Federal Realty Investment Trust

business continued to contribute. Specific drivers which deserve mention, overage percentage rent continues to outpace expectations as tenant sales demonstrate strength and resiliency. Parking revenues also saw gains above forecast as customer traffic at our large mixed-use assets continues to drive higher. Small shop occupancy again showed gains, and we saw lower expenses both at the property and corporate level. This was offset modestly by higher collectability impact or bed debt expense than was forecast. Our gap-based comparable POI growth metric was 3.6%, coming in at the upper end of the range of our 2% to 4% initial guidance. On a cash basis, comparable excluding prior period rent term fees is 5.2%. Cash basis, comparable minimum rent grew by 4%. Term fees in the comparable pool this quarter were essentially flat the first quarter 2022 at $1.4 million in each period. Prior period rent this quarter was $1.3 million versus $2.4 million in the first quarter last year. Please note that we have added all of these figures to pages 10 and 11 of our 8K supplemental disclosure. You're welcome, Steve. Year-over-year occupancy results were also solid, with our overall occupied metric growing 140 basis points year-over-year from 91.2% to 92.6%, and our least percentage increasing 50 basis points from 93.7 to 94.2. Sequentially, we took a small but anticipated step backward, given 1Q seasonality and two known anchor departures in January at lease expiration, which were reflected and our guidance. Our sign not occupied spread in the existing portfolio stands at 160 basis points as we continue to show progress in getting tenants open and rent paying. This spread represents roughly $18 million of incremental total rent. Our sign not occupied in our non-comparable pool stands at $18 million as well of total rent, bringing total signs not occupied to 36 million. This effectively brings our S&O percentage to a total of 3%. These executed leases will continue to drive bottom-line results over the next two years, with roughly 65% coming online over the remainder of 2023 and a balance primarily in 2024. When you include new lease deals in our pipeline for currently unoccupied space, this increases the S&O figure even higher. Rollover for the quarter was 11% on a cash basis and 24% on a straight line basis. The second consecutive quarter to have the cash number in double digits and the straight line number up into the low to mid 20s. I highlight the straight line number as it reflects sector-leading contractual annual rent increases embedded in our leases. Both Anchor and Small Shop blended at roughly 2.25% across the portfolio. Year-to-date, small shop rent bumps have averaged about 3%. Now to the balance sheet. We ended the first quarter with $1.3 billion of total available liquidity at quarter end, comprised of $1.2 billion available under our revolver and $100 million of cash. As many of you saw, we successfully accessed the unsecured market subsequent to quarter end with 350 million of a five and three-eighths green bond, and as a result, no maturity since early 24. Also, keep in mind that for our term loan, whose initial maturity is also in 2024, we have two one-year extensions at our option taking that maturity into 2026. With respect to our leverage metrics, our net debt to EBITDA ratio is roughly six times as adjusted We fully expect to be back to our targeted level in the mid-five times in 2024. Additionally, we are targeting free cash flow after dividends and maintenance capital to return to pre-COVID levels by next year. Our in-process pipeline of active redevelopments and expansions now stands at $740 million, with only $250 million remaining to spend against our $1.3 billion of available liquidity.

Now, on to guidance.

With initial guidance to start the year showing FFO growth of 2.5% at the midpoint and 4% at the top of the range, and a solid first quarter under our belts, we are affirming guidance for 2023 at 638 to 658 per share. While we continue to see strength and resiliency in our business, With three quarters left for the year, it is rare that we would modify guidance at this point in the year. For the first time in almost two years, we are seeing tenant bankruptcies in retail, as selected businesses struggle to compete in a challenging economic environment of higher interest rates and diminished government subsidies from the pandemic. Despite the bankruptcies to date, where we have very manageable exposure, we still feel comfortable with our initial 100 to 135 basis points of total credit reserve comprised of roughly a 75 basis points general reserve and 25 to 60 basis points of specified bed bath reserve. Now, given where we started May and the expected range of outcomes, this bed bath reserve has now been reduced to 20 to 45 basis points given the cash rents we've already received on eight of our nine anchor boxes that have not yet been rejected. including May rent. That range will depend on the timing of the bankruptcy process and which leases are affirmed and or assumed, if any. From a comparable growth perspective, given a solid first quarter metric, we are affirming the 2% to 4% range for comparable DOI growth, as well as our 3% to 5% range on a cash basis, adjusting for prior period rents and terminates. Page 27 in our 8K provides an updated summary of the key assumptions for our guidance. Now, in addition to the expanded disclosure on term fees and prior period rent that I previously highlighted, we'll also notice several other additions to our 8K relating to revenues, comparable POI growth, debt, occupancy, and leasing metrics, demonstrating our commitment to continuing to expand our disclosure to provide the information we believe is most relevant for investors to analyze our business effectively and efficiently.