Company: FRT-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000034903-25-000063
Chunk: 61

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 61
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 the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and SOFR rate. In addition, we evaluate the default risk of the counterparty by monitoring the credit-worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.

As of September 30, 2025, we have interest rate swap agreements that effectively fix the rate on the following debt instruments:

Debt Notional Amount of Related Swap AgreementsWeighted Average Fixed RateMaturity Date of Related Swap Agreements(in millions)Term Loan$300.0 4.21 %March 1, 2028Bethesda Row mortgage loan$200.0 5.03 %December 28, 2025Hoboken mortgage loan$51.0 3.67 %December 15, 2029

Additionally, our Assembly Row hotel joint venture is a party to two interest rate swap agreements that effectively fix its outstanding $38.1 million of debt at an average rate of 6.11% through May 2028.

All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings as of September 30, 2025.

REIT Qualification

We intend to maintain the Trust's qualification as a REIT under Section 856(c) of the Code. As a REIT, we generally will not be subject to corporate federal income taxes on income we distribute to our shareholders as long as we satisfy certain technical requirements of the Code, including the requirement to distribute at least 90% of our taxable income to our shareholders.

Funds From Operations

Funds from operations (“FFO”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with the NAREIT definition, and we have historically reported our