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FRT Q1 FFO Tops Estimates on Record Leasing, POI Growth
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Key Takeaways
Federal Realty Investment Trust posted Q1 FFO of $1.88, beating estimates and rising 10.6% YoY.
FRT saw strong leasing with 101 deals and 13% cash rent spreads, driving rental income growth.
Federal Realty raised 2026 FFO outlook and maintained dividend after solid operating performance.
Federal Realty Investment Trust (FRT - Free Report) reported first-quarter 2026 core funds from operations (FFO) per share of $1.88, up 10.6% year over year and ahead of the Zacks Consensus Estimate of $1.82. Total revenues of $341.08 million increased 10.3% year over year and beat the consensus mark of $333.8 million.
Results were supported by strong leasing momentum and higher comparable property operating income (POI). The company signed 101 comparable retail leases spanning 649,078 square feet, delivering cash rent spreads of 13% for the quarter.
FRT’s Revenue Mix Improves as Rents and Reimbursements Rise
The top-line beat reflected broad-based property income strength. Rental income rose to $332.66 million from $302.29 million in the year-ago quarter, aided by higher commercial minimum rents and stronger cost reimbursements.
Within rental income, commercial minimum rents climbed to $225.36 million, while cost reimbursements increased to $71.91 million.
Federal Realty’s Leasing Produces Meaningful Rent Spreads
Leasing activity was a key highlight, with Federal Realty signing 106 retail leases totaling 661,158 square feet during the quarter. On a comparable basis, leasing volume set a first-quarter record, with contractual average rent of $35.79 per square foot versus $31.75 under prior leases.
New leases were especially productive. Comparable new leases totaled 242,901 square feet and generated cash rent growth of 26% and straight-line rent growth of 35%, supported by an average lease term of 8.6 years. Renewals, which made up the balance of comparable volume, produced cash rent growth of 6% and straight-line growth of 16%.
Portfolio metrics were mixed but generally steady. Overall commercial occupancy ended the quarter at 93.8%, while the leased rate was 96.1%, reflecting stable demand for the company’s retail-based real estate.
Small-shop leasing remained a point of durability, with the small-shop leased rate ending the quarter at 93.8%. Comparable commercial properties reported occupancy of 94.1% and a leased rate of 96.5% at quarter-end, while the residential leased rate for comparable properties was 95.6%.
Federal Realty’s Transaction Activity Reshapes Portfolio
Capital recycling was active during and just after the quarter. On Feb. 5, 2026, Federal Realty sold two assets for a combined $158.5 million.
The company also added targeted assets to deepen market presence. It acquired Congressional North Shopping Center in Montgomery County, MD, on March 12, 2026 for $72.3 million, a 217,000-square-foot grocery-anchored center along the Rockville Pike corridor. After quarter-end, Federal Realty purchased an adjacent 88,000-square-foot retail parcel at Kingstowne Towne Center in Alexandria, VA, for $19.7 million.
Federal Realty’s Balance Sheet Supports Investment Activity
Federal Realty ended the quarter with $115.63 million of cash and cash equivalents and total net debt of $4.73 billion. The company also enhanced financing flexibility after quarter-end by amending and restating its revolving credit facility, increasing borrowing capacity to $1.4 billion and extending maturity to April 2030, plus extension options.
FRT Raises 2026 Outlook and Maintains Dividend
Management raised and tightened full-year 2026 expectations following the strong quarter. Core FFO per share is now projected in the range of $7.46-$7.55, up from prior guidance of $7.42-$7.52. The Zacks Consensus Estimate of $7.47 lies within the guided range.
Underlying assumptions were also adjusted modestly higher. Comparable properties growth is expected at 3.125%-3.625%, with lease termination fees forecast at $8-$9 million and incremental redevelopment/expansion POI projected at $14-$15 million. Development/redevelopment capital is planned at $175-$225 million.
Federal Realty also maintained its regular shareholder payout. The board of trustees declared a quarterly cash dividend of $1.13 per common share, implying an annualized rate of $4.52 per share. The dividend is payable on July 15, 2026 to shareholders of record as of July 1, 2026.
Regency Centers Corporation (REG - Free Report) reported first-quarter 2026 core FFO per share of $1.20, missing the Zacks Consensus Estimate of $1.21. However, the metric increased 4.3% from the year-ago quarter.
Results were aided by continued leasing traction, as reflected in same-property net operating income (NOI) growth of 4.4% year over year.
Kimco Realty Corporation (KIM - Free Report) reported first-quarter 2026 core FFO per share of 46 cents, topping the Zacks Consensus Estimate of 45 cents. The metric increased 4.5% from the year-ago quarter.
Results were supported by steady rent growth and continued demand for Kimco’s open-air, grocery-anchored centers, with pro-rata leased occupancy ending the quarter at 96.3%, up 50 basis points year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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FRT Q1 FFO Tops Estimates on Record Leasing, POI Growth
Key Takeaways
Federal Realty Investment Trust (FRT - Free Report) reported first-quarter 2026 core funds from operations (FFO) per share of $1.88, up 10.6% year over year and ahead of the Zacks Consensus Estimate of $1.82. Total revenues of $341.08 million increased 10.3% year over year and beat the consensus mark of $333.8 million.
Results were supported by strong leasing momentum and higher comparable property operating income (POI). The company signed 101 comparable retail leases spanning 649,078 square feet, delivering cash rent spreads of 13% for the quarter.
FRT’s Revenue Mix Improves as Rents and Reimbursements Rise
The top-line beat reflected broad-based property income strength. Rental income rose to $332.66 million from $302.29 million in the year-ago quarter, aided by higher commercial minimum rents and stronger cost reimbursements.
Within rental income, commercial minimum rents climbed to $225.36 million, while cost reimbursements increased to $71.91 million.
Federal Realty’s Leasing Produces Meaningful Rent Spreads
Leasing activity was a key highlight, with Federal Realty signing 106 retail leases totaling 661,158 square feet during the quarter. On a comparable basis, leasing volume set a first-quarter record, with contractual average rent of $35.79 per square foot versus $31.75 under prior leases.
New leases were especially productive. Comparable new leases totaled 242,901 square feet and generated cash rent growth of 26% and straight-line rent growth of 35%, supported by an average lease term of 8.6 years. Renewals, which made up the balance of comparable volume, produced cash rent growth of 6% and straight-line growth of 16%.
FRT’s Occupancy Steady, Small-Shop Leasing Resilient
Portfolio metrics were mixed but generally steady. Overall commercial occupancy ended the quarter at 93.8%, while the leased rate was 96.1%, reflecting stable demand for the company’s retail-based real estate.
Small-shop leasing remained a point of durability, with the small-shop leased rate ending the quarter at 93.8%. Comparable commercial properties reported occupancy of 94.1% and a leased rate of 96.5% at quarter-end, while the residential leased rate for comparable properties was 95.6%.
Federal Realty’s Transaction Activity Reshapes Portfolio
Capital recycling was active during and just after the quarter. On Feb. 5, 2026, Federal Realty sold two assets for a combined $158.5 million.
The company also added targeted assets to deepen market presence. It acquired Congressional North Shopping Center in Montgomery County, MD, on March 12, 2026 for $72.3 million, a 217,000-square-foot grocery-anchored center along the Rockville Pike corridor. After quarter-end, Federal Realty purchased an adjacent 88,000-square-foot retail parcel at Kingstowne Towne Center in Alexandria, VA, for $19.7 million.
Federal Realty’s Balance Sheet Supports Investment Activity
Federal Realty ended the quarter with $115.63 million of cash and cash equivalents and total net debt of $4.73 billion. The company also enhanced financing flexibility after quarter-end by amending and restating its revolving credit facility, increasing borrowing capacity to $1.4 billion and extending maturity to April 2030, plus extension options.
FRT Raises 2026 Outlook and Maintains Dividend
Management raised and tightened full-year 2026 expectations following the strong quarter. Core FFO per share is now projected in the range of $7.46-$7.55, up from prior guidance of $7.42-$7.52. The Zacks Consensus Estimate of $7.47 lies within the guided range.
Underlying assumptions were also adjusted modestly higher. Comparable properties growth is expected at 3.125%-3.625%, with lease termination fees forecast at $8-$9 million and incremental redevelopment/expansion POI projected at $14-$15 million. Development/redevelopment capital is planned at $175-$225 million.
Federal Realty also maintained its regular shareholder payout. The board of trustees declared a quarterly cash dividend of $1.13 per common share, implying an annualized rate of $4.52 per share. The dividend is payable on July 15, 2026 to shareholders of record as of July 1, 2026.
FRT’s Zacks Rank
Currently, FRT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Federal Realty Investment Trust Price, Consensus and EPS Surprise
Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote
Performance of Other Retail REITs
Regency Centers Corporation (REG - Free Report) reported first-quarter 2026 core FFO per share of $1.20, missing the Zacks Consensus Estimate of $1.21. However, the metric increased 4.3% from the year-ago quarter.
Results were aided by continued leasing traction, as reflected in same-property net operating income (NOI) growth of 4.4% year over year.
Kimco Realty Corporation (KIM - Free Report) reported first-quarter 2026 core FFO per share of 46 cents, topping the Zacks Consensus Estimate of 45 cents. The metric increased 4.5% from the year-ago quarter.
Results were supported by steady rent growth and continued demand for Kimco’s open-air, grocery-anchored centers, with pro-rata leased occupancy ending the quarter at 96.3%, up 50 basis points year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.