Federal Realty Announces December Sales of Non-Strategic Assets and Senior Note Redemptions as the Company Looks Beyond COVID-19

Rhea-AI Summary

Federal Realty Investment Trust (NYSE: FRT) announced the sale of three non-strategic properties, including The Shops at Sunset Place, for $170 million. The sales closed before year-end 2020. The Trust also repaid $250 million of 2.55% senior notes due 2021 and redeemed $250 million of 3.00% senior notes due 2022, eliminating public bonds maturing until June 2023. With an $800 million cash balance and a $1 billion credit facility, the company emphasizes the importance of a strong balance sheet for navigating the post-COVID retail recovery.

Positive

• Completed sales of non-strategic assets for $170 million, enhancing liquidity.
• Maintained a strong cash balance of approximately $800 million.
• No public bonds maturing until June 2023, providing financial flexibility.

Negative

• The company recognized a loss on extinguishment of debt of approximately $11.2 million in Q4 2020.

ROCKVILLE, Md., Jan. 7, 2021 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today announced the sale of The Shops at Sunset Place in South Miami Florida along with the sales of two of its more traditional shopping centers in Washington, D.C. and Chapel Hill, North Carolina for combined gross proceeds of $170 million. All three sales closed prior to year-end 2020 and the properties were not central to the Company's future growth plans.

Separately, the Trust repaid at par its $250 million 2.55% senior unsecured notes due 2021 and redeemed $250 million 3.00% senior unsecured notes due 2022. As a result, the Trust has no public bonds maturing until June 2023 and begins 2021 with approximately $800 million of cash on the balance sheet and a fully undrawn $1 billion credit facility.

"As the path to a post COVID retail real estate recovery gets a bit clearer, the flexibility afforded by a strong balance sheet has never been more important," said Donald C. Wood, President and Chief Executive Officer. "We have always understood that our business is a cyclical one yet have always endeavored to de-risk those valleys with the power that only a fortress balance sheet can provide."

In December 2020, the Company sold three non-strategic assets, The Shops at Sunset Place, Eastgate Crossing and Sam's Park and Shop for a combined total sale price of $170 million. As previously announced, the company no longer saw a viable redevelopment path for The Shops at Sunset Place in South Miami, Florida.  The $60.6 million non-recourse mortgage that encumbered The Shops at Sunset Place was repaid as part of the sale transaction. Eastgate Crossing is a 158,000 square foot shopping center anchored by Trader Joe's, Ulta and Petco located in Chapel Hill, North Carolina, which was the Company's only asset in North Carolina. Sam's Park and Shop is a 51,000 square foot shopping center anchored by an urban Target located in Cleveland Park, Washington, D.C.

Additionally, the Company repaid at par its $250 million 2.55% senior unsecured notes due 2021 and redeemed its $250 million 3.00% senior unsecured notes due 2022 ("Senior Notes due 2022"). The Senior Notes due 2022 were redeemed pursuant to their terms at 104.144% of the principal amount, plus accrued and unpaid interest. The total aggregate redemption price was $263.5 million, including $3.1 million in accrued interest. In connection with the redemption, the Company will recognize a loss on extinguishment of debt of approximately $11.2 million in the fourth quarter of 2020. The Company financed the redemption of the Senior Notes due 2021 and the Senior Notes due 2022 with cash on hand.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 101 properties include approximately 2,800 tenants, in 23 million square feet, and approximately 2,800 residential units. 

Federal Realty has increased its quarterly dividends to its shareholders for 53 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.

Inquiries:
Leah Andress Brady
Investor Relations Senior Manager
301.998.8265
lbrady@federalrealty.com

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SOURCE Federal Realty Investment Trust

FAQ

What properties did Federal Realty Investment Trust sell recently?

Federal Realty sold The Shops at Sunset Place, Eastgate Crossing, and Sam's Park and Shop for a combined $170 million.

What is the impact of Federal Realty's recent sales on its financial status?

The sales improved liquidity and allowed the company to pay down significant debt.

When are Federal Realty's public bonds due?

Federal Realty has no public bonds maturing until June 2023.

What financial losses did Federal Realty report?

Federal Realty reported an approximately $11.2 million loss on extinguishment of debt in Q4 2020.

How much cash does Federal Realty have on hand?

Federal Realty starts 2021 with approximately $800 million in cash.