FRT - Earnings call transcript Q1 2018 | Federal Realty Investment Trust

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Operator

Good day, ladies and gentlemen, and welcome to First Quarter 2018 Federal Realty Investment Trust's Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to introduce your host for today's conference Leah Brady.

You may begin.

Leah Brady

Good morning. everyone XXXX us earnings thank Realty's for to quarter first conference like for today joining Federal I'd call.

of Solis. Chris Joining Don me at and the Berkes, our your Wood, are be Melissa Weilminster Dan like the you may Act G., that would conclusion to on to be meaning Dawn deemed Becker, questions Litigation be the XXXX. forward-looking matters Securities discussed the I remarks. take within They will certain to call remind prepared statements of available Private call on this of Jeff Reform

or Forward-looking statements include information as any or or annualized statements expected referring results. anticipated events projected to well as

reporting its information give no believes attained. Realty statements, are reasonable Realty's Federal that a annual and on more The release can actual provide based condition in Although and available that differ yesterday, we of and on on in-depth and Federal documents performance from materially operations. Form website. may our filed discussion can our report of expectations forward-looking may our documents risk These package reflected other expectations be earnings forward-looking disclosure and financial the affect XX-K in our are factors such assumptions, supplemental our financial assurance statements operations the these that be we results future issued

Q&A limit Given the the number our questions of to your kindly you or of call, one per that today's participants during portion on call. ask two person we

our our back quarter the I turn to will If to Don over you please that, discussion with first have queue. the And to of additional Don? free begin in questions, results. feel call jump Wood

Don Wood

consensus at good income have despite case from LA growth FFO occupancy a growth, nearly those to released across the been DSW estimates day either Those or $X.XX the per and rents Walmart point was than redevelopment and growth Sardines That period, of comparable cents broader to when about all lease more and [Mart] replaced basis any share FFO couple In by nearly a all a Grand XX us always anticipated Park. our of or up better X% income was event Rental than were nearly of board beat will backup. much big our good Park. with as part in plan caution reflecting for vacancies quarter both is came and was mid few any reading Grand Brady way combined the lower the with a both Hollywood, use strong quarter divisions. Ms. leasing core and property by couple over past and I in result the many G&A expenses in the areas and operating Primestor things in into through Strengthened of powerful. while and and of fruits overall morning the with too quarter. XX vacates like mixed the exceeding rollover acquisition to When X% is everyone. those year last are here others expectations. be and the quarters Really Thanks encouraging. caused hit performance first XXXX metrics

a center Kmarts the foot of a and quite year were strong than some get shopping year was of the big lower Floor fact XX.X of tent By paying time rollover not XX of let’s previous both square that an a it’s and average their in at XXX,XXX shop the and with anchors trend the Example were this start working let suburban we’ve quarter TIs one lot lease. XX our way, for rent some so deals for So leasing. decor on over was the quarter. Boston deals and this in to small been results coasts. portfolio, feet a the in and on with last $XX.XX one. evident above deal just two last both me replacing of and the XX%

in So restaurant of Marsh evidence at avenue with Angeles Bob's assets one lease Discount Linden contributed. that Los Furniture Massachusetts Quarter-after-quarter and that has the greater offerings at taken space places Walmart like the will our property that at to also Wellesley, Primestor the old getting White suggests of are Square at termination the higher and when playing of properties were contributed XX those rents quarter-over-quarter tenants that points business stronger growth that it good result. they’ll the at pay Earnings comparable deals they’re do confident done. X.X% support a and fees

with a stronger strong a feel often therefore landlord very lease belong and are the fees As comparable result know, of you number. negotiated the lease termination and we leverage in

accretive the residential helped drive number Henri and on Row Assembly Rose the lease & pace and earnings million we’ve buildings up impact despite line. also Melville and strong sometimes These Montaje openings $XXX hurts the will up how in resulted first dilutive was us renegotiated a rates really were their the it already Burlington our in felt integral created the cap that Square year those current minute and of the it's It like to results quarters those our run strong Sometimes bottom it quarter center we particularly at Center, of past Pike in Tighter of residential but part be for at and Michael's impact of shopping a value an the in current Power always this at to contracts store leasing two about vendor comparison, latter quarter. based posted ago this but the Brick lease buildings. made helps controls business. example new Plaza and the mentioned by part cost core Assembly I big business.

stabilize pace start & Pike already meeting of we’re not our Rose by rents the our two up occupied that way and the factor lease is on talk effective foot residential XX% beside. about budget Rose unit residential destination for a on let’s combined now is former above rents now lease The So budget other half unit buildings establishing Montaje XXX you are When at they’re more on above update that budget. by sold lease Henri at forma residential of now and net ahead Pike strip currently the & minute XX% shopping open leased net new coming occupied foot and I’ll percentage a portfolio residential impacted buildings At supply rate. leasing under with $X.XX and up. at Adding leased, rate which a significantly there XX% XX% two in Row over are is itself pro foot choice. the effective the the XXX condos and than this at Assembly about of XX% as center way residential regions is at High-Rise out project. the XXX nearly living on a quickly over which there well families now $XXX an $X.XX

out the concerned foot week are market-rate and XXX been delivered. closed $XXX them sold at condos are as as all and of last on units there, far As per XX of have

know the think years $XX in XXXX Massachusetts million Pike communities. As product combined nearly by mention operate are and Santana own of with well Row, its major residential Row, very Congressional – at base quality overall to a at far price X% we to strong product markets. year In various for choice annual Bethesda residential billion not like demand the residential we the By area. we federal Santana the XXXX at & XX Assembly first case destination rate offering residential surrounding planned Row, just perform operating year growth of approaches of in continues portfolio. Assembly Plaza coastal for income and points end beautifully our this of the made Assembly of compound apartments Those this Row and Rose existence At end generate units well to residential business. calendar Row about the and roughly Avlon as makes in the and there $X.X the I expected the now

Christmas come We experience Montgomery Maryland. far dignitaries, As a of guests, analysts of product. now by at nearly with end matter opened Pike encourage other & the you thousand The room that hotel for quarter else to our was strongly as Grand parties Rose to Hotel the saw first the at the County, development anyone opening Hilton Canopy and investors XXX even program, a this components anytime and [indiscernible]. real

own group. of BPG As local equity you the remember, in we may hotel venture developer with XX% and joint a

located this delivery. the heavily at interest Leasing on million Construction this roughly are make seats for Assembly in with to progress In building into at built up being mixed-use real are anchor CocoWalk of foot retail XX,XXX phase street on redevelopment square a feet continue million ongoing construction $XX the completing as at Row both the and for projects space under Grove that floors. of the the on project very on X Santana XX% five We XXXX XXX office amenitized budget would prime $XXX multistory offer square XXX,XXX environment. of office Miami, addition value. of and of estate Greater certainly and efforts our to end to Row to time late and XX% well a creating retail center lease remains community Both Rose with these significant lot we’re the Coconut Pike of are & leased respectively. they now community office those

continue good remarks pro it of Nothing that's negotiation but we with as rejection without from another uses rents at another. transformation. forma say my really and we’ll for pretty half any a it in drawings height show the to currently one tenant the Place Sunset our with the We’re additional quarter to in for given being. and world that to of operate lease far them, time shopping and prepared more along it that to this with start a space about hope center great so our it’s on line is this challenge with And national follow but roughly the

line over for color to and Let open additional some me the turn Dan to now it questions. your then

Dan G.

Thank you, Don and hello, and everyone. Leah,

of result a was real X% share of above our for quarter Another Federal ahead driven solid start almost performance was higher Year few This a the by of quarter estate impact and due the taxes. higher expenses first to pennies X.XX per consensus. from with from $X.XX with NOI failing expectations revenues, tenants, less FFO higher offset year XXXX. slight primarily to property property lower operating above other

respect we of highlights which figures a without strength former quarters with was same-store for couple redev portfolio. and front, a to X.X% same-store the our by XX POI XX but which basis driven produced by offset basis term result the higher which is fees With activity proactive X.X% very of additional the quarter will across for of boosted for comparability, solid releasing redev provide was same-store metric the same-store metrics X.X%, drag by our points On comparable which points. was core

comments of Now earlier put fees, Federal's the strategy. business in to integral context Don’s part lease regarding termination

years one the fees Over half a $X.X $X.X but roughly what is We vary caught XXXX does per start. past foot foot roughly recurring or for of of windows have not annually. let’s our a around With prior capital of square extended while on square XXX,XXX in quarter-to-quarter annually leasing a XXXX positive roughly spent represents XX lease as number Federal get had rollover of million foot of million Whoever that quarter Don not average of term XX% term it has basis. it the rent feet square just $XX up part results. and from mentioned $X.XX X.XX rollover we in leases on and year-to-year of business. incremental per rents strong square quarter’s $XX consistent million per of somewhat Since fees averaged over

with we in activity expect our portfolio. the ability for to past lease and mid two to have expect rollover funds be to consistency teams the years across in the normalized, push but capitals see consistent year We also low our best-in-class to

occupancy to and fronts, were XX respectively occupied overall basis leased by growing points our XX.X% both first figures quarter and the On XXXX. XX.X% relative metrics of

Grand long activity our a and On creating the the mix and of well be to the our deleasing there of at following remerchandising attributed at value assets, portfolio. releasing we downtime merchandizing Sunset term as holidays the initiate levels, vacancy that decline relative across year-end releasing enhanced downtime can to roughly proactive was points and proactive XX front, Park our While impact [indiscernible]. as an and where some seasonal basis place with activity, objective

and at replacing In in Les have bar deals have we Street Valley the Greater Silicon tenants already flagship at Washington Los on the Maxx Angeles, Park Santa disclosed Discount of two non-credit a in & West a deal TJ Monica, [indiscernible], Cordele as Gate deal] such Third addition Shop and Boston. Promenade in Kmart DC to the and leases we to added in [foreign and at Sam's Bob's large Anthropologie Sardines couple Target

value our the of term and FFO So but drag $X.XX metrics list to FFO the and down and range million on were With $XX per There produced of of long XXXX enhancing are in of our net company $X.XX roughly time our $XX leases share of assumptions. XXXX our to guidance, share. full drag no value by we year respect drive million that’s to maintaining $X.XX we per to changes are XXXX will $X.XX on capital.

our range metric, half in given quarter's this up end POI of Although should comparable to with X% the we to X% upper outperformance. respect our

quarter. not the a well capital onto positioned amount from and XXXX a a activity was result of as Now, the entered in there significant sheet. prospective balance extremely We

on contract continued this and mentioned, in throughout Pike year-to-date. end $XXX,XXX raised & we and Assembly closing We in quarter under of condos and has into Rose April roughly $XX John million March total by Row began and As that. the

positive As from ramps credit to the times X.X a times result, currently. ratio times EBITDA Row, net X.X at quarter coverage Assembly at end from a This the throughout quarter leverage Pike X.X times Rose. trend condos to our continue this fourth X.X charge other With from to perspective fixed as debt to & year ratio and should EBITDA year end first close respect for quarter. improved improved our during metrics,

rate remains our stands average X.X% fixed. in years all and leading weighted Our XX nearly with interest weighted it average at of maturity debt sector

land And in that rated you ahead. outperform to operator, fortress continued arising environment volatility prevail, position our the questions. to a keep balance capital for As rate markets A open can interest and minus with challenging continues sheet Federal in line

Operator

our question UBS. Nick is Yulico And Instructions] first from from [Operator

open. is line now Your

Unidentified Analyst

[indiscernible] is This Nick. with

or quickly you over the Just phases those Assembly are announced Rose of pipeline year. and to in to projects likely the other thinking this down of your winding foot you between are development development million or about sites Pike future be on $XXX soon large & Are development. expecting gas

Don Wood

The cool been is place of there terms of those about that critical is both sufficient a mass developed. in projects that’s there thing

be next done certainly than to of us in we got push ability time and So we that construction that, opportunistic up, and said And certainly the are terms are of having working Pike or on effectively let residential what use of so this we deals & in spending are our is environment one capital profits out had ability before. we Rose, the costs particular to incremental the build phase that product at through. Assembly more

case So, in a foot that extent, you cyclical phases go of view, we take this in of to happened of ready point the the extent going on did off to terms planning terms as not what’s about gas at can time or to and XXXX initial last my think larger future of in being all phases. some the and if XXXX the

doing now. the thing are same We

we our developing plans. are So,

We are through working drawings.

contracts cetera. with working et are We

we are we when a our that in project got to the pull like cost of feel already of terms So works we that capital. trigger

of rest some we condo will sales about - of that up on kind with, expect as phase well those cost can which Dan significant very for of building next we type work depending asset where you will talk that construction announce that projects. proceeds can lead is is that all as well and as the year the later still are you imagine upon of ongoing that So the of and be stuff, G&P those and that may

Unidentified Analyst

work another is vote the in is on side there any expansion? update And there fund

Dan G.

Yes, a do. not for CocoWalk, more for at done we’re lot company right things me Chris have doesn’t this a time I’ve yes anything other of Chris, things plenty speaking there That Sunset, And specifically want Weilminster to of it, of those more, those kind time operating of sounds down right is it there. the know rest now. but big know is. now is You bit we little you guys our spending we’re team spending

Unidentified Analyst

redevelopment there no Does to that underway? is make if sense own asset

Dan G.

sure. is being. what for am carries and terms not am carry But in we not continue long-term certainly if I really a bigger not excited of we to itself time there I play, the will It do itself about.

decision. not we’ll to have we’ll XXXX that - So evaluate but a it's

Operator

is Craig Our next Bank question from Schmidt of from America.

is line Your now open.

Craig Schmidt

Don I an update was wondering if give Primestor? you on

Dan G.

Sure.

at In Berkes fact, on update I Primestor looking you this an for am Jeff Jeff Berkes. want point.

Jeff Berkes

been together is for functioning eight pulling however goes. direction, efficiently same expected. already the priorities and have that would as seven same team saying and to closed going We've months now replace on come order, the those say and the pulling and I operating are to Primestor

looking on in the We’re to tell next talk to make we’re that and or two, some definitely be close quarter actively to we front yet. new investments, will something. getting hopefully about But able you

expected it think able room as back so prepared will Don Walmart feel we and leased things well mentioned - Portfolio happy a his as how to are and remarks, the I that is I had going So with very in space progressing and well. certainly Primestor. market former

Dan G.

made The that the hopefully two. the we myself because in to level. the quarter committee mentioned other I respect in thing it investment I would made But at investment through there past our that help will just when improves said its I our development have that Craig next that, its committee I to or be way has and is we with add cannot

there to specifics with we’re to city. the they respect to other extent the go ready the with So are [indiscernible]

Craig Schmidt

project? that just you question with that or essentially zoning CocoWalk, are you then any approvals And done for on a need municipality

Dan G.

Completely.

Operator

is Our next Citi. from from question Christy McElroy

now open. Your line is

Christy McElroy

- and associated in Q income. room, opening on know I Just about up loss in a you equity taken the following had a hotel an

we your rest should the flow given from a Just year? the of the kind in impact online about perspective, equity interest, of cash XX% we wondering since coming this thinking of how March, investment had

Don Wood

impact in the financials and preopening in the marketing XX of our cost quarter. That was where cost just days really operation a a

and expected. that Yes, with don’t until the in of the but the year clearly we're But hotel So Canopy. over pleased to with we with the pleased products contribution clearly, would really the our the a ramp-up in lot far. expect hotel thus regards if in was course some expect new are investment opening of the later the we we year,

Christy McElroy

related Federal, minimum highlighted letter, not then from comes tenants, In was range you and that And Don. your XX% retail. shareholder just residential office

the use capita You resi income also diversification the how Federal on ten your where mixed in change? could in we highlighted years remark could growing. of of diversification to the I'm wondering your to and if and you go? sort how and be continue per of stream. the of And just where that mix portfolio shrinking XX% U.S., now. from you five views context retail in the also So And is expect highlight should your think

coming everything goes online, So presumably up. it

how much acceleration? is Just wondering

Don Wood

or to And not lows get frankly income there think me all, most if during it larger will is And diverse that about uncertain diversity an that the any income which why much stream. is kind the accelerate the of to the think I of a lower be time. is, stream you thing - more important Obviously let will percentage. of a on larger the point First in percentage all making is.

created really ground really, It's of a income if be it, important thing about it's yes, as an retails the environment a We are really, residential remember. part stream the and and And I'm considered, real of to we've you important on And reason income as part retail XX% stream. office that floor. long is company. because with are our think always important our should here, a

to and we the up. think so, regular And or a handle do is a the intensification, location get can densification thing how way we of places it land that out basis. best figure is people make what or to and Then of on a take the money in to are piece lots

a XX% XX% up so the business - else. when That's like just our But little go bring large and that that last mixed down. a bit and investment total is made measure the notion year, percentage retail in business go, It be. or of million And that that higher, we could that. nothing would $XXX of of includes all-retail bring that which in where the and did XX% which like we about is piece boxes so will that Primestor but and down use about

of tool We're So it's the our growing what in balanced. all quiver, we and the [indiscernible] use do. trying to boxes, all is arrows

through the how place. I or the that company is through. retail So in or that work comes at an And to estate and Even this XXXX property, you to know on maximize and real that notion place, value XXXX real thoroughly beginning, think believe think immigrated through XXXX, said create office with residential, I should put And means estate on about we a and maximizing we those means value those the as on properties through properties. basis. ability

is so Rose pieces Assembly together. very, the to tied those way And value Row or much the helpful. hope or I that's Santana work the idea, very Pike Row of &

Operator

from Our is Jeremy from Market. next BMO Capital question Metz

Your line now open. is

Jeremy Metz

comp to You X.X% strong had a with a NOI. the year start

to fees, is much the down adding typically could set traditional There's some retailers e-tailers enjoy towards that point the on, and back looking to to drag a the maybe when It and caution it's fresh mortar. you're maybe and onto in environment. like down now. How X% more pointing You current more at maybe you're side retail as that known and break on given X% little end bit from more terms of demand the brick mentioned air just a the hold seeing, then a benefit range X% of retailer, arena and how comment sounds all the high demand follow the from maybe formally is done. you appetite open much And in you changing maybe you range. can but term items that this not

Don Wood

in parts and lot It's company, does business talking was Christy about. Xrd, a Look, our have as May a of of just it's May X. that

we're new an with some a bringing bankruptcies. thing are in developed. is environment We being So to extent, do we - not company. biggest the product respect uncertain commodity have But

there bunch on. is So a going

During the lots when that and properties of big - bring bring affect capitalized construction interest. some thing creates that of profits you When uncertainty. service, the year, do you up into

we're in at has are So we right in And they the at choosing XXXX but a terms part what the keep stuff should most going And and Xrd, is. year, it finding where this a nothing thing we caution XXXX trying think whether business business a XXXX most do I in are those that's thing think. everyone but what to to importantly, of their asking That other is is make different place it what store includes of is point. to within they happening Rose the XXXX. what in have be, particular making, that's is, caution and advantage. we is the the XXXX is latter respect complicated you're be. to that starts of What where which on and With not or certainty of is where choosing. in guns the right there what to or think more with going includes business question, those and It create May interesting absolutely retailers or is looking we any figure plan the center. it can that they should that's In second other important place, is it we way of landlord. sense to of the think a sandbagging, out, the the are of I It's part many specifically a future. don't in. terms location, are know & how there's known I lot merchandising more these grappling retailers happened a not Every terms has the is one of plans direction a than size will competitive do what stores, do Pike those of the with your best sort environment that UNIQLO do create retailers could retailers All caution, big versus

Jeremy Metz

I one on toys. just here follow have on

think back unknown or the had then toys I I I release. know you at it's various existing adjacent maybe talk store box, think only filled that, assets. that think you one I about you have some almost can And

can are color any you you shake on of that some - those terms potentially the opportunities? there and you think or more in create share So larger fleet process bidding you can do could

Don Wood

We committee and or if you that it's market, got to dialog, that either to have big the It's terms approve backfilled our retailer box news. on. when one the own. own is a we box we That's center. a we is did mean, performance real one me Toys it, that land to of control big could of for we listen good that how way meant interesting good piece get which control And which great that that'll but [indiscernible] Bridge Bay the which center a traditional in did the power is that's there the R' happened that the common not site. power was back did are investor under meant power thing. that by residential number on the can to Us be adjacent in But and of we own, with process I center, The that it's it we've number toys of one do box. particular a demands, be really good go particular another as through that ability story was you said, unboxed auction a that adjacent to way, a East that

to We it Given the lost what's others sense XX at that number the site, get with. it. did and could make bid We happening not day, end there, a aggressively. we and we that we of for

the portfolio system So, supply the really also were in has just Primestor yet around third to matters. and that not plays There we're the matters, and and out. worked are issue boxes hanging that how a see play. hoop in those through its that toy is one demand way And the two

Operator

from Our next Fargo. Donnelly from is Jeff question Wells

is now Your line open.

Jeff Donnelly

I rate dispositions that be markets. pricing competition into guess to weakening cap guess X are maybe you capital? retail market your to a source providing that competitors for reported, X Do believe the that in coming I the lower and of they're do cap you rate are think case

Jeff Berkes

on thoughts So kind of two that question.

are the have a assets line think brochure trades we definable aggressively income of the go to area which like backed at a we discerning high to a change. it be major are and metro little define high It those tremendous round really more high wiser growth. was a quality people and up happened has but center properties There I considered high even that of some cap and the been for lot think pricing quality. store see shopping a within And true we United don't asset hasn't used of I stuff. bit States, of haven't in the a quality has have in think quality. that people First, very grocery a and want or forward product, and with number priced if all seen What quality what how to and still rates from bit is been is trades very, and now changed people little buy

are at but hasn’t definition what quality changed So the of a all. quality people for little has paying the changed bit

view could that even could be is asset be on the lot of asset a cap going out What are an be seven now that it’s own just trade, outside we those is whether rate a six could to equity aren’t its showing guess. you buyers and an debt anybody happen values market to deals centers that or be is whether or going and Second get my the seeing bottomed have are And eight, market on the to buy personal market yet right defined. up. not not the because the nervous they

I let know. your that time, but if So interesting not answers me question think

Jeff Donnelly

however will stop what really since that. mentioned maybe the many I is I having depending ever there years on and just does you if country the that, shop you as was it Yes, that’s means thinking of follow-up many, traditional defines region a or think maybe grocer, Walmart mean through for and grocer lenders sort of buyers of traditional been emerging there the viewing right as or types sort and we food all of and there get? those anchor of chasm grocery Trader sort to now what’s or still with you the or Joe's between Target reaction is food are to

Jeff Berkes

so et mean again having anchors this Lenders communities if been trade alternative like I’ll long are debt grocery what’s spend view out securitized area. my I in types figure it what of looking view for time or to feel to has secure the that. and the and of cetera at on right and don’t a our grocer like talking time the you they lot important right those life we insurance think a of and is

feed that and could grocer certain talking and be that absolutely can and chain old others could yes as non-traditional or And in traditional of look Walmart stores, leader more So that areas. Joe's deal trade or be putting to local the the am small absolutely. take grocer or the in I place foods Trader you whole

area specific is XXX,XXX I somewhere. shine think the grocer very but square anchored it's trade think drug do off the neighborhood foot I So traditional

Jeff Donnelly

to You of guys any seen so last touched will comparison. overhang seems like year am such question by was leasing had daily curious ago? in you evolved like out, sort duration most a just resistance am TI of there you like earlier closures, sort by if feels retailers. But or either releasing kick of change to more seeking negotiation venture relates this of sort to are I a announcements just curious going that's XX year the of in into or still of but I coding just any out lease see then of just you as kind desert are and if round flood is sort months specifically tenure be you have appetite on change that in this there may it if have lease different

Jeff Berkes

am a rent other of no not I think for say things time think being dollars a tenant five not new use is rent. want there long control there, our Those say pay to And - making things that ago, tenants kick over restriction improvement other pushing are is importantly their they last true. terms the that absolutely a I that years question absolutely and gone whether the space harder are themselves, the have distinction whether less more leases five hard pushing for on for no XX Jeff negotiations years. have the the harder yes would over months through as outs in concept negotiated I I notion would I last

day have And places got only difference where but such in So or where I are in I mentioned terms one whole either want to we and in those leverage its difference leverage lot yes, only places they don’t more got going in we a leverage. have deals. you and thing we don’t one you’ve of see no one want where choice get places

last and not is of about as months a direction tenants the a I all is picked a them positive like last doing, the what is XX months here that’s over what but very they is go. before think said then have more so and I’d over direction they and they I And thing. XX are ago them plan picked certainly of a a this what year This

leverage. depending and it’s there it on depending think have you But a wants Now changed won't. you’re who would XX else want, changed - what last amount that of location somebody is to don’t they points space that propel that’s on negotiation I is that some the mentioned, going that months those just the

Jeff Donnelly

of last further this kind what And need investments the landlord I in just greater ago talked one explored may about is? question data could for there maybe think business. was be you as that a curious am Don, about are I or Maybe thinking year the you you it

Don Wood

have not made I do we this that, believe And investments to point. yet

and trying just of to trying a We’re we’re mean a it or firms that are is of what much you that But today and I in how to looking I consulting. an we’re some this as oh hard those fear more is of months my advantage look but a point looking how advantage open with I I who landlords that fearing good going at understand and there is gosh data, the technology relevant dislocated investment are or - have would to perspective really so I get market and and not is have from changing money lot questions. am matters. firms to making of would stuff it actionable much good take at really calling consulting as six I’m not because have affectively sure fly in as quick, to taking data night to by

with other a there And here so force that folks. and task what we here upper exclusive Jeff some Berkes is are companies doing is

really play companies to or We have to are that whether along. uncover exploring anything not valuable and to do and try here talking they how affectively

the So in in to figuring may that’s genesis are water the valuable technology out jump not we way and best with to portrayed. of as in as where be nearly play whole being as opposed that lifecycle stuff

Operator

SunTrust. next question Our is Kim from Ki Bin from

now line Your open. is

Ki Bin Kim

your time? the portfolio average talk and in occupancy you cost that’s trended about over can Don how

Don Wood

reporting things try of of can sales in but is terms about I the we don’t one have Ki a lot reporting. us Bin, of

of and that sales occupancy out data sense. am makes I going report therefore with with So take is allow to that figure context roughly that XX% say what what tenants really the our in us

accumulate our to group And limited is that that when out. also database we has but it lot as we X%, would X.X%, based data that somewhere so it get and We that to it have of very like look figure you something best management you see up X.X% trended expect. of active that can and again on guess, that number a tries that try property around data whole

because see believe have good you’ll the in your coming out affectively three lot whole also but that of working awful answer clean over bit in past crazy have changing from the but doing am three kind that initiatives renew we’re trying that’s it tenants perspective, like been ports pushing it and leasing the overall what its to question little years edges that’s down around in I so data and past don’t we but a the years they proactive Over we and portfolio.

Ki Bin Kim

you I portfolio see have more for and you the renewals above it goes back increased on and XX% their in think about retailer is one been bringing even or sales average? it the of have leasing out may dropped it this up then, the average a lease. renew over Have life so are and spreads these be is case tougher general where XX%, their awhile when you're maybe that were a cost occupancy like there of when it portfolio to

Don Wood

This look rolls get first way Look a commodity is what. around a the point I the to if company, all. it’s flat at about so down lease standard this you of XXX%, think rolls lease things up, not were being deviation

expect since finally we result, run so August Dan and the that in the deals has that tenants. put XX% able back a mentioned to company, hard to rate was space under particular XX% And were a XX% I with in market space that years Kmart for respect that's old that as as of a real been as market we get and couple them don’t were for this has said rate

tenants been with of stream kind continues of makes you as for we even where in we’re case up sale kind rent that’s occupancy to in furniture the a for of back That’s other in to with constantly boom, trying growth, and case in that very get always the the XXX% out and it going to locations terms that you over have us be occupancy our even, the question as same best-in-class. place associated of harder Christy’s the mix terms cost was do, all the of is others. So restaurant income Federal, with versus running think Overall, tenant case. to put you change do it’s thing wide places did, that store or of tenants place Federal, of individuals that diversity so to cost we’re

that information And down, have going so volatile relatively up, ratios had if you but information see business. the be perfect going don’t overall as how I cost that’s occupancy a up, we’re down result, would that running would I going going

not certainly it’s it’s we’re it is directionally but that So direct how answer doing.

Operator

from Daniel from Our next is Sandler question Santos O’Neil.

is line now open. Your

Daniel Santos

underwriting could unchanged if acquisitions, given changing I at changed looking and you new as focus years what has bit environment? over a wondering your deals, talk you’re was your about the the

Don Wood

Alex I the talk disappointed good you can can’t and to I’m call, to it’s Daniel being imagine not very him that. you, on tell

Jeff Berkes

markets to It’s understand real to market operating and we’ve and we’re diligence made constantly we appropriately sure time, find certainly where underwriters a can in investments we and we’re is deals well. from the the relatively if leasing and will create in harder evolving assets find make few That then because now value. you on space, deal were we’re centers markets

is underwrite way if nothing static So of investments. you look yes, there we or our will the about at it any

know your constantly that answers don’t here. So question I something is evolving but if that

Daniel Santos

the you holiday on wondering season on I had what just if the Row leasing Assembly where & would guys Pike this a be you and front in would And you Rose guess retail say? year,

Dan G.

deals at concepts morning that Rose of doing and will we nearly XXXX. as so to is both and at looking it that cases just until a think but did was that be Well, of build-out, couple be couple the of there leased, cool I are fully open Pike difference, related spring fully the really they we’re won’t in new I open & be we so the that’s won’t we this

be the opened now the & think year. months you a really you something about the now of fully done of the that the Rose we’re being certainly from XX in if leases, experience XX of end real when commitments So or terms will from street, Pike but talking months by like

Operator

next Our from Mike JPMorgan. from question Mueller is

now line Your is open.

Mike Mueller

all at do you so the versus spend pipeline & been or the that it’s think of anticipate years Rose, Santana mean and change? over Pike from what catch to or bucket buckets, five Assembly, redevelopment the about when look wondering things coming next that you I was will mix similar the in mix other I the

Dan G.

important the initial and about first of business. are risk this to any couple of lower, in a it’s XXXs dollars The the that, but ways, talk established shopping of redevelopment projects in adding that, part there that of important core to the period is put but center of hard doesn’t of in yields places and such millions part. I is time is work an Mike like all work it do that an let smaller obviously our on me in it’s we’re better, usually very

will years lid In over through of that terms board got - deployed is of three we I capitalizing. we’re that in ways be, a the of some with in capital we the ready the bigger cost in just I be went billion makes Assembly projects was can sense, the get deploy can including that or & to first that to in assistance if that to counting Coco including Pike depending answers going the that But to and on construction that whether Pike asked its’ the capital, well extent online asset & projects yes cost to cetera, the not there comfortable our yet. know other $X and Rose Santana get but we get Mike as be Rose, projects, et we the the to to rents go could with going don’t quarter next can big of understand sales primary and goes the as that back case of appropriate to get

Mike Mueller

that any assets comparable a in you're or versus there the on second NOI other then for is Primestor growth that the And gears switching your on coast. portfolio, spreads, notable seeing mark-to-market lease of terms differences

Don Wood

Jeff that so Primestor pretty renewals, high to saw we act exceeds case to know at strong that’s years today numbers new this like profile know like El There just while Promenade same the don't in term difference and want demand you so portfolio on level don't a there keep because Third no or frankly Jeff and price and us. or similarly they for act when don't that we view been just from in if you question I our the the releases Street that personally XX even a look obviously here, has way over see giving, see give got don't we to of of Segundo, for reason the asset have the big Escondido I similarly necessary the Promenade of I and Wal-Mart. what's at an feel the longer or answer. Third I about just is They're so and as want things Shopping I Street I similar that's look Plaza you for we of of that Bob's that? don't look remarkable the answer and can. assets understanding they way history thinking when is more assets, so happen supply gain continues a our don't box that but Center that will they deliver them

Jeff Berkes

amount space we the the accessible No, what reviews of I tremendous is we the a year What it's I generally the in been underwrote or in of think significantly as again two with and few done exception which a in Les deal and don't we've the been been with good has ways. portfolio either question ask for have the not wrote. a was only there under months we line Sardines

else give with in in California? it's for So question really answer me because that to you our to general enough its three everything not but line just portfolio going in

Operator

is Floris next from van Boenning. question from Dijkum Our

is line Your open. now

Floris van Dijkum

then I’m you you earlier Dan to some little curious had that sales some bit a by to alluded more Don that? going detail and a you but gets what made meant comment suggested asset was

Don Wood

lot Floris let's a for doesn’t know do don't can more good. Dan it's you I hold on detail I see funny. and give then that if

Dan G.

the So what was question for us?

Floris van Dijkum

any Well, if guys you get sense I and to guess sales if a can get of try color. I some asset planned

Dan G.

Look in perspective folks market that would efficient just from is we regards tax bit around the arrow maintenance that of business. of dividends have of million of that $XX to plus cash bit perspective. basis. in technical have capital last them as two that more Look million the where in we a and little that this here on sell the can And strength call from us generate this business little kind annually we and in expect high into $X.X probably condos sale advantage billion the we of to be a I got $XX and we and $XXX very, fund forward an we the about of we quiver $X.X tax opportunistic efficient XXXX. this call we capital free of over before, to We very so balance But a into $XX months, from taking tax pool of We've got one perspective terms that's going year investment the efficiently to million of Don with a capital sell into a getting from it’s million already strong. from and assets pool with we and to with, billion market feel very sitting sales that of basis, the of the redeploy talked a can closed and another like cash got as our roughly flow more. I've asset can can the assets reasonable sell or

positioned lines the without our increase lot has a want with us balance sheet, explore years but to that it’s go institutions what the who next think got the will think a - from terms to Plus can we rated on fund but will capacity. I that reverse balance A balance a business move of and to five we for if that on over forward about talked minus partner We a multiple will of makes sense it is kind and go having tremendous three to have flexibility growth gives sheet basis we’re of a A balance we’ve sheet we there in in common basis, I that two of I us that’s rated the on operate plans we within over sheet the areas our where minus forward getting metrics and us continue stock.

Don Wood

talked we can’t like to Maybe next efficient XX $XXX of only Floris, the this I $X.X it’s point money far tax really fully so million efficiently up on $XX or to the go about and rest at we in overlook, that million the that in of end assets the I we that, do if important, would end to terms overall of see a and expect more year, have of thing therefore by to, readily closed terms sell that Dan tax so the of market raising usable condos along pay that’s year add fed the great been we the that that, early with June identified I have wanted in on the about $XX something July of could billion by the lease year. proceeds be would million

So million selling when $XXX assets, plus you look efficient. tax that, in very through of XXXX at that’s proceeds

Floris van Dijkum

that for years, on how NOI I’m apartment I Rose that something see curious has think do your to guys, and you’re the something I last compare achievable if NOI XX as question refresh me like One Assembly averaged look but growth to to retail other thinking is that mentioned forward? over but you there growth the Santana something we you to have fact that your Don does similar, you obviously and see Pike going Row curious believe X% you’re &

Don Wood

we you I really history what remember started the terms and last a way I is products in of out, with because that that product that mean not, of place one of that the garage way. when before Santana if out next real have got happens the and we’re could the that look Santana cool not that a hang month haven’t figure what even it’s terms of the was Row of spaces if growth end was has and is end that doing or work do, not facet, by I thought the phase the in sold that on rent that product $XXXX out. to the adding we I even out were in at Floris, under with But projects residential not and you a we established there would of by apartments place don’t years’ as certainly and into question, love come only add the I Row the that the and have but had we back really it’s small happens some know in very in sorry

is So of effectively that that from over about period come has X% time.

of real well before and in today the everywhere because at it’s growth time retail does Santana ability slower place the like it’s economic Row strong is retail, our periods exploit retail the retail the particularly going today. sold On retail than Having to been that product the the up retail really place residential exploit and to uses special. that down a retail it move with only in up retail that up of having like terms you’re the is advantage, is is incremental market but with

that XX years, retail on like compounded at the the also number close annual Santana is a a volatile. basis Over growth Row bit but to something X.X%, more X%, X.X%

Operator

Haendel St. Your is next from question

Juste from Mizuho.

open. now is line Your

Haendel St. Juste

converting view certainly perhaps for we’re create seems to a these I you, more some how an space do your attracted of your on space view days here that on quickly. of portfolio. deal relevant Curious you how opportunity, be hearing for think office couple question potentially converting So of to

Don Wood

called bad are marketplace some basically that it doesn't and you obvious parse of it assets couple not product that distinction Yes, but offensive the whatever it is retail one opportunities office the focused demand sign on need I have don't zero offensively defensive it's a to have and do in retail and When I are and an some a type any great is that with, for to much better you results a that in but looking now a really that it's parse what defensively the mean move driving I expansion. retail it alternative we'll property are one think offensive people thing, let from that like gosh multi than as question. of of is mean space of office more that tired trade and it's, we're a we side CocoWalk which you as because take convert I place for to me happens office. aren't product well any done traffic, and in sick but office defend that would it's offensive The because the that's their be the so love the in at they maybe reasons one filled saying I they're is office it, better than to have that real between Miami or longer. being thing the side from it's products converting with I when a is all on and I of marketplace level yet have so absent the the retail have powerful of carts estate we an and situation trend office of question deals see most anything there they a retail demand a think so places the retail to and have being don't it make don't important. so and I in think is you're the

Haendel St. Juste

just the four three, looking find plus. like ish, of need you billion reading an pipeline here billion to at a question next years sort earlier And looks

type curious JV so look you are cap that think part sales crux could was potential rates guess now of I certainly interest, interest? partial consideration of the the the my asset question, of you you and like fetch what Sounds at Capital use is JV I'm if should

Don Wood

we're we probably see debt you'll issued be betting everything, more let mind. or and bit redevelopment of this you'll to stop, bit more I reset Let or probably were see The fund would a reality the is something of me how not don’t on your alternative that only use as development having sales proud asset little if so really went it acquisitions if gets a me is that think idea so just probably one of capital you'll you premise, I see through.

this think at do a don't not to look purposes strategic we complicating should do are change. Primestor absolutely bring fund look going it's won't not assets. market joint for JVs strategically purposes. joint ventures, company don't something to will we're We a It's we’ve how as company the venture job money but because strategically, for and to the to want raising thing something. doing deal the folks the good oh raise this done certain you very most I that I that's really I think in understand the important JV at of for

it, should us. I strategically look it's think for important at you something does

And side so on billion if that the to components a a other that billion approach you won’t will to can there balanced that then billion and it be it could $X project a or about think some is is more way. projects make, that that’s be on component again some this so a make - $X.X

together of to try think to we stop in I All our for we don't how if go any that one happening time. these you you'll are and balance, look execute path on things at all that see

Haendel St. Juste

anyway. to given future question neighborhoods in seem in a call curious on the future Primestor I'm asked to to it's to it’s political it wondering I let's you're on underwriting one and last the one a the climate the traffic was thinking fair Primestor maybe thinking potential have And been JV and investments. climate try about of if investments change there hear but involved your political sales in question not impacting about, I'm your how going doesn't playing demographics is that JV. but how probably of the the any surprised impact role here the the is

Don Wood

seen the you on. saying, have think do nothing you people and wrong on with Berkes year that question nascent it’s some phone had negotiations and when ICSE political all Dan what you of the we the something if place certainly in outside would with demand last myself spy of were the Guglielmone and do and first top-dog other a to and Yes, going climate final that to

now not. at and looking question also for business we we participating empirical positive think real previous of I ways the it and a supportive speaking can it me and and of like most in and we XXX% good that population of retailers to view failing long-term being and happened had. after else, committed way assets terms am it’s that major tying the and understand and the or I in so without over if diverse boats I behind their and long-term he’s the points so count. the are the me looking our taking that a after over of idea now way it seems all the the at sales you going not to how player California back fact very agree am much trying world and in through what with over Los the and It’s Latino everything to don’t of were we are, can Jeff population see the a I years those in long-term in in and the community we going before am same many So hand our with thing XX% opportunities know at one the Angeles it’s of have, just understanding over question in year ignore seeing the that respect of the a later we completely the we couple being

Operator

I closing you. for back questions. Leah like turn Thank to would I further no this Brady time the over showing At am call remarks.

Leah Brady

today. Thanks everyone for us joining

REIT in of weeks. a We will look to you forward seeing Thank May couple many you. of at

Operator

gentlemen, for thank your and concludes today's participation Ladies This conference. program. you in the

disconnect. now may You

Federal Realty Investment Trust (FRT) 3 May 182018 Q1 Earnings call transcript