Company: FRT-PC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000034903-25-000037
Chunk: 33

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 33
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 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 2.2 million square feet of comparable space leasing we've completed in the last twelve months, and the 2.1% spread between our leased rate of 95.7% and our occupied rate of 93.6%. 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. 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.

We continue to have several development projects in process being delivered as follows:

•Phase IV at Pike & Rose is a 276,000 square foot office building (which includes 10,000 square feet of ground floor retail space). Approximately 250,000 square feet of the office space is leased, of which, 193,000 square feet is open, and all of the retail space is open. 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 302,000 square feet of space is leased.

•Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $271 million that we expect to stabilize over the next several years.

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The above includes our best estimates based on information currently known, however, the completion of construction, final costs