Federal Realty Raises 2026 Core FFO Outlook After Leasing

The Tip Desk · October 30, 2026 · 3 min read

The retail REIT lifted full-year Core FFO guidance to $7.54–$7.58 a share after Nareit and Core FFO of $1.87 a share in the third quarter.

Federal Realty Investment Trust (FRT) raised and tightened its 2026 funds-from-operations outlook after a third quarter in which Nareit FFO and Core FFO each reached $1.87 a share, up 5.6% from a year earlier.

The retail REIT now expects full-year Nareit FFO and Core FFO of $7.54 to $7.58 a share, versus prior guidance of $7.48 to $7.56, implying 6.8% to 7.4% Core FFO growth versus a prior range of 5.9% to 7.1%. It also tightened 2026 earnings guidance to $4.23 to $4.27 a share from $4.22 to $4.30.

Net income available for common shareholders was $64.2 million, or $0.74 a share, for the three months ended September 30, 2026, compared with $59.6 million, or $0.69 a share, a year earlier. Operating income was $116.9 million. Nareit FFO and Core FFO were each $163.0 million.

Comparable Property property operating income grew 2.5% in the quarter, and Adjusted Comparable Property POI, which excludes straight-line rents and amortization of in-place leases, grew 4.0%. The company tightened full-year Comparable Property POI growth guidance to 3.375% to 3.625% from 3.25% to 3.75%, and Adjusted Comparable Property POI growth to 4.375% to 4.625% from 4.00% to 4.50%.

Federal Realty signed 117 leases covering 532,220 square feet of comparable retail space in the quarter, with average rent of $40.01 a square foot versus $35.07 under prior leases, a 14% cash-basis increase and a 25% straight-line increase. On a trailing twelve-month basis it signed 447 comparable leases for 2,601,255 square feet at the same 14% cash and 25% straight-line spreads. Including non-comparable space, the company signed 123 leases totaling 589,726 square feet of retail.

Overall portfolio occupancy was 93.8% at quarter end, flat sequentially and year-over-year. The leased rate was 96.5%, up 40 basis points sequentially and 110 basis points year-over-year. Small-shop leased rate was 94.1%, up 20 basis points sequentially and 80 basis points year-over-year. The residential leased rate for comparable properties was 95.7%.

President and Chief Executive Officer Donald C. Wood said the company delivered “strong leasing with materially higher new rents, higher leased occupancy and healthy cash POI growth,” and that on the capital-allocation side it stayed disciplined with share repurchases, incremental development on existing land and an acquisition.

On August 11 the company issued $460.0 million of 3.50% exchangeable senior notes due August 15, 2031, with net proceeds of about $451 million. The notes are initially exchangeable into common shares at about $138.54 a share. Federal Realty used $21.7 million of the proceeds to buy capped calls that provide protection up to about $165.07 a share, a 40% premium to the August 6, 2026 closing price.

During the third quarter and year-to-date through October 9, 2026, the company repurchased and retired 869,748 common shares for $94.7 million at a weighted average price of $108.82 a share.

Subsequent to quarter end, on October 1, 2026, Federal Realty acquired The Summit, an approximately 870,000-square-foot open-air center in Birmingham, Alabama, for $508.0 million. The company said the 100-acre property is the most-visited retail destination in Alabama, drawing nearly 9 million visits annually from a trade area reaching 100 miles in every direction, according to Placer.ai. The tenant roster includes Apple, Trader Joe’s, RH, Nordstrom Rack, ALO, Sephora and North Italia.

The board declared a regular quarterly cash dividend of $1.16 a common share, an indicated annual rate of $4.64. The dividend is payable January 15, 2027 to holders of record January 4, 2027. Federal Realty said it has increased quarterly dividends for 59 consecutive years.