Federal Realty (NYSE: FRT) details 104-property retail REIT footprint
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
Federal Realty Investment Trust presents its annual overview as a retail-focused REIT operating through Federal Realty OP LP. The company owns or has majority interests in 104 shopping center and mixed-use projects totaling about 28.8 million commercial square feet, primarily in dense coastal markets.
As of December 31, 2025, properties were 96.1% leased and 94.1% occupied, supported by roughly 3,700 commercial and 2,700 residential leases, with no tenant over 2.4% of base rent. Federal Realty highlights its 58-year streak of common dividend increases, REIT tax status, and a capital structure that includes about $5.0 billion of debt, most at fixed rates.
The filing emphasizes strategies for leasing, redevelopment, acquisitions and conservative financing, along with detailed risk factors. Key risks include tenant health and bankruptcies, e-commerce competition, development and redevelopment execution, geographic concentration, interest-rate and refinancing exposure, environmental and climate regulation, cybersecurity, and the need to maintain REIT qualification and ownership limits.
Positive
- None.
Negative
- None.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
| ANNUAL REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended December 31
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 1-07533 (Federal Realty Investment Trust)
Commission file number: 333-262016-01 (Federal Realty OP LP)
(Exact Name of Registrant as Specified in its charter)
| (State of Organization) | (IRS Employer Identification No.) | |||||||
(Address of Principal Executive Offices) (Zip Code)
(301 ) 998-8100
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Federal Realty Investment Trust | ||||||||
| Title of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||
| $.01 par value per share, with associated Common Share Purchase Rights | ||||||||
| of 5.00% Series C Cumulative Redeemable Preferred Stock, $.01 par value per share | ||||||||
| Federal Realty OP LP | ||||||||
| Title of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||
| None | N/A | N/A | ||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Federal Realty Investment Trust ☒ Yes ☐ No
Federal Realty OP LP ☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Federal Realty Investment Trust ☐ Yes ☒ No
Federal Realty OP LP ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Federal Realty Investment Trust ☒ Yes ☐ No
Federal Realty OP LP ☒ Yes ☐ No
Table of Contents
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Federal Realty Investment Trust ☒ Yes ☐ No
Federal Realty OP LP ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
| Federal Realty Investment Trust | |||||||||||
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
| Federal Realty OP LP | |||||||||||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
| ☒ | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
| If an emerging growth company, indicate by checkmark if the registrant has elected not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||||||||
| Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | |||||||||||
| Federal Realty Investment Trust | |||||||||||
| Federal Realty OP LP | |||||||||||
| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | |||||||||||
| Federal Realty Investment Trust | |||||||||||
| Federal Realty OP LP | |||||||||||
| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). | |||||||||||
| Federal Realty Investment Trust | ☐ | ||||||||||
| Federal Realty OP LP | ☐ | ||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Federal Realty Investment Trust ☐ Yes ☒ No
Federal Realty OP LP ☐ Yes ☒ No
The aggregate market value of the registrant's common shares held by non-affiliates of the registrant, based upon the closing sales price of the registrant's common shares on June 30, 2025:
Federal Realty Investment Trust: $8.2 billion
Federal Realty OP LP: N/A
The number of Federal Realty Investment Trust's common shares outstanding on February 9, 2026 was 86,276,033 .
Table of Contents
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Federal Realty Investment Trust’s Proxy Statement to be filed with the Securities and Exchange Commission (the "SEC") for its annual meeting of shareholders to be held in May 2026 will be incorporated by reference into Part III hereof.
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2025, of Federal Realty Investment Trust and Federal Realty OP LP. Unless stated otherwise or the context otherwise requires, references to "Federal Realty Investment Trust," the "Parent Company" or the "Trust" mean Federal Realty Investment Trust; and references to "Federal Realty OP LP" or the "Operating Partnership" mean Federal Realty OP LP. The term "the Company," "we," "us," and "our" refer to the Parent Company and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. References to "shares" and "shareholders" refer to the shares and shareholders of the Parent Company and not the limited partnership interests for limited partners of the Operating Partnership.
The Parent Company is a real estate investment trust ("REIT") that owns 100% of the limited liability company interests of, is the sole member of, and exercises exclusive control over Federal Realty GP LLC (the "General Partner"), which is the sole general partner of the Operating Partnership. As of December 31, 2025, the Parent Company owned 100% of the outstanding partnership units (the "OP Units") in the Operating Partnership.
The Company believes combining the annual reports on Form 10-K of the Parent Company and the Operating Partnership into this single report provides the following benefits:
•Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the businesses as a whole in the same manner as management views and operates the business;
•Eliminates duplicate disclosure and provides a more streamlined and readable presentation; and
•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates the Parent Company and the Operating Partnership as one business. Since the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the management of the Parent Company consists of the same individuals as the management of the Operating Partnership.
We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its direct and indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company is not expected to incur any material indebtedness. The Operating Partnership holds substantially all of our assets and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.
Shareholders' equity, partner capital, and non-controlling interests are the primary areas of difference between the Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent, and may in the future include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for in capital in the Operating Partnership’s financial statements and in non-controlling interests in the Parent Company’s financial statements.
The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while shareholders’ equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.
In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.
Table of Contents
FEDERAL REALTY INVESTMENT TRUST
FEDERAL REALTY OP LP
ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED DECEMBER 31, 2025
TABLE OF CONTENTS
| PART I | ||||||||
| Item 1. | Business | 3 | ||||||
| Item 1A. | Risk Factors | 8 | ||||||
| Item 1B. | Unresolved Staff Comments | 19 | ||||||
| Item 1C. | Cyber Security | 19 | ||||||
| Item 2. | Properties | 19 | ||||||
| Item 3. | Legal Proceedings | 28 | ||||||
| Item 4. | Mine Safety Disclosures | 28 | ||||||
| PART II | ||||||||
| Item 5. | Market for Our Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities | 29 | ||||||
| Item 6. | Reserved | 31 | ||||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | ||||||
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 47 | ||||||
| Item 8. | Financial Statements and Supplementary Data | 48 | ||||||
| Item 9. | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure | 48 | ||||||
| Item 9A. | Controls and Procedures | 48 | ||||||
| Item 9B. | Other Information | 49 | ||||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 48 | ||||||
| PART III | ||||||||
| Item 10. | Trustees, Executive Officers and Corporate Governance | 51 | ||||||
| Item 11. | Executive Compensation | 51 | ||||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 51 | ||||||
| Item 13. | Certain Relationships and Related Transactions, and Trustee Independence | 51 | ||||||
| Item 14. | Principal Accountant Fees and Services | 51 | ||||||
| PART IV | ||||||||
| Item 15. | Exhibits and Financial Statement Schedules | 51 | ||||||
| Item 16. | Form 10-K Summary | 55 | ||||||
| SIGNATURES | 56 | |||||||
2
Table of Contents
PART I
Forward-Looking Statements
Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Federal Realty Investment Trust and Federal Realty OP LP (together, “we” “our” or “us”) and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:
•risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire or to fill existing vacancy;
•risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment, or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected;
•risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
•risks that our growth will be limited if we cannot obtain additional capital, or if the costs of capital we obtain are significantly higher than historical levels;
•risks associated with general economic conditions, including inflation, tariffs, and local economic conditions in our geographic markets;
•risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense;
•risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT; and
•risks related to natural disasters, climate change and public health crises (such as worldwide pandemics), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.
In addition, we describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” (Part I, Item 1A of this Annual Report on Form 10-K), “Quantitative and Qualitative Disclosures about Market Risk” (Part II, Item 7A), and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (Part II, Item 7).
ITEM 1. BUSINESS
General
Federal Realty Investment Trust (the "Parent Company" or the "Trust") is an equity real estate investment trust ("REIT"). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Trust conducts substantially all of its operations and owns substantially all of its assets. The Trust owns 100% of the limited liability company interest of, is sole member of, and exercises exclusive control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole
3
Table of Contents
general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, "we," "our," and "us" means the Trust and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. We specialize in the ownership, management, and redevelopment of high quality retail and mixed-use properties. These properties are located primarily in major coastal markets and select underserved markets that we believe have strong economic and demographic fundamentals. As of December 31, 2025, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects comprising approximately 28.8 million commercial square feet. In total, the real estate projects were 96.1% leased and 94.1% occupied at December 31, 2025. Our revenue is primarily generated from lease agreements with tenants. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 58 consecutive years.
We were founded in 1962 as a REIT under the laws of the District of Columbia and re-formed as a REIT in the state of Maryland in 1999. In January of 2022, we consummated the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report. We operate in a manner intended to qualify as a REIT for tax purposes pursuant to provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Our principal executive offices are located at 909 Rose Avenue, North Bethesda, Maryland 20852. Our telephone number is (301) 998-8100. Our website address is www.federalrealty.com. The information contained on our website is not a part of this report and is not incorporated herein by reference.
Business Objectives and Strategies
Our primary business objective is to own, manage, acquire and redevelop a portfolio of high quality retail focused properties that will:
•provide increasing cash flow for distribution to shareholders;
•generate higher internal growth than the shopping center industry over the long term;
•provide potential for capital appreciation; and
•protect investor capital.
Our portfolio includes, and we continue to acquire and redevelop, high quality retail in many formats ranging from regional, community and neighborhood shopping centers that often are anchored by grocery stores to mixed-use properties that are typically centered around a retail component but also include residential and office components.
Operating Strategies
We continuously evaluate and assess our operating strategies to ensure they are effective and put us in the best position to address changes in the market. We actively manage our properties to maximize rents and maintain occupancy levels by attracting and retaining a strong and diverse base of tenants and replacing less relevant, weaker, underperforming tenants with stronger ones. Our properties are generally located in some of the most densely populated and affluent areas of the country. These strong demographics help our tenants generate higher sales, which has generally enabled us to maintain higher occupancy rates, charge higher rental rates, and maintain steady rent growth, all of which increase the value of our portfolio. Our operating strategies also include:
•increasing rental rates through the negotiation of contractual rental increases during the term of the lease, the renewal of expiring leases or the leasing of space to new tenants at higher rental rates while limiting vacancy and down-time;
•maintaining a diversified tenant base, thereby limiting exposure to any one tenant’s financial or operating difficulties;
•actively managing the merchandising mix of our tenant base to achieve a balance of strong national and regional tenants with local specialty tenants;
•minimizing overhead and operating costs;
•actively managing the physical appearance of our properties and the construction quality, condition and design of the buildings and other improvements located on our properties to maximize our ability to attract customers and thereby generate higher rents and occupancy rates;
•managing our properties to take into account their impact on climate change and their resilience in the face of climate change;
•developing local and regional market expertise in order to capitalize on market and retailing trends;
•leveraging the contacts and experience of our management team to build and maintain long-term relationships with tenants;
•providing exceptional customer service; and
•creating an experience at many of our properties that is identifiable, unique and serves the surrounding communities to help insulate these properties and the tenants at these properties from the impact of on-line retailing.
4
Table of Contents
Investing Strategies
Our investment strategy is to deploy capital at risk-adjusted rates of return that exceed our long-term weighted average cost of capital in projects that have potential for future income growth and increased value. Our investments primarily fall into one of the following four categories:
•acquiring quality retail and mixed-use properties located in densely populated and/or affluent areas where barriers to entry for further development are high, and that have possibilities for enhancing operating performance and creating value through renovation, expansion, reconfiguration and/or retenanting;
•renovating, expanding, reconfiguring and/or retenanting our existing properties to take advantage of under-utilized land or existing square footage to increase revenue;
•renovating or expanding tenant spaces for tenants capable of producing higher sales, and therefore, paying higher rents; and
•developing the retail portions of mixed-use properties and developing or otherwise investing in non-retail portions of mixed-use properties we already own in order to capitalize on the overall value created in these properties.
Investment Criteria
When we evaluate potential redevelopment, retenanting, expansion, acquisition and development opportunities, we consider such factors as:
•the expected returns in relation to our short and long-term cost of capital as well as the anticipated risk we will face in achieving the expected returns;
•the anticipated growth rate of operating income generated by the property;
•the ability to increase the long-term value of the property through redevelopment and retenanting;
•the tenant mix at the property, tenant sales performance and the creditworthiness of those tenants;
•the geographic area in which the property is located, including the population density, household incomes, education levels, as well as the population and income trends in that geographic area. 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.
Financing Strategies
Our financing strategies are designed to enable us to maintain an investment grade balance sheet while retaining sufficient flexibility to fund our operating and investing activities in the most cost-efficient way possible. Our financing strategies include:
•maintaining a prudent level of overall leverage and an appropriate pool of unencumbered properties that is sufficient to support our unsecured borrowings;
•managing our exposure to variable-rate debt;
•maintaining sufficient levels of cash and available line of credit to fund operating and investing needs on a short-term basis;
•taking advantage of market opportunities to refinance existing debt, reduce interest costs and manage our debt maturity schedule so that a significant portion of our debt relative to our size does not mature in any one year;
•selling properties that have limited growth potential or are not a strategic fit within our overall portfolio and redeploying the proceeds to redevelop, renovate, retenant and/or expand our existing properties, acquire new properties or reduce debt; and
•utilizing the most advantageous long-term source of capital available to us to finance redevelopment and acquisition opportunities, which may include:
◦the sale of our equity or debt securities through public offerings, including our at-the-market ("ATM") equity program in which we may from time to time offer and sell common shares including through forward sales contracts, or private placements,
◦the incurrence of indebtedness through unsecured or secured borrowings including exchangeable debt,
5
Table of Contents
◦the issuance of units in our operating partnership (generally issued in exchange for a tax deferred contribution of property); these units typically receive the same distributions as our common shares and the holders of these units have the right to exchange their units for cash or common shares at our option, or
◦the use of joint venture arrangements.
Human Capital
At February 9, 2026, we had 314 full-time employees and 6 part-time employees. None of our employees are represented by a collective bargaining unit. We believe that our relationship with our employees is good. We are an Equal Opportunity/Affirmative Action employer, and strive to maintain a workplace that is free from discrimination on the basis of race, color, religion, age, sex, national origin, disability status, genetics, protected veteran status, sexual orientation, and gender identity or expression.
Health, Safety, and Wellness
We are committed to the health, safety, and wellness of our employees, and foster an environment that allows our people to succeed while balancing work and life. We provide our employees with access to health and wellness programs, which includes benefits that support both physical and mental health. We have also transitioned to a hybrid work model.
Compensation and Benefits
We provide competitive pay and benefits including health, dental, vision, short and long-term disability, life insurance and a 401(k) retirement program, as well as a generous paid time off program that includes vacation, sick, and personal leave. In addition to our equity awards program, we also reward employees with spot bonuses for stellar performance or going above and beyond the base requirements of their job description.
Talent Development
Employees have access to a variety of different training courses, books, book summaries and audio books, and an array of source materials covering a myriad of different business and soft skills training subjects. Additionally, we provide reimbursement for tuition and professional licenses.
Community Involvement
Giving back to the community is an integral part of who we are and what we do. We provide ample ways to give back through programs at our properties or charitable endeavors and volunteer opportunities that also serve as team building exercises for our employees.
Tax Status
We elected to be taxed as a REIT under the federal income tax laws when we filed our 1962 tax return. As a REIT, we are generally not subject to federal income tax on taxable income that we distribute to our shareholders. Under the Code, REITs are subject to numerous organizational and operational requirements, including the requirement to generally distribute at least 90% of taxable income each year. We will be subject to federal income tax on our taxable income (including, for our taxable years ending on or prior to December 31, 2017, any applicable alternative minimum tax) at regular corporate rates if we fail to qualify as a REIT for tax purposes in any taxable year, or to the extent we distribute less than 100% of our taxable income. We will also generally not qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost. Even if we qualify as a REIT for federal income tax purposes, we may be subject to certain state and local income and franchise taxes and to federal income and excise taxes on our undistributed taxable income.
We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Code. A TRS is subject to federal and state income taxes. Our TRS activities have not been material.
General Economic Conditions
Significant uncertainty continues within the macro-economic environment including inflation risk, changes in interest rates, new or higher tariffs and their impact on trade and prices, increases or decreases in federal government spending, and potentially worsening economic conditions, which presents risks for our business and tenants. We continue to monitor and address risks related to the general state of the economy. We believe the actions we have taken to maintain a strong financial position and reinforce our liquidity will continue to mitigate the negative short term impacts of the current economic environment. The extent of the future effects on our business, results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future developments, none of which can be predicted.
6
Table of Contents
Governmental Regulations Affecting Our Properties
We and our properties are subject to a variety of federal, state and local environmental, health, safety and similar laws. Please see Item 1A. "Risk Factors - Risk Factors Related to our REIT Status and Other Laws and Regulations" for further discussion of potential material effects of our compliance with government regulation, including environmental regulations and the rules governing REITs.
The application of these laws to a specific property that we own depends on a variety of property-specific circumstances, including the current and former uses of the property, the building materials used at the property and the physical layout of the property. Under certain environmental laws, we, as the owner or operator of properties currently or previously owned, may be required to investigate and clean up certain hazardous or toxic substances, asbestos-containing materials, or petroleum product releases at the property, we may be held liable for property damage and for investigation and clean up costs incurred in connection with the contamination, and we may be liable under common law to third parties for damages and injuries resulting from environmental contamination emanating from the real estate. Such costs or liabilities could exceed the value of the affected real estate. The presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease real estate or to borrow using the real estate as collateral.
Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results of operations, and management does not believe they will in the future. In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past. However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future. We have no current plans for substantial capital expenditures with respect to compliance with environmental, health, safety and similar laws and we carry environmental insurance which covers a number of environmental risks for most of our properties.
Energy and Emissions Regulations Affecting Our Properties
Some jurisdictions in which we own property have enacted or may enact legislation that requires use of only certain types of energy sources, limits energy usage on site, or limits allowable emissions from buildings with fines or other costs being imposed for exceeding those limits. This type of legislation typically includes an extended period of time from adoption to implementation to allow property owners ample opportunity to make investments and take other actions to comply with the legislation. Any investments we believe we will need to make to comply with laws that have been passed to date are being included as part of our ordinary capital improvement planning process for our properties. We also address the potential effects of these types of laws in our energy reduction and energy efficient efforts that are described in more detail in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Corporate Responsibility." These types of laws have not had a material adverse effect on our financial condition or results of operations and management does not believe they will have a material adverse effect in the future. We cannot, however, predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future.
Competition
Numerous commercial developers and real estate companies compete with us with respect to the leasing and the acquisition of properties. Some of these competitors may possess greater capital resources than we do, although we do not believe that any single competitor or group of competitors in any of the primary markets where our properties are located are dominant in that market. This competition may:
•reduce the number of properties available for acquisition;
•increase the cost of properties available for acquisition;
•interfere with our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents; and
•adversely affect our ability to minimize expenses of operation.
Retailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs, superstores, and other forms of sales and marketing of goods and services, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants.
Available Information
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are available free of charge through the Investors section of our website at www.federalrealty.com as soon as reasonably practicable after we electronically file the material with, or furnish the material to, the Securities and Exchange Commission, or the SEC.
7
Table of Contents
Our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics applicable to our Chief Executive Officer and senior financial officers, Whistleblower Policy, organizational documents and the charters of our audit committee, compensation and human capital committee and nominating and corporate governance committee are all available in the Corporate Governance section of the Investors section of our website.
Amendments to the Code of Ethics or Code of Business Conduct or waivers that apply to any of our executive officers or our senior financial officers will be disclosed in the Corporate Governance section of our website as well.
ITEM 1A. RISK FACTORS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Also, documents that we “incorporate by reference” into this Annual Report on Form 10-K, including documents that we subsequently file with the SEC will contain forward-looking statements. When we refer to forward-looking statements or information, sometimes we use words such as “may,” “will,” “could,” “should,” “plans,” “intends,” “expects,” “believes,” “estimates,” “anticipates” and “continues.” In particular, the below risk factors describe forward-looking information. The risk factors describe risks that may affect these statements but are not all-inclusive, particularly with respect to possible future events. Many things can happen that can cause actual results to be different from those we describe. These factors include, but are not limited to the following:
Risk Factors Related to our Real Estate Investments and Operations
Revenue from our properties may be reduced or limited if the retail operations of our tenants are not successful.
Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent and other charges due under their leases on a timely basis. Some of our leases provide for the payment, in addition to base rent, of additional rent above the base amount according to a specified percentage of the gross sales generated by the tenants and generally provide for reimbursement of real estate taxes and expenses of operating the property. Economic, legal, and/or competitive conditions, such as impacts from higher tariffs, changing interest rates, the cost and availability of labor, and changes in federal government spending, may impact the success of our tenants’ retail operations and therefore the amount of rent and expense reimbursements we receive from our tenants. Any reduction in our tenants' abilities to pay base rent, percentage rent, or other charges on a timely basis, including the closing of stores prior to the end of the lease term or the filing by any of our tenants for bankruptcy protection, will adversely affect our financial condition and results of operations. In the event of default by a tenant, we may experience delays and unexpected costs in enforcing our rights as landlord under lease terms, which may also adversely affect our financial condition and results of operations.
Our net income depends on the success and continued presence of our “anchor” tenants.
Our net income could be adversely affected in the event of a downturn in the business, or the bankruptcy or insolvency, of any anchor store or anchor tenant. Anchor tenants generally occupy large amounts of square footage, pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing significant numbers of customers to a property. 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. If we were to experience high levels of anchor turnover and closings, an oversupply of larger retail spaces could result and we may see an increase in vacancy, and/or a decrease in rents for those spaces, which could have a negative impact to our net income. As of December 31, 2025, our anchor tenant space is 97.3% leased and 95.5% occupied.
A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations.
Many retailers operating brick and mortar stores have made online sales a vital piece of their business. 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. This risk is partially mitigated by our strategy of maintaining a diverse portfolio of retail properties. The trend of retailers utilizing brick and mortar locations for ‘showroom’ and on-line sales distribution purposes (particularly at shopping centers in densely populated areas like ours) may further mitigate this risk. However, there can be no assurance that our shopping centers will not be further impacted by the shift to online shopping. As a result, our cash flow, financial condition, and results of operations could be adversely affected.
8
Table of Contents
We have properties that are geographically concentrated, and adverse economic or real estate market declines in these areas could have a material adverse effect on us.
As of December 31, 2025, our tenants operated in 14 states and the District of Columbia. Any adverse situation that disproportionately affects the the markets where our properties are concentrated may have a magnified adverse effect on our portfolio. Refer to “Properties” (Item 2 of this Annual Report on Form 10-K) for additional discussion of the geographic concentration. Real estate markets are subject to economic downturns, as they have been in the past, and we cannot predict how economic conditions will impact this market in both the short and long term.
Declines in the economy or a decline in the real estate market in these states could hurt our financial performance and the value of our properties. Factors that may negatively affect economic conditions in these states include:
•business or government layoffs or downsizing;
•industry slowdowns;
•elevated levels of inflation over an extended period of time;
•increasing interest rates;
•introduction of new or higher tariffs;
•significant decrease in federal government spending;
•increased business restrictions due to health crises;
•relocations of businesses;
•changing demographics;
•increased telecommuting and use of alternative work places;
•infrastructure quality;
•any oversupply of, or reduced demand for, real estate;
•concessions or reduced rental rates under new leases for properties where tenants defaulted; and
•increased operating costs including insurance premiums and real estate taxes.
We may be unable to collect balances due from tenants that file for bankruptcy protection.
If a tenant or lease guarantor files for bankruptcy, we may not be able to collect all pre-petition amounts owed by that party. In addition, a tenant that files for bankruptcy protection may terminate our lease in which event we would have a general unsecured claim that would likely be for less than the full amount owed to us for the remainder of the lease term, which could adversely affect our financial condition and results of operations.
We may experience difficulty or delay in renewing leases or re-leasing space.
We derive most of our revenue directly or indirectly from rent received from our tenants. We are subject to the risks that, upon expiration or termination of leases, whether by their terms, as a result of a tenant bankruptcy, general economic conditions or otherwise, leases for space in our properties may not be renewed, space may not be re-leased, or the terms of renewal or re-lease, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms and may include decreases in rental rates. As a result, our net income could be reduced.
Our development activities have inherent risks.
The ground-up development of improvements on real property, as opposed to the renovation and redevelopment of existing improvements, presents substantial risks. We generally do not look to acquire raw land for future development; however, we do intend to develop and construct additional buildings on projects we already own in order to maximize the value of our real estate. We may also choose to delay completion of a project if market conditions do not allow an appropriate return. If conditions arise and we are not able or decide not to complete a project or if the expected cash flows of our project do not exceed the book value, an impairment of the project may be required. If any new projects are not successful, it may adversely affect our financial condition and results of operations.
In addition to the risks associated with real estate investment in general, as described elsewhere and the specific risks above, the risks associated with our remaining development activities include:
•contractor changes may delay the completion of development projects and increase overall costs;
•significant time lag between commencement and stabilization subjects us to greater risks due to fluctuations in the general economy;
•delivery of residential product into uncertain residential environments may result in lower rents or longer time periods to reach economic stabilization;
•substantial amount of our investment is related to infrastructure and the overall value of the project may be negatively impacted if we do not complete subsequent phases;
9
Table of Contents
•failure or inability to obtain construction or permanent financing on favorable terms;
•expenditure of money and time on projects that may never be completed;
•difficulty securing key anchor or other tenants may impact occupancy rates and projected revenue;
•inability to achieve projected rental rates or anticipated pace of lease-up;
•higher than estimated construction or operating costs, including labor and material costs; and
•possible delay in completion of a project because of a number of factors, including public health crises (such as worldwide pandemics), supply chain disruptions and shortages, inflation, climate change and weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes or floods).
Redevelopments and acquisitions may fail to perform as expected.
Our investment strategy includes the redevelopment and acquisition of high quality, retail focused properties in densely populated areas with high average household incomes and significant barriers to adding competitive retail supply. The redevelopment and acquisition of properties entail risks that include the following, any of which could adversely affect our results of operations and our ability to meet our obligations:
•our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, or the time we estimate to complete the improvement, repositioning or redevelopment may be too short. As a result, the property may fail to achieve the returns we have projected, either temporarily or for a longer period;
•we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify;
•we may not be able to integrate an acquisition into our existing operations successfully;
•properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project, within the time frames we project, at the time we make the decision to invest, which may result in the properties’ failure to achieve the returns we projected;
•our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property; and
•our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.
Our performance and value are subject to general risks associated with the real estate industry.
Our economic performance and the value of our real estate assets, and consequently, the value of our investments, are subject to the risk that if our properties do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our shareholders will be adversely affected. As a real estate company, we are susceptible to the following real estate industry risks:
•economic downturns in general, or in the areas where our properties are located;
•adverse changes in local real estate market conditions, such as an oversupply or reduction in demand;
•changes in tenant preferences that reduce the attractiveness of our properties to tenants;
•zoning or regulatory restrictions;
•decreases in market rental rates;
•weather conditions that may increase or decrease energy costs and other weather-related expenses;
•costs associated with the need to periodically repair, renovate and re-lease space; and
•increases in the cost of adequate maintenance, insurance and other operating costs, including real estate taxes, associated with one or more properties, which may occur even when circumstances such as market factors and competition cause a reduction in revenues from one or more properties, although real estate taxes typically do not increase upon a reduction in such revenues.
Each of these risks could result in decreases in market rental rates and increases in vacancy rates, which could adversely affect our financial condition and results of operation.
Many real estate costs are fixed, even if income from our properties decreases.
Our financial results depend primarily on leasing space in our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes, insurance and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to rent our properties on favorable terms. Under those circumstances, we might not be able to enforce our rights as landlord without
10
Table of Contents
delays and may incur substantial legal costs. Additionally, new properties that we may acquire or redevelop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with such new properties until they are fully occupied.
Competition may limit our ability to purchase new properties and generate sufficient income from tenants.
Numerous commercial developers and real estate companies compete with us in seeking tenants for our existing properties and properties for acquisition. This competition may:
•reduce properties available for acquisition;
•increase the cost of properties available for acquisition;
•reduce rents payable to us;
•interfere with our ability to attract and retain tenants;
•lead to increased vacancy rates at our properties; and
•adversely affect our ability to minimize expenses of operation.
Retailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs and other forms of sales and marketing of goods, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants. If we are unable to continue to attract appropriate retail tenants to our properties, or to purchase new properties in our geographic markets, it could materially affect our ability to generate net income, service our debt and make distributions to our shareholders.
We may be unable to sell properties when appropriate because real estate investments are illiquid.
Real estate investments generally cannot be sold quickly. In addition, there are some limitations under federal income tax laws applicable to real estate and to REITs in particular that may limit our ability to sell our assets. We may not be able to alter our portfolio promptly in response to changes in economic or other conditions including being unable to sell a property at a return we believe is appropriate due to the economic environment. Our inability to respond quickly to adverse changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our shareholders.
We may have limited flexibility in dealing with our jointly owned investments.
Our organizational documents do not limit the amount of funds that we may invest in properties and assets owned jointly with other persons or entities. As of December 31, 2025, we held 18 predominantly retail real estate projects jointly with other persons in addition to properties owned in a “downREIT” structure. Additionally, as of December 31, 2025, we owned an interest in the hotel component of Assembly Row. We may make additional joint investments in the future. Our existing and future joint investments may subject us to special risks, including the possibility that our partners or co-investors might become bankrupt, that those partners or co-investors might have economic or other business interests or goals which are unlike or incompatible with our business interests or goals, that those partners or co-investors might be in a position to take action contrary to our suggestions or instructions, or in opposition to our policies or objectives, and that disputes may develop with our joint venture partners over decisions affecting the property or the joint venture, which may result in litigation or arbitration or some other form of dispute resolution. Although as of December 31, 2025, we held the controlling interests in all of our existing co-investments (except the hotel investment discussed above and the investments in the La Alameda, Chandler Festival, and Chandler Gateway shopping centers), we generally must obtain the consent of the co-investor or meet defined criteria to sell or to finance these properties. Joint ownership gives a third party the opportunity to influence the return we can achieve on some of our investments and may adversely affect our ability to make distributions to our shareholders. We may also be liable for the actions of our co-investors.
Our insurance coverage on our properties may be inadequate.
We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire, flood, earthquake, environmental matters, rental loss and acts of terrorism. All of these policies contain coverage limitations. We believe these coverages are of the types and amounts customarily obtained for or by an owner of similar types of real property assets located in the areas where our properties are located. We intend to obtain similar insurance coverage on subsequently acquired properties.
The availability of insurance coverage may decrease and the prices for insurance may increase as a consequence of significant losses incurred by the insurance industry and other factors outside our control. As a result, we may be unable to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts, pandemics, and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance
11
Table of Contents
coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations related to the property. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Also, due to inflation, changes in codes and ordinances, environmental considerations and other factors, it may not be feasible to use insurance proceeds to replace a building after it has been damaged or destroyed. Further, we may be unable to collect insurance proceeds if our insurers are unable to pay or contest a claim. Events such as these could adversely affect our results of operations and our ability to meet our obligations, including distributions to our shareholders.
Natural disasters, climate change and health crises, could have an adverse impact on our cash flow and operating results.
Climate change may add to the unpredictability and frequency of natural disasters and severe weather conditions, impact the availability of natural resources, and create additional uncertainty as to future trends and exposures. Certain of our operations are located in areas that are subject to natural disasters and severe weather conditions such as hurricanes, earthquakes, droughts, snow storms, floods and fires. The impact of climate change or the occurrence of natural disasters can delay new development projects, increase investment costs to repair or replace damaged properties, increase operating costs, create additional investment costs to make improvements to existing properties to comply with climate change regulations, increase future property insurance costs, impact the availability of water and other natural resources, and negatively impact the tenant demand for space. If insurance is unavailable to us or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from these events, our earnings, liquidity or capital resources could be adversely affected.
In addition, our business is subject to risks related to the effects of public health crises, epidemics, and pandemics. Such events could:
•inhibit global, national and local economic activity;
•drive inflation, adversely affect trading activity in securities markets, which could negatively impact the trading prices of our common shares and debt securities and our ability to access the securities markets as a source of liquidity;
•adversely affect our tenants’ financial condition by limiting foot traffic and staffing at their businesses, which could affect their ability to pay rent and willingness to make new leasing commitments;
•reduce our cash flow, which could impact our ability to pay dividends at the current rate and in the current format or at all or to service our debt;
•temporarily or permanently reduce the demand for retail or office space;
•interfere with our business operations by requiring our personnel to work remotely;
•increase the frequency of cyber-attacks;
•disrupt supply chains that could be important in our development and redevelopment activities;
•result in labor shortages;
•interfere with potential purchases and sales of properties;
•impact our ability to pay dividends at the current rate and in the current format or at all; and
•have other direct and indirect effects that are difficult to predict.
Such risks depend upon the nature and severity of the public health concern, as well as the extent and duration of government-mandated orders and personal decisions to limit travel, economic activity and personal interaction, none of which can be predicted with confidence. In particular, we cannot predict the impact of stay-at-home and other government orders instituted in response to a public health concern, which may vary by jurisdiction, or a public health concerns' short and long term economic effects, each of which could have a material adverse effect on our business
Risk Factors Related to our Funding Strategies and Capital Structure
The amount of debt we have and the restrictions imposed by that debt could adversely affect our business and financial condition.
As of December 31, 2025, we had approximately $5.0 billion of debt outstanding. Of that outstanding debt, approximately $523.2 million was secured by all or a portion of 8 of our real estate projects. As of December 31, 2025, approximately 82.6% of our debt is fixed rate or is fixed via interest rate swap agreements. Our organizational documents do not limit the level or amount of debt that we may incur. The amount of our debt outstanding from time to time could have important consequences to our shareholders. For example, it could:
12
Table of Contents
•require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, property acquisitions, redevelopments and other appropriate business opportunities that may arise in the future;
•limit our ability to make distributions on our outstanding common shares and preferred shares;
•make it difficult to satisfy our debt service requirements;
•require us to dedicate increased amounts of our cash flow from operations to payments on debt upon refinancing or on our variable rate, unhedged debt, if interest rates rise;
•limit our flexibility in planning for, or reacting to, changes in our business and the factors that affect the profitability of our business;
•limit our ability to obtain any additional debt or equity financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, redevelopments or other general corporate purposes or to obtain such financing on favorable terms; and/or
•limit our flexibility in conducting our business, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms.
Our ability to make scheduled principal payments of, to pay interest on, or to refinance our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other factors beyond our control. There can be no assurance that our business will continue to generate sufficient cash flow from operations in the future to service our debt or meet our other cash needs. If we are unable to generate this cash flow from our business, we may be required to refinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs, including the payment of dividends required to maintain our status as a real estate investment trust. We cannot assure you that any such refinancing, sale of assets or additional financing would be possible on terms that we would find acceptable.
We are obligated to comply with financial and other covenants pursuant to our debt obligations that could restrict our operating activities, and the failure to comply with such covenants could result in defaults that accelerate payment under our debt agreements.
Our revolving credit facility, unsecured term loans, and certain series of notes include financial covenants that may limit our operating activities in the future. We are also required to comply with additional covenants that include, among other things, provisions:
•relating to the maintenance of property securing a mortgage;
•restricting our ability to pledge assets or create liens;
•restricting our ability to incur additional debt;
•restricting our ability to amend or modify existing leases at properties securing a mortgage;
•restricting our ability to enter into transactions with affiliates; and
•restricting our ability to consolidate, merge or sell all or substantially all of our assets.
As of December 31, 2025, we were in compliance with all of our default related financial covenants. If we were to breach any of our default related debt covenants, including the covenants listed above, and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares.
Adverse changes in our credit rating could affect our borrowing capacity and borrowing terms.
Our credit worthiness is rated by nationally recognized credit rating agencies. The credit ratings assigned are based on our operating performance, liquidity and leverage ratios, financial condition and prospects, and other factors viewed by the credit rating agencies as relevant to our industry and the economic outlook in general. Our credit rating can affect the amount of capital we access, as well as the terms of certain existing and future financing we obtain. Since we depend on debt financing to fund the growth of our business, an adverse change in our credit rating, including actual changes in outlook, or even the initiation of review of our credit rating that could result in an adverse change, could have a material adverse effect on us.
Our ability to grow will be limited if we cannot obtain additional capital.
Our growth strategy is focused on the development and redevelopment of properties we already own and the acquisition of additional properties. We believe that it will be difficult to fund our expected growth with cash from operating activities
13
Table of Contents
because, in addition to other requirements, we are generally required to distribute to our shareholders at least 90% of our taxable income each year to continue to qualify as a REIT for federal income tax purposes. As a result, we must rely primarily upon the availability of debt or equity capital, which may or may not be available on favorable terms or at all. Debt could include the sale of debt securities and mortgage loans from third parties. If economic conditions and conditions in the capital markets are not favorable at the time we need to raise capital, we may need to obtain capital on less favorable terms. Additionally, we cannot guarantee that additional financing, refinancing, or other capital will be available in the amounts we desire or on favorable terms. Our access to debt or equity capital depends on a number of factors, including the market’s perception of our growth potential and risk profile, our ability to pay dividends, and our current and potential future earnings. Depending on the outcome of these factors as well as the impact of the economic environment, we could experience delay or difficulty in implementing our growth strategy on satisfactory terms, or be unable to implement this strategy.
Rising interest rates could adversely affect our cash flow and the market price of our outstanding debt and preferred shares.
Of our $5.0 billion of debt outstanding as of December 31, 2025, approximately $1.4 billion bears interest at a variable rate. We have entered into interest rate swaps on $500.6 million of this variable rate debt to effectively fix the rate and limit our exposure to variable rates. We have a $1.25 billion revolving credit facility, which bears interest at SOFR plus 77.5 basis points, of which $310.0 million was outstanding at December 31, 2025, and we have a $250.0 million term loan that bears interest at SOFR plus 85 basis points, of which no amount was outstanding at December 31, 2025. We may borrow additional funds at variable interest rates in the future. Increases in interest rates would increase the interest expense on our variable rate debt and reduce our cash flow, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our shareholders. We may enter into additional hedging arrangements or other transactions for all or a portion of our variable rate debt to limit our exposure to rising interest rates. However, the amounts we are required to pay under variable rate debt to which hedging or similar arrangements relate may increase in the event of non-performance by the counterparties to any such hedging arrangements. In addition, an increase in market interest rates may lead purchasers of our debt securities and preferred shares to demand a higher annual yield, which could adversely affect the market price of our outstanding debt securities and preferred shares and the cost and/or timing of refinancing or issuing additional debt securities or preferred shares.
Hedging activity may expose us to risks, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate, which may adversely affect us.
We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. These and similar hedging arrangements involve risks, including the risks that counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that the amount of income we earn from hedging transactions may be limited by federal tax provisions governing REITs, and that these arrangements may reduce the benefits to us if interest rates decline. Developing and implementing an interest rate risk strategy is complex, and there can be no assurance that our hedging activities will be completely effective at insulating us from risks associated with interest rate fluctuations.
Additionally, in connection with our offering in January 2024 of 3.25% Exchangeable Senior Notes due 2029, we have entered into capped call transactions with certain option counterparties. The capped call transactions cover, subject to customary adjustments, the number of common shares initially underlying the notes. The capped call transactions are expected generally to reduce the potential dilution to our common shares upon any exchange of notes and/or offset any cash payments we are required to make in excess of the principal amount of exchanged notes, as the case may be, with such reduction and/or offset subject to a cap. The option counterparties are financial institutions, and we are subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral. Global economic conditions have resulted in the actual or perceived failure or financial difficulties of certain financial institutions and could adversely impact the option counterparties’ performance under the capped call transactions. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to the termination amount at that time as determined pursuant to the capped call documentation with such option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of the common shares. In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to the common shares. We can provide no assurances as to the financial stability or viability of the option counterparties.
14
Table of Contents
Risk Factors Related to our REIT Status and Other Laws and Regulations
Failure to qualify as a REIT for federal income tax purposes would cause the Parent Company to be taxed as a corporation, which would substantially reduce funds available for payment of distributions.
We believe that we are organized and qualified as a REIT for federal income tax purposes and currently intend to operate in a manner that will allow us to continue to qualify as a REIT under the Code. However, we cannot assure you that we will remain qualified as such in the future.
Qualification as a REIT involves the application of highly technical and complex Code provisions and applicable income tax regulations that have been issued under the Code. Certain facts and circumstances not entirely within our control may affect our ability to qualify as a REIT. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying rents and certain other income. Satisfying this requirement could be difficult, for example, if defaults by tenants were to reduce the amount of income from qualifying rents. As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income. In addition, new legislation, new regulations, new administrative interpretations or new court decisions may significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. Any modification in the tax treatment of REITs could have a significant adverse impact to our net income.
If we fail to qualify as a REIT:
•we would not be allowed a deduction for distributions to shareholders in computing taxable income;
•we would be subject to federal income tax at regular corporate rates;
•unless we are entitled to relief under specific statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified;
•we could be required to pay significant income taxes, which would substantially reduce the funds available for investment or for distribution to our shareholders for each year in which we failed or were not permitted to qualify; and
•we would no longer be required by law to make any distributions to our shareholders.
To maintain our status as a REIT, we limit the amount of shares any one shareholder of the Parent Company can own.
The Code imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code) during the last half of any taxable year. To protect our REIT status, the Parent Company's declaration of trust prohibits any one shareholder from owning (actually or constructively) more than 9.8% in value of the outstanding common shares or of any class or series of outstanding preferred shares. The constructive ownership rules are complex. Shares of the Parent Company's capital stock owned, actually or constructively, by a group of related individuals and/or entities may be treated as constructively owned by one of those individuals or entities. As a result, the acquisition of less than 9.8% in value of the outstanding common shares and/or a class or series of preferred shares (or the acquisition of an interest in an entity that owns common shares or preferred shares) by an individual or entity could cause that individual or entity (or another) to own constructively more than 9.8% in value of the outstanding capital stock. If that happens, either the transfer of ownership would be void or the shares would be transferred to a charitable trust and then sold to someone who can own those shares without violating the 9.8% ownership limit.
The Board of Trustees may waive these restrictions on a case-by-case basis. In addition, the Board of Trustees and two-thirds of our shareholders eligible to vote at a shareholder meeting may remove these restrictions if they determine it is no longer in our best interests for the Parent Company to attempt to qualify, or to continue to qualify, as a REIT. The 9.8% ownership restrictions may delay, defer or prevent a transaction or a change of our control that might involve a premium price for the common shares or otherwise be in the shareholders’ best interest.
Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the IRS, could have a material adverse effect on us and our investors.
The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process, and by the Internal Revenue Service (“IRS”) and the U.S. Department of the Treasury (“Treasury”). Changes to the tax laws or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect us and our investors. No prediction can be made as to the likelihood of passage of new tax legislation or other provisions, or the direct or indirect effect on us and our shareholders. Accordingly, such new legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify to be taxed as a REIT and/or the U.S. federal income tax consequences to us and our investors of such qualification.
15
Table of Contents
We may be required to incur additional debt to qualify as a REIT.
As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income. We are subject to income tax on amounts of undistributed taxable income and net capital gain. In addition, we would be subject to a 4% excise tax if we fail to distribute sufficient income to meet a minimum distribution test based on our ordinary income, capital gain and aggregate undistributed income from prior years. We intend to make distributions to shareholders to comply with the Code’s distribution provisions and to avoid federal income and excise tax. We may need to borrow funds to meet our distribution requirements because:
•our income may not be matched by our related expenses at the time the income is considered received for purposes of determining taxable income; and
•non-deductible capital expenditures, creation of reserves, or debt service requirements may reduce available cash but not taxable income.
In these circumstances, we might have to borrow funds on terms we might otherwise find unfavorable and we may have to borrow funds even if our management believes the market conditions make borrowing financially unattractive. Current tax law also allows us to pay a portion of our distributions in shares instead of cash.
Environmental laws and regulations could reduce the value or profitability of our properties.
All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Under various federal, state and local laws, ordinances and regulations, we and our tenants may be responsible for the disposal or treatment of hazardous or toxic substances released on or in properties we own or operate, as well as certain other potential costs relating to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not we knew about, or were responsible for, the presence of hazardous or toxic substances. Further, the presence of contamination on our properties or the failure to properly remediate contamination at any of our properties may adversely affect our ability to sell or lease those properties or to borrow funds by using those properties as collateral. The costs or liabilities could exceed the value of the affected real estate. We are not aware of any environmental condition with respect to any of our properties that management believes would have a material adverse effect on our business, assets or results of operations taken as a whole.
In addition, changes in government legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our development or redevelopment projects without a corresponding increase in revenues, which may adversely affect our financial condition, results of operations and cash flows.
The Americans with Disabilities Act of 1990 could require us to take remedial steps with respect to existing or newly acquired properties.
Our existing properties, as well as properties we may acquire, as commercial facilities, are required to comply with Title III of the Americans with Disabilities Act of 1990. Investigation of a property may reveal non-compliance with this Act. The requirements of this Act, or of other federal, state or local laws or regulations, also may change in the future and restrict further renovations of our properties with respect to access for disabled persons. Future compliance with this Act may require expensive changes to the properties.
The revenues generated by our tenants could be negatively affected by various federal, state and local laws to which they are subject.
We and our tenants are subject to a wide range of federal, state and local laws and regulations, such as local licensing requirements, consumer protection laws and state and local fire, life-safety and similar requirements that affect the use of the properties. The leases typically require that each tenant comply with all laws and regulations. Failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such properties. Non-compliance of this sort could reduce our revenues from a tenant, could require us to pay penalties or fines relating to any non-compliance, and could adversely affect our ability to sell or lease a property.
Certain tax and anti-takeover provisions of the Parent Company's declaration of trust and bylaws, and certain restrictions in the Partnership's limited partnership agreement, may inhibit a change of our control.
Certain provisions contained in the Parent Company's declaration of trust and bylaws and the Maryland General Corporation Law, as applicable to Maryland REITs, may discourage a third party from making a tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the removal of existing management. These
16
Table of Contents
provisions also may delay or prevent the shareholders from receiving a premium for their common shares over then-prevailing market prices. These provisions include:
•the REIT ownership limit described above;
•authorization of the issuance of our preferred shares with powers, preferences or rights to be determined by the Board of Trustees;
•special meetings of our shareholders may be called only by the chairman of the board, the chief executive officer, the president, by one-third of the trustees or by shareholders possessing no less than 25% of all the votes entitled to be cast at the meeting;
•the Board of Trustees, without a shareholder vote, can classify or reclassify unissued shares of beneficial interest, including the reclassification of common shares into preferred shares and vice-versa;
•a two-thirds shareholder vote is required to approve some amendments to the declaration of trust; and
•advance-notice requirements for proposals to be presented at shareholder meetings.
In addition, if we elect to be governed by it in the future, the Maryland Control Share Acquisition Law could delay or prevent a change in control. Under Maryland law, unless a REIT elects not to be subject to this law, “control shares” acquired in a “control share acquisition” have no voting rights except to the extent approved by shareholders by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquirer and by officers or trustees who are employees of the REIT. “Control shares” are voting shares that would entitle the acquirer to exercise voting power in electing trustees within specified ranges of voting power. A “control share acquisition” means the acquisition of control shares, with some exceptions.
The Parent Company's bylaws state that the Maryland control share acquisition law will not apply to any acquisition by any person of our common shares. This bylaw provision may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares, by a vote of a majority of the shareholders entitled to vote, and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.
In addition, certain provisions in the Partnership’s limited partnership agreement (the “Partnership Agreement”) may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some shareholders might consider such proposals, if made, desirable. 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. These provisions include, among others:
•redemption rights of limited partners and certain assignees of units of limited partnership interest ("OP Units");
•transfer restrictions on OP Units and restrictions on admissions of partners;
•a requirement that the General Partner may not be removed as the general partner of the Partnership without its consent;
•the ability of the General Partner to issue preferred partnership interests in the Partnership with terms that it may determine, without the approval or consent of any Limited Partner; and
•restrictions on the ability of the General Partner, the Partnership or the Parent Company to transfer its interests in the Partnership or otherwise engage in certain extraordinary transactions, including, among others, certain mergers, business combinations, sales of all or substantially all of their assets and recapitalizations.
General Risk Factors
The market value of our debt and equity securities is subject to various factors that may cause significant fluctuations or volatility.
As with other publicly traded securities, the market price of our debt and equity securities depends on various factors, which may change from time to time and/or may be unrelated to our financial condition, operating performance or prospects that may cause significant fluctuations or volatility in such prices. These factors include, among others:
•general economic and financial market conditions;
•level and trend of interest rates;
•our ability to access the capital markets to raise additional capital;
•the issuance of additional equity or debt securities;
•changes in our funds from operations (“FFO”) or earnings estimates;
•changes in our credit or analyst ratings;
•our financial condition and performance;
•market perception of our business compared to other REITs; and
•market perception of REITs, in general, compared to other investment alternatives.
17
Table of Contents
We cannot assure you we will continue to pay dividends in the current composition or at historical rates.
Our ability to continue to pay dividends on our common shares at historical rates or to increase our common share dividend rate, and our ability to pay preferred share dividends and service our debt securities, will depend on a number of factors, including, among others, the following:
•our financial condition and results of future operations;
•the performance by our tenants under their contractual lease agreements;
•the terms of our loan covenants; and
•our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates.
If we do not maintain or increase, or if we change the composition of the dividend on our common shares, it could have an adverse effect on the market price of our common shares and other securities. Any preferred shares we may offer in the future may have a fixed dividend rate that would not increase with any increases in the dividend rate of our common shares. Conversely, payment of dividends on our common shares may be subject to payment in full of the dividends on any preferred shares and payment of interest on any debt securities we may offer.
The Parent Company is a holding company with no direct operations, and it will rely on funds received from the Partnership to pay its obligations and make distributions to its shareholders.
The Parent Company is a holding company and expects to conduct substantially all of its operations through the Partnership. The Parent Company will not have, apart from an interest in the Partnership, any independent operations. As a result, the Parent Company will rely on distributions from the Partnership to make any distributions we declare on our common shares. The Parent Company will also rely on distributions from the Partnership to meet its obligations, including any tax liability on taxable income allocated to the Parent Company from the Partnership. Through its ownership and control of the General Partner, the Parent Company exercises exclusive control over the Partnership, including the authority to cause the Partnership to make distributions, subject to certain limited approval and voting rights of the Partnership’s Limited Partners as described in the Partnership Agreement. In addition, because the Parent Company is a holding company, your claims as shareholders are structurally subordinated to all existing and future liabilities and obligations to preferred equity holders of the Partnership and its subsidiaries. Therefore, in the event of a bankruptcy, insolvency, liquidation or reorganization of the Partnership or its subsidiaries, assets of the Partnership or the applicable subsidiary will be available to satisfy any claims of our shareholders only after such liabilities and obligations have been satisfied in full.
We currently own 100% of the OP Units issued by the Partnership and are its sole Limited Partner. However, in connection with our future acquisition activities or otherwise, we may issue additional OP Units to third parties and admit additional Limited Partners. Such issuances would reduce the Parent Company’s percentage ownership in the Partnership.
Loss of our key management could adversely affect performance and the value of our common shares.
We are dependent on the efforts of our key management. Although we believe qualified replacements could be found for any departures of key executives, the loss of their services could adversely affect our performance and the value of our common shares.
We may adjust our business policies without shareholder approval.
We may modify our approach to investment, financing, borrowing, and other operating strategies without shareholder approval. A change in the approach to any of these items could adversely affect our financial condition and results of operations, and the market price of our securities.
Our current business plan focuses on our investment in high quality retail based properties that are typically neighborhood and community shopping centers or mixed-use properties, principally through redevelopments and acquisitions. If this business plan is not successful, it could have a material adverse effect on our financial condition and results of operations.
Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Annual Report on Form 10-K. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the above risks and the risk factors.
We face risks relating to cyber threats that could cause loss of confidential information and other business disruptions.
We rely extensively on information technology systems to process transactions and manage our business, and our business is at risk from and may be impacted by cybersecurity incidents. These could include attempts to gain unauthorized access to our data and computer systems as well as attacks on third party's information technology systems that we rely on to provide important
18
Table of Contents
information technology services relating to key business functions, such as payroll. Cyber attacks can be both individual and/or highly organized attempts by very sophisticated hacking organizations. A cyber attack could compromise the confidential information of our employees, tenants, and vendors. A successful attack could adversely affect our business operations, results of operations, or financial condition by, among other things, disrupting our collection of revenue, interfering with our ability to satisfy our financial obligations by restricting access to our assets, or causing inaccuracies in our financial reporting. We employ a number of measures to prevent, detect, and mitigate these threats, which include password encryption, multi-factor authentication, frequent password change events, firewall detection systems, anti-virus software in-place, frequent backups, a redundant data system for core applications, and penetration testing; however, there is no guarantee such efforts will be successful in preventing a material cybersecurity incident.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBER SECURITY
We rely on our management team's experience in risk management, in consultation with our third party advisor, to appropriately address cybersecurity threats. As part of our processes to manage risks from cybersecurity threats and our use of artificial intelligence, we have developed and enforce company-wide policies related to password encryption, strength and expiration, we require multi-factor authentication where appropriate, conduct regular employee training about our policies and cybersecurity threats, and we have adopted a policy on use of artificial intelligence. We make use of firewalls, end-point protection, backups, redundancies, regular penetration testing, and our systems monitor and flag irregularities in how our information systems are accessed or used. Any known cybersecurity incidents would be reported by our chief information officer to our chief legal officer and disclosure committee for evaluation and remediation, and for a determination of how we might develop further security systems and procedures to address evolving cybersecurity threats. Management provides written and verbal updates to the Audit Committee at least quarterly identifying our primary areas of risk, actions taken or planned to be taken to mitigate those risks, and specific activities undertaken during the quarter, including employee training and the results of that training. Management would also provide updates to seek oversight from the Audit Committee on an ad hoc basis in connection with any material cybersecurity incident, should one occur.
ITEM 2. PROPERTIES
General
As of December 31, 2025, we owned or had a majority ownership interest in community and neighborhood shopping centers and mixed-used properties which are operated as 104 predominantly retail real estate projects comprising approximately 28.8 million commercial square feet. These properties are located primarily in major coastal markets and select underserved markets that we believe have strong economic and demographic fundamentals. No single commercial or residential property accounted for over 10% of our 2025 total revenue. We believe that our properties are adequately covered by commercial general liability, fire, flood, earthquake, terrorism and business interruption insurance provided by reputable companies, with commercially reasonable exclusions, deductibles and limits.
Tenant Diversification
As of December 31, 2025, we had approximately 3,700 commercial leases and 2,700 residential leases, with commercial tenants ranging from sole proprietors to major national and international retailers. No one tenant or affiliated group of tenants accounted for more than 2.4% of our annualized base rent as of December 31, 2025. As a result of our tenant diversification, we
19
Table of Contents
believe our exposure to any one bankruptcy filing has not been and will not be significant, however, multiple filings by a number of tenants could have a significant impact.
Geographic Diversification
Our 104 real estate projects are located in 14 states and the District of Columbia. The following table shows the number of projects, the gross leasable area (“GLA”) of commercial space and the percentage of total portfolio gross leasable area of commercial space in each state as of December 31, 2025.
| State | Number of Projects | Gross Leasable Area | Percentage of Gross Leasable Area | |||||||||||||||||
| (In square feet) | ||||||||||||||||||||
| California | 20 | 7,169,000 | 24.9 | % | ||||||||||||||||
| Maryland | 18 | 5,085,000 | 17.7 | % | ||||||||||||||||
| Virginia | 20 | 4,766,000 | 16.5 | % | ||||||||||||||||
| Massachusetts | 7 | 2,249,000 | 7.8 | % | ||||||||||||||||
| New Jersey | 7 | 1,886,000 | 6.5 | % | ||||||||||||||||
| Pennsylvania | 9 | 1,786,000 | 6.2 | % | ||||||||||||||||
| New York | 7 | 1,494,000 | 5.2 | % | ||||||||||||||||
| Florida | 4 | 1,287,000 | 4.5 | % | ||||||||||||||||
| Arizona | 2 | 908,000 | 3.2 | % | ||||||||||||||||
| Illinois | 4 | 778,000 | 2.7 | % | ||||||||||||||||
| Kansas | 1 | 552,000 | 1.9 | % | ||||||||||||||||
| Nebraska | 1 | 452,000 | 1.6 | % | ||||||||||||||||
| Michigan | 1 | 205,000 | 0.7 | % | ||||||||||||||||
| Connecticut | 2 | 156,000 | 0.5 | % | ||||||||||||||||
| District of Columbia | 1 | 25,000 | 0.1 | % | ||||||||||||||||
| Total | 104 | 28,798,000 | 100.0 | % | ||||||||||||||||
Leases, Lease Terms and Lease Expirations
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. These features in our leases generally reduce our exposure to higher costs and allow us to participate in improved tenant sales.
Commercial property leases generally range from three to ten years; however, certain leases, primarily with anchor tenants, may be longer. 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. Leases on residential units are generally for a period of one year or less and, in 2025, represented approximately 8.7% of total rental income.
20
Table of Contents
The following table sets forth the schedule of lease expirations for our commercial leases in place as of December 31, 2025 for each of the 10 years beginning with 2026 and after 2035 in the aggregate assuming that none of the tenants exercise future renewal options. Annualized base rents reflect in-place contractual rents as of December 31, 2025.
| Year of Lease Expiration | Leased Square Footage Expiring | Percentage of Leased Square Footage Expiring | Annualized Base Rent Represented by Expiring Leases | Percentage of Annualized Base Rent Represented by Expiring Leases | ||||||||||||||||||||||
| 2026 | 1,859,000 | 7 | % | $ | 51,872,000 | 6 | % | |||||||||||||||||||
| 2027 | 3,016,000 | 11 | % | 101,069,000 | 11 | % | ||||||||||||||||||||
| 2028 | 3,300,000 | 12 | % | 99,794,000 | 11 | % | ||||||||||||||||||||
| 2029 | 3,726,000 | 14 | % | 127,878,000 | 14 | % | ||||||||||||||||||||
| 2030 | 2,879,000 | 11 | % | 94,113,000 | 11 | % | ||||||||||||||||||||
| 2031 | 2,197,000 | 8 | % | 76,161,000 | 9 | % | ||||||||||||||||||||
| 2032 | 2,572,000 | 9 | % | 90,735,000 | 10 | % | ||||||||||||||||||||
| 2033 | 1,607,000 | 6 | % | 54,261,000 | 6 | % | ||||||||||||||||||||
| 2034 | 1,403,000 | 5 | % | 44,586,000 | 5 | % | ||||||||||||||||||||
| 2035 | 1,886,000 | 7 | % | 67,991,000 | 8 | % | ||||||||||||||||||||
| Thereafter | 2,650,000 | 10 | % | 79,917,000 | 9 | % | ||||||||||||||||||||
| Total | 27,095,000 | 100 | % | $ | 888,377,000 | 100 | % | |||||||||||||||||||
During 2025, we signed leases for a total of 2,471,000 square feet of retail space including 2,340,000 square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of 15% on a cash basis. New leases for comparable spaces were signed for 841,000 square feet at an average rental increase of 19% on a cash basis. Renewals for comparable spaces were signed for 1,499,000 square feet at an average rental increase of 12% on a cash basis. Tenant improvements and incentives for comparable spaces were $23.18 per square foot, of which, $53.34 per square foot was for new leases and $6.26 per square foot was for renewals in 2025.
During 2024, we signed leases for a total of 2,434,000 square feet of retail space including 2,392,000 square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of 11% on a cash basis. New leases for comparable spaces were signed for 979,000 square feet at an average rental increase of 15% on a cash basis. Renewals for comparable spaces were signed for 1,413,000 square feet at an average rental increase of 8% on a cash basis. Tenant improvements and incentives for comparable spaces were $26.03 per square foot, of which, $58.91 per square foot was for new leases and $3.25 per square foot was for renewals in 2024.
The rental increases associated with comparable spaces generally include all leases signed for retail space in arms-length transactions reflecting market leverage between landlords and tenants during the period, excluding leases at properties sold or under contract to be sold. The comparison between the rent for expiring leases and new leases is determined by including contractual rent on the expiring lease, including percentage rent considered to part of base rent, and the comparable annual rent and in some instances, projections of percentage rent, to be paid on the new lease. In atypical circumstances, management may exercise judgment as to how to most effectively reflect the comparability of spaces reported in this calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, capital investment made in the space and the specific lease structure. Tenant improvements and incentives include the total dollars committed for the improvement (fit out) of a space as it relates to a specific lease. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements. Costs related to tenant improvements require judgment by management in determining what are costs specific to the tenant and not deferred maintenance on the space.
In the past five years, we have executed comparable space leases for 2.0 to 2.4 million square feet of retail space each year and expect the volume for 2026 will be in line with these historical averages. Although we expect overall positive increases in annual rent for comparable spaces, changes in annual rent for any individual lease or combinations of individual leases reported in any particular period may be positive or negative and we can provide no assurance that the annual rents on comparable space leases will continue to increase at historical levels, if at all. A decline in current economic conditions could adversely impact our volume of leasing activity and the amount of rent we are able to charge to new or renewing tenants.
The leases signed in 2025 generally become effective over the following two years though some may not become effective until 2028 and beyond. Further, there is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other matters. However,
21
Table of Contents
our historical increases in rental rates do provide information about the tenant/landlord relationship and the potential increase we may achieve in rental income over time.
Retail and Residential Properties
The following table sets forth information concerning all real estate projects in which we owned an equity interest, had a leasehold interest, or otherwise controlled and are consolidated as of December 31, 2025. Except as otherwise noted, we are the sole owner of our real estate projects. Principal tenants are the largest tenants in the project based on square feet leased or are tenants important to a project’s success due to their ability to attract retail customers.
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Arizona | ||||||||||||||||||||||||||||||||||||||
| Camelback Colonnade Phoenix, AZ 85016(4) | 1977, 2019 | 2021 | 603,000 | $18.82 | 99% | Fry's Food & Drug Marshalls Nordstrom Last Chance Best Buy HomeGoods | ||||||||||||||||||||||||||||||||
| Chandler Festival Chandler, AZ 85224(5)(6) | 2000 | 2022 | 355,000 | $19.22 | 98% | Ross Dress for Less Nordstrom Rack TJ Maxx Ulta Wayfair Outlet | ||||||||||||||||||||||||||||||||
| Chandler Gateway Chandler, AZ 85226(5)(6) | 2001 | 2022 | 261,000 | $11.54 | 97% | Walmart Hobby Lobby Petco | ||||||||||||||||||||||||||||||||
| The Shops at Hilton Village Scottsdale, AZ 85250(4)(7) | 1982, 1989 | 2021/2022 | 305,000 | $36.78 | 88% | CVS Houston's | ||||||||||||||||||||||||||||||||
| California | ||||||||||||||||||||||||||||||||||||||
| Azalea South Gate, CA 90280(4)(6) | 2014 | 2017 | 226,000 | $33.07 | 100% | Marshalls Ross Dress for Less Ulta Michaels | ||||||||||||||||||||||||||||||||
| Bell Gardens Bell Gardens, CA 90201(4)(6)(7) | 1990, 2003, 2006 | 2017/2018 | 371,000 | $25.79 | 93% | Food 4 Less El Super Marshalls Ross Dress for Less Bob's Discount Furniture | ||||||||||||||||||||||||||||||||
| Colorado Blvd Pasadena, CA 91103(7) | 1905-1988 | 1998 | 42,000 | $50.42 | 73% | Banana Republic True Food Kitchen | ||||||||||||||||||||||||||||||||
| Crow Canyon Commons San Ramon, CA 94583 | 1980, 1998, 2006 | 2005/2007 | 239,000 | $36.98 | 85% | Sprouts Total Wine & More Alamo Ace Hardware | ||||||||||||||||||||||||||||||||
| Del Monte Shopping Center Monterey, CA 93940 | 1968, 1976, 1984, 2004 | 2025 | 675,000 | $18.82 | 80% | Whole Foods Macy's Petco Pottery Barn Apple Sephora | ||||||||||||||||||||||||||||||||
| East Bay Bridge Emeryville & Oakland, CA 94608 | 1994-2001, 2011, 2012 | 2012 | 441,000 | $20.93 | 98% | Pak-N-Save Target Home Depot Nordstrom Rack Michaels | ||||||||||||||||||||||||||||||||
| Escondido Promenade Escondido, CA 92029 | 1987 | 1996/2010 | 298,000 | $32.01 | 100% | TJ Maxx Dick's Sporting Goods Ross Dress for Less Bob's Discount Furniture | ||||||||||||||||||||||||||||||||
| Fourth Street Berkeley, CA 94710(4) | 1948, 1975 | 2017 | 71,000 | $41.11 | 47% | CB2 Bellwether Coffee | ||||||||||||||||||||||||||||||||
| Freedom Plaza Los Angeles, CA 90002(4)(7) | 2020 | 2018 | 114,000 | $32.68 | 92% | Smart & Final Nike Blink Fitness Ross Dress for Less | ||||||||||||||||||||||||||||||||
| Grossmont Center La Mesa, CA 91942(4) | 1961, 1963, 1982-1983, 2002 | 2021 | 866,000 | $16.62 | 95% | Target Walmart Barnes & Noble CVS | ||||||||||||||||||||||||||||||||
| Hastings Ranch Plaza Pasadena, CA 91107(7) | 1958, 1984, 2006, 2007 | 2017 | 273,000 | $9.66 | 100% | Marshalls HomeGoods CVS | ||||||||||||||||||||||||||||||||
| La Alameda Walnut Park, CA 90255(5)(6)(7) | 2008 | 2017 | 245,000 | $29.04 | 94% | Marshalls Ross Dress for Less CVS Petco | ||||||||||||||||||||||||||||||||
22
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Old Town Center Los Gatos, CA 95030 | 1962, 1998 | 1997 | 99,000 | $49.43 | 89% | Anthropologie Sephora Arhaus Furniture Teleferic Barcelona | ||||||||||||||||||||||||||||||||
| Olivo at Mission Hills Mission Hills, CA 91345(4) | 2018 | 2017 | 155,000 | $35.10 | 100% | Target 24 Hour Fitness Ross Dress for Less Ulta | ||||||||||||||||||||||||||||||||
| Pinole Vista Crossing Pinole, CA 94564 | 1995, 2015 | 2024 | 216,000 | $22.48 | 99% | FoodMaxx TJ Maxx Nordstrom Rack HomeGoods Ulta | ||||||||||||||||||||||||||||||||
| Plaza Del Sol South El Monte, CA 91733(4) | 2009 | 2017 | 48,000 | $25.97 | 98% | Marshalls | ||||||||||||||||||||||||||||||||
| Plaza El Segundo / The Point El Segundo, CA 90245 (6) | 2006-2007, 2016 | 2011/2013 | 503,000 | $49.24 | 99% | Whole Foods Nordstrom Rack HomeGoods Dick's Sporting Goods Multiple Restaurants | ||||||||||||||||||||||||||||||||
| San Antonio Center Mountain View, CA 94040(7)(8) | 1958, 1964-1965, 1974-1975, 1995-1997 | 2015/2019 | 213,000 | $18.37 | 100% | Trader Joe's Walmart 24 Hour Fitness | ||||||||||||||||||||||||||||||||
| Santana Row San Jose, CA 95128(7)(10) | 2002, 2009, 2016, 2020 | 1997 | 1,521,000 | $57.21 | 98% | Crate & Barrel Container Store Best Buy Sephora Cisco Systems Net App Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Santana Row Residential San Jose, CA 95128 | 2003-2006, 2014 | 1997/2012 | 554 units | N/A | 97% | |||||||||||||||||||||||||||||||||
| Sylmar Towne Center Sylmar, CA 91342(4) | 1973 | 2017 | 148,000 | $22.37 | 95% | Food 4 Less CVS Ross Dress for Less | ||||||||||||||||||||||||||||||||
| Westgate Center San Jose, CA 95129 | 1960-1966 | 2004 | 650,000 | $23.72 | 92% | Target Nordstrom Rack Nike Factory TJ Maxx Ross Dress for Less | ||||||||||||||||||||||||||||||||
| Connecticut | ||||||||||||||||||||||||||||||||||||||
| Darien Commons Darien, CT 06820 | 1920-2009, 2023 | 2013/2018 | 120,000 | $48.04 | 96% | Equinox Walgreens Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Darien Commons Residential Darien, CT 06820 | 2022 | 2013/2018 | 124 units | N/A | 96% | |||||||||||||||||||||||||||||||||
| Greenwich Avenue Greenwich Avenue, CT 06830 | 1968 | 1995 | 36,000 | $96.19 | 100% | Saks Fifth Avenue | ||||||||||||||||||||||||||||||||
| District of Columbia | ||||||||||||||||||||||||||||||||||||||
| Friendship Center Washington, DC 20015 | 1998 | 2001 | 25,000 | $23.18 | 100% | Maggiano's | ||||||||||||||||||||||||||||||||
| Florida | ||||||||||||||||||||||||||||||||||||||
| CocoWalk Coconut Grove, FL 33133(11) | 1990/1994, 1922-1973, 2018-2021 | 2015-2017 | 278,000 | $50.24 | 100% | Cinepolis Theaters Youfit Health Club Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Del Mar Village Boca Raton, FL 33433 | 1982, 1994 & 2007 | 2008/2014 | 187,000 | $25.59 | 98% | Aldi CVS L.A. Fitness | ||||||||||||||||||||||||||||||||
| Shops at Pembroke Gardens Pembroke Pines, FL 33027 | 2007 | 2022 | 391,000 | $33.70 | 100% | Nike Factory Old Navy DSW Barnes & Noble | ||||||||||||||||||||||||||||||||
| Tower Shops Davie, FL 33324 | 1989, 2017 | 2011/2014 | 431,000 | $30.53 | 99% | Trader Joe's TJ Maxx Ross Dress for Less Best Buy Ulta | ||||||||||||||||||||||||||||||||
| Illinois | ||||||||||||||||||||||||||||||||||||||
| Crossroads Highland Park, IL 60035 | 1959 | 1993 | 168,000 | $21.52 | 97% | L.A. Fitness Ulta Binny's Ferguson Home | ||||||||||||||||||||||||||||||||
23
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Finley Square Downers Grove, IL 60515 | 1974 | 1995 | 258,000 | $18.96 | 93% | Marshalls Home Goods Michaels Portillo's | ||||||||||||||||||||||||||||||||
| Garden Market Western Springs, IL 60558 | 1958 | 1994 | 141,000 | $16.62 | 100% | Mariano's Fresh Market Walgreens | ||||||||||||||||||||||||||||||||
| Riverpoint Center Chicago, IL 60614 | 1989, 2012 | 2017 | 211,000 | $22.00 | 98% | Jewel Osco Marshalls Old Navy | ||||||||||||||||||||||||||||||||
| Kansas | ||||||||||||||||||||||||||||||||||||||
| Town Center Crossing/Town Center Plaza Leawood, KS 66209 | 1995, 2005-2008, 2014, 2015 | 2025 | 552,000 | $37.14 | 95% | Trader Joe's Crate & Barrel Pottery Barn Restoration Hardware Apple Aritzia | ||||||||||||||||||||||||||||||||
| Maryland | ||||||||||||||||||||||||||||||||||||||
| Annapolis Town Center Annapolis, MD 21401 | 2007-2010 | 2025 | 479,000 | $34.67 | 90% | Whole Foods Restoration Hardware Pottery Barn Williams Sonoma Life Time Fitness Anthropologie | ||||||||||||||||||||||||||||||||
| Bethesda Row Bethesda, MD 20814(6)(7) | 1945-1991 2001, 2008 | 1993-2006/ 2008/2010 | 532,000 | $60.65 | 99% | Giant Food Apple Anthropologie Equinox Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Bethesda Row Residential Bethesda, MD 20814 (6) | 2008 | 1993 | 180 units | N/A | 92% | |||||||||||||||||||||||||||||||||
| Congressional Plaza Rockville, MD 20852(4) | 1965 | 1965 | 309,000 | $46.87 | 91% | The Fresh Market Ulta Barnes & Noble Container Store | ||||||||||||||||||||||||||||||||
| Congressional Plaza Residential Rockville, MD 20852(4) | 2003, 2016 | 1965 | 194 units | N/A | 95% | |||||||||||||||||||||||||||||||||
| Courthouse Center Rockville, MD 20852 | 1975 | 1997 | 33,000 | $30.44 | 81% | |||||||||||||||||||||||||||||||||
| Federal Plaza Rockville, MD 20852 | 1970 | 1989 | 249,000 | $40.51 | 96% | Trader Joe's TJ Maxx Micro Center Ross Dress for Less | ||||||||||||||||||||||||||||||||
| Gaithersburg Square Gaithersburg, MD 20878 | 1966 | 1993 | 205,000 | $33.44 | 98% | Marshalls Ross Dress for Less Ashley Furniture HomeStore CVS | ||||||||||||||||||||||||||||||||
| Governor Plaza Glen Burnie, MD 21961 | 1963 | 1985 | 243,000 | $20.62 | 100% | Aldi Dick's Sporting Goods Ross Dress for Less Petco Bob's Discount Furniture | ||||||||||||||||||||||||||||||||
| Laurel Laurel, MD 20707 | 1956 | 1986 | 367,000 | $25.27 | 96% | Giant Food Marshalls L.A. Fitness HomeGoods | ||||||||||||||||||||||||||||||||
| Montrose Crossing Rockville, MD 20852 | 1960-1979, 1996, 2011 | 2011/2013 | 369,000 | $35.06 | 98% | Giant Food Marshalls Home Depot Design Center Old Navy Burlington | ||||||||||||||||||||||||||||||||
| Perring Plaza Baltimore, MD 21134 | 1963 | 1985 | 398,000 | $17.07 | 91% | Giant Food Home Depot Dick's Sporting Goods Micro Center Burlington | ||||||||||||||||||||||||||||||||
| Pike & Rose North Bethesda, MD 20852(10) | 1963, 2014, 2018, 2020, 2025 | 1982/2007/ 2012 | 955,000 | $47.31 | 100% | Porsche Uniqlo REI H&M L.L. Bean Choice Hotels Multiple Restaurants | ||||||||||||||||||||||||||||||||
24
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Pike & Rose Residential North Bethesda, MD 20852 | 2014, 2018 | 1982/2007 | 447 units | N/A | 94% | |||||||||||||||||||||||||||||||||
| Plaza Del Mercado Silver Spring, MD 20906 | 1969 | 2004 | 116,000 | $35.01 | 97% | Aldi CVS L.A. Fitness | ||||||||||||||||||||||||||||||||
| Quince Orchard Gaithersburg, MD 20877(7) | 1975 | 1993 | 271,000 | $26.17 | 87% | Aldi HomeGoods L.A. Fitness Staples | ||||||||||||||||||||||||||||||||
| THE AVENUE at White Marsh Baltimore, MD 21236(8) | 1997 | 2007 | 315,000 | $29.05 | 100% | AMC Ulta Old Navy Nike | ||||||||||||||||||||||||||||||||
| The Shoppes at Nottingham Square Baltimore, MD 21236 | 2005-2006 | 2007 | 33,000 | $55.48 | 100% | |||||||||||||||||||||||||||||||||
| White Marsh Other Baltimore, MD 21236 | 1985 | 2007 | 43,000 | $47.89 | 100% | |||||||||||||||||||||||||||||||||
| White Marsh Plaza Baltimore, MD 21236 | 1987 | 2007 | 80,000 | $24.55 | 98% | Giant Food | ||||||||||||||||||||||||||||||||
| Wildwood Bethesda, MD 20814 | 1958 | 1969 | 88,000 | $114.79 | 100% | Balducci's CVS Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Massachusetts | ||||||||||||||||||||||||||||||||||||||
| Assembly Row/ Assembly Square Marketplace Somerville, MA 02145(10) | 2005, 2014, 2018, 2021 | 2005-2011/ 2013 | 1,230,000 | $41.61 | 98% | Trader Joe's TJ Maxx AMC Nike Burlington World Market PUMA Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Assembly Row Residential Somerville, MA 02145 | 2018, 2021 | 2005-2011 | 947 units | N/A | 94% | |||||||||||||||||||||||||||||||||
| Campus Plaza Bridgewater, MA 02324 | 1970 | 2004 | 113,000 | $20.28 | 100% | Roche Bros. Burlington Five Below | ||||||||||||||||||||||||||||||||
| Chelsea Commons Chelsea, MA 02150(6) | 1962,1969, 2008 | 2006-2008 | 233,000 | $15.88 | 99% | Home Depot Planet Fitness CVS Burlington | ||||||||||||||||||||||||||||||||
| Dedham Plaza Dedham, MA 02026 | 1959 | 1993/2016/ 2019 | 253,000 | $24.15 | 97% | Star Market Planet Fitness | ||||||||||||||||||||||||||||||||
| Linden Square Wellesley, MA 02481 | 1960, 2008 | 2006 | 223,000 | $53.28 | 97% | Roche Bros. CVS Multiple Restaurants | ||||||||||||||||||||||||||||||||
| 7 units | N/A | 100% | ||||||||||||||||||||||||||||||||||||
| North Dartmouth North Dartmouth, MA 02747 | 2004 | 2006 | 48,000 | $17.22 | 100% | Stop & Shop | ||||||||||||||||||||||||||||||||
| Queen Anne Plaza Norwell, MA 02061 | 1967 | 1994 | 149,000 | $21.65 | 99% | Big Y Foods TJ Maxx HomeGoods | ||||||||||||||||||||||||||||||||
| Michigan | ||||||||||||||||||||||||||||||||||||||
| Gratiot Plaza Roseville, MI 48066 | 1964 | 1973 | 205,000 | $14.68 | 85% | Kroger Best Buy Bob's Discount Furniture | ||||||||||||||||||||||||||||||||
| Nebraska | ||||||||||||||||||||||||||||||||||||||
| Village Pointe Omaha, NE 68118 | 2004 | 2025 | 452,000 | $26.43 | 96% | Nordstrom Rack Best Buy Apple Sephora lululemon | ||||||||||||||||||||||||||||||||
| New Jersey | ||||||||||||||||||||||||||||||||||||||
| Brick Plaza Brick Township, NJ 08723(7) | 1958 | 1989 | 405,000 | $23.66 | 97% | Trader Joe's L.A. Fitness HomeGoods Ulta Burlington | ||||||||||||||||||||||||||||||||
| Brook 35 Sea Grit, NJ 08750(4)(6)(8) | 1986, 2004 | 2014 | 97,000 | $42.96 | 100% | Banana Republic Gap Tommy's Tavern + Tap | ||||||||||||||||||||||||||||||||
| Ellisburg Cherry Hill, NJ 08034 | 1959 | 1992 | 260,000 | $21.18 | 100% | Whole Foods Five Below RH Outlet | ||||||||||||||||||||||||||||||||
25
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Hoboken Hoboken, NJ 07030(4)(6)(12) | 1887-2006 | 2019/2020/2022 | 171,000 | $62.98 | 97% | CVS New York Sports Club Sephora Multiple Restaurants | ||||||||||||||||||||||||||||||||
| 129 units | N/A | 96% | ||||||||||||||||||||||||||||||||||||
| Mercer on One Lawrenceville, NJ 08648(7) | 1975 | 2003/2017/2023 | 551,000 | $29.16 | 97% | Shop Rite Nike Ross Dress for Less Nordstrom Rack REI Tesla | ||||||||||||||||||||||||||||||||
| The Grove at Shrewsbury Shrewsbury, NJ 07702(4)(6)(8) | 1988, 1993 & 2007 | 2014 | 191,000 | $56.91 | 99% | Bloomies lululemon Anthropologie Pottery Barn Williams Sonoma | ||||||||||||||||||||||||||||||||
| Troy Hills Parsippany-Troy, NJ 07054 | 1966 | 1980 | 211,000 | $20.09 | 99% | Target Floor & Décor Michaels | ||||||||||||||||||||||||||||||||
| New York | ||||||||||||||||||||||||||||||||||||||
| Fresh Meadows Queens, NY 11365 | 1949 | 1997 | 408,000 | $41.67 | 99% | Lidl Island of Gold AMC Kohl's Planet Fitness | ||||||||||||||||||||||||||||||||
| Georgetowne Shopping Center Brooklyn, NY 11234 | 1969, 2006, 2015 | 2019 | 147,000 | $43.82 | 94% | Foodway Five Below IHOP | ||||||||||||||||||||||||||||||||
| Greenlawn Plaza Greenlawn, NY 11743 | 1975, 2004 | 2006 | 103,000 | $18.72 | 93% | Greenlawn Farms Planet Fitness | ||||||||||||||||||||||||||||||||
| Hauppauge Hauppauge, NY 11788 | 1963 | 1998 | 134,000 | $27.26 | 94% | Shop Rite TJ Maxx Five Below | ||||||||||||||||||||||||||||||||
| Huntington Huntington, NY 11746 | 1962, 2024 | 1988/2007/ 2015 | 217,000 | $37.02 | 97% | Whole Foods Petsmart REI Ulta | ||||||||||||||||||||||||||||||||
| Huntington Square East Northport, NY 11731 | 1980, 2007 | 2010/2023 | 244,000 | $23.07 | 90% | Aldi 24 Hour Fitness AMC | ||||||||||||||||||||||||||||||||
| Melville Mall Huntington, NY 11747(7) | 1974 | 2006 | 241,000 | $30.84 | 100% | Uncle Giuseppe's Marketplace Marshalls Dick's Sporting Goods | ||||||||||||||||||||||||||||||||
| Pennsylvania | ||||||||||||||||||||||||||||||||||||||
| Andorra Philadelphia, PA 19128 | 1953 | 1988 | 212,000 | $15.30 | 96% | TJ Maxx Kohl's L.A. Fitness Five Below | ||||||||||||||||||||||||||||||||
| Bala Cynwyd on City Avenue Bala Cynwyd, PA 19004 | 1955 | 1993 | 174,000 | $38.74 | 96% | Acme Markets Michaels L.A. Fitness | ||||||||||||||||||||||||||||||||
| Bala Cynwyd on City Avenue Residential Bala Cynwyd, PA 19004 | 2020 | 1993 | 87 units | N/A | 98% | |||||||||||||||||||||||||||||||||
| Flourtown Flourtown, PA 19031 | 1957 | 1980 | 158,000 | $24.32 | 98% | Giant Food Movie Tavern | ||||||||||||||||||||||||||||||||
| Lancaster Lancaster, PA 17601(7) | 1958 | 1980 | 126,000 | $20.42 | 98% | Giant Food AutoZone | ||||||||||||||||||||||||||||||||
| Langhorne Square Levittown, PA 19056 | 1966 | 1985 | 226,000 | $19.76 | 99% | Redner's Warehouse Markets Marshalls Planet Fitness | ||||||||||||||||||||||||||||||||
| Lawrence Park Broomall, PA 19008 | 1972 | 1980/2017 | 357,000 | $25.46 | 100% | Acme Markets TJ Maxx HomeGoods Barnes & Noble Lankenau Medical Center | ||||||||||||||||||||||||||||||||
| Northeast Philadelphia, PA 19114 | 1959 | 1983 | 208,000 | $22.79 | 96% | Marshalls Ulta Skechers Crunch Fitness | ||||||||||||||||||||||||||||||||
| Willow Grove Willow Grove, PA 19090 | 1953 | 1984 | 86,000 | $26.10 | 100% | Amazon Food Marshalls Five Below | ||||||||||||||||||||||||||||||||
26
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Wynnewood Wynnewood, PA 19096 | 1948 | 1996 | 239,000 | $32.54 | 97% | Giant Food Old Navy DSW | ||||||||||||||||||||||||||||||||
| 9 units | N/A | 100% | ||||||||||||||||||||||||||||||||||||
| Virginia | ||||||||||||||||||||||||||||||||||||||
| 29th Place Charlottesville, VA 22091 | 1975-2001 | 2007 | 168,000 | $21.73 | 99% | Lidl HomeGoods DSW Staples | ||||||||||||||||||||||||||||||||
| Barcroft Plaza Falls Church, VA 22041 | 1963, 1972, 1990, & 2000 | 2006/2007/ 2016 | 113,000 | $32.78 | 98% | Harris Teeter | ||||||||||||||||||||||||||||||||
| Barracks Road Charlottesville, VA 22905 | 1958 | 1985 | 487,000 | $29.95 | 91% | Harris Teeter Kroger Anthropologie Old Navy Ulta Michaels | ||||||||||||||||||||||||||||||||
| Birch & Broad Falls Church, VA 22046 | 1960/1962 | 1967/1972 | 144,000 | $40.58 | 100% | Giant Food CVS Staples | ||||||||||||||||||||||||||||||||
| Chesterbrook McLean, VA 22101(4) | 1967 | 2021 | 89,000 | $32.43 | 91% | Safeway Starbucks | ||||||||||||||||||||||||||||||||
| Fairfax Junction Fairfax, VA 22030(8) | 1981, 1986, 2000 | 2019/2020 | 124,000 | $29.15 | 98% | Aldi CVS Planet Fitness | ||||||||||||||||||||||||||||||||
| Graham Park Plaza Falls Church, VA 22042 | 1971 | 1983 | 133,000 | $39.72 | 95% | Giant Food | ||||||||||||||||||||||||||||||||
| Idylwood Plaza Falls Church, VA 22030 | 1991 | 1994 | 73,000 | $51.51 | 98% | |||||||||||||||||||||||||||||||||
| Kingstowne Towne Center Kingstowne, VA 22315 | 1996, 2001, 2006 | 2022 | 411,000 | $29.03 | 100% | Giant Food Safeway TJ Maxx HomeGoods Ross Dress for Less | ||||||||||||||||||||||||||||||||
| Mount Vernon/South Valley/ 7770 Richmond Hwy Alexandria, VA 22306(8) | 1966, 1972,1987 & 2001 | 2003/2006/2021 | 565,000 | $21.43 | 97% | Shoppers Food Warehouse TJ Maxx Home Depot Old Navy Burlington Ulta | ||||||||||||||||||||||||||||||||
| Old Keene Mill Springfield, VA 22152 | 1968 | 1976 | 90,000 | $46.51 | 100% | Trader Joe's Walgreens Planet Fitness | ||||||||||||||||||||||||||||||||
| Pike 7 Plaza Vienna, VA 22180 | 1968 | 1997/2015 | 175,000 | $51.85 | 99% | Lidl TJ Maxx DSW Ulta | ||||||||||||||||||||||||||||||||
| Providence Place (formerly Pan Am) Fairfax, VA 22031 | 1979 | 1993 | 228,000 | $25.17 | 90% | Safeway Micro Center CVS Michaels | ||||||||||||||||||||||||||||||||
| Tower Shopping Center Springfield, VA 22150 | 1960 | 1998 | 109,000 | $31.09 | 99% | L.A. Mart Total Wine & More Talbots | ||||||||||||||||||||||||||||||||
| Twinbrooke Centre Fairfax, VA 22032 | 1977 | 2021 | 103,000 | $30.42 | 98% | Safeway Outback Steakhouse | ||||||||||||||||||||||||||||||||
| Tyson's Station Falls Church, VA 22043 | 1954 | 1978 | 48,000 | $54.82 | 96% | Trader Joe's | ||||||||||||||||||||||||||||||||
| Village at Shirlington Arlington, VA 22206(7) | 1940, 2006-2009 | 1995 | 277,000 | $41.22 | 91% | Harris Teeter CVS AMC Multiple Restaurants | ||||||||||||||||||||||||||||||||
| Virginia Gateway Gainesville, VA 20015 | 1999, 2006-2008, 2013-2016 | 2024 | 668,000 | $27.56 | 98% | Giant Food HomeGoods Total Wine & More Best Buy Ulta | ||||||||||||||||||||||||||||||||
| Westpost Arlington, VA 22202 | 2001-2002 | 1998/2010 | 298,000 | $35.22 | 99% | Harris Teeter Target TJ Maxx Ulta Walgreens DSW | ||||||||||||||||||||||||||||||||
27
Table of Contents
| Property, City, State, Zip Code | Year Completed | Year Acquired | Square Feet(1) /Apartment Units | Average Base Rent Per Square Foot(2) | Percentage Leased(3) | Principal Tenant(s) | ||||||||||||||||||||||||||||||||
| Willow Lawn Richmond, VA 23230 | 1957 | 1983 | 463,000 | $23.49 | 98% | Kroger Old Navy Ross Dress for Less Gold's Gym Dick's Sporting Goods Ulta | ||||||||||||||||||||||||||||||||
| Total — Commercial (9) | 28,798,000 | $32.79 | 96% | |||||||||||||||||||||||||||||||||||
| Total —Residential | 2,678 units | 95% | ||||||||||||||||||||||||||||||||||||
_____________________
(1)Represents the GLA of the commercial portion of the property. Some of our properties include office space which is included in this square footage.
(2)Average base rent per square foot is calculated as the aggregate, annualized in-place contractual (defined as cash basis excluding rent abatements) minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces. Average base rent is for commercial spaces only.
(3)Percentage leased is expressed as a percentage of rentable commercial square feet occupied or subject to a lease. Residential percentage leased is expressed as a percentage of units occupied or subject to a lease.
(4)We own the controlling interest in this property.
(5)We own a noncontrolling interest in this property.
(6)All or a portion of this property is encumbered by a mortgage loan.
(7)All or a portion of this property is owned pursuant to a ground lease.
(8)We own all or a portion of this property in a “downREIT” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units.
(9)Aggregate information is calculated on a GLA weighted-average basis, excluding Chandler Festival, Chandler Gateway, and La Alameda, which are all unconsolidated properties at December 31, 2025.
(10)Portion of property is currently under development. See further discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
(11)This property includes interests in four nearby buildings.
(12)This property includes 40 buildings primarily along Washington Street and 14th Street in Hoboken, New Jersey.
ITEM 3. LEGAL PROCEEDINGS
We are involved from time-to-time in various legal and regulatory proceedings that arise in the ordinary course of our business, including, but not limited to, commercial disputes, environmental matters, and litigation in connection with transactions such as acquisitions and divestitures. We believe that our current proceedings will not have a material adverse effect on our financial condition, liquidity or results of operations. See Note 7 to the consolidated financial statements for further discussions.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
28
Table of Contents
PART II
ITEM 5. MARKET FOR OUR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common shares trade on the New York Stock Exchange under the symbol “FRT.” Listed below are the high and low sales prices of our common shares as reported on the New York Stock Exchange and the dividends declared for each of the periods indicated.
| Price Per Share | Dividends Declared Per Share | ||||||||||||||||
| High | Low | ||||||||||||||||
| 2025 | |||||||||||||||||
| Fourth quarter | $ | 102.81 | $ | 90.03 | $ | 1.130 | |||||||||||
| Third quarter | $ | 102.94 | $ | 89.99 | $ | 1.130 | |||||||||||
| Second quarter | $ | 99.37 | $ | 80.65 | $ | 1.100 | |||||||||||
| First quarter | $ | 111.82 | $ | 94.58 | $ | 1.100 | |||||||||||
| 2024 | |||||||||||||||||
| Fourth quarter | $ | 118.09 | $ | 109.41 | $ | 1.100 | |||||||||||
| Third quarter | $ | 118.34 | $ | 99.64 | $ | 1.100 | |||||||||||
| Second quarter | $ | 105.98 | $ | 95.98 | $ | 1.090 | |||||||||||
| First quarter | $ | 104.54 | $ | 97.13 | $ | 1.090 | |||||||||||
On February 9, 2026, there were 1,780 holders of record of our common shares.
Our ongoing operations generally will not be subject to federal income taxes as long as we maintain our REIT status and distribute to shareholders at least 100% of our taxable income. Under the Code, REITs are subject to numerous organizational and operational requirements, including the requirement to generally distribute at least 90% of taxable income.
Future distributions will be at the discretion of our Board of Trustees and will depend on our actual net income available for common shareholders, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Trustees deems relevant. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our regular annual dividend rate for 58 consecutive years.
Our total annual dividends paid per common share for 2025 and 2024 were $4.43 per share and $4.37 per share, respectively. The annual dividend amounts are different from dividends as calculated for federal income tax purposes. Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary dividend income. Distributions in excess of current and accumulated earnings and profits will be treated as a nontaxable reduction of the shareholder’s basis in such shareholder’s shares, to the extent thereof, and thereafter as taxable capital gain. Distributions that are treated as a reduction of the shareholder’s basis in its shares will have the effect of increasing the amount of gain, or reducing the amount of loss, recognized upon the sale of the shareholder’s shares. No assurances can be given regarding what portion, if any, of distributions in 2026 or subsequent years will constitute a return of capital for federal income tax purposes. During a year in which a REIT earns a net long-term capital gain, the REIT can elect under Section 857(b)(3) of the Code to designate a portion of dividends paid to shareholders as capital gain dividends. If this election is made, then the capital gain dividends are generally taxable to the shareholder as long-term capital gains.
The following table reflects the income tax status of distributions per share paid to common shareholders:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Ordinary dividend | $ | 3.810 | $ | 3.583 | |||||||
| Capital gain | 0.620 | 0.656 | |||||||||
| Return of capital | — | 0.131 | |||||||||
| $ | 4.430 | $ | 4.370 | ||||||||
Distributions on our 5.417% Series 1 Cumulative Convertible Preferred Shares were paid at the rate of $1.354 per share per annum commencing on the issuance date of March 8, 2007. Distributions on our 5.0% Series C Cumulative Redeemable
29
Table of Contents
Preferred Shares were paid at the rate of $1.250 per depositary share per annum, commencing on the issuance date of September 29, 2017. We do not believe that the preferential rights available to the holders of interest in our preferred shares or the financial covenants contained in our debt agreements had or will have an adverse effect on our ability to pay dividends in the normal course of business to our common shareholders or to distribute amounts necessary to maintain our qualification as a REIT.
Total Stockholder Return Performance
The following performance graph compares the cumulative total shareholder return on Federal Realty's common shares with the S&P 500 Index and the index of equity real estate investment trusts prepared by the National Association of Real Estate Investment Trusts ("NAREIT") for the five fiscal years commencing December 31, 2020, and ending December 31, 2025, assuming an investment of $100 and the reinvestment of all dividends into additional common shares during the holding period. Equity real estate investment trusts are defined as those that derive more than 75% of their income from equity investments in real estate assets. The FTSE NAREIT Equity REIT Total Return Index includes all tax qualified real estate investment trusts listed on the NYSE, NYSE MKT, or the NASDAQ National Market. Stock performance for the past five years is not necessarily indicative of future results.
Recent Sales of Unregistered Shares
Under the terms of various operating partnership agreements of certain of our affiliated limited partnerships, the interest of limited partners in those limited partnerships may be redeemed, subject to certain conditions, for cash or an equivalent number of our common shares, at our option. During the three months ended December 31, 2025, no common shares in connection with the redemption of downREIT operating partnership units were issued. Any equity securities sold by us during 2025 that were not registered have been previously reported in a Quarterly Report on Form 10-Q.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In April 2025, our Board of Trustees approved a new common share repurchase program, under which we may purchase up to $300.0 million of our outstanding common shares of beneficial interest, $0.01 par value per share from time to time using a variety of methods, including open market, privately negotiated transactions or otherwise. The specific timing and amount of common share repurchases, if any, will depend on a number of factors, including prevailing share prices, trading volume and
30
Table of Contents
general market conditions, along with our working capital requirements, cash flow, and other factors. The program does not require us to repurchase any dollar amount or number of common shares and may be suspended or discontinued at any time. As of December 31, 2025, no common shares have been repurchased through the program.
During 2025, 5,489 restricted common shares were forfeited by former employees.
From time to time, we could be deemed to have repurchased shares as a result of shares withheld for tax purposes upon a stock compensation related vesting event.
ITEM 6. RESERVED
None.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on February 13, 2025.
Forward-Looking Statements
Certain statements in this section or elsewhere in this report may be deemed “forward-looking statements”. See “Item 1A. Risk Factors” in this report for important information regarding these forward-looking statements and certain risk and uncertainties that may affect us. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in “Item 8. Financial Statements and Supplementary Data” of this report.
Overview
Federal Realty Investment Trust (the "Parent Company" or the "Trust") is an equity real estate investment trust ("REIT"). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Trust conducts substantially all of its operations and owns substantially all of its assets. The Trust owns 100% of the limited liability company interest of, is sole member of, and exercises exclusive control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole general partner of the Operating Partnership. Unless stated otherwise or the context otherwise requires, "we," "our," and "us" means the Trust and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. We specialize in the ownership, management, and redevelopment of high quality retail and mixed-use properties. These properties are located primarily in major coastal markets and select underserved markets that we believe have strong economic and demographic fundamentals.As of December 31, 2025, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects comprising approximately 28.8 million commercial square feet. In total, the real estate projects were 96.1% leased and 94.1% occupied at December 31, 2025. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 58 consecutive years.
General Economic Conditions
Significant uncertainty continues within the macro-economic environment including concerns over inflation, changing interest rates, new or higher tariffs and their impact on trade and prices, increases or decreases in federal government spending, and potentially worsening economic conditions, which presents risks for our business and tenants. We continue to monitor and address risks related to the general state of the economy. We believe the actions we have taken to maintain a strong financial position and reinforce our liquidity will continue to mitigate the negative short term impacts of the current economic environment. The extent of the future effects on our business, results of operations, cash flows, and growth strategies is highly uncertain and will ultimately depend on future developments, none of which can be predicted.
Additional discussion of the impact of current economic conditions on our results and long-term operations can be found throughout Item 7 and Item 1A. Risk Factors.
Corporate Responsibility
We actively endeavor to operate and develop our properties in a sustainable, responsible, and effective manner with the objective being to drive long-term growth and aid in value creation for our shareholders, tenants, employees, and local communities. We have aligned our program and efforts with the United Nations Sustainable Development Goals, as described
31
Table of Contents
in our Sustainability Policy and our 2024 sustainability report, which are provided only for informational purposes on our website and not incorporated by reference herein.
We are committed to implementing sustainable business practices at our operating properties that focus on energy efficiency, water conservation and waste minimization and have established greenhouse gas (GHG) emissions reduction targets in accordance with the Science-Based Targets initiative. To achieve this target, we are actively addressing energy efficiency projects on site such as upgrading to LED lighting, procuring zero carbon energy, reducing electric consumption, and increasing our onsite solar generation capacity. We have installed on-site solar systems at 28 of our properties with a capacity of 15.3 MW. We also installed electric vehicle car charging stations in numerous properties throughout our portfolio. We currently have nearly 500 charging stations in operation with more planned.
We also understand that we face risks presented by climate change and are working to evaluate our risk exposure. In our 2024 sustainability report, we provided a disclosure pursuant to the Task Force on Climate Related Financial Disclosure and we intend to provide that disclosure annually.
We are also highly committed to our employees and fostering a work environment that promotes growth, development and personal well-being. Our four core values are accountability, excellence, innovation and integrity and we seek to attract and retain talented professionals who embrace those values. All of our efforts with respect to corporate responsibility are overseen by our Board of Trustees.
Our development activities have been heavily focused on owning, developing and operating properties that are certified under the U.S. Green Building Council’s® (“USGBC”) Leadership in Energy and Environmental Design™ (LEED®) rating system which serves as a third-party verification that a building or community was designed and built to mitigate its environmental footprint. We currently have 25 LEED certified buildings and our Pike & Rose project has achieved LEED for Neighborhood Development Stage 3 Gold certification.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP”, requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past and current events and economic conditions. In addition, information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third party experts. Actual results could differ from these estimates. A discussion of possible risks which may affect these estimates is included in “Item 1A. Risk Factors” of this report. Management considers an accounting estimate to be critical if changes in the estimate could have a material impact on our consolidated results of operations or financial condition.
Our significant accounting policies are more fully described in Note 2 to the consolidated financial statements; however, the most critical accounting policies, which are most important to the portrayal of our financial condition and results of operations, and involve the use of complex estimates and significant assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows:
Collectibility of Lease Income
Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. For example, in the event that our collectibility determinations were not accurate and we were required to write off additional receivables equaling 1% of rental income, our rental income and net income would decrease by $12.5 million. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income.
32
Table of Contents
Real Estate Acquisitions
Upon acquisition of operating real estate properties, we estimate the fair value of assets and liabilities acquired including land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, and current assets and liabilities, if any. Based on these estimates, we allocate the purchase price to the applicable assets and liabilities. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the statement of operations. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any acquired lease value is written off to rental income.
During 2025 and 2024, we acquired properties included in our consolidated financial statements with a total purchase price of $1.0 billion. $11.7 million, or 1% of the total purchase price was allocated to above market lease assets and $71.6 million, or 7% was allocated to below market lease liabilities. If the amounts allocated in 2025 and 2024 to below market lease liabilities and building assets were each reduced by 5% of the total purchase price, annual below market lease liability amortization increasing rental income would decrease by approximately $3.8 million (using the weighted average life of below market liabilities at each respective acquired property) and annual depreciation expense would decrease by approximately $1.5 million (using a depreciable life of 35 years).
Long-Lived Assets and Impairment
There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, taking into account the anticipated hold period, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value.
The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. We are also required to estimate the anticipated hold period. A change in the expected holding period from a long term hold to a short term would cause a significant change in the undiscounted cash flows and could result in an impairment charge. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. During the fourth quarter of 2025, we recognized a $7.4 million impairment charge related to our North Dartmouth property, as a result of an impairment analysis.
Recently Adopted and Recently Issued Accounting Pronouncements
See Note 2 to the consolidated financial statements.
2025 and 2026 Acquisitions and Dispositions
During the year ended December 31, 2025, we acquired the following properties:
| Date Acquired | Property | City/State | Gross Leasable Area (GLA) | Purchase Price | |||||||||||||||||||||||||
| (in square feet) | (in millions) | ||||||||||||||||||||||||||||
| February 25, 2025 | Del Monte Shopping Center | Monterey, California | 675,000 | $ | 123.5 | (1) | |||||||||||||||||||||||
| July 1, 2025 | Town Center Crossing and Town Center Plaza | Leawood, Kansas | 552,000 | $ | 289.0 | (2) | |||||||||||||||||||||||
| October 10, 2025 | Annapolis Town Center | Annapolis, Maryland | 479,000 | $ | 187.0 | (3) | |||||||||||||||||||||||
| November 24, 2025 | Village Pointe | Omaha, Nebraska | 452,000 | $ | 153.3 | (4) | |||||||||||||||||||||||
33
Table of Contents
(1)Approximately $17.7 million and $0.8 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $23.5 million of net assets acquired were allocated to other liabilities for "below market leases."
(2)Approximately $31.0 million and $6.5 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $11.4 million of net assets acquired were allocated to other liabilities for "below market leases."
(3)Approximately $18.0 million and $2.9 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $9.0 million of net assets acquired were allocated to other liabilities for "below market leases."
(4)Approximately $18.1 million and $1.0 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $10.5 million of net assets acquired were allocated to other liabilities for "below market leases."
During the year ended December 31, 2025, we sold the following properties:
| Property | Sales Price | Gain | |||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||
| Pike & Rose (one residential building) | $ | 125.0 | $ | 41.9 | |||||||||||||
| Santana Row (one residential building) | 73.9 | 49.1 | |||||||||||||||
| Hollywood Boulevard | 69.0 | 27.2 | |||||||||||||||
| Bristol Plaza | 44.4 | 30.6 | |||||||||||||||
| White Marsh Other (portion) | 3.4 | 0.8 | |||||||||||||||
| $ | 315.7 | $ | 149.6 | ||||||||||||||
On February 5, 2026, we sold a residential building at our Santana Row property and our Courthouse Center property for sales prices totaling $158.5 million.
2025 Significant Debt and Equity Transactions
On January 9, 2025 and October 1, 2025 we repaid two mortgage loans at our Hoboken property totaling $4.3 million,at par.
On March 20, 2025, we amended and restated our $600.0 million unsecured term loan, extending the maturity date to March 20, 2028, plus two one-year extensions, at our option. We also had the right to borrow up to an additional $150.0 million, which we exercised on September 22, 2025, bringing our total amount outstanding under this agreement to $750.0 million as of December 31, 2025. Debt issuance costs related to our term loan were $4.9 million. Under an accordion feature, we have the right to request additional loans, subject to an aggregate maximum of $1.0 billion borrowed under the restated agreement. Additionally, on May 1, 2025, the interest rate was reduced by removing the 0.10% adjustment to SOFR.
On October 30, 2025, we refinanced the $40.0 million mortgage loan at Azalea, with a new $55.0 million mortgage loan that bears interest at SOFR + 85 basis points, based on our credit rating, and matures on October 30, 2028, plus two one-year extensions, at our option. Debt issuance costs related to this mortgage loan were $0.6 million.
On November 17, 2025, we entered into an additional unsecured term loan agreement, which gives us the capacity to borrow up to $250.0 million at an interest rate of SOFR + 85 basis points, based on our current credit rating. The loan matures on January 31, 2031, and as of December 31, 2025, we do not have any outstanding borrowings under this agreement. Debt issuance costs related to this term loan were $1.5 million. Under an accordion feature, we have the right to request additional loans, subject to an aggregate maximum of $500.0 million.
On December 17, 2025, we exercised our first option to extend our $200.0 million mortgage loan at Bethesda Row by one year to December 28, 2026. We have one one-year extension, at our option remaining to extend the loan to December 28, 2027.
During 2025, the maximum amount of borrowings outstanding under our revolving credit facility was $461.6 million. The weighted average amount of borrowings outstanding was $153.2 million, and the weighted average interest rate, before amortization of debt fees, was 5.0%. The revolving credit facility requires an annual facility fee which is $1.9 million under the amended credit agreement. At December 31, 2025, our revolving credit facility had $310.0 million outstanding. On October 30, 2025, the interest rate on our revolving credit facility was reduced by removing the 0.10% adjustment to SOFR.
Our revolving credit facility, term loans, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2025, we were in compliance with all default related debt covenants.
34
Table of Contents
On February 14, 2025, we amended our existing at-the-market (“ATM”) equity program under which we may from time to time offer and sell common shares. This amendment reset the aggregate offering price of the program to $750.0 million. Our ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes. As of December 31, 2025, we have the capacity to issue up to $750.0 million in common shares under this program.
During 2025, we settled our open forward sales agreements by issuing 476,497 common shares for net proceeds of $54.2 million.
In April 2025, our Board of Trustees approved a new common share repurchase program, under which we may purchase up to $300.0 million of our outstanding common shares of beneficial interest, $0.01 par value per share from time to time using a variety of methods, including open market, privately negotiated transactions or otherwise. The specific timing and amount of common share repurchases, if any, will depend on a number of factors, including prevailing share prices, trading volume and general market conditions, along with our working capital requirements, cash flow, and other factors. The program does not require us to repurchase any dollar amount or number of common shares and may be suspended or discontinued at any time. As of December 31, 2025, no common shares have been repurchased through the program.
Other Transaction
In June 2018, we formed a joint venture to develop Freedom Plaza (formerly Jordan Downs Plaza), for which we own 92%. The investment in this development qualified for tax credits under the New Market Tax Credit ("NMTC") Program, established by the Community Renewal Tax Relief Act of 2000. In 2018, we transferred the earned tax credits to a third-party bank in exchange for cash proceeds. The proceeds received and related transaction costs were deferred until the end of the seven-year NMTC compliance period, which concluded in June 2025. As a result, for the year ended December 31, 2025, we recognized $14.2 million ($13.0 million, net of income attributable to noncontrolling interest) in income related to the sale of the new market tax credits.
Capitalized Costs
Certain external and internal costs directly related to the development, redevelopment and leasing of real estate, including pre-construction costs, real estate taxes, insurance, and construction costs and salaries and related costs of personnel directly involved, are capitalized. We capitalized external and internal costs related to both development and redevelopment activities of $185 million and $9 million, respectively, for 2025 and $136 million and $8 million, respectively, for 2024. We capitalized external and internal costs related to other property improvements of $105 million and $5 million, respectively, for 2025 and $103 million and $5 million, respectively, for 2024. We capitalized external and internal costs related to leasing activities of $19 million and $4 million, respectively, for 2025 and $27 million and $4 million, respectively, for 2024. The amount of capitalized internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were $8 million, $4 million, and $4 million, respectively, for both 2025 and 2024. Total capitalized costs were $326 million for 2025 and $283 million for 2024, respectively.
Outlook
Our long-term growth strategy is focused on growth in earnings, funds from operations, and cash flows primarily through a combination of the following:
•growth in our comparable property portfolio,
•expansion of our portfolio through property acquisitions, and
•growth in our portfolio from property redevelopments and expansions.
Although general economic impacts of elevated levels of inflation and higher interest rates are impacting us in the short-term, our long-term focus has not changed.
Our comparable property growth is primarily driven by increases in rental rates on new leases and lease renewals, changes in portfolio occupancy, and the redevelopment of those assets. 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. We continue to experience strong demand for our commercial space as evidenced by the 2.3 million square feet of comparable space leasing we've completed in 2025, and the 2.0% spread between our leased rate of 96.1% and our occupied rate of 94.1%. However, the effects of inflationary pressures and elevated interest rates continue to negatively impact our business with the largest impacts being higher interest costs, increased material costs, and higher operating costs. Additionally, significant impacts from supply chain disruptions or tariffs could also result in extended time frames and/or increased costs for completion of our projects and tenant build-outs, which could delay the commencement of rent payments under new leases.
35
Table of Contents
Similarly, if our tenants experience significant disruptions in supply chains and unexpected impacts of tariffs supporting their own products, staffing issues due to labor shortages, or are otherwise impacted by worsening economic conditions, their ability to pay rent may be adversely affected. We continue to monitor these macroeconomic developments and are working with our tenants and our vendors to limit the overall impact to our business.
We believe the locations and nature of our centers and diverse tenant base partially mitigates any potential negative changes in the economic environment. However, any significant reduction in our tenants' abilities to pay base rent, percentage rent or other charges, will adversely affect our financial condition and results of operations. We seek to maintain a mix of strong national, regional, and local retailers. At December 31, 2025, no single tenant accounted for more than 2.4% of annualized base rent.
We continue to have several development projects in process being delivered as follows:
•Phase IV at Pike & Rose is a 272,000 square foot office building (which includes 10,000 square feet of ground floor retail space). All of the space is leased, of which, 249,000 square feet is occupied. The building is expected to cost between $180 million and $190 million, and began delivering in late September 2023.
•Construction on Santana West includes an eight story 369,000 square foot office building, which is expected to cost between $325 million and $335 million. Approximately 345,000 square feet of space is leased, of which 317,000 square feet is occupied.
•Construction of a 258-unit residential project at Santana Row, which is expected to cost between $140 million and $148 million.
•Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $304 million that we expect to stabilize over the next several years.
The above includes our best estimates based on information currently known, however, the completion of construction, final costs, and the timing of leasing and openings may be further impacted by the current environment including the duration and severity of the economic impacts of broader, as well as local, economic conditions, inflation, tariffs, higher interest rates, and higher operating costs.
The development of future phases of Assembly Row, Pike & Rose, Santana Row, and other properties will be pursued opportunistically based on, among other things, market conditions, tenant demand, and our evaluation of whether those phases will generate an appropriate financial return.
We continue to review acquisition opportunities that complement our portfolio and provide long-term growth opportunities. Initially, some of our acquisitions do not contribute significantly to earnings growth; however, we believe they provide long-term re-leasing growth, redevelopment opportunities, and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance the property acquisition. Generally, our acquisitions are initially financed by available cash and/or borrowings under our revolving credit facility which may be repaid later with funds raised through the issuance of new equity or new long-term debt. We may also finance our acquisitions through the issuance of common shares, preferred shares, or units in the Operating Partnership, as well as through assumed mortgages and property sales.
At December 31, 2025, the leasable commercial square feet in our properties was 96.1% leased and 94.1% occupied. The leased rate is higher than the occupied rate due to leased spaces that are being redeveloped or improved or that are awaiting permits and, therefore, are not yet ready to be occupied. Our occupancy and leased rates are subject to variability over time due to factors including acquisitions, the timing of the start and stabilization of our redevelopment projects, lease expirations and tenant closings and bankruptcies.
Comparable Properties
Throughout this section, we have provided certain information on a “comparable property” basis. Information provided on a comparable property basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties that are currently under development or are being repositioned for significant redevelopment and investment. For the year ended December 31, 2025 and the comparison of 2024, all or a portion of 94 properties were considered comparable properties and seven were considered non-comparable properties. For the year ended December 31, 2025, one property was moved from comparable properties to non-comparable properties, and two properties and one portion of three properties were removed from comparable properties, as they were sold, compared to the designations as of December 31, 2024. While there is judgment surrounding changes in designations, we typically move non-comparable properties to comparable properties once they have stabilized, which is typically considered 90% physical occupancy or when the growth expected from the redevelopment has been included in the comparable periods. We typically remove properties from
36
Table of Contents
comparable properties when the repositioning of the asset has commenced and has or is expected to have a significant impact to property operating income within the calendar year. Acquisitions are moved to comparable properties once we have owned the property for the entirety of comparable periods and the property is not under development or being repositioned for significant redevelopment and investment.
37
Table of Contents
YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024
| Change | |||||||||||||||||||||||
| 2025 | 2024 | Dollars | % | ||||||||||||||||||||
| (Dollar amounts in thousands) | |||||||||||||||||||||||
| Rental income | $ | 1,245,491 | $ | 1,170,078 | $ | 75,413 | 6.4 | % | |||||||||||||||
| Other property income | 32,371 | 31,258 | 1,113 | 3.6 | % | ||||||||||||||||||
| Mortgage interest income | 1,113 | 1,116 | (3) | (0.3) | % | ||||||||||||||||||
| Total property revenue | 1,278,975 | 1,202,452 | 76,523 | 6.4 | % | ||||||||||||||||||
| Rental expenses | 267,445 | 249,569 | 17,876 | 7.2 | % | ||||||||||||||||||
| Real estate taxes | 151,438 | 142,230 | 9,208 | 6.5 | % | ||||||||||||||||||
| Total property expenses | 418,883 | 391,799 | 27,084 | 6.9 | % | ||||||||||||||||||
Property operating income (1) | 860,092 | 810,653 | 49,439 | 6.1 | % | ||||||||||||||||||
| General and administrative expense | (46,913) | (49,739) | 2,826 | (5.7) | % | ||||||||||||||||||
| Depreciation and amortization | (367,842) | (342,598) | (25,244) | 7.4 | % | ||||||||||||||||||
| New market tax credit transaction income | 14,176 | — | 14,176 | 100.0 | % | ||||||||||||||||||
| Gain on sale of real estate | 150,111 | 54,040 | 96,071 | 177.8 | % | ||||||||||||||||||
| Impairment charge | (7,425) | — | (7,425) | 100.0 | % | ||||||||||||||||||
| Operating income | 602,199 | 472,356 | 129,843 | 27.5 | % | ||||||||||||||||||
| Other interest income | 3,143 | 4,294 | (1,151) | (26.8) | % | ||||||||||||||||||
| Interest expense | (183,614) | (175,476) | (8,138) | 4.6 | % | ||||||||||||||||||
| Income from partnerships | 1,920 | 3,160 | (1,240) | (39.2) | % | ||||||||||||||||||
| Total other, net | (178,551) | (168,022) | (10,529) | 6.3 | % | ||||||||||||||||||
| Net income | 423,648 | 304,334 | 119,314 | 39.2 | % | ||||||||||||||||||
| Net income attributable to noncontrolling interests | (12,571) | (9,126) | (3,445) | 37.7 | % | ||||||||||||||||||
| Net income attributable to the Trust | $ | 411,077 | $ | 295,208 | $ | 115,869 | 39.2 | % | |||||||||||||||
(1) Property operating income is a non-GAAP measure that consists of rental income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations to the previous period and we consider it be a significant measure. We believe that property operating income is useful to investors in measuring the operating performance of our property portfolio because the definition excludes various items included in operating income that do not relate to, or are not indicative of, the operating performance of our properties, such as general and administrative expenses and depreciation and amortization, and allows us to isolate disparities in operating income caused by acquisitions, dispositions, and stabilization of properties. Property operating income may, therefore, provide a more consistent metric for comparing the operating performance of our real estate between periods. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of operating income to property operating income for 2025 and 2024 is as follows:
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Operating income | $ | 602,199 | $ | 472,356 | ||||||||||
| General and administrative | 46,913 | 49,739 | ||||||||||||
| Depreciation and amortization | 367,842 | 342,598 | ||||||||||||
| New market tax credit transaction income | (14,176) | — | ||||||||||||
| Gain on sale of real estate | (150,111) | (54,040) | ||||||||||||
| Impairment charge | 7,425 | — | ||||||||||||
| Property operating income | $ | 860,092 | $ | 810,653 | ||||||||||
Property Revenues
Total property revenue increased $76.5 million, or 6.4%, to $1.28 billion in 2025 compared to $1.20 billion in 2024. The percentage occupied at our shopping centers was 94.1% at both December 31, 2025 and 2024. Rental income consists primarily
38
Table of Contents
of minimum rent, cost reimbursements from tenants and percentage rent, and is net of collectibility related adjustments. Other property income includes revenue for our Pike & Rose hotel, parking income, and other incidental income from our properties. 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.
Property Expenses
Total property expenses increased $27.1 million, or 6.9%, to $418.9 million in 2025 compared to $391.8 million in 2024. Changes in the components of property expenses are discussed below.
Rental Expenses
Rental expenses increased $17.9 million, or 7.2%, to $267.4 million in 2025 compared to $249.6 million in 2024. This increase is primarily due to the following:
•and increase of $10.6 million from 2025 and 2024 acquisitions,
•an increase of $7.3 million from comparable properties due primarily to higher snow removal, higher utilities, and an increase in management fees on higher revenues, partially offset by lower repairs and maintenance costs and insurance costs, and
•an increase of $4.2 million from non-comparable properties due primarily to openings at Santana West and Pike & Rose Phase IV,
partially offset by
•a decrease of $3.7 million from property dispositions.
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 21.5% for the year ended December 31, 2025 from 21.3% for the year ended December 31, 2024.
Real Estate Taxes
Real estate tax expense increased $9.2 million, or 6.5% to $151.4 million in 2025 compared to $142.2 million in 2024 due primarily to the following:
•an increase of $5.6 million from 2025 and 2024 acquisitions,
•an increase of $2.8 million from comparable properties due to higher assessments and prior year refunds received during 2024, and
•an increase of $2.6 million from non-comparable properties primarily due to openings at Santana West and Pike & Rose Phase IV,
partially offset by
•a decrease of $1.8 million from property dispositions.
Property Operating Income
Property operating income increased $49.4 million, or 6.1%, to $860.1 million in 2025 compared to $810.7 million in 2024. This increase is primarily driven by 2025 and 2024 acquisitions and higher rental rates and average occupancy, partially offset by property dispositions and higher collectibility related adjustments.
General and administrative expenses
General and administrative expense decreased $2.8 million, or 5.7%, to $46.9 million in 2025 compared to $49.7 million in 2024. This decrease is primarily driven by the $3.7 million one-time charge in 2024 related to the departure of an executive officer, partially offset by higher employee compensation expense.
39
Table of Contents
Depreciation and amortization
Depreciation and amortization expense increased $25.2 million, or 7.4%, to $367.8 million in 2025 from $342.6 million in 2024. This increase is due primarily to 2025 and 2024 acquisitions and openings at Santana West and Pike & Rose Phase IV, partially offset by fully depreciated lease assets related to our Grossmont property and property dispositions.
New Market Tax Credit Transaction Income
The $14.2 million new market tax credit transaction income for the year ended December 31, 2025 is due to the sale of new market tax credits related to Freedom Plaza (see Note 7 to the consolidated financial statements for additional information).
Gain on Sale of Real Estate
The $150.1 million gain on sale of real estate for the year ended December 31, 2025 is due primarily to the sale of one residential building at both Santana Row and Pike & Rose, our Bristol Plaza and Hollywood Boulevard properties, and a portion of our White Marsh Other property (see Note 3 to the consolidated financial statements for additional information).
The $54.0 million gain on sale of real estate for the year ended December 31, 2024 is due primarily to the sale of Third Street Promenade and a portion of our White Marsh Other property (see Note 3 to the consolidated financial statements for additional information).
Impairment Charge
The $7.4 million impairment charge for the year ended December 31, 2025 relates to our North Dartmouth property.
Operating Income
Operating income increased $129.8 million, or 27.5%, to $602.2 million in 2025 compared to $472.4 million in 2024. This increase is primarily driven by higher gains on sale of real estate, higher rental rates and average occupancy, income related to the sale of the new market tax credits, and 2025 and 2024 acquisitions, partially offset by property dispositions, impairment charge, and higher collectibility related adjustments.
Other
Interest Expense
Interest expense increased $8.1 million, or 4.6%, to $183.6 million in 2025 compared to $175.5 million in 2024. This increase is due primarily to the following:
•a decrease of $7.3 million in capitalized interest, and
•an increase of $6.2 million due to higher weighted average borrowings,
partially offset by,
•a decrease of $5.4 million due to a lower overall weighted average borrowing rate.
Gross interest costs were $196.8 million and $196.0 million in 2025 and 2024, respectively. Capitalized interest was $13.2 million and $20.5 million in 2025 and 2024, respectively.
Net income attributable to noncontrolling interests
Net income attributable to noncontrolling interests increased $3.4 million, or 37.7%, to $12.6 million in 2025 compared to $9.1 million in 2024. The increase is primarily attributable to the new market tax credit transaction income in 2025, as well as higher income at our properties where there is a noncontrolling interest.
Discussions of year-to-year comparisons between 2024 and 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on February 13, 2025.
40
Table of Contents
Liquidity and Capital Resources
Due to the nature of our business and strategy, we typically generate significant amounts of cash from operations which is largely paid to our common and preferred shareholders in the form of dividends because as a REIT, the Trust is generally required to make annual distributions to shareholders of at least 90% of our taxable income (cash dividends paid in 2025 were approximately $389.7 million). Remaining cash flow from operations after regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities) and dividend payments is used to fund recurring and non-recurring capital projects (such as tenant improvements and redevelopments). We maintain an unsecured $1.25 billion revolving credit facility to fund short term cash flow needs and also look to the public and private debt and equity markets, joint venture relationships, and property dispositions to fund capital expenditures on a long-term basis.
On March 20, 2025, we amended and restated our $600.0 million unsecured term loan, extending the maturity date to March 20, 2028, plus two one-year extensions, at our option. We also increased the size of our term loan by $150.0 million, which we exercised in September 2025, bringing our total amount outstanding under this agreement to $750.0 million as of December 31, 2025. In October 2025, we refinanced the $40.0 million loan at Azalea, with a new $55.0 million mortgage loan. In the next twelve months, we have $652.4 million of debt maturing, of which $200.0 million is the mortgage loan secured by Bethesda Row, for which we have one additional one-year extension remaining, under which we could extend the maturity date to December 28, 2027.
As of December 31, 2025, we had cash and cash equivalents of $107.4 million, $310.0 million outstanding on our $1.25 billion unsecured revolving credit facility, and the capacity to issue up to $750.0 million in common shares under the ATM program. We also have the ability to borrow $250.0 million through a new term loan agreement that we entered into on November 17, 2025 (see Note 5 to our consolidated financial statements for additional information); we expect to borrow the $250.0 million in February 2026 to fund debt maturities.
For the year ended 2025, the weighted average amount of borrowings outstanding on our revolving credit facility was $153.2 million, and the weighted average interest rate, before amortization of debt fees, was 5.0%.
Our capital requirements in 2026 will depend on acquisition opportunities, the level and general timing of our redevelopment and development activities, and the overall economic environment. We currently have development and redevelopment projects in various stages of construction with remaining costs of $322 million. We expect to incur the majority of those costs in the next two years. We expect other capital costs (excluding acquisitions) to be at levels consistent with 2025. During 2025, we acquired properties for $752.8 million, and will continue to evaluate additional opportunities in 2026.
We believe cash flow from operations, the cash on our balance sheet, and our $1.25 billion revolving credit facility will allow us to continue to operate our business in the short-term. Given our ability to access the capital markets, we also expect debt or equity financing to be available to us, although newly issued debt would likely be at higher interest rates than the debt we are refinancing. We also have the ability to delay the timing of certain development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy. We expect these sources of liquidity and opportunities for operating flexibility to allow us to meet our financial obligations over the long term. We intend to operate with and to maintain our long term commitment to a conservative capital structure that will allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings.
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. The increase was primarily attributable to higher net income after adjusting for non-cash items and gains on sale of real estate and the timing of payments.
41
Table of Contents
Net cash used in investing activities increased $296.2 million to $743.1 million during 2025 from $446.8 million during 2024. The increase was primarily attributable to:
•a $461.3 million increase in acquisition of real estate primarily due to the acquisitions of the fee interest in Village Pointe in November 2025, Annapolis Town Center in October 2025, Town Center Crossing and Town Center Plaza in July 2025 and Del Monte Shopping Center in February 2025 (see Note 3 to the consolidated financial statements for additional information), as compared to the acquisitions of the fee interest in Virginia Gateway in May 2024 and Pinole Vista Crossing in July 2024, and
•$44.6 million increase in capital expenditures,
partially offset by,
•a $205.7 million increase in net proceeds from the sale of real estate primarily due to $305.6 million of net proceeds from the sale of a residential building at both Santana Row and Pike & Rose, our Hollywood Boulevard and Bristol properties, and a portion of our White Marsh Other property in 2025, as compared to $99.9 million of net proceeds from the sale of Third Street Promenade and a portion of our White Marsh Other property in 2024.
Net cash used in financing activities decreased $355.3 million to $103.0 million provided by financing activities during 2025 from $252.3 million used in financing activities during 2024. The decrease was primarily attributable to:
•$600.0 million from the January 2024 repayment of our $600.0 million 3.95% senior unsecured notes at maturity,
•$310.0 million in borrowings on our revolving credit facility at December 31, 2025,
•$145.0 million in net proceeds from our unsecured term loan in 2025,
•a $19.4 million premium paid for the capped call transactions entered into in connection with the issuance of $485.0 million 3.25% exchangeable senior notes in January 2024, and
•$14.4 million in net proceeds from the refinance of the $40.0 million loan at Azalea, with a new $55.0 million mortgage loan (see Note 5 to the consolidated financial statements for additional information),
partially offset by
•$471.5 million in net proceeds from the issuance of $485.0 million 3.25% exchangeable senior notes in January 2024,
•a $249.6 million decrease in net proceeds from the issuance of common shares under our ATM program, and
•a $16.5 million increase in dividends paid to common and preferred shareholders due to an increase in the number of outstanding shares, as well as an increase to the common share dividend rate.
Cash Requirements
The following table provides a summary of material cash requirements comprising our fixed, noncancelable obligations as of December 31, 2025:
| Cash Requirements by Period | |||||||||||||||||
| Total | Next Twelve Months | Greater than Twelve Months | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Fixed and variable rate debt (principal only) (1) | $ | 4,963,602 | $ | 655,595 | $ | 4,308,007 | |||||||||||
| Fixed and variable rate debt - our share of unconsolidated real estate partnerships (principal only)(2) | 62,384 | 378 | 62,006 | ||||||||||||||
| Lease obligations (minimum rental payments) (3) | 281,338 | 6,331 | 275,007 | ||||||||||||||
| Redevelopments/capital expenditure contracts | 314,158 | 238,613 | 75,545 | ||||||||||||||
| Real estate commitments (4) | 10,438 | 2,500 | 7,938 | ||||||||||||||
| Total estimated cash requirements | $ | 5,631,920 | $ | 903,417 | $ | 4,728,503 | |||||||||||
_____________________
(1)The weighted average interest rate on our fixed and variable rate debt is 3.8% as of December 31, 2025. Of the $655.6 million of debt maturing in the next twelve months as of December 31, 2025, $200.0 million is our mortgage loan secured by Bethesda Row which has a one-year extension, at our option, to extend the loan to December 2027.
(2)The weighted average interest rate on the fixed and variable rate debt related to our unconsolidated real estate partnerships is 4.79% as of December 31, 2025.
(3)This includes minimum rental payments related to both finance and operating leases.
42
Table of Contents
(4)On January 6, 2026, we purchased the fee interest under one of our ground leases at Bethesda Row for $2.5 million.The total also includes the liability related to the sale under threat of condemnation at San Antonio Center as further discussed in Note 7 to the consolidated financial statements.
In addition to the amounts set forth in the table above and other liquidity requirements previously discussed, the following potential commitments exist:
(a)Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63% interest in Congressional Plaza at the interest’s then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2025, our estimated liability upon exercise of the put option would range from approximately $62 million to $63 million.
(b)Under the terms of various other partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. As of December 31, 2025, a total of 526,915 downREIT operating partnership units are outstanding.
(c)The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1% interest in The Grove at Shrewsbury and approximately 6.5% interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million.
(d)The other member in Hoboken has the right to require us to purchase all of its 10% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $12 million to $13 million.
(e)Effective June 14, 2026, the other member in Camelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million.
(f)Effective October 6, 2027, the other member in the partnership that owns equity method investments in Chandler Festival and Chandler Gateway has the right to require us to purchase its 2.5% net ownership interest. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $1 million and $2 million.
(g)Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 million.
(h)At December 31, 2025, we had letters of credit outstanding of approximately $5.5 million.
Off-Balance Sheet Arrangements
At December 31, 2025, we have four real estate related equity method investments with total debt outstanding of $151.1 million, of which our share is $62.4 million. Our investment in these ventures at December 31, 2025 was $27.9 million.
Other than the items disclosed in the Cash Requirements table, we have no off-balance sheet arrangements as of December 31, 2025 that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements, or capital resources.
43
Table of Contents
Debt Financing Arrangements
The following is a summary of our total debt outstanding as of December 31, 2025:
| Description of Debt | Original Debt Issued | Principal Balance as of December 31, 2025 | Stated Interest Rate as of December 31, 2025 | Maturity Date | ||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Mortgages payable | ||||||||||||||||||||||||||
| Bell Gardens | Acquired | $ | 10,885 | 4.06 | % | August 1, 2026 | ||||||||||||||||||||
| Bethesda Row (1) | 200,000 | 200,000 | SOFR + 0.95% | December 28, 2026 | ||||||||||||||||||||||
| Plaza El Segundo | 125,000 | 125,000 | 3.83 | % | June 5, 2027 | |||||||||||||||||||||
| The Grove at Shrewsbury (East) | 43,600 | 43,600 | 3.77 | % | September 1, 2027 | |||||||||||||||||||||
| Azalea (2)(3) | 55,000 | 55,000 | SOFR + 0.85% | October 30, 2028 | ||||||||||||||||||||||
| Brook 35 | 11,500 | 11,500 | 4.65 | % | July 1, 2029 | |||||||||||||||||||||
| Hoboken (24 Buildings) (4) | 56,450 | 50,568 | SOFR + 1.95% | December 15, 2029 | ||||||||||||||||||||||
| Various Hoboken (12 Buildings) (5) | Acquired | 23,568 | Various | Various through 2029 | ||||||||||||||||||||||
| Chelsea | Acquired | 3,091 | 5.36 | % | January 15, 2031 | |||||||||||||||||||||
| Subtotal | 523,212 | |||||||||||||||||||||||||
| Net unamortized debt issuance costs and discount | (1,453) | |||||||||||||||||||||||||
| Total mortgages payable, net | 521,759 | |||||||||||||||||||||||||
| Notes payable | ||||||||||||||||||||||||||
| Revolving credit facility (2)(7) | (6) | 310,000 | SOFR + 0.775% | April 5, 2027 | ||||||||||||||||||||||
| $750 million term loan (2)(7)(8) | 750,000 | 750,000 | SOFR + 0.85% | March 20, 2028 | ||||||||||||||||||||||
| $250 million term loan (2)(7) | 250,000 | — | SOFR + 0.85% | January 31, 2031 | ||||||||||||||||||||||
| Various | 3,484 | 1,190 | Various | Various through 2059 | ||||||||||||||||||||||
| Subtotal | 1,061,190 | |||||||||||||||||||||||||
| Net unamortized debt issuance costs | (3,859) | |||||||||||||||||||||||||
| Total notes payable, net | 1,057,331 | |||||||||||||||||||||||||
| Senior notes and debentures (7) | ||||||||||||||||||||||||||
| Unsecured fixed rate | ||||||||||||||||||||||||||
| 1.25% notes | 400,000 | 400,000 | 1.25 | % | February 15, 2026 | |||||||||||||||||||||
| 7.48% debentures | 50,000 | 29,200 | 7.48 | % | August 15, 2026 | |||||||||||||||||||||
| 3.25% notes | 475,000 | 475,000 | 3.25 | % | July 15, 2027 | |||||||||||||||||||||
| 6.82% medium term notes | 40,000 | 40,000 | 6.82 | % | August 1, 2027 | |||||||||||||||||||||
| 5.375% notes | 350,000 | 350,000 | 5.375 | % | May 1, 2028 | |||||||||||||||||||||
| 3.25% exchangeable notes | 485,000 | 485,000 | 3.25 | % | January 15, 2029 | |||||||||||||||||||||
| 3.20% notes | 400,000 | 400,000 | 3.20 | % | June 15, 2029 | |||||||||||||||||||||
| 3.50% notes | 400,000 | 400,000 | 3.50 | % | June 1, 2030 | |||||||||||||||||||||
| 4.50% notes | 550,000 | 550,000 | 4.50 | % | December 1, 2044 | |||||||||||||||||||||
| 3.625% notes | 250,000 | 250,000 | 3.625 | % | August 1, 2046 | |||||||||||||||||||||
| Subtotal | 3,379,200 | |||||||||||||||||||||||||
| Net unamortized debt issuance costs and premium | (15,190) | |||||||||||||||||||||||||
| Total senior notes and debentures, net | 3,364,010 | |||||||||||||||||||||||||
| Total debt, net | $ | 4,943,100 | ||||||||||||||||||||||||
_____________________
(1)We have one one-year extension, at our option to extend the maturity date of this mortgage loan to December 28, 2027.
(2)Our Azalea mortgage loan, revolving credit facility SOFR loans, and our term loans bear interest at Daily Simple SOFR, as defined in the respective credit agreements, plus a spread, based on our current credit rating.
(3)The Operating Partnership is a co-borrower on this mortgage loan. Additionally, we have two one-year extensions, at our option to extend the maturity date of this mortgage loan to October 30, 2030.
(4)The interest rate on this mortgage loan is fixed at 3.67% through two interest rate swap agreements.
(5)The interest rates on these mortgages range from 3.91% to 5.00%.
(6)The maximum amount drawn under our $1.25 billion revolving credit facility during 2025 was $461.6 million and the weighted average effective interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 5.0%.
(7)The Operating Partnership is the obligor under our revolving credit facility, term loans, senior notes and debentures. A wholly owned subsidiary of the Operating Partnership is also an obligor of the $750.0 million term loan.
44
Table of Contents
(8)The interest rate on $450.0 million of our term loan is fixed at a weighted average interest rate of 4.17% through March 1, 2028 through interest rate swap agreements.
Our revolving credit facility, unsecured term loans, and other debt agreements include financial and other covenants that may limit our operating activities in the future. As of December 31, 2025, we were in compliance with all financial and other covenants related to our revolving credit facility, term loans, and senior notes. Additionally, we were in compliance with all of the financial and other covenants that could trigger a loan default on our mortgage loans. If we were to breach any of these financial and other covenants and did not cure the breach within an applicable cure period, our lenders could require us to repay the debt immediately and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares. Our organizational documents do not limit the level or amount of debt that we may incur.
The following is a summary of our scheduled principal repayments as of December 31, 2025:
| Unsecured | Secured | Total | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| 2026 | $ | 429,353 | $ | 226,242 | (1) | $ | 655,595 | |||||||||||||
| 2027 | 825,037 | (2) | 178,282 | 1,003,319 | ||||||||||||||||
| 2028 | 1,100,000 | (3) | 57,511 | (4) | 1,157,511 | |||||||||||||||
| 2029 | 885,000 | 60,434 | 945,434 | |||||||||||||||||
| 2030 | 400,000 | 684 | 400,684 | |||||||||||||||||
| Thereafter | 801,000 | 59 | 801,059 | |||||||||||||||||
| $ | 4,440,390 | $ | 523,212 | $ | 4,963,602 | (5) | ||||||||||||||
_____________________
(1)Our $200.0 million mortgage loan secured by Bethesda Row matures on December 28, 2026 plus one one-year extension, at our option to December 28, 2027.
(2)Our $1.25 billion revolving credit facility matures on April 5, 2027 plus two six-month extensions, at our option to April 5, 2028. As of December 31, 2025, there was $310.0 million outstanding under this credit facility.
(3)Our $750.0 million term loan matures on March 20, 2028, plus two one-year extensions at our option to March 20, 2030.
(4)Our $55.0 million mortgage loan secured by Azalea matures on October 30, 2028, plus two one-year extensions at our option to October 30, 2030.
(5)The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2025.
Interest Rate Hedging
We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes.
Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income which is included in "accumulated other comprehensive income" on the balance sheets, statement of shareholders' equity, and statement of capital. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and SOFR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.
45
Table of Contents
At December 31, 2025, we have interest rate swap agreements that effectively fix the rate on the following debt instruments:
| Debt | Notional Amount of Related Swap Agreements | Weighted Average Fixed Rate | Maturity Date of Related Swap Agreements | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Consolidated Debt | ||||||||||||||||||||||||||
| $750 million term loan | $ | 450.0 | 4.17 | % | March 1, 2028 | |||||||||||||||||||||
| Hoboken mortgage loan | $ | 50.6 | 3.67 | % | December 15, 2029 | |||||||||||||||||||||
| Unconsolidated Debt | ||||||||||||||||||||||||||
| Assembly Row Hotel | $ | 37.9 | 6.11 | % | May 30, 2028 | |||||||||||||||||||||
| Chandler Festival | $ | 51.0 | 4.93 | % | October 4, 2030 | |||||||||||||||||||||
| Chandler Gateway | $ | 22.3 | 4.93 | % | October 4, 2030 | |||||||||||||||||||||
All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2025, 2024 and 2023.
REIT Qualification
We intend to maintain our qualification as a REIT under Section 856(c) of the Code. As a REIT, we generally will not be subject to corporate federal income taxes on income we distribute to our shareholders as long as we satisfy certain technical requirements of the Code, including the requirement to distribute at least 90% of our taxable income to our shareholders.
Funds From Operations
Nareit Funds From Operations (“Nareit FFO”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“Nareit”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization, and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute Nareit FFO in accordance with the Nareit definition, and we have historically reported our Nareit FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that Nareit FFO:
•does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income);
•should not be considered an alternative to net income as an indication of our performance; and
•is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends.
We consider Nareit FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use Nareit FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of Nareit FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the Nareit definition used by such REITs.
An increase or decrease in Nareit FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in Nareit FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis.
Core Funds From Operations ("Core FFO") is a supplemental non-GAAP financial measure of performance that adjusts Nareit FFO to exclude the impact of certain items that management considers are not indicative of the Company’s ongoing operating and financial performance. These adjustments include, when applicable, (1) gains or losses on early extinguishment of debt, (2) new market tax credit transaction income, (3) executive transition costs, (4) collection of prior period rents which were contractually deferred or payments renegotiated related to the COVID-19 pandemic, and (5) other items as determined by management. Management believes Core FFO provides enhanced comparability across periods and additional insight into the Company’s underlying operating results, by excluding items that may reflect short-term fluctuations in net income and Nareit
46
Table of Contents
FFO. Core FFO is not intended to be a substitute for net income or Nareit FFO. Comparison of our presentation of Core FFO to similarly titled measures for other REITs may not be meaningful due to possible differences in the way Core FFO is defined or applied by other REITs.
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."
(2)The weighted average common shares used to compute FFO per diluted common share includes shares issuable upon the assumed redemption of outstanding downREIT operating partnership units that were excluded from the computation of diluted EPS. The assumed issuance of shares upon redemption of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for 2024 and 2023.
(3)The $13.0 million net new market tax credit transaction income for the year ended December 31, 2025 is due to the sale of new market tax credits related to Freedom Plaza (see Note 7 to the consolidated financial statements for additional information).
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our use of financial instruments, such as debt instruments, subjects us to market risk which may affect our future earnings and cash flows, as well as the fair value of our assets. Market risk generally refers to the risk of loss from changes in interest rates and market prices. We manage our market risk by attempting to match anticipated inflow of cash from our operating, investing and financing activities with anticipated outflow of cash to fund debt payments, dividends to common and preferred shareholders, investments, capital expenditures and other cash requirements.
47
Table of Contents
We may enter into certain types of derivative financial instruments to further reduce interest rate risk. We use interest rate protection and swap agreements, for example, to convert some of our variable rate debt to a fixed-rate basis or to hedge anticipated financing transactions. We use derivatives for hedging purposes rather than speculation and do not enter into financial instruments for trading purposes.
Interest Rate Risk
The following discusses the effect of hypothetical changes in market rates of interest on interest expense for our variable rate debt and on the fair value of our total outstanding debt, including our fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. Quoted market prices were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. This analysis does not purport to take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure.
Fixed Interest Rate Debt
The majority of our outstanding debt obligations (maturing at various times through 2059) have fixed interest rates which limit the risk of fluctuating interest rates. However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments. At December 31, 2025, we had $4.1 billion of fixed-rate debt outstanding, including $450.0 million of our unsecured term loan and $50.6 million of mortgage payables for which the rate is effectively fixed by interest rate swap agreements. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, 2025 had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately $137.4 million. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, 2025 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $152.9 million.
Variable Interest Rate Debt
Generally, we believe that our primary interest rate risk is due to fluctuations in interest rates on our outstanding variable rate debt. At December 31, 2025, we had $865.0 million of variable rate debt outstanding, comprised of $310.0 million outstanding on our revolving credit facility, $300.0 million of our unsecured term loan, our $200.0 million mortgage loan at Bethesda Row, and our $55.0 million mortgage loan at Azalea. Based upon this amount of variable rate debt and the specific terms, if market interest rates increased 1.0%, our annual interest expense would increase approximately $8.7 million with a corresponding decrease in our net income and cash flows for the year. Conversely, if market interest rates decreased 1.0%, our annual interest expense would decrease by approximately $8.7 million with a corresponding increase in our net income and cash flows for the year.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our consolidated financial statements and supplementary data are included as a separate section of this Annual Report on Form 10-K commencing on page F-1 and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Management's Evaluations of Disclosure Controls and Procedures
The Trust and the Operating Partnership maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Trust and the Operating Partnership's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.
48
Table of Contents
Our management, with the participation of the Trust and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust and the Operating Partnership’s disclosure controls and procedures as of December 31, 2025. Based on that evaluation, the Trust and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, the Trust and the Operating Partnership’s disclosure controls and procedures were effective at a reasonable assurance level.
Management's Evaluations of Internal Control over Financial Reporting
The Trust and the Operating Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Trust and the Operating Partnership’s principal executive and principal financial officers and effected by our Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (GAAP) and includes those policies and procedures that:
•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of our assets;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of management and our Trustees; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of any of our assets in circumstances that could have a material adverse effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
We assessed the effectiveness of the Trust and the Operating Partnership’s internal control over financial reporting as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment and criteria, management concluded that the Trust and the Operating Partnership's internal control over financial reporting was effective as of December 31, 2025.
Grant Thornton LLP, the independent registered public accounting firm that audited the Trust and the Operating Partnership's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust and the Operating Partnership's internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting during our fourth fiscal quarter of 2025 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Recent Legislation. New legislation has been recently enacted that modifies certain disclosures under the heading "Material Federal Income Tax Considerations" contained in prospectuses filed by Federal Realty Investment Trust and/or Federal Realty OP LP under the Securities Act of 1933 prior to the date of this Annual Report. See below for a brief description of these modifications.
•The new legislation permanently extends the ability of non-corporate shareholders to generally deduct 20% of the aggregate amount of ordinary dividends distributed by us, eliminating the previously-scheduled expiration of this deduction at the end of 2025.
•Under the new legislation, as of January 1, 2026, the 20% asset test quarterly limit on the value of our securities in one or more taxable REIT subsidiaries (unless they would otherwise be treated as real estate assets) will increase to 25%.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
49
Table of Contents
50
Table of Contents
PART III
Certain information required in Part III is omitted from this Report but is incorporated herein by reference from our Proxy Statement for the 2026 Annual Meeting of Shareholders (as amended or supplemented, the “Proxy Statement”).
ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The tables and narrative in the Proxy Statement identifying our Trustees and Board committees under the caption “Election of Trustees” and “Corporate Governance”, the sections of the Proxy Statement entitled “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance,” the section of the Proxy Statement entitled "Equity Grant Practices," and other information included in the Proxy Statement required by this Item 10 are incorporated herein by reference.
We have adopted a Code of Ethics, which is applicable to our Chief Executive Officer and senior financial officers. The Code of Ethics is available in the Corporate Governance section of the Investors section of our website at www.federalrealty.com.
We have adopted an insider trading policy and related procedures governing the purchase, sale, and other dispositions of our securities that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations and any NYSE listing standards applicable to us.
ITEM 11. EXECUTIVE COMPENSATION
The sections of the Proxy Statement entitled “Summary Compensation Table,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report,” “Trustee Compensation” and “Compensation Discussion and Analysis” and other information included in the Proxy Statement required by this Item 11 are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The sections of the Proxy Statement entitled “Share Ownership” and “Equity Compensation Plan Information” and other information included in the Proxy Statement required by this Item 12 are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE
The sections of the Proxy Statement entitled “Certain Relationship and Related Transactions” and “Independence of Trustees” and other information included in the Proxy Statement required by this Item 13 are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The sections of the Proxy Statement entitled “Ratification of Independent Registered Public Accounting Firm” and “Relationship with Independent Registered Public Accounting Firm” and other information included in the Proxy Statement required by this Item 14 are incorporated herein by reference.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements | ||
Our consolidated financial statements and notes thereto, together with Reports of Independent Registered Public Accounting Firm are included as a separate section of this Annual Report on Form 10-K commencing on page F-1. | ||
(2) Financial Statement Schedules | ||
Our financial statement schedules are included in a separate section of this Annual Report on Form 10-K commencing on page F-41. | ||
(3) Exhibits | ||
(b) The following documents are filed as exhibits are filed as part of, or incorporated by reference info, this report: | ||
51
Table of Contents
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| 2.1 | Merger Agreement and Plan of Reorganization, dated December 2, 2021, by and among the Predecessor, the Parent Company, and Merger Sub (previously filed as Exhibit 2.1 to the Predecessor's Current Report on Form 8-K filed on December 2, 2021 and incorporated herein by reference) ‡ | |||||||
| 3.1 | Amended and Restated Declaration of Trust of the Parent Company dated January 1, 2022, as amended by the Articles of Amendment effective as of January 1, 2022 and Articles of Amendment effective as of May 4, 2023 (previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on August 2, 2023 and incorporated herein by reference) | |||||||
| 3.2 | Amended and Restated Bylaws of the Parent Company dated January 1, 2022, as amended February 7, 2023 (previously filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on May 4, 2023 and incorporated herein by reference) | |||||||
| 3.3 | Articles of Merger, dated December 8, 2021, by and among Merger Sub and the Predecessor (previously filed as Exhibit 3.4 to the Parent Company's Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference) | |||||||
| 3.4 | Certificate of Limited Partnership of Federal Realty OP LP (previously filed as Exhibit 3.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) | |||||||
| 3.5 | Agreement of Limited Partnership of Federal Realty OP LP, dated as of January 5, 2022, by and between Federal Realty GP LLC and the Parent Company (Previously filed as Exhibit 3.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) | |||||||
| 4.1 | Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference) | |||||||
| 4.2 | † Indenture dated December 1, 1993 related to the Partnership’s 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit 4(a) to the Predecessor’s Registration Statement on Form S-3, and amended on Form S-3, filed on December 13, 1993 and incorporated herein by reference) ‡ | |||||||
| 4.3 | † Indenture dated September 1, 1998 related to the Partnership’s 2.75% Notes due 2023; 3.95% Notes due 2024; 4.50% Notes due 2044; 2.55% Notes due 2021; 3.625% Notes due 2046; 3.25% Notes due 2027; 3.20% Notes due 2029; 3.50% Notes due 2030; 1.25% Notes due 2026 (previously filed as Exhibit 4(a) to the Predecessor’s Registration Statement on Form S-3 filed on September 17, 1998 and incorporated herein by reference) ‡ | |||||||
| 4.4 | † First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated December 1, 1993 related to the Partnership's 7.48% Debentures due August 15, 2026 and 6.82% Medium Term Notes due August 1, 2027 (previously filed as Exhibit 4.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) | |||||||
| 4.5 | † First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated September 1, 1998 related to the Partnership's 2.75% Notes due 2023; 3.95% Notes due 2024; 4.50% Notes due 2044; 2.55% Notes due 2021; 3.625% Notes due 2046; 3.25% Notes due 2027; 3.20% Notes due 2029; 3.50% Notes due 2030; 1.25% Notes due 2026; 5.375% Notes due 2028 (previously filed as Exhibit 4.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) | |||||||
| 4.6 | Deposit Agreement, dated as of September 29, 2017, by and among Federal Realty Investment Trust, Equiniti Trust Company, LLC (successor to American Stock Transfer and Trust Company, LLC), as Depositary, and all holders from time to time of Receipt (previously filed as Exhibit 4.1 to the Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference) | |||||||
| 4.7 | Specimen certificate relating to the 5.000% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.3 to the Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference) | |||||||
| 4.8 | † Indenture dated January 11, 2024 related to the 3.25% Exchangeable Senior Notes due 2029, by and between Federal Realty OP LP and U.S. Bank National Association (previously filed as Exhibit 4.1 to our current report on Form 8-K filed on January 11, 2023 and incorporated herein by reference) | |||||||
| 4.9 | Description of Securities (previously filed as Exhibit 4.9 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference) | |||||||
| 10.1 | * Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "1999 1Q Form 10-Q") and incorporated herein by reference) | |||||||
52
Table of Contents
| Exhibit No. | Description | |||||||
| 10.2 | * Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Predecessor's 1999 1Q Form 10-Q and incorporated herein by reference) | |||||||
| 10.3 | * Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2004 (the “2004 Form 10-K”) and incorporated herein by reference) | |||||||
| 10.4 | * Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the Predecessor's 2004 Form 10-K and incorporated herein by reference) | |||||||
| 10.5 | * Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Predecessor’s 2005 2Q Form 10-Q and incorporated herein by reference) | |||||||
| 10.6 | * Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the Predecessor's 2004 Form 10-K and incorporated herein by reference) | |||||||
| 10.7 | Form of Restricted Share Award Agreement for long term vesting and retention awards for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2010 (the "2010 Form 10-K") and incorporated herein by reference) | |||||||
| 10.8 | * Amendment to Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.26 to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2008 (“the 2008 Form 10-K”) and incorporated herein by reference) | |||||||
| 10.9 | * Second Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.27 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) | |||||||
| 10.10 | * Amendment to Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.28 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) | |||||||
| 10.11 | * Second Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated January 1, 2009 (previously filed as Exhibit 10.30 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) | |||||||
| 10.12 | 2010 Performance Incentive Plan (previously filed as Appendix A to the Predecessor’s Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference) | |||||||
| 10.13 | Amendment to 2010 Performance Incentive Plan (“the 2010 Plan”) (previously filed as Appendix A to the Predecessor’s Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference) | |||||||
| 10.14 | Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.34 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference) | |||||||
| 10.15 | Revised Form of Restricted Share Award Agreement for front loaded awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K") and incorporated herein by reference) | |||||||
| 10.16 | Revised Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.36 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) | |||||||
| 10.17 | Revised Form of Performance Share Award Agreement for shares awarded out of the 2010 Plan (previously filed as Exhibit 10.37 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) | |||||||
| 10.18 | Revised Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) | |||||||
| 10.19 | Severance Agreement between Federal Realty Investment Trust and Daniel Guglielmone dated August 15, 2016 (previously filed as Exhibit 10.36 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and incorporated herein by reference) | |||||||
| 10.20 | 2020 Performance Incentive Plan (previously filed as Appendix B to the Predecessor’s Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders and incorporated herein by reference) | |||||||
53
Table of Contents
| Exhibit No. | Description | |||||||
| 10.21 | Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust's Long-Term Incentive Award Program and the Trust's Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out the 2020 Plan (previously filed as Exhibit 10.32 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021 and incorporated herein by reference) | |||||||
| 10.22 | Form of Option Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.33 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) | |||||||
| 10.23 | Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.34 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) | |||||||
| 10.24 | Form of Performance Share Award Agreement for shares awarded out of the 2020 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on From 10-K, filed on February 11, 2021, and incorporated herein by reference) | |||||||
| 10.25 | Form of Option Award Agreement for basic options awarded out of the 2020 Plan (previously filed as Exhibit 10.36 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) | |||||||
| 10.26 | Omnibus Assignment, Assumption and Amendment entered into between the Predecessor and the Parent Company (previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on January 3, 2022 and incorporated herein by reference) | |||||||
| 10.27 | Second Amended and Restated Credit Agreement, dated as of October 5, 2022, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on October 11, 2022 and incorporated herein by reference) | |||||||
| 10.28 | First Amendment to Second Amended and Restated Credit Agreement, dated as of August 25, 2023, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed a Exhibit 10.34 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference) | |||||||
| 10.29 | Second Amendment to Second Amended and Restated Credit Agreement, dated as of January 2, 2024, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed a Exhibit 10.36 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated herein by reference) | |||||||
| 10.30 | Registration Rights Agreement dated January 11, 2024 among the Issuer, the Parent and the Representatives (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K filed on January 11, 2024 and incorporated herein by reference) | |||||||
| 10.31 | Third Amendment to Second Amended and Restated Credit Agreement, dated as of March 14, 2024, by and among the Partnership, as borrower, each of the lenders arty thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed as Exhibit 10.1 to the Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference) | |||||||
| 10.32 | ₸ Consulting Agreement between Federal Realty OP LP and Jeffrey S. Berkes, dated January 1, 2025 (previously filed as Exhibit 10.40 to the Trust's Annual Report on Form 10-K, filed on February 13, 2025 and incorporated here by reference) | |||||||
| 10.33 | Amended and Restated Term Loan Agreement, dated as of March 20, 2025, by and among the Partnership, FRIT San Jose Town and Country Village, LLC, the financial institutions party thereto, as Lenders, PNC Bank, National Association, as Administrative Agent, and the other parties thereto (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K file on March 21, 2025 and incorporated by reference) | |||||||
| 10.34 | First Amendment to Severance Agreement dated as of May 7, 2025, by and between Federal Realty Investment Trust and Daniel Guglielmone (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K filed on May 9, 2025 and incorporated herein by reference) | |||||||
| 10.35 | Term Loan Agreement dated as of November 17, 2025, by and among the Partnership, as Borrower, the financial institutions party thereto as Lenders, Truist Bank, as Administrative Agent, Bank of America, N.A and Mizuho Bank LTD., as Co-Syndication Agents, each of Truist Securities, Inc., BOA Securities, Inc., and Mizuho Bank LTD., as Joint Lead Arrangers and and Truist Securities, Inc., as Sole Book Manager (previously filed as Exhibit 10.1 to the Trust's Current Report on Form 8-K, filed on November 20, 2025 and incorporated herein by reference) | |||||||
| 19.1 | Policy on Insider Information and Trading in Federal Realty Shares and other Securities (previously filed as Exhibit 19.1 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference) | |||||||
54
Table of Contents
| Exhibit No. | Description | |||||||||||||
| 21.1 | Subsidiaries of Federal Realty Investment Trust and Federal Realty OP LP (filed herewith) | |||||||||||||
| 23.1 | Consent of Grant Thornton LLP (filed herewith) | |||||||||||||
| 31.1 | Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith) | |||||||||||||
| 31.2 | Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith) | |||||||||||||
| 31.3 | Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith) | |||||||||||||
| 31.4 | Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith) | |||||||||||||
| 32.1 | Section 1350 Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith) | |||||||||||||
| 32.2 | Section 1350 Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith) | |||||||||||||
| Exhibit No. | Description | |||||||||||||
| 32.3 | Section 1350 Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith) | |||||||||||||
| 32.4 | Section 1350 Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith) | |||||||||||||
| 97 | Federal Realty Investment Trust and Federal Realty OP LP Clawback Policy (previously filed as Exhibit 97 to the Trust's Annual Report on Form 10-K, filed on February 12, 2024 and incorporated here by reference) | |||||||||||||
| 101 | The following materials from this Annual Report on Form 10-K for the year ended December 31, 2025, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged. | |||||||||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |||||||||||||
_____________________
* Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.
† Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust and the Partnership by this filing agree, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust and the Partnership.
‡ In this Exhibit Index, the term "Predecessor" refers to Federal Realty Investment Trust before the effectiveness of our UPREIT conversion as described in our Current Reports on Form 8-K filed on January 3 and 5, 2022. Upon completion of the UPREIT conversion, the Partnership became the successor to the Predecessor's rights and obligations under this instrument.
₸ Portions of this exhibit have been redacted because (i) the registrants customarily and actually treat that information as private or confidential and (ii) the omitted information is not material.
ITEM 16. FORM 10-K SUMMARY
None.
55
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, each of the Registrants have duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February 12, 2026.
| Federal Realty Investment Trust | |||||
| Federal Realty OP LP | |||||
| By: | /S/ DONALD C. WOOD | ||||
| Donald C. Wood Chief Executive Officer and Trustee | |||||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of each of the Registrants and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of Donald C. Wood and Dawn M. Becker as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof.
| Signature | Title | Date | ||||||||||||
| /S/ DONALD C. WOOD | Chief Executive Officer and Trustee | February 12, 2026 | ||||||||||||
| Donald C. Wood | (Principal Executive Officer) | |||||||||||||
| /S/ DANIEL GUGLIELMONE | Executive Vice President - Chief Financial | February 12, 2026 | ||||||||||||
| Daniel Guglielmone | Officer and Treasurer (Principal | |||||||||||||
| Financial and Accounting Officer) | ||||||||||||||
| /S/ DAVID W. FAEDER | Non -Executive Chairman | February 12, 2026 | ||||||||||||
| David W. Faeder | ||||||||||||||
/S/ JOSEPH D. FISHER | Trustee | February 12, 2026 | ||||||||||||
| Joseph D. Fisher | ||||||||||||||
/S/ ELIZABETH I. HOLLAND | Trustee | February 12, 2026 | ||||||||||||
| Elizabeth I. Holland | ||||||||||||||
| /S/ NICOLE Y. LAMB-HALE | Trustee | February 12, 2026 | ||||||||||||
| Nicole Y. Lamb-Hale | ||||||||||||||
| /S/ THOMAS A. MCEACHIN | Trustee | February 12, 2026 | ||||||||||||
| Thomas A. McEachin | ||||||||||||||
| /S/ ANTHONY P. NADER, III | Trustee | February 12, 2026 | ||||||||||||
| Anthony P. Nader, III | ||||||||||||||
| /S/ GAIL P. STEINEL | Trustee | February 12, 2026 | ||||||||||||
| Gail P. Steinel | ||||||||||||||
56
Table of Contents
Item 8 and Item 15(a)(1) and (2)
Index to Consolidated Financial Statements and Schedules
| Page No. | |||||
Report of Independent Registered Public Accounting Firm ( PCAOB ID Number | F-2 | ||||
| Federal Realty Investment Trust: | |||||
| Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-8 | ||||
| Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023 | F-9 | ||||
| Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023 | F-10 | ||||
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 | F-11 | ||||
| Federal Realty OP LP: | |||||
| Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-12 | ||||
| Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023 | F-13 | ||||
| Consolidated Statements of Capital for the Years Ended December 31, 2025, 2024, and 2023 | F-14 | ||||
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 | F-15 | ||||
| Notes to Consolidated Financial Statements | F-16 | ||||
| Financial Statement Schedules | |||||
| Schedule III—Summary of Real Estate and Accumulated Depreciation | F-41 | ||||
| Schedule IV—Mortgage Loans on Real Estate | F-49 | ||||
All other schedules have been omitted either because the information is not applicable, not material, or is disclosed in our consolidated financial statements and related notes.
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
Trustees and Shareholders
Federal Realty Investment Trust
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Trust as of and for the year ended December 31, 2025, and our report dated February 12, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
February 12, 2026
F-2
Table of Contents
Report of Independent Registered Public Accounting Firm
Trustees and Shareholders
Federal Realty Investment Trust
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Trust’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 12, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Lease Collectibility Assessment
In order to recognize rental income on an accrual basis, the Trust must determine whether substantially all the rents due under a lease arrangement are collectible. If the Trust reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental income under that arrangement can only be recognized when cash payment from the tenant is received.
Significant judgment is exercised by the Trust when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures:
•Creditworthiness of the tenant
•Current economic conditions
•Historical experience with the tenant and other tenants operating in the same industry
Our audit procedures related to the collectibility assessment included the following:
•We tested the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.
F-3
Table of Contents
•We evaluated management’s accounting policies related to this assessment.
•We verified the completeness of the population of tenants that management evaluated.
•We researched recent publicly available information, including information for a selection of tenants with the highest rental income recognized in the year ended December 31, 2025, such as bankruptcy filings, industry journals, and periodicals, and for any of the Trust’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.
•For a selection of tenant receivables where collectibility was deemed as probable, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection:
◦Verified that management’s accounting policies related to the collectibility assessment were followed.
◦Inspected documentation from management such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached.
◦Recalculated the aging using supporting documentation.
◦Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment.
/s/ GRANT THORNTON LLP
We have served as the Trust’s auditor since 2002.
February 12, 2026
F-4
Table of Contents
Report of Independent Registered Public Accounting Firm
Trustees and Unitholders
Federal Realty OP LP
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the “Operating Partnership”) as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Operating Partnership as of and for the year ended December 31, 2025, and our report dated February 12, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
February 12, 2026
F-5
Table of Contents
Report of Independent Registered Public Accounting Firm
Trustees and Unitholders
Federal Realty OP LP
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the "Operating Partnership") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Operating Partnership’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 12, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Lease Collectibility Assessment
In order to recognize rental income on an accrual basis, the Operating Partnership must determine whether substantially all the rents due under a lease arrangement are collectible. If the Operating Partnership reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental income under that arrangement can only be recognized when cash payment from the tenant is received.
Significant judgment is exercised by the Operating Partnership when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures:
•Creditworthiness of the tenant
•Current economic conditions
•Historical experience with the tenant and other tenants operating in the same industry
Our audit procedures related to the collectibility assessment included the following:
F-6
Table of Contents
•We tested the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.
•We evaluated management’s accounting policies related to this assessment.
•We verified the completeness of the population of tenants that management evaluated.
•We researched recent publicly available information, including information for a selection of tenants with the highest rental income recognized in the year ended December 31, 2025, such as bankruptcy filings, industry journals, and periodicals, and for any of the Operating Partnership’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.
•For a selection of tenants where collectibility was deemed as probable, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection:
◦Verified that management’s accounting policies related to the collectibility assessment were followed.
◦Inspected documentation from management such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached.
◦Recalculated the aging using supporting documentation.
◦Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment.
/s/ GRANT THORNTON LLP
We have served as the Operating Partnership's auditor since 2022.
February 12, 2026
F-7
Table of Contents
Federal Realty Investment Trust
Consolidated Balance Sheets
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands, except share and per share data) | |||||||||||
| ASSETS | |||||||||||
| Real estate, at cost | |||||||||||
Operating (including $ | $ | $ | |||||||||
Construction-in-progress (including $ | |||||||||||
Less accumulated depreciation and amortization (including $ | ( | ( | |||||||||
| Net real estate | |||||||||||
| Cash and cash equivalents | |||||||||||
| Accounts and notes receivable, net | |||||||||||
| Mortgage notes receivable, net | |||||||||||
| Investment in partnerships | |||||||||||
| Operating lease right of use assets, net | |||||||||||
| Finance lease right of use assets, net | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Liabilities | |||||||||||
Mortgages payable, net (including $ | $ | $ | |||||||||
| Notes payable, net | |||||||||||
| Senior notes and debentures, net | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| Dividends payable | |||||||||||
| Security deposits payable | |||||||||||
| Operating lease liabilities | |||||||||||
| Finance lease liabilities | |||||||||||
| Other liabilities and deferred credits | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 7) | |||||||||||
| Redeemable noncontrolling interests | |||||||||||
| Shareholders’ equity | |||||||||||
Preferred shares, authorized | |||||||||||
Common shares of beneficial interest, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated dividends in excess of net income | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total shareholders’ equity of the Trust | |||||||||||
| Noncontrolling interests | |||||||||||
| Total shareholders’ equity | |||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated statements.
F-8
Table of Contents
Federal Realty Investment Trust
Consolidated Statements of Comprehensive Income
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| REVENUE | |||||||||||||||||
| Rental income | $ | $ | $ | ||||||||||||||
| Other property income | |||||||||||||||||
| Mortgage interest income | |||||||||||||||||
| Total revenue | |||||||||||||||||
| EXPENSES | |||||||||||||||||
| Rental expenses | |||||||||||||||||
| Real estate taxes | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| New market tax credit transaction income | |||||||||||||||||
| Gain on sale of real estate | |||||||||||||||||
| Impairment charge | ( | ||||||||||||||||
| OPERATING INCOME | |||||||||||||||||
| OTHER INCOME/(EXPENSE) | |||||||||||||||||
| Other interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||
| Income from partnerships | |||||||||||||||||
| NET INCOME | |||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO THE TRUST | |||||||||||||||||
| Dividends on preferred shares | ( | ( | ( | ||||||||||||||
| NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ | $ | $ | ||||||||||||||
| EARNINGS PER COMMON SHARE, BASIC | |||||||||||||||||
| Net income available for common shareholders | $ | $ | $ | ||||||||||||||
| Weighted average number of common shares | |||||||||||||||||
| EARNINGS PER COMMON SHARE, DILUTED | |||||||||||||||||
| Net income available for common shareholders | $ | $ | $ | ||||||||||||||
| Weighted average number of common shares | |||||||||||||||||
| NET INCOME | $ | $ | $ | ||||||||||||||
| Other comprehensive (loss) income - change in value of interest rate swaps | ( | ( | |||||||||||||||
| COMPREHENSIVE INCOME | |||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-9
Table of Contents
Federal Realty Investment Trust
Consolidated Statement of Shareholders’ Equity
| Shareholders’ Equity of the Trust | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred Shares | Common Shares | Additional Paid-in Capital | Accumulated Dividends in Excess of Net Income | Accumulated Other Comprehensive Income (loss) | Noncontrolling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income, excluding $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss - change in value of interest rate swaps, excluding $ | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to common shareholders ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared to preferred shareholders | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests, excluding $ | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under dividend reinvestment plan | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares withheld for employee taxes | — | — | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net income, excluding $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income - change in value of interest rate swaps, excluding $ | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to common shareholders ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared to preferred shareholders | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend equivalent rights | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests, excluding $ | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under dividend reinvestment plan | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares withheld for employee taxes | — | — | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of capped calls | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | — | — | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net income, excluding $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss - change in value of interest rate swaps, excluding $ | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared to common shareholders ($ | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared to preferred shareholders | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests, excluding $ | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares issued, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued under dividend reinvestment plan | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares withheld for employee taxes | — | — | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-10
Table of Contents
Federal Realty Investment Trust
Consolidated Statements of Cash Flows
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Gain on sale of real estate | ( | ( | ( | ||||||||||||||
| Income from partnerships | ( | ( | ( | ||||||||||||||
| New market tax credit transaction income | ( | ||||||||||||||||
| Straight-line rent | ( | ( | ( | ||||||||||||||
| Share-based compensation expense | |||||||||||||||||
| Impairment charge | |||||||||||||||||
| Other, net | ( | ( | ( | ||||||||||||||
| Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||||||||
| Decrease (increase) in accounts receivable, net | ( | ||||||||||||||||
| Increase in prepaid expenses and other assets | ( | ( | ( | ||||||||||||||
| Increase in accounts payable and accrued expenses | |||||||||||||||||
| Increase in security deposits and other liabilities | |||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||
| Acquisition of real estate | ( | ( | ( | ||||||||||||||
| Capital expenditures - development and redevelopment | ( | ( | ( | ||||||||||||||
| Capital expenditures - other | ( | ( | ( | ||||||||||||||
| Costs associated with property sold under threat of condemnation | ( | ( | |||||||||||||||
| Proceeds from sale of real estate | |||||||||||||||||
| Investment in partnerships | ( | ||||||||||||||||
| Distribution from partnerships in excess of earnings | |||||||||||||||||
| Leasing costs | ( | ( | ( | ||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||
| Net borrowings under revolving credit facility | |||||||||||||||||
| Issuance of senior notes, net of costs | |||||||||||||||||
| Repayment of senior notes | ( | ( | |||||||||||||||
| Issuance and extension of mortgages and notes payable, net of costs | ( | ||||||||||||||||
| Repayment of mortgages, finance leases, and notes payable | ( | ( | ( | ||||||||||||||
| Purchase of capped calls | ( | ||||||||||||||||
| Issuance of common shares, net of costs | |||||||||||||||||
| Dividends paid to common and preferred shareholders | ( | ( | ( | ||||||||||||||
| Shares withheld for employee taxes | ( | ( | ( | ||||||||||||||
| Contributions from noncontrolling interests | |||||||||||||||||
| Distributions to and acquisition/redemptions of noncontrolling interests | ( | ( | ( | ||||||||||||||
| Net cash provided by (used in) financing activities | ( | ( | |||||||||||||||
| (Decrease) increase in cash, cash equivalents, and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | |||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of year | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-11
Table of Contents
Federal Realty OP LP
Consolidated Balance Sheets
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands, except unit data) | |||||||||||
| ASSETS | |||||||||||
| Real estate, at cost | |||||||||||
Operating (including $ | $ | $ | |||||||||
Construction-in-progress (including $ | |||||||||||
Less accumulated depreciation and amortization (including $ | ( | ( | |||||||||
| Net real estate | |||||||||||
| Cash and cash equivalents | |||||||||||
| Accounts and notes receivable, net | |||||||||||
| Mortgage notes receivable, net | |||||||||||
| Investment in partnerships | |||||||||||
| Operating lease right of use assets, net | |||||||||||
| Finance lease right of use assets, net | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| LIABILITIES AND CAPITAL | |||||||||||
| Liabilities | |||||||||||
Mortgages payable, net (including $ | $ | $ | |||||||||
| Notes payable, net | |||||||||||
| Senior notes and debentures, net | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| Dividends payable | |||||||||||
| Security deposits payable | |||||||||||
| Operating lease liabilities | |||||||||||
| Finance lease liabilities | |||||||||||
| Other liabilities and deferred credits | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 7) | |||||||||||
| Redeemable noncontrolling interests | |||||||||||
| Partner capital | |||||||||||
Preferred units, | |||||||||||
Common units, | |||||||||||
| Accumulated other comprehensive income | |||||||||||
| Total partner capital | |||||||||||
| Noncontrolling interests in consolidated partnerships | |||||||||||
| Total capital | |||||||||||
| TOTAL LIABILITIES AND CAPITAL | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated statements.
F-12
Table of Contents
Federal Realty OP LP
Consolidated Statements of Comprehensive Income
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands, except per unit data) | |||||||||||||||||
| REVENUE | |||||||||||||||||
| Rental income | $ | $ | $ | ||||||||||||||
| Other property income | |||||||||||||||||
| Mortgage interest income | |||||||||||||||||
| Total revenue | |||||||||||||||||
| EXPENSES | |||||||||||||||||
| Rental expenses | |||||||||||||||||
| Real estate taxes | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| New market tax credit transaction income | |||||||||||||||||
| Gain on sale of real estate | |||||||||||||||||
| Impairment charge | ( | ||||||||||||||||
| OPERATING INCOME | |||||||||||||||||
| OTHER INCOME/(EXPENSE) | |||||||||||||||||
| Other interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||
| Income from partnerships | |||||||||||||||||
| NET INCOME | |||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP | |||||||||||||||||
| Dividends on preferred units | ( | ( | ( | ||||||||||||||
| NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS | $ | $ | $ | ||||||||||||||
| EARNINGS PER COMMON UNIT, BASIC | |||||||||||||||||
| Net income available for common unit holders | $ | $ | $ | ||||||||||||||
| Weighted average number of common units | |||||||||||||||||
| EARNINGS PER COMMON UNIT, DILUTED | |||||||||||||||||
| Net income available for common unit holders | $ | $ | $ | ||||||||||||||
| Weighted average number of common units | |||||||||||||||||
| NET INCOME | $ | $ | $ | ||||||||||||||
| Other comprehensive (loss) income - change in value of interest rate swaps | ( | ( | |||||||||||||||
| COMPREHENSIVE INCOME | |||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-13
Table of Contents
Federal Realty OP LP
Consolidated Statements of Capital
| Preferred Units | Common Units | Accumulated Other Comprehensive (Loss) Income | Total Partner Capital | Noncontrolling Interests in Consolidated Partnerships | Total Capital | |||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income, excluding $ | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss - change in fair value of interest rate swaps, excluding $ | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distributions declared to common unit holders | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distributions declared to preferred unit holders | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Common units issued as a result of common stock issued by Parent Company, net of issuance costs | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units issued under dividend reinvestment plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units withheld for employee taxes | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | — | ( | |||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income, excluding $ | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive income - change in fair value of interest rate swaps, excluding $ | — | — | — | |||||||||||||||||||||||||||||||||||
| Distributions declared to common unit holders | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distributions declared to preferred unit holders | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distribution equivalent rights | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Common units issued as a result of common stock issued by Parent Company, net of issuance costs | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units issued under dividend reinvestment plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units withheld for employee taxes | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Purchase of capped calls | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interest | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | — | — | |||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Net income, excluding $ | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss - change in fair value of interest rate swaps, excluding $ | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distributions declared to common unit holders | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Distributions declared to preferred unit holders | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Common units issued as a result of common stock issued by Parent Company, net of issuance costs | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units issued under dividend reinvestment plan | — | — | — | |||||||||||||||||||||||||||||||||||
| Share-based compensation expense, net of forfeitures | — | — | — | |||||||||||||||||||||||||||||||||||
| Common units withheld for employee taxes | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Conversion and redemption of downREIT OP units | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Adjustment to redeemable noncontrolling interests | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-14
Table of Contents
Federal Realty OP LP
Consolidated Statements of Cash Flows
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Gain on sale of real estate | ( | ( | ( | ||||||||||||||
| Income from partnerships | ( | ( | ( | ||||||||||||||
| New market tax credit transaction income | ( | ||||||||||||||||
| Straight-line rent | ( | ( | ( | ||||||||||||||
| Share-based compensation expense | |||||||||||||||||
| Impairment charge | |||||||||||||||||
| Other, net | ( | ( | ( | ||||||||||||||
| Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||||||||
| Decrease (increase) in accounts receivable, net | ( | ||||||||||||||||
| Increase in prepaid expenses and other assets | ( | ( | ( | ||||||||||||||
| Increase in accounts payable and accrued expenses | |||||||||||||||||
| Increase in security deposits and other liabilities | |||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||
| Acquisition of real estate | ( | ( | ( | ||||||||||||||
| Capital expenditures - development and redevelopment | ( | ( | ( | ||||||||||||||
| Capital expenditures - other | ( | ( | ( | ||||||||||||||
| Costs associated with property sold under threat of condemnation | ( | ( | |||||||||||||||
| Proceeds from sale of real estate | |||||||||||||||||
| Investment in partnerships | ( | ||||||||||||||||
| Distribution from partnerships in excess of earnings | |||||||||||||||||
| Leasing costs | ( | ( | ( | ||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||
| Net borrowings under revolving credit facility | |||||||||||||||||
| Issuance of senior notes, net of costs | |||||||||||||||||
| Repayment of senior notes | ( | ( | |||||||||||||||
| Issuance and extension of mortgages and notes payable, net of costs | ( | ||||||||||||||||
| Repayment of mortgages, finance leases, and notes payable | ( | ( | ( | ||||||||||||||
| Purchase of capped calls | ( | ||||||||||||||||
| Issuance of common units, net of costs | |||||||||||||||||
| Dividends paid to common and preferred unit holders | ( | ( | ( | ||||||||||||||
| Common units withheld for employee taxes | ( | ( | ( | ||||||||||||||
| Contributions from noncontrolling interests | |||||||||||||||||
| Distributions to and acquisition/redemptions of noncontrolling interests | ( | ( | ( | ||||||||||||||
| Net cash provided by (used in) financing activities | ( | ( | |||||||||||||||
| (Decrease) increase in cash, cash equivalents, and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | |||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of year | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated statements.
F-15
Table of Contents
Federal Realty Investment Trust
Federal Realty OP LP
Notes to Consolidated Financial Statements
December 31, 2025, 2024 and 2023
NOTE 1—BUSINESS AND ORGANIZATION
Federal Realty Investment Trust (the “Parent Company” and "Trust") is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operating and owns all of its assets. The Parent Company owns 100 % of the limited liability company interests of, is sole member of, and exercises control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole general partner of the Operating Partnership. The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. Our properties are located in major coastal markets and select underserved markets that we believe have strong economic and demographic fundamentals. As of December 31, 2025, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects.
We operate in a manner intended to enable the Trust to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90 % of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders.
General Economic Conditions
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
As discussed in the Explanatory Note, we have combined the Annual Reports on Form 10-K of the Parent Company and the Operating Partnership into this single report. As a result, we present two sets of consolidated financial statements. Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to the primary beneficiary of a variable interest entity (“VIE”). The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent, and through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership. The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.
Revenue Recognition and Accounts Receivable
Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. Lease payments are recognized on a straight-line basis from the point in time when the tenant controls the space through the term of the related lease. Variable lease payments relating to percentage rent are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at
F-16
Table of Contents
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. 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. Lease termination fees are generally recognized on the termination date if the tenant has relinquished control of the space. When a lease is terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is generally recognized evenly over the remaining term of the modified lease agreement. Lease concessions are evaluated to determine whether the concession represents a modification of the original lease contract. Modifications generally result in a reassessment of the lease term and lease classification, and remeasurement of lease payments received. Remeasured lease payments are recognized on a straight-line basis over the remaining term of the modified lease contract.
When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income.
As of December 31, 2025 and 2024, our straight-line rent receivables balance was $189.3 million and $164.6 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet.
Other revenue recognition policies
Sales of real estate are recognized upon the transfer of control, which usually occurs when the real estate is legally sold. When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment.
Other property income includes revenue for our Pike & Rose hotel, parking income and other incidental income from the properties and is generally recognized as the performance obligation is met.
Real Estate
Land, buildings and improvements are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range generally from 35 years to a maximum of 50 years on buildings and major improvements. Minor improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 2 to 20 years. Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as incurred. Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter. If a tenant vacates its space prior to contractual termination of its lease, the undepreciated balance of any tenant improvements are written off if they are replaced or have no future value. In 2025, 2024 and 2023, real estate depreciation expense was $319.6 million, $302.4 million and $282.0 million, respectively, including amounts from real estate sold.
Our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and/or appraised values. When we acquire operating real estate properties, the purchase price is allocated to land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, if any, and to current assets acquired and current liabilities assumed, if any. The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the consolidated statements of comprehensive income. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of acquired lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any acquired lease value is written off to rental income.
F-17
Table of Contents
Transaction costs related to asset acquisitions, such as broker fees, transfer taxes, legal, accounting, valuation, and other professional and consulting fees, are capitalized as part of the acquisition cost. The acquisition of an operating shopping center typically qualifies as an asset acquisition.
We capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved, are capitalized. Additionally, we capitalize interest costs related to development and redevelopment activities. Capitalization of these costs begin when the activities and related expenditures commence and cease when the project is substantially complete and ready for its intended use at which time the project is placed in service and depreciation commences. Additionally, we make estimates as to the probability of certain development and redevelopment projects being completed. If we determine the development or redevelopment is no longer probable of completion, we expense all capitalized costs which are not recoverable.
Long-Lived Assets and Impairment
There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value.
The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. During the fourth quarter of 2025, we recognized a $7.4 million impairment charge related to our North Dartmouth property, as a result of an impairment analysis.
Cash and Cash Equivalents
We define cash and cash equivalents as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity, when purchased, under three months. Cash balances in individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation (the “FDIC”). At December 31, 2025, we had $111.9 million in excess of the FDIC insured limit.
Prepaid Expenses and Other Assets
Prepaid expenses and other assets consist primarily of lease costs, prepaid property taxes and acquired above market leases. Capitalized lease costs are incremental direct costs incurred which were essential to originate a successful leasing arrangement and would not have been incurred had the leasing transaction not taken place. These costs include third party commissions related to obtaining a lease. Capitalized lease costs are amortized over the initial life of the related lease which generally ranges from to ten years . We view these lease costs as part of the up-front initial investment we made in order to generate a long-term cash inflow and therefore, we classify cash outflows related to leasing costs as an investing activity in our consolidated statements of cash flows. If a tenant vacates its space prior to the contractual termination of its lease, the unamortized balance of any previously capitalized lease costs are written off.
Debt Issuance Costs
Costs related to the issuance of debt instruments are deferred and are amortized as interest expense over the estimated life of the related issue using the straight-line method which approximates the effective interest method. If a debt instrument is paid off prior to its original maturity date, the unamortized balance of debt issuance costs are written off to interest expense or, if significant, included in “early extinguishment of debt.” Debt issuance costs related to our revolving credit facility and our undrawn $250.0 million unsecured term loan are classified as an asset and are included in "prepaid expenses and other assets" in our consolidated balance sheets. All other debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability.
F-18
Table of Contents
Derivative Instruments
We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes.
Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in accumulated other comprehensive income (loss) on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and SOFR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.
At December 31, 2025, we have interest rate swap agreements that effectively fix the rate on the following debt instruments:
| Debt | Notional Amount of Related Swap Agreements | Weighted Average Fixed Rate | Maturity Date of Related Swap Agreements | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Consolidated Debt | ||||||||||||||||||||||||||
| $750 million term loan | $ | % | March 1, 2028 | |||||||||||||||||||||||
| Hoboken mortgage loan | $ | % | December 15, 2029 | |||||||||||||||||||||||
| Unconsolidated Debt | ||||||||||||||||||||||||||
| Assembly Row Hotel | $ | % | May 30, 2028 | |||||||||||||||||||||||
| Chandler Festival | $ | % | October 4, 2030 | |||||||||||||||||||||||
| Chandler Gateway | $ | % | October 4, 2030 | |||||||||||||||||||||||
All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2025, 2024 and 2023.
Mortgage Notes Receivable
We have invested in certain mortgage loans that, because of their nature, qualify as loan receivables. At the time of investment, we did not intend for the arrangement to be anything other than a financing and did not contemplate a real estate investment. We evaluate each investment to determine whether the loan arrangement qualifies as a loan, joint venture or real estate investment and the appropriate accounting thereon. Such determination affects our balance sheet classification of these investments and the recognition of interest income derived therefrom.
Mortgage notes receivable are recorded at cost, net of any valuation adjustments. We account for mortgage notes receivable using the "expected credit loss" model, and accordingly impairment losses are estimated and recorded for the entire life of the loan. Interest income is accrued as earned. Mortgage notes receivable are considered past due based on the contractual terms of the note agreement. On a quarterly basis, we evaluate the collectability of each mortgage note receivable and update our expected credit loss model based on various factors which may include payment history, expected fair value of the collateral securing the loan, internal and external credit information and/or economic trends. A loan is considered impaired when it is probable that we will be unable to collect all amounts due under the existing contractual terms. When a loan is considered impaired, the amount of the loss accrual is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows. As our loans are collateralized by mortgages, these loans have risk characteristics similar to the risks in owning commercial real estate.
At December 31, 2025, we had three mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments, of $9.1 million, and a weighted average interest rate of 11.0 %. The borrower on two of these mortgage notes receivable is in default. However, we believe the fair value of the property supports the $9.1 million carrying value of our notes.
F-19
Table of Contents
Share Based Compensation
We grant share based compensation awards to employees and trustees typically in the form of restricted common shares, common shares, and options. We measure share based compensation expense based on the grant date fair value of the award and recognize the expense ratably over the requisite service period, which is typically the vesting period. See Note 12 to the consolidated financial statements for further discussion regarding our share based compensation plans and policies.
Variable Interest Entities
Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.
Our equity method investments in the Assembly Row hotel joint venture, the La Alameda shopping center, the Chandler Festival and Chandler Gateway shopping centers, and our mortgage notes receivable are considered variable interests in a VIE. As we do not control the activities that most significantly impact the economic performance of our equity method joint ventures or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate. As of December 31, 2025 and 2024, our investment in the equity method joint ventures and maximum exposure to loss was $27.9 million and $29.4 million, respectively. As of December 31, 2025 and 2024, our investment in mortgage notes receivable and maximum exposure to loss was $9.1
In addition, we have 18 entities that meet the criteria of a VIE in which we hold a variable interest. For each of these entities, we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of the entities. As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for each of these entities, all are consolidated in our financial statements. Net real estate assets related to VIEs included in our consolidated balance sheets were approximately $1.4 194.2 million and $186.6 million, as of December 31, 2025 and 2024, respectively.
Redeemable Noncontrolling Interests
We have certain noncontrolling interests that are redeemable for cash upon the occurrence of an event that is not solely in our control and therefore are classified outside of permanent equity. We adjust the carrying amounts of these noncontrolling interests that are currently redeemable to redemption value at the balance sheet date. Adjustments to the carrying amount to reflect changes in redemption value are recorded as adjustments to additional paid-in capital in shareholders' equity. These amounts are classified within the mezzanine section of the consolidated balance sheets.
The following table provides a rollforward of the redeemable noncontrolling interests:
| Year Ended | |||||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Beginning balance | $ | $ | |||||||||
| Net income | |||||||||||
| Contributions | |||||||||||
| Other comprehensive (loss) income - change in value of interest rate swaps | ( | ||||||||||
| Distributions & redemptions | ( | ( | |||||||||
| Change in redemption value | ( | ||||||||||
| Ending balance | $ | $ | |||||||||
Leases
For operating leases where we are the lessee, the related operating lease right of use ("ROU") assets and lease liabilities are shown separately on the face of our consolidated balance sheet and reflect the present value of the minimum lease payments. A key input in the calculation is the discount rate. As the rate implied in the lease agreements is not readily determinable, we
F-20
Table of Contents
Income Taxes
We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90 % of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.
We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Code”). A TRS is subject to federal and state income taxes. Our TRS activities have not been material.
With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2020. As of December 31, 2025 and 2024, we had no no
Segment Information
Our primary business is the ownership, management, and redevelopment of retail and mixed-use properties. Our chief executive officer is our chief operating decision maker ("CODM"), who regularly reviews operating and financial information for commercial and, as applicable, residential components for each property on an individual basis. As a result, each commercial and, as applicable, residential component for each property represents an individual operating segment. We evaluate financial performance using property operating income ("POI"), a non-GAAP measure which consists of rental income and mortgage interest income, less rental expenses and real estate taxes.
Reconciliation of property operating income to consolidated net income:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Property operating income | $ | $ | $ | ||||||||||||||
| General and administrative expense | ( | ( | ( | ||||||||||||||
| Depreciation and amortization | ( | ( | ( | ||||||||||||||
| New market tax credit transaction income | |||||||||||||||||
| Gain on sale of real estate | |||||||||||||||||
| Impairment charge | ( | ||||||||||||||||
| Other interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ||||||||||||||
| Income from partnerships | |||||||||||||||||
| Net income | |||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| Net income attributable to the Trust | $ | $ | $ | ||||||||||||||
F-21
Table of Contents
reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies and are typically located in major metropolitan areas.
We do not present significant expense disclosures for our reportable segment as operating segment level expenses are not regularly provided to our CODM. However, a breakout of the principal components of rental expense can be found in Note 11 to the consolidated financial statements and real estate tax expense is presented on the face of the consolidated statement of comprehensive income.
We do not present a reconciliation of our reportable segment's assets to consolidated assets, as asset information by operating segment is not used by our CODM to allocate resources and capital or assess performance.
Forward Equity Sales
Our at-the-market (“ATM”) equity program allows shares to be sold through forward sales contracts. Our forward sales contracts currently meet all the conditions for equity classification; and therefore, we record common stock on the settlement date at the purchase price contemplated by the contract. Furthermore, we consider the potential dilution resulting from forward sales contracts in our earnings per share calculations. We use the treasury stock method to determine the dilution, if any, from the forward sales contracts during the period of time prior to settlement. See Note 8 to the consolidated financial statements for details of our forward sales transactions.
Exchangeable Senior Notes
On January 11, 2024, our Operating Partnership issued $485.0 million aggregate principal amount of 3.25 % Exchangeable Senior Notes due 2029 (the "Notes") in a private placement (see Note 5 for additional information). We account for our Notes in accordance with ASC 470-20, Debt with Conversion and Other Options (after the adoption of ASU 2020-06, Debt - Debt and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Contracts in an Entity's Own Equity (ASU 2020-06)). The embedded exchange feature is eligible for an exception from derivative accounting because it is indexed to our own stock and meets the equity classification under ASC 815-40; therefore, the exchange feature is not bifurcated. At each reporting period, we calculate the effect of the Notes on our dilutive earnings per common share and per common unit using the if-converted method. In connection with the Notes, we entered into privately negotiated capital call transactions with certain of the initial purchasers of the notes or their affiliates or other financial institutions. Similar to the exchange feature embedded in the Notes, the capped call transactions meet all the conditions for equity classification, and therefore, the related premiums paid are recorded in shareholders' equity for the Trust and capital for the Operating Partnership.
Recent Accounting Pronouncements
| Standard | Description | Effect on the financial statements or significant matters | ||||||||||||
| Issued in 2025: | ||||||||||||||
ASU 2025-01, January 2025, and ASU 2024-03, November 2024, Income Statement—Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) | This ASU requires the disaggregation of specific natural expense categories within relevant income statement captions. Public business entities are required to provide tabular disclosures which disaggregate expenses such as purchases of inventory, employee compensation, depreciation and amortization. A separate total of an entity's selling expenses is also required, along with the disclosure of how the company determines them. The guidance is required to be applied prospectively, but may be applied retrospectively for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15 2027. Early adoption is permitted. | We are assessing the impact of this ASU on our consolidated financial statements. | ||||||||||||
F-22
Table of Contents
| Standard | Description | Effect on the financial statements or significant matters | ||||||||||||
ASU 2025-09, November 2025, Derivatives and Hedging (Topic 815), Hedge Accounting Improvements | This ASU amends certain aspects of hedge accounting in ASC 815. The main amendments relate to cash flow hedging, but some of the amendments affect certain fair value and net investment hedges. The key changes include: (1) Allows individual forecasted transactions to be hedged in a group if they have similar risk exposure for cash flow hedges. (2) Establishes a model borrowers can use in cash flow hedges of forecasted interest payments on choose-your-rate debt instruments. (3) Expands hedge accounting for forecasted purchases and sales of nonfinancial assets. (4) Eliminates the requirement for the net written option test in certain instances to accommodate differences in the loan and swap markets that resulted from reference rate reform. (5) Eliminates the recognition and presentation mismatch for foreign currency-denominated debt used as both a net investment hedge instrument and a hedged item for interest rate risk. The guidance is applied prospectively for all hedging relationships as of the date of adoption. The guidance applies to all public entities and is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. | We are assessing the impact of this ASU on our consolidated financial statements. | ||||||||||||
ASU 2025-10, December 2025, Government Grants (Topic 832), Accounting for Government Grants Received by Business Entities | This ASU establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 introduces specific recognition thresholds (probability of compliance and receipt) and detailed disclosures, aiming to improve consistency and comparability in financial reporting for grants. The new guidance is effective for public business entities in annual periods beginning after December 15, 2028 (including interim periods within) and one year later for all other entities, with early adoption permitted in any period for which financial statements have not yet been issued. The guidance can be applied on a modified prospective basis, a modified retrospective basis, or a full retrospective basis | We are assessing the impact of this ASU on our consolidated financial statements. | ||||||||||||
ASU 2025-11, December 2025, Interim Reporting (Topic 270), Narrow-Scope Improvements | This ASU clarifies that an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. This ASU also addresses the form and content of such financial statements, adds a comprehensive list of mandatory interim disclosures pulled from other ASC topics, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. The guidance can be applied either prospectively or retrospectively. The guidance applies to all public entities and is effective for interim reporting periods with annual reporting periods after December 15, 2027. Early adoption is permitted. | We are assessing the impact of this ASU on our consolidated financial statements. | ||||||||||||
F-23
Table of Contents
| Standard | Description | Effect on the financial statements or significant matters | ||||||||||||
ASU 2025-12, December 2025, Codification Improvements | This ASU clarifies, corrects errors in and makes improvements to several topics within the FASB Codification. The amendments are part of an ongoing FASB project to make non-substantive technical corrections, clarifications, and improvements to make standards more consistent and easier to interpret for preparers and users. The guidance applies to all public entities and is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. | We do not expect this ASU to have a material impact on our consolidated financial statements. | ||||||||||||
| Issued in 2024: | ||||||||||||||
ASU 2024-04, November 2024, Debt—Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments | This ASU clarifies that to qualify for induced conversion accounting, an inducement offer must preserve the issuance of all of the consideration (in form and amount) issuable in accordance with the conversion privileges specified in the terms of the existing debt instrument. In addition, the ASU requires that to qualify for induced conversion accounting, an instrument must contain a substantive conversion feature as of the date on which both the issuance offer and the inducement offer are accepted by the convertible debt holder. An entity that doesn't meet all of the criteria for conversion accounting or induced conversion accounting applies extinguishment accounting and recognizes a gain or loss for the difference between the fair value of the entire consideration transferred and the net carrying amount of the debt. Entities have the option to apply the guidance either (1) prospectively to settlements of convertible debt instruments that occur during fiscal years (and interim periods within those fiscal years) beginning after the effective date or (2) retrospectively. Under the retrospective transition approach, the entity recasts prior periods and recognizes a cumulative-effect adjustment to equity as of the later of the beginning of the earliest period presented or the date the entity adopted ASU 2020-06. This is effective for all entities for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. | We do not expect this ASU to have a material impact on our consolidated financial statements. | ||||||||||||
| Issued in 2023: | ||||||||||||||
ASU 2023-06, October 2023, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative | This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standard Codification (the "Codification"). The new guidance is intended to align U.S. GAAP requirements with those of the SEC and to facilitate the application of U.S. GAAP for all entities. These disclosure requirements are currently included in either SEC Regulation S-X or SEC Regulation S-K. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited and the amendments should be applied prospectively. If the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K by June 30, 2027, the amendments will be removed from the Codification and will not be effective. | We do not expect this ASU to have a material impact on our consolidated financial statements. | ||||||||||||
F-24
Table of Contents
Consolidated Statements of Cash Flows—Supplemental Disclosures
The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| SUPPLEMENTAL DISCLOSURES: | |||||||||||||||||
| Total interest costs incurred | $ | $ | $ | ||||||||||||||
| Interest capitalized | ( | ( | ( | ||||||||||||||
| Interest expense | $ | $ | $ | ||||||||||||||
| Cash paid for interest, net of amounts capitalized | $ | $ | $ | ||||||||||||||
| Cash paid for income taxes | $ | $ | $ | ||||||||||||||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS: | |||||||||||||||||
| Mortgage loans refinanced | $ | $ | $ | ||||||||||||||
| Shares issued under dividend reinvestment plan | $ | $ | $ | ||||||||||||||
| DownREIT operating partnership units redeemed for common shares | $ | $ | $ | ||||||||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash (1) | |||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | |||||||||
(1)Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets, and is primarily related to escrow accounts.
NOTE 3—REAL ESTATE
2025 Property Acquisitions
During the year ended December 31, 2025, we acquired the following properties:
| Date Acquired | Property | City/State | Gross Leasable Area (GLA) | Purchase Price | |||||||||||||||||||||||||
| (in square feet) | (in millions) | ||||||||||||||||||||||||||||
| February 25, 2025 | Del Monte Shopping Center | Monterey, California | $ | (1) | |||||||||||||||||||||||||
| July 1, 2025 | Town Center Crossing and Town Center Plaza | Leawood, Kansas | $ | (2) | |||||||||||||||||||||||||
| October 10, 2025 | Annapolis Town Center | Annapolis, Maryland | $ | (3) | |||||||||||||||||||||||||
| November 24, 2025 | Village Pointe | Omaha, Nebraska | $ | (4) | |||||||||||||||||||||||||
(1)Approximately $17.7 million and $0.8 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $23.5 million of net assets acquired were allocated to other liabilities for "below market leases."
(2)Approximately $31.0 million and $6.5 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $11.4 million of net assets acquired were allocated to other liabilities for "below market leases."
(3)Approximately $18.0 million and $2.9 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $9.0 million of net assets acquired were allocated to other liabilities for "below market leases."
(4)Approximately $18.1 million and $1.0 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $10.5 million of net assets acquired were allocated to other liabilities for "below market leases."
F-25
Table of Contents
2025 Property Dispositions
During the year ended December 31, 2025, we sold the following properties:
| Property | Sales Price | Gain | |||||||||||||||
| (in millions) | (in millions) | ||||||||||||||||
| Pike & Rose (one residential building) | $ | $ | |||||||||||||||
| Santana Row (one residential building) | |||||||||||||||||
| Hollywood Boulevard | |||||||||||||||||
| Bristol Plaza | |||||||||||||||||
| White Marsh Other (portion) | |||||||||||||||||
| $ | $ | ||||||||||||||||
2024 Property Acquisitions
On May 31, 2024, we acquired the fee interest in Virginia Gateway, which comprises five adjacent shopping centers in Gainesville, Virginia, totaling 664,000 square feet, for $215.0 million. Approximately $21.1 million and $0.4 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $13.3 million of net assets acquired were allocated to other liabilities for "below market leases."
On July 31, 2024, we acquired the fee interest in Pinole Vista Crossing, a 216,000 square foot retail shopping center in Pinole, California for $60.0 million. Approximately $5.7 million of net assets acquired were allocated to other assets for "acquired lease costs," and $4.0 million of net assets acquired were allocated to other liabilities for "below market leases."
2024 Property Disposition
During the year ended December 31, 2024, we sold our Third Street Promenade property and a portion of our White Marsh Other property for sales prices totaling $106.8 million, resulting in a gain on sale of $53.8 million.
NOTE 4—ACQUIRED LEASES
Acquired lease assets comprise of above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities comprise below market leases where we are the lessor and above market leases where we are the lessee. As a lessor, acquired above market leases are included in prepaid expenses and other assets, and acquired below market leases are included in other liabilities and deferred credits. In accordance with our adoption of ASC Topic 842, acquired below market leases and acquired above market leases where we are the lessee are included in right of use assets. The following is a summary of our acquired lease assets and liabilities:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Cost | Accumulated Amortization | Cost | Accumulated Amortization | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Above market leases, lessor | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Below market leases, lessee | ( | ( | |||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Below market leases, lessor | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Above market leases, lessee | ( | ( | |||||||||||||||||||||
| Total | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The value allocated to acquired leases where we are the lessor is amortized over the related lease term and reflected as additional rental income for below market leases or a reduction of rental income for above market leases in the consolidated statements of comprehensive income. The related amortization of acquired leases where we are the lessee is reflected as additional rental expense for below market leases or a reduction of rental expenses for above market leases in the consolidated statements of comprehensive income. The following is a summary of acquired lease amortization:
F-26
Table of Contents
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Amortization of above market leases, lessor | $ | ( | $ | ( | $ | ( | |||||||||||
| Amortization of below market leases, lessor | |||||||||||||||||
| Net increase in rental income | $ | $ | $ | ||||||||||||||
| Amortization of below market leases, lessee | $ | $ | $ | ||||||||||||||
| Amortization of above market leases, lessee | ( | ( | ( | ||||||||||||||
| Net increase in rental expense | $ | $ | $ | ||||||||||||||
The following is a summary of the remaining weighted average amortization period for our acquired lease assets and acquired lease liabilities:
| December 31, 2025 | ||||||||
| Above market leases, lessor | ||||||||
| Below market leases, lessee | ||||||||
| Below market leases, lessor | ||||||||
| Above market leases, lessee | ||||||||
The amortization for acquired leases during the next five years and thereafter, assuming no early lease terminations, is as follows:
| Acquired Lease Assets | Acquired Lease Liabilities | |||||||||||||
| (In thousands) | ||||||||||||||
| Year ending December 31, | ||||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| Thereafter | ||||||||||||||
| $ | $ | |||||||||||||
F-27
Table of Contents
NOTE 5—DEBT
The following is a summary of our total debt outstanding as of December 31, 2025 and 2024:
| Principal Balance as of December 31, | Stated Interest Rate as of | Stated Maturity Date as of | |||||||||||||||||||||||||||
| Description of Debt | 2025 | 2024 | December 31, 2025 | December 31, 2025 | |||||||||||||||||||||||||
| Mortgages payable | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Bell Gardens | $ | $ | % | August 1, 2026 | |||||||||||||||||||||||||
| Bethesda Row (1) | SOFR + | December 28, 2026 | |||||||||||||||||||||||||||
| Plaza El Segundo | % | June 5, 2027 | |||||||||||||||||||||||||||
| The Grove at Shrewsbury (East) | % | September 1, 2027 | |||||||||||||||||||||||||||
| Azalea (2)(3) | SOFR + | October 30, 2028 | |||||||||||||||||||||||||||
| Brook 35 | % | July 1, 2029 | |||||||||||||||||||||||||||
| Hoboken (24 Buildings) (4) | SOFR + | December 15, 2029 | |||||||||||||||||||||||||||
| Various Hoboken (12 Buildings)(5) | Various | Various through 2029 | |||||||||||||||||||||||||||
| Chelsea | % | January 15, 2031 | |||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
| Net unamortized debt issuance costs and discount | ( | ( | |||||||||||||||||||||||||||
| Total mortgages payable, net | |||||||||||||||||||||||||||||
| Notes payable | |||||||||||||||||||||||||||||
| Revolving credit facility (2)(6) | SOFR + | April 5, 2027 | |||||||||||||||||||||||||||
| $750 million term loan (2)(6)(7) | SOFR + | March 20, 2028 | |||||||||||||||||||||||||||
| $250 million term loan (2)(6) | SOFR + | January 31, 2031 | |||||||||||||||||||||||||||
| Various | Various | Various through 2059 | |||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
| Net unamortized debt issuance costs | ( | ( | |||||||||||||||||||||||||||
| Total notes payable, net | |||||||||||||||||||||||||||||
| Senior notes and debentures (6) | |||||||||||||||||||||||||||||
| 1.25% notes | % | February 15, 2026 | |||||||||||||||||||||||||||
| 7.48% debentures | % | August 15, 2026 | |||||||||||||||||||||||||||
| 3.25% notes | % | July 15, 2027 | |||||||||||||||||||||||||||
| 6.82% medium term notes | % | August 1, 2027 | |||||||||||||||||||||||||||
| 5.375% notes | % | May 1, 2028 | |||||||||||||||||||||||||||
| 3.25% exchangeable notes | % | January 15, 2029 | |||||||||||||||||||||||||||
| 3.20% notes | % | June 15, 2029 | |||||||||||||||||||||||||||
| 3.50% notes | % | June 1, 2030 | |||||||||||||||||||||||||||
| 4.50% notes | % | December 1, 2044 | |||||||||||||||||||||||||||
| 3.625% notes | % | August 1, 2046 | |||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
| Net unamortized debt issuance costs and premium | ( | ( | |||||||||||||||||||||||||||
| Total senior notes and debentures, net | |||||||||||||||||||||||||||||
| Total debt | $ | $ | |||||||||||||||||||||||||||
(1)We have one one-year extension, at our option to extend the maturity date of this mortgage loan to December 28, 2027.
(2)Our Azalea mortgage loan, revolving credit facility SOFR loans, and our term loans bear interest at Daily Simple SOFR, as defined in the respective credit agreements, plus a spread, based on our current credit rating.
(3)The Operating Partnership is a co-borrower on this mortgage loan. Additionally, we have two one-year extensions, at our option to extend the maturity date of this mortgage loan to October 30, 2030.
(4)The interest rate on this mortgage loan is fixed at 3.67 % through two interest rate swap agreements.
(5)The interest rates on these mortgages range from 3.91 % to 5.00 %.
(6)The Operating Partnership is the obligor under our revolving credit facility, term loans, and senior notes and debentures. A wholly owned subsidiary of the Operating Partnership is also an obligor of the $750.0 million term loan.
F-28
Table of Contents
(7)The interest rate on $450.0 million of our term loan is fixed at a weighted average interest rate of 4.17 % through March 1, 2028 through interest rate swap agreements.
On January 9, 2025 and October 1, 2025 we repaid two mortgage loans at our Hoboken property totaling $4.3 million,at par.
On March 20, 2025, we amended and restated our $600.0 million unsecured term loan, extending the maturity date to March 20, 2028, plus two one-year extensions, at our option. We also had the right to borrow up to an additional $150.0 750.0 million as of December 31, 2025. Debt issuance costs related to our term loan were $4.9 million. Under an accordion feature, we have the right to request additional loans, subject to an aggregate maximum of $1.0 billion borrowed under the restated agreement. Additionally, on May 1, 2025, the interest rate was reduced by removing the 0.10 % adjustment to SOFR.
On October 30, 2025, we refinanced the $40.0 million mortgage loan at Azalea, with a new $55.0 million mortgage loan that bears interest at SOFR + 85 basis points, based on our credit rating, and matures on October 30, 2028, plus two one-year extensions, at our option. Debt issuance costs related to this mortgage loan were $0.6 million.
On November 17, 2025, we entered into an additional unsecured term loan agreement, which gives us the capacity to borrow up to $250.0 million at an interest rate of SOFR + 85 basis points, based on our current credit rating. The loan matures on January 31, 2031, and as of December 31, 2025, we do not have any outstanding borrowings under this agreement. Debt issuance costs related to this term loan were $1.5 million. Under an accordion feature, we have the right to request additional loans, subject to an aggregate maximum of $500.0 million.
On December 17, 2025, we exercised our first option to extend our $200.0 million mortgage loan at Bethesda Row by one year to December 28, 2026. We have one one-year extension, at our option remaining to extend the loan to December 28, 2027.
During 2025, 2024 and 2023, the maximum amount of borrowings outstanding under our revolving credit facility was $461.6 million, $202.7 million and $115.5 million, respectively. The weighted average amount of borrowings outstanding was $153.2 million, $33.5 million and $44.7 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 5.0 %, 6.1 % and 5.9 %, respectively. The revolving credit facility requires an annual facility fee which is $1.9 million under the amended credit agreement. At December 31, 2025, our revolving credit facility had $310.0 million outstanding, and had no balance outstanding at December 31, 2024. On October 30, 2025, the interest rate on our revolving credit facility was reduced by removing the 0.10 % adjustment to SOFR.
Our revolving credit facility, term loans, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2025, we were in compliance with all default related debt covenants.
Exchangeable Senior Notes
On January 11, 2024, our Operating Partnership issued $485.0 million aggregate principal amount of 3.25 % Exchangeable Senior Notes due 2029 (the “Notes”) in a private placement. The notes bear interest at an annual rate of 3.25 %, payable semiannually in arrears on January 15th and July 15th of each year, beginning July 15, 2024. The notes mature on January 15, 2029, unless earlier exchanged, purchased, or redeemed. Net proceeds after the initial purchaser's discount and offering costs were approximately $471.5 million. Interest expense related to these Notes was $18.5 million and $17.9 million, respectively for the years ended December 31, 2025 and 2024, and includes debt issuance cost amortization of $2.7 million and $2.6 million, respectively. Including the debt issuance cost amortization, the current effective interest rate on these notes is approximately 3.9 %. The unamortized debt issuance costs related to the Notes were $8.2 million and $10.9 million, respectively, at December 31, 2025 and 2024.
Prior to the close of business on July 15, 2028, the Notes will be exchangeable at the option of the holders only upon certain circumstances and during certain periods. On or after July 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes, holders may exchange their Notes at any time. The Operating Partnership will settle exchanges of the Notes by delivering cash up to the principal amount of the Notes exchanged, and if applicable, cash, common shares of the Trust, or a combination thereof at our option, in respect of the remainder, if any, of the exchange obligation in excess of the principal amount. If we elect to settle any portion of the exchange obligation in excess of the principal amount with shares of the Trust, an equivalent number of common units will be issued by the Operating Partnership to the Trust. The exchange rate initially equals 8.1436 common shares per $1,000 principal amount of the Notes (which is equivalent to an exchange price of approximately $122.80 per common share and reflects an exchange premium of approximately 20 % based on the closing price of $102.33 on January 8, 2024). The initial exchange rate is subject to adjustment upon the occurrence of certain events, including in the event of a payment of a quarterly common dividend in excess
F-29
Table of Contents
of $1.09 per share, but will not be adjusted for any accrued and unpaid interest. While our quarterly common dividend per share currently exceeds $1.09 , the exchange rate has not materially changed.
The Operating Partnership may redeem the Notes, at its option, in whole or in part, on or after January 20, 2027 if the last reported sales price of the common shares has been at least 130 % of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 day consecutive trading period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Operating Partnership provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date.
In connection with the Notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes or their affiliates or other financial institutions. The capped call transactions cover, subject to customary adjustments, the number of our common shares that initially underlie the Notes. The capped call transactions are expected generally to reduce the potential dilution to our common shares upon exchange of any Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Notes, with such reduction and/or offset subject to a cap. The cap price of the capped call transaction initially is approximately $143.26 per share, which represents a premium of approximately 40 % over the last reported sale price of our common shares of $102.33 on the New York Stock Exchange on January 8, 2024, and is subject to certain adjustments under the terms of the capped call transactions. A portion of the proceeds from the Notes were used to pay the capped call premium of $19.4 million, which was recorded in shareholders' equity for the Trust and capital for the Operating Partnership.
Scheduled principal payments on mortgages payable, notes payable, senior notes and debentures as of December 31, 2025 are as follows:
| Mortgages Payable | Notes Payable | Senior Notes and Debentures | Total Principal | ||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Year ending December 31, | |||||||||||||||||||||||||||||||||||
| 2026 | $ | (1) | $ | $ | $ | ||||||||||||||||||||||||||||||
| 2027 | (2) | ||||||||||||||||||||||||||||||||||
| 2028 | (3) | (4) | |||||||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||||||||
| 2030 | |||||||||||||||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | (5) | |||||||||||||||||||||||||||||||
_____________________
(1)Our $200.0 mortgage loan secured by Bethesda Row matures on December 28, 2026 plus one one-year extension, at our option to December 28, 2027.
(2)Our $1.25 billion revolving credit facility matures on April 5, 2027 plus two six-month extensions, at our option to April 5, 2028. As of December 31, 2025, there was $310.0 million outstanding under this credit facility.
(3)Our $55.0 million mortgage loan secured by Azalea matures on October 30, 2028, plus two one-year extensions at our option to October 30, 2030.
(4)Our $750.0 million term loan matures on March 20, 2028, plus two one-year extension at our option to March 20, 2030.
(5)The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2025.
NOTE 6—FAIR VALUE OF FINANCIAL INSTRUMENTS
A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows:
| 1. | Level 1 Inputs—quoted prices in active markets for identical assets or liabilities | ||||
| 2. | Level 2 Inputs—observable inputs other than quoted prices in active markets for identical assets and liabilities | ||||
| 3. | Level 3 Inputs—prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable | ||||
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.
F-30
Table of Contents
Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Mortgages and notes payable | $ | $ | $ | $ | |||||||||||||||||||
| Senior notes and debentures | $ | $ | $ | $ | |||||||||||||||||||
| Exchangeable senior notes | $ | $ | $ | $ | |||||||||||||||||||
The following table is a summary of our outstanding interest rate swap agreements on consolidated debt as of December 31, 2025:
| Interest Rate Swap | Notional Amount | Maturity Date of Related Swap Agreements | Weighted Average Interest Rate | Balance Sheet Location | Fair Value | |||||||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||||||
| $750 million term loan (1) | $ | March 1, 2028 | % | Other liabilities and deferred credits | $ | ( | ||||||||||||||||||||||||||
| Hoboken | December 15, 2029 | % | Prepaid expenses and other assets | |||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||||
(1) These interest rate swaps were entered into during the year ended December 31, 2025, and fix the interest rate on $ | ||||||||||||||||||||||||||||||||
The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. During 2025, the value of our interest rate swaps decreased $2.6 million (including $2.5 million reclassified from other comprehensive income as a decrease to interest expense). A summary of our net financial assets that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
During the year ended December 31, 2025, we entered into interest rate swap agreements for two of our equity method investees. Therefore, as of December 31, 2025, three of our equity method investees have interest rate swaps which qualify as cash flow hedges. At December 31, 2025 and December 31, 2024, our share of the change in fair value of the related swaps included in "accumulated other comprehensive (loss) income" was a loss of $0.3 million and income of $0.2 million, respectively.
NOTE 7—COMMITMENTS AND CONTINGENCIES
We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.
We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also
F-31
Table of Contents
under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us.
We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability. Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported. Management considers a number of factors, including third-party actuarial analysis, previous experience in our portfolio, and future increases in costs of claims, when making these determinations. If our liability costs exceed these accruals, it will reduce our net income.
At December 31, 2025 and 2024, our reserves for general liability costs were $5.0 million and $4.4 million, respectively, and are included in “accounts payable and accrued expenses” in our consolidated balance sheets. Any potential losses which exceed our estimates would result in a decrease in our net income. During 2025 and 2024, we made payments from these reserves of $2.9 million and $2.1 million, respectively. Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over-time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses.
On December 11, 2019, we received proceeds related to the sale under threat of condemnation at San Antonio Center as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. We indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and recorded a corresponding liability for our estimate of these costs. At December 31, 2025, we have a liability of $3.4 million to reflect our estimate of the remaining costs.
In June 2018, we formed a joint venture to develop Freedom Plaza (formerly Jordan Downs Plaza), for which we own 92 %. The investment in this development qualified for tax credits under the New Market Tax Credit ("NMTC") Program, established by the Community Renewal Tax Relief Act of 2000. In 2018, we transferred the earned tax credits to a third-party bank in exchange for cash proceeds. The proceeds received and related transaction costs were deferred until the end of the seven-year NMTC compliance period, which concluded in June 2025. As a result, for the year ended December 31, 2025, we recognized $14.2 million ($13.0 million, net of income attributable to noncontrolling interest) in income related to the sale of the new market tax credits.
At December 31, 2025, we had letters of credit outstanding of approximately $5.5 million.
As of December 31, 2025 in connection with capital improvement, development, and redevelopment projects, we have contractual obligations of approximately $314.2 million.
We are obligated under operating lease agreements on several shopping centers and one office lease requiring minimum annual payments as follows, as of December 31, 2025:
| (In thousands) | |||||
| Year ending December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future minimum operating lease payments | |||||
| Less amount representing interest | ( | ||||
| Operating lease liabilities | $ | ||||
F-32
Table of Contents
Future minimum lease payments and their present value for properties under finance leases as of December 31, 2025, are as follows:
| (In thousands) | |||||
| Year ending December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future minimum finance lease payments | |||||
| Less amount representing interest | ( | ||||
| Finance lease liabilities | $ | ||||
Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63 % interest in Congressional Plaza at the interest’s then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from approximately $62 million to $63 million.
The master lease for Melville Mall, as amended on January 15, 2026, includes a fixed price put option at any time on or prior to June 30, 2030 for $4.5 million. Additionally, we have the right to purchase Melville Mall in 2031 for approximately $5.0 million.
The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1 % interest in The Grove at Shrewsbury and approximately 6.5 % interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million.
The other member in Hoboken has the right to require us to purchase all of its 10.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $12 million to $13 million.
Effective June 14, 2026, the other member in Camelback Colonnade and The Shops at Hilton Village has the right to require us to purchase all of its 2.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million.
Effective October 6, 2027, the other member in the partnership that owns equity method investments in Chandler Festival and Chandler Gateway has the right to require us to purchase its 2.5 % net ownership interest. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $1 million and $2 million.
Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0 % ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2025, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 million.
Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. A total of 526,915 downREIT operating partnership units are outstanding which have a total fair value of $53.1 million, based on our closing stock price on December 31, 2025.
NOTE 8—SHAREHOLDERS’ EQUITY
We have a Dividend Reinvestment Plan (the “Plan”), whereby shareholders may use their dividends and optional cash payments to purchase shares. In 2025, 2024 and 2023, 19,139 shares, 18,101 shares, and 19,847 shares, respectively, were issued under the Plan.
As of December 31, 2025, 2024, and 2023, we had 6,000,000 5.0 0.01 25.00 25,000
F-33
Table of Contents
Shares accrue dividends at a rate of 5.0 25,000
As of December 31, 2025, 2024, and 2023, we had 392,878 5.417 25 0.01 5.417 104.69 per share. The Series 1 Preferred Shares are also convertible under certain circumstances at our election. The holders of the Series 1 Preferred Shares have no voting rights.
On February 14, 2025, we amended our existing at-the-market (“ATM”) equity program under which we may from time to time offer and sell common shares. This amendment reset the aggregate offering price of the program to $750.0 million. Our ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.
During 2025, there were no sales and we did not enter into any forward sales contracts under the amended ATM equity program, and therefore we have the remaining capacity to issue up to $750.0 million in common shares under this program as of December 31, 2025.
For the year ended December 31, 2024, we issued 2,059,654 common shares at a weighted average price per share of $109.20 for net cash proceeds of $222.3 million including paying $2.2 million in commissions and $0.4 million in additional offering expenses related to the sales of these common shares.
For the year ended December 31, 2024, we also entered into forward sales contracts for 1,186,422 common shares under our ATM equity program at a weighted average offering price of $115.72 . During 2024, we settled a portion of the forward sales agreements entered into during the year by issuing 709,925 common shares for net proceeds of $81.7 million. During 2025, we settled our remaining open forward sales agreements by issuing 476,497 common shares for net proceeds of $54.2 million.
In April 2025, our Board of Trustees approved a new common share repurchase program, under which we may purchase up to $300.0 million of our outstanding common shares of beneficial interest, $0.01 par value per share from time to time using a variety of methods, including open market, privately negotiated transactions or otherwise. The specific timing and amount of common share repurchases, if any, will depend on a number of factors, including prevailing share prices, trading volume and general market conditions, along with our working capital requirements, cash flow, and other factors. The program does not require us to repurchase any dollar amount or number of common shares and may be suspended or discontinued at any time. As of December 31, 2025, no common shares have been repurchased through the program.
NOTE 9—DIVIDENDS
The following table provides a summary of dividends declared and paid per share:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Declared | Paid | Declared | Paid | Declared | Paid | ||||||||||||||||||||||||||||||
| Common shares | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| 5.417% Series 1 Cumulative Convertible Preferred shares | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| 5.0% Series C Cumulative Redeemable Preferred shares (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| (1) Amount represents dividends per depositary share, each representing 1/1000th of a share. | |||||||||||||||||||||||||||||||||||
F-34
Table of Contents
A summary of the income tax status of dividends per share paid is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Common shares | |||||||||||||||||
| Ordinary dividend | $ | $ | $ | ||||||||||||||
| Capital gain | |||||||||||||||||
| Return of capital | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
| Ordinary dividend | $ | $ | $ | ||||||||||||||
| Capital gain | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
| Ordinary dividend | $ | $ | |||||||||||||||
| Capital gain | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
On October 31, 2025, the Trustees declared a quarterly cash dividend of $1.13 per common share, payable January 15, 2026 to common shareholders of record on January 2, 2026.
NOTE 10— LEASES
At December 31, 2025, our 104 predominantly retail shopping center and mixed-use properties are located in 14 states and the District of Columbia. There are approximately 3,700 commercial leases and 2,700 residential leases. Our commercial tenants range from sole proprietorships to national retailers and corporations. At December 31, 2025, no one tenant or corporate group of tenants accounted for more than 2.4 % of annualized base rent.
Our leases with commercial property and residential tenants are classified as operating leases. Commercial property leases generally range from to ten years (certain leases with anchor tenants may be longer), and in addition to minimum rents, may provide for percentage rents based on the tenant’s level of sales achieved and cost recoveries for the tenant’s share of certain operating costs. Leases on apartments are generally for a period of 1 year or less.
As of December 31, 2025, future minimum rentals from noncancelable commercial operating leases (excluding both tenant reimbursements of operating expenses and percentage rent based on tenants' sales) are as follows:
| (In thousands) | |||||
| Year ending December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| $ | |||||
F-35
Table of Contents
The following table provides additional information on our operating and finance leases where we are the lessee:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| LEASE COST: | ||||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | |||||||||||||||||
| Interest on lease liabilities | ||||||||||||||||||||
| Operating lease cost | ||||||||||||||||||||
| Variable lease cost | ||||||||||||||||||||
| Total lease cost | $ | $ | $ | |||||||||||||||||
| OTHER INFORMATION: | ||||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||
| Operating cash flows for finance leases | $ | $ | $ | |||||||||||||||||
| Operating cash flows for operating leases | $ | $ | $ | |||||||||||||||||
| Financing cash flows for finance leases | $ | $ | $ | |||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Weighted-average remaining term - finance leases | ||||||||||||||||||||
| Weighted-average remaining term - operating leases | ||||||||||||||||||||
| Weighted-average discount rate - finance leases | % | % | ||||||||||||||||||
| Weighted-average discount rate - operating leases | % | % | ||||||||||||||||||
NOTE 11—COMPONENTS OF RENTAL EXPENSES
The principal components of rental expenses are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Repairs and maintenance | $ | $ | $ | ||||||||||||||
| Utilities | |||||||||||||||||
| Management fees and costs | |||||||||||||||||
| Payroll | |||||||||||||||||
| Insurance | |||||||||||||||||
| Marketing | |||||||||||||||||
| Ground rent | |||||||||||||||||
| Other operating | |||||||||||||||||
| Total rental expenses | $ | $ | $ | ||||||||||||||
NOTE 12—SHARE-BASED COMPENSATION PLANS
A summary of share-based compensation expense included in net income is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Grants of common shares, restricted stock units, and options | $ | $ | $ | ||||||||||||||
| Capitalized share-based compensation | ( | ( | ( | ||||||||||||||
| Share-based compensation expense | $ | $ | $ | ||||||||||||||
As of December 31, 2025, we have grants outstanding under two share-based compensation plans. In May 2020, our shareholders approved the 2020 Performance Incentive Plan ("the 2020 Plan"), which authorized the grant of share options,
F-36
Table of Contents
common shares, and other share-based awards for up to 1,750,000 common shares of beneficial interest. Our 2010 Long Term Incentive Plan, as amended (the "2010 Plan”), which expired in May 2020, authorized the grant of share options, common shares and other share-based awards for up to 2,450,000 common shares of beneficial interest.
Option awards under the plans are required to have an exercise price at least equal to the closing trading price of our common shares on the date of grant. Options and restricted share awards under the plan generally vest over to seven years and option awards typically have a -year contractual term. We pay dividends on unvested shares. Certain options and share awards provide for accelerated vesting if there is a change in control. Additionally, the vesting on certain option and share awards can accelerate in part or in full upon termination without cause.
The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities, term, dividend yields, employee exercises and estimated forfeitures are primarily based on historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each share award is determined based on the closing trading price of our common shares on the grant date. No The following table provides a summary of the assumptions used to value options granted in 2024:
| Year Ended December 31, | |||||
| 2024 | |||||
| Volatility | % | ||||
| Expected dividend yield | % | ||||
| Expected term (in years) | |||||
| Risk free interest rate | % | ||||
The weighted-average grant-date fair value of options granted in 2024 was $24.59 per share. The following table provides a summary of option activity for 2025:
| Shares Under Option | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| (In years) | (In thousands) | ||||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | ||||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||
| Forfeited or expired | |||||||||||||||||||||||
| Outstanding at December 31, 2025 | $ | $ | |||||||||||||||||||||
| Exercisable at December 31, 2025 | $ | $ | |||||||||||||||||||||
The following table provides a summary of restricted share award activity for 2025:
| Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
| Unvested at December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Unvested at December 31, 2025 | $ | ||||||||||
The weighted-average grant-date fair value of stock awarded in 2025, 2024 and 2023 was $110.17 , $101.84 and $109.44 , respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2025, 2024 and 2023, was $14.0 million, $17.3 million and $14.4 million, respectively.
On February 10, 2021, 10,441 restricted stock units were awarded to an officer, of which 7,204 vested on January 7, 2025, based on meeting certain market based performance criteria. The amount of dividend equivalent rights related to these units is approximately $0.1 million, and was recorded against retained earnings for the year ended December 31, 2024. The weighted-average grant-date fair value of the restricted stock units awarded in 2021 was $97.01 .
F-37
Table of Contents
As of December 31, 2025, there was $17.2 million of total unrecognized compensation cost related to unvested share-based compensation arrangements (i.e. options and unvested shares) granted under our plans. This cost is expected to be recognized over the next 4.3 years with a weighted-average period of 1.8 years.
Subsequent to December 31, 2025, common shares were awarded under various compensation plans as follows:
| Date | Award | Vesting Term | Beneficiary | ||||||||||||||||||||
| January 2, 2026 | Shares | Immediate | Trustees | ||||||||||||||||||||
| February 11, 2026 | Restricted Shares | Officers and key employees | |||||||||||||||||||||
NOTE 13—SAVINGS AND RETIREMENT PLANS
We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Code. Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $23,500 for 2025, $23,000 for 2024, and 22,500 for 2023. Under the plan, we contribute 50 5 1,061,000 , $1,012,000 and $960,000 , respectively.
A non-qualified deferred compensation plan for our officers and certain other employees was established in 1994 that allows the participants to defer a portion of their income. As of December 31, 2025 and 2024, we are liable to participants for approximately $27.0 million and $24.0 million, respectively, under this plan. Although this is an unfunded plan, we have purchased certain investments to match this obligation. Our obligation under this plan and the related investments are both included in the accompanying consolidated financial statements.
F-38
Table of Contents
NOTE 14—EARNINGS PER SHARE AND UNIT
We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method. The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings. For 2025, 2024, and 2023, we had 0.3
The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:
•exercise of 1,190 1,829
•shares issuable upon the assumed redemption of outstanding downREIT operating partnership units for 2024, and 2023
•5.417
•the issuance of 1.2
Potentially issuable shares and units in exchange for the 3.25
Additionally, 7,204
Federal Realty Investment Trust Earnings per Share
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| NUMERATOR | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Less: Preferred share dividends | ( | ( | ( | ||||||||||||||
| Less: Income from operations attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| Less: Earnings allocated to unvested shares | ( | ( | ( | ||||||||||||||
| Net income available for common shareholders, basic | |||||||||||||||||
| Add: Income attributable to downREIT operating partnership units | |||||||||||||||||
| Net income available for common shareholders, diluted | $ | $ | $ | ||||||||||||||
| DENOMINATOR | |||||||||||||||||
| Weighted average common shares outstanding—basic | |||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||
| Unvested performance shares | |||||||||||||||||
| DownREIT operating partnership units | |||||||||||||||||
| Weighted average common shares outstanding—diluted | |||||||||||||||||
| EARNINGS PER COMMON SHARE, BASIC AND DILUTED | |||||||||||||||||
| Net income available for common shareholders | $ | $ | $ | ||||||||||||||
F-39
Table of Contents
Federal Realty OP LP Earnings per Unit
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands, except per unit data) | |||||||||||||||||
| NUMERATOR | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Less: Preferred unit distributions | ( | ( | ( | ||||||||||||||
| Less: Income from operations attributable to noncontrolling interests | ( | ( | ( | ||||||||||||||
| Less: Earnings allocated to unvested units | ( | ( | ( | ||||||||||||||
| Net income available for common unit holders, basic | |||||||||||||||||
| Add: Income attributable to downREIT operating partnership units | |||||||||||||||||
| Net income available for common unit holders, diluted | $ | $ | $ | ||||||||||||||
| DENOMINATOR | |||||||||||||||||
| Weighted average common units outstanding—basic | |||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||
| Unvested performance units | |||||||||||||||||
| DownREIT operating partnership units | |||||||||||||||||
| Weighted average common units outstanding—diluted | |||||||||||||||||
| EARNINGS PER COMMON UNIT, BASIC AND DILUTED | |||||||||||||||||
| Net income available for common unit holders | $ | $ | $ | ||||||||||||||
NOTE 15—SUBSEQUENT EVENT
On January 6, 2026, we purchased the fee interest under one of our ground leases at Bethesda Row for $2.5 million.
On February 5, 2026, we sold a residential building at our Santana Row property and our Courthouse Center property for sales prices totaling $158.5 million.
F-40
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land | Building and Improvements | Land | Building and Improvements | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 29TH PLACE (Virginia) | $ | $ | $ | $ | $ | $ | $ | 1975 - 2001 | 5/30/2007 | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ANDORRA (Pennsylvania) | 1953 | 1/12/1988 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ANNAPOLIS TOWN CENTER (Maryland) | 2007-2010 | 10/10/2025 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ASSEMBLY ROW/ASSEMBLY SQUARE MARKETPLACE (Massachusetts) | 2005, 2012-2023 | 2005-2013 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AZALEA (California) | 2014 | 8/2/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BALA CYNWYD ON CITY AVENUE (Pennsylvania) | 1955/2020/ 2025 | 9/22/1993 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BARCROFT PLAZA (Virginia) | 1963, 1972, 1990, & 2000 | 1/13/16 & 11/7/16 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BARRACKS ROAD (Virginia) | 1958 | 12/31/1985 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BELL GARDENS (California) | 1990, 2003, 2006 | 8/2/17 & 11/29/18 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BETHESDA ROW (Maryland) | 1945-2008 | 12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BIRCH & BROAD (Virginia) | 1960/1962 | 9/30/67 & 10/05/72 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BRICK PLAZA (New Jersey) | 1958 | 12/28/1989 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BROOK 35 (New Jersey) | 1986/2004 | 1/1/2014 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAMELBACK COLONNADE (Arizona) | 1977/2019 | 6/14/2021 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAMPUS PLAZA (Massachusetts) | 1970 | 1/13/2016 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CHELSEA COMMONS (Massachusetts) | 1962/1969/ 2008 | 8/25/06, 1/30/07, & 7/16/08 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CHESTERBROOK (Virginia) | 1967/1991 | 4/30/21 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-41
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COCOWALK (Florida) | 1990/1994, 1922-1973, 2018-2021 | 5/4/15, 7/1/15, 12/16/15, 7/26/16, 6/30/17, & 8/10/17 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLORADO BLVD (California) | 1905-1988 | 8/14/98 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONGRESSIONAL PLAZA (Maryland) | 1965/2003/ 2016 | 4/1/1965 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COURTHOUSE CENTER (Maryland) | 1975 | 12/17/1997 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CROSSROADS (Illinois) | 1959 | 7/19/1993 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CROW CANYON COMMONS (California) | Late 1970's/ 1998/2006 | 12/29/05 & 2/28/07 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DARIEN COMMONS (Connecticut) | 1920-2009/2022-2023 | 4/3/13 & 7/20/18 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEDHAM PLAZA (Massachusetts) | 1959 | 12/31/93, 12/14/16, 1/29/19, & 3/12/19 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEL MAR VILLAGE (Florida) | 1982/1994/ 2007 | 5/30/08, 7/11/08, & 10/14/14 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEL MONTE SHOPPING CENTER (California) | 1968, 1976, 1984, 2004 | 2/25/2025 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EAST BAY BRIDGE (California) | 1994-2001, 2011/2012 | 12/21/2012 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ELLISBURG (New Jersey) | 1959 | 10/16/1992 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ESCONDIDO PROMENADE (California) | 1987 | 5/26/2023 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIRFAX JUNCTION (Virgina) | 1981/1986/ 2000 | 2/8/19 & 1/10/20 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FEDERAL PLAZA (Maryland) | 1970 | 6/29/1989 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINLEY SQUARE (Illinois) | 1974 | 4/27/1995 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FLOURTOWN (Pennsylvania) | 1957 | 4/25/1980 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FOURTH STREET (California) | 1948,1975 | 5/19/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-42
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FREEDOM PLAZA (California) | 2018-2020 | 6/15/2018 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FRESH MEADOWS (New York) | 1946-1949 | 12/5/1997 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FRIENDSHIP CENTER (District of Columbia) | 1998 | 9/21/2001 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAITHERSBURG SQUARE (Maryland) | 1966 | 4/22/1993 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GARDEN MARKET (Illinois) | 1958 | 7/28/1994 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GEORGETOWNE SHOPPING CENTER (New York) | 1969/2006/ 2015 | 11/15/19 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOVERNOR PLAZA (Maryland) | 1963 | 10/1/1985 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GRAHAM PARK PLAZA (Virginia) | 1971 | 7/21/1983 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GRATIOT PLAZA (Michigan) | 1964 | 3/29/1973 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GREENLAWN PLAZA (New York) | 1975/2004 | 1/13/2016 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GREENWICH AVENUE (Connecticut) | 1968 | 4/12/1995 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GROSSMONT CENTER (California) | 1961, 1963, 1982-1983, 2002 | 6/1/2021 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HASTINGS RANCH PLAZA (California) | 1958, 1984, 2006, 2007 | 2/1/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HAUPPAUGE (New York) | 1963 | 8/6/1998 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HOBOKEN (New Jersey) | 1887-2006 | 9/18/19, 11/26/19, 12/19/19, 2/12/20, & 11/18/22 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HUNTINGTON (New York) | 1962/2022-2024 | 12/12/88, 10/26/07, & 11/24/15 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HUNTINGTON SQUARE (New York) | 1980/2004- 2007/2019 | 8/16/2010 & 1/31/2023 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| IDYLWOOD PLAZA (Virginia) | 1991 | 4/15/1994 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KINGSTOWNE TOWNE CENTER (Virginia) | 1996/2001/ 2006 | 4/20/22 & 7/27/22 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LANCASTER (Pennsylvania) | 1958 | 4/24/1980 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-43
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LANGHORNE SQUARE (Pennsylvania) | 1966 | 1/31/1985 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LAUREL (Maryland) | 1956 | 8/15/1986 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LAWRENCE PARK (Pennsylvania) | 1972 | 7/23/1980 & 4/3/17 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LINDEN SQUARE (Massachusetts) | 1960-2008 | 8/24/2006 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MELVILLE MALL (New York) | 1974 | 10/16/2006 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MERCER ON ONE (New Jersey) | 1975 | 10/14/03, 1/31/17, & 10/12/2023 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MONTROSE CROSSING (Maryland) | 1960s, 1970s, 1996 & 2011 | 12/27/11 & 12/19/13 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MOUNT VERNON/SOUTH VALLEY/7770 RICHMOND HWY. (Virginia) | 1966/1972/ 1987/2001 | 3/31/03, 3/21/03, 1/27/06 & 1/4/21 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NORTH DARTMOUTH (Massachusetts) | ( | 2004 | 8/24/2006 | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NORTHEAST (Pennsylvania) | 1959 | 8/30/1983 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OLD KEENE MILL (Virginia) | 1968 | 6/15/1976 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OLD TOWN CENTER (California) | 1962, 1997-1998 | 10/22/1997 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OLIVO AT MISSION HILLS (California) | 2017-2018 | 8/2/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PERRING PLAZA (Maryland) | 1963 | 10/1/1985 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PIKE & ROSE (Maryland) | 1963, 2012-2025 | 5/18/82, 10/26/07, & 7/31/12 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PIKE 7 PLAZA (Virginia) | 1968 | 3/31/97 & 7/8/15 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PINOLE VISTA CROSSING (California) | ( | 1995, 2015 | 7/31/2024 | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PLAZA DEL MERCADO (Maryland) | 1969 | 1/13/2016 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PLAZA DEL SOL (California) | 2009 | 8/2/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-44
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PLAZA EL SEGUNDO/THE POINT (California) | 2006/2007/ 2016 | 12/30/11, 6/14/13, 7/26/13, & 12/27/13 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROVIDENCE PLACE (formerly Pan Am) (Virginia) | 1979 | 2/5/1993 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| QUEEN ANNE PLAZA (Massachusetts) | 1967 | 12/23/1994 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| QUINCE ORCHARD (Maryland) | 1975 | 4/22/1993 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RIVERPOINT CENTER (Illinois) | 1989, 2012 | 3/31/2017 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SAN ANTONIO CENTER (California) | 1958, 1964-1965, 1974-1975, 1995-1997 | 1/9/2015, 9/13/19 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SANTANA ROW (California) | 1999-2006, 2009, 2014, 2016-2025 | 3/5/97, 7/13/12, 9/6/12, 4/30/13 & 9/23/13 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHOPS AT PEMBROKE GARDENS (Florida) | 2007 | 7/27/2022 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SYLMAR TOWNE CENTER (California) | — | 1973 | 8/2/2017 | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| THE AVENUE AT WHITE MARSH (Maryland) | 1997 | 3/8/2007 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| THE GROVE AT SHREWSBURY (New Jersey) | 1988/1993/ 2007 | 1/1/2014 & 10/6/14 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| THE SHOPPES AT NOTTINGHAM SQUARE (Maryland) | 2005 - 2006 | 3/8/2007 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| THE SHOPS AT HILTON VILLAGE (Arizona) | 1982/1989 | 6/14/21 & 7/18/22 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOWER SHOPPING CENTER (Virginia) | 1953-1960 | 8/24/1998 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOWER SHOPS (Florida) | 1989, 2017 | 1/19/11 & 6/13/14 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOWN CENTER CROSSING/TOWN CENTER PLAZA (Kansas) | 1995, 2005-2008, 2014, 2015 | 7/1/2025 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-45
Table of Contents
| FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE III | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | COLUMN F | COLUMN G | COLUMN H | COLUMN I | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Initial cost to company | Cost Capitalized Subsequent to Acquisition | Gross amount at which carried at close of period | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Descriptions | Encumbrance | Land | Building and Improvements | Cost Capitalized Subsequent to Acquisition | Land | Building and Improvements | Total | Accumulated Depreciation and Amortization | Date of Construction | Date Acquired | Life on which depreciation in latest income statements is computed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TROY HILLS (New Jersey) | 1966 | 7/23/1980 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TWINBROOKE CENTRE (Virginia) | 1977 | 9/2/2021 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TYSON'S STATION (Virginia) | 1954 | 1/17/1978 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| VILLAGE AT SHIRLINGTON (Virginia) | 1940, 2006-2009 | 12/21/1995 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| VILLAGE POINTE (Nebraska) | 2004 | 11/24/2025 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| VIRGINIA GATEWAY (Virginia) | 1999, 2006-2008, 2013-2016 | 5/31/2024 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WESTGATE CENTER (California) | 1960-1966 | 3/31/2004 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WESTPOST (Virginia) | 1999 - 2002 | 1998 & 11/22/10 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WHITE MARSH PLAZA (Maryland) | 1987 | 3/8/2007 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WHITE MARSH OTHER (Maryland) | 1985 | 3/8/2007 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WILDWOOD (Maryland) | 1958 | 5/5/1969 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WILLOW GROVE (Pennsylvania) | 1953 | 11/20/1984 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WILLOW LAWN (Virginia) | 1957 | 12/5/1983 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WYNNEWOOD (Pennsylvania) | 1948 | 10/29/1996 | (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TOTALS | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Depreciation of building and improvements is calculated based on useful lives ranging from the life of the lease to 50 years.
F-46
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
Three Years Ended December 31, 2025
Reconciliation of Total Cost
(in thousands)
| Balance, December 31, 2022 | $ | ||||
| Additions during period | |||||
| Improvements | |||||
| Reconsolidation of VIE | |||||
Acquisitions | |||||
| Deduction during period—dispositions and retirements of property | ( | ||||
| Balance, December 31, 2023 | |||||
| Additions during period | |||||
| Acquisitions | |||||
| Improvements | |||||
| Deduction during period—dispositions and retirements of property | ( | ||||
| Balance, December 31, 2024 | |||||
| Additions during period | |||||
| Acquisitions | |||||
| Improvements | |||||
| Deduction during period | |||||
| Dispositions and retirements of property | ( | ||||
| Impairment of property | ( | ||||
| Balance, December 31, 2025 (1) | $ | ||||
_____________________
(1)For Federal tax purposes, the aggregate cost basis is approximately $10.2 billion as of December 31, 2025.
F-47
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
Three Years Ended December 31, 2025
Reconciliation of Accumulated Depreciation and Amortization
(In thousands)
| Balance, December 31, 2022 | $ | ||||
| Additions during period | |||||
| Depreciation and amortization expense | |||||
| Reconsolidation of VIE | |||||
| Deductions during period -dispositions and retirements of property | ( | ||||
| Balance, December 31, 2023 | |||||
| Additions during period-depreciation and amortization expense | |||||
| Deductions during period -dispositions and retirements of property | ( | ||||
| Balance, December 31, 2024 | |||||
| Depreciation and amortization expense | |||||
| Deductions during period -dispositions and retirements of property | ( | ||||
| Balance, December 31, 2025 | $ | ||||
F-48
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
Year Ended December 31, 2025
(Dollars in thousands)
| Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description of Lien | Interest Rate | Maturity Date | Periodic Payment Terms | Prior Liens | Face Amount of Mortgages | Carrying Amount of Mortgages(1) | Principal Amount of Loans Subject to delinquent Principal or Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Second mortgage on a retail shopping center in Rockville, MD (2) | February 2026 | Interest only monthly; balloon payment due at maturity | $ | (3) | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Second mortgage on a retail shopping center in Rockville, MD (2) | February 2026 | Interest only monthly; balloon payment due at maturity | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Second mortgage on a retail shopping center in Baltimore, MD | October 2031 | Principal and interest monthly; balloon payment due at maturity | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
_____________________
(1)The amounts are net of any expected losses in accordance with ASU 2016-13. See note 2 to the consolidated financial statements. For Federal tax purposes, the aggregate tax basis is approximately $10.0 million as of December 31, 2025.
(2)The borrower on the noted mortgage notes receivable is in default. However, we believe the fair value of the property supports the $9.1 million carrying value of our notes.
(3)These mortgages are both subordinate to a first mortgage of $58.8 million in total. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2025 is estimated.
(4)This mortgage is subordinate to a first mortgage of $5.0 million. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2025 is estimated.
F-49
Table of Contents
FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE - CONTINUED
Three Years Ended December 31, 2025
Reconciliation of Carrying Amount
(In thousands)
| Balance, December 31, 2022 | $ | ||||
| Deductions during period: | |||||
| Valuation adjustments | ( | ||||
| Collection and satisfaction of loans | ( | ||||
| Balance, December 31, 2023 | |||||
| Deductions during period: | |||||
| Collection and satisfaction of loans | ( | ||||
| Valuation adjustments | ( | ||||
| Balance, December 31, 2024 | |||||
| Deductions during period: | |||||
| Collection and satisfaction of loans | ( | ||||
| Valuation adjustments | |||||
| Balance, December 31, 2025 | $ | ||||
F-50
FAQ
What does Federal Realty Investment Trust (FRT) focus on in its business?
Federal Realty Investment Trust focuses on owning, managing and redeveloping high quality retail and mixed-use properties. Its 104 projects are mainly community and neighborhood shopping centers and mixed-use assets in densely populated, affluent markets, designed to support strong tenant sales and long-term rental growth.
How large is Federal Realty Investment Trust (FRT)’s property portfolio and where is it located?
Federal Realty’s portfolio totals about 28.8 million commercial square feet across 104 projects in 14 states and the District of Columbia. Major exposures include California, Maryland, Virginia and Massachusetts, giving the REIT a diversified but coastal- and corridor-heavy geographic footprint.
What occupancy and tenant diversification does Federal Realty Investment Trust (FRT) report?
As of December 31, 2025, Federal Realty’s portfolio was 96.1% leased and 94.1% occupied. It had around 3,700 commercial and 2,700 residential leases, with no single tenant or affiliated group contributing more than 2.4% of annualized base rent, limiting individual tenant concentration risk.
How much debt does Federal Realty Investment Trust (FRT) carry and what is its structure?
Federal Realty reports approximately
What are key risks highlighted by Federal Realty Investment Trust (FRT)?
Key risks include tenant rent nonpayment and bankruptcies, anchor tenant closures, competition from online retail, economic downturns in core markets, development and redevelopment execution, refinancing and interest-rate risks, environmental and climate regulation, cybersecurity threats, and potential loss of REIT tax status.
How does Federal Realty Investment Trust (FRT) describe its dividend and REIT status?
Federal Realty notes it has paid quarterly dividends since 1962 and increased dividends per common share for 58 consecutive years. As a REIT, it generally avoids federal income tax on distributed taxable income but must meet complex Code requirements, including distributing at least 90% of taxable income annually.
What is the relationship between Federal Realty Investment Trust (FRT) and Federal Realty OP LP?
The Parent Company is a REIT holding company whose only material asset is its interest in Federal Realty OP LP. It owns 100% of the partnership units, consolidates the Operating Partnership’s results, and relies on Operating Partnership distributions to pay its obligations and shareholder dividends.
Federal Realty Op Lp
NYSE:FRT
FRT Rankings
FRT Latest News
FRT Latest SEC Filings
FRT Stock Data
9.04B
85.36M
1.04%
97.32%
2.15%
REIT - Retail
Real Estate Investment Trusts
United States
NORTH BETHESDA