067 )
Finance lease liabilities $ 12,783
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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 other 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, 2024, our estimated maximum liability upon exercise of the put option would range from approximately $ 60 million to $ 63 million.
A master lease for Melville Mall, as amended on October 14, 2021, includes a fixed price put option at any time prior to June 30, 2025, requiring us to purchase Melville Mall for approximately $ 3.6 million. Additionally, we have the right to purchase Melville Mall in 2026 for approximately $ 3.6 million. The consideration is net of a contract amendment fee to be paid by the landlord.
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, 2024, our estimated maximum liability upon exercise of the put option would range from $ 8 million to $ 9 million.
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, 2024, our estimated maximum liability upon exercise of the put option would range from $ 11 million to $ 12 million.
Effective June 14, 2026, the other member in Camelback Colonnade and The Shops at Hilton Village has the right to require us to purchase all of its 2.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2024, our estimated maximum liability upon exercise of the put option would range from $ 4 million to $ 5 million.
Effective October 6, 2027, the other member in the partnership that owns equity method investments in Chandler Festival and Chandler Gateway has the right to require us to purchase its 2.5 % net ownership interest. Based on management's current estimate of fair value as of December 31, 2024, our estimated maximum liability upon exercise of the put option would range from $ 1 million and $ 2 million.
Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2024, our estimated maximum liability upon exercise of the put option would range from $ 68 million to $ 73 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 608,348 downREIT operating partnership units are outstanding which have a total fair value of $ 68.1 million, based on our closing stock price on December 31, 2024.
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 2024, 2023 and 2022, 18,101 shares, 19,847 shares, and 19,502 shares, respectively, were issued under the Plan.
As of December 31, 2024, 2023, and 2022, 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. 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, 2024, 2023, and 2022, we had 392,878 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 March 8, 2024, we amended our existing at-the-market (“ATM”) equity program under which we may from time to time offer and sell common shares. This amendment reset the aggregate offering price of the program to $ 500.0 million. Our ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.
For the year ended December 31, 2024, we issued 2,059,654 common shares at a weighted average price per share of $ 109.20 for net cash proceeds of $ 222.3 million including paying $ 2.2 million in commissions and $ 0.4 million in additional offering
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expenses related to the sales of these common shares. For the year ended December 31, 2023, we issued 1,309,994 common shares at a weighted average price per share of $ 101.74 for net cash proceeds of $ 131.7 million including paying $ 1.3 million in commissions and $ 0.2 million in additional offering expenses related to the sales of these common shares.
We also entered into forward sales contracts for the year ended December 31, 2024 for 1,186,422 common shares under our ATM equity program at a weighted average offering price of $ 115.72 . During 2024, we settled a portion of the forward sales agreements entered into during the year by issuing 709,925 common shares for net proceeds of $ 81.7 million.
The forward price that we will receive upon physical settlement of the agreements is subject to the adjustment for (i) commissions, (ii) floating interest rate factor equal to a specified daily rate less a spread, (iii) the forward purchasers' stock borrowing costs and (iv) scheduled dividends during the term of the forward sale agreements. The remaining open forward shares may be settled at any time on or before December 2025. As of December 31, 2024, we have the remaining capacity to issue up to $ 144.4 million in common shares under our ATM equity program.
Effective May 4, 2023, our Declaration of Trust was amended to increase the number of authorized common shares of beneficial interest to 200,000,000 .
NOTE 9— DIVIDENDS
The following table provides a summary of dividends declared and paid per share:
Year Ended December 31,
2024 2023 2022
Declared Paid Declared Paid Declared Paid
Common shares $ 4.380 $ 4.370 $ 4.340 $ 4.330 $ 4.300 $ 4.290
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 $ 1.250
(1) Amount represents dividends per depositary share, each representing 1/1000th of a share.
A summary of the income tax status of dividends per share paid is as follows:
Year Ended December 31,
2024 2023 2022
Common shares
Ordinary dividend $ 3.583 $ 3.551 $ 3.518
Capital gain 0.656 0.130 0.772
Return of capital 0.131 0.649 —
$ 4.370 $ 4.330 $ 4.290
5.417 % Series 1 Cumulative Convertible Preferred shares
Ordinary dividend $ 1.151 $ 1.313 $ 1.110
Capital gain 0.203 0.041 0.244
$ 1.354 $ 1.354 $ 1.354
5.0 % Series C Cumulative Redeemable Preferred shares
Ordinary dividend $ 1.063 $ 1.213 1.025
Capital gain 0.187 0.037 0.225
$ 1.250 $ 1.250 $ 1.250
On October 30, 2024, the Trustees declared a quarterly cash dividend of $ 1.10 per common share, payable January 15, 2025 to common shareholders of record on January 2, 2025.
NOTE 10— LEASES
At December 31, 2024, our 102 predominantly retail shopping center and mixed-use properties are located in 12 states and the District of Columbia. There are approximately 3,500 commercial leases and 3,100 residential leases. Our commercial tenants range from sole proprietorships to national retailers and corporations. At December 31, 2024, no one tenant or corporate group of tenants accounted for more than 2.6 % 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,
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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, 2024, 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,
2025 $ 775,646
2026 735,191
2027 663,562
2028 565,100
2029 473,196
Thereafter 1,881,620
$ 5,094,315
The following table provides additional information on our operating and finance leases where we are the lessee:
Year Ended December 31,
2024 2023 2022
(In thousands)
LEASE COST:
Finance lease cost:
Amortization of right-of-use assets $ 220 $ 998 $ 1,251
Interest on lease liabilities 825 4,332 5,743
Operating lease cost 6,048 6,232 6,138
Variable lease cost 413 348 309
Total lease cost $ 7,506 $ 11,910 $ 13,441
OTHER INFORMATION:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for finance leases $ 713 $ 4,227 $ 5,642
Operating cash flows for operating leases $ 6,276 $ 6,146 $ 5,644
Financing cash flows for finance leases $ — $ 55,228 $ 50
December 31,
2024 2023
Weighted-average remaining term - finance leases 69.7 years 70.6 years
Weighted-average remaining term - operating leases 53.2 years 53.6 years
Weighted-average discount rate - finance leases 6.5 % 6.5 %
Weighted-average discount rate - operating leases 4.8 % 4.8 %
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NOTE 11— COMPONENTS OF RENTAL EXPENSES
The principal components of rental expenses are as follows:
Year Ended December 31,
2024 2023 2022
(In thousands)
Repairs and maintenance $ 99,367 $ 87,349 $ 90,343
Utilities 38,676 35,109 34,226
Management fees and costs 32,203 30,203 27,416
Payroll 22,302 20,598 19,693
Insurance 19,383 18,273 16,380
Marketing 7,536 7,978 7,814
Ground rent 5,259 5,303 5,092
Other operating 24,843 26,853 27,994
Total rental expenses $ 249,569 $ 231,666 $ 228,958
NOTE 12— SHARE-BASED COMPENSATION PLANS
A summary of share-based compensation expense included in net income is as follows:
Year Ended December 31,
2024 2023 2022
(In thousands)
Grants of common shares, restricted stock units, and options $ 17,379 $ 15,427 $ 15,018
Capitalized share-based compensation ( 1,022 ) ( 1,119 ) ( 1,314 )
Share-based compensation expense $ 16,357 $ 14,308 $ 13,704
As of December 31, 2024, 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 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 2023 and 2022. The following table provides a summary of the assumptions used to value options granted in 2024:
Year Ended December 31,
2024
Volatility 31.9 %
Expected dividend yield 4.3 %
Expected term (in years) 7.5
Risk free interest rate 4.1 %
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The weighted-average grant-date fair value of options granted in 2024 was $ 24.59 per share. The following table provides a summary of option activity for 2024:
Shares
Under
Option Weighted-
Average
Exercise
Price Weighted-
Average
Remaining
Contractual Term Aggregate
Intrinsic
Value
(In years) (In thousands)
Outstanding at December 31, 2023 1,829 $ 95.77
Granted 1,190 101.66
Exercised — —
Forfeited or expired — —
Outstanding at December 31, 2024 3,019 $ 98.09 7.3 $ 42
Exercisable at December 31, 2024 1,097 $ 95.77 6.1 $ 18
The following table provides a summary of restricted share activity for 2024:
Shares Weighted-Average
Grant-Date Fair
Value
Unvested at December 31, 2023 286,205 $ 111.89
Granted 149,842 101.84
Vested ( 167,495 ) 109.82
Forfeited ( 332 ) 104.66
Unvested at December 31, 2024 268,220 $ 107.57
The weighted-average grant-date fair value of stock awarded in 2024, 2023 and 2022 was $ 101.84 , $ 109.44 and $ 125.34 , respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2024, 2023 and 2022, was $ 17.3 million, $ 14.4 million and $ 14.3 million, respectively.
On February 10, 2021, 10,441 restricted stock units were awarded to an officer, of which 7,204 vested on January 7, 2025, based on meeting certain market based performance criteria. The amount of dividend equivalent rights related to these units is approximately $ 0.1 million, and was recorded against retained earnings for the year ended December 31, 2024. The weighted-average grant-date fair value of the restricted stock units awarded in 2021 was $ 97.01 .
As of December 31, 2024, there was $ 16.9 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 3.5 years with a weighted-average period of 1.8 years.
Subsequent to December 31, 2024, common shares were awarded under various compensation plans as follows:
Date Award Vesting Term Beneficiary
January 2, 2025 6,164 Shares Immediate Trustees
February 12, 2025 136,810 Restricted Shares 3 - 4 years
Officers and key employees
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 $ 23,000 for 2024, $ 22,500 for 2023, and 20,500 for 2022. 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, 2024, 2023 and 2022 was approximately $ 1,012,000 , $ 960,000 and $ 869,000 , 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, 2024 and 2023, we are liable to participants for approximately $ 24.0 million and $ 22.0 million, respectively, under this plan. Although this is an unfunded plan, we have
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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 AND UNIT
We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method. The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings. For 2024, 2023, and 2022, we had 0.3 million weighted average unvested shares and units outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS and EPU between common shares and units and unvested shares and units; the portion of earnings allocated to the unvested shares and units is reflected as “earnings allocated to unvested shares” or "earnings allocated to unvested units" in the reconciliation below.
The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:
• exercise of 1,190 stock options in 2024 and 1,829 stock options in 2023,
• conversions of downREIT operating partnership units for 2024 and 2023,
• 5.417 % Series 1 Cumulative Convertible Preferred Shares and units for 2024, 2023, and 2022, and
• the issuance of 1.2 million shares and units issuable under common share forward sales agreements in 2024.
Additionally, 7,204 unvested restricted stock shares and units are included in the diluted EPS and EPU calculations, as certain market based performance criteria in the award was achieved as of December 31, 2024.
Federal Realty Investment Trust Earnings per Share
Year Ended December 31,
2024 2023 2022
(In thousands, except per share data)
NUMERATOR
Net income $ 304,334 $ 247,217 $ 395,661
Less: Preferred share dividends ( 8,032 ) ( 8,032 ) ( 8,034 )
Less: Income from operations attributable to noncontrolling interests ( 9,126 ) ( 10,232 ) ( 10,170 )
Less: Earnings allocated to unvested shares ( 1,283 ) ( 1,286 ) ( 1,328 )
Net income available for common shareholders, basic 285,893 227,667 376,129
Add: Income attributable to downREIT operating partnership units — — 2,810
Net income available for common shareholders, diluted $ 285,893 $ 227,667 $ 378,939
DENOMINATOR
Weighted average common shares outstanding—basic 83,559 81,313 79,854
Effect of dilutive securities:
Unvested performance shares 7 — —
DownREIT operating partnership units — — 654
Weighted average common shares outstanding—diluted 83,566 81,313 80,508
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders $ 3.42 $ 2.80 $ 4.71
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders $ 3.42 $ 2.80 $ 4.71
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Federal Realty OP LP Trust Earnings per Unit
Year Ended December 31,
2024 2023 2022
(In thousands, except per unit data)
NUMERATOR
Net income $ 304,334 $ 247,217 $ 395,661
Less: Preferred unit distributions ( 8,032 ) ( 8,032 ) ( 8,034 )
Less: Income from operations attributable to noncontrolling interests ( 9,126 ) ( 10,232 ) ( 10,170 )
Less: Earnings allocated to unvested units ( 1,283 ) ( 1,286 ) ( 1,328 )
Net income available for common unit holders, basic 285,893 227,667 376,129
Add: Income attributable to downREIT operating partnership units — — 2,810
Net income available for common unit holders, diluted $ 285,893 $ 227,667 $ 378,939
DENOMINATOR
Weighted average common units outstanding—basic 83,559 81,313 79,854
Effect of dilutive securities:
Unvested performance units 7 — —
DownREIT operating partnership units — — 654
Weighted average common units outstanding—diluted 83,566 81,313 80,508
EARNINGS PER COMMON UNIT, BASIC
Net income available for common unit holders $ 3.42 $ 2.80 $ 4.71
EARNINGS PER COMMON UNIT, DILUTED
Net income available for common unit holders $ 3.42 $ 2.80 $ 4.71
NOTE 15— SUBSEQUENT EVENT
On January 7, 2025, we sold a portion of our White Marsh Other property for $ 3.4 million.
On January 9, 2025, we repaid a $ 1.2 million mortgage loan at our Hoboken property, at par.
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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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 $ 11,819 $ 10,195 $ 30,698 $ 40,893 $ 18,709 1975 - 2001 5/30/2007 (1)
ANDORRA (Pennsylvania) 2,432 12,346 19,250 2,432 31,596 34,028 23,211 1953 1/12/1988 (1)
ASSEMBLY ROW/ASSEMBLY SQUARE MARKETPLACE (Massachusetts) 93,252 34,196 1,011,083 69,421 1,069,110 1,138,531 197,521 2005, 2012-2023 2005-2013 (1)
AZALEA (California) 39,955 40,219 67,117 2,186 40,219 69,303 109,522 18,036 2014 8/2/2017 (1)
BALA CYNWYD ON CITY AVENUE (Pennsylvania) 3,565 14,466 69,478 2,683 84,826 87,509 27,953 1955/2020 9/22/1993 (1)
BARCROFT PLAZA (Virginia) 12,617 29,603 9,515 12,617 39,118 51,735 11,885 1963, 1972, 1990, & 2000 1/13/16 & 11/7/16 (1)
BARRACKS ROAD (Virginia) 4,363 16,459 54,659 4,363 71,118 75,481 53,757 1958 12/31/1985 (1)
BELL GARDENS (California) 11,131 24,406 85,947 9,542 24,406 95,489 119,895 31,681 1990, 2003, 2006 8/2/17 & 11/29/18 (1)
BETHESDA ROW (Maryland) 199,548 46,579 35,406 188,872 44,347 226,510 270,857 118,234 1945-2008 12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10 (1)
BIRCH & BROAD (Virginia) 1,798 1,270 23,046 1,819 24,295 26,114 12,873 1960/1962 9/30/67 & 10/05/72 (1)
BRICK PLAZA (New Jersey) — 24,715 80,017 4,385 100,347 104,732 68,642 1958 12/28/1989 (1)
BRISTOL PLAZA (Connecticut) 3,856 15,959 17,074 3,856 33,033 36,889 24,473 1959 9/22/1995 (1)
BROOK 35 (New Jersey) 11,407 7,128 38,355 8,469 7,128 46,824 53,952 15,288 1986/2004 1/1/2014 (1)
CAMELBACK COLONNADE (Arizona) 52,658 126,646 3,234 52,658 129,880 182,538 16,329 1977/2019 6/14/2021 (1)
CAMPUS PLAZA (Massachusetts) 16,710 13,412 1,880 16,710 15,292 32,002 4,834 1970 1/13/2016 (1)
CHELSEA COMMONS (Massachusetts) 3,461 8,689 19,466 12,607 8,669 32,093 40,762 12,127 1962/1969/
2008 8/25/06, 1/30/07, & 7/16/08 (1)
CHESTERBROOK (Virginia) 13,042 24,725 10,608 13,042 35,333 48,375 3,926 1967/1991 4/30/21 (1)
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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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
COCOWALK (Florida) 32,513 71,536 101,487 48,943 156,593 205,536 34,298 1990/1994, 1922-1973, 2018-2021 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 7,636 2,415 11,600 14,015 10,585 1905-1988 8/14/98 (1)
CONGRESSIONAL PLAZA (Maryland) 2,793 7,424 98,222 2,793 105,646 108,439 71,737 1965/2003/
2016 4/1/1965 (1)
COURTHOUSE CENTER (Maryland) 1,750 1,869 3,874 1,750 5,743 7,493 4,158 1975 12/17/1997 (1)
CROSSROADS (Illinois) 4,635 11,611 21,541 4,635 33,152 37,787 25,837 1959 7/19/1993 (1)
CROW CANYON COMMONS (California) 27,245 54,575 11,946 27,245 66,521 93,766 37,186 Late 1970's/
1998/2006 12/29/05 & 2/28/07 (1)
DARIEN COMMONS (Connecticut) 30,368 19,523 102,156 30,368 121,679 152,047 11,337 1920-2009/2022-2023 4/3/13 & 7/20/18 (1)
DEDHAM PLAZA (Massachusetts) 16,354 13,413 22,964 16,354 36,377 52,731 22,447 1959 12/31/93, 12/14/16, 1/29/19, & 3/12/19 (1)
DEL MAR VILLAGE (Florida) 15,624 41,712 18,785 15,587 60,534 76,121 34,165 1982/1994/ 2007 5/30/08, 7/11/08, & 10/14/14 (1)
EAST BAY BRIDGE (California) 29,069 138,035 11,803 29,069 149,838 178,907 59,988 1994-2001, 2011/2012 12/21/2012 (1)
ELLISBURG (New Jersey) 4,028 11,309 23,701 4,013 35,025 39,038 24,641 1959 10/16/1992 (1)
ESCONDIDO PROMENADE (California) 29,281 105,736 417 29,281 106,153 135,434 10,682 1987 5/26/2023 (1)
FAIRFAX JUNCTION (Virgina) 16,768 23,825 5,958 16,768 29,783 46,551 6,571 1981/1986/ 2000 2/8/19 & 1/10/20 (1)
FEDERAL PLAZA (Maryland) 10,216 17,895 46,183 10,216 64,078 74,294 55,584 1970 6/29/1989 (1)
FINLEY SQUARE (Illinois) 9,252 9,544 20,381 9,252 29,925 39,177 21,457 1974 4/27/1995 (1)
FLOURTOWN (Pennsylvania) 1,345 3,943 14,510 1,507 18,291 19,798 8,873 1957 4/25/1980 (1)
FOURTH STREET (California) 13,978 9,909 4,219 13,978 14,128 28,106 5,381 1948,1975 5/19/2017 (1)
FREEDOM PLAZA (California) — 3,255 40,883 — 44,138 44,138 5,552 2018-2020 6/15/2018 (1)
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Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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
FRESH MEADOWS (New York) 24,625 25,255 46,839 24,633 72,086 96,719 53,699 1946-1949 12/5/1997 (1)
FRIENDSHIP CENTER (District of Columbia) 12,696 20,803 5,973 12,696 26,776 39,472 15,766 1998 9/21/2001 (1)
GAITHERSBURG SQUARE (Maryland) 7,701 5,271 26,679 5,973 33,678 39,651 22,751 1966 4/22/1993 (1)
GARDEN MARKET (Illinois) 2,677 4,829 9,296 2,677 14,125 16,802 11,021 1958 7/28/1994 (1)
GEORGETOWNE SHOPPING CENTER (New York) 32,202 49,586 5,005 32,202 54,591 86,793 9,566 1969/2006/ 2015 11/15/19 (1)
GOVERNOR PLAZA (Maryland) 2,068 4,905 28,479 2,068 33,384 35,452 24,307 1963 10/1/1985 (1)
GRAHAM PARK PLAZA (Virginia) 642 7,629 19,705 653 27,323 27,976 20,093 1971 7/21/1983 (1)
GRATIOT PLAZA (Michigan) 525 1,601 18,738 525 20,339 20,864 18,290 1964 3/29/1973 (1)
GREENLAWN PLAZA (New York) 10,590 20,869 2,705 10,946 23,218 34,164 7,346 1975/2004 1/13/2016 (1)
GREENWICH AVENUE (Connecticut) 7,484 5,445 10,819 7,484 16,264 23,748 8,177 1968 4/12/1995 (1)
GROSSMONT CENTER (California) 125,434 50,311 2,075 125,434 52,386 177,820 11,848 1961, 1963, 1982-1983, 2002 6/1/2021 (1)
HASTINGS RANCH PLAZA (California) 2,257 22,393 1,143 2,257 23,536 25,793 6,263 1958, 1984, 2006, 2007 2/1/2017 (1)
HAUPPAUGE (New York) 8,791 15,262 18,335 8,518 33,870 42,388 18,206 1963 8/6/1998 (1)
HOBOKEN (New Jersey) 80,714 56,866 167,835 5,195 56,872 173,024 229,896 27,492 1887-2006 9/18/19, 11/26/19, 12/19/19, 2/12/20, & 11/18/22 (1)
HOLLYWOOD BLVD (California) 8,300 16,920 36,881 8,370 53,731 62,101 26,897 1929/1991 3/22/99 & 6/18/99 (1)
HUNTINGTON (New York) 12,194 16,008 83,077 12,294 98,985 111,279 22,090 1962/2022-2023 12/12/88, 10/26/07, & 11/24/15 (1)
HUNTINGTON SQUARE (New York) 12,023 33,509 6,976 12,534 39,974 52,508 8,831 1980/2004- 2007/2019 8/16/2010 & 1/31/2023 (1)
IDYLWOOD PLAZA (Virginia) 4,308 10,026 3,788 4,308 13,814 18,122 11,111 1991 4/15/1994 (1)
KINGSTOWNE TOWNE CENTER (Virginia) 72,234 137,466 2,294 72,234 139,760 211,994 13,169 1996/2001/ 2006 4/20/22 & 7/27/22 (1)
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Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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
LANCASTER (Pennsylvania) — 2,103 6,554 432 8,225 8,657 6,746 1958 4/24/1980 (1)
LANGHORNE SQUARE (Pennsylvania) 720 2,974 20,770 720 23,744 24,464 19,322 1966 1/31/1985 (1)
LAUREL (Maryland) 7,458 22,525 32,079 7,551 54,511 62,062 47,277 1956 8/15/1986 (1)
LAWRENCE PARK (Pennsylvania) 6,150 8,491 51,056 6,161 59,536 65,697 28,373 1972 7/23/1980 & 4/3/17 (1)
LINDEN SQUARE (Massachusetts) 79,382 19,247 60,224 79,346 79,507 158,853 39,371 1960-2008 8/24/2006 (1)
MELVILLE MALL (New York) 35,622 32,882 36,673 35,622 69,555 105,177 30,804 1974 10/16/2006 (1)
MERCER ON ONE (FORMERLY KNOWN AS MERCER MALL) (New Jersey) 19,152 44,384 57,909 19,102 102,343 121,445 47,496 1975 10/14/03, 1/31/17, & 10/12/2023 (1)
MONTROSE CROSSING (Maryland) 48,624 91,819 31,719 48,624 123,538 172,162 52,558 1960s, 1970s, 1996 & 2011 12/27/11 & 12/19/13 (1)
MOUNT VERNON/SOUTH VALLEY/7770 RICHMOND HWY. (Virginia) 15,769 33,501 48,433 15,851 81,852 97,703 53,729 1966/1972/ 1987/2001 3/31/03, 3/21/03, 1/27/06 & 1/4/21 (1)
NORTH DARTMOUTH (Massachusetts) 9,366 — 3 9,366 3 9,369 2 2004 8/24/2006 (1)
NORTHEAST (Pennsylvania) 938 8,779 25,954 939 34,732 35,671 24,536 1959 8/30/1983 (1)
OLD KEENE MILL (Virginia) 638 998 17,578 638 18,576 19,214 8,352 1968 6/15/1976 (1)
OLD TOWN CENTER (California) 3,420 2,765 38,080 3,420 40,845 44,265 27,328 1962, 1997-1998 10/22/1997 (1)
OLIVO AT MISSION HILLS (California) 15,048 46,732 21,127 15,048 67,859 82,907 12,574 2017-2018 8/2/2017 (1)
PERRING PLAZA (Maryland) 2,800 6,461 32,748 2,800 39,209 42,009 24,984 1963 10/1/1985 (1)
PIKE & ROSE (Maryland) 31,471 10,335 845,420 33,716 853,510 887,226 147,322 1963, 2012-2024 5/18/82, 10/26/07, & 7/31/12 (1)
PIKE 7 PLAZA (Virginia) 14,970 22,799 18,561 14,914 41,416 56,330 24,352 1968 3/31/97 & 7/8/15 (1)
PINOLE VISTA CROSSING (California) 25,218 33,286 — 25,218 33,286 58,504 737 1995, 2015 7/31/2024 (1)
PLAZA DEL MERCADO (Maryland) 10,305 21,553 15,060 10,305 36,613 46,918 12,793 1969 1/13/2016 (1)
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Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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
PLAZA DEL SOL (California) 5,605 12,331 ( 12 ) 5,605 12,319 17,924 2,969 2009 8/2/2017 (1)
PLAZA EL SEGUNDO/THE POINT (California) 124,799 62,127 153,556 95,868 64,463 247,088 311,551 92,094 2006/2007/ 2016 12/30/11, 6/14/13, 7/26/13, & 12/27/13 (1)
PROVIDENCE PLACE (formerly Pan Am) (Virginia) 8,694 12,929 15,435 8,695 28,363 37,058 19,092 1979 2/5/1993 (1)
QUEEN ANNE PLAZA (Massachusetts) 3,319 8,457 7,986 3,319 16,443 19,762 12,878 1967 12/23/1994 (1)
QUINCE ORCHARD (Maryland) 3,197 7,949 30,256 2,928 38,474 41,402 29,542 1975 4/22/1993 (1)
RIVERPOINT CENTER (Illinois) 15,422 104,572 2,850 15,422 107,422 122,844 26,428 1989, 2012 3/31/2017 (1)
SAN ANTONIO CENTER (California) 26,400 18,462 7,388 26,400 25,850 52,250 8,428 1958, 1964-1965, 1974-1975, 1995-1997 1/9/2015, 9/13/19 (1)
SANTANA ROW (California) 66,682 7,502 1,282,018 57,592 1,298,610 1,356,202 343,439 1999-2006, 2009, 2011, 2014, 2016-2024 3/5/97, 7/13/12, 9/6/12, 4/30/13 & 9/23/13 (1)
SHOPS AT PEMBROKE GARDENS (Florida) 39,506 141,356 5,953 39,506 147,309 186,815 13,346 2007 7/27/2022 (1)
SYLMAR TOWNE CENTER (California) 18,522 24,637 5,443 18,522 30,080 48,602 6,371 1973 8/2/2017 (1)
THE AVENUE AT WHITE MARSH (Maryland) 20,682 72,432 44,086 20,685 116,515 137,200 58,425 1997 3/8/2007 (1)
THE GROVE AT SHREWSBURY (New Jersey) 43,363 18,016 103,115 15,570 18,021 118,680 136,701 39,683 1988/1993/ 2007 1/1/2014 & 10/6/14 (1)
THE SHOPPES AT NOTTINGHAM SQUARE (Maryland) 4,441 12,849 2,322 4,441 15,171 19,612 8,397 2005 - 2006 3/8/2007 (1)
THE SHOPS AT HILTON VILLAGE (Arizona) — 85,431 2,554 — 87,985 87,985 9,217 1982/1989 6/14/21 & 7/18/22 (1)
TOWER SHOPPNG CENTER (Virginia) 7,170 10,518 11,187 7,280 21,595 28,875 12,356 1953-1960 8/24/1998 (1)
TOWER SHOPS (Florida) 29,940 43,390 33,000 29,962 76,368 106,330 33,633 1989, 2017 1/19/11 & 6/13/14 (1)
TROY HILLS (New Jersey) 3,126 5,193 28,322 5,865 30,776 36,641 21,942 1966 7/23/1980 (1)
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Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2024
(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
TWINBROOKE CENTRE (Virginia) 16,484 18,898 1,845 16,484 20,743 37,227 2,509 1977 9/2/2021 (1)
TYSON'S STATION (Virginia) 388 453 5,782 493 6,130 6,623 4,255 1954 1/17/1978 (1)
VILLAGE AT SHIRLINGTON (Virginia) 9,761 14,808 51,620 6,323 69,866 76,189 40,565 1940, 2006-2009 12/21/1995 (1)
VIRGINIA GATEWAY (Virginia) 93,767 114,609 320 93,767 114,929 208,696 2,780 1999, 2006-2008, 2013-2016 5/31/2024 (1)
WESTGATE CENTER (California) 6,319 107,284 46,408 6,319 153,692 160,011 88,375 1960-1966 3/31/2004 (1)
WESTPOST (Virginia) — 2,955 116,242 — 119,197 119,197 67,940 1999 - 2002 1998 & 11/22/10 (1)
WHITE MARSH PLAZA (Maryland) 3,478 21,413 2,199 3,514 23,576 27,090 13,302 1987 3/8/2007 (1)
WHITE MARSH OTHER (Maryland) 26,011 — 198 26,011 198 26,209 76 1985 3/8/2007 (1)
WILDWOOD (Maryland) 9,111 1,061 18,331 9,111 19,392 28,503 12,031 1958 5/5/1969 (1)
WILLOW GROVE (Pennsylvania) 1,499 6,643 45,557 1,499 52,200 53,699 24,064 1953 11/20/1984 (1)
WILLOW LAWN (Virginia) 3,192 7,723 97,980 8,211 100,684 108,895 73,891 1957 12/5/1983 (1)
WYNNEWOOD (Pennsylvania) 8,055 13,759 22,438 8,055 36,197 44,252 29,234 1948 10/29/1996 (1)
TOTALS $ 514,378 $ 1,830,741 $ 3,289,871 $ 5,783,101 $ 1,824,068 $ 9,079,645 $ 10,903,713 $ 3,152,799
(1) Depreciation of building and improvements is calculated based on useful lives ranging from the life of the lease to 50 years.
F-44
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
Three Years Ended December 31, 2024
Reconciliation of Total Cost
(in thousands)
Balance, December 31, 2021 $ 9,422,062
Additions during period
Acquisitions 445,319
Improvements 399,623
Deductions during period
Dispositions and retirements of property ( 107,682 )
Deconsolidation of VIE ( 54,823 )
Balance, December 31, 2022 10,104,499
Additions during period
Improvements 287,286
Reconsolidation of VIE 135,017
Acquisitions 74,723
Deduction during period—dispositions and retirements of property ( 55,338 )
Balance, December 31, 2023 10,546,187
Additions during period
Acquisitions 266,877
Improvements 249,043
Deduction during period—dispositions and retirements of property ( 158,394 )
Balance, December 31, 2024 (1) $ 10,903,713
_____________________
(1) For Federal tax purposes, the aggregate cost basis is approximately $ 9.8 billion as of December 31, 2024.
F-45
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
Three Years Ended December 31, 2024
Reconciliation of Accumulated Depreciation and Amortization
(In thousands)
Balance, December 31, 2021 $ 2,531,095
Additions during period—depreciation and amortization expense 266,877
Deductions during period
Dispositions and retirements of property ( 59,066 )
Deconsolidation of VIE ( 23,089 )
Balance, December 31, 2022 2,715,817
Additions during period
Depreciation and amortization expense 282,896
Reconsolidation of VIE 2,869
Deductions during period -dispositions and retirements of property ( 38,063 )
Balance, December 31, 2023 2,963,519
Additions during period—depreciation and amortization expense 302,635
Deductions during period -dispositions and retirements of property ( 113,355 )
Balance, December 31, 2024 $ 3,152,799
F-46
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
Year Ended December 31, 2024
(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
Second mortgage on a retail shopping center in Rockville, MD 11.5 % February 2026 Interest only monthly;
balloon payment due
at maturity $ 58,750 (2) $ 5,075 $ 4,644 $ —
Second mortgage on a retail shopping center in Rockville, MD 10.75 % February 2026 Interest only monthly;
balloon payment due
at maturity 58,750 (2) 4,500 4,500 —
Second mortgage on a retail shopping center in Baltimore, MD 7.0 % October 2031 Principal and interest monthly; balloon payment due at maturity 4,990 (3) 453 — —
$ 63,740 $ 10,028 $ 9,144 $ —
_____________________
(1) The amounts are net of any expected losses in accordance with ASU 2016-13. See note 2 to the consolidated financial statements. For Federal tax purposes, the aggregate tax basis is approximately $ 10.0 million as of December 31, 2024.
(2) 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, 2024 is estimated.
(3) This mortgage is subordinate to a first mortgage of $ 5.0 million. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2024 is estimated.
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Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE - CONTINUED
Three Years Ended December 31, 2024
Reconciliation of Carrying Amount
(In thousands)
Balance, December 31, 2021 $ 9,543
Deductions during period:
Valuation adjustments ( 44 )
Collection and satisfaction of loans ( 43 )
Balance, December 31, 2022 9,456
Deductions during period:
Valuation adjustments ( 213 )
Collection and satisfaction of loans ( 47 )
Balance, December 31, 2023 9,196
Deductions during period:
Collection and satisfaction of loans ( 50 )
Valuation adjustments ( 2 )
Balance, December 31, 2024 $ 9,144
F-48