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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 1-07533 (Federal Realty Investment Trust)
Commission file number: 333-262016-01 (Federal Realty OP LP)
FEDERAL REALTY INVESTMENT TRUST
FEDERAL REALTY OP LP
(Exact Name of Registrant as Specified in its Charter)
Maryland (Federal Realty Investment Trust)
 87-3916363
Delaware (Federal Realty OP LP)
52-0782497
(State of Organization) (IRS Employer Identification No.)
909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852
(Address of Principal Executive Offices) (Zip Code)
(301) 998-8100
(Registrant’s Telephone Number, Including Area Code)

Federal Realty Investment Trust
Title of Each ClassTrading SymbolName of Each Exchange On Which Registered
Common Shares of Beneficial InterestFRTNew York Stock Exchange
$.01 par value per share, with associated Common Share Purchase Rights
Depositary Shares, each representing 1/1000 of a share of FRT-CNew York Stock Exchange
5.00% Series C Cumulative Redeemable Preferred Stock, $.01 par value per share
Federal Realty OP LP
Title of Each ClassTrading SymbolName of Each Exchange On Which Registered
NoneN/AN/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
 Federal Realty Investment Trust ☒  Yes    ☐  No Federal Realty OP LP ☒  Yes    ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Federal Realty Investment Trust ☒  Yes    ☐  No Federal Realty OP LP ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Federal Realty Investment TrustFederal Realty OP LP
Large Accelerated Filer
☒
Accelerated filer
☐
Large Accelerated Filer
☒
Accelerated filer
☐
Non-Accelerated Filer
☐
Smaller reporting company
☐
Non-Accelerated Filer
☐
Smaller reporting company
☐
Emerging growth company
☐
Emerging growth company
☐
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Federal Realty Investment Trust ☐  Yes    ☐  No Federal Realty OP LP ☐  Yes    ☐  No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
Federal Realty Investment Trust ☐  Yes    ☒  No Federal Realty OP LP ☐  Yes    ☒  No
The number of registrant’s common shares outstanding on May 1, 2023 was 81,515,397.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2023, of Federal Realty Investment Trust and Federal Realty OP, LP. Unless stated otherwise or the context otherwise requires, references to "Federal Realty Investment Trust," the "Parent Company" or the "Trust" mean Federal Realty Investment Trust; and references to "Federal Realty OP LP" or the "Operating Partnership" mean Federal Realty OP LP. The term "the Company," "we," "us," and "our" refer to the Parent Company and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. References to "shares" and "shareholders" refer to the shares and shareholders of the Parent Company and not the limited partnership interests for limited partners of the Operating Partnership.
The Parent Company is a real estate investment trust ("REIT") that owns 100% of the limited liability company interests of, is the sole member of, and exercises exclusive control over Federal Realty GP LLC (the "General Partner"), which is the sole general partner of the Operating Partnership. As of March 31, 2023, the Parent Company owned 100% of the outstanding partnership units (the "OP Units") in the Operating Partnership.
The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:
•Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the businesses as a whole in the same manner as management views and operates the business;
•Eliminates duplicate disclosure and provides a more streamlined and readable presentation; and
•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as one business. Since the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the management of the Parent Company consists of the same individuals as the management of the Operating Partnership.
We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its direct and indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company is not expected to incur any material indebtedness. The Operating Partnership holds substantially all of our assets and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Stockholders' equity, partner capital, and non-controlling interests are the primary areas of difference between the unaudited Condensed Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent, and may in the future include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for in capital in the Operating Partnership’s financial statements and in non-controlling interests in the Parent Company’s financial statements.
The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders’ equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.


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FEDERAL REALTY INVESTMENT TRUST
FEDERAL REALTY OP LP
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
Federal Realty Investment Trust
Consolidated Balance Sheets (unaudited) as of March 31, 2023 and December 31, 2022
Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2023 and 2022
Consolidated Statements of Shareholders' Equity (unaudited) for the three months ended March 31, 2023 and 2022
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2023 and 2022
Federal Realty OP LP
Consolidated Balance Sheets (unaudited) as of March 31, 2023 and December 31, 2022
Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2023 and 2022
Consolidated Statements of Capital (unaudited) for the three months ended March 31, 2023 and 2022
Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2023 and 2022
Federal Realty Investment Trust and Federal Realty OP LP
Notes to Consolidated Financial Statements (unaudited)
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4.Controls and Procedures
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
SIGNATURES


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Federal Realty Investment Trust
Consolidated Balance Sheets
March 31,December 31,
20232022
 (In thousands, except share and per share data)
(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,002,163 and $1,997,583 of consolidated variable interest entities, respectively)
$9,532,332 $9,441,945 
Construction-in-progress (including $12,174 and $8,477 of consolidated variable interest entities, respectively)
664,184 662,554 
10,196,516 10,104,499 
Less accumulated depreciation and amortization (including $376,441 and $362,921 of consolidated variable interest entities, respectively)
(2,771,150)(2,715,817)
Net real estate7,425,366 7,388,682 
Cash and cash equivalents99,449 85,558 
Accounts and notes receivable, net200,512 197,648 
Mortgage notes receivable, net9,443 9,456 
Investment in partnerships143,464 145,205 
Operating lease right of use assets, net88,831 94,569 
Finance lease right of use assets, net45,179 45,467 
Prepaid expenses and other assets257,050 267,406 
TOTAL ASSETS$8,269,294 $8,233,991 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable, net (including $191,193 and $191,827 of consolidated variable interest entities, respectively)
$319,910 $320,615 
Notes payable, net661,391 601,077 
Senior notes and debentures, net3,408,104 3,407,701 
Accounts payable and accrued expenses196,092 190,340 
Dividends payable90,436 90,263 
Security deposits payable28,351 28,508 
Operating lease liabilities77,442 77,743 
Finance lease liabilities67,658 67,660 
Other liabilities and deferred credits237,316 237,699 
Total liabilities5,086,700 5,021,606 
Commitments and contingencies (Note 6)
Redeemable noncontrolling interests178,353 178,370 
Shareholders’ equity
Preferred shares, authorized 15,000,000 shares, $.01 par:
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding
150,000 150,000 
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 392,878 shares issued and outstanding
9,822 9,822 
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 81,511,204 and 81,342,959 shares issued and outstanding, respectively
820 818 
Additional paid-in capital3,828,930 3,821,801 
Accumulated dividends in excess of net income(1,068,892)(1,034,186)
Accumulated other comprehensive income4,546 5,757 
Total shareholders’ equity of the Trust2,925,226 2,954,012 
Noncontrolling interests79,015 80,003 
Total shareholders’ equity3,004,241 3,034,015 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$8,269,294 $8,233,991 
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended March 31,
 20232022
 (In thousands, except per share data)
REVENUE
Rental income$272,798 $256,507 
Mortgage interest income261 264 
Total revenue273,059 256,771 
EXPENSES
Rental expenses55,205 56,211 
Real estate taxes32,566 30,560 
General and administrative12,545 12,342 
Depreciation and amortization78,637 71,674 
Total operating expenses178,953 170,787 
       Gain on sale of real estate1,702 — 
OPERATING INCOME95,808 85,984 
OTHER INCOME/(EXPENSE)
Other interest income632 120 
Interest expense(39,225)(31,573)
Income from partnerships516 197 
NET INCOME57,731 54,728 
Net income attributable to noncontrolling interests(2,396)(2,744)
NET INCOME ATTRIBUTABLE TO THE TRUST55,335 51,984 
Dividends on preferred shares(2,008)(2,010)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS$53,327 $49,974 
EARNINGS PER COMMON SHARE, BASIC:
       Net income available for common shareholders$0.65 $0.63 
Weighted average number of common shares81,141 78,446 
EARNINGS PER COMMON SHARE, DILUTED:
       Net income available for common shareholders$0.65 $0.63 
Weighted average number of common shares81,141 78,543 
COMPREHENSIVE INCOME$56,395 $58,644 
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST$54,124 $55,556 

The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Consolidated Statements of Shareholders’ Equity
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
 Shareholders’ Equity of the Trust  
 Preferred SharesCommon SharesAdditional
Paid-in
Capital		Accumulated
Dividends in
Excess of Net
Income		Accumulated
Other
Comprehensive
Income (Loss)		Noncontrolling InterestsTotal Shareholders' Equity
 SharesAmountSharesAmount
 (In thousands, except share data)
BALANCE AT DECEMBER 31, 2022398,878 $159,822 81,342,959 $818 $3,821,801 $(1,034,186)$5,757 $80,003 $3,034,015 
Net income, excluding $1,668 attributable to redeemable noncontrolling interests
— — — — — 55,335 — 728 56,063 
Other comprehensive loss - change in fair value of interest rate swaps, excluding $125 attributable to redeemable noncontrolling interests
— — — — — — (1,211)— (1,211)
Dividends declared to common shareholders ($1.08 per share)
— — — — — (88,033)— — (88,033)
Dividends declared to preferred shareholders— — — — — (2,008)— — (2,008)
Distributions declared to noncontrolling interests, excluding $1,560 attributable to redeemable noncontrolling interests
— — — — — — (1,048)(1,048)
Common shares issued, net— — 57,064 1 6,250 — — — 6,251 
Shares issued under dividend reinvestment plan— — 4,664 — 423 — — — 423 
Share-based compensation expense, net of forfeitures— — 141,234 1 4,433 — — — 4,434 
Shares withheld for employee taxes— — (42,240)— (4,645)— — — (4,645)
Redemption of downREIT OP units— — 7,523 — 668 — — (668)— 
BALANCE AT MARCH 31, 2023398,878 $159,822 81,511,204 $820 $3,828,930 $(1,068,892)$4,546 $79,015 $3,004,241 
BALANCE AT DECEMBER 31, 2021405,896 $159,997 78,603,305 $790 $3,488,794 $(1,066,932)$(2,047)$82,546 $2,663,148 
Net income, excluding $1,735 attributable to redeemable noncontrolling interests
— — — — — 51,984 — 1,009 52,993 
Other comprehensive income - change in fair value of interest rate swaps, excluding $344 attributable to redeemable noncontrolling interests
— — — — — — 3,572 — 3,572 
Dividends declared to common shareholders ($1.07 per share)
— — — — — (84,196)— — (84,196)
Dividends declared to preferred shareholders— — — — — (2,010)— — (2,010)
Distributions declared to noncontrolling interests, excluding $1,744 attributable to redeemable noncontrolling interests
— — — — — — — (1,759)(1,759)
Common shares issued, net— — 729,769 8 82,741 — — — 82,749 
Shares issued under dividend reinvestment plan— — 3,770 — 502 — — — 502 
Share-based compensation expense, net of forfeitures— — 108,891 1 4,178 — — — 4,179 
Shares withheld for employee taxes— — (38,270)— (4,601)— — — (4,601)
Conversion and redemption of downREIT OP units— — 10,007 — 977 — — (977)— 
BALANCE AT MARCH 31, 2022405,896 $159,997 79,417,472 $799 $3,572,591 $(1,101,154)$1,525 $80,819 $2,714,577 
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Consolidated Statements of Cash Flows
 (Unaudited)
Three Months Ended March 31,
 20232022
 (In thousands)
OPERATING ACTIVITIES
Net income$57,731 $54,728 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization78,637 71,674 
Gain on sale of real estate(1,702)— 
Income from partnerships(516)(197)
Straight-line rent(2,478)(4,962)
Share-based compensation expense4,097 3,820 
Other, net(1,277)(494)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable, net(466)(11,257)
Decrease (increase) in prepaid expenses and other assets3,563 (4,577)
Increase (decrease) in accounts payable and accrued expenses1,941 (5,419)
Increase (decrease) in security deposits and other liabilities3,477 (247)
Net cash provided by operating activities143,007 103,069 
INVESTING ACTIVITIES
Acquisition of real estate(35,340)— 
Capital expenditures - development and redevelopment(50,780)(66,610)
Capital expenditures - other(25,737)(18,409)
Proceeds from sale of real estate12,626 874 
Distribution from partnerships in excess of earnings2,174 517 
Leasing costs(3,754)(4,577)
Repayment of mortgage and other notes receivable, net— 11 
Net cash used in investing activities(100,811)(88,194)
FINANCING ACTIVITIES
Net borrowings under revolving credit facility60,000 — 
Repayment of mortgages, finance leases and notes payable(819)(869)
Issuance of common shares, net of costs6,245 82,819 
Dividends paid to common and preferred shareholders(89,431)(85,684)
Shares withheld for employee taxes(4,645)(4,601)
Distributions to and redemptions of redeemable noncontrolling interests(2,616)(3,514)
Net cash used in financing activities(31,266)(11,849)
Increase in cash, cash equivalents and restricted cash10,930 3,026 
Cash, cash equivalents, and restricted cash at beginning of year96,348 175,163 
Cash, cash equivalents, and restricted cash at end of period$107,278 $178,189 

The accompanying notes are an integral part of these consolidated statements.

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Federal Realty OP LP
Consolidated Balance Sheets
March 31,December 31,
20232022
 (In thousands, except unit data)
(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,002,163 and $1,997,583 of consolidated variable interest entities, respectively)
$9,532,332 $9,441,945 
Construction-in-progress (including $12,174 and $8,477 of consolidated variable interest entities, respectively)
664,184 662,554 
10,196,516 10,104,499 
Less accumulated depreciation and amortization (including $376,441 and $362,921 of consolidated variable interest entities, respectively)
(2,771,150)(2,715,817)
Net real estate7,425,366 7,388,682 
Cash and cash equivalents99,449 85,558 
Accounts and notes receivable, net200,512 197,648 
Mortgage notes receivable, net9,443 9,456 
Investment in partnerships143,464 145,205 
Operating lease right of use assets, net88,831 94,569 
Finance lease right of use assets, net45,179 45,467 
Prepaid expenses and other assets257,050 267,406 
TOTAL ASSETS$8,269,294 $8,233,991 
LIABILITIES AND CAPITAL
Liabilities
Mortgages payable, net (including $191,193 and $191,827 of consolidated variable interest entities, respectively)
$319,910 $320,615 
Notes payable, net661,391 601,077 
Senior notes and debentures, net3,408,104 3,407,701 
Accounts payable and accrued expenses196,092 190,340 
Dividends payable90,436 90,263 
Security deposits payable28,351 28,508 
Operating lease liabilities77,442 77,743 
Finance lease liabilities67,658 67,660 
Other liabilities and deferred credits237,316 237,699 
Total liabilities5,086,700 5,021,606 
Commitments and contingencies (Note 6)
Redeemable noncontrolling interests178,353 178,370 
Partner capital
Preferred units, 398,878 units issued and outstanding
154,788 154,788 
Common units, 81,511,204 and 81,342,959 units issued and outstanding, respectively
2,765,892 2,793,467 
Accumulated other comprehensive income4,546 5,757 
Total partner capital2,925,226 2,954,012 
Noncontrolling interests in consolidated partnerships79,015 80,003 
Total capital3,004,241 3,034,015 
TOTAL LIABILITIES AND CAPITAL$8,269,294 $8,233,991 
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended March 31,
 20232022
 (In thousands, except per unit data)
REVENUE
Rental income$272,798 $256,507 
Mortgage interest income261 264 
Total revenue273,059 256,771 
EXPENSES
Rental expenses55,205 56,211 
Real estate taxes32,566 30,560 
General and administrative12,545 12,342 
Depreciation and amortization78,637 71,674 
Total operating expenses178,953 170,787 
       Gain on sale of real estate 1,702 — 
OPERATING INCOME95,808 85,984 
OTHER INCOME/(EXPENSE)
Other interest income632 120 
Interest expense(39,225)(31,573)
Income from partnerships516 197 
NET INCOME57,731 54,728 
Net income attributable to noncontrolling interests(2,396)(2,744)
NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP55,335 51,984 
Distributions on preferred units(2,008)(2,010)
NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS$53,327 $49,974 
EARNINGS PER COMMON UNIT, BASIC:
       Net income available for common unit holders$0.65 $0.63 
Weighted average number of common units81,141 78,446 
EARNINGS PER COMMON UNIT, DILUTED:
       Net income available for common unit holders$0.65 $0.63 
Weighted average number of common units81,141 78,543 
COMPREHENSIVE INCOME$56,395 $58,644 
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP$54,124 $55,556 

The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Statements of Capital
For the Three Months Ended March 31, 2023 and 2022
(Unaudited)
 Preferred UnitsCommon UnitsAccumulated
Other
Comprehensive
Income (Loss)		Total Partner CapitalNoncontrolling Interests in Consolidated PartnershipsTotal Capital
 
(In thousands, except unit data)
BALANCE AT DECEMBER 31, 2022$154,788 $2,793,467 $5,757 $2,954,012 $80,003 $3,034,015 
Net income, excluding $1,668 attributable to redeemable noncontrolling interests
2,008 53,327 — 55,335 728 56,063 
Other comprehensive loss - change in fair value of interest rate swaps, excluding $125 attributable to redeemable noncontrolling interest
— — (1,211)(1,211)— (1,211)
Distributions declared to common unit holders— (88,033)— (88,033)— (88,033)
Distributions declared to preferred unit holders(2,008)— — (2,008)— (2,008)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $1,560 attributable to redeemable noncontrolling interests
— — — — (1,048)(1,048)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs— 6,251 — 6,251 — 6,251 
Common units issued under dividend reinvestment plan— 423 — 423 — 423 
Share-based compensation expense, net of forfeitures— 4,434 — 4,434 — 4,434 
Common units withheld for employee taxes— (4,645)— (4,645)— (4,645)
Redemption of downREIT OP units— 668 — 668 (668)— 
BALANCE AT MARCH 31, 2023$154,788 $2,765,892 $4,546 $2,925,226 $79,015 $3,004,241 
BALANCE AT DECEMBER 31, 2021$154,963 $2,427,686 $(2,047)$2,580,602 $82,546 $2,663,148 
Net income, excluding $1,735 attributable to redeemable noncontrolling interests
2,010 49,974 — 51,984 1,009 52,993 
Other comprehensive income - change in fair value of interest rate swaps, excluding $344 attributable to redeemable noncontrolling interests
— — 3,572 3,572 — 3,572 
Distributions declared to common unit holders— (84,196)— (84,196)— (84,196)
Distributions declared to preferred unit holders(2,010)— — (2,010)— (2,010)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $1,744 attributable to redeemable noncontrolling interests
— — — — (1,759)(1,759)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs— 82,749 — 82,749 — 82,749 
Common units issued under dividend reinvestment plan— 502 — 502 — 502 
Share-based compensation expense, net of forfeitures— 4,179 — 4,179 — 4,179 
Common units withheld for employee taxes— (4,601)— (4,601)— (4,601)
Conversion and redemption of downREIT OP units— 977 — 977 (977)— 
BALANCE AT MARCH 31, 2022$154,963 $2,477,270 $1,525 $2,633,758 $80,819 $2,714,577 
The accompanying notes are an integral part of these consolidated statements.
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Federal Realty OP LP
Consolidated Statements of Cash Flows
 (Unaudited)
Three Months Ended March 31,
 20232022
 (In thousands)
OPERATING ACTIVITIES
Net income$57,731 $54,728 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization78,637 71,674 
Gain on sale of real estate(1,702)— 
Income from partnerships(516)(197)
Straight-line rent(2,478)(4,962)
Share-based compensation expense4,097 3,820 
Other, net(1,277)(494)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Increase in accounts receivable, net(466)(11,257)
Decrease (increase) in prepaid expenses and other assets3,563 (4,577)
Increase (decrease) in accounts payable and accrued expenses1,941 (5,419)
Increase (decrease) in security deposits and other liabilities3,477 (247)
Net cash provided by operating activities143,007 103,069 
INVESTING ACTIVITIES
Acquisition of real estate(35,340)— 
Capital expenditures - development and redevelopment(50,780)(66,610)
Capital expenditures - other(25,737)(18,409)
Proceeds from sale of real estate12,626 874 
Distribution from partnerships in excess of earnings2,174 517 
Leasing costs(3,754)(4,577)
Repayment of mortgage and other notes receivable, net— 11 
Net cash used in investing activities(100,811)(88,194)
FINANCING ACTIVITIES
Net borrowings under revolving credit facility60,000 — 
Repayment of mortgages, finance leases and notes payable(819)(869)
Issuance of common units, net of costs6,245 82,819 
Distributions to common and preferred unit holders(89,431)(85,684)
Shares withheld for employee taxes(4,645)(4,601)
Distributions to and redemptions of redeemable noncontrolling interests(2,616)(3,514)
Net cash used in financing activities(31,266)(11,849)
Increase in cash, cash equivalents and restricted cash10,930 3,026 
Cash, cash equivalents, and restricted cash at beginning of year96,348 175,163 
Cash, cash equivalents, and restricted cash at end of period$107,278 $178,189 

The accompanying notes are an integral part of these consolidated statements.
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Federal Realty Investment Trust
Federal Realty OP LP
Notes to Consolidated Financial Statements
March 31, 2023
(Unaudited)

NOTE 1—BUSINESS AND ORGANIZATION
Federal Realty Investment Trust (the "Parent Company" and the “Trust”) is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operations and owns all of its assets. The Parent Company owns 100% of the limited liability company interests of, is sole member of and exercises exclusive control over Federal Realty GP LLC ("the General Partner"), which in turn, is the sole general partner of the Operating Partnership. The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of March 31, 2023, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 102 predominantly retail real estate projects.
We operate in a manner intended to enable the Trust to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited interim consolidated financial statements of the Parent Company and Operating Partnership have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in our latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full year.
Principles of Consolidation
As discussed in the Explanatory Note, we have combined the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report. As a result, we present two sets of consolidated financial statements. Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity. The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent Company, through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership. The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures which we do not control using the equity method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.
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Recently Issued Accounting Pronouncements
StandardDescriptionEffect on the financial statements or significant matters
ASU 2023-01, March 2023, Leases (Topic 842) Common Control Arrangements
This ASU requires all lessees in a lease with a lessor under common control to (1) amortize leasehold improvements over their useful life to the common control group, as long as the lessee controls the use of the underlying asset through a lease and (2) account for the leasehold improvements as a transfer of assets between entities under common control through an adjustment to equity when the lessee no longer controls the use of the underlying asset.

The guidance may be applied prospectively to new and existing leasehold improvements, with the remaining balance of existing leasehold improvements amortized over their remaining useful life to the common control group or retrospectively, through a cumulative-effect adjustment to opening retained earnings.

The guidance is effective in fiscal years beginning after December 15, 2023, and interim periods withing those fiscal years. Early adoption is permitted.		We do not expect this ASU to have an impact on our consolidated financial statements.
ASU 2020-04, March 2020, Reference Rate Reform (Topic 848)
This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform. For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied. For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract.

ASU 2022-06 extended the period for which this guidance can be immediately applied through December 24, 2024.
We expect to apply some of the practical expedients, as we are in the process of transitioning the $54.7 million mortgage loan at Hoboken and the $37.7 million mortgage loan related to the unconsolidated Assembly Row hotel (of which our share is $18.8 million) from LIBOR to alternative interest rates. We do not expect a significant impact to our financial results, financial position, or cash flows from this transition.
Consolidated Statements of Cash Flows—Supplemental Disclosures
The following tables provide supplemental disclosures related to the Consolidated Statements of Cash Flows:
Three Months Ended
 March 31,
 20232022
 (In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred$44,606 $36,188 
Interest capitalized(5,381)(4,615)
Interest expense$39,225 $31,573 
Cash paid for interest, net of amounts capitalized$37,136 $30,436 
Cash paid for income taxes$— $4 
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
DownREIT operating partnership units redeemed for common shares$668 $977 
Shares issued under dividend reinvestment plan$429 $432 
 March 31,December 31,
20232022
 (In thousands)
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Cash and cash equivalents$99,449 $85,558 
Restricted cash (1)7,829 10,790 
Total cash, cash equivalents, and restricted cash$107,278 $96,348 
(1)Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets.
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NOTE 3—REAL ESTATE
On January 31, 2023, we acquired the 168,000 square foot portion of Huntington Square shopping center that was not previously owned, as well as the fee interest in the land underneath the portion of the shopping center which we controlled under a long-term ground lease for $35.5 million. As a result of this transaction, we now own the entire fee interest in this property and the "operating lease right of use assets, net" on our consolidated balance sheet decreased by $5.3 million. Approximately $4.1 million and $1.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively.
During the three months ended March 31, 2023, we sold one retail property for $13.2 million, resulting in a gain on sale of $1.6 million.

NOTE 4—DEBT
During the three months ended March 31, 2023, the maximum amount of borrowings outstanding under our $1.25 billion revolving credit facility was $80.5 million. The weighted average amount of borrowings outstanding was $49.7 million, and the weighted average interest rate, before amortization of debt fees, was 5.4%, for the three months ended March 31, 2023. At March 31, 2023, our revolving credit facility had $60.0 million outstanding.
Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders' equity and debt coverage ratios and a maximum ratio of debt to net worth. As of March 31, 2023, we were in compliance with all default related debt covenants.

NOTE 5—FAIR VALUE OF FINANCIAL INSTRUMENTS
Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:

 March 31, 2023December 31, 2022
Carrying
Value		Fair ValueCarrying
Value		Fair Value
(In thousands)
Mortgages and notes payable, net$981,301 $959,730 $921,692 $895,654 
Senior notes and debentures, net$3,408,104 $3,097,830 $3,407,701 $3,048,456 

As of March 31, 2023, we have two interest rate swap agreements with notional amounts of $54.7 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the interest rate on $54.7 million of mortgage payables at 3.67% through December 15, 2029. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at March 31, 2023 was an asset of $4.9 million and is included in "prepaid expenses and other assets" on our consolidated balance sheets. For the three months ended March 31, 2023, the value of our interest rate swaps decreased $1.3 million (including $0.4 million reclassified from other comprehensive income as a decrease to interest expense). A summary of our financial assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:
March 31, 2023December 31, 2022
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
(In thousands)
Interest rate swaps$— $4,891 $— $4,891 $— $6,144 $— $6,144 
One of our equity method investees has two interest rate swaps which qualify for cash flow hedge accounting. For the three months ended March 31, 2023, our share of the change in fair value of the related swaps included in "accumulated other comprehensive income" was a decrease of $0.1 million.

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NOTE 6—COMMITMENTS AND CONTINGENCIES
We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.
We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us.
On August 25, 2022, we entered into a purchase option agreement to acquire the tenancy in common interest from our co-owner at Escondido Promenade, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2022. Our agreement, as amended on February 28, 2023, allows us to exercise the option between May 1, 2023 and May 31, 2023.
Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or common shares, at our option. A total of 637,031 downREIT operating partnership units are outstanding which have a total fair value of approximately $63.0 million, which is calculated by multiplying the outstanding number of downREIT partnership units by our closing stock price on March 31, 2023.

NOTE 7—SHAREHOLDERS’ EQUITY
The following table provides a summary of dividends declared and paid per share:

 Three Months Ended March 31,
 20232022
 DeclaredPaidDeclaredPaid
Common shares$1.080 $1.080 $1.070 $1.070 
5.417% Series 1 Cumulative Convertible Preferred shares$0.339 $0.339 $0.339 $0.339 
5.0% Series C Cumulative Redeemable Preferred shares (1)$0.313 $0.313 $0.313 $0.313 
(1)Amount represents dividends per depository share, each representing 1/1000th of a share.

We have an at-the-market ("ATM") equity program under which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. The ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.
For the three months ended March 31, 2023, we issued 57,034 common shares at a weighted average price per share of $111.64 for net cash proceeds of $6.2 million including paying $0.1 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. We have the remaining capacity to issue up to $445.6 million in common shares under our ATM equity program as of March 31, 2023.

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NOTE 8—SHARE-BASED COMPENSATION PLANS
A summary of share-based compensation expense included in net income is as follows:
Three Months Ended
 March 31,
 20232022
 (In thousands)
Grants of common shares, restricted stock units, and options$4,434 $4,179 
Capitalized share-based compensation(337)(359)
Share-based compensation expense$4,097 $3,820 

NOTE 9—EARNINGS PER SHARE AND UNIT
We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method. The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings. For both the three months ended March 31, 2023 and 2022, we had 0.3 million weighted average unvested shares and units outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS and EPU between common shares and units and unvested shares and units; the portion of earnings allocated to the unvested shares and units is reflected as “earnings allocated to unvested shares” or "earnings allocated to unvested units" in the reconciliations below.
The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:
•exercise of 1,829 stock options for the three months ended March 31, 2023,
•conversions of downREIT operating partnership units for both the three months ended March 31, 2023 and 2022,
•conversions of 5.417% Series 1 Cumulative Convertible Preferred Shares and units for both the three months ended March 31, 2023 and 2022, and
•the issuance of 0.7 million shares and units issuable under common share forward sales agreements for the three months ended March 31, 2022.
Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS and EPU calculations as the market based performance criteria in the awards has not yet been achieved.
Federal Realty Investment Trust Earnings per Share
Three Months Ended
March 31,
 20232022
 (In thousands, except per share data)
NUMERATOR
Net income$57,731 $54,728 
Less: Preferred share dividends(2,008)(2,010)
Less: Income from operations attributable to noncontrolling interests(2,396)(2,744)
Less: Earnings allocated to unvested shares(327)(307)
Net income available for common shareholders, basic and diluted$53,000 $49,667 
DENOMINATOR
Weighted average common shares outstanding, basic81,141 78,446 
Effect of dilutive securities:
Open forward contracts for share issuances— 97 
Weighted average common shares outstanding, diluted81,141 78,543 
EARNINGS PER COMMON SHARE, BASIC AND DILUTED:
Net income available for common shareholders$0.65 $0.63 
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Federal Realty OP LP Earnings per Unit
Three Months Ended
March 31,
 20232022
 (In thousands, except per unit data)
NUMERATOR
Net income$57,731 $54,728 
Less: Preferred unit distributions(2,008)(2,010)
Less: Income from operations attributable to noncontrolling interests(2,396)(2,744)
Less: Earnings allocated to unvested units(327)(307)
Net income available for common unit holders, basic and diluted$53,000 $49,667 
DENOMINATOR
Weighted average common units outstanding, basic81,141 78,446 
Effect of dilutive securities:
Common unit issuances relating to open common share forward contracts— 97 
Weighted average common units outstanding, diluted81,141 78,543 
EARNINGS PER COMMON UNIT, BASIC AND DILUTED:
Net income available for common unit holders$0.65 $0.63 

NOTE 10—SUBSEQUENT EVENT
On April 12, 2023, we issued $350.0 million of fixed rate senior unsecured notes that mature on May 1, 2028 and bear interest at 5.375%. The notes were offered at 99.590% of the principal amount with a yield to maturity of 5.468%.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The following discussion should be read in conjunction with the consolidated interim financial statements and notes thereto appearing in Item 1 of this report and the more detailed information contained in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on February 8, 2023.
Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:
•risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire;
•risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that completion of anticipated or ongoing property redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
•risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental
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issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
•risks that our growth will be limited if we cannot obtain additional capital;
•risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense;
•risks related to the Trust's status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to the Trust's status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT;
•risks related to natural disasters, climate change and public health crises (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.
Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Quarterly Report on Form 10-Q. You should carefully review the risks and the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2022 and under Part II, Item 1A in this Quarterly Report on Form 10-Q, before making any investments in us.
Overview
Federal Realty Investment Trust (the "Parent Company" or the “Trust”) is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Trust conducts substantially all of its operations and owns substantially all of its assets. The Trust owns 100% of the limited liability company interests of, and is sole member and exercises exclusive control over Federal Realty GP LLC ("the General Partner"), which in turn, is the sole general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, "we," "our," and "us" means the Trust and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. We specialize in the ownership, management, and redevelopment of high quality retail and mixed-use properties. As of March 31, 2023, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 102 predominantly retail real estate projects comprising approximately 25.9 million square feet. In total, the real estate projects were 94.2% leased and 92.6% occupied at March 31, 2023.
General Economic Conditions
Given the higher levels of inflation, rising interest rates, and potentially worsening economic conditions, we continue to monitor and address risks related to the general state of the economy. We believe that the actions we have taken to improve our financial position and maximize our liquidity, as described further in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K, will continue to mitigate the impact to our cash flow caused by tenants not timely paying contractual rent.
See further discussion of the impact of current economic conditions on our business throughout Item 2.
Critical Accounting Policies
There have been no significant changes to the critical accounting policies disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K.
Property Acquisition and Disposition
On January 31, 2023, we acquired the 168,000 square foot portion of Huntington Square shopping center that was not previously owned, as well as the fee interest in the land underneath the portion of the shopping center which we controlled under a long-term ground lease for $35.5 million. As a result of this transaction, we now own the entire fee interest in this property and the "operating lease right of use assets" on our consolidated balance sheet decreased by $5.3 million. Approximately $4.1 million and $1.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively.
During the three months ended March 31, 2023, we sold one retail property for $13.2 million, resulting in a gain on sale of $1.6 million.
Debt and Equity Transactions
For the three months ended March 31, 2023, we issued 57,034 common shares at a weighted average price per share of $111.64 for net cash proceeds of $6.2 million including paying $0.1 million in commissions and $0.1 million in additional offering
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expenses related to the sales of these common shares. We have the remaining capacity to issue up to $445.6 million in common shares under our ATM equity program as of March 31, 2023.
On April 12, 2023, we issued $350.0 million of fixed rate senior unsecured notes that mature on May 1, 2028 and bear interest at 5.375%. The notes were offered at 99.590% of the principal amount with a yield to maturity of 5.468%. The net proceeds of these notes, or "green bonds," will be allocated to the financing and refinancing of recently completed and future eligible green projects, which includes (i) investments in acquisitions of buildings; (ii) building developments or redevelopments; (iii) renovations in existing buildings; and (iv) tenant improvement projects, in each case that have received, or are expected to receive, in the three years prior to the issuance of the notes or during the term of the notes, a LEED Gold or Platinum certification (or environmentally equivalent successor standards). Net proceeds allocated to previously incurred costs associated with eligible green projects will be available for repayment of indebtedness, or pending allocation, may be invested in short-term income-producing investments or may be used to temporarily repay current and/or future amounts outstanding under our revolving credit facility.
Recently Issued Accounting Pronouncements
See Note 2 to the consolidated financial statements.
Capitalized Costs
Certain external and internal costs directly related to the development, redevelopment and leasing of real estate, including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved, are capitalized. We capitalized certain external and internal costs related to both development and redevelopment activities of $53 million and $2 million, respectively, for the three months ended March 31, 2023, and $69 million and $3 million for the three months ended March 31, 2022. We capitalized external and internal costs related to other property improvements of $23 million and $1 million, respectively, for the three months ended March 31, 2023, and $22 million and $1 million, respectively, for the three months ended March 31, 2022. We capitalized external and internal costs related to leasing activities of $4 million and $1 million, respectively, for both the three months ended March 31, 2023 and 2022. The amount of capitalized internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were $2 million, $1 million, and $1 million, respectively for both the three months ended March 31, 2023 and 2022. Total capitalized costs were $80 million and $99 million for the three months ended March 31, 2023 and 2022, respectively.
Outlook
Our long-term growth strategy is focused on growth in earnings, funds from operations, and cash flows primarily through a combination of the following:
•growth in our comparable property portfolio,
•growth in our portfolio from property redevelopments and expansions, and
•expansion of our portfolio through property acquisitions.
Although the general economic impacts of the elevated levels of inflation and rising interest rates are impacting us in the short-term, our long-term focus has not changed. See our 10-K filed on February 8, 2023, for discussion of our long-term strategies.

Our comparable property growth is primarily driven by increases in rental rates on new leases and lease renewals, changes in portfolio occupancy, and the redevelopment of those assets. Over the long-term, the infill nature and strong demographics of our properties provide a strategic advantage allowing us to maintain relatively high occupancy and generally increase rental rates. We continue to experience strong demand for our commercial space as evidenced by the 2.0 million square feet of comparable space leasing we've completed in the last twelve months, and the 1.6% spread between our leased rate of 94.2% and our occupied rate of 92.6%. However, the effects of high levels of inflation and rising interest rates continue to negatively impact our business with the largest current impacts being increased material costs, higher interest costs, and higher operating costs. We continue to see impacts of increased costs for certain construction and other materials that support our development and redevelopment activities. Worsening supply change disruptions could also result in extended timeframes and/or increased costs for completion of our projects and tenant build-outs, which could delay the commencement of rent payments under new leases. Similarly, if our tenants experience significant disruptions in supply chains supporting their own products, staffing issues due to labor shortages, or are otherwise impacted by worsening economic conditions, their ability to pay rent may be adversely affected. We continue to monitor these macroeconomic developments and are working with our tenants and our vendors to limit the overall impact to our business.

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The duration and severity of the current economic environment will depend on future developments, which are highly uncertain and cannot be fully predicted, however, we seek to position the Company to continue to participate in the resulting economic recovery.

We continue to have several development projects in process being delivered as follows:
•Phase IV at Pike & Rose is a 276,000 square foot office building (which includes 10,000 square feet of ground floor retail space). Approximately 157,000 square feet of the office space is pre-leased to two tenants and approximately 5,000 square feet of retail space is pre-leased. The building is expected to cost between $185 million and $200 million, and begin delivering in late 2023.
•The first phase of construction on Santana West includes an eight story 376,000 square foot office building, which is expected to cost between $315 million and $330 million.
•Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $229 million that we expect to stabilize over the next several years.

The above includes our best estimates based on information currently known, however, the completion of construction, final costs, and the timing of leasing and openings may be further impacted by the current environment including the duration and severity of the economic impacts of broader, as well as local, economic conditions, inflation, higher interest rates, and higher operating costs.
The development of future phases of Assembly Row, Pike & Rose and Santana Row will be pursued opportunistically based on, among other things, market conditions, tenant demand, and our evaluation of whether those phases will generate an appropriate financial return.
We continue to review acquisition opportunities that complement our portfolio and provide long-term growth opportunities. Initially, some of our acquisitions do not contribute significantly to earnings growth; however, we believe they provide long-term re-leasing growth, redevelopment opportunities, and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance the property acquisition. Generally, our acquisitions are initially financed by available cash and/or borrowings under our revolving credit facility which may be repaid later with funds raised through the issuance of new equity or new long-term debt. We may also finance our acquisitions through the issuance of common shares, preferred shares, or units in the Operating Partnership, as well as through assumed mortgages and property sales.
At March 31, 2023, the leasable square feet in our properties was 94.2% leased and 92.6% occupied. The leased rate is higher than the occupied rate due to leased spaces that are being redeveloped or improved or that are awaiting permits and, therefore, are not yet ready to be occupied. Our occupancy and leased rates are subject to variability over time due to factors including acquisitions, the timing of the start and stabilization of our redevelopment projects, lease expirations and tenant closings and bankruptcies.
Lease Rollovers
For the first quarter of 2023, we signed leases for a total of 524,000 square feet of retail space including 505,000 square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of 11% on a cash basis. New leases for comparable spaces were signed for 242,000 square feet, with an average rental increase of 9% on a cash basis. Renewals for comparable spaces were signed for 262,000 square feet at a 14% average rental increase on a cash basis. Tenant improvements and incentives for comparable spaces were $39.47 per square foot, of which $79.20 per square foot was for new leases and $2.83 per square foot was for renewals for the three months ended March 31, 2023.
The rental increases associated with comparable spaces generally include all leases signed for retail space in arms-length transactions reflecting market leverage between landlords and tenants during the period. The comparison between the rent for expiring leases and new leases is determined by including contractual rent on the expiring lease, including percentage rent, and the comparable annual rent and in some instances, projections of percentage rent, to be paid on the new lease. In atypical circumstances, management may exercise judgment as to how to most effectively reflect the comparability of spaces reported in this calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, capital investment made in the space and the specific lease structure. Tenant improvements and incentives include the total dollars committed for the improvement (fit out) of a space as it relates to a specific lease. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements. Costs related to tenant improvements
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require judgement by management in determining what are costs specific to the tenant and not deferred maintenance on the space.
Historically, we have executed comparable space leases for 1.4 to 2.0 million square feet of retail space each year. We expect the volume in 2023 will be in line with these historical averages. Although we expect overall positive increases in annual rent for comparable spaces, changes in annual rent for any individual lease or combinations of individual leases reported in any particular period may be positive or negative and we can provide no assurance that the annual rents on comparable space leases will continue to increase at historical levels, if at all.
The leases signed in 2023 generally become effective over the following two years though some may not become effective until 2026 and beyond. Further, there is a risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other matters. However, our historical increases in rental rates do provide information about the tenant/landlord relationship and the potential increase we may achieve in rental income over time.
Comparable Properties
Throughout this section, we have provided certain information on a “comparable property” basis. Information provided on a comparable property basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties that are currently under development or are being repositioned for significant redevelopment and investment. For the three months ended March 31, 2023, all or a portion of 94 properties, respectively, were considered comparable properties and eight properties were considered non-comparable properties. For the three months ended March 31, 2023, one property was moved from comparable properties to non-comparable properties, four properties and one portion of a property were moved from acquisitions to comparable properties, and one property was removed from comparable properties, as it was sold; all compared to the designations as of December 31, 2022. While there is judgment surrounding changes in designations, we typically move non-comparable properties to comparable properties once they have stabilized, which is typically considered 90% physical occupancy or when the growth expected from the redevelopment has been included in the comparable periods. We typically remove properties from comparable properties when the repositioning of the asset has commenced and has or is expected to have a significant impact on property operating income within the calendar year. Acquisitions are moved to comparable properties once we have owned the property for the entirety of comparable periods and the property is not under development or being repositioned for significant redevelopment and investment.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2023 AND 2022
   Change
 20232022Dollars%
 (Dollar amounts in thousands)
Rental income$272,798 $256,507 $16,291 6.4 %
Mortgage interest income261 264 (3)(1.1)%
Total property revenue273,059 256,771 16,288 6.3 %
Rental expenses55,205 56,211 (1,006)(1.8)%
Real estate taxes32,566 30,560 2,006 6.6 %
Total property expenses87,771 86,771 1,000 1.2 %
Property operating income (1)185,288 170,000 15,288 9.0 %
General and administrative expense(12,545)(12,342)(203)1.6 %
Depreciation and amortization(78,637)(71,674)(6,963)9.7 %
Gain on sale of real estate1,702 — 1,702 100.0 %
Operating income95,808 85,984 9,824 11.4 %
Other interest income632 120 512 426.7 %
Interest expense(39,225)(31,573)(7,652)24.2 %
Income from partnerships516 197 319 161.9 %
Total other, net(38,077)(31,256)(6,821)21.8 %
Net income57,731 54,728 3,003 5.5 %
Net income attributable to noncontrolling interests(2,396)(2,744)348 (12.7)%
Net income attributable to the Trust$55,335 $51,984 $3,351 6.4 %
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(1)Property operating income is a non-GAAP measure that consists of rental income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of operating income to property operating income for the three months ended March 31, 2023 and 2022 is as follows:
20232022
(in thousands)
Operating income$95,808 $85,984 
General and administrative12,545 12,342 
Depreciation and amortization78,637 71,674 
Gain on sale of real estate (1,702)— 
Property operating income$185,288 $170,000 
Property Revenues
Total property revenue increased $16.3 million, or 6.3%, to $273.1 million in the three months ended March 31, 2023 compared to $256.8 million in the three months ended March 31, 2022. The percentage occupied at our shopping centers was 92.6% and 91.2% at March 31, 2023 and 2022, respectively. Changes in the components of property revenue are discussed below.
Rental Income
Rental income consists primarily of minimum rent, cost reimbursements from tenants and percentage rent, and is net of collectibility related adjustments. Rental income increased $16.3 million, or 6.4%, to $272.8 million in the three months ended March 31, 2023 compared to $256.5 million in the three months ended March 31, 2022 due primarily to the following:
•an increase of $10.1 million from 2022 and 2023 acquisitions,
•an increase of $6.3 million from non-comparable properties primarily driven by occupancy increases at Assembly Row Phase III, CocoWalk, Pike & Rose Phase III, and Darien Commons,
•an increase of $4.7 million from comparable properties primarily related to higher rental rates of $4.6 million, a $1.8 million increase in real estate tax and tenant recoveries on higher costs, higher average occupancy of approximately $1.7 million, and higher percentage rent and parking income of $0.6 million, partially offset by a $3.1 million decrease in common area maintenance ("CAM") recoveries primarily due to lower snow removal costs, and a $0.3 million increase in collectibility related adjustments, and
•an increase of $1.0 million from improving demand at our Pike & Rose hotel,
partially offset by
•a decrease of $3.3 million from property sales, and
•a decrease of $2.6 million from the deconsolidation of Escondido Promenade in the third quarter of 2022, which is now being recorded as an equity method investment.
Property Expenses
Total property expenses increased $1.0 million, or 1.2%, to $87.8 million in the three months ended March 31, 2023 compared to $86.8 million in the three months ended March 31, 2022. Changes in the components of property expenses are discussed below.
Rental Expenses
Rental expenses decreased $1.0 million, or 1.8%, to $55.2 million in the three months ended March 31, 2023 compared to $56.2 million in the three months ended March 31, 2022. This decrease is primarily due to the following:
•a decrease of $2.0 million from comparable properties due primarily to lower snow removal costs, partially offset by higher repairs and maintenance costs and utilities, as 2022 had lower costs as a result of COVID-19 impacts as well as inflationary impacts in 2023, and
•a decrease of $1.4 million from property sales,
partially offset by
•an increase of $1.8 million from 2022 acquisitions, and
•an increase of $0.6 million from non-comparable properties driven by openings at Assembly Row Phase III and Darien Commons.
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As a result of the changes in rental income and rental expenses as discussed above, rental expenses as a percentage of rental income decreased to 20.2% in the three months ended March 31, 2023 from 21.9% in the three months ended March 31, 2022.
Real Estate Taxes
Real estate tax expense increased $2.0 million, or 6.6%, to $32.6 million in the three months ended March 31, 2023 compared to $30.6 million in the three months ended March 31, 2022. This increase is primarily due to the following:
•an increase of $1.4 million from 2022 acquisitions, and
•an increase of $0.9 million from comparable properties due primarily to successful tax appeals recorded during 2022 and higher assessments.
Property Operating Income
Property operating income increased $15.3 million, or 9.0%, to $185.3 million in the three months ended March 31, 2023 compared to $170.0 million in the three months ended March 31, 2022. This increase is primarily driven by 2022 and 2023 acquisitions, higher rental rates and occupancy at comparable properties, the 2022 openings at Assembly Row Phase III, and higher percentage rent and parking income, partially offset by 2022 property sales.
Other Operating
Depreciation and Amortization
Depreciation and amortization expense increased $7.0 million, or 9.7%, to $78.6 million in the three months ended March 31, 2023 from $71.7 million in the three months ended March 31, 2022. This increase is due primarily to property acquisitions, and placing redevelopment properties into service, partially offset by 2022 property sales and the 2022 deconsolidation of Escondido Promenade.
Gain on Sale of Real Estate
The $1.7 million gain on sale of real estate for the three months ended March 31, 2023 is due primarily to the sale of one retail property.
Operating Income
Operating income increased $9.8 million, or 11.4%, to $95.8 million in the three months ended March 31, 2023 compared to $86.0 million in the three months ended March 31, 2022. This increase is primarily driven by higher occupancy and rental rates at comparable properties, the 2022 openings at Assembly Row Phase III, higher percentage rent and parking income, gain on the sale of real estate, and 2022 and 2023 acquisitions, partially offset by 2022 property sales.
Other
Other Interest Income
Other interest income increased $0.5 million to $0.6 million in the three months ended March 31, 2023 compared to $0.1 million in the three months ended March 31, 2022. This increase is due primarily to higher interest earned due to higher interest rates on cash accounts.
Interest Expense
Interest expense increased $7.7 million, or 24.2%, to $39.2 million in the three months ended March 31, 2023 compared to $31.6 million in the three months ended March 31, 2022. This increase is due primarily to the following:
•an increase of $5.6 million due to a higher overall weighted average borrowing rate, and
•an increase of $2.8 million due to higher weighted average borrowings,
partially offset by,
•an increase of $0.8 million in capitalized interest.
Gross interest costs were $44.6 million and $36.2 million in the three months ended March 31, 2023 and 2022, respectively. Capitalized interest was $5.4 million and $4.6 million for the three months ended March 31, 2023 and 2022, respectively.
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Income from Partnerships
Income from partnerships increased $0.3 million, or 161.9%, to $0.5 million in the three months ended March 31, 2023 compared to $0.2 million in the three months ended March 31, 2022. This increase is due primarily to operating results of Escondido Promenade, which is now recorded as an equity method investment following the deconsolidation during the third quarter of 2022.

Liquidity and Capital Resources
Due to the nature of our business and strategy, we typically generate significant amounts of cash from operations which is largely paid to our common and preferred shareholders in the form of dividends because as a REIT, the Trust is generally required to make annual distributions to shareholders of at least 90% of our taxable income (cash dividends paid in the three months ended March 31, 2023 were approximately $89.9 million). Remaining cash flow from operations after dividend payments is used to fund recurring and non-recurring capital projects (such as tenant improvements and redevelopments), and regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities). We maintain an unsecured $1.25 billion revolving credit facility to fund short term cash flow needs and also look to the public and private debt and equity markets, joint venture relationships, and property dispositions to fund capital expenditures on a long-term basis.
As of March 31, 2023, we had cash and cash equivalents of $99.4 million and $60.0 million outstanding on our $1.25 billion revolving credit facility. For the three months ended March 31, 2023, the weighted average amount of borrowings outstanding on our revolving credit facility was $49.7 million, and the weighted average interest rate, before amortization of debt fees, was 5.4%. We also have the capacity to issue up to $445.6 million in common shares under our ATM equity program.
On April 12, 2023, we issued $350.0 million of fixed rate senior unsecured notes that mature on May 1, 2028 and bear interest at 5.375%. A portion of the net proceeds from this transaction will be used to repay the $275.0 million of 2.75% senior unsecured notes that mature in June 2023. We have no other debt maturing for the remainder of 2023.
Our overall capital requirements for the remainder of 2023 will be impacted by the overall economic environment including impacts of inflation, higher interest rates, and a potential recession, as well as acquisition opportunities and the level and general timing of our redevelopment and development activities. We currently have development and redevelopment projects in various stages of constructions with remaining costs of $250 million. We expect to incur the majority of these costs in the next two years. We expect overall capital costs to be at levels consistent with 2022, or slightly reduced as we complete current redevelopment projects, prepare vacant space for new tenants, and complete the current phase and start on the next phase of our larger mixed use development projects.
We believe cash flow from operations, the cash on our balance sheet, and our $1.25 billion revolving credit facility will allow us to continue to operate our business in the short-term. Given our ability to access the capital markets, we also expect debt or equity to be available to us, although newly issued debt would likely be at higher interest rates than we currently have outstanding. We also have the ability to delay the timing of certain development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy. We expect these sources of liquidity and opportunities for operating flexibility to allow us to meet our financial obligations over the long term. We intend to operate with and to maintain our long term commitment to a conservative capital structure that will allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings.

Summary of Cash Flows
 Three Months Ended March 31,
 20232022
 (In thousands)
Net cash provided by operating activities$143,007 $103,069 
Net cash used in investing activities(100,811)(88,194)
Net cash used in financing activities(31,266)(11,849)
Increase in cash, cash equivalents and restricted cash10,930 3,026 
Cash, cash equivalents, and restricted cash at beginning of year96,348 175,163 
Cash, cash equivalents, and restricted cash at end of period$107,278 $178,189 

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Net cash provided by operating activities increased $39.9 million to $143.0 million during the three months ended March 31, 2023 from $103.1 million during the three months ended March 31, 2022. The increase was primarily attributable to the timing of payments, higher collections related to year end recovery billings, and higher net income before adjusting for non-cash items and the gain on sale of real estate.
Net cash used in investing activities increased $12.6 million to $100.8 million during the three months ended March 31, 2023 from $88.2 million during the three months ended March 31, 2022. The increase was primarily attributable to:
•a $35.3 million increase in acquisition of real estate due to the January 2023 Huntington Square acquisition (see Note 3 to the consolidated financial statements for additional information),
partially offset by,
•$12.6 million of net proceeds from the sale of one retail property during the three months ended March 31, 2023, and
•an $8.5 million decrease in capital expenditures.
Net cash used in financing activities increased $19.4 million to $31.3 million during the three months ended March 31, 2023 from $11.8 million during the three months ended March 31, 2022. The increase was primarily attributable to:
•a $76.6 million decrease in net proceeds from the issuance of common shares under our ATM program, and
•a $3.7 million increase in dividends paid to common and preferred shareholders due to an increase in the number of outstanding shares, as well as an increase to the common share dividend rate.
partially offset by
•$60.0 million of borrowings on our revolving credit facility.
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Debt Financing Arrangements
The following is a summary of our total debt outstanding as of March 31, 2023:
Description of DebtOriginal
Debt
Issued		Principal Balance as of March 31, 2023Stated Interest Rate as of
March 31, 2023		Maturity Date
 (Dollars in thousands)  
Mortgages payable
Secured fixed rate
AzaleaAcquired$40,000 3.73 %November 1, 2025
Bell GardensAcquired11,761 4.06 %August 1, 2026
Plaza El Segundo125,000 125,000 3.83 %June 5, 2027
The Grove at Shrewsbury (East)43,600 43,600 3.77 %September 1, 2027
Brook 3511,500 11,500 4.65 %July 1, 2029
Hoboken (24 Buildings) (1)56,450 54,699 LIBOR + 1.95%December 15, 2029
Various Hoboken (14 Buildings) (2)Acquired30,626 VariousVarious through 2029
ChelseaAcquired4,340 5.36 %January 15, 2031
Subtotal321,526 
Net unamortized debt issuance costs and premium(1,616)
Total mortgages payable, net319,910 
Notes payable
Term loan (3) (5)600,000 600,000 SOFR + 0.85%April 16, 2024
Revolving credit facility (3) (4) (5)1,250,000 60,000 SOFR + 0.775%April 5, 2027
Various7,749 2,913 Various (6)Various through 2059
Subtotal662,913 
Net unamortized debt issuance costs(1,522)
Total notes payable, net661,391 
Senior notes and debentures (5)
Unsecured fixed rate
2.75% notes275,000 275,000 2.75 %June 1, 2023
3.95% notes600,000 600,000 3.95 %January 15, 2024
1.25% notes400,000 400,000 1.25 %February 15, 2026
7.48% debentures50,000 29,200 7.48 %August 15, 2026
3.25% notes475,000 475,000 3.25 %July 15, 2027
6.82% medium term notes40,000 40,000 6.82 %August 1, 2027
3.20% notes400,000 400,000 3.20 %June 15, 2029
3.50% notes400,000 400,000 3.50 %June 1, 2030
4.50% notes550,000 550,000 4.50 %December 1, 2044
3.625% notes250,000 250,000 3.625 %August 1, 2046
Subtotal3,419,200 
Net unamortized debt issuance costs and premium(11,096)
Total senior notes and debentures, net3,408,104 
Total debt, net$4,389,405 
_____________________
(1)On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on this mortgage loan at 3.67%.
(2)The interest rates on these mortgages range from 3.91% to 5.00%.
(3)Our revolving credit facility SOFR loans bear interest at Daily Simple SOFR or Term SOFR, and our term loan bears interest at Term SOFR as defined in the credit agreement, plus 0.10%, plus a spread, based on our current credit rating.
(4)The maximum amount drawn under our revolving credit facility during the three months ended March 31, 2023 was $80.5 million and the weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 5.4%.
(5)The Operating Partnership is the obligor under our revolving credit facility, term loan, and senior notes and debentures.
(6)The interest rates on these notes payable range from 3.00% to 11.31%.
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Our revolving credit facility, unsecured term loan, and other debt agreements include financial and other covenants that may limit our operating activities in the future. As of March 31, 2023, we were in compliance with all financial and other covenants related to our revolving credit facility, term loan, and senior notes. Additionally, we were in compliance with all of the financial and other covenants that could trigger a loan default on our mortgage loans. If we were to breach any of these financial and other covenants and did not cure the breach within an applicable cure period, our lenders could require us to repay the debt immediately and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares. Our organizational documents do not limit the level or amount of debt that we may incur.
The following is a summary of our scheduled principal repayments as of March 31, 2023:
 
UnsecuredSecuredTotal
 (In thousands) 
2023$275,711 $2,347 $278,058 
20241,200,671 (1)3,299 1,203,970   
2025418 47,630 48,048   
2026429,276 26,240 455,516   
2027575,037 (2)178,278 753,315   
Thereafter1,601,000 63,732 1,664,732   
$4,082,113   $321,526 $4,403,639 (3)
__________________    
(1)Our $600.0 million term loan matures on April 16, 2024, plus two one-year extensions at our option to April 16, 2026.
(2)Our $1.25 billion revolving credit facility matures on April 5, 2027, plus two six-month extensions at our option to April 5, 2028. As of March 31, 2023, there was $60.0 million outstanding under this credit facility.
(3)The total debt maturities differ from the total reported on the consolidated balance sheets due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of March 31, 2023.
Interest Rate Hedging
We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes.
Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income which is included in "accumulated other comprehensive income (loss)" on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, we evaluate the default risk of the counterparty by monitoring the credit-worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.
As of March 31, 2023, we have two interest rate swap agreements that effectively fix the rate on a mortgage payable associated with our Hoboken portfolio at 3.67%. Our Assembly Row hotel joint venture is also a party to two interest rate swap agreements that effectively fix their debt at 5.206%. All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings as of March 31, 2023.
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REIT Qualification
We intend to maintain the Trust's qualification as a REIT under Section 856(c) of the Code. As a REIT, we generally will not be subject to corporate federal income taxes on income we distribute to our shareholders as long as we satisfy certain technical requirements of the Code, including the requirement to distribute at least 90% of our taxable income to our shareholders.
Funds From Operations
Funds from operations (“FFO”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO:
•does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income);
•should not be considered an alternative to net income as an indication of our performance; and
•is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends.
We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis.
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The reconciliation of net income to FFO available for common shareholders is as follows:

 Three Months Ended
March 31,
 20232022
 (In thousands, except per share data)
Net income$57,731 $54,728 
Net income attributable to noncontrolling interests(2,396)(2,744)
Gain on sale of real estate(1,702)— 
Depreciation and amortization of real estate assets70,504 62,977 
Amortization of initial direct costs of leases7,785 5,793 
Funds from operations131,922 120,754 
Dividends on preferred shares (1)(1,875)(1,875)
Income attributable to downREIT operating partnership units693 706 
Income attributable to unvested shares(482)(436)
Funds from operations available for common shareholders$130,258 $119,149 
Weighted average number of common shares, diluted (1)(2)81,877 79,299 
Funds from operations available for common shareholders, per diluted share (2)$1.59 $1.50 
_____________________
(1)For the three months ended March 31, 2023 and 2022, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and included in "weighted average common shares, diluted."
(2)The weighted average common shares used to compute FFO per diluted common share includes downREIT operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted share for all periods presented but is anti-dilutive for the computation of dilutive EPS for these periods.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our use of financial instruments, such as debt instruments, subjects us to market risk which may affect our future earnings and cash flows, as well as the fair value of our assets. Market risk generally refers to the risk of loss from changes in interest rates and market prices. We manage our market risk by attempting to match anticipated inflow of cash from our operating, investing and financing activities with anticipated outflow of cash to fund debt payments, dividends to common and preferred shareholders, investments, capital expenditures and other cash requirements.
We may enter into certain types of derivative financial instruments to further reduce interest rate risk. We use interest rate protection and swap agreements, for example, to convert some of our variable rate debt to a fixed-rate basis or to hedge anticipated financing transactions. We use derivatives for hedging purposes rather than speculation and do not enter into financial instruments for trading purposes.
Interest Rate Risk
The following discusses the effect of hypothetical changes in market rates of interest on interest expense for our variable rate debt and on the fair value of our total outstanding debt, including our fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. Quoted market prices were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. This analysis does not purport to take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure.
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Fixed Interest Rate Debt
The majority of our outstanding debt obligations (maturing at various times through 2059) have fixed interest rates which limit the risk of fluctuating interest rates. However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments. At March 31, 2023, we had $3.7 billion of fixed-rate debt outstanding, including $54.7 million of mortgage payables for which the rate is effectively fixed by two interest rate swap agreements. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at March 31, 2023 had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately $163.1 million. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at March 31, 2023 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $183.3 million.
Variable Interest Rate Debt
Generally, we believe that our primary interest rate risk is due to fluctuations in interest rates on our outstanding variable rate debt. At March 31, 2023, we had $660.0 million of variable rate debt outstanding (the principal balance on our unsecured term loan and $60.0 million outstanding on our revolving credit facility). Based upon this amount of variable rate debt and the specific terms, if market interest rates increased 1.0%, our annual interest expense would increase approximately $6.6 million with a corresponding decrease in our net income and cash flows for the year. Conversely, if market interest rates decreased 1.0%, our annual interest expense would decrease by approximately $6.6 million with a corresponding increase in our net income and cash flows for the year.
ITEM 4.    CONTROLS AND PROCEDURES
Controls and Procedures (Federal Realty Investment Trust)
Periodic Evaluation and Conclusion of Disclosure Controls and Procedures
An evaluation has been performed, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Trust's disclosure controls and procedures as of March 31, 2023. Based on this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the Trust's disclosure controls and procedures were effective as of March 31, 2023 to provide reasonable assurance that information required to be disclosed in the Trust's reports filed or submitted under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to the Trust’s management including its principal executive and principal financial officer as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There has been no change in the Trust's internal control over financial reporting during the quarterly period covered by this report that materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Controls and Procedures (Federal Realty OP LP)
Periodic Evaluation and Conclusion of Disclosure Controls and Procedures
An evaluation has been performed, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Operating Partnership's disclosure controls and procedures as of March 31, 2023. Based on this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that the Operating Partnership's disclosure controls and procedures were effective as of March 31, 2023 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and (ii) accumulated and communicated to the Operating Partnership’s management including its principal executive and principal financial officer as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There has been no change in the Operating Partnership's internal control over financial reporting during the quarterly period covered by this report that materially affected, or is reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
There have been no material developments in any of our legal proceedings since the disclosure contained in our Annual Report to Form 10-K for the fiscal year ended December 31, 2022.
ITEM 1A.    RISK FACTORS
There have been no material changes to the risk factors previously disclosed in our Annual Report to our Form 10-K for the year ended December 31, 2022 filed with the SEC on February 8, 2023.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Under the terms of various partnership agreements of certain of our affiliated limited partnerships, the interest of limited partners in those limited partnerships may be redeemed, subject to certain conditions, for cash or common shares, at our option. During the three months ended March 31, 2023, we redeemed 7,523 downREIT operating partnership units for common shares.
From time to time, we could be deemed to have repurchased shares as a result of shares withheld for tax purposes upon a stock
compensation related vesting event.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.OTHER INFORMATION
None.

ITEM 6.EXHIBITS
A list of exhibits to this Quarterly Report on Form 10-Q is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.

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EXHIBIT INDEX
Exhibit No.Description
Amended and Restated Bylaws of the Parent Company dated January 1, 2022, as amended February 7, 2023 (filed herewith)
Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)
Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)
Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)
Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith)
Section 1350 Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)
Section 1350 Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)
Section 1350 Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)
Section 1350 Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith)
101The following materials from Federal Realty Investment Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged.
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized.

 FEDERAL REALTY INVESTMENT TRUST
FEDERAL REALTY OP LP
May 4, 2023 /s/ Donald C. Wood
 Donald C. Wood,
 Chief Executive Officer and Trustee
 (Principal Executive Officer)

 FEDERAL REALTY INVESTMENT TRUST
FEDERAL REALTY OP LP
May 4, 2023 /s/ Daniel Guglielmone
 Daniel Guglielmone,
Executive Vice President
 Chief Financial Officer and Treasurer
 (Principal Financial and Accounting Officer)

41
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