NORTH BETHESDA, Md. - Federal Realty (NYSE:FRT) Investment Trust (NYSE:FRT) reported its operating results for the year ended December 31, 2023, noting a decrease in net income for common shareholders compared to the previous year. The real estate investment trust announced a net income of $2.80 per diluted share for 2023, down from $4.71 per diluted share in 2022. For the fourth quarter, net income was $0.76 per diluted share, a decrease from $1.40 per diluted share in the same period of 2022.
Operating income for the year also declined to $406.5 million from $526.4 million in 2022. The fourth quarter operating income saw a drop to $108.8 million from $155.1 million year-over-year.
Despite the decline in net income, Federal Realty experienced growth in funds from operations (FFO), a key metric for real estate investment trusts. The FFO per diluted share for 2023 reached $6.55, an increase from $6.32 in 2022. The fourth quarter FFO per diluted share improved to $1.64 from $1.58 in the corresponding quarter of the previous year.
The trust reported robust leasing activity for 2023, signing 408 leases for over 2 million square feet of comparable retail space. The portfolio was 92.2% occupied and 94.2% leased at the end of the quarter. Small shop leasing ended the quarter at 90.7%, marking a year-over-year increase.
Subsequent to the quarter-end, Federal Realty announced a second phase of residential redevelopment at Bala Cynwyd in Pennsylvania with a projected cost of $90 to $95 million and an expected return on investment of 7%.
In financing activities, Federal Realty raised $685.0 million in capital through two separate transactions, including a $200.0 million mortgage loan and $485.0 million of exchangeable senior notes. The trust also repaid $600.0 million of senior unsecured notes at maturity.
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