FRT - Earnings call transcript Q2 2024 | Federal Realty Investment Trust

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Operator

Good day, and welcome to the Federal Realty Investment Trust Second Quarter 2024 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brenda Pomar, Senior Director of Corporate Communications. Please go ahead.

Unknown Executive

Good evening. Thank you for joining us today for Federal Realty's Second Quarter 2024 Earnings Conference Call.

certain Officer call President questions Wood, team matters Dan Chief and at may Vice Chief the to Officer; Chief of Securities G., Investment on members Sweetnam, of XXXX. Region President, Berkes, available are Jan President; of Seher, Jeff Chief Financial President, Officer; me other remarks. A and call are: that reminder on the Act our prepared discussed President Executive executive that conclusion Federal's this Don be the be take Executive Executive within as Executive Wendy Joining of Vice forward-looking Treasurer; Vice and Private our Eastern and Operating your well the Reform Officer; to deemed as Litigation statements meaning

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

such reasonable give and attained. Although performance in reflected that expectations are from the can statements, in Federal our operations can expectations these future assurance statements Realty's information forward-looking on believes and Realty its differ Federal materially we forward-looking based no may the be actual assumptions,

of XX-K release disclosure discussion report that our package The the filed factors supplemental may that other quarter risk documents of our we affect tonight, second on turn issued Don with over and call our earnings our provide reporting a our in-depth will Form and financial annual financial conditions I to more discussion and to results Instructions] And of operations. results. that, [Operator Wood Don? begin

Donald Wood

and good Brenda, everyone. Thanks, afternoon,

Monica the are apartments $XXX and our of of the waiting remaining interest quarter assets to quarter. transactional leasing tough feet on X,XXX volume ever Commons the buyout gains analyst Promenade in quarter at the minority list resi up leased in Not Santa XX% quarter. get million Levels Street Darien million record an a period. Quarterly consensus Gateway, Virginia sale with acquisition activity on in when occupancy income up basis in per to for California. Yes, at ago. All-time XXXX-XXXX the of respectively, $XXX not with respectively, CocoWalk. to record product. balance the bottom. Third of leasing last comparable million. the $XX this the Panola, expectations, way, with of second $X.XX, last time and any our volume square the versus internal the XXX year. XXX,XXX comp to seen are mention XX.X% residential So the to is and year highlights. in. Strong share pipeline, a All-time our points, continued Panola in FFO most properties, both continue as Crossing And stabilized a Vista what at square X here from least had $XX X.X% Strong feet occupied July with The acquisition of year. Darien, a we very strong XXX X.X% very and New our quarter, comparable a exceeding quarterly in environment the since expected deal on the lease leasing momentum basis, was operating to see top Connecticut based and By the XX.X%, with including million on the

X% roughly Promenade, is over our this on Bidvest leased against year share growth per X-year, In over period in year-over-year growth the X doing the increase been those still the record-setting results. But Shopping start that the year. Contractual Third that to the in of were Great sit so include top places XX% this. The they best like of what setbacks. -- of the earnings, and portfolio-wide overall you'll the new portfolio has XX.X%. rent to due and this growth with for so quarter room at picked straight-line previous and important the bumps the growing so XXXX color those we Enduro stores well or in leasing both very comparable muted cycle. It's out. In of impact X-year, small little entire leases and or of full truly recording more all next expect of occupancy are Gateway X at to the previous other the over on second quarter, bringing its redevelopment retail is way company's and to acquisition still business. This to X.XX% impressive of bottom rent on than has setting impressive a last lease XX to XX% starting the are But occupancy. XXX great FFO the give year more contractual still portfolio-wide well-leased history, new XQ last points but per us. pandemic It's quarter, thanks second largely steady there's financial XXX XX-year basis averaged NetScreen. anchor so quarter XX-year, right lease a the Yet Center. at an of the the any the long X.X% the large volumes, the $XX.XX done has more impact numbers up a all Virginia rent why results, basis shop last we're XX-year in more open be final on planned with last leased the stood on a that on committed them because particularly that way, And to is percentage, X- rent deals, years, the foot compared sale the makes growth by of many our grown me on company fiscal past momentary crisis deals and likely X, second. Compare in our and the basis Both the less this likely by commercial of of see has Let XX second quarter. of been the this the years, to never XXXX start Street line at why over months. $XX.XX a leasing actually you to representative deals rent its XX we average and years. of of occupancy only of global

Our to percentage anchor there's gained XX lease and at basis since here. alone and points sits points quarter XXX-plus XX.X% basis last another comment

Third X Let transactions me Santa a with or quarter, this mix. the for moment of Proman sale the talk starting Street about

this trust relationships of with over tenant a did. that and type over what company the all, of a a that unlevered for project this every great a benefited and into lifestyle-oriented XX% period been First IRR has investment years, past XX mixed-use for the we springboard

dynamic asset California Virginia a various lost West past and and acres the in of years, Merion Santana one-off the sale there old X host fits much purchased newly the & building building, late the East more the spoken enable months, portfolio income Bridge building, to from future at Over on like outside proceeds past of Reinvesting of Virginia we the the long-standing seem meetings active those couple sits with fully remainder Township not Coast Coast continue cloud the Santana Gateway a $XXX of our Row. residential this like few and in complementary events with retail. That of prospective is over at reasons to our growth other center Bay developer Lord growth deal possibilities signed from sold and no-brainer. We've at at on one square and so Gateway to year. to will time AI-powered of in with to tenants million. first $XXX development including has use bad. The for about there an last Federal's floor a done the $XX role a apartments We're return shopping for over and acquisition the XX which initial don't selected been local future report shopping with database Shopping generate it negotiations $XX feet Taylor million deals. And new West the foot. from Canola a Suffice provider we East should underway through confidence when with of our Shopping significant managed on team for Lower complementing over Bisto $XXX there. in for week, and this with Not Center create closed ground million, million earlier XX,XXX low square will of at we'll in continues This Philadelphia, grocery-anchored and our dominant on our Xs, XXX,XXX grow and the a Northern successful cash-on-cash foot floor XXX next most state-of-the-art headquarters it and either. Lease-up say, of for value the construction new Virginia repeat placemaking was redevelopment. And on demolished, material have all centers. the re-leasing to Belkinwood will Commons and is to and Center development Canyon us few regional excited be to acquisition the Crow integrated them. Bay on be with management nicely West years center

closer to in Realty X,XXX a striking. here. could new $XX entitlements locations. It brought still around doing, Bellekeno, to week the may over rise continue beautifully doing the after reimagined existing and a next they've are time redevelopment shopping a Woodman stabilize and to Foods who comfortable our Island addition and listening, of continue costs in have the residential see by best Long economics expect as last closer right know effect center have they've yield work cadre joined new X% pretty Simon's as Federal or tuned. By Mall Yorkers Walt and Ulta, Huntington, including and where our and we projects is as represents Shopping opened at dozen Center please set in tenants, alternatives for budget. worthy million stabilized stop to now development way, to before We grocery-anchored reason door. and pencil. to these design brand-new a is the powerful those with really nice It's in setting Stay been been REI, getting completely to rents on of The of on active units construction be that Huntington might that to thinking interested landscaped others comprehensive Whole assets. and redeveloped process Huntington dining complement be execution. The open-air just on inflation with New

remarks was in these I team the this up call. them finishing week, prepared was preparation I reading senior for earlier to As the in

for Virginia the deploying acquisitions, of X-plus we've $XXX Plano, He's right. Collectively, $XX between they're meaningful, a percent transformational completed a needle Pizza and decisions Promenade sat new New sale. capital portfolio. million misuse of President, executing of how to the XXX,XXX commented with allocation in up freed relative All as wanted of company. $XX XXX feet the prepared our my million XXX capital results underperforming future space given to size leases significant past the a Third this back all development Our while this yield. We've the York, Street and say property Jeff days, comprehensive square cementing made over and bright. That's million they and began of in Berkes have I future at feet to redevelopment XXX,XXX XXX been and remarks cover over million looks total the of $XXX I'd balance Gateway growth. move I square commercial mean nearly of afternoon. reflectively XX capital in

over up questions. opening Dan before it to more to So it I'll granularity provide your to turn

Daniel Guglielmone

and Thank you, everyone. hello, Don,

a driven to quarterly came a guidance Our for portfolio. Primary our overall was property FFO top simply second second POI performance level and which the XXXX This the range strength record our for result $X.XX. expense drivers quarter the for acceleration our was $X.XX strong per operating growth against quarter tough of the portfolio, across comp, by our in highlighting in reported and of growth, comparable $X.XX our our of a share strong the of quarterly previous occupancy FFO, residential controls, fundamentals POI at excluding rent the expectations X.X%, impact cash levels and prior min a rents a basis. total on period GAAP. revenues see cash X.X% up numbers as guidance was strength X.X% X.X%, in It's a are for term on basis with period, basis. continued will and X.X% Comparable GAAP of fees revision you comparable and above were on that's result. Comparable the and upward property Both portfolio.

the you increase rent largely quarter Solid mind XX. XX.X% in to Bed XX.X% and increased occupied. throughout leased Bath March XXX the points occupancy and when metrics Beyond over quarter. Portfolio basis was Both perception that results keep paying in in second & since

that signed not As we pipeline pipeline. Also amount result, continue space. vacant yet an in a as come leases portfolio signed at of $XX noncomparable negotiated robust currently note $XX the be rents million a from a booties stayed leases occupied for the in from online leasing million elevated to of existing rent additional significant with with have

list the open troubled ahead. move tenants points that paying our quarters given that a tenant between to proven to to team we XXX leased target ability exposure the get tenants coordination watch to current and With spread lack minimal, our is of tenant over none, is our rent second of toward our for and basis and occupied expect

As our rollover capital. capital highlights occupancy a balance drive roughly focus in combined a small straight-line rollover tenant of rollover increases rollover ramp-up we from our with level again, anchor contractual well ongoing positioned net targeted resulted lease from after over our in increased and to and stood last straight-line and quarter, occupancy the lease leasing X.X% blended and extremely we XX% XX%, controlling the of the metrics strength leases cash to XX% which year have of and year-end XX.X%. on The shop are perspective effective

Now an liquidity to the update balance on sheet our and position.

$XXX billion million refinancing facility we $XXX to our redevelopment pipeline. of liquidity liquidity $X.X start our hand. This $XX XXXX cash roughly billion of on $XXX and of XXXX, $X.XX remaining net from and credit the only for available in-process million have successful spend million on against activity about only balance redevelopment material stand until expansion We Given expansion remaining spend XXXX. needle-moving to with maturities of and stands million no

Gateway metrics the a targeted annualized Virginia us the XXXX along also charge mid-Xs XXXX we in reach with metric of Gateway $XXX FFO expectation, as half in show the for driven leverage outperform midpoint is to in underlying meaningful June Street the represents improvement. QX revision of our the by stronger in of occupancy again FFO solid expected, metrics come increased a to Third the EBITDA from our and revision XXXX. XX upwards of to EBITDA demand with the completion the the of equity performance second at at as respect Santa Monica XXXX. This the buyout line per of us to access higher than acquisition FFO expected at quarter. continue tenant to a With portfolio Fixed growth to as midpoint to upward markets coverage quarters well at Virginia of end that acquisition and CocoWalk, face fully at quarter, $X.XX. to our metric environment XXXX, online. And at the has which $X.XX, growth XXXX. and Old Promenade continuing in decreased of to more interest guidance, X% contribute faced this debt again year, midpoint combined for implies to the in with X.Xx. in this here million, -- partners refined share with X% and rate and will sale That a over in net the the improve the That net Santa raising This the than course range. Strong Monica, in upward behind upper incremental only Vista $X.XX first both Crossing, continues bottom to and stronger pace with here accretion and of guidance X provides X.Xx range This should are improve in modest EBITDA over and but which X.X% $X.XX growth sale XXXX. provide growth at XXXX

transactions. X these only reflects guidance Our

prospective guidance As acquisitions reflected a in reminder, be our will completed. when and dispositions

revised X%, comparable comparable midpoint. also fees to and at are X.X% X% excluding period growth, We term outlook -- our revising growth to prior rent upward is the

fees, to our X.X%, term lagged. outlook at have leaving given are X.XX% comparable year-to-date is growth as We

fees as assumption to million for million $X million to term million $X As to our $XX assumption from $X are to as we adjusting million $X well G&A down our such, million. to downward for expense $XX

continues progress XXX and expected activity both XXXX. impact none this Santana for our While leasing Meeting incremental of forecast West X is at to Street,

come evident. to signed year as XXXX. additional more delivery benefit in get the We on will leases dates and clarity that see outlook overall More progresses, on the becomes

all are assumptions basis be on reserve We guidance of XX Page our credit XX X-K. of found and maintaining can expected points other XX to our outlined

Now Directors basis, Federal $X.XX has share let an again, year share per per highlight go Realty's industry $X.XX me common to increased an dividend. The REIT that which to represents Q&A, dividend of we annualized the before declared as increase in its we yet on years delivering or a a quarterly the consecutive as stream or XXth Board for dividend shareholders. And we've XX-year stand the common signifies our XX with king, increases. to cash for more the commitment only operator, dividend annual to open the up going record flow questions. our testament stable, with as consecutive REIT that, serves status a growing line of we to which record,

Operator

[Operator BMO. Instructions] first And our from will come Sanabria with Juan today question

Juan Sanabria

just pricing more you changed? a looking of in cap that of we before and could the rates success environment competition type John, year-to-date, assets that at focused the still have bogey has hoping, for great little Just should back low in with kind acquisition of the about talk bit come you're all I expectations, less the but or general larger on kind our assets of think have X% minds? you're

Donald Wood

kind Yes. tell more little jump they window and of window sense. It's question. Gateway being so took a we Virginia today, to about can come it be if No, makes what you that in the clear up We Crystal we through it that year than a expensive bit. bought signed would I very when at. have able a Juan. in the the fair arbitrage

in yes, still, there's between Yet, that we've them As some you assume more available absolutely down, look can close know. the -- make direct money there should of should out got like or you than we interest a mean, overall some that's I what assumptions hopper that But expect, of don't coming rates not, cost sense. Again, that. working things the product with the they whether you I is. sensitive nothing would there's correlation and

So inside X with let's looking is same happens of bit that in terms feeling made interest frankly, hit that a see the product on. I'm much year in rest of others far, window ones now. right that little so the assume we've those where we the how what the rates at but Still great about places, were around the respect available. to maybe built with we it

Juan Sanabria

Great. kind leasing incremental And of just then at Santana. mentioned you

kind today, been any Cisco? there's that that if Splunk of we the leased update about should specific you've asset? from think how 'XX curious progress interest is where date with and leasing for made to And Just in capitalized

Donald Wood

to that? do want take Jan, you

Jan Sweetnam

Yes, sure.

the West XX%. new It's us at Juan, with above well bring So tech this to company. leasing Santana AI-based going

all letters have We and quarter not But with able the to about back We're first of XX,XXX sign forth now. of of demand pretty of of that start well we'll actually there. We year. them. beginning next rapidly think right year, leased end working the We'll square by may the get up another of to intent. feet I would see. be pretty

We're pretty with Splunker, no see floors. lease really, good that's comes And strong are. smaller activity, that. breaking what seeing on and plans So or Cisco off, tenants. to demand. And where we'll what still their have ways really we're whatsoever That update seeing

Daniel Guglielmone

the regards with to change capitalized outlook. have of And with in kind XXXX, of terms interest we to regards no

any on more guidance But I still front. we think to before we'll I that provide clarity. things think better getting in fall -- need place we're

Operator

And question Fargo. from come our Dori Kesten with will next Wells

Dori Kesten

I Can points anchor. shop close end you you're may talked on I there believe think update anchor. give shop about year small and that year XXX an see. already and about this on us the previously you small your perspective where about basis occupancy I And XXX You on can on pretty adding of

Donald Wood

Yes. through what question, to Dori, because that I we yes, expected assumed. our blew we assumptions this respect with

year. I so it's I said, points think on there's I anchor. think or As more XXX still don't another go this basis to

really be a end there. On effectively not between too, which 'XX, there, expecting looks but little think say able to more pipeline the go man, was be bit by it's very strong. -- it's to of there the might small I I to shop,

I for So if news. that's don't all have number a know good I you.

Daniel Guglielmone

got in That's mean executed. ballpark of get year-end that obviously, open folks roughly highlighted I estimate. I XX.X%. quickly we occupancy No. upon prepared to what revised already my remarks, in dependent a can terms level our we how deals targeted upward And we've

Operator

with question And Goldsmith from our next come Michael will UBS.

Michael Goldsmith

slowed Same-property the difficult though reflects in more quarter, the sequentially comparison. that NOI presumably

that Just get given like how property a Is the X% the high now to right kind that X% like NOI of assumptions kind just talk you getting little back to year? that some expectations there? implies a on return of like there how bit range? on through same to range. outline the Can like about the just guidance growth you back that to the of we're back half And mid- like get high of you mid-

Donald Wood

Sure.

Got move-ins. -- it's was it really the end in got think driven largely weighted be going of I terms occupancy. of to by little quarter the back a

So during quarter. we in didn't occupancy the think, strength see, I the fully growth

that more year. expect to see the in the we upper of second of so third I in to kind Xs mid- be half the the in quarter. And think we'll And fully

I year. think assuming a occupancy half second are of relevant in rates the it's just stretch, big the not

Operator

will come Steve with Evercore. And Sakwa next from our question

Steve Sakwa

the August X, of in that you debt here, things are the sit lot you really as have don't guess any bag, and of you've to a got of I speaking Dan, and known kind guess and range to mature of us through FFO year. low the of help of just this high the think range. the end getting FFO end factors I kind of the swing

Daniel Guglielmone

think I all end. factors our Look, the that outlined on us different get I the can that upper to the lower guidance end we page, and Yes. think

us the towards top get range. is driver I the big think occupancy a to of

things of road other more kind probably it been are have middle expectations terms revenue, far. that in or year are whether percentage there, the our parking be whether this the of on of think what other so rents I

back. get really based don't lag upon Our are term year to we tenants space where because want candidly will this fees

recognition closer given to we the where also, revenue and going cash Timing -- of terms that I swings probably some some of think bottom and when just our of to approach have tenants that's we look, of and timing. between so these up And can sit range pay today. cause in end very in quarters it we a So forth. conservative to coming is

of think, also, driver us we I be opening to to of top continuing how the and getting in successful be beating time is perspective. And it's that a a it. And to part rent critical or on then big certain going have floating of tenants have exposure the one? screen. range our we to Do ahead we of degree, how get be can again X? time more also, that's do we think So more mean get rate we to many we to of going really commencement up date have is next -- But some I bit little that's I have rate further do cuts? a impactful that's us X year. -- Do probably are a from

Operator

Greg question Scotiabank. next from McGinniss will come with our And

Greg McGinniss

you taking do Or they retailers new Are seeing or potentially space is Based that retailer tenant ladder peers or growth there's under any this be anecdotes is to facing challenges either of plenty up lower-end into right pressure. don't happening? some willingness now? And conversations there this just the tenant and on consumer about guidance out well. immune care socioeconomic the as seeing leak sales, inching at of

Wendy Seher

it's Greg, Wendy.

over we're seeing product types. that are any We the diminish demand various not different our that leasing seeing in way

are or end on tenant that the So City consumer. it's or consumer that's tenants on end impact our I Party look lower they those -- you sensitive, out that some with some lower portfolio, if that their even in of some that Dollar McDonald's and the tenants reports are varied think Tree as at just came whether

we not that. seeing So are

in In looking and all fact, more affluent, some end with them, any and I of day, that mixed demographic Starbucks you is our out. XX-some that impact the And results other markets saw locations our of discussions at come we we have not were with was because demographic. their seeing upper that on sales having our we're they've had

not $X So -- our so showing in markets. there there is fatigue are in the some but latte, much

Operator

from And our Sandler. come Piper Goldfarb with will next question Alexander

Alexander Goldfarb

Don, Alexander it's up question I'm and have but keep not new supply. higher to We mass. for it's same is XX%, today, rents thing, XX% the would sure justify still. a that name you new to hearing in on which my be supply

guys taking between to down I'm at rent redevelopments? the redevelopment curious, as needed So the difference and centers you portions supply do are rebuilding, looking in rents not, And just significant redevelopment? you math pencil what basic to and at of new same explains look needed if

Donald Wood

No, Yes. way. the Alexandra, by and you're you I'm not calling -- Alex,

You're Alex to me, buddy.

are couple it's a think of first let that. You've pressure seen the got to on with we starting is a restructuring -- things including we've prices see that since about, long thing costs. -- and And that to because start me prices that time been construction coming down,

things this profit. only things certainly starts. rents to given not which is to pressure, that the properties, particular, to of are a -- whole lack more the is equation. And growth. existing to changes to Bala. come willing very when particularly, we're There to that so redevelop, definitely it our your about be it are needed, the stuff a lot the rent, And that depends do and important would residential cost come work the actually like lumber, on what where it's then but obviously Whether down lack we they're would depends number there of when we housing whether that you you of Now added the under rents talking like incremental that's starting of less are developer's on see in profit the of take

more And to country environment sitting sit a housing that residential is mixed-use more know centers there's add -- to throughout or what clearly so you there we've I've seen create press globally. and to you shopping you use you're on mixed ability And of -- we're like you the saying our the when to rents. there needed there, them told up

are Jeff of grow, got continue really add important. I'm his be to construction talking today you, are So Jeff. combination to something else tomorrow say, where costs so ahead, up are rents going to and to is putting coupled Go going will finger, he's Berkes the as that. those Alex, And with

Jeffrey Berkes

if this getting Alex, from to. coming vast of trade where places the best now you're definitely of vast, use single-store we're are majority our supply not into is what say located about the would which Don's and a retail service -- is highest about I thinking the the Hey, more areas, land, we competitive parking concerned retail

building like little something a Our just bit of locations new trade maybe become in areas supply do see see starting that. viable. the of to themselves lot where a lend that. don't an getting densification, ground we And in business, those we we or competitive of But in terms apartment economics are us for more retail

we of supply fact, and us supply, a is lid a on maybe lot pressure In giving with pricing which downward see on power retailers.

Operator

from question Spector come Bank of America. And next will with Jeff our

Jeffrey Spector

just what portfolio like then category, anecdotal you the bit Maybe a trying concerned comments again, executed. about And are follow-up categories but over? bit people the had Great. demand you a you Can restaurants. lot you've you to of little this about -- questions seeing point? comment are And leasing I you're at share what a talk talk more that on know by there throughout all some any can you're on lattes, I on talked categories? little a fill of a more you guess can about, that other the in restaurants leasing

Wendy Seher

Yes.

pretty types. we think spread in it's of still of again, in see, terms in our wide terms property what different I categories,

this the strong. So part because looking our that was at growing first we're metric of year at multiple is There's to remains centers. I and sales the one about, sales we're look what the first at. year AI our when visiting check at concerned of from to as to of who's last looking another metric tenants. of shopping And our to is part to look the points kind productivity health

well. fast price what just focused Specialty many I that casual That's maybe well. in been was we've So for we're category seeing on restaurants is there. I booming looking, are a with our of Foods is think more apparel quite big options there's us. properties. Full quite doing And is example, doing out

So and the those off chart. anything beauty-related health and -- those all

per like growing anything in they're year. categories, So to at X% those XX%

And those are rents. we're so those being still when push growing, to sales able

we and quite with that full distribution -- is get one metric that a that and that into Sales retailer So the of always another retailers. on don't even e-commerce perspective. some can add from be have metric doesn't is productive

Donald Wood

they're look a I comes -- extremely at Jeff, feel look whenever saying of you because for always because up is the was the we at as reason it qualify best-in-class Row, I at in like have productive to extremely categories. looking to restaurants, part operators space. by I have I we Santana in just you have caveat question I see feel I to -- always category to Assembly example, Row, at whatever operators. mean And productive. And have is like at best our the the some Python for of they're sales Row numbers the operators about

be operators, to who can you've comes best it. And apparel of you, got forward. those on restaurant properties, little into -- find when there operators, all about shop consumer you're you the I look the about at properties. operators, more a away. mediocre going apparel applies tell their businesses the Strong choosy go a gym operators, where through. time ability consumer way businesses that If bit is worry is the talking whether smaller And you've got

of categories. And when ask so categories. It's of the that the the you into be operator has to more just mix understanding strength about figured than

Operator

JPMorgan. Mueller Mike from come will question next our And with

Michael Mueller

redevelopment, Going be the flex you or to at you more first? Do focused to retail think whenever program. focused development, up back going mixed-use resi to right again time it's it's the decide

Donald Wood

actually the properties that integration fully to environment. the mixed-use it's about all and so that users, or the absolutely our office of minimized units, more that be building or you're soon. near to on whatever you're what it's talking learned too, think is amenities. It's talking the we've this if clearly -- about But it's the integration going applies anytime whether you're whether is residential of other I those office talking we'll much about impactful office

where So be or to numbers know those -- that getting work. for good demographic residential our we areas largely ready are be at high make centers, when high shopping you our to to able enough in centers would the look and rents enough you be shopping

being being where So when either probably of or entitled ballot apartment of in that's comments that we'll in my big are evidenced by talked kind or designed, I units where about terms start entitled X,XXX as happens. development

Now now, where is worked if shopping When shopping we've evidenced believe us, that. retail through Huntington, see I to opportunity as adding and a to you that's by center. And COVID, our us go out complete centers to I you'll redevelopment starting look residential came retail Bala. frankly, a of probably before that

Operator

next from And Craig come Citi. will with Mailman question our

Craig Mailman

Santa issue continue back two two, sell a during Kind part in I'm into then kind have you XX-year on the the I of guys of capital, you in be to maybe some accretive bit. the guys quick Monica. assets this half capital And the a year the would of the equity most potentially just into curious, did here what's to yet sources assets guys with whether method? Just more equity as look And you One, of it you coming 'XX, the mix quarter. redeploy here. cap rate the or disclosed noticed as acquire you strength optimal potential

Daniel Guglielmone

of was What in question? You X first questions there. the got part part the

Craig Mailman

cheat I did. Probably it. did a I

first The Monica. was one Santa

Daniel Guglielmone

that goes Xs. of Monica Yes. Xs low the to it's kind kind pies. hard and The the year of to into is mean on in of it little rate the kind but of one. in bit after kind cap down year quickly mid of of Santa next a a upper place, -- kind I --

of it. a that of So we handle IRR X kind the as penciled unlevered low on has kind

this capital. of as source accretive would very longer attractive really but over Not we term. a it's as like, So much the accretive year

in of fund we do capital, million balanced piece the capital that business. in think acquired quarter, of I approach CocoWalk, terms always second we The Panola -- Crossing put $XXX at Bala in Gateway, Virginia which in raising a look, to work we and the

at We accretive in have fund we a still to to and multiple it. it's premium be and $XXX an needed it it, a attractive was capital. multiple deployed that capital quarter a even that though an million, it's not Where the amount it modest there where NAV perspective, from we'd like

think to acquisitions, regards approach we'll prudent very be in terms it. With So future was of we opportunistic. it and I going how forward

can of we'll so assets full market it's under consideration a and That equity capital deploy of we for We means be it to, half we And big component have accretive. think, as look If then necessarily a the think that opportunistically I sale. will see grow from. pipeline sell. will it accretively we it. I don't FFO

of kind at that's that. So we how look

Operator

next Floris Dijkum our from Van And question will Point. Compass with come

Floris Gerbrand van Dijkum

Guys, just one thing...

Donald Wood

Floris, one question, not a X-quarter.

Floris Gerbrand van Dijkum

et are also having And example, that your more what drive for on tenants of you maybe rent anchors, that there? well of I'm your you're have bumps are just terms. going guys not And at focused levels? talk aspects Or are et cetera historically you options. Maybe of the I'm terms other is some you percentage leases able some the I Are that? counting on annually, there not are in and shorten you're rent to around you A terms, fact leases upside as peers lot driving your behind the -- signing, talk -- shop detail able of that or they're for in now as the your software of -- to you X%? books cheat. always certain bumps to about terms could maybe improvements lease at if less the what seeing the market rent X% renewal lease about cetera.

Donald Wood

get Yes. rent on small better side, the anchors, shop That our driven Floris, and better small upper even bumps the mid- percentage of our of was blended Xs. of think, Nobody strong. X.X%, we I significant by in leases kind is really, to X% at kind shop. else, that's close. And anchor really probably announced on or and we

I we quarter. think last were where was that about this

blended that gets us So there.

to an The continue part to we as rent that. components. starting push important component, We of also look important well. it other It's is but push an

hand more tenants And in getting better we negotiating things Wendy from this qualitative are so getting terms I'll aspects, in the leverage. over we're environment of what where other to

we're to couple had other highlight and TIs -- my thing is quarter, good just good mentioned to of to we've like starting a The quarters that I terms that We're impressive kind and but... and why rents in a And remarks. the focused you also something of in the dollars that. mid-teens had we I'd TI number those an of to on net effect limiting that's in straight-line controlling I'd I highlighted of prepared like highlight is and

Wendy Seher

be is I there options, components it that increases, exclusivity, whether thing components rights, that so different it are would contract, be add think it to the only whether many the that whether I make any that really going hasn't of be on that every always we've differently we're separate changed with that them sense this after treated which particular needs demand is them, component and high is every than component asset. to control

options. just So getting some for which success say are like in I would having options, don't. we on don't some we We more flexibility example,

we you certain exercise give and that do can -- the have rarely volume to maybe market there's it if many, have we unless several that if tenant, base we've a value if So done of we'll level a -- fair if center. try that's -- from heavy it there's tie within allocation we capital a sales them to a at we to to, they're try production the a reaching and can't with where actually, they see

So with of those and doing tenants. yes, having success, We're we approach, and always are a regional all we like a and more lot national balanced do diving deep into it's right? these business

want we So that make have sure we a to balanced approach.

Donald Wood

And bumps, strongest, co-tenancy. talking I'm which not the qualitative like contracts, rights, the we lack about, add felt contracts when I've you I I'm lack is that, thing sales our lease that only But like not redevelopment certainly, what of going like takeouts, quantify. can know say only of things among the the that were I if in The to added strongest Floris, to industry. always

contracts I sector. prove All a and of think was our years Better ago, I in I a than more are to today few ago, even years the think leverage, Hard think stronger few there that, that's us it. locations give where were we they are.

Operator

come will question from Haendel St. next our And

Mizuho. with Juste

Ravi Vaidya

the The quick had is watches credit follow-up the well. of Why are doing for back the guys tenant year? XX debt minimal on I portfolio you the XX now maintain right a I to issues. guide at this as This line half bps hope seems Haendel. your to bad the of Vaidya here. point? Ravi What's for

Daniel Guglielmone

we kind Look, I I the end we that at year, the that keep ability end I'm leverage. and to of of we the where of the guidance. But obviously, were range operative. end I hoping same think it. prudent I can I'm get given fine certainly, towards that up XX if up to of range XX towards think the that of think outperform were. look our towards at And -- to bottom half upper lower the our is And end. enhances still it's we mean first we'll in end way the

ended think kind year, see to don't of of I lower we change I at -- the of that up think we point and that half out. the at the range, don't first this it's a end reason

Operator

Linda from And Jefferies. with Tsai our will come next question

Linda Yu Tsai

of dollars. How job does look Dan, doing you like? And process mentioned that What better earlier are you're go? a TI conversations? do those those what controlling

Wendy Seher

with of figure I and anchors they're to deals. anchors. have with the Many out these how we to eager will long-standing guess more start relationships make I

it's -- into deep and of the and digging really we're not details space creative getting take the on space. they'll they're getting So how that

needs space condition to end. we'll and that -- So

So to that real demand the of the and estate. quality speaks the

influence the have probably On ability conversation. the we most that shops, smaller to

we how as that the to also we into want well. So understand And to using space much maximum. are putting yes, they're capital the

discussions having some good many So progress. and

Donald Wood

that clear. Just to really make

wants years, this whether it to operating, to they and have are I a No, a is tenant works storefront get willing a a means and is, see on that a we and whether tenant get be cost to they'll of unit particular as do supply together that to -- storefront of in the X a tenant think limit and the the before. biggest were what landlord space an how it you the demand, demand ideally. what not like because looks replace on it heavy we'll thing willingness we that supply is are would to whether up than accept particularly that where wanted work a incremental to space that. What able the of so HVAC put in let's things to differently space on hanging that to pick there goes, that give that at

Operator

And our come Street. next question Paulina from with Green will Rojas

Paulina Rojas Schmidt

the environment very solid. Even clearly is retail

to you in So investors to what I forecast your agree that this are of me rent X%. environment the wonder think market market It will do you generally next hesitant growth And say, XX let's terms very for markets to translate rent months? if in seems or growth disagree X%, XX this. above, with

Donald Wood

say, X the things taking to that were higher pushing the What are pre-COVID. to about is That -- is XX% than first, back through inflationary I to is they push trying obviously is in they're tenant. business. costs One profitable their that tenant doing through Paulina, would order be in

to to doing little through. The I to they pay businesses that to rent. thing have obvious more trying the is less try an be margins on more are make What's to the obvious efficient. they're a their more there. they that So able they're more willing their push successful work are,

they're unable space. they're the what to to to push trying all That increase even increases to profitability. cost extent into the So that through, willing for do their they're goes

that size that, you pretty to that tenant lack move, tenant So a increases. take they're success where choices can if to a get rent as with is having some take you able the good you that's and consumer where of has

single an Importantly it contractual day economics. to absolutely bump. is day, every say hear have us every single that it but we the of part it's because important know you say And in the I

with know bumps, year versus don't a me able -- those XX% straight-line that tell to I percentage you, from there you in I us was -- overall tenant you. that's of on increases and last stuff So when basis. strong, that's the I have top really see why When move on let XX% for new to it's what a a the of

where the should this. don't that's see over So that to And I XX months. expect XX next changing I you think

Operator

next Tayo come from with Bank. question And Okusanya Deutsche our will

Omotayo Okusanya

and outlook. a what quarter the the of this I'm the on news and but FRC if thoughts is potentially great if shopping this are broader center question, there for specifically, the think ROIC? -- what curious on fair not Blackstone group maybe sure curious in out particular, implications you And are your just and buying Congrats Don, any?

Donald Wood

years. But of the no sit Of forward it's over question. a have hear it. think course, looking what space next when going about retail you I you for the fair because an at inside you're Tayo, And is no, X opinion very demand to knowledge

I think negotiations there that. think And feels about wouldn't feel pretty good that. be Blackstone pretty you I should that And about good way.

the -- are all that talking supply-demand that other is as as over sectors, also choices the only robust been couple they about we've I think the about characteristics which last were the maybe here, and in but the all valuations not of not years.

together, it So that when doesn't you all me. put surprise

there that know something are, companies in center them You or shopping companies. cap like that. whatever smaller are we've of got XX the Many index

like to should you under to think companies sale. of that that -- I pressure always be expect

really see. company Now we'll But that Blackstone whether to being a as never those deals happen not, have stretched. thought of or I've

see of So they I value there. a lot suspect

Operator

And Scotiabank. from question McGinniss come our next Greg with will

Greg McGinniss

debt has And had embedded at if on addressed expectation you that this apologize remember, remarks, what's just changed just in opening I bad in the Dan, but all? can't the same-store?

Daniel Guglielmone

that's around. range. kind and can that up the in year lower that originally, the think outlined the We lower to in guidance we of range. and XX Still first end points of that And we're end the half remain same shifting our prepared I hopefully, of had it ended in XX in the remarks. don't of we in basis

Donald Wood

in the And that's reflected same-store outlook.

Operator

to question-and-answer remarks. I'd turn closing conference the Brenda back this conclude like our will to And over any Pomar for session.

Unknown Executive

to the for today. We us of you few next forward joining in seeing weeks. Thanks many look

Operator

conference Thank at this you your now for time. may disconnect presentation, and The you concluded. has now today's lines attending

Federal Realty Investment Trust (FRT) 1 Aug 242024 Q2 Earnings call transcript