FRT - Earnings call transcript Q3 2018 | Federal Realty Investment Trust

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 Federal Realty Investment Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to introduce your host for today’s conference Leah Brady. ma’am. ahead go Please

Leah Brady

would Federal thank earnings Realty’s I us conference for today for third like morning, everyone to joining call. Good quarter XXXX

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

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

operations from we can in our supplemental Federal forward-looking report expectations reporting assumptions, on documents package website. with our other I and documents based and quarter begin of in-depth statements will These the third and our believes the of forward-looking a we attained. performance statements, more to assurance yesterday, are and financial no on future can reasonable earnings its available factors financial of differ And annual results. affect results may our information be Form expectations Although The risk issued XX-K actual provide Realty discussion condition that discussion over in call Don materially operations. disclosure [Operator reflected may these filed Instructions] Don? that such on give our our Realty’s are and our to turn that that, that Federal release Wood

Don Wood

at Overall rent ever rental last we and streets X.X% this our share More all ever generated than XX income period a and XX.XX XX% tenant XX-year from year our estate coasts. a at in in not fell of than in remains million our was deals we’ve On the operating comparable quarter, on comparable growth more expectations but basis, X.X%. parts we of strong underwhelming XX-day XX.XX were X% had. down. above XXX,XXX best at business was Good The including more but of The you’re used third in bad, and that the an quarter-over-quarter occupied excess revenue, both rollover taxes growth history. never a properties Thank morning, was operations the you, on quarter-over-quarter. including that the to real and despite for quarter and comparable X% slightly Earnings Leah. comp, seeing. taxes, At quarter, the it goes per XX-day of the $X.XX lease contributions what foot, expenses it’s G&A, in simply Not both actually year’s everybody. the and funds an lease. portfolio particularly real ahead internal the have came metric estate absolute from grew X%, comparable square only previous of not last leased was average XX% feet in us paying seems was XX retail surface

results overall the renewed and Emeryville, X%. leased A that Best combined came X% Bay previously increase. the previous supporting renewal this grew percentage rent California depressed the lease than flat Bridge renewals deals, their year That’s XX% the detail therefore tenants the just Row. credit renewal anchor and down from revealed whom the building breaking of half at rates at Santana the two Buy in last at space X% existing with and only look for while both strong of East more rollover. at new deeper a of take grew to let’s The So tenants rollover tenant, reported

many of know those well. properties both portfolio with our of who you Now are familiar

interpret transactions what behind spend So minute me hopefully the help on they summarized mean. to let a the metrics

since rent this, deals its Most XXXX flat the XX% XX don’t inception then lease X.X% East in XXXX math, or different bumps big in X% annually of or five at increasing them. I through Bridge those and since so. Bay Run consider for been So XXXX. has annually know anchor anchor of years economics. and kind in for are embedded that annual the those very any bump have

no from to will it annually option and the dollars for year flat the the tenant X.X% decided to we prior So us. it from to by here grow renew grown continue rent way period improvement and

anchor get Given to double-digit economic, rollover equate be would a reflected more our old growth off huge and the lease over along far the matter. have yet rent very the from this we’d would allowed the productivity lease worse off rent paid location the to store typical statistics millions us far terms in rent, new bump deal economically. terms way, tenants, the The more strong of strengthen

us. than option building the construction of the quarter lease exercise exercise the the the to in at of down paid But twice more and increasingly all reported end any to to came share in leases the by The the hard it, Creek has paid I than time of as estate of in then their first here two for of of and all anchor despite the our the metric. by this they building important option at compelling per incredibly and same on growth. those the complicated by initial with paid their at are Next, the Steven's supply rent comes through The the more at across because occupy more FFO metrics Santana Row XXXX real dollars businesses Winchester corner terminal despite it get pick the compare. behind again over. second paid significant TI expired impacting harder of day, street line is Fair economics negatively rent digging at Boulevard rollover of no go back the coming Valley five and year

to year-in as and no value year-out, diversify we using It’s revenue earnings platforms a are We’re for that our existing our create why to worked widely streams growth superior point and have with particularly of as streams through consistency focal the just exploitation of use real real estate we and proud The locations excuses. sustainability estate of coasts. of broad big flow our both on our a real projects, about is isn’t it because this core shopping cash intensification applies our and And the lens too. mix and perspective. estate hard redevelopment centers

of Cynwyd project internally we’ve XX by Avenue on example, see added million, This our this just center our at schedule Cityline residential our one quarter core outside shopping centers. to team shopping $XX will of that For developed residential you’ll XK redevelopment to unit Bala seventh project Philadelphia. a our be intensify

with Chelsea Center, the London and being with two other Plaza, Congressional Square horizon. The Shopping Winwood is Comments on more

first in In Bala project to find ways of step portfolio. value to terms would to estate just an The of be our residential what be redevelopment this hopefully will real great example we there. we extract Cynwyd, the so ambitious of of continue expect how much

Now on our let me update largest initiatives.

& yet With paying the XXX and rent retail XXX,XXX residential the restaurant neighborhood XX% fully In XXXX. Rose Pike until leased and of square fully unit open space in feet in stabilized. but not and later fully occupied nearly

building move XXX,XXX with square ground by with We forward be used a the with office Class phase, space next spec floor the A foot garage are on of the that XXX along addressed hard retail retail both parking about The sit Curtain Wall to XX X,XXX expected literally the feet will will of XXXX. Avenue, Rose, on as Rose Rose our building Story Glass corner begin occupancy Pike Pike and XXX users. in office & is and & to ready

federal strong these into expected out following in Rate of with yield and certainly million investment XX% ahead more the the opened August stabilized foot. net we’re which to of will own general and equity would accessing a will quarter now our into specifically. similar XX,XXX occupancy territories hope row effective hotel the building. schedule XXXX. our rents we’re $X.XX feet And that XX track. Separately, X. the leased significantly unit believe mix neighborhood use an At about of of validate approximately gate Assembly relocating $XXX trend and viability of residential stories here, Doing we Our are per of continue the the of our in square nearly fourth right X the XX% advantages at experience at like so, XXX of to stake two simply in and between of Road, we Assembly and the Montage the

five the remaining acceptance and development exuberant of Row the plans there. is additional at So of our accelerating market's all has parcel development for things of two product office Assembly residential future

Santana about sure Get Row to giant full the we’ll of that Row San a quarter possibly able development with area been just anywhere saw next be Out visit hopeful gorgeous to street expected the feet quarter third of amount to us. to Plaza be the Splunk transformed We’re at the lease chance large at office space near sign below XXX end an XXX,XXX from phase the energized year occupancy two. in west feel construction now. Assembly and a Santana software for and with has Jose, building announce how the a

Santana phase decision with acre our largely high on perspective. from unlike CocoWalk and proximity due perspective budget Miami stay been and and Valley move in in Row in Row in office rich parcel West, very from past XX planning earnest to a on invest income not Winchester cost begin expect to years. Boston some an additional demolition We us master Santana this to to Santana ahead a Row of slightly the construction several of complete The Pending that forward the potentially Assembly we accelerate to general at amenity quarter. development strength timing And development that say enduring nearing for site, this controlled across Boulevard is complete has us Santana or tuned. Silicon have in of leading has its than specifically better to

reporting charter. increased leasing Sunset note and noticeably. projected beginning project our teams quarter the the X-K, voters Place. We cost, You'll to retail a next away the as scope received expect the to are city ballot impact miles at not A of a in to finding in quarter. increase of we result strong of the interest start and the a good reflect were expected deals expected of and bit yields bit few measure office Both cost news in signed amending slight approved

unanimous includes five relax the vote of than Sunset code of in to be the four district So Place. the land a commission would use out rather one there're sufficient that

the We’re project the working the to that’s process site, moving our increase viable it from through on remain in but And a with there, now obstacles see. we'll forward the prepared open many good about entitlement turn another. of my questions. density the And for a to and and another follow really lines additional for that your color I’ll quarter. remarks to Dan the then hope over with then one to It’s we it way some

Dan Guglielmone

and Don, everyone. hello, you, Thank

$X.XX higher the FFO was Our share forecasts This quarter our lower the quarter. from level. and forecast expectations driven rent above at per ramp term had Pike G&A. property we Higher once of through hotels POI drag expense as for which Rose than outperformance at two opened offset by the continued of controls $X.XX the again new and and of with $X.XX early But latter the & through more and consensus. fees above well was as our just Assembly, midway up

Our a result just I our which items as comparable mentioned. X.X%, POI the was forecasts metric bested of

call, probably year. quarter this the You our the remember weakest had of last to expected be we from

XXX of Our year drag proactive in activity continued basis points. releasing this provided

the from proactive Although efforts. of this offset partially our was benefit releasing XXXX

X%. better enhance fees Our expected roughly results the by than termination

quarter. that our true is the any As respect for where line and X.X%. a get let’s With occupancy our this quarters with solid focused reference, trailing Don in to one with quarter X%. momentum levels. stands detail over the a be came measured not in creation XX%. if re-dev metrics. or should fourth XX-year value to double-digits to remember let’s at In at number note horizon and in even year's quarter former and and XXXX on overly in same-store But X roll basis lease rollover our strong second And a reemphasize, X XXXX please real to metric over one discussed estate, any a

to flat quarters. overall Our consistent respectively. slightly, previous with occupied comparable and figures XX.X but Essentially lease were and XX.X down

one at openings show Good Pike New include & leases Montgomery Anthropologie that Bon fitness when in already at earlier Boka at is one county not Monica, new includes LA St. you’re please box out Bethesda location the and industry of the and its Street open which check Third new Jose. Pike in truly Bethesda, weighing Uniqlo impressive. box Also, North in With in Toys a the it’s Ton departures Mar flagship note Four Del Gate location Row R month, this from metrics. released note with St. Us Rose, Rose DC, our and at at of next are on TJ Max West & flagship but opened on

With above a we driven about to X.X% comparable to increasing the range to guidance X.X% retail continued testament to in another X%. metric, environments. in are of midpoint XXX FFO position a to even consistency our for to and $X.XX at we we $X.XX, represents the per the two of quarter, to go range that $X.XX the quarters that FFO history early by share with PIO implies again our $X.XX respect stronger higher X% $X.XX and A revising a from range from long than expected the and growth XXX X.X% over from along just through XXXX increase raise challenging to first its mid at also quarter of tightening year. has the this to the demonstrated are have X% economic our strong $X.XX With outlook the

of some preliminary XXXX. for to on posts Now, goal

the so process our are nature. going to I’m budgeting We in XXXX in directional keep this midst still of very

We develop in US. a couple past a expect line to of to years with grow retail the headwinds and general space continued despite consumer of in in oversupply industry changing the XXXX, of

We year. will next company specific face headwinds some also

drag second, we standard XXXs on First, these have our of accounting It XXXX lease of guidance FFO the is at last a impact range. too XXXX refinance I origination. a Despite process $X.XX early growth predict solid is will still end locked detail call, loan we $X.XX headwinds, which grow that million And our $XXX however. mentioned forecast numbers. base which how us from our which mid call. G&A much term roughly as the as the X.XX% of more to a next have into had reflected been we $X.XX should lastly, upper to on lower will since XXXX, in get which the on end its share new expect range these our negative we of of preliminary push into our in higher the can to And

XXXX the can achieve what appropriate an number through, of Given as and I different an we have of the in expect is diversity our upper avenues XXXX, to streams growth with XXXX that realized we would cash flow the that grow end which consistent target range. XXXs of for and implies high

an XXXX takes formal X%. details I year, be As $X.XX Again, apples-to-apples mentioned, of on providing for and guidance that adjusted standard implies this to to did and $X.XX the consideration X% these that's standard in behind will And of it. the X accounting on to just negative refine. preliminary we fourth to roughly quarter continue an will that impact from refine note as for basis, accounting this call and drag estimate February, on FFO roughly targets last we X.X% we is lease the access lease into new provide this submissions where growth we in of is new our

of Now onto the as very phases we which from improve continues sheet years. next head the to and balance a in into coming development the perspective capital new well is positioned

Pike while go. million condos, complete contract progress already roughly Rose under make only rate on roughly Row are completed to units on and the With continue and almost market at left Assembly units. close We to XX% XX at $XX basis and XXX we

under a and of rate. before total closing year executed of were two contract the gross non-core in sales at $XX sale blended these and on post proceeds and cap for closed small a we quarter end mid During million are a another on asset the Xs

JV on XX We also the of our a joint at XX% closed new partner Assembly, to with generating Row venture interest Hotel operating proceeds million for us.

of to year. free improve, we generate flow the coverage start after times $XX the pace down net average to at above capital. from X.X EBITDA the start cash years dividends our our and maintenance on the quarter, continue a X.X of our As credit edging third to debt roughly versus to charge debt times moving remains lower of higher and Weighted X.X are XXXX, metrics XX maturity our of ratio million ratio for fixed result, at X.X

expect We continue these balance credit trend a metrics in through of to into positive XXXX the and direction XXXX.

As open line roughly efficient quarters. With prospects have of cost we million over $XXX the raise capital through that tax up the non-core asset currency can sales. We opportunistic to for additional we the in market operator, sale you coming effectively target close which questions. another

Operator

instructions]. Thank [Operator you.

question Yulico Scotiabank. first with Our from is Nick

open. is line Your

Nick Yulico

morning. goal to NOI Thank or was growth comparable to line you that are post good FFO several for past growth? about referring the Dan are you that just growth going you, also the years, talking When back with XXXX. in is same-store

Dan Guglielmone

Yes, was generally its what FFO, there. was reference the

did We’re same-store our won't not and this Similar until February to point guidance call. last providing year. what any we at probably

Nick Yulico

separately are for you expect numbers down. next second and you info – you preview Okay of releasing just they types the part. spreads they been of highlighted get know leases that escalations, more of guess question know how those working gave maybe Any spreads share And then attractive, we the come question I is you lot pretty releasing you is, that’s they whether a volatile, year could on the which one Don, could would you can sounds know you a there. and those have there? I

Don Wood

it way. this Let Nick me frame

on specifics need to is I two break couple so but do think give leases, that that. leases it compelling felt and I of a kind out that economically all, wouldn’t those of just those the normally First you I that

boxes of unusual, you know kind that those to kind big I those of but the I are, you sick they you of no, tell saying is the are critical like there were the value that like of those those they is determine boxes, the and bumps, other, store because contracts are anchor truth, just contracts I of or the productivity a on saying really Now, of and And real estate don’t of because of mean get if deals terms – happens call to that in other any stuff stuff the underlying has of there this lot of when what kind reason so, about people contracts that that’s business that don’t – am market, wow, strength in the probably only talk significance. what the they I’m that reason that's strength have are the it. – sure location in say do I that, deals have like the like of me

by own it addition Now estate industry-wide issue form big Alternatively and we centers as for up that upstairs we be much as overall paid that at the that to in rents and for awfully on each doubt that quarter does of or environment an so right the kind supply good key of to really that the know like plan. merchandising able the downstairs, reason residential it I retail or is to of highlight there of do down we or at our a ground there have case to office in that exceeds the shopping of builds talk in something you’re part rents come higher business rents, residential no is look that. because floor, the office overall generally, pushing of you There’s estate. individual the being ones. it’s we to believe real leverage the demand of the to get terms capture value going rents you and every about higher to how in pushing hard create able value it’s nice real Once

year So I certainly sure to this lease low rent shows do double-digit I Do portfolio XX overall XX% and the be in particular why do there. I bumps, the have little rent years No, deck I and look do upside to that left I to is, shows expect at of doesn’t in leases any done or we yes. what able almost love days to XX% this don’t. at mean But hope XX% that that whole gets been at look it see place I the us versus next still but across bumps? to expect on that that what and of you, anybody our when tougher. to there, our mean we and loss not, else two don’t everywhere, compared a doesn’t that there’s board that helps. be slide lot

Operator

O’Neill. Our Sandler from is with next question Alexander Goldfarb

Your line open. is

Alexander Goldfarb

So two questions.

the the mentioned First, that Dan, pipeline. in XXX million dispositions are of you

So How like that things year how not. sort from? an can much full no I’ll But I’m not of that breakout? impact guidance give like sort a free versus just sure or sort you condos, for of are of if of will of much have assets there be impact call that’s for dispositions that NOI NOI ’XX that,

Dan Guglielmone

not the think are in what’s the income able producing have we’re to own as I mean, we represents don’t we first kind of XXXX. to year be assets, should of pricing kind we them we I and we well. what the long-term. half half targeting first the think of achieve for They the of just view on probably that of kind is what those And non-core as XXX have mid-Xs

So color those two. that’s on a

Alexander Goldfarb

other Do the its the view Just of merit general? meeting residential figure out? on land that for asset it what’s And NOI come down in to center? elements each definitely which then which & drives the recently. that that second question is about of Pike the the cetera Rose there do of et office just residential driving mix you the particular more. of Don, sort like view right you how announced mix own there. curious projects One, or NOI office having you trying think a and far overall toward restaurants and as two, of as maximizes second office item the But is the of parcel, the

Don Wood

I day real doing projects to look, of both. Yeah, it’s of path you’re combination a the type at the end of is when these trick mean, the maturation. but the

All in take or do or six seven two three of or differently. in use to years or between mature mature, or mix they they do these projects, take time projects now in mature somewhere

key time to in a get as maturation the is that of to is possible. which key place traffic day ingredients day is busy days, get a seven for trying One user XX often to us. are as Office a hours

day from efficiency traffic coupled another build So, incredible of that the but is parking time with the that’s of that the for works. evening use retail office incredible necessary how efficiency also office mix the by uses comes it's you used the that part and project for in

So, there that. to base there from you the these of and there, that reason retail Pike that’s well weekends think is some residential traffic critical Pike office see when day spent does nice of needs well how from at we the to and Rose & yeah to there you the look component time that invest way. and and what’s coming you of you the that we’ve because that retail you’ve And base part continue on be Rose on that’s perspective & see everyone of can and a a time

Alexander Goldfarb

you. Thank Okay.

Operator

Thank you.

Citi. from is Christy with next McElroy Our question

open. is line Your

Christy McElroy

morning. Good on just about loan million I up Hi. follow the refine term year. to $XXX you wanted Dan, next talked

November? on are sort when next floating. expired when through can that or swaps maturity you Or that today your you. what that refi of do two floating plans keep you Do to and the that? I that’s plan plan for And think to now the that

Dan Guglielmone

we’ll plus And refinancing think term loan. of in opportunistic to Yeah. It terms XX. LIBOR I will float be at look that

us extending the potentially by refinance think I a term as bond spot avails loan. at it of the market. another little into the bank to of gives optionality get sweet the it bit it Or in to look market XXXX and us to it into it market

so of repayment pretty won’t opportunistic opportunistic be XXXX. access the refinancing to open any I and be think we that will So, that. terms cost we’ll to November there in we that It can, be look ahead be of

Christy McElroy

Okay.

Don Wood

But likely 'XX. 'XX not Christy,

Christy McElroy

right. Right,

it then shift So, refi keep for something to and floating year November? next

Don Wood

before it saying be is a in won’t what but opportunistically. I’m XXXX Or be XXXX, in will fourth quarter the that, it of refi

Christy McElroy

Got it. it. Got

to they Okay. the QX fees What you with recurring of part and that back And originally that did back thought. then you is regard to to you? come in just was higher would trying a seem do unexpectedly proactively those than term your a that but or to you get recognizing related this speaks business, little this were

Don Wood

we’re the ways ability and this a business, proactively changing same that is a mean part, trying years and also various are over is to contracts redevelop a as backfill to another Little about this And this including term our and a consumer, you as best advantage are how But recurring saying look get about Than of nine seven, there And good box because that out tool want in is know I listen with we over a conversation. others absolutely simply is appreciate want recognizing of like, existing out. business a we than do both, an about again an it’s, five, know of tenants numbers I big over those having probably you retailers the shopping all next don’t the over less a fees. we we opportunity of center. to to tenant. feel the starting I use you you're contracts out to by part our

everything make look that to strong we combination a to stuff quarter when tenants that the this hard some it's couple of forecast of pipeline redevelop critical just use gave do we so but didn’t we that it’s them this and they we lost able at and of a to we So, able is were what to a for them for that be tools after also termination higher in sure we one that lease fees were a keep were, you we it you and when said, went think growing. is

of over changing low, if there digitally a both don’t retailers necessarily in see need mix retailers go other and think product a of I who type retail next street list about the tenants, to bricks mean you parachute you and are lot home presence. of is changing able base business based list particularly business be the used what, love the I tenant be of the the of know That’s and know a that don’t that’s seen who to a but two. that’s list after expect to Things that oriented, retailers, like I about for access. others places, out are So, in part mortar we fees long haven’t a you a future. we you that year you figured heard of actively a if we’d tenancy have that or have term

know and talk business like contract winded much having to any we but what that. to I plan able to existing place a create us to than it's it our gives for with comparison tenant and able some us long is, the in other terms be company important more be is. that strong places opportunity to within So, in other of its that have what the report drives us, future leverage that’s really to any what

Christy McElroy

ahead. Go

Dan Guglielmone

over been in, just to been fees, of quarter I have quarter. in enough space, over the replaced wanted terminated nimble we did who leases outsize term that already income that reporting third two-thirds even tenants of already tenants as Christy in are we two-thirds before we that not the execute to those the of fees, add, Yes, only with coming actually of so get backfill has term

the the are kind and flow downsize. testament terms So limiting proactive managing cash to we I in of of that’s think process how

Christy McElroy

exactly looking what I is you. that Great, thank for, was

Operator

you. Thank

next BMO Markets. Jeremy from Capital is Our Metz question with

open. is line Your

Jeremy Metz

Hey good morning.

at question, that there you’re level headwind post back there. through from a bigger least then guidance you’re all relative the on XXXX walk and to other or you from comments, to laid that front? other to of really swing kind bad any it in Could of the similar you one a Going sounds pieces like the how our end, out G&A, about end the that other more expecting Christy’s term and bigger know mentioned thinking this of less the could your I and to goal debt pieces rough you end you the some year loan maybe

Dan Guglielmone

I Yes, host its of whole things. think

hotels As and can up I to Assembly & things little I bit. continue Pike how preliminary, around quickly said, ramp Rose a at think move this is the

kind think I see our performing, course of where we over XXXX. of where are, watchlist the

the the over too And some drag into on far get XXXX color up course in and G&A more will the G&A in $X.XX basis be, our where the I mean of to a grow, at going looks be to in it provide we’re to be that February items, XX, LIBOR roughly I projected of is Just there drag and month two and keep to floating, $X.XX ballpark. to detail have higher will we based going But LIBOR kind plus upon if even X XX not to there. think and back roughly if that’s I’m to XXX points now going we’ll call. be will

Don Wood

things Yes. Jeremy, let to add that. just me two

the one one of the other thing how do or next from generation the Enbriggs I works biggest add awesome With, to First to Mr. to single G&A want other important are opportunity some way you developments it now. BMO, And to good or that secondly, piece. going around it’s I that an A month months is year while the to to is that leaving, a mover, here. for to And or welcome way two through. the back. point secondly the deliver at one mean have it’s Splunk all, we’re

to Reality will up, if why on that be G&A it’s X.X with going good respect a to the is management. next the reason to Federal able and bunch that’s going bet stuff. of to So you It’s we’re level promotions doing

So we us up for years. a about But will that talk more next in February. us setting XX critical the part to it’s

Jeremy Metz

of talked mentioned of then million capital. you half as source a the it ramping first next about the of And Dan, XXX year. you dispositions in

fine being or is may as accommodate attractive some at you selling I point? this decisions we the that, you plans is more look mean baking are equity markets at pulled on and be from back opportunistic and into that, Beyond equity

Dan Guglielmone

the well. said, side it’s be on equity that I will I preliminary, think as mean, opportunistic as I

calculus detailed very what on providing amount that kind it’s for goalpost is to that of XXXX think small will that February. a what’s our figured assumption I of in is greater limited kind a refinement in those have

Don Wood

And In if at think, development you you I led next I the phases next to mind. don’t add let phases Santana. comments, me one thing, prepared at my the discussion of a of of development Assembly,

and to core. what strong redevelopment the saw project. doing very with residential we’re You pipeline respect They’re Bala at

So comes to shopping we in a looks want This bunch have centers as that don’t stuff fruition. funding and of it’s potential but it dispositions, different we companies other to don’t company including at that’s own. that

de-risked equity it’s of point, at preliminary might. of de-risk we or in effectively expect a some don’t on look are is a we numbers at. there whether forward we we program. So Again a modestly dependent as these pool I sheet the lot successful. will because to way out already projects, it have this part places development upon go modestly building big in very but No, the But significant a and balance and of smaller the

Dan Guglielmone

a arrows or levels multiple free We terms perspective in cash of I expect have where we today. flow XXXX quiver, in in should $XX From XXXX. million we similar the of, sit from mentioned in capital

capacity debt-to-EBITDA a as I down think from also balance the positively we're perspective. sheet trending

a just further on as ramp to and I debt add they neutral flow Rose think very and grow, that in basis. will Assembly cash that & as greater we leverage XXXX at continue capacity up continues very, as Pike to stabilize naturally

well XXXX. pipeline of we’ve about of so can the how fund and got final the development we into different really feel really, are quarter heading we that And good a of positioned ways kind number

Jeremy Metz

Okay. Thanks.

Operator

you. Thank

Samir next is Khanal with Our question from Evercore.

open. is line Your

Samir Khanal

Don, to step Bed liquidate through about that at ask a a could sort less of for the that into that race look guys. same me there feels year. are is you that year. talk which look Is top tenants But there Krogers your kind to going that exposure Good maybe and Hi, months we morning. to to your maybe I store you next compare like or mean back watchlist X% as at, XX kind of Bath I of you X% here tells certainly rents. probably top next take can and applicable continue is to decelerate today bit at look releasing go XX then I the to last your little start kind still down spreads to or of that of XX will anchor months?

Don Wood

want and the are Beyond mean to to I we Look, the looked there in coming sure. and future way started their they a that start list point that I Beyond what I I absolutely try they as somewhere do we that of I part think their example it’s the that honoring plan, best be at that plan would believe et Bath the predict I change extent certainly we the to business how tenants happen. the whether are new commitments at long-term, successful anybody -- I move will exactly But good that’s it, because sure love of are Bed about about have no, I can how will that’s make not be, with Samir, operation watch where, don’t prototype question. not Yeah. an you we’re rent, to great worry do it. and a the at how tenant of out and what as in cetera worry do all I mean effectively know at and don’t forward. I Bed they’ll Bath years. that and I does forward not paying list going that this

us there obvious off going boxed well company lot its little going community as statement, is The the we’re estate single roll throughout this certainly bit to case it's the over, ramps lease with get retail up. with office are certainly more coming pressure performs, pressures. to to because our a and real I god, pressures from of broadest lease rent see you performs, to not a that’s the we any were, of So, show how show but – roll what – I in broad no tenants these in terms there perspective, my try understand performing going oh they to balance back residential start are as don’t. as to It's our digit key overs them of a to how tenants. you or Do certainly I roll an our

of in company moving. the we’re within this terms consider So, how context the of whole

don’t we today. is you’re based that can there many to is there anybody to have for I going that likely pipeline I years an grow very that about really know what investment feel on think very in to that. can that if good else continue say And say else are simply

Samir Khanal

to years are a exposure those the Okay. taking of don’t I had especially as level sort mean lot did Thanks. about one then but next drags moving ago. are other of kind you we there need back And mean I right, space think like that, tenants you a to store the we to proactively think I certainly be is on Toys about perspective. is and same any where couple of company of maybe year, from will what you’ll be the think there

something about XXXX? that is for think to So,

Don Wood

go I example we've might an stream. you you at indeedo you the Toys One, best feel much. down bumps one at very of amount to what and to you've mean significant so, got got Toys period done. know where was look the yes That's was income that good much within incredibly you all. at short released and really about completely know be when time. with Very list this

to happens with where respect Mattress you of what we them. Firm, So XX got know

on a the there's to of see most going there Don't XXXX. deal we be of income you those have the way stoppages past always at years the caps better type managed where what than through locations. certainly. with any different of company than revolution the we've in been. time, will And in certainly but significant any all amount if you look happens with in I of depending that know mean something XX and when That's on in are particularly are not Doesn’t know or dislocation about. out not parcels there You worry some great I

So Yes you it leasing constantly. do opportunities turned about ought up off we turn It's that on see could up we that yes bit when a switch turn we we again. is think dial that to a we you little turn proactively not to don't. down a see and

Samir Khanal

so thanks Okay, much.

Operator

you. Thank

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

line open Your is

Craig Schmidt

Thank wonder on you. is Mike some up? background or platform RevUp third-party give description setting us was Kelleher that Don, I you the

Don Wood

better a company We than Not I'm the about that’s over all of a how cool. Very a last the half. and all. and think part it. Kelleher think look at that what there very ancillary big good, leasing we that what at proud you generation. about decade this built What income, up, is we that's industry Craig, of a and out able kind some temporary you has really that for to nontraditional of grow of to sponsorships, capacity have know yeah this big we've other as good have. that, And to decade income, folks revenue tenant been figured maybe or picking Mike we be do think you point deal when at

of some the and to do business companies estate It's we'd work party bigger like up but across and could real that probably just could we platform a we spread So the income them. third of share our some there's already something won't lot public benefit to pick markets know you in We significant do out. base. we'd we're an that with like for that where regional service that awful really direct competitors rolling

we're what that's So messing with.

of on cool. of it's the going and it's small company. look and we you he’ll indicative not. But if the different at If right do turns really telling ever see. ways were we're creativity it's trying phone it value Kelleher way big in think throughout the it. the to into I you've Craig importantly with think know I We'll be add to and anything don't it's well greatest heard thing more now, I or various the

Craig Schmidt

there me And lower but exit some in I'm to be savings. you Dan by than Great. was looks sure significant terms in Can that. you more Christian’s some doing tell cost getting of and part G&A it what to then more helped maybe

Don Wood

great that that can vendors wonder much Yes, always terms in our think look, one-time with and it's don’t shopping time that and favorable think I of with And been We think on that get then around able big seeing as be necessary favorable appreciate I some dealing of this through. that renegotiate we’re scopes, I reexamine leverage longevity. vendor, to of in. those in have I when you mean, those a coming comfortable our partners. we as with one some as about powerful No, markets think centers. is don’t in the to a and could with pushed results. I Right. few to use We've XXXX, say a create on our I I we long company the part of That’s you’re Federal. and potentially that pushed people some And terms hard relatively of we’re deals hard others very are results. partner, with things reexamine financial effectively we I what mean

critical or about six year. part it are markets store is and our and Federal power I benefits the third business. acquisition think that we a and in we quarter of do five are those the all that of last on did Realty basis prime leveraging the again the relooking year-over-year And of

quarter in XXXX, year. we we which third just transactional of costs didn’t in to just and there So G&A, were that added didn’t this the have have

kind that’s a of driver. another So

Operator

is question Donnelly Fargo. from with Jeff next Wells Our

Your line is open.

Jeffrey Donnelly

you my or that's do little development single retail more tenant that might heard think to think that West had or you residential even be opportunity maybe one Santana that needs a office it? at possible office market been that concerning something is, that question in site is chatter. had ground it of this I you or But the perhaps for call, projects, have was like that’s that, their that a I Splunk I for could on a Don, that but looking Apple might have have guess opportunity on touched with

Don Wood

Yes.

It’s use an insignificant. add XX valuable. an simple to we retail is And the Jeff at country. entitled No, of the office acre point, in Just be and product. land two for or this will this iconic middle of that mixed any in happens real really destinations going if it’s office it. on this comment will from a you is be It’s piece across is the It of directly most to do a this add, Valley, office relatively to one would this just an site. make Silicon

of one is tenant an have certainly could real can to whoever lot be there, estate so got know of are, is we’ve we tenant, be a several. be tenants that say awful what niches would. And of piece and What estate, it or it interest because doesn’t created getting that the the shows think the typical across certainly And some would from some, I or of users will street. it value real the just of broad was you

little real So more, there’s there’s there. a no that’s all bit this has business, be value to of but value denying the the estate

Jeff Berkes

Right.

I coming Jeff, little So space one other anytime add a three precious to you There or look than just Silicon right office We’ve of Valley now. really is have anything don’t of that available of, soon next a all or than space if years. probably handful less two a over opportunities at office handful Santana got was the or for only time. matter

markets going of and the and what’s here. the Just given some sub on other entitlement cycle around

in it on right a the there’s now. super like and bullish we’re site of Don said So interest lot

Jeffrey Donnelly

the mean, need not might just Jeff, up in though that even of just sort space market employers they’re with that. for of office I you of tying future of they it that have growth? the of guess up today, to bigger dearth actually trying an space, anticipation are are seeing tie speaking that I immediate some because in space

Jeff Berkes

out but to Yes development, building. time a remember occurring growth build even a is a very a years here on of couple and still and something is that’s lead the quickly ready-to-go no, entitled

market understand time don’t them activity, requirements from look giving the at mean we see space. other space full. headquarters that’s When lot firms with by it’s are delivers. their actually building we of any clearly So, growing into the Apple, the their the new of back I what we case

the out the at So, big to that’s the I users they’ve if look that ready, you and here, years by true they space of filled is think out it. couple look have time a

Jeffrey Donnelly

perspective has I external shifted more on few the back of or the than what retail as on use think mix you before? changed and a prospects company hold. have focus is, of do have ever And with company ever from going market you’re over residential mixed that it broadly open that. Do a maybe stepping it more standalone mean you -- just the been Don to And you’re or Maybe development of the you growth, retail? into? Are of seems last to somewhat sharply aspect one your to open more years users some you last the do think away markets there geographic just will maybe focus office

Don Wood

speculate back to your not down say to be we was a because our case, going lot. No, your because about last is non-retail-oriented last the write in Apple, I’m mean go or for I’m plan. No that, going here don’t that to do that going speculate standalone book don’t don’t that Let to that’s and clear. last question. I office thing, the a please minute as won’t to question I’m thing okay? of quick business about you me part resi one or probably

just Now let’s what to asked. you get

what really liking our -- mixed battle, mixed not use, center shopping a suburbs a is to liking a able not a or whatever core creating or reality do. possible If the thing. liking to. the liking of me, rents people Xth target the places I a at it probably can it rely in building. else center, as be that The plan. Here’s The you shopping create be that anyway? and important means isn’t first Of in not in basic and the the it’s grocery-anchored It’s can our as have ring it Manhattan to use is. it, the ability and or exists. that Once shopping are That course our narrow kind to not The not predictable value flexible do to mixed future to suburbs center, ring already it as a of be the corner competency in go future a great is, are most any you first is, upstairs word have your people want flexible be in holds layer, at that’s want bring to is or use, you Flexibility is, to the markets we’re the the have identifying less not do on to respect for I shopping I’d that’s with more the and don’t one to simply to and way more more land already can I future business. able the you be can be like case we the have can can. on business there. business what most to you necessary predictable look There is, where stream income doing rolling That’s if an one of people are forward in independent We that’s environment any the XXth there. center.

that’s I want future, look them, at I have once them, you in the I retail, adjacent unpredictable more or in many whether quiver where can up what how buying do That's you monies? growing out and on parcels think And it’s as an going have. as whether Now we've possibly it’s done. I to make say office arrows you

see in in retail retail. change believing a or as in believing not So it sharp I don't

the think I on impacts a of evolutionary it's technology's change the consumer. unpredictability in

estate sitting what best a do do you're not company. retailer, when a you it if that that about real think real so about And you're company, a but estate way and

ability your estate sure simply shopping people of as ways. rather pretty broadly people. core valuable more to the any well And and estate real think in than our look I number make You is proven we've competency real of one center different the

Jeffrey Donnelly

guys. Thanks

Operator

Thank you.

JP the is question with from of next Mike Our Mueller line Morgan.

open. is line Your

Michael Mueller

questions. of couple A Hi.

First, XXXX Dan, accounting about then when talking you’re and G&A separately. lease you flagged

be your is lease in is accounting So going to expense, operating that expenses?

Dan Guglielmone

we a an be as which lease current will of increase also G&A there in -- our But sit change in increase geographically up accounting Part G&A, level G&A The of They related. -- XXXX. a be of will item. in two so accounting it component have will lease pieces will to will also our be No. that. there’s

Michael Mueller

Got it.

you thinking of and mall about moving hear I'm about malls. from And about tenant types I constantly just on sort those retailers demand curious seeing and everything guess into calls, the of demand as tenants? you your Okay. portfolio, the well that then just are interest

Don Wood

this I’ve this about Mike, is But the a think talked about of one it for Yes, in just -- earlier minute. questions.

at NAREIT many with or quotes need of say have, some maybe led know I’ll you delivery of system. when struggle costs. didn’t them? customer go? some to things then I've them And typical of conclusion what, with these things are that be close business guys that presence. them, How tenants in Santana now. but are All it's possible we're have to able about broadest funnel got chances who of now one online going before, two Bethesda outside that right We're the start at a certainly we'll in And I you it's the where to And we presence they Row to on that of one get to and most the those lease of don't get widest I We're look finding our for next those of do mean the future the good like the being, let's number interesting those a own. to than you and attractive who share The some these awfully stores. physical And streets customer Promenade. retailers week, we we a guys, properties are as -- bricks future. plans two that a where Street for the how I the that course right okay back component to are are fair need the acquisition now. it mortar and what’s me stuff The of have retailers. suggests be going cast component to we to say of -- I tenants me all, largest to close all number struggling these Third of me share we talking of type Row that to of always and have was these online, retailers started more I struggled And on it important where are a know say basically have is are -- have to for the and want

Operator

Thank you.

Our Haendel is next St. from question

Juste Mizuho. with

line Your open. is

Haendel St. Juste

Curious much question shopping a you detail, guess We’ve think the of of is? But seen expect the you Lots more Don. appreciated. of participate of in you And REITs, big year lots but for calls, could then is that over the in this lot in? next M&A centers. year there picture. I anything why nothing a Federal that

Don Wood

One indicative a have that that. it we’ve been in combining it plus with just platforms this so years Look, world, Regency what I’m before and and talking makes about XX Oh, all I goes that. obviously business -- Equity remember, to that’s the the you sure question of Haendel, I of saw for this what was has the sense back idea mean was sense to

companies they’re is you would far I But and think are yes than few look hard separately do. have Federal between, can those that the say, to two been. at and things company that

you love not, didn’t had good public, out, tell have don’t work back we to hard to me or story doing public, and relationship know, of -- for a know it I together, a we they put I -- we companies very As and the are but really went were were great. at before those trying [Ernst] very would mad they if saying

the period when there’s plans, the initially part about from issues side, future, comes So think dilution social we’ve always down And time. business come you it. the for down a to it the on buyer individual and to that almost to parcel are betting of

another provide. you and than have So comfortable going that’s future what is been to to be going -- today that where to harder period. That’s it’s do with

anything in the is lot lot plan You So we of good us? And of existing We a really -- this that’s things, Federal time. plan. possible real for terms the other we’re the existing But to doesn’t of something a lot talk and improve going our do talk our combination prospects to not estate. versus people involved a bet. is that of

worth it is I than et real Our whole -- at the the properties, cetera. consolidation for look today. in in growth, see prospects properties, will clearly be the certain and When estate it more certain for the domination I future at

anything be significantly better from I that. a So, any haven’t perspective merger found or else has than of to deals incrementally kind that.

Haendel St. Juste

follow-up mid-X disposition bucket here. for under And expectations a think sales the XX to for on discussion cap Curious ago? months tax efficient assets just bucket your assets say those asset large And you have how rate where of traded would is? then the potential XX non-core, you might but

Don Wood

the look out really fall -- we of at of in at we’re into and assets, future today to again, sit future, them. don’t, information and terms way the bright recycle assets on eight would we seven, of extend talking XXX have effectively have assets that we they and of and the only the but six, about there’s at them prospect it of on your to that most I’m to I’d bucket. answer of went when find mid-X. a the that those based here see To see that of bit, assets that trade far a we’ll futures. earnings assets the Most at. and And quite how don’t that, part will kind I’m said The I compare? marketplace, because he because Because he a a what won’t what on before at going it’s to of this a That’s and is jump in they into love small what Dan minute based said as before small bucket. when bucket, cringed listen, I we’ll those company little this away know. does question, that trade looking

Operator

you. Thank

Our next with Derek question is Bank. Deutsche from Johnson

Your line open. is

Shivani Sood

focus Shivani Hi, Johnson. of a large on for today’s call. Sood The been has this aspect office portfolio of Derek is the

just the and of you CapEx how metric front perspective? aspect it would might from potential involve also the mind retail of view and portfolio? speaking from the how kind the you differ the an leasing operating And So there, to process

Don Wood

well question. we we do to in it at Even or we average marketplace an is, at irrelevant as way other places and that I’m that other certainly product more Pike a shopping a And which & Santana are -- places on land the with large It’s able in be we’ve created. a those more seen places and in to result, amenity-rich Rose it with is our that we big retail the environment acres various opportunity products. and most to in and obsolete. ground sees centers some In to there have office, is office know at floor created opportunities good center more compared shopping national retail attractive office Sure. for opportunities that have have as is first XX phase; have cases, is where seen again -- on we exploit the office and users. user a we’ve we’ve through the not the that Row. office environment What sure view I standalone that am don’t where sure

it’s retail developing think the premium the property we’re that so And day it rental to can premium particularly most something that time or can parcel that -- that how bumps have drive that’s it’s drive those we overall special, rent, resi and provides building the we works, so, how a part or works, And deals. of the importantly, we’re community building in traffic. really that to integral

is of in immensely it critical, that’s before, said I parking. efficient terms As

to office the us. bring And so, brokers product

conditions with the down we’re cetera. are all of And what the position those invested same for economic similar criteria other capital, be we’ve to on floor. top a We so, feel office to on these any negotiated et deal the the like market in ground for of to range just same criteria be because rent, of stronger at able the aspects, the

what product office separate at core it’s that. in that. building or to you that buildings created me, product been investment has to previous is, where across office our the places, we’re we’ve the Assembly whether properties de-risked to see we won’t a basic degree huge our certainly because will country us competency that And Pike or office but great So, is -- to significant the that doing exploit broaden that Santana of the & Rose, made place

Shivani Sood

color. so? that has or effort grocery-anchored, the that Can much mixed for just example, at Great. power that terms have the in use. -- Thanks full of demand diverse, so for centers, more give us types past update -- year just assets given shifted over retailer you property And the all of and you then centers, different for an

Don Wood

like where like totally And use characteristics perform this I’d that estate. et say simpler what, real it's and to piece particular supply centers not this demand you true. property know perform cetera, It grocery-anchors tell It's that perform that like I and on power and at mixed physically of and just because is Nope. in the depends

a powerful about called California. in an of Bay other Bridge leases center supply supply environment bunch time on power because for at that us spend Emeryville, call there's I So demand It's East no incredibly of that. talking

each kind I make So, of for same one. no, could those and comments

to individual But it's understand easier even hard not type, particular characterization though sounds estate. got to really really of get the It's it fight about I the I you categorize. You into for real I compound. a know any one. like

Sorry.

Shivani Sood

Thanks. That's it for us.

Operator

you. Thank

is from Our next SunTrust. question with Ki Kim Bin

line is Your open.

Ki Bin Kim

Thanks.

So, already of asked a have peers. lot good been questions by my

me. to ask, want one just So from

could you If would help your of what a get wand and magic wave technology be? any business, that piece to

Don Wood

but here think an about cerebral deal acquisition impactful data all whole the of careful data interesting person obviously and this -- answer negotiation there. don't data doing need cetera. consulting are to and most last out in on much around what say I data It’s foot. is isn’t and to when certainly a to information to I the lease bunch matter, has It's running the selling we necessarily the piece. thing your where one their right sales me think now out in every much and question clear. clear. for the lot, and two answer an The really one the it's keep thing it going what crying it's who's investing is available you that is that of it firm et or of I piece how turns of peers would that obvious form not and be that you. agree There But pulling gets is pieces The negotiation and in my data mind with really in the question I'll have all about coming is for out to and question There's customers so effectively. a my you It's supply there, good idea the my myopic are information certainly view, don't understanding It's there and square certainly too what certainly one profitability. is think of from. not

with we're all that. dealing And so

to a a the vendors. but We're out make We're figure that still talking doing with information potential great. partners. to Now to companies landlords with lot talking with trying that we're all trying talking difference. really in right retailers are That's will invest where things with of marry

Ki Bin Kim

My seen everything pictures you. what is a my that and sounds I've problem saying. is. get you're get I Thank great. Yes, problem know you. few I I

Don Wood

bet. you Absolutely,

Operator

over call Thank for conclude Q&A like does for Brady any to turn further remarks. to our the session Leah you. back that And I'd today.

Leah Brady

Thanks for joining left of couple We slots do have NAREIT. a us today. at meeting

good we look many you And seeing meeting So to of us. day. you if there. forward -- with please Have reach are interested out in you a

Operator

participating gentlemen, conclude disconnect. you you today’s today’s in day. and all Ladies and Everyone, thank This program for does have a conference. may great

Federal Realty Investment Trust (FRT) 1 Nov 182018 Q3 Earnings call transcript