Federal Realty (FRT.N): Momentum Continues: Federal Realty Posts Another Strong Quarter

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31 Jul 2026 12:40:44 ET │ 15 pages

Federal Realty (FRT.N)

Momentum Continues: Federal Realty Posts Another Strong Quarter

CITI'S TAKE

FRT’s 2Q26 Core FFO of $1.88 was +3c above consensus and Citi,

continuing the momentum from a strong first quarter. Building on this

outperformance, FRT raised its 2026 Core FFO guidance by +1.5c at the

midpoint. The quarter was highlighted by record leasing volume of 819ksf,

with robust blended cash spreads of +15% (vs. +13% in 1Q). Despite the

leasing, portfolio leased and occupancy rates were flat sequentially at

96.1% (up +70bps y/y), and the company also raised its dividend by 3%.

Overall, FRT continues to benefit from the same fundamental tailwind as

retail peers with the added momentum from the long-term growth

algorithm discussed at the recent Investor Day targeting annual 5-7.5%

FFO and 7-10% AFFO growth through 2028.

Results & Fundamentals — FRT reported 2Q FFO of $1.88, +3c (+1.6%) above both

FactSet consensus and Citi estimates. The upside vs. our estimate was driven by

higher NOI, lease term fees and other income partially offset by higher G&A and

interest expense. Overall, this performance was driven by another quarter of record

leasing activity and outsized FFO growth. The company signed an all-time volume

record of 819ksf, achieving a +15% cash leasing spread (vs. +13% in 1Q) and +28%

straight-line (vs. +23% in 1Q). Portfolio occupancy was flat sequentially at 93.8%

(+20bps y/y), and the leased rate was also flat sequentially at 96.1% (+70bps y/y).

Small shop lease rates continued to climb, up +10bps sequentially to 93.9%. Cashbasis comparable POI (adjusted) slowed to a still-healthy +4.2% from +5.1% in 1Q.

Neutral

Price (30 Jul 26 16:00)

US$124.09

Target price

US$120.00

Expected share price return

-3.3%

Expected dividend yield

3.6%

Expected total return

0.3%

Market Cap

US$10,720M

Nick JosephAC

Craig Mailman

Guidance — FRT raised its 2026 Core FFO guidance to $7.48-$7.56 from $7.46$7.55, a +1.5c (+0.2%) increase at the midpoint. The new midpoint of $7.52 is in line

with the Street consensus. The guidance update was supported by an increase in

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