Company: FRT-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000034903-25-000063
Chunk: 64

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 64
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 discusses the effect of hypothetical changes in market rates of interest on interest expense for our variable rate debt and on the fair value of our total outstanding debt, including our fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. Quoted market prices were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. This analysis does not purport to take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure.

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Table of Contents

Fixed Interest Rate Debt

The majority of our outstanding debt obligations (maturing at various times through 2059) have fixed interest rates which limit the risk of fluctuating interest rates. However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments. At September 30, 2025, we had $4.2 billion of fixed-rate debt outstanding, including $300.0 million of our unsecured term loan and $251.0 million of  mortgage payables for which the rate is effectively fixed by interest rate swap agreements. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at September 30, 2025 had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately $144.3 million. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at September 30, 2025 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $160.7 million.

Variable Interest Rate Debt

Generally, we believe that our primary interest rate risk is due to fluctuations in interest rates on our outstanding variable rate debt. At September 30, 2025, we had $552.4 million of variable rate debt outstanding ($450.0 million of our unsecured term loan and $102.4 million outstanding in our revolving credit facility). Based upon this amount of variable rate debt and the specific terms, if market interest rates increased 1.0%, our annual interest expense would increase approximately $5.5 million with a