NORTH BETHESDA, Md., July 31, 2026 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported its results for the second quarter ended June 30, 2026. For the three months ended June 30, 2026 and 2025, net income available for common shareholders per diluted share was $0.97 and $1.78, respectively, with the year-over-year decline primarily driven by a lower gain on the sale of real estate compared to the prior year period, as well as the absence of a one-time tax credit benefit recognized in the second quarter of 2025. Operating income for the same periods was $138.7 million and $202.7 million, respectively.
Highlights for the second quarter include:
- Generated Core funds from operations available to common shareholders (Core FFO) per diluted share of $1.88 for the quarter, a 6.8% increase year-over-year.
- Signed 124 leases for 819,273 square feet of comparable retail space -- an all-time volume record -- with rent growth of 15% on a cash basis and 28% on a straight-line basis.
- Generated Adjusted Comparable Property Operating Income (POI) growth (excluding straight-line rents and amortization of in-place leases) of 4.2%.
- Comparable POI growth was 2.8%.
- Reported overall portfolio occupancy of 93.8% and a leased rate of 96.1% at quarter end, with:
- Occupancy and leased rate both flat sequentially.
- Occupancy up 20 basis points and leased rate up 70 basis points year-over-year.
- Continued strong small shop leased rate, ending the quarter at 93.9% leased -- representing an increase of 50 basis points year-over-year and 10 basis points sequentially.
- Acquired an adjacent retail parcel at Kingstowne Towne Center in Alexandria, VA for $19.7 million on April 17, 2026, completing the retail assemblage at the center.
- Sold two properties during the second quarter for a combined $66.1 million.
- Increased the regular quarterly cash dividend by 3% to $1.16 per common share, resulting in an indicated annual rate of $4.64 per common share. This marks the 59th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.
- Hosted an Investor Day at Federal Realty's flagship Santana Row property, where management introduced a framework for long-term FFO and AFFO per share growth targets through 2028.
- Raised and tightened guidance for 2026 earnings per diluted share to $4.22 to $4.30.
- Raised and tightened guidance for both 2026 Nareit FFO and Core FFO per diluted share to $7.48 to $7.56, representing 6.5% Core FFO growth at the midpoint year-over-year.
"This was another quarter of record leasing activity and outsized FFO growth, extending a trend we've sustained for several quarters now, and it's exactly why we're confident executing against the long-term plan we shared with investors at Santana Row," said Donald C. Wood, President and Chief Executive Officer of Federal Realty. "It all comes back to productivity -- getting more out of the exceptional real estate we already own -- and that discipline is what's translating into durable growth for our shareholders."
Financial Results
Net Income
For the second quarter of 2026, net income available for common shareholders was $83.7 million and earnings per diluted share was $0.97 versus $153.9 million and $1.78, respectively, for the second quarter of 2025, with the year-over-year decline primarily driven by a lower gain on the sale of real estate this quarter ($20.6 million compared to $76.5 million in the prior year period) and, to a lesser extent, the absence of a one-time tax credit benefit recognized in the second quarter of 2025.
FFO
Nareit FFO was $162.8 million, or $1.88 per diluted share, for the second quarter of 2026, compared to $165.5 million, or $1.91 per diluted share, in the second quarter of 2025, a 1.6% per share decline. The year-over-year decline is due to a one-time $13.0 million, or $0.15 per share, of new market tax credit transaction income recognized in the second quarter of 2025.
Core FFO was $162.8 million, or $1.88 per diluted share, for the second quarter of 2026, compared to $152.5 million, or $1.76 per diluted share, in the second quarter of 2025, a 6.8% per-share increase.
Nareit FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. Core FFO adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the company's ongoing operating and financial performance. See attachments for a reconciliation of Nareit FFO and Core FFO and a full definition of Core FFO.
Operational Update
Occupancy
The following operational metrics for the commercial portfolio are as of June 30, 2026:
- Overall portfolio occupancy was 93.8%, flat sequentially and up 20 basis points year-over-year.
- Overall portfolio leased rate was 96.1%, flat sequentially and up 70 basis points year-over-year.
- Small shop leased rate was 93.9%, up 10 basis points sequentially and up 50 basis points year-over-year.
The residential leased rate for comparable properties was 97.0% as of June 30, 2026, down 20 basis points year-over-year.
Leasing Activity
During the second quarter of 2026, Federal Realty signed 131 leases totaling 852,051 square feet of retail space. On a comparable space basis, the company signed 124 leases for 819,273 square feet -- an all-time volume record -- at an average rent of $33.68 per square foot, compared to $29.23 under prior leases, representing a 15% increase on a cash basis and 28% increase on a straight-line basis.
On a trailing twelve-month basis, Federal Realty signed 453 comparable leases totaling 2,796,064 square feet -- also a volume record for any 12-month period -- representing 17% rent spreads on a cash basis and 29% on a straight-line basis.
Transaction Activity
- April 17, 2026 -- acquired an adjacent 88,000-square-foot retail parcel at Kingstowne Towne Center in Alexandria, VA for $19.7 million, completing the retail assemblage at the center, which Federal Realty originally acquired in 2022.
- May 8, 2026 -- sold 3131 Commodore Plaza in Coconut Grove, FL for $8.1 million.
- May 21, 2026 -- sold Barcroft Plaza in Falls Church, VA for $58.0 million.
Development Activity
Fully delivered the residential units at Blayr, a mixed-use development on City Avenue in Bala Cynwyd, PA, featuring 217 residential units, 19,000 square feet of ground-floor retail, and on-site parking.
Other Activity*
*The contents of our website are not included in or incorporated by reference into this press release.
Financing Activity
- On April 14, 2026, the company amended and restated the $1.25 billion revolving credit facility, increasing the borrowing capacity to $1.4 billion, reducing the SOFR spread to 72.5 basis points, and extending the maturity date to April 12, 2030, plus two optional six-month extensions.
- During the second quarter, the company issued 493,374 common shares under its at-the-market (ATM) equity offering program at a weighted average price of $123.92 per share, generating gross proceeds of $61.1 million.
Regular Quarterly Dividends
Federal Realty announced today that its Board of Trustees increased the regular quarterly cash dividend to $1.16 per common share, resulting in an indicated annual rate of $4.64 per common share. The regular common dividend will be payable on October 15, 2026 to common shareholders of record as of October 1, 2026. This increase represents the 59th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.
Federal Realty's Board of Trustees also declared a quarterly cash dividend on its Class C depositary shares, each representing 1/1000 of a 5.000% Series C Cumulative Preferred Share of Beneficial Interest, of $0.3125 per depositary share. All dividends on the depositary shares will be payable on October 15, 2026 to shareholders of record as of October 1, 2026.
2026 Guidance
Federal Realty has raised and tightened its 2026 earnings per diluted share, Nareit FFO, and Core FFO guidance, as summarized in the table below:
Full Year 2026 Guidance Revised Guidance Prior Guidance
--- ---
Net income available for common shareholders per diluted share
$4.22 to $4.30
$3.94 to $4.03
Nareit FFO per diluted share
$7.48 to $7.56
$7.46 to $7.55
Core FFO per diluted share
$7.48 to $7.56
$7.46 to $7.55
Comparable Property POI Growth(1) 3.25% to 3.75% 3.125% to 3.625%
% Core FFO growth over the prior year 5.9% - 7.1% 5.7% - 6.9%
(1)Adjusted Comparable Property POI growth estimated to be approximately 75 basis points higher than Comparable Property POI growth in 2026 (see appendix).
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its second quarter 2026 earnings conference call, which is scheduled for Friday, July 31, 2026 at 9:00 AM ET. To participate, please call 833-821-4548 or 412-652-1258 prior to the call start time. The teleconference can also be accessed via a live webcast at www.federalrealty.com in the Investors section. A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through August 14, 2026 by dialing 844-512-2921 or 412-317-6671; Passcode: 10209822.
About Federal Realty
Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets and select underserved regions with strong economic and demographic fundamentals. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. This includes a portfolio of open-air shopping centers and mixed-use destinations--such as Santana Row, Pike & Rose, and Assembly Row--which together reflect the company's ability to create distinctive, high-performing environments that serve as vibrant destinations for their communities. Federal Realty's 103 properties include approximately 3,700 tenants in 28.8 million commercial square feet, and approximately 2,500 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 59 consecutive years, the longest record in the REIT industry. The company is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.
Safe Harbor Language
Certain matters discussed within this Press Release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K filed on February 12, 2026 and include the following:
- risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire or to fill existing vacancy;
- risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
- risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
- risks that our growth will be limited if we cannot obtain additional capital, or if the costs of capital we obtain are significantly higher than historical levels;
- risks associated with general economic conditions, including inflation, tariffs, and local economic conditions in our geographic markets;
- risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense;
- risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT; and
- risks related to natural disasters, climate change and public health crises (such as worldwide pandemics), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.
Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Press Release. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2026 and subsequent quarterly reports on Form 10-Q.
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Federal Realty Investment Trust
Consolidated Balance Sheets
June 30, 2026
June 30, December 31,
2026 2025
(in thousands, except share
and
per share data)
(unaudited)
ASSETS
Real estate, at cost
Operating (including $1,901,302 and $1,832,190 of consolidated variable interest $11,348,512 $11,265,167
entities, respectively)
Construction-in-progress (including $37,695 and $28,418 of consolidated variable 329,803 374,735
interest entities, respectively)
11,678,315 11,639,902
Less accumulated depreciation and amortization (including $487,052 and $468,725 of (3,444,324) (3,351,881)
consolidated variable interest entities, respectively)
Net real estate 8,233,991 8,288,021
Cash and cash equivalents 107,246 107,415
Accounts and notes receivable, net 262,108 249,755
Mortgage notes receivable, net - 9,091
Investment in partnerships 30,571 31,881
Operating lease right of use assets, net 81,644 83,120
Finance lease right of use assets, net 6,301 6,410
Prepaid expenses and other assets 337,258 354,767
TOTAL ASSETS $9,059,119 $9,130,460
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable, net (including $190,863 and $194,176 of consolidated variable $518,371 $521,759
interest entities, respectively)
Notes payable, net 1,282,856 1,057,331
Senior notes and debentures, net 2,966,685 3,364,010
Accounts payable and accrued expenses 217,548 219,678
Dividends payable 100,490 99,792
Security deposits payable 32,809 31,548
Operating lease liabilities 70,943 72,304
Finance lease liabilities 12,966 12,903
Other liabilities and deferred credits 238,760 250,494
Total liabilities 5,441,428 5,629,819
Commitments and contingencies
Redeemable noncontrolling interests 183,119 181,655
Shareholders' equity
Preferred shares, authorized 15,000,000 shares, $0.01 par:
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation 150,000 150,000
preference $25,000 per share), 6,000 shares issued and outstanding
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation 9,822 9,822
preference $25 per share), 392,878 shares issued and outstanding
Common shares of beneficial interest, $0.01 par, 200,000,000 shares authorized, 876 869
86,883,595 and 86,266,009 shares issued and outstanding, respectively
Additional paid-in capital 4,374,872 4,310,365
Accumulated dividends in excess of net income (1,179,380) (1,224,372)
Accumulated other comprehensive income 8,340 2,047
Total shareholders' equity of the Trust 3,364,530 3,248,731
Noncontrolling interests 70,042 70,255
Total shareholders' equity 3,434,572 3,318,986
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $9,059,119 $9,130,460
Federal Realty Investment Trust
Consolidated Income Statements
June 30, 2026
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 2026 2025
(in thousands, except per share data)
(unaudited)
REVENUE
Rental income $325,896 $302,477 $658,554 $604,771
Other property income 9,797 8,769 17,687 15,354
Mortgage interest income 13 277 549 552
Total revenue 335,706 311,523 676,790 620,677
EXPENSES
Rental expenses 64,491 61,609 139,188 129,413
Real estate taxes 39,077 36,681 78,048 73,248
General and administrative 13,470 11,925 25,395 22,800
Depreciation and amortization 100,623 89,241 199,840 176,187
Total operating expenses 217,661 199,456 442,471 401,648
Gain on sale of real estate 20,617 76,501 113,328 77,672
New market tax credit transaction income - 14,176 14,176
OPERATING INCOME 138,662 202,744 347,647 310,877
OTHER INCOME/(EXPENSE)
Other interest income 563 905 1,603 1,648
Interest expense (50,008) (44,598) (99,124) (87,073)
(Loss) income from partnerships (664) 905 (503) 1,082
NET INCOME 88,553 159,956 249,623 226,534
Net income attributable to noncontrolling interests (2,851) (4,040) (4,822) (6,850)
NET INCOME ATTRIBUTABLE TO THE TRUST 85,702 155,916 244,801 219,684
Dividends on preferred shares (2,008) (2,008) (4,016) (4,016)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS $83,694 $153,908 $240,785 $215,668
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders $0.97 $1.78 $2.79 $2.51
Weighted average number of common shares 86,183 85,969 86,112 85,722
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders $0.97 $1.78 $2.78 $2.51
Weighted average number of common shares 86,183 86,611 86,639 86,300
Federal Realty Investment Trust
Funds From Operations
June 30, 2026
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 2026 2025
(in thousands, except per share data)
Nareit Funds from Operations available for common shareholders (Nareit FFO) (1)
---
Net income $88,553 $159,956 $249,623 $226,534
Net income attributable to noncontrolling interests (2,851) (4,040) (4,822) (6,850)
Gain on sale of real estate (20,617) (76,501) (113,328) (77,672)
Depreciation and amortization of real estate assets 86,531 78,598 171,309 155,096
Amortization of initial direct costs of leases 13,027 9,358 26,260 18,435
Funds from operations 164,643 167,371 329,042 315,543
Dividends on preferred shares (2) (1,875) (1,875) (3,750) (3,750)
Income attributable to downREIT operating partnership units 595 603 1,191 1,272
Income attributable to unvested shares (569) (559) (1,135) (1,049)
Nareit FFO $162,794 $165,540 $325,348 $312,016
Weighted average number of common shares, diluted (2)(3) 86,803 86,611 86,733 86,393
Nareit FFO per diluted share (3) $1.88 $1.91 $3.75 $3.61
Core Funds from Operations (Core FFO) (1)
---
Nareit FFO $162,794 $165,540 $325,348 $312,016
Adjustments:
New market tax credit transaction income, net (13,004) (13,004)
Collection of prior period rents deferred during COVID (69) (136)
Core FFO $162,794 $152,467 $325,348 $298,876
Core FFO per diluted share (3) $1.88 $1.76 $3.75 $3.46
Reconciliation of the range of estimated earnings per diluted share to estimated Nareit FFO and Core FFO per diluted share for
the full year 2026:
---
Full Year 2026 Guidance Range
Low
High
Estimated net income available for common shareholders per diluted share $4.22 $4.30
Adjustments:
Estimated gain on sale of real estate (1.30) (1.30)
Estimated depreciation and amortization 4.56 4.56
Estimated Nareit FFO and Core FFO per diluted share $7.48 $7.56
See Glossary of Terms. Individual items may not add up to total due to rounding.
Federal Realty Investment Trust
Comparable Property Information
June 30, 2026
The following information is being provided for "Comparable Properties." Comparable Properties represents our consolidated property portfolio
other than those properties that distort comparability between periods in two primary categories: (1) assets that were not owned for the full quarter
in both periods presented and (2) assets currently under development or being repositioned for significant redevelopment and investment. The assets
excluded from Comparable Properties in Q2 include: Bala Cynwyd on City Avenue residential - Blayr, Friendship Center, Grossmont Center, Pike
& Rose Phase IV, Santana West, Willow Grove Shopping Center, and all properties acquired, disposed of, or not consolidated from Q2 2025 to Q2
2026. Comparable Property property operating income ("Comparable Property POI") and Adjusted Comparable Property POI are non-GAAP
measures used by management in evaluating the operating performance of our properties period over period. Adjusted Comparable Property
POI excludes the impact of straight-line rents and amortization of in-place leases from Comparable Property POI.
Reconciliation of GAAP operating income to Comparable Property POI and Adjusted Comparable Property POI
Three Months Ended
June 30,
2026 2025
(in thousands)
Operating income $138,662 $202,744
Add:
Depreciation and amortization 100,623 89,241
General and administrative 13,470 11,925
Gain on sale of real estate (20,617) (76,501)
New market tax credit transaction income (14,176)
Property operating income (POI) 232,138 213,233
Less: Non-comparable POI - acquisitions/dispositions (15,681) (6,277)
Less: Non-comparable POI - redevelopment, development & other (10,179) (6,296)
Comparable Property POI $206,278 $200,660
Less: Straight-line rents (2,846) (4,162)
Less: Amortization of in-place leases (2,700) (3,815)
Adjusted Comparable Property POI $200,732 $192,683
Glossary of Terms
Nareit-defined Funds From Operations (Nareit FFO): Nareit FFO is a supplemental measure of real estate companies' operating performances. NAREIT defines FFO as follows: net income, computed in accordance with GAAP plus real estate related depreciation and amortization, gains and losses on sale of real estate, and impairment write-downs of depreciable real estate. Nareit developed FFO as a relative measure of performance and liquidity of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. However, Nareit FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to pay dividends. We consider Nareit FFO a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. Comparison of our presentation of Nareit FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the Nareit definition used by such REITs.
Core Funds From Operations (Core FFO): Core FFO is a supplemental non-GAAP financial measure of performance that adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the Company's ongoing operating and financial performance. These adjustments include, when applicable, (1) gains or losses on early extinguishment of debt, (2) new market tax credit transaction income, (3) executive transition costs, (4) collection of prior period rents which were contractually deferred or payments renegotiated related to the COVID-19 pandemic, and (5) other items as determined by management. Management believes Core FFO provides enhanced comparability across periods and additional insight into the Company's underlying operating results, by excluding items that may reflect short-term fluctuations in net income and Nareit FFO. Core FFO is not intended to be a substitute for net income or Nareit FFO. Comparison of our presentation of Core FFO to similarly titled measures for other REITs may not be meaningful due to possible differences in the way Core FFO is defined or applied by other REITs.
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