Company: FRT-PC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0000034903-25-000052
Chunk: 31

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 1
Chunk 31
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 these matters.We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us.In June 2018, we formed a joint venture to develop Freedom Plaza (formerly Jordan Downs Plaza), for which we own 92%. The investment in this development qualified for tax credits under the New Market Tax Credit ("NMTC") Program, established by the Community Renewal Tax Relief Act 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 three and six months ended June 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.Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or common shares, at our option. During the three months ended June 30, 2025, we redeemed 77,983 downREIT operating partnership units for $7.0 million. As of June 30, 2025, a total of 529,207 downREIT operating partnership units were 

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outstanding which had a total fair value of approximately $50.3 million, which is calculated by multiplying the outstanding number of downREIT