Federal Realty (FRT) Q1 2026 Earnings Transcript

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DATE

Friday, May 1, 2026, at 9 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Donald C. Wood
• Chief Financial Officer — Daniel Guglielmone
• Eastern Region President and Chief Operating Officer — Wendy A. Seher
• Chief Investment Officer — Jan W. Sweetnam
• Senior Vice President, Investor Relations — Jill Sawyer

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TAKEAWAYS

• FFO per Share -- $1.88, representing a 10.6% increase and nearly 11% growth.
• Leased and Occupied Rate -- Portfolio 96.1% leased and 93.8% occupied, 40 basis points higher excluding new centers.
• Leasing Volume -- Over 100 leases and 649,000 square feet of deals, with 13% cash rollover and 23% straight-line basis.
• Comparable POI Growth (GAAP) -- 4.7%, with cash-basis comparable growth at 5.1%, and cash-basis minimum rent up 3.6%.
• Lease Termination Fees -- $2.8 million higher, contributing to bottom-line results but offset by $2 million in increased winter-related expenses.
• Portfolio Acquisitions and Dispositions -- Asset sales of $159 million (Misora and Courthouse) at a blended sub-5% cap rate; Congressional North Shopping Center acquired for $72 million at a 7% stabilized yield.
• Residential Development Pipeline -- $400 million allocated, including The Blair at Ballard + Kenwood (34% leased), 301 Washington Street, Lot 12 at Santana Row, and Willow Grove's 261 units, targeting nearly 800 new units and $27 million operating income at stabilization.
• Office Portfolio Leased Rate -- 99% leased, with Santana West, Pike & Rose, and CocoWalk office all at 100%, Bethesda Row at 97%, and Assembly Row at 94%.
• Foot Traffic -- Up 3% for the quarter and 4% in April.
• Executed but Not Yet Occupied Deals -- Set to add $36 million of rent through 2027.
• Pipeline Under Negotiation -- More than 1.7 million square feet currently being negotiated for lease.
• Restaurant Sales Metrics -- Full-service restaurant sales average $723 per sq. ft, fast casual average $873 per sq. ft, both with occupancy cost ratios near 9%.
• Credit Facility Update -- Revolver upsized to $1.4 billion, initial term extended to April 2030, spread over SOFR lowered by 5 basis points to 72.5.
• Net Debt to EBITDA -- 5.5x annualized, with fixed charge coverage at 3.9x, both expected to improve.
• Guidance Increase -- NAREIT/core FFO raised to $7.46–$7.55 per share (midpoint growth of 6.3% for core FFO), driven by improved POI outlook (3.125%–3.625%) and contributions from asset recycling and redevelopment.
• Quarterly FFO Cadence -- Second quarter projected at $1.83–$1.86, third at $1.84–$1.87, with Q4 in the low to mid-$1.90s, mainly from contractual occupancy growth.
• Asset Sales Pipeline -- Additional $66 million in sales expected by quarter-end at mid- to upper-5% cap rates; 2025 and year-to-date 2026 sales total $540 million at a low- to mid-5% blended cash yield.
• Occupancy Cost Ratios -- Restaurants maintain cost ratios around 9%, providing buffer against consumer or cycle fluctuations.

SUMMARY

Federal Realty Investment Trust (NYSE:FRT) demonstrated another quarter of operational outperformance, marked by near-record leasing volume and significant growth in FFO per share. Management emphasized active capital recycling, with recent acquisitions structured to enhance strategic market control and asset value. A robust development pipeline and record office occupancy further underscore the company's internal and external growth strategies, while portfolio optimization and rising rent commencements are positioned to drive earnings acceleration toward year-end. Balance sheet flexibility, fostered by a larger and cheaper revolver, and limited debt maturities, continues to support ongoing value creation initiatives and future capital deployment.

• Wood highlighted the distinct purchasing power around company centers: if you take our household incomes of $167,000 overall, and you multiply that by the number of households within the three-mile—this is the easiest thing to look at—you are talking about $11 billion per shopping center of purchasing power.
• Sweetnam noted increased acquisition pipeline activity, and a greater number of actionable opportunities than in the prior quarter.
• Guglielmone discussed that leases that have already been signed are the catalyst for a projected Q4 FFO step-up, with the majority of rent commencements scheduled for October.
• Management reported operating recent acquisitions at a higher level, not only meeting internal standards, but doing so more efficiently and at a lower cost, with additional margin from vendor management and scaling.
• Assembly Row's full development potential is being value-banked through new entitlements, despite waiting for more favorable market conditions to begin further construction.
• Wood pointedly ruled out speculative ground-up office development, stating on Santana Row, It would only happen to the extent we have a build-to-suit,
• Guglielmone attributed elevated operating costs in the Northeast to a huge amount of weather impacts, particularly snow removal and utility expenses, resulting in higher-than-expected seasonal expenses for the quarter.

INDUSTRY GLOSSARY

• Cap Rate: The ratio of net operating income to property value or acquisition price, used for benchmarking property yield.
• Comparable POI: Property Operating Income measured for stabilized assets, adjusted for properties held in both comparison periods, excluding certain revenue items like straight-line rent.
• Lease Rollover: The change in rent per square foot when a lease expires and is renewed, often referenced as cash or straight-line (GAAP) basis.
• Asset Recycling: The process of selling mature or non-core assets and redeploying proceeds into higher-growth opportunities.
• Occupancy Cost Ratio: A measure of tenant health, calculated as occupancy-related costs (typically rent plus related charges) divided by tenant sales.

Full Conference Call Transcript

Jill Sawyer: Thanks, Rocco, and good morning, everyone. Thank you for joining us today for Federal Realty Investment Trust’s first quarter 2026 earnings conference call. Joining me on the call are Donald C. Wood, Federal Realty Investment Trust’s Chief Executive Officer; Daniel Guglielmone, Chief Financial Officer; Wendy A. Seher, Eastern Region President and Chief Operating Officer; and Jan W. Sweetnam, Chief Investment Officer, as well as other members of our executive team who are available to take your questions at the conclusion of our prepared remarks. A reminder that certain matters discussed on this call may be deemed to be forward-looking statements.

Forward-looking statements include any annualized or projected information, as well as statements referring to expected or anticipated events or results, including guidance. Although Federal Realty Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realty Investment Trust’s future operations and its actual performance may differ materially from the information in our forward-looking statements, and we can give no assurance that these expectations can be attained. The earnings release and supplemental reporting package that we issued this morning, our annual report filed on Form 10-K, and our other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and operational results.

Given the number of participants on the call, we kindly ask that you limit yourself to one question during the Q&A portion. If you have additional questions, please re-queue. And with that, I will turn the call over to Donald C. Wood.

Donald C. Wood: Well, thanks, Jill, and good morning, everybody. You know, the combination of stepped-up capital recycling portfolio-wide; the strong incremental cash flow, the result of near-record leasing in terms of both volume and rate over the past 18 months; and the beginnings of meaningful incremental contributions from previous years’ development spend are showing up in bottom line results with FFO per share of $1.88, besting a year-ago quarter by 10.6%, setting the stage for this quarter’s earnings beat, enabling us to raise guidance for the balance of the year. More details from Dan in a few minutes.

Lease termination fees, a direct result of strong landlord-oriented leases and an important part of our business, were higher this quarter compared to a year ago by $2.8 million, below higher snow removal and related energy expenses than our recoveries caused by the season’s unusually rough winter were also higher this quarter by over $2 million. Of course, we still grew at 9% even if you eliminate just the termination fee impact. Capital recycling this quarter saw us close on the sales of Misora apartments at Santana Row and Courthouse Shopping Center in Rockville, Maryland for combined proceeds of $159 million at a combined cap rate well inside 5%.

Subsequently, we closed on the acquisition of Congressional North Shopping Center, directly adjacent to our long held A-rated Congressional Plaza in Rockville, for $72 million at a 7% stabilized yield. Opportunities for additional accretive acquisitions net of dispositions continue to be a laser-like focus of this team and are expected to continue to improve our overall growth. Activity in the form of additional interesting centers coming to market that are worth looking at has clearly picked up as we have come into the spring season. Business is good with strong demand for our assets in both our historical locations as well as the newer markets.

We ended the quarter with the overall portfolio 96.1% leased and 93.8% occupied, and about 40 basis points higher excluding newly acquired centers. With the continued strength in new leasing that I will talk about in a minute, these good times that we are seeing are expected to continue. Specifically, the anchor box leasing and repositioning that has been done and will continue to get done, particularly on the West Coast for us, should provide strong income contributions in 2027 and 2028. Now I know there has not been a lot of obvious evidence over the past few years that great demographics, particularly in an affluent customer base, make a demonstrable business difference in the performance of a retail property.

And there are a lot of reasons for that, including shifting population trends, government subsidies, and a favorable supply and demand dynamic. And some of those macro trends will likely continue. But today’s economic realities are different. And the divergent day-to-day purchasing decisions of consumers in this K-shaped economy are very real. Periods like this, where everyday costs from gas to groceries are elevated and the consumer is more selective, quality demographics matter more. They matter a lot. Wendy will talk through what we are seeing on the ground specifically. Now it is no surprise that leasing drives these and future results.

With over 100 leases and 649,000 feet of comparable deals done in the quarter, at 13% cash rollover and 23% on a straight-line basis, this was more volume than we have ever leased in any first quarter, and the third best ever in any quarter. That includes 13 anchor deals for nearly 400,000 square feet at 13% rollover and 21% on a straight-line basis. This is really strong leasing, and it looks to be continual. As we have talked about over the last several quarters, we are also finding ways to intensify our properties with development, usually residential product that is complementary to our shopping centers.

With little or no incremental land costs, the math can work in the right locations. If 2025 has taught us anything about value, it is that high-quality apartments adjacent to great shopping environments in strong suburban locations create a more desirable living environment. That translates to higher residential rents, higher and stronger growth, and ultimately lower cap rates upon sale. The 2025–2026 sales of Levare Misora at Santana Row and The Parker at Pike & Rose unlocked an unmatched cost of capital for us to reinvest, sub-5% overall.

We have also previously disclosed the allocation of a total of $400 million for residential development of The Blair at Ballard + Kenwood, which at 34% leased already is well ahead of projections for both timing and rate; 301 Washington Street in Hoboken, which is under construction and will begin lease-up in about nine months; Lot 12 at Santana Row, which is well under construction and will be seen by many of you if you are coming to our Investor Day in a couple of weeks; and an incremental 261 units at Willow Grove Shopping Center outside of Philadelphia, for which demolition of part of the adjacent shopping center is happening this week.

Together, this densification of our shopping center assets will add nearly 800 units and $27 million of new operating income to the portfolio once stabilized in the next few years. Our experience with residential development at our retail-centric properties is a skill set developed over 25 years and is certainly a unique differentiator of our business. Now, with the signing of a lease with PNC Bank a couple of weeks ago for the last remaining 11,000 square feet, Santana West is officially 100% leased. In fact, all of Santana Row’s office space is 100% leased. This is particularly impressive given that just a few miles away, downtown San Jose, California Class A office vacancy stands at 36%.

Let that sink in for a minute. And it is not an anomaly. Pike & Rose office stands at 100% leased. CocoWalk office stands at 100% leased. Bethesda Row office stands at 97% leased. And Assembly Row office stands at 94% leased. Our whole office portfolio is 99% overall leased. Now our office income stream at our nationally recognized mixed-use communities is in extremely high demand and is stable, solid, and growing. We will showcase our plans with a comprehensive day at Santana Row in May. Looks like we will have a great turnout and would love to add a few more. Really looking forward to seeing most of you there.

Enhanced internal and external growth using all the tools at our disposal is the name of the game. Quarters like this first one increase my confidence in our ability to do so. I will now turn it over to Wendy and then to Dan to provide additional color.

Wendy A. Seher: Thank you, Don. This was a strong quarter across the board. Every key operating metric delivered, continuing the momentum from prior quarters and validating the broad-based demand on our high-quality real estate across all of our formats. As Don mentioned, we had record leasing this quarter with rent rollover at 16% on a trailing 12-month basis, keeping in mind that the rollover statistic represents 96% of our reported deals. Comparable POI growth was strong for the quarter at 4.7%, particularly impressive given the challenging winter conditions we faced in the Northeast. I could not be more pleased with the results. Our lease rate held firm at 96.1%, a direct reflection of our proactive leasing approach.

Foot traffic was up 3% for the quarter and, more importantly, 4% in April. Executed but not yet occupied deals will contribute an incremental $36 million of rent over the balance of the year and into 2027. On the small shop side, we are at 93.8% leased, with room to push rents further given the demand we continue to see across our submarkets. The pipeline remains robust at over 1.7 million square feet of space under lease negotiation, providing embedded growth over the next two years. Last quarter, I highlighted several of our recent acquisitions, walking you through the early leasing momentum and outsized performance we are seeing relative to our underwriting.

What is now coming into focus more clearly is the financial opportunity we are seeing on the operating side. We are operating these properties at a higher level, not only meeting our internal standards, but doing so more efficiently and at a lower cost. As we all know, it is not how much you spend, it is how you spend it. Through a combination of internal scaling, vendor management, and scope alignment, we expect to continue creating value through more efficient operations. Lastly, there is a great deal of conversation right now about the K-shaped economy and its impact on commercial real estate.

When I match that narrative up against what we are actually experiencing across the portfolio, there is no doubt that we are benefiting from the upper end of that K. Traffic is up, sales are up, and not with just value-based retailers as you would expect, but at full-price and aspirational concepts like Crate & Barrel, Madewell, and Aritzia, all of which continue to outperform in our centers. Discretionary spending in restaurants is another topic that is getting a lot of airtime, so I wanted to share some numbers with you. Our full-service restaurants average $723 per square foot in sales, and our fast casual restaurants average $873 per square foot.

Both represent healthy performance, more than double the national averages, and both are operating and occupancy cost ratios in the 9% range, leaving meaningful cushion to absorb either consumer fluctuation or a broader economic cycle. Durable real estate matters. And with that, I will turn it over to Dan.

Daniel Guglielmone: Thank you, Wendy, and hello, everyone. Our FFO per share of $1.88 for the first quarter reflects almost 11% growth versus last year and highlights an exceptionally strong quarter operationally. This result came in $0.06 plus, or 3.6%, above the midpoint of our guidance range, a result which reflects a business plan firing on all cylinders. Drivers for the outperformance include $0.02 from higher revenues through better occupancy, parking revenues, and ancillary income; $0.01 from expense savings, including efficiencies from our 2025 acquisition pool as Wendy just highlighted; $0.01 from higher than forecast term fees; and $0.02 attributed to timing, pulling forward some items that were expected later in the year.

Comparable POI growth, a GAAP metric, was 4.7% for 1Q. Cash-basis comparable growth was 5.1% for the quarter. Excluding term fees, the result was still roughly 4%. Cash-basis minimum rent increased 3.6% for the quarter. All variations of this metric were ahead of our expectations, highlighting the strong start to the year. Look to our 8-Ks for expanded disclosure in this area. Now let us turn to the balance sheet. Subsequent to first quarter end, we closed on a recast of our revolving credit facility where we increased the size of the facility to $1.4 billion, extended the initial term to April 2030 with extension options into 2031, and reduced the spread over SOFR by 5 basis points to 72.5.

We repaid our 1.25% notes due in February and now have only $50 million of remaining loan maturities through the balance of 2026. We continue to forecast strong free cash flow after dividends and maintenance capital and expect to exceed $100 million in 2026 and head higher in 2027 and 2028 as we convert straight-line rent to cash-paying rent. During the first quarter, we closed on asset sales of $159 million combined at a blended mid-4s cap rate. We also have an additional $66 million of sales in process with expected closings by quarter end, with cap rates targeted in the mid- to upper-5% range.

2025 and expected year-to-date 2026 asset sales will stand at a total of $540 million with a blended cash yield in the low- to mid-5% range, a very attractive cost of capital. Through this active and disciplined asset recycling program, which has effectively been executed on a leverage-neutral basis, our debt metrics remain solid. First quarter annualized net debt to EBITDA is 5.5x and should improve over the course of the year. Fixed charge coverage is 3.9x and should eclipse our target metric of 4x over the balance of 2026. And with that, I will now move on to guidance.

As a result of a robust first quarter and more encouraging outlook, given the continued resiliency in our portfolio, we are raising guidance for both NAREIT and core FFO to $7.46 to $7.55 per share. At the midpoint, this $0.03 to $0.04 increase represents 6.3% growth for core FFO when compared to 2025. Drivers for the increase in guidance include our comparable POI growth outlook improving to 3.125%–3.625% from the previous range of 3%–3.5%. We still expect the trajectory of occupancy in 2026 to be in the mid- to upper-93% range before climbing higher to the mid- to upper-94% range by year-end, powered by leases that have already been signed.

Our improved guidance reflects stronger than expected contribution from the $750 million of dominant high-quality properties acquired in 2025, driven by expense savings and greater leasing velocity at these dominant assets. We increased our expected incremental POI for redevelopment to $14 million to $15 million as we get tenants open and operating sooner than forecast, and our outlook on term fees also improves to $8 million to $9 million as our strong leasing contracts allow us to leverage underperforming tenants. We refinanced our 1.25% unsecured notes with a combination of a new term loan and availability on our upsized credit facility, so assume roughly 4.5% for the effective interest rate reset on those notes, in line with prior expectations.

Please note that this represents roughly 175 basis points of refinancing headwind, without which our midpoint core FFO guidance would eclipse 8% growth. Given it is early in the year, we are keeping our credit reserve flat at 60 to 85 basis points of rental income, and additional guidance assumptions all remain unchanged and are outlined on Page 27 of the 8-Ks. This updated guidance also reflects the $92 million of acquisitions completed to date in 2026, as well as the Misora and Courthouse Center asset sales.

We continue to be active on recycling, with additional acquisition and disposition opportunities targeted for the second half of the year, and we will adjust our guidance for those, likely upwards, as we go. To summarize, our $0.03 to $0.04 increase in guidance is driven by better than $0.01 of operational outperformance, $0.01 from acquisitions, $0.01 from term fees primarily in our non-comp pool, and roughly half a penny from incremental redevelopment. All areas of our business plan are exceeding forecast.

With respect to our expectations for quarterly FFO cadence over the remainder of 2026, the second quarter is $1.83 to $1.86, the third quarter is $1.84 to $1.87, with the fourth quarter in the low to mid-$1.90s per share primarily driven by contractual occupancy growth. And with that, operator, please open the line for questions.

Operator: Yes, sir. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. Once again, we do ask you limit yourself to one question, and then you can join the queue again if you have further questions. At this time, we will pause for just a moment to assemble our roster. And today’s first question comes from Samir Khanal with Bank of America. Please go ahead.

Samir Upadhyay Khanal: Good morning, everybody. I guess, Don, maybe high level to start off. You talked about the K-shaped economy. So if this backdrop continues and given your sort of high-income trade areas, your strategy and tenant mix, I guess, does that all translate into relative strength or outperformance versus your peers? Thanks.

Donald C. Wood: Thanks, Samir. There is a lot to unpack in that. I am thinking the best way to try to say it. I mean, look. We are a real estate company of high-quality stuff that is not about eliminating things that change in the economy. We expect things to change in the economy. What it is about is limiting effectively the negative impacts on us, and we do that by the type of real estate that we own. You know, we used to give out a metric I think we are going to dig up again based on this question, and it is about purchasing power.

What purchasing power is: if you take our household incomes of $167,000 overall, and you multiply that by the number of households within the three-mile—this is the easiest thing to look at—you are talking about $11 billion per shopping center of purchasing power. Now, when you think about that, it becomes less about the type of product and more about the real estate and who shops in that real estate. And that is really where we are in the right spot. If you have looked over the past few weeks, there was a series of articles in the Wall Street Journal. It was all about a growing upper middle class.

It was all about where that discretionary income comes from and how it is being spent by consumers. That is the center of our business plan, and it has always been the center of our business plan. It is why during some periods it does not matter as much. You are asking me to look at a crystal ball. Now is when it matters. So I think it is real, the K-shaped economy. I think it is real that we operate in the top part of the K.

And I think it is real that the affluence and the number of people effectively combined that are around our shopping centers provide a level of cushion that is really hard to replicate.

Operator: Thank you. And our next question today comes from Michael Goldsmith at UBS. Please go ahead.

Michael Goldsmith: Good morning. Thanks a lot for taking my question. You continue to make progress on the capital recycling and—and not to spoil what I am sure will be an excellent Investor Day—but what inning do you think you are in here? And is there any way to how this capital recycling had benefited the comp POI this quarter and maybe where that contribution could go over time?

Donald C. Wood: Thanks, Michael. I want to make a couple of points, and I do not know if I can quantify—I know I cannot quantify—what you are asking. There are a couple of things to think about. It is not about what inning it is in, because what this is all about is continuously, forever, being able to recycle assets that we have created a ton of value on into things and raw material that give us an opportunity to do that again. In certain times in the marketplace, that will be a boon, and there will be lots. In other times, there will be less. But it is a continuous laser-like focus, and that is, to me, the most important thing.

You should always expect us to buy and build, make a lot of money, recycle into stuff that we can do it all over again year in, year out. And we will talk about that with more specificity at the Investor Day, but that is the concept in what you buy when you buy a share of Federal Realty Investment Trust.

Daniel Guglielmone: Yes, and just to add to that, just to give a little bit of color on the growth in FFO—6.3%—more than half of it is driven by growth in the core portfolio, call it 50% to 60%. And then acquisitions and redevelopments are the other two big drivers, in the 20% to 25% of growth. I would expect going forward growth in our core portfolio will be a little bit higher, and so the pressure on acquisitions and redevelopment will actually come down a little bit, but probably, you know, 20% to 25% of the overall FFO growth this year was driven by acquisitions.

Operator: Thank you. And our next question today comes from Juan Sanabria with BMO Capital Markets. Please go ahead.

Juan Carlos Sanabria: Hi. Good morning. Just hoping you could talk a little about the same-store NOI trajectory and cadence we should expect in occupancy as part of that FFO build in the quarter. Will the run-rate you gave, Dan, just given some of the noise both in the quarter and with weather and closures and bankruptcies, etcetera, hold?

Daniel Guglielmone: Good question. You know, with regards to—you know, we mentioned the occupancy, which will stay a little bit at this lower level in the mid- to high-93s. That will impact the cadence of comparable growth, and then we will shoot up in the fourth quarter because we have a lot of rent commencing in late third quarter, early fourth quarter that will really drive, and those are with leases that are already signed. So that will dictate.

We will see a little bit of a dip in the second and third quarters from a comparable growth perspective into the twos, closer to 2%, and then a resurgence back up in the fourth quarter up into the 3.5% to 4% range on a comparable GAAP basis. It will be probably about 40 to 50 basis points higher on a cash basis. Cash will be higher this year than our reported GAAP. So that is a little bit of the color there, and we should see momentum heading into 2027 on that.

Operator: Thank you. And our next question today comes from Cooper Clark at Wells Fargo.

Cooper R. Clark: Great. Thanks for taking the question. Could you provide us with an update on the multifamily dispo pipeline today and how much product you may consider bringing to the market over the course of the year if you are continuing to find attractive opportunities on the acquisition front? And if we should continue to expect strong pricing in the high-4% to low-5% cap rate range?

Donald C. Wood: Sure, Cooper. Let me cover that in a couple of different ways. I do not have any particular residential property on the market as we stand here today. However, what we are looking at doing and thinking about doing is monetizing not only that, but other parts in the form of a joint venture. As we talked about in the past, that is one potential way. But the notion of being able to do that will be tied certainly with what it is that we are able to find on the acquisition side, because there is an important matching that is critical there because, as you know, we created a lot of value.

And so we have big tax gains that we would like to be able to shelter to the extent we could with 1031. So I cannot give you a number that way. It will be largely driven by the acquisition pipeline, which Jan can talk about here in a moment. But I do want you to know the reason we sell is because we have created a ton of value and see places where we can reinvest with creating greater value going forward. So that is the theory. Jan, what are you seeing on the ground?

Jan W. Sweetnam: It is not new news that it is more competitive now than it was a year ago. But the good news is we are seeing a lot more opportunities today than we were just three months ago. So when we look at what we are underwriting, both on market and off market, we are as busy as heck right now. And, notwithstanding all the noise out there, properties where we compete best really are just more complicated, probably have more leasing opportunities to them. And more good news really is that large, more leasing- and more complicated assets are still thinning out the crowd.

And our ability to compete for those really fits right into our skill set—identifying where tenant demand exceeds supply, remerchandising, and, if applicable, placemaking where we can lift sales and rents. We have seen it in recent acquisitions. We are seeing it in opportunities looking forward. So it is hard to say what is going to happen, what the volume is going to be, but we like our ability to compete, and we have been busier than we have been in a long time. So still pretty optimistic on the second half of the year.

Operator: Thank you. And our next question today comes from Michael Griffin at Evercore ISI. Please go ahead.

Michael Anderson Griffin: Great, thanks. Maybe following up in that vein of acquisition—Don or Jan, I am curious if you can give any color on the two deals announced year to date, the one at Kingstowne and in Congressional. And it seems like the tenant roster there could see some remerchandising as benefit there. So maybe talk about the opportunity set with those two. And then maybe, Jan, just expanding a bit on your acquisition pipeline comments just a minute ago, would you say more of the deals you are looking at in the hopper are towards a Congressional—kind of standard, larger open-air retail format—versus maybe a town center or a Village Pointe that you closed last year?

Just kind of talk about the interplay of those two as well. Thanks so much.

Donald C. Wood: Sure, Griff. Thanks so much for the question. A couple of things to say. First of all, to the last part of your question, it is a wide band—it is a wide swath of things that we look at. And with Congressional North Shopping Center, I mean, stand-alone, that is a power center with a vacant Bed Bath & Beyond that historically we would not be all that interested in. Now let us talk about what is around it. Basically, it is on Rockville Pike, one of the most critical retail nodes in D.C., certainly the most critical on the Maryland side.

And we control Congressional Plaza—the one we have owned forever—Federal Plaza, Pike & Rose, Mid-Pike Plaza, and Wildwood Shopping Center, all within a few miles. This Congressional North was the last center of any kind of size where a box tenant had the opportunity to go. So the notion of being able to buy that and better control, frankly, was a no-brainer. And the reason those types of things do have vacancy is because often, private ownership, particularly smaller private ownership families, do not want to put money in necessary to create the return that you can get on the asset. So that is what we were doing there.

Similarly at Kingstowne, we are simply closing a loop and controlling the entire very big shopping center by taking a hole in the donut and moving that over to our side for a very nominal capital outlay, frankly. Putting that stuff together—we will always try to do those things. Those are strategic to where it is that we go. In terms of our love, frankly, for Kansas City, and for Omaha, and for Annapolis, you bet we are trying to do more of that stuff. And to Jan’s point a few minutes ago, we are very active in looking through those and other markets to make sure nothing slips through.

Those markets could also be supplemented with smaller centers, grocery-anchored, etcetera, that will complement the big assets that we have already purchased. Those are some of the things that we are working on. Jan, I do not know if there is anything to add to that.

Jan W. Sweetnam: I would add that there is a good blend between opportunity—I kind of consider Congressional and Kingstowne, they are both opportunistic acquisitions and strategic at the same time. And, you know, when we look at the yields of those, it does not really count in the leverage that we get at the existing properties, whether it is next door on the Pike or in Kingstowne itself. So I think we have got a really good mix of opportunistic transactions that we are looking at in our existing markets, maybe with some smaller assets, both in markets we have been in a long time as well as our new markets.

And there are a lot of larger assets that we think dominate trade areas that we are not in yet that we are looking at right now. So it is a pretty good mix.

Operator: Thank you. And our next question today comes from Greg McGinniss at Scotiabank. Please go ahead.

Greg Michael McGinniss: Hey. Good morning. Don, as you mentioned, Santana is now 100% leased on the office side. But you are also entitled to do more there. And more broadly across the portfolio, office lease rate is healthy. Are you willing to start more ground-up office development today?

Donald C. Wood: Hey, Greg. Yes—I still have scar tissue, in case that is really your question. The notion of starting another office building at Santana would not happen on a spec basis. It would only happen to the extent we have a build-to-suit, which, by the way, with what is going on out there—and I mean, when you juxtapose Santana Row with downtown San Jose—it is incredible. I do want you there. I really want you to see this because these things are three miles away, and one is clearly a winner in this situation. And so there may be more opportunities, but I am not going to spec.

Operator: Thank you. And our next question today comes from Craig Mailman at Citi. Please go ahead.

Craig Allen Mailman: Hey, good morning, guys. Dan, maybe for you—just helpful that you went through some of the benefits to earnings in the first quarter and giving us quarterly cadence for the next couple of quarters here. But could you just bridge the $1.88 to get to sort of the $1.84 and a half next quarter and $1.85 and a half in 3Q? Like, how much of the $0.02 benefit of earlier timing is nonrecurring?

I know the lease term fees are lumpy, but could you just walk through what was more nonrecurring this quarter versus recurring, to get to the decel before the pickup in the back half of year, especially as you guys are talking more about potential acquisitions ramping up?

Daniel Guglielmone: Again, we have probably some seasonality that is a positive going from the first quarter to the second quarter with less weather-related issues and so forth. There is some—but probably the biggest drag heading into the second and third quarters are, obviously, we have the refinancing headwind, which is at least a penny or so of drag. We are leasing up The Blair in the second quarter—early lease-up of a residential product is something that will be a drag initially before it turns positive later in the year as we hit the breakeven occupancy levels.

I think just some other timing-related things that just happened to be forecasted for later in the year, and we were able to move them forward into the first quarter—lock them in—so there is greater certainty there, but they will not happen a little bit later in the year. So those are the main drivers of a little bit of the cadence there. And then the big spike in performance in terms of FFO is driven by leases that have already been signed that have rent commencement dates—surprisingly, a surprising amount of October 1 rent commencement dates—that we feel really, really good about will occur, and that is what drives us up into the January.

So that is a little bit of the color on the cadence there.

Operator: Thank you. And our next question today comes from Haendel St. Juste with Mizuho. Please go ahead.

Haendel St. Juste: Hey. Good morning. Don, I can hear the clear excitement in your voice about the earnings growth setup, the momentum that seems to be improving with the leasing tailwind and capital rotation. Looks like better, maybe mid- to upper-single-digit growth the next couple of years by our estimates. So maybe what can you share with us about the earnings trajectory that you think you are setting up here, how sustainable it is? And then remind us what the long-term plan for the green bond refinancing here is. I think it is on the revolver at the moment. Thanks.

Donald C. Wood: You bet. And I hope—I think you are on the list. I know you are playing golf when you come out on May 20 or so with Jay, but that is the purpose. I do not want to steal thunder for the Investor Day. We are going to talk about earnings trajectory. We are going to talk about those opportunities on those two days. So I am going to leave it at that if you do not mind. And with regards to the second part of your question with regards to the 1.25% bond, we put longer-term $250 million on a five-plus-year term loan. That gets us into 2031.

The balance is on the line, and we will be opportunistic in either hitting the bond market or the convert market as we see the opportunity. We have the capacity to look to do this at the most opportune moment. That is when we will do it. I would love to do a bond and do a long-term bond. So stay tuned on that front.

Operator: Thank you. And our question today comes from Alexander Goldfarb at Piper Sandler. Please go ahead.

Alexander David Goldfarb: Hey. Good morning. Don, just a question on the new governor in Virginia. Certainly, you guys are used to operating in some other very deep blue states, but Virginia has taken a noticeable shift. That said, you have more defense spending, cyber investment, etcetera. But as you look at what is going on in the Mid-Atlantic and the two Maryland and Virginia markets, are you concerned at all that Virginia could mirror Maryland and become anti-development or enact policies that slow down what has otherwise been a very good path?

Or is your view that whatever the governor is talking about and the change in politics—not much of it you see interfering with your shopping centers and the customer base and the reason why businesses want to locate in Northern Virginia?

Donald C. Wood: Yeah, Alex. It is the latter. Take a look at Federal Realty Investment Trust and understand the markets that we operate in; understand not only the incomes that I have talked about here, but you know what we do not talk about? It is the wealth—the wealth of those families—and how that continues the spending throughout ups and downs and all kinds of changes. The political atmosphere—if I get worried about the political atmosphere, I am effectively not running my company as well. And the diversity of these marketplaces is really important. Now, on the Virginia side, which happens to be where I live, have you seen the defense budget that is being proposed?

And I do not know if $1.5 trillion is going to happen or not. But, boy, I know who the beneficiary is going to be to the extent it does, and it is going to be a lot of the consumers around our properties. Do I think that will be a measurable difference? Probably not. But overall, when you buy into this company, you are buying a diversified group of geographies and types of assets—formats of assets, tenant base, etcetera—with an awful lot of room, effectively, in occupancy cost ratios to be able to continue the path that we are on. That is my focus.

Operator: Thank you. And our next question today comes from Omotayo Okusanya with Deutsche Bank. Please go ahead.

Omotayo Tejumade Okusanya: Yes. Good morning, everyone. Congrats on the results. Clearly, momentum is on your side. Dan, just quick comments around the occupancy rates again in 1Q for the comparable occupancy, 94.1%. And I think we were all kind of expecting something in the mid-93s. Clearly, again, better leasing, but also curious if there were leases you were expecting to fall out that did not that maybe we see in 2Q and 3Q, which kind of explains some of the momentum for the rest of the year.

Daniel Guglielmone: Yes. Look, we did better from an occupancy perspective than we had talked about. We had expected the overall occupancy rate to dip down into the low- to mid-93%. I think first quarter we held occupancy better than we expected, and we are at 93.8%. It should stay fairly constant at that level with some timing and puts and takes of tenants coming in and so forth and leaving, and then seeing that spike in the fourth quarter up into the mid- to upper-94% range.

That is consistent with what we talked about, although we will be a little bit higher in the second and third quarter than I think we had originally forecast because we did so well maintaining occupancy in the first quarter. Hopefully that answers your question.

Operator: Thank you. And our next question today comes from Floris Van Dijkum with Ladenburg. Please go ahead.

Floris Van Dijkum: Thanks. Morning, guys. We talked a little bit about San Jose. We have talked a lot about some of your acquisitions—Congressional, which looks very good. We have not really talked about Boston and Assembly Row much. Could you guys give us a little bit of an update on what is happening there and what your plans are for that asset going forward? In terms of, in particular, the Row aspect of that property.

Donald C. Wood: You bet, Floris. It is actually a very good question from the standpoint of understanding that big asset. First of all, clearly, Assembly Row has become the center of that—not only immediate area—but larger area from the standpoint of shopping and entertainment and food and all of that. Clearly, the residential product that we built there adjacent to the Avalon stuff—we have got our own 1,000 units there—that does extremely well and continues to do extremely well. The notion of building out the rest of Assembly clearly took a back seat when life science imploded.

I am very proud of the fact that we did not move forward on that, but it does not change the fact that there is great opportunity for the remaining three lots that are there. We have them fully entitled. We cannot get them to pencil yet at this point. But while we are doing that, we are also entitling the entire Assembly Square marketplace, which is the power center that is adjacent to it—and a very powerful power center at that. We are in the process of getting entitled 3 million—Dan, is it 4 million?—square feet. In other words, the notion of continuing the Assembly Row property through the power center at some point well into the future.

But we are going to have that entitled this year, we expect it. And if that is entitled this year, even if the numbers do not work at this point, think about the future value of that entire 50-acre piece of land. And so when you look at Assembly, you ought to be thinking about value banking there that I do not expect to be paid for in stock price today but certainly anybody that looks at that property will see the long-term value to be created. In the meantime, income keeps rising. Rents keep going up. Residential keeps staying filled. Really, really powerful property.

Operator: Thank you. And our next question today comes from Mike Mueller at JPMorgan. Please go ahead.

Michael William Mueller: Yes, hi. I know it was a small sale at just $10 million, but can you talk about selling Courthouse Center in Rockville considering it is part of critical mass and scale that you have built up over decades there? Would you have sold a more consequential center there?

Donald C. Wood: Oh, yeah, Mike. It is not part of the critical mass at all. Basically, you may remember a couple of years ago we sold Rockville Town Square. This is an adjacent small unanchored strip next to it that really had nothing to do with the rest of our properties at all. If we could have, we would have simply sold it at the same time we sold Rockville Town Square, but there was a local buyer here that stepped up to pay us a number that there is no way we are saying no to. So that is all it is.

It really is not—I know on a map it looks close to the rest of our properties on Rockville Pike, but it is a different world away. So no, it is not at all important.

Operator: Thank you. And once again, if you do have a question. And next question is a follow-up from Samir Khanal at Bank of America.

Samir Upadhyay Khanal: Hey, I am sorry if I missed this, but you mentioned there were some items that were pulled forward in the quarter. Was that term fees or something else? Maybe just some clarification. Thanks.

Daniel Guglielmone: Yeah. Look. There were some FAS 141 benefits that we were expecting later in the year—in second or third quarter—that were in our budget that we pulled forward into the first quarter. That was the primary driver of that. So, yes, it is good we got it locked in the first quarter, but it is just timing.

Operator: Thank you. And our next question is a follow-up from Omotayo Okusanya with Deutsche Bank. Please go ahead.

Omotayo Tejumade Okusanya: Hi. Yes. Just a very quick one on cost reimbursement rates. It felt a little elevated in 1Q 2026. Curious if anything pulled forward. Is there a timing thing that happened? How do we think about that for the rest of the year?

Daniel Guglielmone: Yes. Look, there was a huge amount of weather impacts in the Northeast, particularly anywhere from our D.C. Metro all the way up to Boston. So snow removal and utility expense were highly elevated for the quarter. And, obviously, our cost reimbursements are elevated as a result. That was well above our initial expectations, and it ended up working out as we expected, but that is the driver there.

Operator: Thank you. And our next question today is a follow-up from Alexander Goldfarb at Piper Sandler. Please go ahead.

Alexander David Goldfarb: Thank you. Dan, I think in your opening comments, you made a reference that you expect some positive revision to guidance later this year. But I want to make sure, one, I heard that correctly. And two, what were the factors? I think you said there were some things that could happen that would cause that, and I just want to understand more about that.

Daniel Guglielmone: Looking at my prepared remarks, I do not recall making that comment. I am optimistic with regards to the balance of the year, and I am optimistic with how we are being set up for 2027. So I feel good about our positioning. We are only here in the first quarter. But, no, I do not think I referred to forecasting a positive revision going forward.

Operator: Thank you. That concludes our question and answer session for today. I would like to turn the conference back over to Jill Sawyer for any closing remarks.

Jill Sawyer: Thanks for joining us today. We look forward to seeing many of you at our upcoming Investor Day in a few weeks. Bye.

Operator: Thank you. That concludes today’s conference call. Thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.

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