Federal Realty Investment Trust (NYSE:FRT) Q4 2022 Earnings Call Transcript

Operator: And our next question is from Michael Goldsmith with UBS. Please proceed with your question.

Michael Goldsmith : Thanks a lot for taking another one for me. The lease occupied spread compressed by 50 basis points down to 170 basis points. So, on the one hand, you’re monetizing all the leasing that you’re doing, but maybe on the other side, you’re not — there’s maybe a little bit less benefit in the pipeline. Like how do you think about it? It seems like you’ve been very positive on being able to monetize it sooner, but just wanted to kind of get your thoughts on either side of that argument?

Don Wood : Well, Michael, I want to make sure we agree on the premise. The lease percentage continues to get better, get higher. The primary thing there is that we continue to lease up the portfolio. We feel very good about that. Now that’s a job of that leasing team, and that’s working out pretty darn well. But the job of the tenant coordinators, the job of the construction people, the job is to get those tenants open. And frankly, that has just been as amazing as leasing is and leasing have record years. Tenant coordinators and that part of the construction of those spaces to get them open, is just stellar. And so, I hope when you look through what’s important about leased versus occupied that, if you’re in the middle of COVID, it’s great to have a whole bunch of leasing done and not a bunch of sub open as it come back up.

But to get to normalized operations, you want that as tight as you possibly can to be able to turn a contract into rent. So, I love where we are, in fact, because we’re doing both increasing that lease and more than increasing that amount by occupancy.

Dan Guglielmone : Yes. And just to add another thing that’s not in that 170 basis points of signed and not open SNO is are non-comparable pool where we have an equivalent amount of POI that’s expected to come on from what we’re delivering stuff, buildings that are not yet placed into service, where we have leasing done, contracts leases that are done. And it’s the equivalent of that same 170 basis point spread. So that’s an added differentiator and an advantage that none of our peers have because they don’t have the scale of that non-comparable pool.

Operator: As there are no further questions at this time, I would like to turn the floor back over to Ms. Leah Brady for closing comments.

Leah Brady : Thank you, everyone, and we look forward to seeing many of you at the Citi Conference.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.