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Federal Realty (FRT) Tops Q3 FFO Estimates, Raises 2021 View

Federal Realty Investment Trust’s FRT third-quarter 2021 funds from operations (FFO) per share of $1.51 surpassed the Zacks Consensus Estimate of $1.28. This also compares favorably with the year-ago quarter’s tally of $1.12.

Results reflect better-than-anticipated revenues. The retail REIT also raised its guidance for 2021 and 2022 FFO per share.

Quarterly revenues of $247.3 million topped the consensus mark of $229.7 million and improved the year-ago tally by 18.8%.

According to Donald C. Wood, the company’s chief executive officer, "Collections have improved dramatically, new and exciting retail and office tenants are committing to long term leases at a very brisk pace, and our development and acquisition pipeline have never been more active. We're more confident than ever that the places we create and the markets that we're in are spot on in a post COVID world."

It also collected about 96% of total third-quarter 2021 billed recurring rents as of Oct 29, 2021.

Quarter in Details

During the reported quarter, Federal Realty signed 124 leases for 481,607 square feet of the retail space. On a comparable space basis, the company signed 119 leases for 430,234 square feet of space at an average rent of $40.73 per square foot. This denotes cash-basis rollover growth of 7%, 16% on a straight-line basis.

As of Sep 30, REIT’s portfolio was 90.2% occupied, denoting a sequential expansion of 60 basis points. The company reported a 260-basis-point spread between leased and occupied.

During the third quarter, Federal Realty acquired Twinbrooke Shopping Centre in Fairfax, VA, taking the COVID-era off-market acquisitions total to 5 properties, 1.9 million square feet and 135 acres.

Balance Sheet

Federal Realty exited third-quarter 2021 with cash and cash equivalents of $177.6 million, down from $798.3 million recorded at the end of 2020. Along with the undrawn availability under its $1 billion revolving-credit facility, the company’s liquidity amounted to $1.2 billion.

Outlook

Federal Realty raised its guidance for both 2021 and 2022. For 2021, the company now projects FFO per share of $5.45-$5.50 compared with $5.05-$5.15 guided earlier. The current guidance is ahead of the Zacks Consensus Estimate of $5.16.

For 2022, REIT now estimates FFO per share of $5.65-$5.85 compared with $5.30-$5.50 projected earlier. The Zacks Consensus Estimate for the same is currently pinned at $5.53.

Dividend Update

Concurrent with the third-quarter earnings release, Federal Realty announced a regular quarterly cash dividend of $1.07 per share, which indicates an annual rate of $4.28 per share. The dividend will be paid out on Jan 18, to shareholders of record as of Jan 3, 2022.

Federal Realty currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Retail REITs

Simon Property Group, Inc.’s SPG FFO per share of $3.13 exceeded the Zacks Consensus Estimate of $2.47 in the September-end quarter. This performance was backed by better-than-projected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of the year. It also announced a hike in the quarterly dividend.

Realty Income Corporation’s O third-quarter 2021 adjusted funds from operations (AFFO) per share of 89 cents missed the Zacks Consensus Estimate of 92 cents. However, the reported figure compared favorably with the prior-year quarter’s 82 cents displayed better-than-expected improvement in revenues. The retail REIT also raised its 2021 AFFO per share guidance and increased the 2021 acquisition volume projection to more than $5 billion.

Macerich Company MAC delivered better-than-expected adjusted funds from operations (FFO) per share on solid top-line growth. The retail REIT reported FFO per share of 45 cents, excluding financing expenses in relation to Chandler Freehold and loss on extinguishment of debt, which exceeded the Zacks Consensus Estimate of 43 cents. It has also raised the 2021 FFO per share guidance.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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Simon Property Group, Inc. (SPG): Free Stock Analysis Report
 
Macerich Company The (MAC): Free Stock Analysis Report
 
Federal Realty Investment Trust (FRT): Free Stock Analysis Report
 
Realty Income Corporation (O): Free Stock Analysis Report
 
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