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So with that, to start today's presentation, I’ll turn it over Don.Don Wood Thanks Andy. I am going to talk on this, because I don't want to stand back there. I would rather be out here and talk to you guys. First of all, I cannot thank enough for making the trip all the way out here from San Francisco or from Newport Beach, but particularly the East Coast people for making this trip. You know it’s been 10 years ago when Santana opened. It opened on November 7, 2002 and I wouldn't have a job if Santana Row didn't almost burned down three months earlier and I don't know how many of you know that, but this property started out in a real auspicious way with a major fire on one of the buildings that you will see next to this building actually, and you will see it on the tour as we walk through. Hopefully, you will see the site that went through the fire. But, this property I talked to a group of analysts and investors on November 7, 2002 and I said that Santana Row was a mistake. And that didn't go over well with my boss and it was pretty contentious and frankly it wound up with us making change in the company. Santana Row was a mistake, and the reason it was a mistake, basically telling people what everybody already knew. It’s the same as the sky is blue and that is not the property itself, but that the company took basically $600 million, $650 million bet, all by itself in a time that, you know, the company’s total market cap was about $1.8 billion. So a third of the company bet that way. It was a mistake. It doesn’t matter, whether it was going to turn out good, turn out bad, catch on fire, not catch on fire, whatever. And I believe it then and I believe it to this day, is why, when we go into development, particularly mixed use development and due projects, every time since risk has been mitigated in one way or another.
You’ve seen that most recently at Assembly, where we brought in AvalonBay to do the first phase of the apartments, because it is an unproven site. They are there locally and very, very confident with respect to what they are doing. We didn’t want to take that risk.If you go 200 miles south to Mid-Pike Plaza, where we’ll be doing what I think will be one of the best projects nationally, we’re changing the name of Mid-Pike to Pike & Rose as we build it out. We’re going to do that first phase ourselves, but we won’t do all of it ourselves going forward for the same risk mitigating reasons. And so, there is in this room are, is a real varied group of people. Some folks have been around a long time and who remember the story that I’ve told you. Most of you really haven’t been to this property, but you know when you evaluate Federal Realty and you evaluate the work that we do and when you evaluate our team you know that the West Coast and particularly Santana is the large part of the company. So what we really wanted to do is to make sure that we got a group here today and real with the folks that did come, because you’ve got the big names and the big investors in Federal Realty, so I couldn’t be happier to have you here. Just frankly, we want to show off a little bit today. We don’t want to show off from the standpoint of, this is the most amazing financial success or whatever, but we do want to show up that you understand that 25% of the company is represented here on the West Coast; a fourth quarter of the company on the West Coast and growing.
And what we’ve done in the last 18 months is to make sure that we put a dedicated team and we would be centralized a little bit. So Jeff Berkes, who you’ll meet, has taken over the role as President of the West Coast. He has built a team, most folks who have been here already, he pulled them together; he has added folks like Jeff Kreshek who are going to meet as Head of Leasing.And working with the Jan Sweetnam who some of you have met, with Randy Paul on Development; you’re going to see that there is a real West Coast operation that is extremely confident and is extremely responsible if you will for growing this part of Federal Realty’s business and we didn’t know anyway to really do that better than to try to get you out here, so that you can walk the property with them, you can ask them whatever you want, it’s not filtered through me, it won’t be filtered through Andy Blocher; please use this day to get to know these folks and to access for yourself, whether we’ve got a competent group of people here in order for you to feel this West Coast region. What we have at Santana Row is not a development project. The place has been opened 10 years now and what you are going to walk through is one of the most stable shopping centers in the portfolio. I am going to show you some numbers; I am going to talk about some numbers in terms of the property. This is as you know the thing opened at about a about a 3.5 cap or something like that, so it certainly wasn’t going to make a lot of money. The question was, well okay, if you did it in the right location, if you can get through that for two or three of truly disaster from a capital loss perspective, then would the value of the real estate, would the area that we build in, with the product that we build, we will be able to overcome those first two, three, four, five years of planning, construction and opening.
And I think you’re going to find that you bet we can. I am proud to say Santana Row is truly, truly, truly the center of San Jose; it’s the center of Silicon Valley in so many ways and the more time you spend here, the more people you talk to, (inaudible) somebody came up to him and said, independently and basically, said that something along those lines.So we are proud of what we have, but it’s not just Santana; we’re going to go through some of the other province. I just want to a couple of quick big things on Federal, most of you know, nothing to take long access; we had our conference call, we had our earnings release and all that, but just to put it in perspective, we have to – is that thing enough, is that great, okay. Sorry folks, we are handing out these handouts, we got to hand it out and get them issued here; we’ll handle and take them. It’s simple, that’s nothing more than a summary of the first quarter; you know that we did $1.04, and you know that our same center growth was nearly 6% you know that our cash basis leasing spread were plus 17% from straight line over 20%. We increased our guidance as somebody said and he does it every quarter. He does not increase guidance every quarter. We have some pretty good momentum going in and felt comfortable doing that. And look, Fitch moving is up to an A minus, a positive outlook from Moody’s and S&P. We are hitting on all cylinders right now. We are also going into the video business and we won’t announce that today, because we - I am good at it. I do want to make a point and that is that this company, only company on the retail side whose property level same store growth from 2007-2008 through the recession up till today. If you can find another one, I would love it. I went on Mad Money and I said on Mad Money that you know Federal is the only company whose same store NOI growth increased in ’09 over ’08, ’10 over ’09, ’11 over ’10, and we expect to do that’12 over ’11.
And I don't think I got out of the studio when there was an email from [David Simons], saying, hey, to which I responded you are not a competitor in this particular case, in this particular thing, so I don't count you. Now I don't know whether that's true, because Andy said it wasn’t sure, it is true, alright Simons and then, Simons, come on. I don't know if there is anybody else, but its notwithstanding; it’s a great overall portfolio I should note. We made a couple of acquisitions this year, you know about Montrose Crossing I think and are you going to switch it, switch it again.Montrose is a big deal for us. It’s a big piece of property, its nearly 40 acres; 357,000 feet. We obviously don’t worry about this site, get the next one, but the one I really do want you to look at when you do get the package is this aerial that we have of Rose & Pike. I mean you can’t see it too well from here, but I've got to tell you if there is shopping to happen in Montgomery County, it happens at Montgomery Mall, happens on the Pike. And to control Mid-Pike, which will be Pike & Rose and mixed-use largely heading north, a lot of residential, little bit of office, retail on the ground floor, Federal Plaza which is more of a power center, that's where your Ross is, that's where your trader Joes is, that's where your boxes are. Congressional, which is where our headquarters is and having Congressional Plaza with some just great tenants like Bye Bye Baby, like a container store, like the Fresh Market and a great place for moms and families; and now owning the big piece of land directly across the street basically, corner from Mid-Pike is Montrose Crossing.
And if there were ever a case for regional dominance, this is pretty good, I mean we basically work real hard to not cannibalize each other, so the reason I went through the type of properties that they are is to basically show you we are trying to offer our retail product for everybody in that spot, from boxes to small shop to restaurant to [light box] and that's over 1.2 million square feet within a mile. That has been one of the best performing areas ever within the portfolio that we have. That will do nothing but enhance that, make that happen.There is another small shopping center right next to it that’s for sale right now. We passed on the ground lease, it’s going for a stupid, stupid, stupid number and no offence, that whoever is buying it at that number but it’s not going to be us in doing it and so we stay, we remain disciplined, we’re not going to bid the farm. It’s truly is all about real regional dominance in the right places. Read the rest of this transcript for free on seekingalpha.com