06/12/2014 | by
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Federal Realty CEO Says Company “Firing On All Cylinders”

Donald Wood, president and CEO of Federal Realty Investment Trust (NYSE: FRT), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.

Federal Realty’s funds from operations (FFO) per share hit an all-time high in the first quarter. Wood was asked about the factors behind those results, and whether he expected them to continue.

“We certainly do. Our company is based on properties in great locations with lots of people, money to spend, and most importantly barriers to entry,” he said. In the wake of the financial crisis, “we’re firing on all cylinders, there’s no question about that,” he added.

 “If you take a look at where we are – that’s strong leasing, that’s strong results from our development, there’s an acquisition impact or two from the prior years - that is just the beginning of where we see ourselves going,” Wood said.

He stressed that Federal Realty is trying to effectively double earnings during the next 10 years. “We can do that with things that we already have under our control, both in the form of the great core portfolio that we have, development opportunities that are starting to deliver, and the occasional acquisition,” he said.

Wood noted that Federal Realty has about 85 properties in its portfolio. “To me that’s a real benefit of the company because it means we look at each individual project. Real estate is a local business and we don’t look at it as a giant portfolio,” he said.

Turning to specific projects, Wood highlighted the Pike & Rose mixed-use retail and residential development in Rockville, Md., which is currently delivering its first phase. He noted that “$250 million is being put to work at about an 8 percent yield… (and) that’s only the first phase, for the next 10 years you are going to see incremental phases there.”

Federal Realty is also delivering on the first phase of Assembly Row in Somerville, Ma., worth about $200 million. “That’s also the first phase of a long window of development,” Wood stressed.

“The long-term perspective is that opportunities are as good as they’ve ever been at our company,” Wood added.