Federal Realty (FRT) Q4 2025 Earnings Transcript

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Date

Feb. 12, 2026 at 5 p.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
• Executive Vice President, West Coast Operations -- Jeff Krashick
• Vice President, Investor Relations -- Jill Sawyer

Takeaways

• FFO per share -- $1.84 for the quarter, reflecting 6.4% growth, with full-year core FFO of $7.06 per share and NAREIT FFO of $7.22 per share; the latter includes $0.15 from new market tax credit income.
• FFO guidance -- 2026 guidance for core and NAREIT FFO of $7.42 to $7.52 per share, implying core FFO growth of 5.8% at the midpoint and NAREIT FFO growth of 3.5% due to the absence of one-time items.
• Comparable POI growth -- 3.8% for 2025 and 3.1% in Q4 (cash basis: 3.6% and 4.3%, respectively), with 2026 forecast at 3%-3.5% and a 75 basis point drag anticipated from anchor tenant transitions.
• Leasing performance -- Portfolio ended at 96.1% leased and 94.1% occupied; $11 million incremental new rent from 2.3 million square feet of comparable deals at 15% rollover, plus $6.3 million new rent from 20 noncomparable deals at $48.18 per square foot.
• Record leasing volume -- 2025 delivered the company's highest-ever square footage leased and decade-high comparable rent spreads, with 601,000 square feet of Q4 comparable deals at 12% rollover.
• Signed-not-occupied spread -- Q4 ended with a 200 basis point spread, adding $27 million of in-place portfolio rent contribution.
• Transaction activity -- Acquisitions in Q4 included Annapolis Town Center and Village Pointe for $340 million at an initial cash-on-cash yield in the low 7% range, targeting unlevered IRRs of 9%.
• Disposition activity -- Asset sales of Bristol Plaza, Palisades, Massaro, and one other property totaled $329 million at a blended low-5% cap rate; additional sales of $170 million in process at similar cap rates.
• Development pipeline -- $500 million active redevelopment pipeline with 780 residential units, including new projects like The Blair at Bala Cynwyd and Willow Grove Shopping Center; expected incremental POI contribution of $13 million to $15 million in 2026.
• Balance sheet and liquidity -- Year-end liquidity at $1.3 billion and annualized net debt to EBITDA at 5.7x (pro forma inside 5.6x), with refinancing of $400 million bonds nearing completion and fixed charge coverage at 3.9x, projected to exceed 4x during the year.
• Interest rate impact -- Refinancing of 1.25% unsecured notes to 4.25%-4.5% represents a 170-180 basis point expense headwind, which lowers FFO growth approximately 150 basis points compared to prior funding.
• Dividend policy -- Management stated, "You can count on us managing tax efficiently through the dividend and sales of gains and 1031," indicating no expectation of a special dividend.
• Credit loss reserve -- 2026 guidance includes a 60-85 basis point credit reserve, with management noting limited exposure to tenant credit issues following "a noncash charge related to Saks filing for bankruptcy" ($0.03 per share impact).
• California portfolio -- Management expects California to be "our largest source of growth for the next few years," driven by backlogged leasing, development activity, and capital recycling at assets like Santana Row and Grossmont.
• New core FFO metric -- Company will report both NAREIT FFO and core FFO definitions going forward, with core FFO adjusting for "nonrecurring one-time items in order to provide enhanced comparability across periods."
• Asset recycling -- Approximately $400 million-$500 million of additional nonperipheral multifamily assets are potential candidates for sale, with prospective cap rates below 5% if market conditions are favorable.
• Office leasing completion -- Management stated, "we should have zero office product available for lease—that means 100% leased—within the next 30 to 45 days" at mixed-use properties.

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Risks

• The refinancing of $400 million of unsecured notes at higher rates produces a "170 to 180 basis point financing headwind," forecast to reduce core FFO growth by approximately 1.5 percentage points.
• Comparable POI growth guidance for 2026 includes a "75 basis points of drag from that temporary disruption in occupancy" due to anchor tenant transitions.
• FFO per share for the quarter "came in slightly below the midpoint of our guidance range solely due to a noncash charge related to Saks filing for bankruptcy post-year-end," impacting earnings by $0.03 per share.

Summary

Federal Realty Investment Trust (NYSE:FRT) reported significant FFO per share growth, record leasing activity, and robust demand across geographies, all reflected in its 2026 guidance. Strategic acquisitions and targeted dispositions were executed at favorable cap rates, while active development continues to expand the residential and retail footprint. Management expects incremental POI from development and continued portfolio enhancement through asset recycling, with additional multifamily and retail asset sales under consideration. Balance sheet strength and ample liquidity support forward-looking investment plans, despite headwinds from higher refinancing costs.

• 2025 saw execution of 49 deals at recently acquired centers, marking a 34% increase in rents and high-quality tenant additions such as Solidcore, Allo, and Free People Movement.
• Fourth quarter marked a 90 basis point sequential increase in total comparable lease rates, while mall shop leasing rose to 93.8%, up 50 basis points, providing further mark-to-market rent opportunities.
• For 2026, incremental POI of $13 million to $15 million from the development pipeline is forecast to be evenly distributed by quarter, contributing to full-year earnings trajectory.
• Management notes that approximately 85%-90% of NOI is currently in the comparable pool, with additional SNO (signed-not-occupied) rent of $27 million expected, and about $25 million expected to materialize in 2026.
• The company is agnostic as to acquisition geography, focusing on dominant assets in both established and new affluent markets, with most external acquisition activity targeted for the second half of 2026.

Industry glossary

• FFO (Funds from Operations): A non-GAAP REIT metric representing net income excluding depreciation, amortization, and gains or losses on asset sales; used to assess the operating performance of a real estate portfolio.
• Core FFO: An adjusted FFO figure that excludes significant one-time or nonrecurring items for improved period-to-period comparability.
• NAREIT FFO: The National Association of Real Estate Investment Trusts-defined FFO metric adhering to industry-standard adjustments and reporting protocols.
• POI (Property Operating Income): Income generated from property operations before corporate-level expenses, taxes, and interest; analogous to property-level NOI.
• SNO (Signed-Not-Occupied): Lease agreements signed for space not yet physically occupied or contributing to in-place rent; a forward-looking indicator of revenue onboarding.
• Term fees: Payments received by the landlord for consenting to lease terminations, modifications, or extensions.

Full Conference Call Transcript

Donald Wood, Federal’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 that 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 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 tonight, our annual report filed on Form 10-Ks, 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 requeue.

With that, I will turn the call over to Donald Wood. Thank you, Jill, and good afternoon, everybody.

Donald C. Wood: Strong quarter, strong year, strong 2026 guidance. 6.4% bottom line FFO growth in the quarter, 4.3% for the year, and guidance close to 6% at the midpoint for 2026. All those numbers, of course, eliminate the impact of the onetime new market tax credit last year, as reflected in our new core FFO metric—more to come on that from Dan. Business is good, with strong demand for our assets in both our historical locations as well as the newer markets. We ended the year with the overall portfolio 96.1% leased, 94.1% occupied, about 50 basis points higher than that excluding newly acquired centers.

No surprise that leasing drives these and future results, with 601,000 feet of comparable deals done in the quarter at 12% rollover, and 2,300,000 feet of comparable deals done for the year at 15% rollover—an incremental $11,000,000 of new rent is under contract. Starting rent on the new 2025 leases was $37.98, compared with ending rent on those same spaces, after years of contractual bumps, by the way, of $33.12. We also did 20 noncomparable deals in 2025 at an average rate of $48.18, resulting in an incremental $6,300,000 of new rent under contract, and the deal pipeline continues to look strong. Wendy will talk more about that in a little bit.

Leases signed in the fourth quarter included weighted average contractual rent bumps of 2.6%. As strong as operations were, transaction activity was equally robust in the fourth quarter and thus far into 2026.

Jill Sawyer: We closed Annapolis Town Center in Maryland,

Donald C. Wood: and Village Pointe in Omaha, adding nearly a million square feet to the portfolio for $340,000,000 at an initial cash-on-cash yield in the low 7% range. Remerchandising rents commensurate with the strong sales at these locations are the focal points of these two A-quality assets over the next five years, with targeted unlevered IRRs approaching 9%. Both have started out as we have underwritten. Acquisitions completed earlier in the year, including Gilmonte Center and two Leawood, Kansas properties, are looking like excellent additions, particularly in Leawood, where tenant demand and expected rents are exceeding our underwriting.

On the disposition side, we closed on the sale of Bristol Plaza in Connecticut and Palisades, the peripheral residential building in Pike & Rose, in the quarter for a combined sales price of $169,000,000. Just last week, we closed on Massaro, the peripheral residential building at Santana Row, for proceeds of nearly $150,000,000 along with another small asset sale for $10,000,000. The overall combined cap rate of these dispositions was in the low 5s. As we have talked about over the last several quarters, we are also finding opportunities to intensify our properties with development, usually residential products, that is complementary to our shopping centers with little to no incremental land cost. The math works in the right locations.

If 2025 has taught us anything about value, it is that high-quality apartments adjacent to great shopping environments and strong suburban locations create a more desirable living environment. That translates into higher residential rents, stronger growth, and ultimately lower cap rates on sale. The 2025 and 2026 sales of Levare and Massaro at Santana Row and Palisades at Pike & Rose unlocked an unmatched cost of capital for us to reinvest in material amounts at sub-5% overall.

We previously disclosed the allocation of a total of $280,000,000 for new residential development of The Blair at Bala Cynwyd, which is nearly complete and ready for lease-up beginning this quarter; 301 Washington Street, Hoboken; and Lot 12 at Santana Row, which together will add more than 500 units to the portfolio. And just this quarter, we have added another residential project to our development schedule that you can see in the 8-Ks. Willow Grove Shopping Center in suburban Philadelphia will be completely redeveloped and include an additional 261 apartments that complement a modernized and remerchandised shopping center.

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 plan. After enjoying the 6.5% to 7% or higher income contribution from each of these residential additions for a period of time, we have the optionality to take advantage of cap rates well inside those yields and reinvest in tax efficiently, just as we have done so effectively last year and this. 2025 is a very special year for the Trust, and 2026 and 2027 look to capitalize on that. First of all, core leasing was exceptionally strong. It looks to remain that way in 2026.

Our expanded geographical reach is proving particularly fruitful, with strong retailer demand anxious to be part of our property improvement effort. Last of the COVID-era office leasing effort has been largely completed, with meaningful rents starting in 2026 and 2027. In fact, at the mixed-use properties, we should have zero office product available for lease—that means 100% leased—within the next 30 to 45 days. Our asset recycling effort is validating the long-term value creation that our business plan has created. And all of this is wrapped in a relatively stable interest rate environment that could result in lower rates as the year progresses. We will see.

The refinancing of our 1.25% bonds up 1.5% this month represents the last major component of our debt portfolio with such a large market rate adjustment like, and even through that, we are guiding to near 6% growth. Later this spring, we will showcase our plan through an Investor Day at Santana Row, Jill has the details. I think the save-the-dates have been sent out. Really looking forward to seeing most of you there. Enhanced internal and external growth using all the tools at our disposal—name of the game. Quarters like this fourth, and in fact all of 2025, increased my confidence of our ability to do so.

I will now turn the call over to Wendy and then to Dan to provide additional color. Wendy?

Jill Sawyer: Thank you, Don.

Wendy A. Seher: In 2025, our leasing platform achieved record-breaking volume, delivering the highest annual square footage leased in company history, alongside the strongest comparable rent spreads achieved in over a decade. As we head into 2026 with an overall lease rate of 96.1%, our strategic focus will continue to be all about driving rent growth, disciplined expense management, and capitalizing on our quality real estate to provide continuous opportunities for multiple-year growth. For the quarter, we signed 105 comparable deals, achieving 12% rollover. Fifteen anchor leases and 90 small shop deals drove a 90 basis point increase in our total comparable lease rates sequentially.

Looking ahead, the breadth and durability of demand across all categories remains strong, reinforcing my confidence in our outlook for the year ahead. Increased leased and occupied rates in Q4 drove our signed-not-occupied spread to 200 basis points, representing a contribution of an additional $27,000,000 to our in-place portfolio. Robust anchor demand, particularly in California, is fueling momentum. While we anticipate seasonal occupancy shift in 2026 while anchors transition, most of these deals are already executed at higher rents, positioning us for improved occupancy levels by the end of the year. Mall shops remain a highlight at 93.8% leased, up 50 basis points, providing mark-to-market opportunities to drive rent growth while continuing to prune and tweak a premium merchandising mix.

Leasing production from our expanded acquisition initiatives over the last few years continues to exceed expectations. In 2025, we executed 49 deals, nearly 200,000 square feet, at 34% increase from prior rents. Over the next 24 months, we are targeting accretive capital allocation to better align these centers with our core operating standards and the high-income profile of the respective submarkets. Top-tier addition to these centers since acquisitions includes names such as Solidcore, Allo, Design Within Reach, Lovesac, Free People Movement, and State and Liberty. More to come in 2026. Turning to our suburban portfolio in the Greater Washington, D.C. Area, we are continuing to be encouraged by the resilience across our Maryland and Virginia assets.

Foot traffic momentum remains strong, with quarterly traffic increasing 3% and up overall for the year. Annual sales moved higher year over year; the fourth quarter sales remained stable from a strong prior quarter comp. What is especially encouraging to me is the outperformance of the hard goods category. We saw robust demand in furniture and home furnishing from premium brands such as Serena & Lily and West Elm and Sur La Table. We view this as a strong indicator of the underlying health of our consumer base. Given that home furnishings are highly discretionary, our core customer in this region continues to invest in their home, signaling confidence in their personal financial position.

Now let me turn it over to Dan to dive into the numbers.

Daniel Guglielmone: Thank you, Wendy, and hello, everyone. Our FFO per share of $1.84 for the fourth quarter reflects 6.4% growth versus last year and highlights a really strong underlying quarter operationally. This result came in slightly below the midpoint of our guidance range solely due to a noncash charge related to Saks filing for bankruptcy post-year-end. Comparable POI growth, excluding prior period rent and term fees, averaged 3.8% for the year and 3.1% for the fourth quarter. On a cash basis, this metric was 3.6% and 4.3% for the full year and fourth quarter, respectively. Now let me move quickly to the balance sheet. Liquidity at year-end stood at $1,300,000,000 under our available bank facilities and cash on hand.

During the fourth quarter, we closed on an additional $250,000,000 delayed draw term loan, providing us with enhanced financial flexibility. The facility has a five-year maturity into 2031 and an interest rate of SOFR plus 85 bps. With respect to our $400,000,000 bond maturity next week, we will utilize this term loan and available capacity on our revolving credit facility to refinance it on a near-term basis. A possible unsecured note or convertible bond offering remains under consideration for later in 2026.

As lease-up of the larger commercial components of our redevelopment pipeline nears completion, with Huntington Shopping Center fully stabilized, 915 Meeting Street 100% leased, and One Santana 100% committed, our free cash flow after dividends and maintenance capital is expected to exceed $100,000,000 in 2026 and add higher in 2027 as we convert straight-line rent to cash-paying rent. With these $600,000,000 of projects behind us and essentially complete, our ongoing redevelopment pipeline moving forward stands at about $500,000,000. The pipeline includes 780 residential units, all at existing retail properties. During the fourth quarter, we closed on asset sales of $169,000,000 and added another $159,000,000 subsequent to year-end at a combined blended low-5% cap rate.

We also have an additional $170,000,000 of sales in process with expected closings in 2026, with cap rates targeted in the low-5% range. While we have been active over 2025 deploying capital externally, for our disciplined asset recycling program we continue to maintain strong leverage metrics. Fourth quarter annualized adjusted net debt to EBITDA stood at 5.7x at year-end, but is now inside 5.6x pro forma of our most recent asset sales and should trend further to the low to mid-5x range over the course of the year. Fixed charge coverage now stands at 3.9x and should eclipse our target metric of 4x over the course of the year.

Now on to a discussion of our new core FFO metric and guidance. After much discussion with the analyst and investor community over the course of 2025 regarding recurring FFO and significant one-timers, on a go-forward basis, we will be reporting both NAREIT FFO and core FFO. Core FFO is defined in our 8-K’s financial supplement on page 10. It is also outlined in a table on the fourth page of the press release. It will be GAAP-based and simply adjust our NAREIT FFO for nonrecurring onetime items in order to provide an enhanced comparability across periods for Federal Realty Investment Trust’s underlying operating results.

Such onetime items include new market tax credit transaction income, executive transition costs, collection of COVID-era prior period deferred rent, and other items such as gain or loss on early extinguishment of debt. As we look forward to 2026, our guidance for both NAREIT and core FFO is $7.42 to $7.52 per share, with no onetime adjustments in the forecast. At the midpoint of $7.47 per share, this represents about 5.8% growth for core when compared to 2025 and 3.5% for NAREIT-defined. 2025 core FFO is $7.06 per share and NAREIT FFO is $7.22 per share, with the material difference being the $0.15 of new market tax credit.

Guidance drivers through 2026 include: comparable POI growth forecasted at 3% to 3.5%. This assumes the trajectory of occupancy in 2026 moves into the mid-93% range before returning above the current 94% level and up into the mid and upper 94% range by year-end 2026. As a result, we are set up well for a strong 2027 on a comparable basis. Comparable lease rollovers are forecast in the low to mid-teens. Incremental POI contributions from our development and expansion pipeline is forecast in the $13,000,000 to $15,000,000 range. Please see some additional disclosure that we have added in our 8-K at the bottom of page 29.

With respect to the quarterly cadence of POI for 2026 from the development pipeline, guidance reflects a full year’s contribution—$750,000,000 of dominant high-quality assets acquired in 2025 at roughly a 7% blended cash cap rate and a 7.5% GAAP cap rate. We are assuming our 1.25% unsecured notes are refinanced at a 4.25% to 4.5% interest rate under our available bank facilities. Please note that this represents a 170 to 180 basis point financing headwind, without which our midpoint core FFO for 2026 would be growing at roughly 7.5%.

We have assumed a total credit reserve of roughly 60 to 85 basis points of rental income in 2026 given our limited exposure to credit issues, and additional guidance assumptions that we usually talk about here are outlined for capitalized interest, redevelopment spend, G&A, and term fees on page 29 of our 8-Ks supplement. This guidance does not include any acquisitions in 2026—none are probable enough at the moment. With respect to asset sales, it assumes only the dispositions announced last week: Massaro and Courthouse Center. For all other acquisitions and dispositions, we will adjust our guidance likely upwards as we go.

With respect to quarterly cadence of FFO in 2026, the first quarter will start with a range of $1.80 to $1.83 with the normal 1Q seasonality and asset recycling activity impacting sequential cadence from 4Q. The second and third quarter will be in the mid-$1.80s and the fourth quarter in the -$1.90s per share. And with that, operator, please open the line for questions. Thank you.

Operator: At any time your question has been addressed and you would like to withdraw your question, please press star then 2. We ask that you please limit yourself to one question and rejoin the queue if you have any further questions. The first question comes from Michael Anderson Griffin with Evercore ISI. Please go ahead.

Daniel Guglielmone: Great, thanks. Maybe just turning to the investment pipeline. Don or maybe Jan, can you give us a sense of what deals in the hopper look like today? I realize you are not guiding to anything this year, but is this more of what we have seen at Town Center in Kansas City or at the Village Pointe in Omaha? Is it stuff in kind of your core coastal—what are you really targeting, I guess? And do you have a feeling that we could see some deals close at some point this year? Hi, Michael. Jan. Hope you are well. Thanks for the question. Look, we are still targeting large dominant shopping centers.

We are focused on new markets in the middle of the country. We are still also trying to acquire on the coasts in our existing markets. So right now, there are a couple of acquisitions that we are working on. We expect to see a lot more opportunities coming in the next several months, larger transactions, so, you know, some real reason to be optimistic. It is a little too early to kind of forecast how much we will be able to buy this year. But based on where we are today and, you know, similar to last year, I would expect that the bulk of our activity will occur in the second half of this year.

So from my perspective, reasons to be optimal.

Operator: The next question comes from Cooper R. Clark with Wells Fargo. Go ahead.

Daniel Guglielmone: Great. Thanks for taking the question. I wanted to talk about the multi—

Donald C. Wood: family development and also ongoing recycling plan. Curious how much more peripheral multifamily you could potentially market for sale this year if you are able to source attractive opportunities on the acquisition side? And also where yields stand today on the entitled multifamily development pipeline.

Daniel Guglielmone: Sure, Michael. Let me start with you on that—or Cooper, rather. Sorry. Let me start on that. You know, it is such a kind of unique thing that we have here by having that value in there. There are still opportunities for us to monetize some residential product. And I am not going to go into the specific ones right now, but you could probably guess. Again, they are peripheral to our primary mixed-use assets and our shopping center assets. But, you know, that stuff is at 5% or lower in terms of those cap rates, and that is just, you know, it is just a real advantage.

Now in total, there is probably another $400,000,000 or $500,000,000 to be able to do of that ilk. Not sure that we will do that. We do not have them in the marketplace yet. But I am pushing hard, frankly, to start doing that come the second quarter, third quarter, and fourth quarter of this year to the extent we find the assets that Jan was just talking about a minute ago. Have one other—you had a backup question, Zach. I do not remember what it was. Anybody?

Jill Sawyer: Development pipeline. What is that? Yes. On residential development pipeline.

Daniel Guglielmone: And on the—basically, we are able to underwrite the new development pipeline as somewhere between 6.5% and 7% on most of them. The reality is those are low-5s cap rate assets today. If what happens as what I think will happen is, while we enter into it 6.5%–7%, you will see strong growth in those ads. But the one thing that is crystal clear is at fully amenitized shopping centers, those rents are higher. They tend to have more retention, and they tend to grow faster.

So I am just really encouraged about this program, which I do not think anybody has got the expertise that we do on the shopping center side to be able to do this kind of stuff. We have been doing it for a long time. I think you should look hard at that portfolio, and we will be talking to you more about that in the quarters to come.

Operator: The next question comes from Andrew Reilly with Bank of America. Please go ahead.

Donald C. Wood: Hi, good afternoon. Thanks for taking my question. Wendy highlighted that 2025 delivered the strongest rent spreads, in, I believe, over a decade. I am just wondering, is that pricing power being driven by any specific property types or regions, or is that really truly broad-based? And do you view these levels of pricing power across the portfolio as sustainable throughout 2026?

Wendy A. Seher: Thank you for the question, Andrew. I do think broad-based. It is a good time to be in a CLO position with this high demand that we are having across the board and limited supply and the kind of premier properties that we own. So it does not get any better than right now. I will say that what you are seeing on being able to drive rents, if you look at our last three years, we are consistently overall driving rents higher and higher percentage-wise every year for the last three years. So I am really thrilled with that.

And then when you look at, you know, the demand on the anchor side, you are going to see that our occupancy is going to be kind of driving up as we head into the latter part of the year. So yes, all metrics are good right now. And I do think—although Dan is going to look at me—I do think, given what I know of today, and we look at our rollover for next year, we should be able to be equal to where we are today.

Operator: Next question comes from Greg Michael McGinniss with Scotiabank. Please go ahead.

Donald C. Wood: Hey, thanks for taking the question.

Daniel Guglielmone: Dan, I was just hoping that you could kind of give us the breakdown—

Michael Anderson Griffin: on the same-store NOI growth and then the primary pieces that are kind of adding on top of that to get to the 6% growth. That would be appreciated. And if there is anything in the term fee, which is bigger this year than last year, that is known and in particular would be appreciated. Thank you.

Daniel Guglielmone: Yeah, no. With regards to kind of getting to the percent FFO growth, yes, roughly, and as I have been talking about, the 3% to 3.5% that I have been talking to folks about over the course of 2025—roughly about $0.30 of growth there represents probably a good, you know, more than half of the growth in FFO drivers there. And then with probably net from acquisitions and net from redevelopment, we have got about $0.12 each there. So very, very consistent with kind of the guidance we have been giving. The refi headwind is kind of roughly $0.12 in terms of refinancing the 1.25% bonds the way we are planning them out.

That gets you to kind of almost that 6% FFO drive. And, you know, our comparable growth is pretty broad-based. It is rent bumps, it is rollover, it is parking, it is across the spectrum of kind of what we create in terms of a comprehensive shopping center growth profile—nothing stands out there. And with regards to term fees, it is slightly higher than last year. We are just under $6,000,000. We are guiding to $7,000,000 to $8,000,000 and we kind of feel like, you know, there are some things that are identified. You know, we will see how that comes out. That is an estimate, and that is why we give a range, but kind of in line.

Our 20-year history is probably in and around $7,000,000 or $8,000,000. The last ten years, probably more in the $5,000,000 to $6,000,000. So you are kind of right in line with the historical levels on term fees.

Operator: The next question comes from Craig Allen Mailman with Citi. Please go ahead.

Donald C. Wood: Hey, everyone. Just—

Michael Anderson Griffin: Just curious, Don, as you guys ramp up the sales here and acquisitions take a little bit longer or more back-end weighted in a given year, just from a timing perspective, do you have enough—

Wendy A. Seher: cushion—

Michael Anderson Griffin: the dividend either 1031 these from a timing perspective or absorb some of the gains, or could there be a bit of a special potential here as we move on later through the year.

Daniel Guglielmone: I think, Craig, that you can count on us managing tax efficiently through the dividend and sales of gains and 1031. All of those tools are available to us to manage our taxable income and our dividend in line with what we have been doing for a bunch of years. That is what you should expect, not a special.

Operator: The next question comes from Alexander David Goldfarb with Piper Sandler. Please go ahead.

Donald C. Wood: Hey. Good evening. Don, you were among the standouts sticking with the NAREIT FFO, not going to core. Real estate, you know, has a lot of—yeah. There is a lot of cost. There is a lot of benefits. Right? You sometimes you win on revenue. Sometimes there is added cost from various things. But as you run the company and look at your team, you do not judge them and say, oh, we will take out these items, take out those items. I will give you—you know, I will let you hit your number. You judge your team based on, you know, how they perform.

So when you switch to the core, I get it that there is volatility, but at the same time, is not the whole point to judge the company based on the results they deliver, you know, as sort of the ball lies, not where, you know, you would like it to be?

Daniel Guglielmone: Alex, adding on a core FFO metric is truly simply a tool that is aimed not having anything to do with this team at all, but everything to do with being able to better analyze the financial results of the company, making it easier for you to see kind of missing some of the missteps that we have had in the past with simply using NAREIT FFO. And so that is completely what this is all about. What is important in our view is that this is not used as a nickel-and-diming, if you will, of the NAREIT FFO result, but rather big items, consequential items that just plain old distort the operating results of the company.

That is all that is about. This team is judged on their performance based on what they do day in and day out, and changing to a core FFO metric will have no impact on that whatsoever.

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

Jill Sawyer: Good afternoon. Thanks for taking my question.

Michael Goldsmith: Comparable POI growth in 2025 of 3.8%, initial guidance for 2026 of 3% to 3.5%. So just a couple of questions on this. Can you bridge the gap from 2025 to 2026? Any headwinds that would drive a deceleration? And then is that 3% to 3.5%—is that the right way to think about the steady-state runway rate of the business, or as you continue to reposition the portfolio into higher growth assets can it accelerate from here? Thanks.

Daniel Guglielmone: Yes. The big driver in terms of the deceleration is just, yeah, we will be turning over, as Wendy alluded to in her comments, a significant amount of anchor space that is already leased at much higher rents, but there will be downtime as leases end and we position the spaces to give to the incoming tenants at higher rent. That is about a 75 basis point drag of comparable POI. So the 3% to 3.5% has got 75 basis points of drag from that temporary disruption in occupancy. And so we will see a spike in SNO as a result over the course of the year. So, you know, we are at 200 basis points.

It has been increasing as both metrics increase, occupied and leased. So we expect that to balloon a bit in the middle of the year and then come back down by the end of the year as occupancy levels get back up into the mid-94s, upper-94s from the 94% level today. That is probably the biggest driver. The second question—

Jill Sawyer: No.

Donald C. Wood: Steady state? Yeah. I would say, look. I think historically, when you look back,

Daniel Guglielmone: we are in the 3% to 4% range. I think with some of the acquisitions—$2,000,000,000 of acquisitions—and we are seeing that we are operating these assets, I think, better than we had expected and with growth rates that are higher than the kind of 3% to 4% that we have historically seen in our portfolio. I would hope that would move up into the upper end of kind of the 3% to 4% range, and, you know, I think next year, 2027, we are well positioned to kind of be in and around that 4% level from where we sit today.

Operator: The next question comes from Ravi Vijay Vaidya with Mizuho. Please go ahead.

Daniel Guglielmone: Hi there. Hope you guys are doing well. I wanted to ask about tenant credit. Seems like the reserves are a bit conservative. Can you provide a bit more color here?

Michael Goldsmith: What was the amount realized at full year 2025, and are there any tenant or categories on your watch list?

Daniel Guglielmone: Can you add color on the mark-to-market opportunity for some of the recent bankruptcies?

Michael Goldsmith: Container Store—oh, wow. One or each—

Daniel Guglielmone: Sure. So I am going to—there were too many questions in there. So let me just start here. With regards to the tenant credit, you know, 60 to 85 is lower than we were to start the year last year at 75 to 80. We were about 80 finishing up the year—kind of in that ballpark. It is not a very precise number, but, yeah, that is kind of where we end up—kind of 80 to 85 in 2025. The 60 to 85—we do not have a lot of exposure to tenant credit issues. We just do not. We do have Saks. Saks has got two exceptionally strong locations.

One, we are getting back, or expect to get back, or it is closed for going-out-of-business sales. And Off 5th at Assembly Row, which is a gray box facing the power center right on a corner. It is probably got a 100% roll-up in rent from what is current rent to where market rent is. So it is a huge opportunity. And the other location is—

Michael Goldsmith: Saks Fifth Avenue store.

Daniel Guglielmone: A flagship location on Greenwich Avenue, hugely productive, in the over-affluent submarket of Greenwich, Connecticut, arguably one of the best pieces of real estate in the portfolio. So, yeah, we will see how that all plays out, but, you know, really, really great real estate with respect to that. The other thing that we keep an eye on is—and we have talked about it—is Container Store. All five locations paying rent. All five locations, we feel good about. I think that is kind of the color we can give there. We will see how this all plays out. I think we are well covered in the 60 to 85 basis point range that we have given.

Operator: The next question comes from Richard Allen Hightower with Barclays. Please go ahead.

Donald C. Wood: Hi, good evening, guys. I want to go back to one of the comments Wendy made in the prepared commentary about California being especially robust—I guess enough to make it into the comments. So just tell us what is going on there. Guess we are hearing that from other property types as well, so perhaps it is all of us singing the same chord, but I would like to hear what you guys are seeing.

Daniel Guglielmone: Can we tee up by Jeff Krashick to answer that? Jeff, I would love you—Jeff runs our West Coast operations as our president. Jeff, I would love you to talk about that.

Michael Anderson Griffin: Yeah, sure. Rich, thanks for the question.

Richard Allen Hightower: Simply put, California is going to be our largest source of growth—

Michael Anderson Griffin: for the next few years given the backlog of leasing and development activity and the strategic capital recycling we are seeing out of Santana Row and Grossmont. So California is going to be a big, big contributor going forward for a number of years. I—

Operator: question comes from Linda Yu Tsai with Jefferies. Please go ahead. Hi. Just a question on timing.

Jill Sawyer: In terms of the $13,000,000 to $15,000,000 for the development expansion pipeline, what is the timing of that—

Daniel Guglielmone: Yeah. We have given some additional disclosure that hopefully will make it easy for everybody to understand. At the bottom of page 29 in our 8-K supplement, at the bottom of the guidance page, there is sequential quarterly cadence of the increase over the course of the year. It will be pretty pro rata. It will be pretty close each quarter. And you will see the ramp up from the $17,000,000 coming from the properties in the development pipeline up to roughly a midpoint range that gets you to kind of 30 to 32—or 31 midpoint. And so that $14,000,000—the cadence is outlined there.

Anybody have any questions with regards to additional disclosure that I think would be welcomed by most of you? Feel free to give me or Jill a call. We will walk you through it.

Operator: The next question comes from Floris van Dijkum with Ladenburg. Please go ahead.

Daniel Guglielmone: Hey, guys. Thanks for taking my—

Donald C. Wood: So it seems like, you know, some people, based on the questions you have had, the comp NOI growth, you know, perhaps is understating the true growth that you expect to get from this portfolio in 2026. Maybe—and I know that in the past, your comp NOI as a percentage of overall NOI was actually pretty robust and pretty high. What percentage of your NOI is being captured in your comp pool today, and how does that impact the SNO pipeline as well? Yeah. I would estimate that kind of what is in the comparable pool is probably 85%, 90%. We can kind of refine that, but that feels about right. You know, with regards to—yeah. Oh, SNO. Yeah. Sorry.

Regards to SNO, our SNO within the existing pipeline is growing, and significantly growing. With the commencement of the PWC lease and beginning to recognize that in the fourth quarter, what is coming from the development portfolio is not going to be as high as it was in past. So SNO is probably around $27,000,000 in the existing portfolio. Another $5,000,000 or $6,000,000 in the development portfolio. And so, you know, the cadence—about 75% of that will come on next year. So roughly, call it about $25,000,000. That will be roughly kind of $10,000,000 to $11,000,000 in the first half of the year and call it $14,000,000 to $15,000,000 in the second half. And then the balance in 2027.

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

Michael Goldsmith: Hi. Good afternoon. Just hoping you could talk a little bit about the anchor movement—kind of what is driving that. Is that proactive by you, or is that something else that is going on? And then you kind of mentioned a onetime hit that otherwise you would have hit your expectations related to Saks. If you could just quantify that dollar amount, that would be helpful. Thank you.

Daniel Guglielmone: Yeah, Juan. First of all, on the anchors, simply timing. The way the expirations were working, particularly on the West Coast assets, there were expirations that were coming due a lot last year and in the first half of this year, etcetera. So we have been on top of that to try to make sure that we have got either new tenants coming in—Grossmont is basically a redevelopment of the entire asset there. That is happening. Best Buy at Santana Row, which you may remember, going out after an extremely productive period of time for a new Lifetime deal there.

It is simply the timing that, you know, we have got all leased up, but there will be, you know, a hit in the meantime. But we are plowing right through that, and it is still going to grow, hopefully, at 6% next year. So that is what is going on with respect to the anchors—nothing more than timing. And what was the last—the Saks charge was a noncash charge writing off straight-line rent at roughly around the $0.03 a share.

Operator: The next question comes from Paulina Rojas Schmidt with Green Street. Please go ahead.

Daniel Guglielmone: Good afternoon.

Wendy A. Seher: My question is about acquisitions.

Jill Sawyer: While acquisitions are shaped really by what comes to market, if you had full discretion would you tap your exposure to new secondary or tertiary markets, or are you truly—

Operator: taking a fully market-agnostic approach?

Jill Sawyer: Assuming property quality meets your standards.

Daniel Guglielmone: And first of all, Paulina, I love that you started this off with, of course, it depends on how much supply is available, because that is a really important point. You know, acquisitions get lumpy. We are so completely committed to the plan that we talked about last year, which is a combination of the new markets that we talked about. And I think you have seen our buy box of what markets effectively apply to that, and, you know, it is a million people in a marketplace and very affluent—all of the stuff that we talked about.

But yes, I would be agnostic to whether we find those assets in those places or in our existing markets that we have, because real estate is local. And it really comes down to the submarket. And so to the extent we find those opportunities in places that we know inside and out—and we are looking at some right now, frankly, that are adjacent to our existing assets—love that kind of stuff. In addition to the new markets that fit the buy box, yes, we are agnostic as to which of those opportunities come to fruition. I hope that helps.

Operator: Once again, if you have a question, please press star then 1. The next question comes from Michael William Mueller with JPMorgan. Please go ahead.

Michael Anderson Griffin: Yes, hi. I think you mentioned you had another $400,000,000 to $500,000,000 of nonperipheral residential left that you can sell to fund acquisitions. And it seems like the acquisition opportunity is greater than that. So what is next on the pecking order after those remaining resi assets?

Daniel Guglielmone: Oh, no question. And it is not even next—it is in conjunction with, Michael. It would be those assets—retail assets—where we have done all we can. And to the extent we have done all we can and we can get a strong price for those retail assets, we will use those to recycle into better growth opportunities. So having the opportunity to have both resi and strong assets—strong retail assets that have limited growth opportunities—all of those things are considered. So it is not which one is—it is not using up the resi and then moving to those. It is a combination based on market conditions and where we think we can effectively get paid best for.

So you should see a combination of both as we move forward.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Jill Sawyer for any closing remarks. Please go ahead.

Jill Sawyer: Thanks for joining us today. We look forward to seeing many of you in Florida in a few weeks.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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