Federal Realty Investment Trust

Good day and welcome to the Federal Realty Investment Trust fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Jill Sawyer, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Ashia. Good evening, everyone. Thank you for joining us today for Federal Realty's fourth quarter 2025 earnings conference call. Joining me on the call are John Williams, Federal's Chief Executive Officer, Dan Guglielmini, Chief Financial Officer, Wendy Sear, Eastern Region President and Chief Operating Officer, and Jan Sweetnam, Chief Investment Officer, as well as other members of our executive team are available to take your questions at the conclusion of our prepared remarks. A reminder that certain matters discussed on this call may be deemed to be forward-looking statements. Forward-looking statements include any annualized or projected information, as well as statements referring to expected or anticipated events or results, including guidance. Although federal realty believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realties future operations and its actual performance may differ materially from the information in our full listing statements, and we can give no assurance that these expectations can be attained. The earnings released and supplemental reporting package that we issued tonight, our annual report filed on Form 10-K, and our other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and operational results. Given the number of participants on the call, we kindly ask that you limit yourself to one question during the Q&A portion. If you have additional questions, please reach you. With that, I will turn the call over to John Wood.

Thank you, Jill, and good afternoon, everybody. Strong quarter, strong year, strong 2026 guidance. 6.4% bottom line FFO growth in the quarter, 4.3% for the year, and guidance close to 6% at the midpoint for 2026. All those numbers, of course, eliminate the impact of the one-time new market tax credit last year. as reflected in our new core FFO metric. More to come on that from Dan. Business is good, with strong demand for our assets in both our historical locations as well as the newer markets. We ended the year with the overall portfolio 96.1% leased, 94.1% occupied, about 50 basis points higher than that, excluding newly acquired centers. No surprise that leasing drives these and future results. With 601,000 feet of comparable deals done in the quarter, at 12% rollover, and 2.3 million feet of comparable deals done for the year at 15% rollover, an incremental $11 million of new rent is under contract. Starting rent on the new 2025 leases was $37.98, compared with ending rent on those same spaces, after years of contractual bumps, by the way, of $33.12. We also did 29 comparable deals in 2025 at an average rate of $48.18, resulting in an incremental $6.3 million of new rent under contract, and the deal pipeline continues to look strong. Wendy will talk more about that in a little bit. Leases signed in the fourth quarter included weighted average contractual rent bumps of 2.6%. As strong as operations were, Transaction activity was equally robust in the fourth quarter and thus far into 2026. We closed Annapolis Town Center in Maryland and Village Point in Omaha, adding nearly a million square feet to the portfolio for $340 million at an initial cash-on-cash yield in the low 7% range. Remerchandising and rents commensurate with the strong sales at these locations are the focal points of these two A-quality assets over the next five years, with targeted unlevered IRRs approaching 9%. Both have started out as we've underwritten. Acquisitions completed early in the year, earlier in the year, including Del Monte Center and two Leawood Kansas properties are looking like excellent additions, particularly in Leawood, where tenant demand and expected rents are exceeding our underwriting. On the disposition side, we closed on the sale of Bristol Plaza in Connecticut and Palace, the peripheral residential building in Pike and Rose in the quarter, for a combined sales price of $169 million. Just last week, we closed on Missouri, the peripheral residential building in Santana Row, for proceeds of nearly $150 million, along with another small asset sale for 10. The overall combined cap rate of these dispositions was in the low fives. As we've talked about over the last several quarters, we're also finding opportunities to intensify our properties development, usually residential products that is complementary to our shopping centers with little to no incremental land cost, and that works in the right locations. If 2025 has taught us anything about value, it's that high-quality apartments adjacent to great shopping environments and strong suburban locations create a more desirable living environment. That translates into higher residential rents, stronger growth, and ultimately lower cap rates on sale. The 2025 and 2026 sales of Levare and Masura at Santana Row and Palace at Pike and Rose unlocked an unmatched cost of capital for us to reinvest in material amounts at sub 5% overall. We previously disclosed the allocation of a total of $280 million for new residential development of the Blair at Ballot Kenwood, which is nearly complete and ready for lease-up beginning this quarter, 301 Washington Street in Hoboken, and Lot 12 at Santana Row, which together will add more than 500 units to the portfolio. In just this quarter, we've added another residential project to our development schedule that you can see in the 8K. Willow Grove Shopping Center in suburban Philadelphia will be completely redeveloped and include an additional 261 apartments to complement a modernized and re-merchandise shopping center. Our experience with residential development at our retail-centric properties is a skill set developed over 25 years and is certainly a unique differentiator of our business plan. After enjoying the 6.5% to 7% or higher income contribution from each of these residential additions for a period of time, we have the optionality to take advantage of cap rates well inside those yields and reinvest them tax-sufficiently, just as we've done so effectively last year in this. 2025 is a very special year for the Trust, and 2026 and 2027 look to capitalize on that. First of all, core leasing was exceptionally strong and looks to remain that way in 2026. Our expanded geographical reach is proving particularly fruitful, with strong retailer demand anxious to be part of our property improvement efforts. Last, the COVID-era office leasing effort has been largely completed with meaningful rents starting in 26 and 27. In fact, at the mixed-use properties, we should have zero office product available for lease, and that means 100% lease within the next 30 to 45 days. Our asset recycling effort is validating the long-term value creation that our business plan has created. And all of this is wrapped in a relatively stable interest rate environment. that could result in lower rates as the year progresses. We'll see. The refinancing of our one and a quarter percent bonds, yup, one and a quarter percent this month, represents the last major component of our debt portfolio with such a large market rate adjustment likely. And even through that, we're guiding to near 6% growth. Later this spring, we'll showcase our plan through an investor day in a row. Jill has the details, and I think the save the dates have been sent out. Really looking forward to seeing most of you there. Enhanced internal and external growth using all the tools at our disposal is the name of the game. Quarters like this fourth, and in fact all of 2025, increased my confidence of our ability to do so. Let me now turn it over to Wendy and then to Dan to provide additional color. Wendy?