Federal Realty Investment Trust: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 1 May 2026: press release. Guidance figures: 6 raised, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Nareit FFO per share rose 10.6%: Nareit FFO was $162.6 million, or $1.88 per diluted share, against $146.5 million, or $1.70, a year earlier. Source
• 2026 FFO guidance raised, tightened: Management raised and tightened 2026 Nareit FFO and Core FFO per diluted share guidance to $7.46 - $7.55, citing 6.3% midpoint growth. Source
• Record first-quarter leasing volume: The company signed 101 comparable leases for 649,078 square feet at $35.79 per square foot, against $31.75 under prior leases. Source
• Cash and straight-line rent growth: Rent growth on comparable spaces was 13% on a cash basis and 23% on a straight-line basis for the quarter. Source
• Occupancy slipped sequentially: Overall occupancy was 93.8% at March 31, 2026, down 30 basis points sequentially; the leased rate was 96.1%, flat sequentially and up 40 basis points year-over-year. Source
• Comparable POI rose 4.7%: Comparable property POI was $200.6 million against $191.6 million; adjusted for straight-line rents and in-place lease amortization, growth was 5.1%. Source
• Congressional North bought for $72.3 million: The 217,000 square foot grocery-anchored center was acquired on March 12, 2026, deepening the company's presence along Rockville Pike in Montgomery County, MD. Source

“We delivered a strong start to the year, exceeding expectations and continuing the momentum we built in 2025.”

Donald C. Wood, Chief Executive Officer of Federal Realty

Guidance

What changed from last quarter

• Guidance raised: 2026 EPS guidance raised and tightened to $3.94 - $4.03 from $3.90 - $4.00. Source
• Guidance raised: 2026 Nareit FFO and Core FFO per diluted share guidance raised to $7.46 - $7.55 from $7.42 - $7.52. Source
• Guidance raised: Comparable properties growth guidance raised to 3.125% to 3.625% from 3.0% to 3.5%. Source
• Guidance raised: Lease termination fee guidance raised to $8 million to $9 million from $7 million to $8 million. Source
• Guidance kept: G&A, development capital and capitalized interest guidance unchanged from the prior ranges. Source
• New: Congressional North Shopping Center acquired for $72.3 million. Source
• New: Adjacent parcel at Kingstowne Towne Center acquired for $19.7 million. Source
• New: Revolving credit facility amended and restated, borrowing capacity raised to $1.4 billion. Source
• Ended: $400 million 1.25% senior notes repaid at maturity on February 17, 2026. Source
• Ended: Misora and Courthouse Center sold for a combined $158.5 million. Source

Results and FFO growth

• Nareit FFO per share rose 10.6%: Nareit FFO was $162.6 million, or $1.88 per diluted share, against $146.5 million, or $1.70, a year earlier. Source
• Core FFO matched Nareit FFO: Core FFO was $162.6 million, or $1.88 per diluted share, against $146.4 million, or $1.70. The 2025 figure excluded $67 thousand of COVID-deferred rent collected. Source
• Reported EPS includes property gain: Diluted EPS was $1.81 against $0.72. The quarter includes $92.7 million of gain on sale of real estate, against $1.2 million a year earlier. Source
• 2026 FFO guidance raised, tightened: Management raised and tightened 2026 Nareit FFO and Core FFO per diluted share guidance to $7.46 - $7.55, citing 6.3% midpoint growth. Source

Leasing volume and rent growth

• Record first-quarter leasing volume: The company signed 101 comparable leases for 649,078 square feet at $35.79 per square foot, against $31.75 under prior leases. Source
• Cash and straight-line rent growth: Rent growth on comparable spaces was 13% on a cash basis and 23% on a straight-line basis for the quarter. Source
• Trailing twelve-month leasing set records: Over the trailing twelve months, 448 comparable leases covered 2,620,601 square feet, also a volume record, with spreads of 16% cash and 28% straight-line. Source
• 106 retail leases signed in quarter: Total retail leasing was 106 leases for 661,158 square feet, of which 101 leases covered comparable space. Source

“Our portfolio is performing well amid a volatile macro environment, reflecting both the strength of our platform and the resilience of the higher-income consumer we serve,”

Donald C. Wood, Chief Executive Officer of Federal Realty

Occupancy and leased rates

• Occupancy slipped sequentially: Overall occupancy was 93.8% at March 31, 2026, down 30 basis points sequentially; the leased rate was 96.1%, flat sequentially and up 40 basis points year-over-year. Source
• Comparable leased rate reached 96.5%: Comparable commercial leased rate was 96.5%, against 96.1% a year earlier; comparable occupancy was 94.1%, against 93.9%. Source
• Small shop leased rate up year over year: The small shop leased rate was 93.8%, flat on the prior quarter and up 30 basis points from a year earlier. Source
• Residential leased rate up 100 basis points: The residential leased rate across comparable properties was 95.6%, against 94.6% a year earlier. Source

Comparable POI and rental income

• Comparable POI rose 4.7%: Comparable property POI was $200.6 million against $191.6 million; adjusted for straight-line rents and in-place lease amortization, growth was 5.1%. Source
• Commercial minimum rents and recoveries rose: Commercial minimum rents were $225.4 million against $203.1 million, and cost reimbursements $71.9 million against $63.3 million. Residential minimum rents fell to $22.5 million from $26.9 million. Source
• Lease termination fees rose to $4.1 million: Lease termination fees were $4.1 million against $1.3 million a year earlier; straight-line rents were $8.7 million against $7.5 million. Source

“With this performance, we are increasing our outlook for 2026, reinforcing our confidence in the consistency and durability of our earnings growth.”

Donald C. Wood, Chief Executive Officer of Federal Realty

Costs and interest expense

• Rental expenses and taxes increased: Rental expenses were $74.7 million against $67.8 million, and real estate taxes were $39.0 million against $36.6 million. Source
• Interest expense rose to $49.1 million: Interest expense was $49.1 million against $42.5 million. The ratio of EBITDAre to combined fixed charges and preferred dividends was 3.9x, against 3.8x. Source
• Depreciation and G&A increased: Depreciation and amortization was $99.2 million against $86.9 million, and general and administrative expense was $11.9 million against $10.9 million. Source

Capital recycling and transactions

• Misora and Courthouse sold for $158.5 million: Misora, a peripherally located residential component of Santana Row, sold for $148.5 million; Courthouse Center sold for $10.0 million. Source
• Congressional North bought for $72.3 million: The 217,000 square foot grocery-anchored center was acquired on March 12, 2026, deepening the company's presence along Rockville Pike in Montgomery County, MD. Source
• Kingstowne parcel bought for $19.7 million: An 88,000 square foot retail parcel adjacent to Kingstowne Towne Center was acquired on April 17, 2026, completing the retail assemblage at the center. Source

Debt, liquidity and dividends

• Revolver upsized to $1.4 billion: Borrowing capacity rose from $1.25 billion to $1.4 billion, the SOFR spread was reduced to 72.5 basis points, and maturity was extended to April 12, 2030. Source
• Net debt at 34% of market capitalization: Total net debt to market capitalization at market price per common share was 34%, the same as a year earlier. Total net debt was $4.73 billion, against $4.40 billion. Source
• Covenants within thresholds at quarter end: All four senior notes covenants were within their thresholds at March 31, 2026, including total debt to total assets of 40% against a limit under 60%. Source
• Variable rate debt at 24% of total: Variable rate debt was $1.17 billion, or 24% of total debt, at a weighted average rate of 4.59%; fixed rate debt was 76% at 4.11%. Source
• Quarterly dividend declared at $1.13: The Board declared a $1.13 regular quarterly dividend per common share, an indicated annual rate of $4.52. The payout ratio was 60% of Nareit FFO, against 65%. Source

Development and redevelopment spending

• Development spending $35.2 million: Development, redevelopment and expansion capital was $35.2 million against $34.3 million; total capital expenditures were $56.4 million against $61.5 million. Source
• Santana West office building mostly delivered: Santana West, a 369,000 square foot office building, is 75% to 80% delivered, with projected cost of $325 million to $335 million and projected ROI of 5% to 6%. Source
• Santana Row Lot 12 residential project: The six story building will include 258 residential units; projected cost is $140 million to $148 million, with $34 million spent to date and projected ROI of 6% to 7%. Source
• Willow Grove mixed-use rebuild: Demolition of 130,000 square feet of retail precedes a mixed-use building; projected cost is $110 million to $120 million, projected ROI 7%, with $16 million spent to date. Source

Pipeline and entitlements

• Assembly Row entitlements remain: Remaining Assembly Row entitlements include about 1.5 million square feet of commercial-use buildings and 326 residential units. The company notes that work on many such projects is preliminary. Source
• Santana Row entitlements remain: Remaining Santana Row entitlements include about 321,000 square feet of commercial space and 137 residential units, plus about 604,000 square feet across from the property. Source
• 915 Meeting Street office building: The 262,000 square foot office building with 10,000 square feet of retail is fully leased; projected cost is $180 million to $185 million, with 90% to 95% delivered. Source

Coming up, as management said on 1 May 2026

• Regular dividend payable July 15: The $1.13 regular common dividend is payable July 15, 2026, to common shareholders of record as of July 1, 2026. Source
• Guidance basis set at April 30: Guidance excludes acquisitions or dispositions not closed by April 30, 2026, and the company states all amounts are estimates. Source

Figures management reported

Risks management discussed

• Demand: Blayr, a new residential building opened in Q1 2026, is being leased up for the first time and is excluded from the overall residential leased rate. Source
• Financial: The $200 million Bethesda Row mortgage matures December 28, 2026, with one one-year extension at the company's option to December 28, 2027. Source
• Operational: Projected costs, ROI and POI delivered for development projects may change, and some factors in the development process are outside company control. Source

Earlier plans management reported on

• Met: Delivery of the Bala Cynwyd on City Avenue project started in Q1 2026, as the prior schedule had projected. Source
• Met: The $400 million 1.25% senior notes were repaid at maturity on February 17, 2026, using the previously announced delayed draw term loan and revolver. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.