Federal Realty Investment Trust (FRT) investor relations material

Strategic positioning and capital allocation

• Emphasizes the importance of investing in hard assets, highlighting a 58-year track record of increasing dividends, unique among REITs.

• Capital recycling strategy involves selling lower-yield assets at low cap rates and redeploying into higher-yield opportunities, supporting sector-leading growth into 2026 and 2027.

• Expansion into new markets like Kansas City, Leawood, and Omaha focuses on acquiring dominant, under-managed assets to generate incremental IRRs above 9%.

• Capital allocation decisions are opportunistic, balancing market conditions and cost of capital, with a focus on maximizing shareholder value.

• Strategic entry into new markets is limited to a few large, high-quality assets to maintain operational efficiency and market influence.

Development and intensification initiatives

• Incremental residential development leverages excess land at shopping centers, adding units without land costs and commanding premium rents.

• Willingness to monetize residential assets after a holding period, using 1031 exchanges to redeploy capital into higher-growth markets.

• Ongoing projects in Bala Cynwyd, Hoboken, Santana Row, and Willow Grove will contribute to earnings from 2026 through 2029, with $200 million invested annually in repeatable income streams.

• Residential and office income streams each represent about 10% of total income, with retail remaining the core focus at 80%.

• New residential entitlements, such as 300+ units at Pembroke, are pursued when feasible, adding unanticipated growth potential.

Market execution and tenant relationships

• Due diligence and strong tenant relationships enable rapid leasing and remerchandising, as seen in Leawood and Pembroke.

• Tenant demand and leasing momentum increase as high-profile brands commit, driving higher rents and sales.

• Underwriting does not assume cap rate compression; deals must work at entry or higher cap rates, providing a cushion for value creation.

• Pembroke's unlevered IRR forecast increased from just above 8% to over 10% due to operational improvements, excluding potential residential upside.

• Same store NOI growth for next year is projected in the mid-3% range, with fewer companies contributing.