- Earnings call transcript Q3 2022

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Operator

Hello. And welcome to the Federal Realty Investment Trust Third Quarter 2022 Earnings Conference call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Leah Brady. ahead. go Please

Leah Brady

you third Thank us for today Good XXXX for earnings Realty's quarter conference Federal afternoon. joining call.

Securities be of Melissa Joining deemed statements me Jeff They questions and G, that conclusion A be of matters Wood, Don XXXX. of the take our the Litigation will at within Solis. prepared the on the may Reform Berkes, discussed forward-looking call, Wendy on to are call available Private be your to Act meaning reminder remarks. Dan certain Seher, this

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

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

call, Given an to call. one that portion appropriate Q&A we number question follow-up on of you participants the our of and ask kindly limit yourself during the

Don begin re-queue. please to Don? questions, the that, to results. I over with third additional And have you If discussion Wood of quarter turn call our our will

Don Wood

degree better. half lease. have their wide mixed no a more earnings. sales money of for radius, simply well long-term generated terms and threshold tenants estate XX,XXX It's that resulted realty long-term executed not as $X.XX families The than households college strong spending square executing or as have matter, myriad Thanks, three cycles in where of of portfolio can to economic feet flow strong for exceed Past and the mixed-use to annual pipeline are XXX,XXX operates, be in executed especially in properties, Leah. very both XXXX appealed Demographics incomes of will quality sit who trend a leases of convinced bottom $XX.X the has I FFO spend to family above remains our submarkets of as have variety and consumer cash miles income and for quarter an retail share of federal both remains outperformance federal leases to within have that line Well, other uncertainty. of per another demand everyone. future in four-year and billion major XXX significantly know robust particularly three sized manifesting in times with of in in real of real including And a also internal hello such average and retail signal household estate. over mile yet centers. That's expectations $XXX,XXX us raising within space, ways, that. external again. those people itself high were continue a the seeing guidance retail say use grow.

fixed in Although tenants over strong per our an and quarter. goods based above contributed soft absolute rent, share particularly for additional in leases, a and notable strive last the number third restaurants the trend rent we $X.XX is our not fixed with over huge broad among compared contribution and year's since the quarter,

drives that leasing us. I said, As engine remains the core strong

third office about X.XX% income has portfolio. about they leases. than volume of That's typical our when growth. low. deals in The The failures powerful operating feet. as and including the is over tenant just this did with continued the our over pre-COVID, annual retail a more XXX,XXX again, In manifests of demand third decade, It's future rent that also Over the XXXX, performance looks fact deals Annual XXXX and stay XXXX about quarter, average. comparable for for production through one the naturally XX% average at meant the to quarter advantage earnings are doing that $X.XX heated properties occupancy XXX,XXX property the XX reasons square leases and gains last that's shopping pipeline guidance remained raising in properties markets midpoint. Dan tenant a level XXX federal strong, bumps square solid we average speaks deal higher itself the remain at feet, for center overall

gains now year points lease XXX basis further respectively XX.X% there's and now Santana XX.X% and better and large leased referred leased a Those at ago Our year-end. at rate properties. of Pike & demand At on we basis occupied side. leased low current quarter’s I there, year small still a and room are at Assembly, COVID component than the higher outsized the particularly grow Bethesda ones the XXX to that rate is expected remarkable XX.X%. are end. see our occupied space small at XXX to mixed-use Rose, points rent is four obviously earlier shop our rates Note point that shop retail by XX% with the than and

or beat In targeted delivery continue overall hit we addition, to dates.

feels and XXXX and our dividend right the the in and that and upsize right plenty a quality sell for that our non-core with economy with component our X.X% And year credit compelling coordination and the for backdrop, the we're environment product by total dividend of in locations tribute inflationary way, I'm tenant pricing to right like a flexibility of teams, in. we return, line sure we've to been goals for of a good XX the seems And well powder loan we as for yield also at demonstrated be of for economic demographics have of respect able assets sheet construction key of to of the dry that a us. to refinance couple have against awfully our been ever the term this I've corporate portfolio as that XXXX. real a One balance and convinced whatever

in capital incremental needed and for the square just we the about was well in build in a By be sub-five in years and at $XXX to Choice cap. medium will from go, at Similar than today tenant of to complete just $XX week, recent yield growth as to quarter, million building the so income ahead & performing our commissions and to have the long-term signed acquisitions acquisitions, Darien and will A us incremental $XXX made after proceeds In accretive, out million complete serve non-core expected dispositions less capital time in Hotel, in projects, these recycling development, $XXX Those we operating immediately billion both acquisitions not clearly we Those generated headquarters Rose. pre-leased. Colonnade, a $XXX a rates same years sales at rising to are with XX% but terms that totaled other largely in an Investing at and tenant that of Pike the last alone of these XXXX. fixed from the come. our and our development before share period, That to and over large of rates to that building lease million credit way, begin of pro rate foot expectations the forth, Rose we've of cash $XXX equity bringing well to West the In Pike coming mid-XXs Santana products for million Gardens only rata are Commons. since asset million Grossmont & with flowing. COVID aggregate Pembroke in the debt are large XX,XXX the through Camelback million. our projects, superior. beginning $XX over state-of-the-art contributing buildings the small an net

earnings remains sure pace in some how so be it my to view, but about in pressure leave remarks Dan. our how recent seeing, prepared it this everybody's to over ahead, for not was morning the years necessarily like you that's to much final before In inevitable, for to and extent at rates the though, one long interest I'd while seen. turning thought with run-up to we're Okay, the

residential level So than no multiple news more discrete We tools densely the of markets sale it's us most. within with inflation. affluent, real in look These counter to well-leased, income contributions when question an submarkets populated to plan earlier ways well-located times cyclical along our more will effects and the with operating included of level development income has in acquisition shopping property money which to cyclical dominant We're along are and with centers of supply-constrained more from shine. challenge. with compensate. potential portfolio, business, the the the in is, our than mixed-use money centers to costs pressures assets, flexibility always handle financed property And forward and certain why and including business rise Dan? time, the and The retail combination anyone. gives best-in-class buildings a

Dan Guglielmone

and hello, Thank everyone. you, Don,

exceeded comparable again, XXXX by business this quarter, another quarter across all and share driving portfolio of has strength once strength from our saw of For With resilience third consensus a of aspects expectations. $X.XX. by beat beat X% of and strong over we broad $X.XX, we FFO per And our performance.

customer sales property tenant traffic percentage collections by rent, in small forecast, and another parking and strengthen offset uptick although increases shop gains driving than revenues, resulting assets interest. level Continued expenses our higher continued in strong in higher and better residential occupancy, higher

XX%, sequentially double to basis achieved mixed traffic and tenant and rent, Parking points a to Percentage of higher these at and our level. year-over-year. level back hit XXXX quarter indicator up Let to was some X% Same-store XXXX, targeted strength still XX% but since over Small points occupancy me up POI up color use basis XX shop XX% sequentially not XX% sales over third up levels. up a not consumer an revenues, over XQ over indicator basically leased add XQ, residential continued items. strong up almost year-over-year assets year-over-year. of XXX was

did in some other quarter the operating XXXX. as XX% XQ to see expenses start over the On inflationary on OpEx impact by side, grew we

same-store excluding prior and X%. same-store sector a POI a However, term fees, metric. to a growth all comp was Comparable cash almost X.X% tenants. Despite fees above X%, On solid we estimate metric coming from for of Year-to-date is predominantly and growth up XQ that growth is is was X.X% and comparable forecast. third a same-store a based period is and our rent cash leading that recoverable basis, term excluding a metric X.X%. well our rent it non-recurring is our period increase metric XX% in XXXX, off roughly prior on comparable strong

us $X.X third quarters $X average from down for quarter. over the up track a robust those of that pipeline was this second on juncture million, million. the negotiated it. $X quarter. not at period record XX% Furthermore, quarter exceeding in any leasing to a COVID-XX. this quarter, $X.X to quarter of decreasing it, leasing of to as XX% XXXX, we’ve this above from were million, giving in Currently quarter’s and level. rent payments quarter’s and period quarter $X you bit XXXX, of Prior by quarter seen adjusted fees third activity prior period XXXX both million average nine million only as the but quarter over relating by million remains did relative levels third consecutive second For our little exceptional this of term nine $X.X rent significantly this We another is reflect Again,

metric robust rollover our rollover with much quarter gains outlook in in deals a X% more the rent future Our pipeline, indicating quarters. for was for

balance I basis And the rent line to rent points as rollover leases for myself, and but increases bumps, sector bumps, I’m quarter rent repeating higher X.XX% X.XX% with with know, solid quarter at only annual sheet, higher bump our for our the We a financial a flexibility. significant average bumps only contractual XXX another lease. rollover for straight and a portfolio to portfolio and of a in collects year also X.XX% X.XX% will made annual XX more the X% plus XX% portfolio along liquidity bumps progress of during and way. as ending small to achieving retail every we result Hence, rent banker is had and rent the rent enhancing drive leading continue we on our the XX% basis of equivalent is rollover, end shop-lended the in X% With a XX%. be respect

And with today. credit $X.X extending term-loan, which April closed $X.XX billion, increased quarter from both our expanded. refinancing after a which billion of transitioned we Just $X to combined options, capacity billion previous $X.XX to over facility interest options SOFR our loan $X.X $XXX doubled unsecured the SOFR. six by from to of we end, which $XXX two has million facility at existing billion months increased from in XXXX revolving and our a the to comprehensive and out We to April we previously term the of credit to additional our XXXX rate take bank revolving million. from to with an size XXXX and extension LIBOR transitioned XXXX term also maturity options. out term one-year The This base LIBOR here us to two rate billion, loan

roughly net metrics to facilities the available at we liquidity $X.XX of our quarter debt the in credit range time. billion ratings end, within to target With for our closing and continue leverage our and is undrawn we six for respect result over low-to-mid quarter X asset activity. $X.X a ratio including a annualized the on of Comfortably adjusted As total ratio had of EBITDA times times at billion the facility. the

year and per of we the or our to midpoint top increase rent. coverage period this half, of tightened XQ, midpoint $X.XX total proceeds most cap assets of additional one process at center attractive retail ratio blended and including quiver X do even is that Having one an in at that million not at the over X%. and first XXXX the of at totaling we're quarter sell prior retail five-and-a-quarter charge two a the headwinds a guidance in XX% Onto extremely our we two a is potential in basis additionally from is fixed can $X.XX on remainder an at companies there sales during in asset brings outperformance this of $XX from sold over times other that non-core outlook the our a an we rests million for on strong guidance XXXX Current assets asset and $X.XX. sub $X.XX increasing increases for guidance points growth $X.XX valuations to $XXX range increases given residential blended cap are residential, earlier error total of another rate. And to quarter which over implies this have. guidance rate a And share, X%. XXXX despite to of environment Our to $X.XX year-to-date XXX in

POI also bumping from growth to our up the to are for of to X% prior X% comparable We forecast X.X% range X%.

comparable the X.X% Excluding increases from prior period rents to XX% and term fees to range of forecast to POI prior our X%. X%

quarter commentary provide our We giving you weighed With for growth to occupancy let that $X.XX by share February, This around formal be today, from XXXX recent per end. continue a the respect fourth year third of guidance a some guidance but a our of me will XX.X% in assumes we consider. to call $X.XX please FFO quarter. up XX.X% expect for on note to to the to occupied rate acquisitions our during our And range quarter. on decline

million term rate. is $XXX loan Our floating

per not contribute material not the notes fees year We refinancing rate. this timing decided term not with in note be it which XXXX at flexibility unsecured to impact is – our in year. million of have our X.XX% $XX G&A while maximize will interest is on is expected as basis. fixed they SOFR increase again is using currently level $XX the maturity, point rate Also does the to longer a quarter XXXX debt and a to is while to financial term only spread XXXX be a $XXX rate the as an expect million term rents consciously it have the now. We is which Its quarter a adjusted running X.X% XX is use per period and plus opportunistic for rate And to million, prior of maturity June good set; interest in to did basis hedge today. this was placeholder

with trends, show leasing given two failing little counter of continues the a last over year. these significant impact average volumes our core As to to relatively years retailers above business strength over from

POI expect in to driven continuing basis strong points comparable current momentum to see XXXX solid XXXX not by signs a in XXX continue of growth robust show portfolio and the portfolio We by occupied existing driven of new leasing. upside

outlook uncertainty Rose As well recently the as growth XXXX, a to questions. Despite be lease can and economic lease Phase CocoWalk. for up the you stabilized in line operator and POI Rose pressures interest X, higher in inflationary growth the with non-comparable Pike robust particularly XXX% and portfolio, & open Assembly at counter And at momentum Row XXX% provide that XXX rates. for will should the

Operator

Instructions] question comes go with Thank first Please from you. The Alexander today Sandler. [Operator ahead. Piper Goldfarb

Alexander Goldfarb

Hey good afternoon.

go wanted is to time back because quarter, at and I'd spreads. to low FFO this rent just not high spreads something but and have spreads is Dan, the – the the talked So rent over your guys than they're have rather you growth they're in FFO certainly looking growth about

but So how small the two, the and then think an is validate rent is give you're that we can every And annual the just wanted should overview bumps number; retailers? I like shop interaction I just you bigger of anchors format spreads that embedded just that that are of sort in some junior said FFO? X.X%, to and you year think about between or also of one, in the

Dan Guglielmone

Yes.

just the that's to rent are for They obviously, first. year our the we which start spreads or next to rent how The spreads there's component two, that spreads of signed Now is deals company during one so what quarter. are. and we'll grows, the not for FFO will go rent announce are

contractual two-and-a-quarter bit only is little rent the it small we'll a rents see which get retail portfolio, if blended include our year, bit shop get As we this percent and from where office we leases we little said in both anchor bumps, also higher grow higher, bumps. a leases that we

Alexander Goldfarb

And sort you XXXX. XXXX and the believe and in XXXX hard this but to that and stuck to really few flatten XXXX for gave the Obviously metrics it's going goes and that come the the on that up question ground guidance back year a to ago quarters has just second growth. has year this of it's outperformed

it case? a Like about the is ago, XXXX you flattening we versus that really laid can So quarters up or think posts few XXXX the well? goal posts we as guys out should those and think that goal about growth moving

Dan Guglielmone

coming income provided have look at goal in I the posts obviously post that hit expense. that continue We're online portfolio, and and we XXXX, we expenses will our XXXX, operating Look, in good that going but one us guide February that in from XXXX really, and contributing thing interest XXXX. or to is level you to counter property growth provide strong guidance got environment will see to and really and this to call, our operating here in we'll tell on non-comparable on of inflation property we've the counter to see coming impact as we'll well we'll robust

Jeff Berkes

are And I timing the on the me the we back recovery. of an understand Alex question, of obviously I based let those say gave would your goal posts that there, there to implication which just add things it was when two just

to has point timing your been and only the you strength of of faster the been not of clearly said timing news, recovery. the recovery, but recovery it's As great the the the also that's

robust in back them be the POI level I or whenever expect set guideposts when set effectively. that – growth XXXX more XXXX those would to and in than So even we property we

good that's and or has POI is goals good but of situation than rates level, faster, were overall of the are COVID. this deal effectively you you're POI but business that we a right in this there the even the did with and macroeconomic interest at core the portfolio those got if it current better over performing ever got verse and strength leasing one terms as that reset to not at XXXX time. point the your darn we post of goals look So we is that today Obviously lot because a with there of all, to get better only period respect to in XXXX, and those

Operator

Schmidt ahead. Craig of from comes Please go with question next The Bank America.

Craig Schmidt

you. Thank

well recessionary definitely you it your do in your inflationary wondering environment? how have in I'm We witnessed properties environment. a and might an perform performing think trader

Dan Guglielmone

Well, yes. lot I don't think a of wondering about there's that.

believe isn't the great a not period activity, a XXXX take it is the into own economic a of XXXX, It's look demographics or properties important the same clearly we going the going of dotcom financial own. same crisis. Craig. you this it It's forward. call But If your the the at It's as we history, why as reduced will. period what crisis we incredibly why are obviously

we terms So affluent, And the cycles, what to I be imagine in I both they're a exact to we holds hard back of – what numbers those barriers significant within miles and activity activity, so be of in $XX to economic and important. future just shopping X density because past power an and inflation I that’s because we'll the environment. numbers you’ve those have income the lower that believe and a what going both billion inflationary a of very When in center, not that firmly of to will where advantage believe the and reduced it’s they’re are, go entry outperform. economic as got environment

basis on relative a much. this very So like I

Craig Schmidt

experiences, your well. with is vocation, cohorts the be to just held frankly back at are at at experience And cities the just and wondering if tale have People I high the from they’re of and benefited aspect centers look from that we’re seeing may benefiting to wanting paying that very when of consumers also agree hotels There’s how more it’s shopping get also life. actively socialization rates But up travel your their income centers a spending. definitely you you. people pursuing two what different I’m

Don Wood

to not imagine that’s hard case. it’s the Craig,

miles Valley, hear San this middle Silicon Silicon Bay out of it confusion Francisco, from is the – you away and Santana that it call X,XXX activity, goes We’re the always Valley. your if validate There’s terms Area point is that if critically. a right are street today saw in this out particular be miles numbers of you in to the I’m Row on markets. you looking here, XX saw about in here, stuff the generated the taking couldn’t restaurant

We’re seeing in the type of at same Rose. thing Row Pike numbers and restaurant and those at Assembly

the And of anchored so the of along your of properties those combination portfolio type grocery point notion crystal center with clear. a think very I makes shopping substantial together,

Operator

with The go next question Evercore. Sakwa comes from Please Steve ahead.

Steve Sakwa

close Good Thanks. that talk the tenants pipeline, I or leasing Dan you’re does seeing, there’s the guess, if little just you the portfolio, the guess, could wondering you I variation. add I and as afternoon. about of I – just when and on between bit back ultimately significantly? color think Don the of to Yes. guess can was in think types if the you or regional upside a get percentage Wendy, you gap occupy And lease more where as do any the about leased

Wendy Seher

guess that of And course. the the the increasing pipeline points estate. and speaks the Steve, month small is in to taking is just What by the by last in you’ve team, remarkable XX over our XX period months XXX a basis frankly proud And and shop our I real I’m of seeing the and part it really quarter take we’ve that I’ll So of just accomplished remarks, question. heard first strong. as

several doing, I frankly, based we’ve everything seems be very to has to broad what I As it Dave’s last big to to Nike look in from been had Petco at to Chicken Atlanta as the Hot been, we’ve mean, the quarters. one

the of in to have this – together market we that approach, annual side challenging. of only say that period the the piece and but the that to the on of we’re that that amount we And sense the is both activity how the costs move and the to with other is forward not this our been with put So embedded it credibility over a the able We’ve and dealing transparent need retail to again, the increases landlord going positive construction on some seeing figure we’re be costs kind make to heads get for is do. the of we’re do and really lease, rents being though out having, on side we with even we’ve been and what seeing that of we’re we’ve tenants able can have time relationships we challenges to make leases have sense, it to that us. able the been and that economic grow a and

So to those again, within speaks markets. the power that and the buying strength estate real of

Don Wood

much And second I this guess, question, very Steve, expect would with be of plus portfolio respect your the to part I to a XX% leased portfolio.

there Now, the is number the things. of notion on of getting the timing of dependent

solely not driven we’re of occupancy. by First all,

tenants soon economics perfect go them be them & productive What happens we to higher like more lease at That's Bath And rents. able the what way, and get as a give Bed driven by Beyond’s would If we'd I’ll do. value with we'd forward? I to had we creation. and can my example. we as We’re you as back to

of extend trying we not trying here one Now, on we goal. a the And is another that I se, get to It's for XX% and one reach guess lot won't but doesn't consideration only to year, be balance do to occupancy put that is year, mean think no my to that whatever, able I when. that's that's to a get understand. no weight there. matter matter an the necessary And important something to per thing who point in

bucket What see are of in into of of small second industry the going leaks going I of in post-COVID of Obviously, bucket. strong it's bottom that I what and in be gotten there lot of always et a obviously better failures, years. you're thing we've is position period a weak the asking. don't the few of determine The of of of a the over really within be And tenant point is still years going the couple extent But because would terms timing time the beyond at this the of bottom looking at et cetera. the the the hope has to this beginning leaks cetera? COVID. at next question the Bed to a we that's tenants loss couple the shops, Bath and see the to to

Jeff Berkes

basis to hope do work as We really that Steve, That's backing the runs both people there. percentage. Jeff, We've points and a Hey as cleanup working can't our get probably been and are inside short points we the fast got and doing that go we started. quarters. said, we is XXX shrunk today, to to primary get but objective basis basis outside the And I’m not sitting Don at only want to it's not can, the we going that build occupied a company to another been but tenants be where eight like out when last to We're happen. well to everything relationships just company us for also space six, just with the in historically XXX down you, XXX here. said, signed on XXX a our that's Like it'll Wendy points. the tell possible order exactly get

Don Wood

Yes, basis points points. to good XXX spread. XXX It our to on progress we've We've way basis be that down to XXX of to got XXX it used made on targeted, that. north

Dan Guglielmone

I fourth really cleanup guess the matter the matter. is

Steve Sakwa

Thanks.

long for Sorry question.

a hurdles pipeline like I how on you are acquisitions? capital kind changed for ground just thinking you robust you up Don, either have guess, X%. how or have or redevelopments new development, sounds pretty deployment, disposition at It of your Second,

Don Wood

Yes.

Steve Sakwa

unlevered new investments? about how thinking are for just you yields But

Don Wood

well, state are Yes, the that all that in that's of state as of capital obviously flux in flux. market

of the periods as line yield in point. within to through Steve, for not that, average bottom weighted of we're capital – going the continues project basis, to context one end still at view uncertain a particular on at this So that time it's we the any it's long-term cost where company sure to terms up is just always make want because

now. capital where do overall the And you do have And asset, to unless of working X%, ranges for awful stay that of middle is today. those project That end visibility an for but accretive. to think cost will some very probably more would like have deployment lot the up not agree will needed that clearly in projects, only puts terms just of that put that the up. than won't X%, we capital year, next we very able it we're the We We visibility more I right be that in brakes on of by on new want clearly forever. XX% somewhere

Steve Sakwa

for it me. That's Thanks. Great.

Operator

question Johnston next Bank. from ahead. The Derek Deutsche go Please with comes

Derek Johnston

And view is potential, Hi sentiment. the think renewed everybody. as investor Good continue exiting catalyst pandemic era outsize especially We office quality have see I'd and, demand newness, federal, and office they to afternoon. a I should location, it for demand. what comes all and learned positive when real to we operators, say seen

other some quarters a confident And progressing, given So year assets. component, touch I ago perhaps and are few seeing a than the you're office on And how ground guess, Santana West? or more ago? are progressing on what at on your tours maybe you specifically interest

Don Wood

Derek, it's appreciate a that. really great I question.

CEOs believe of which our more, at solely we by Let I but big saying, times, of I've start is do, so product demand remain We solely here that million proclivities as is a cetera, been. available? the new office et said retail for ever knowing The as it with knowing any the confident space, driven it the best not created not be we've can buildings. that is that is the equal. How effectively, differentiator having notion the development, environment be by how economy, of use and mixed me managers, can all office product along therefore couldn't the office hiring – there and that type If not

a we disclose signed I this just I point. As it at is who said, can't lease.

their meeting employees, Rose. cetera, So they et at over Pike X:XX & tell at

terms you we with we Santana I'm ever In the in to meeting board are product. the have out anybody and from what product who respect board to positive of held terms in remain as of here second Jeff, hear heard yet, here last terms couple out we delivering will environment. make there and in row Santana we over but sure that see of West, we're at of why our our a from the on here The days saw here reason not as this was we

over You this the about be to term. got middle

Jeff Berkes

time, we've Santana our a space. X:XX Yes, aside, new and XX% of because locations saying setting XX%, mean, was that leased. And once I is standard is for this are is, office office the long portfolio our is having office been for amenitized, why the reason and it all

talked here leased. you offer here space can't and after we and six back Valley. leased. that XX% bit said But call amenities to that's office? Apple, amenities, had happened. think about three, in And ago, has we Labor we're on get your big Silicon why I others last buildings last get have change to We to you quarter's properties, when decision If the in people question your quarter. made that people Google XX%, can't our going the was the months And are a little this And at right employees keep back Big I fact out Day.

exit. or here, that past the the a see up If get stacked people notice Apple in to the headquarters, at you Bridge, drive off turn over out you TV is the live on and XXX the or line down traffic work Apple's there it you you XXX Bay of headquarters morning when get

space what way and our And when our the So demanding, which is with the size the what space amenities. is do from to in and systems state-of-the-art about to state-of-the-art what. need requirement are we of right has they conversation all what changed provide employees

there West. one mentioned Valley, if is Santana really amenities, Don and that. state-of-the-art is that one around only confidence just look the because is So that's with that building you Silicon And state-of-the-art of

wish I positive building. prospects we So, that we on remain to lease could say but when we can't, our

Derek Johnston

Bed portfolio, your All stay And exposures the right? how tuned. guys. out for so guess, differ Well, And Bath And well specifically you we about it's secondly, tenant that Beyond, I talk there? from list? thanks right, peers, you. And watch & will can you may understood mentioned thank and your centers

Jeff Berkes

the with Beyond to that's nobody is We to Yes. them, points the Hey, about basis single have Bed revenue. only of of digit folks points of Bath & material Bed the About were XX basis top else at thanks anywhere of Derek. terms that name. probably close Other them. No, list. were of Bath to of in is look points all our than focused XX exposure they on, basis exception

concern anything is list us. near not the really on for that's And there term so

Don Wood

you want anything add? to Wendy

Wendy Seher

of good, I three short in very we Bath their some pain, as buybuy of estate. condition I be exposure at would Bed are and from done with five I Bath have there look productivity & or would I company, we've material. I kind look comfortable all with that shopping years as And in that the three, one as a centers. four term left, although that think locations, in say, last when about of is or four probably over controlling Don have Beyond, Beyonds more BABIES agree them couldn't And we we've healthy that & what six our reduced be which at last, Bed And real the terms about so, so what's would Harmon.

Don Wood

which centers fairly low On low. so, rents. $XX our are or on average is given those are average They again,

Operator

comes go Michael UBS. question ahead. with next from The Please Goldsmith

Michael Goldsmith

you was refinancing higher, of bond growth $X G&A It and was XXXX interest the the bit of commentary headwind. percent a million some it offsetting the provide $X There's more looks wondering could capitalize takes. these a for my going be had less it about like evening. also the million that's looks puts about be could Thanks this about and for factors of like portfolio. Good really lot to helpful. is XXXX I taking questions. your a color if little about Dan,

just you a like detail the puts in more start upon XXXX, so on provide is bit some growth of model kind of the we that our of to like and we kind the can where know little takes point So model it? starting before

Dan Guglielmone

highlighted I've more We're on underlying the think, you are of need I that have going our comprehensive look, on February detailed months. we'll when middle in give that, the visibility provided with of to assumptions And Yes, process. XXXX, that's not some done that more we with And in our we'll budgeting call. provide we visibility. detailed, hopefully color We're more information. you three

And so tuned. stay

Don Wood

point. were it because for we’ll was this to It's too going a I a if thought on comments heck, had say at more that out of when preparing tuned. get XXXX, what I laugh this at But try at we funny. was stay point, given he Dan to much

Michael Goldsmith

kind that? rents able you collected least prior of that Are provide that. period so appreciate just around kind at where I are, to can quantify of we

Don Wood

Yes.

modifications we Certainly, a think in probably I plus going minus. guidance lot how $X think placeholder tenants. to more have a Use to collect there. to to We'll is XXXX currently that's what rent we this previous it's now. and year thinking around related was XXXX. as that million less probably or what's that be rent, about period last prior than million for in $X that to it we're with $XX to deals million it year, and about about prior that period COVID expect That's impactful

Operator

go comes from Mcginniss Greg question next Scotiabank. The from ahead. Please

Greg Mcginniss

guess. I afternoon, good Hey

Is occupancy And residential year-over-year. saw residential, assets? spreads decline a to Just comparable of what then point level basis looking XX the you there? point also are seeing any at there in

Don Wood

great a question. it's Yes,

So about, about you Fed is rents Assembly. what that's particularly pushing of know Greg, hard,

it's we with XX% be and the And I Steve at? of – and fast you should a just say fine. lease we even occupancy, portfolio so two because most just always up so to rents leased it going Sakwa's it. building question about filled. earlier, money back leasing we not find the getting push about what or point making the as or this were It's funny is It's when up equilibrium so happened, that lost wanted turns to which to the that as

the so where be, where they the range. can more where And they relative notion should always rates the makes comfortable XX.X% be XX%, are, to me of in occupancy, testing

For leaving XX%, XX%, feels the it money table. on we're like

but at growth, there's either they're So strong have don't or actually at that. more look Assembly, into strong. those that Santana than to into nothing numbers – it I Extremely

Jeff Berkes

past been months work to Yes. starting haven’t to But contributor Montgomery incredible year-over-year in XX lifted been at have incredible. and Santana Also we that the stabilized our rent in low where do good The the recently been are company. in just lease kind We growth because the one County the growth rent and here through of so the that the Montage hand great are double-digits, revenue have tied mid County were managing our has Greg. Assembly expenses we it's building been Row, trade-outs and doing assets. a over a year-over-year there property at stabilized Montgomery bit has at restrictions revenue job back rule behind the restricted, a residential of

Greg McGinniss

then up for the thinking And only just you. quarter, leases XX rate XX about points looking occupancy, Thank represented Okay. potential basis occupancy, new though. points, tenant and retention leased of was at increasing basis this

in thinking towards XX driving to out more points move prior So is tenant what's retention to look comparing move-outs today? potentially during And context, basis challenged QX, how as we economic the years? environment, that

Don Wood

before, of the don't There's occupancy you a as lease up we think see because tenant way your rollover, sure reason I'm lease fast unload it kind you that the we we it's something is is have to that but you're still that right. overall not is space that in And the volume for bunch the is it yes, lease should it that question. still going which in you was often, said And there occupied occupied. if already showing as Part show a there. premise of I that heard

move to occupancy number. the that bigger occupancy you component diluting any number. if that than That's not it's So are a going will, change much outs,

about. got to. for you that head. there It's question the So I of was anything argue I sure And that, there to part your stuck when you in I'm not said caught of in that to kind got answer me else my wanted

Operator

Please Craig from comes Citi. question ahead. go Mailman of next The

Unidentified Analyst

is guidance wanted on pieces to Hi, of the that? guidance? there that any I go moving are to where Craig. Seth is XXXX onetime pieces kind your the this in back increase just and for of And type to $X.XX

Dan Guglielmone

third for XXXX modest our stronger to – the Yes. roughly feel for though quarter. fourth term period for fees, we're just and quarter, in rent over there's With prior which I necessarily third we quarter as items regards think a of outlook significant really onetime – except guidance pipeline, I occurred outperformance and the there, continued in and quarter, buildup, kind tenants third into higher fourth see don't the some just rate will that. it occupancy strength with don't to It's a continued trends continued taking the with percentage offset outperformance asset to our our interest in then, the and regards that environment. in quarter that expectation in quarter possession continue stronger third strong obviously, of rent, was space

Unidentified Analyst

the specific for tenants straight but were XX%. of Page up anything due leasing on Is new rent And is driving Thanks spreads that? the like line X%, on cash the the to type that XX, then color. quick is was like another there question you're summary. looked and the just to? this Or comparable lease It

Dan Guglielmone

get rollover as new you reflected so consider at market think between getting you you are collecting way? and number and the maturity along And cash rent. straight we the at bumps that is basis rent rollover you XX% the line important only straight getting. But what difference we're what least a in. not the you're are you component line on zero that's get rent And an as bumps rent are is get when in the that a least to on to about the the that's rent rollover important Well, ramp-ups think the

Operator

go The comes JPMorgan. Zhang from Please ahead. with next question Hong

Hong Zhang

Yes, around XXX I spread to lease-to-occupied your typical points. basis is how about talked you XXX think hey,

about I was year-end. where think next you commencements wondering trend we think by year, As to spread could that

Dan Guglielmone

sense of because it's really we That's will lease tenants can one and will tough predict to when get to mean, a where go. I will rate guide the commence take one, possession. hard a leases

occupied range. into the our towards up think XX%, So mid-XX% the up get should – towards up we into rate

Don Wood

By the year. of the end

Dan Guglielmone

should goal lease percentage goes holes more upwards, that back over the leased over continue we to components, metric time I occupied can And to the get the difficult we the continue is into us But a have is to leasing where bit in for bottom what it probably and but much a how frame. bucket – time. to at forecast. narrowing of our time think do little and more normalized from XXXX, Where the that both is in XXXX level metrics, a

Don Wood

I to getting construction dogged started a about. do been sure want permitting environment, et the one rent specific is COVID, make since the the getting years the make lease logistical all process, this and is tenants, all The the supply three process. signing of on what coordination the constrained tenant for That's another the based – and cetera. between point this has difference really problems, past things that industry and tenant you're

as get that and tight to because to is what COVID, signed time over between the that lower have getting that means really, can to tenants what rent start doing lease the time Yes, because rent and important. number such So you suggests get want that really get started. not took should objective was the it we're wide time it volume and it be that as is that me that over. you be exaggerated And that lower, necessarily to were that that's the important most But leases going is to not because a in be thing. to

get an us kind is points. basis it's that to it correctly, to to that So means just XXX what but sure of so want on get down important Dan, you to and – absolutely for overall I answer how why basis XXX make metric

Hong Zhang

purchase cap interest rate it at the right curious you it to and agreed. an was now? decision option what if remaining purchase Yes, I to the kind of you have about that at you you could looks like option And Escondido. think talk could would get

Jeff Berkes

for had time very their that a Jeff. approaching flexibility years in long asset asset. partner on some it's a exit the from XX Yes, that We've needed

a So next out. exercise the option us gave structured year to deal to should them we it take that and go we decide ahead

win-win the Escondida of so for the I years, great stronger over used think little bit a has that asset to portfolio the one in was the growers been there. us West property a rate of our in upper the cap Coast Xs. for we everybody value

Operator

next comes from Sanabria BMO Please Markets. The question with Juan ahead. Capital go

Juan Sanabria

Hi, thanks the for time.

is NOI expectation guidance I fourth think the guidance the guidance, XXXX? noise and on on ex the with for curious curious year-to-date just that's is for know what raised limit implied delivered any has the been of Just what you the term fees exit of kind what you quarter about upward there, caused and raised the same-store implied but

Dan Guglielmone

about, Yes. call the term it, should The headwinds number X.X%. and that quarter with which period did we X% we is report, this fourth – what at in to rents. the includes from line X%, fees quarter, prior In be

year-to-date to mentioned, we the is provided for X.X%, Our X% number and I X% year. which

guidance. the what in the obviously, to implied X% quarter overall X% will implied fourth is So with is And higher. that what the is be is

more X% to than prior higher in X% rent range, should continuing this expect to fourth last quarter of we probably that the expected – to We be of because than X%. higher period X% year around be in year something the

Juan Sanabria

– Great. for Thank couple shop different base, tenant you. then guess. this asked ways, has But you're been of small a And at XX%. just I basically the

more tenant go. on was, small And like national that? of remind And that kind us local what the or tenants? just prior could So high you behind of that is local of peak versus confidence tenant how credit what regional the out in color could any shop that kind space,

Dan Guglielmone

of We’ve on was credit we’ll tenant try XX% Wendy answer achieve and me shop advantage pre-financial But reasonable second. time of to that let The side. note. in that of part base opportunity I a on think advantage the Look, let which of I’ll taken the answer first that targeted level XX%, around back small improve the we’ve is I And of the kind over the was that crisis up taken opportunity our so question. forth. shop a your and think peak, small

Wendy Seher

pretty to I – knows savvy shop the we and that And throughout like When time. what result small we a about the think get experienced difficult certainly a the everyone through pandemic. is failures had, is, shops, post-pandemic what how small did

pretty that had than us I vibrancy balance color really are the small brings before. and better maintaining that shops to in So they’ve are always Many that think stable the active their certainly them our local that with and of locations and we ground. they’re sheets we’ve sure quite making community growing, on felt need. They the have tenant

small the on shops. bullish I’m So

Don Wood

Juan, to Hey, to got something I add this.

I they that to As with do have the what of have space. premise here to it borrow poorer a money I because local tenants that are question whatever the said, the tenants regional lose than means have from is we found they And by and money large a not tenants. premise notion their local credits there’s have families, They’d places that they to borrow do do keep from and they going. other problem

and reasons. to lose history especially of we the should they to expect would don’t those in tenant why places outperform those here including Wendy’s here, to want is small if is shops. point So any They’re local the indication as because shop, maybe that

shop been effectively of tenancy that has not whatever robust to where Particularly basin spot. they total. influx solidified new new and small lose in coming do in can out a there they money, a and So COVID complete

Operator

question next Haendel comes St. The from

go ahead. Juste with Mizuho. Please

Haendel St. Juste

with active a And to, future probably Hey, return the I source made good before those? the some looking you’re your pipeline some of pretty disposition they’ll be fund assets selling signals which Can somewhat – key some and talk evening. we uncertainty to back there cabinets the for you’re understand allocation. effectively redev. on But here, should Don, funding? some bit some I opportunistic looking some like about of ahead have macros and capital start you you there’s those you being wanted good of you potential. in know to of to earlier alluded looks expect a you go on I Thanks.

Don Wood

dispositions And I a it’s be source question. and funding a key of do, Yes, to yes, expect it. great

a about And we talking big source. of we’re that unique it’s some getting be pretty now places these hard is things we’ve part a them use established. again, at look moving that’s harvesting now We’ll critical and that’ll fund. along, that’s the incredible funding of the so that premature product sense? properties in that the that it’s component value established the on And consideration and have. of it how residential to to any and in our make looking a mixed is does they’re One And created at such that such

is building, we understand life to science a see today. of funding dependent localized much And place it case demand. the where to when Obviously, very building want capital than making that cost on to very that the the capital, to obviously, it are. venture is look capital what a at deploy for development Secondly, the deploying – want gets requirements in we the better of Assembly,

done will, of And most. particular more terms localized making get in But in that decision more you process. of to redevelopment so, very the assets, again, by I just redevelopment decide that the building capital building, by flexibility think how – to we arrows sale then have quiver, and our if

Haendel St. Juste

life resi. you where share to focus And would and you that. sciences on perhaps consider in prioritizing Could more entitlements there the life appreciate for Boston? with we there? given update some pause sciences office redevs follow-up the over Any supply growth or the life Great, market or you that the Okay. see Row See Assembly anything on or you sciences have additional Thanks. projects. in

Don Wood

No but to process for one for entitlement that just us At completed. this tell it’s very update I the that you adjacencies to to the that talk important can point, about there. not is building,

happens project pause next they of that kind land extent life what up we to financed who on to see again. also will, want during very are important much obviously hard leg us ready I move a us science working whole give happening is if the when to to the you this very forward Blackstone with what’s We’re that there. to period could

So the is that that what’s us we’re not one with happening those you particular us that thing on get at terms I around know They’re very, decisions. time. based of much very in comfortable can formulaic revenue-based

when go to see will. time to if more there, what bit and So you

Operator

ahead. question next Jefferies. Please with go from Linda Tsai The comes

Linda Tsai

much completed Hi. for… is leasing How

Don Wood

out Linda. You’re there, cut

Linda Tsai

for how completed is usually Sorry. what’s and leasing said of the XXXX time I much this that like year?

Don Wood

will saying, I’m effectively or that we’ve much that year, in done of sure simply an million start not She’s the that. estimate X.X million give of XXXX. of so, X.X this how to

Dan Guglielmone

X.X XXX,XXX As number. and expiring has we’ve don’t about still million regard X.X sense, And we anchor back obviously much specifically with leasing that makes how of with in today, been million we’ve Probably could I have up got of specifically or the you follow to total. leased. that specifically got done. we’ve that got

Linda Tsai

for how then much Got expect next like should and property insurance, year? utilities repairs it. operating costs, And growth maintenance in we expenses

Dan Guglielmone

Yes.

I time a to for to some process, tuning today think That’s assess. getting that. budgeting us question of kind spend tough we need fine the through

and that when done some February guidance ready We’re provide of in hopefully on and – that we’ll we formal call. the more we’ll provide in January, guidance have

Dan Guglielmone

mind, of in faster Keep most is it to tenants. the

Operator

The Credit go comes Okusanya Suisse. next from Please question ahead. with Omotayo

Omotayo Okusanya

everyone. afternoon, good Yes, Hi.

in leases? the how slower in regards base seeing you office. give cycle, Just you kind regards behavior months are wondering Are to you us tenant what price side? if for apartment curious, Are Just a color more like some of flexibility six at you this could us overall say, on to to given XX concern of the asking could sensitivity in give see any asking leases? for about if they kind to color starting Are versus of point customer shorter your more just of the behaving is they economic specifically into ago. moving kind

Don Wood

inflation a I’d of space those it now – to go I’ve down Yes, The And you’re always of desirability of side, few that’s very behavior that’s difference flows to cost? asking little for retail the it say in period and question the a uncertain There all let in things a leases on because bit. the the getting does. the space, going of the the is, stuff it’s noticed process that getting why looks pipeline – as that way. that good as strong along what’s there construction about. terms in me comes the down And that little

a That’s trying to got that of leases with but do It’s the of from do it will to getting primarily, to done? longer to underwrite with a construction done. get does – potential so, everything behavioral got perspective, nothing costs it And effect demand. math take not

In seeing. a where going demand seeing interest and attractive. are, mortgage they at the of the look you’re markets period to you’re in make just respect went awfully, rates here in the the we’re and Boston time spending terms incredible It’s numbers is where in It’s awfully home apartments apartment with the I of side, apartment why that strength to of at to over that thing the Row. there. Santana again, it we’re consumer the to offering relates in the as here same here of we’re product terms

to household to it So, for have that me shopping consumer those and are struggle that – $XXX,XXX can is couple have you, $XX,XXX tell income. household where ones the consume? than always $XXX,XXX I mind we’ve centers of of means a comes the that There does are centers demographics doubt income. our down got of shopping more no below the – in that of consumer

the So lower standpoint, I so a We centers, difference, shopping at certainly consumer. that’s few how a at centers of is couple of from a the a that’s end, shopping demonstrable portfolio have kind our high look very this there’s and quality.

Omotayo Okusanya

Anything apartment on the side?

Don Wood

the whole of no, minutes demand. very conversation. strong the X Yes, last No,

Omotayo Okusanya

All Okay. you. Thank right.

Don Wood

Thanks. Yep.

Operator

This turn closing to I concludes to for the remarks. conference like Brady our question-and-answer session. would Leah over back

Leah Brady

We look at request. reach many me today. us of with out for joining forward to meeting any seeing you Please NAREIT. to Thanks

Operator

has concluded. you presentation. conference Thank now attending for The today’s

You may now disconnect.

Federal Realty Investment Trust (FRT) 4 Nov 222022 Q3 Earnings call transcript