AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 2/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Infill positioning and leasing demand are relevant, but disclosed evidence does not establish barriers to competing supply or a defensible relative advantage.
durability · — · Lease duration provides revenue visibility, but the persistence of a competitive advantage beyond those contracts cannot be established.
customer dependency · — · Occupancy and potential termination fees support contractual commitment, but do not establish tenant dependence on Federal Realty rather than alternative locations.
erosion resilience · — · Historical oversupply and subsequent anchor occupancy improvement show changing operating conditions; they do not establish resilience of an identified structural moat.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Higher comparable-property rental rates contributed approximately $14.5 million in 2025 and $7.8 million in first-half 2026. These are demonstrated pricing outcomes, although they do not isolate renewal spreads, concessions or contractual escalators.
retention · 3/4 · Indirect operating evidence supports strong continuing demand: occupancy improved from 92.2% at year-end 2023 to 94.1% in 2024 and 2025, and June 2026 occupancy was slightly higher year over year. Leasing activity corroborates demand. These measures include replacement tenants and are not a measured renewal retention rate.
margin resilience · 2/4 · Expense reimbursement terms and second-quarter 2026 property revenue growth exceeding property expense growth support resilience. First-quarter rental expenses nevertheless rose slightly as a share of rental income. Acquisitions and termination income complicate attribution, and property-level resilience does not establish protection of total earnings.
contractual freedom · 2/4 · Periodic rent increases, percentage rents, cost recovery and possible cancellation fees provide contractual protection. Three-to-ten-year leases and tenant options at pre-established rates constrain immediate repricing; anchor-related rent reduction and termination rights further qualify landlord discretion.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade, currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 20.72
- Net debt / operating income (x)
- 8.03
- Interest coverage (x)
- 3.28
Capital allocation—
Missing required inputs: cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.50
- 3-year average dilution (%)
- 2.44
- 3-year average SBC / revenue (%)
- 1.26
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flow increased in 2025, and first-half 2026 disclosures show asset recycling and debt repayment alongside investment. Core FFO per diluted share rose from $6.49 in 2023 to $7.06 in 2025 despite dilution. Substantial remaining development costs and further equity issuance temper the assessment; project-level realized returns are missing.
incentive alignment · 3/4 · Existing incentives include three-year equity awards tied to relative shareholder return, FFO valuation and invested-capital returns, plus ownership guidelines and hedging restrictions. Actual 2025 awards demonstrate implementation. Significant bonus discretion and accelerated vesting weaken alignment; actual executive holdings are unavailable.
execution · 3/4 · Rising Core FFO per diluted share over 2023–2025, sustained occupancy, realized rent increases and completed openings support strong demonstrated execution. This partly uses indirect operating evidence and does not establish project-by-project delivery against original budgets or schedules.
governance · 3/4 · Existing annual elections, independent chairmanship, majority voting and proxy access are supported by actual board attendance and auditor sessions without management. Partnership provisions restricting management changes are a counterweight. These disclosures support strong processes, not exceptional governance outcomes.
Evidence
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.
MD&A / claimed infill and demographic advantage · Filed 01/05/2026
We continue to experience strong demand for our commercial space as evidenced by the 2.6 million square feet of comparable space leasing we've completed in the last twelve months, and the 2.3% spread between our leased rate of 96.1% and our occupied rate of 93.8%.
MD&A / trailing twelve-month comparable-space leasing · Filed 01/05/2026
The increase in property revenues is due primarily to the following: •an increase of $49.2 million from 2025 and 2024 acquisitions, •an increase of $36.4 million from comparable properties primarily related to higher rental rates of approximately $14.5 million, an $11.9 million increase in recoveries from tenants primarily on higher expenses and occupancy, higher average occupancy of approximately $8.6 million, and a $2.0 million increase in parking income, partially offset by a $1.9 million increase in collectibility related adjustments, and •an increase of $8.3 million from non-comparable properties primarily driven by occupancy increases, partially offset by •a decrease of $15.8 million from property dispositions.
2025 MD&A / property revenue growth drivers · Filed 12/02/2026
•an increase of $22.1 million from comparable properties primarily related to higher rental rates of approximately $7.8 million, a $5.5 million increase in lease termination fee income, a $4.9 million increase in recoveries from tenants on higher occupancy and expenses, a $2.5 million increase in parking income, and higher average occupancy of approximately $2.4 million, and
First-half 2026 MD&A / comparable-property revenue drivers · Filed 31/07/2026
Commercial property leases generally range from three to ten years; however, certain leases, primarily with anchor tenants, may be longer.
Business / commercial lease durations · Filed 12/02/2026
Founded in 1962, our mission is to deliver long-term, sustainable growth through investing in communities where we believe retail demand exceeds supply.
Business / management belief about demand exceeding supply · Filed 31/07/2026
Over the past several years, we have seen higher levels of anchor turnover and closings in some markets, which has caused an oversupply of larger retail spaces.
2023 risk factors / experienced anchor turnover and oversupply · Filed 12/02/2024
This may from time to time include the evaluation of new markets; •competitive conditions in the vicinity of the property, including gross leasable area (GLA) per capita, competition for tenants and the ability of others to create competing properties through redevelopment, new construction or renovation; •access to and visibility of the property from existing roadways and the potential for new, widened or realigned, roadways within the property’s trade area, which may affect access and commuting and shopping patterns; •the level and success of our existing investments in the market area; •the current market value of the land, buildings and other improvements and the potential for increasing those market values; and •the physical condition of the land, buildings and other improvements, including the structural and environmental condition.
Investment criteria / potential competing supply · Filed 12/02/2026
The closing of one or more anchor stores at a property could adversely affect that property and result in lease terminations by, or reductions in rent from, other tenants whose leases may permit termination or rent reduction in those circumstances or whose own operations may suffer as a result.
Risk factors / anchor-related lease termination and rent reduction rights · Filed 12/02/2026
Numerous commercial developers and real estate companies compete with us with respect to the leasing and the acquisition of properties.
Competition / commercial developers and real estate companies · Filed 12/02/2026
In total, the real estate projects were 94.2% leased and 92.2% occupied at December 31, 2023.
Business / December 2023 leased and occupied rates · Filed 12/02/2024
The percentage occupied at our shopping centers was 94.1% at both December 31, 2025 and 2024.
2025 MD&A / year-end occupancy comparison · Filed 12/02/2026
The percentage occupied at our shopping centers was 93.8% and 93.6% at June 30, 2026 and 2025, respectively.
Second-quarter 2026 MD&A / year-over-year occupancy · Filed 31/07/2026
Our leases are classified as operating leases and typically are structured to require the monthly payment of minimum rents in advance, subject to periodic increases during the term of the lease, percentage rents based on the level of sales achieved by tenants, and reimbursement of a majority of on-site operating expenses and real estate taxes.
Business / rent increases and expense reimbursement terms · Filed 12/02/2026
Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent.
Business / tenant renewal options and pre-established rents · Filed 12/02/2026
For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement.
Revenue recognition / potential early termination fees · Filed 12/02/2026
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2026 AND 2025 Change 2026 2025 Dollars % (Dollar amounts in thousands) Rental income $ 325,896 $ 302,477 $ 23,419 7.7 % Other property income 9,797 8,769 1,028 11.7 % Mortgage interest income 13 277 (264) (95.3) % Total property revenue 335,706 311,523 24,183 7.8 % Rental expenses 64,491 61,609 2,882 4.7 % Real estate taxes 39,077 36,681 2,396 6.5 % Total property expenses 103,568 98,290 5,278 5.4 % Property operating income (1) 232,138 213,233 18,905 8.9 % General and administrative expense (13,470) (11,925) (1,545) 13.0 % Depreciation and amortization (100,623) (89,241) (11,382) 12.8 % Gain on sale of real estate 20,617 76,501 (55,884) (73.1) % New market tax credit transaction income — 14,176 (14,176) (100.0) % Operating income 138,662 202,744 (64,082) (31.6) % Other interest income 563 905 (342) (37.8) % Interest expense (50,008) (44,598) (5,410) 12.1 % (Loss) income from partnerships (664) 905 (1,569) (173.4) % Total other, net (50,109) (42,788) (7,321) 17.1 % Net income 88,553 159,956 (71,403) (44.6) % Net income attributable to noncontrolling interests (2,851) (4,040) 1,189 (29.4) % Net income attributable to the Trust $ 85,702 $ 155,916 $ (70,214) (45.0) % (1)Property operating income is a non-GAAP measure that consists of total property revenue, less rental expenses and real estate taxes.
Second-quarter 2026 results / revenues, expenses and income · Filed 31/07/2026
As a result of the changes in rental income and rental expenses as discussed above, rental expenses as a percentage of rental income increased to 22.5% in the three months ended March 31, 2026 from 22.4% in the three months ended March 31, 2025.
First-quarter 2026 MD&A / rental expense ratio · Filed 01/05/2026
Summary of Cash Flows Year Ended December 31, 2025 2024 Change (In thousands) Net cash provided by operating activities $ 622,378 $ 574,563 $ 47,815 Net cash used in investing activities (743,068) (446,826) (296,242) Net cash provided by (used in) financing activities 102,953 (252,298) 355,251 Decrease in cash and cash equivalents (17,737) (124,561) 106,824 Cash, cash equivalents, and restricted cash, beginning of year 135,443 260,004 (124,561) Cash, cash equivalents, and restricted cash, end of year $ 117,706 $ 135,443 $ (17,737) Net cash provided by operating activities increased $47.8 million to $622.4 million during 2025 from $574.6 million during 2024.
2025 MD&A / cash flows · Filed 12/02/2026
11 Table of Contents Federal Realty OP LP Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2026 2025 (In thousands) OPERATING ACTIVITIES Net income $ 249,623 $ 226,534 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 199,840 176,187 Gain on sale of real estate (113,328) (77,672) Loss (income) from partnerships 503 (1,082) New market tax credit transaction income — (14,176) Straight-line rent (15,760) (13,844) Share-based compensation expense 7,871 7,464 Other, net (2,347) (1,163) Changes in assets and liabilities, net of effects of acquisitions and dispositions: Decrease in accounts receivable, net 1,595 14,709 Decrease in prepaid expenses and other assets 11,958 15,333 Increase (decrease) in accounts payable and accrued expenses 2,330 (3,805) (Decrease) increase in security deposits and other liabilities (3,954) 1,252 Net cash provided by operating activities 338,331 329,737 INVESTING ACTIVITIES Acquisition of real estate (85,397) (120,413) Capital expenditures - development and redevelopment (78,779) (69,350) Capital expenditures - other (56,241) (55,257) Proceeds from sale of real estate 220,110 141,151 Investment in partnerships (1,004) — Distribution from partnerships in excess of earnings 2,731 1,094 Leasing costs (11,377) (13,547) Net cash used in investing activities (9,957) (116,322) FINANCING ACTIVITIES Net borrowings under revolving credit facility, net of costs (30,665) 17,600 Repayment of senior notes (400,000) — Issuance and extension of notes payable, net of costs 249,954 (4,818) Repayment of mortgages, finance leases and notes payable (3,786) (2,840) Issuance of common units, net of costs 60,468 54,503 Distributions to common and preferred unit holders (198,359) (192,498) Shares withheld for employee taxes (4,978) (4,675) Contributions from noncontrolling interests 2,871 1,413 Distributions to and redemptions of noncontrolling interests (6,800) (13,921) Net cash used in financing activities (331,295) (145,236) (Decrease) increase in cash, cash equivalents and restricted cash (2,921) 68,179 Cash, cash equivalents, and restricted cash at beginning of year 117,706 135,443 Cash, cash equivalents, and restricted cash at end of period $ 114,785 $ 203,622 The accompanying notes are an integral part of these consolidated statements.
First-half 2026 Operating Partnership cash-flow statement · Filed 31/07/2026
We currently have development and redevelopment projects in various stages of constructions with remaining costs of $304 million.
Liquidity and capital resources / remaining development costs · Filed 31/07/2026
During the three and six months ended June 30, 2026, we issued 493,374 common shares at a weighted average price per share of $123.92 for net cash proceeds of $60.4 million including paying $0.6 million in commissions and $0.2 million in additional offering expenses related to the sales of these common shares.
Equity / actual 2026 common share issuance · Filed 31/07/2026
Federal Realty 2026 Proxy Statement A-1 Table of Contents The reconciliation of net income attributable to common shareholders to Nareit FFO and Core FFO is as follows: Year Ended December 31, 2025 2024 2023 (In thousands, except per share data) Reconciliation of net income attributable to common shareholders to Nareit FFO Net income $ 423,648 $ 304,334 $ 247,217 Net income attributable to noncontrolling interests (12,571) (9,126) (10,232) Gain on sale of real estate (150,111) (54,040) (9,881) Impairment charge 7,425 - - Depreciation and amortization of real estate assets 320,311 302,455 285,689 Amortization of initial direct costs of leases 42,671 33,377 31,208 Funds from operations 631,373 577,000 544,001 Dividends on preferred shares(1) (7,500) (7,500) (7,500) Income attributable to downREIT operating partnership units 2,463 2,743 2,767 Income attributable to unvested shares (2,080) (2,004) (1,955) Funds from operations available for common shareholders $ 624,256 $ 570,239 $ 537,313 Weighted average number of common shares, diluted(1)(2) 86,498 84,286 82,044 Funds from operations available for common shareholders, per diluted share $ 7.22 $ 6.77 $ 6.55 Reconciliation of Nareit FFO to Core FFO Nareit FFO $ 624,256 $ 570,239 $ 537,313 Adjustments: New market tax credit transaction income, net(3) (13,004) - - Executive transition costs - 3,687 - Collection of prior period rents deferred during COVID (261) (3,218) (5,136) Core FFO $ 610,991 $ 570,708 $ 532,177 Core FFO per diluted share(2) $ 7.06 $ 6.77 $ 6.49 (1) For the years ended December 31, 2025, 2024 and 2023, 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 number of common shares, diluted.”
Appendix A / 2023–2025 FFO and Core FFO reconciliation · Filed 27/03/2026
Pay Component Time Metric Purpose Impact Annual / Short-Term Base Pay 1 year Individual performance To provide fair and competitive compensation for individual performance and level of responsibility of position held Attract and retain talent Fixed Annual Performance Bonus 1 year NAREIT FFO per Share* Individual performance To provide performance based annual cash awards to motivate and reward employees for achieving our short-term business objectives Drive near-term corporate and individual performance goals Variable / At risk Long-Term Equity Incentive 3 years Relative total shareholder return (34%) NAREIT FFO multiple premium (33%) Return on invested capital (33%) To provide performance-based equity compensation in the form of restricted shares to drive medium and longer-term business objectives Drive medium and long- term performance goals and retain talent * NAREIT FFO per share is a non-GAAP financial measure that we consider significant in our business.
Compensation / annual and long-term incentive metrics · Filed 27/03/2026
We have three key objectives within this philosophy: • Establish a strong link between pay and performance • Align the financial interest of our NEOs with our shareholders, particularly over the longer term • Reinforce business strategies and objectives and drive sustained shareholder value Federal Realty 2026 Proxy Statement 21 Table of Contents ➣ EXECUTIVE COMPENSATION PRACTICES The following table summarizes key governance elements related to our compensation programs: What We Do What We Don’t Do Maintain a pay mix that is heavily performance-based Have employment agreements with our NEOs with required fixed compensation increases Align compensation with company and individual performance Grant options below fair market value or reprice options Seek annual shareholder advisory approval of executive compensation Permit hedging or pledging of our shares Maintain strong share ownership guidelines of 7x base salary for our CEO and 2.5x base salary plus annual bonus for our other NEOs Provide perquisites that are not made available to all of our employees Maintain incentive compensation clawback policy Conduct annual compensation risk assessment ➣ COMPONENTS OF COMPENSATION The following table sets out the three components of our compensation plan as well as key information about each component.
Compensation / ownership guidelines and compensation safeguards · Filed 27/03/2026
Based on a review of each individual’s performance and the considerations outlined in detail below, the Compensation Committee elected to award each of our NEOs the full amount of the individual performance portion of his/her bonus potential.
2025 compensation decisions / actual individual-performance awards · Filed 27/03/2026
All unvested restricted shares held by our NEOs will vest in the event of termination without cause, termination following a change-in-control, death or disability.
Compensation / accelerated vesting on termination · Filed 27/03/2026
Highlights of our corporate governance practices include: ✓ Annual election of Trustees and annual Board and Trustee evaluations ✓ Independent non-executive chairman since 2003 ✓ Board oversight of sustainability, cyber security, data protection, artificial intelligence practices and human resources ✓ Prohibition on Trustees serving on excessive numbers of other boards ✓ Majority voting in uncontested elections ✓ Proxy access for all shareholders ✓ Prohibition on Trustees and management hedging and pledging our shares ✓ Shareholder approval required to classify our Board ✓ Robust share ownership guidelines in place for Trustees and senior management Ø BOARD LEADERSHIP Our Board has been led by an independent, Non-Executive Chairman for more than 20 years.
Governance / existing board and shareholder practices · Filed 27/03/2026
Ø BOARD AND COMMITTEE MEETINGS The Board met five (5) times in 2025 and our trustees collectively attended 99% of all of the meetings of the Board and the committees on which they serve.
Governance / actual 2025 board meeting attendance · Filed 27/03/2026
In 2025, the Audit Committee met four times and each meeting included an executive session with our independent registered public accounting firm and no members of management present.
Audit Committee / actual 2025 auditor executive sessions · Filed 27/03/2026
These provisions also make it more difficult for third parties to alter the management structure of the Partnership without the concurrence of our Board of Trustees.
Governance risks / restrictions on changing Partnership management · Filed 12/02/2026
This increase is primarily driven by acquisitions, higher rental rates and average occupancy, openings at Santana West and Pike & Rose Phase IV, and higher lease termination fee income, partially offset by property dispositions.
First-half 2026 MD&A / operating growth and completed openings · Filed 31/07/2026
As of December 31, 2025, our anchor tenant space is 97.3% leased and 95.5% occupied.
Risk factors / December 2025 anchor leasing and occupancy · Filed 12/02/2026
As of December 31, 2023, our anchor tenant space is 96.0% leased and 93.9% occupied.
Risk factors / December 2023 anchor leasing and occupancy · Filed 12/02/2024
The shift to online shopping may cause declines in brick and mortar sales generated by certain of our tenants and may cause certain of our tenants to reduce the size or number of their retail locations in the future.
Risk factors / potential online substitution · Filed 12/02/2026
The remaining 75% is earned based on the Compensation Committee’s assessment of each individual’s performance and whether that NEO achieved the objectives set out by the Company within that NEO’s area of responsibility.
Compensation / discretionary individual-performance bonus component · Filed 27/03/2026
