Company: FRT-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000034903-25-000063
Chunk: 72

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 2
Chunk 72
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 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 nine months ended September 30, 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.

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Table of Contents

Recently Issued Accounting Pronouncements

See Note 2 to the consolidated financial statements.

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, construction costs and salaries and related costs of personnel directly involved, are capitalized. We capitalized certain external and internal costs related to both development and redevelopment activities of $121 million and $6 million, respectively, for the nine months ended September 30, 2025, and $102 million and $6 million for the nine months ended September 30, 2024. We capitalized external and internal costs related to other property improvements of $72 million and $4 million, respectively, for the nine months ended September 30, 2025, and $74 million and $4 million, respectively, for the nine months ended September 30, 2024. We capitalized external and internal costs related to leasing activities of $15 million and $3 million, respectively, for the nine months ended September 30, 2025, and $14 million and $3 million, respectively, for the nine months ended September 30, 2024. The amount of capitalized internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were $6 million, $3 million, and $3 million, respectively, for both the nine months ended September 30, 2025 and 2024. Total capitalized costs were $220 million and $204 million for the nine months ended September 30, 2025 and 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