Federal Realty Reports Mixed 1Q - Analyst Blog
May 10 2011 - 8:49AM
Zacks
Federal Realty Investment Trust (FRT) reported
first quarter 2011 FFO (funds from operations) of $61.3 million or
99 cents per share compared with $57.8 million or 94 cents per
share in the year-earlier quarter.
Funds from operations, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
amortization and other non-cash expenses to net income. The
reported quarterly FFO was in line with the Zacks Consensus
Estimate.
Total revenues during the quarter increased marginally to $138.5
million from $138.3 million in the year-ago quarter. The reported
revenues were ahead of the Zacks Consensus Estimate of $138.0
million.
Despite challenging market conditions, Federal Realty executed
healthy leasing activities during the quarter. The company signed
96 leases spanning over 382,000 square feet of retail space.
On a same-store basis, the company leased 340,000 square feet at
an average cash-basis contractual rent increase of 11.0% per square
foot. The average same-store contractual rent for the first year of
the new leases is $30.52 per square foot, compared to $27.55 for
the last year of the prior leases.
Same-store rents (GAAP) increased 24.0% on an average during the
quarter. As of March 31, 2011, Federal Realty's average
contractual, cash basis minimum rent for retail and commercial
space was $22.73 per square foot.
Same-store net operating income, excluding redevelopment and
expansion properties increased 1.8% on a year-over-year basis. The
overall portfolio was 93.8% leased at the end of the quarter,
compared with 93.9% in the prior-year quarter, while the same-store
portfolio was 94.3% leased compared with 94.6% in the year-ago
period.
Federal Realty continues to focus on a low-risk business
strategy of growth through prudent leasing of assets and
completion of redevelopment projects at high risk-adjusted
returns. The company is strengthening its presence in the core
markets by acquiring new assets, which would eventually lead to
better operational and ownership flexibility throughout the entire
portfolio.
Federal Realty maintained its quarterly dividend rate of $0.67
per share or $2.68 on an annualized basis. At year-end 2010, the
company had cash and cash equivalents of $10.0 million. For full
year 2011, Federal Realty reiterated its earlier FFO guidance in
the range of $3.95 – $4.02 per share.
Federal Realty currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock. One of its
competitors, Acadia Realty Trust (AKR) currently
retains a Zacks #3 Rank, which translates into a short-term Hold
rating.
ACADIA RLTY TR (AKR): Free Stock Analysis Report
FED RLTY INV (FRT): Free Stock Analysis Report
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