Item 16. FORM 10-K SUMMARY

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February 13, 2018.

	Federal Realty Investment Trust
By:	/S/ DONALD C. WOOD
	Donald C. Wood President, Chief Executive Officer and Trustee

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of Donald C. Wood and Dawn M. Becker as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof.

Signature		Title		Date
/S/ DONALD C. WOOD		President, Chief Executive Officer and		February 13, 2018
Donald C. Wood		Trustee (Principal Executive Officer)
/S/ DANIEL GUGLIELMONE		Executive Vice President-Chief Financial		February 13, 2018
Daniel Guglielmone		Officer and Treasurer (Principal
		Financial and Accounting Officer)
/S/ JOSEPH S. VASSALLUZZO		Non-Executive Chairman		February 13, 2018
Joseph S. Vassalluzzo
/S/ JON E. BORTZ		Trustee		February 13, 2018
Jon E. Bortz
/S/ DAVID W. FAEDER		Trustee		February 13, 2018
David W. Faeder
/S/ ELIZABETH I. HOLLAND		Trustee		February 13, 2018
Elizabeth I. Holland
/S/ GAIL P. STEINEL		Trustee		February 13, 2018
Gail P. Steinel
/S/ WARREN M. THOMPSON		Trustee		February 13, 2018
Warren M. Thompson

Item 8 and Item 15(a)(1) and (2)

Index to Consolidated Financial Statements and Schedules

Consolidated Financial Statements	Page No.
Report of Independent Registered Public Accounting Firm	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets	F-4
Consolidated Statements of Comprehensive Income	F-5
Consolidated Statement of Shareholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8
Financial Statement Schedules
Schedule III—Summary of Real Estate and Accumulated Depreciation	F-31
Schedule IV—Mortgage Loans on Real Estate	F-39

All other schedules have been omitted either because the information is not applicable, not material, or is disclosed in our consolidated financial statements and related notes.

F-1

Report of Independent Registered Public Accounting Firm

Trustees and Shareholders

Federal Realty Investment Trust

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Federal Realty Investment Trust (a Maryland real estate investment trust) and Subsidiaries (collectively, the "Trust") as of December 31, 2017, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Trust as of and for the year ended December 31, 2017, and our report dated February 13, 2018 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Disclosure Controls and Procedures. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

New York, New York

February 13, 2018

F-2

Report of Independent Registered Public Accounting Firm

Trustees and Shareholders

Federal Realty Investment Trust

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and Subsidiaries (collectively, the "Trust") as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Trust’s internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 13, 2018 expressed an unqualified opinion on those financial statements.

Basis for opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Trust’s auditor since 2002.

New York, New York

February 13, 2018

F-3

Federal Realty Investment Trust

Consolidated Balance Sheets

	December 31,
	2017				2016
	(In thousands, except share and per share data)
ASSETS
Real estate, at cost
Operating (including $1,639,486 and $1,211,605 of consolidated variable interest entities, respectively)	$	6,950,188			$	6,125,957
Construction-in-progress (including $43,393 and $15,313 of consolidated variable interest entities, respectively)	684,873				599,260
Assets held for sale	—				33,856
	7,635,061				6,759,073
Less accumulated depreciation and amortization (including $247,410 and $209,239 of consolidated variable interest entities, respectively)	(1,876,544		)		(1,729,234		)
Net real estate	5,758,517				5,029,839
Cash and cash equivalents	15,188				23,368
Accounts and notes receivable	209,877				116,749
Mortgage notes receivable, net	30,429				29,904
Investment in real estate partnerships	23,941				14,864
Prepaid expenses and other assets	237,803				208,555
TOTAL ASSETS	$	6,275,755			$	5,423,279
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable (including $460,372 and $439,120 of consolidated variable interest entities, respectively)	$	491,505			$	471,117
Capital lease obligations	71,556				71,590
Notes payable	320,265				279,151
Senior notes and debentures	2,401,440				1,976,594
Accounts payable and accrued expenses	196,332				201,756
Dividends payable	75,931				71,440
Security deposits payable	16,667				16,285
Other liabilities and deferred credits	169,388				115,817
Total liabilities	3,743,084				3,203,750
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	141,157				143,694
Shareholders’ equity
Preferred shares, authorized 15,000,000 shares, $.01 par:
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 and 0 shares issued and outstanding, respectively	150,000				—
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding	9,997				9,997
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 73,090,877 and 71,995,897 shares issued and outstanding, respectively	733				722
Additional paid-in capital	2,855,321				2,718,325
Accumulated dividends in excess of net income	(749,367		)		(749,734		)
Accumulated other comprehensive income (loss)	22				(2,577		)
Total shareholders’ equity of the Trust	2,266,706				1,976,733
Noncontrolling interests	124,808				99,102
Total shareholders’ equity	2,391,514				2,075,835
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	6,275,755			$	5,423,279

The accompanying notes are an integral part of these consolidated statements.

F-4

Federal Realty Investment Trust

Consolidated Statements of Comprehensive Income

	Year Ended December 31,
	2017				2016				2015
	(In thousands, except per share data)
REVENUE
Rental income	$	841,461			$	786,583			$	727,812
Other property income	12,825				11,015				11,810
Mortgage interest income	3,062				3,993				4,390
Total revenue	857,348				801,591				744,012
EXPENSES
Rental expenses	164,890				158,326				147,593
Real estate taxes	107,839				95,286				85,824
General and administrative	36,281				33,399				35,645
Depreciation and amortization	216,050				193,585				174,796
Total operating expenses	525,060				480,596				443,858
OPERATING INCOME	332,288				320,995				300,154
Other interest income	475				374				149
Interest expense	(100,125		)		(94,994		)		(92,553		)
Early extinguishment of debt	(12,273		)		—				(19,072		)
(Loss) income from real estate partnerships	(417		)		50				1,416
INCOME FROM CONTINUING OPERATIONS	219,948				226,425				190,094
Gain on sale of real estate and change in control of interests, net	77,922				32,458				28,330
NET INCOME	297,870				258,883				218,424
Net income attributable to noncontrolling interests	(7,956		)		(8,973		)		(8,205		)
NET INCOME ATTRIBUTABLE TO THE TRUST	289,914				249,910				210,219
Dividends on preferred shares	(2,458		)		(541		)		(541		)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS	$	287,456			$	249,369			$	209,678
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders	$	3.97			$	3.51			$	3.04
Weighted average number of common shares, basic	72,117				70,877				68,797
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders	$	3.97			$	3.50			$	3.03
Weighted average number of common shares, diluted	72,233				71,049				68,981
NET INCOME	$	297,870			$	258,883			$	218,424
Other comprehensive income (loss) - change in value of interest rate swaps	2,599				1,533				(595		)
COMPREHENSIVE INCOME	300,469				260,416				217,829
Comprehensive income attributable to noncontrolling interests	(7,956		)		(8,973		)		(8,205		)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST	$	292,513			$	251,443			$	209,624

The accompanying notes are an integral part of these consolidated statements.

F-5

Federal Realty Investment Trust

Consolidated Statement of Shareholders’ Equity

	Shareholders’ Equity of the Trust
	Preferred Shares							Common Shares							Additional Paid-in Capital				Accumulated Dividends in Excess of Net Income				Accumulated Other Comprehensive Income/(Loss)				Noncontrolling Interests				Total Shareholders' Equity
	Shares			Amount				Shares			Amount
	(In thousands, except share data)
BALANCE AT DECEMBER 31, 2014	399,896			$	9,997			68,605,783			$	687			$	2,281,223			$	(683,991	)		$	(3,515	)		$	88,155			1,692,556
Net income, excluding $3,423 attributable to redeemable noncontrolling interests	—			—				—			—				—				210,219				—				4,782				215,001
Other comprehensive loss - change in value of interest rate swaps	—			—				—			—				—				—				(595		)		—				(595		)
Dividends declared to common shareholders	—			—				—			—				—				(250,388		)		—				—				(250,388		)
Dividends declared to preferred shareholders	—			—				—			—				—				(541		)		—				—				(541		)
Distributions declared to noncontrolling interests	—			—				—			—				—				—				—				(5,269		)		(5,269		)
Common shares issued	—			—				813,548			8				108,537				—				—				—				108,545
Exercise of stock options	—			—				29,940			—				1,991				—				—				—				1,991
Shares issued under dividend reinvestment plan	—			—				16,524			—				2,296				—				—				—				2,296
Share-based compensation expense, net of forfeitures	—			—				52,213			1				12,073				—				—				—				12,074
Shares withheld for employee taxes	—			—				(64,227	)						(9,211		)		—				—				—				(9,211		)
Redemption of OP units	—			—				39,611			—				4,072				—				—				(4,223		)		(151		)
Contributions from noncontrolling interests	—			—				—			—				—				—				—				34,737				34,737
Adjustment to redeemable noncontrolling interests	—			—				—			—				(19,114		)		—				—				—				(19,114		)
BALANCE AT DECEMBER 31, 2015	399,896			9,997				69,493,392			696				2,381,867				(724,701		)		(4,110		)		118,182				1,781,931
Net income, excluding $2,713 attributable to redeemable noncontrolling interests	—			—				—			—				—				249,910				—				6,260				256,170
Other comprehensive income - change in value of interest rate swaps	—			—				—			—				—				—				1,533				—				1,533
Dividends declared to common shareholders	—			—				—			—				—				(274,402		)		—				—				(274,402		)
Dividends declared to preferred shareholders	—			—				—			—				—				(541		)		—				—				(541		)
Distributions declared to noncontrolling interests	—			—				—			—				—				—				—				(7,546		)		(7,546		)
Common shares issued	—			—				2,156,671			21				324,170				—				—				—				324,191
Exercise of stock options	—			—				55,365			1				4,541				—				—				—				4,542
Shares issued under dividend reinvestment plan	—			—				15,619			—				2,387				—				—				—				2,387
Share-based compensation expense, net of forfeitures	—			—				134,913			2				11,225				—				—				—				11,227
Shares withheld for employee taxes	—			—				(30,671	)		—				(4,451		)		—				—				—				(4,451		)
Conversion and redemption of OP units	—			—				170,608			2				18,677				—				—				(18,679		)		—
Contributions from noncontrolling interests	—			—				—			—				—				—				—				885				885
Adjustment to redeemable noncontrolling interests	—			—				—			—				(20,091		)		—				—				—				(20,091		)
BALANCE AT DECEMBER 31, 2016	399,896			$	9,997			71,995,897			$	722			$	2,718,325			$	(749,734	)		$	(2,577	)		$	99,102			$	2,075,835
January 1, 2017 adoption of new accounting standard - See Note 2															83				(83		)										—
Net income, excluding $3,874 attributable to redeemable noncontrolling interests	—			—				—			—				—				289,914				—				4,082				293,996
Other comprehensive income - change in value of interest rate swaps	—			—				—			—				—				—				2,599				—				2,599
Dividends declared to common shareholders	—			—				—			—				—				(287,006		)		—				—				(287,006		)
Dividends declared to preferred shareholders	—			—				—			—				—				(2,458		)		—				—				(2,458		)
Distributions declared to noncontrolling interests	—			—				—			—				—				—				—				(5,560		)		(5,560		)
Common shares issued, net	—			—				826,592			8				108,240				—				—				—				108,248
Preferred shares issued, net	6,000			150,000				—			—				(5,035		)		—				—				—				144,965
Exercise of stock options	—			—				152,634			2				9,977				—				—				—				9,979
Shares issued under dividend reinvestment plan	—			—				17,911			—				2,373				—				—				—				2,373
Share-based compensation expense, net of forfeitures	—			—				107,522			1				12,370				—				—				—				12,371
Shares withheld for employee taxes	—			—				(29,709	)		—				(4,229		)		—				—				—				(4,229		)
Conversion and redemption of OP units	—			—				20,030			—				2,569				—				—				(2,569		)		—
Contributions from noncontrolling interests	—			—				—			—				—				—				—				35,331				35,331
Purchase of noncontrolling interests	—			—				—			—				42				—				—				(5,578		)		(5,536		)
Adjustment to redeemable noncontrolling interests	—			—				—			—				10,606				—				$	—			—				10,606
BALANCE AT DECEMBER 31, 2017	405,896			$	159,997			73,090,877			$	733			$	2,855,321			$	(749,367	)		$	22			$	124,808			$	2,391,514

The accompanying notes are an integral part of these consolidated statements.

F-6

Federal Realty Investment Trust

Consolidated Statements of Cash Flows

	Year Ended December 31,
	2017				2016				2015
	(In thousands)
OPERATING ACTIVITIES
Net income	$	297,870			$	258,883			$	218,424
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	216,050				193,585				174,796
Gain on sale of real estate and change in control of interests, net	(77,922		)		(32,458		)		(28,330		)
Early extinguishment of debt	12,273				—				19,072
Loss (income) from real estate partnerships	417				(50		)		(1,416		)
Other, net	(2,674		)		474				(29		)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in accounts receivable, net	2,059				1,868				(9,200		)
Increase in prepaid expenses and other assets	(3,346		)		(3,753		)		(6,695		)
Increase (decrease) in accounts payable and accrued expenses	14,242				7,159				(1,305		)
Increase (decrease) in security deposits and other liabilities	208				(2,003		)		3,729
Net cash provided by operating activities	459,177				423,705				369,046
INVESTING ACTIVITIES
Acquisition of real estate	(436,652		)		(142,958		)		(154,313		)
Capital expenditures - development and redevelopment	(441,984		)		(379,720		)		(236,437		)
Capital expenditures - other	(76,952		)		(57,560		)		(46,096		)
Proceeds from sale of real estate and real estate partnership interests	136,055				—				97,422
Investment in real estate partnerships	(696		)		(7,220		)		(2,802		)
Distribution from real estate partnership in excess of earnings	1,729				3,910				512
Leasing costs	(16,656		)		(18,299		)		(22,382		)
(Issuance) repayment of mortgage and other notes receivable, net	(1,646		)		11,626				10,333
Net cash used in investing activities	(836,802		)		(590,221		)		(353,763		)
FINANCING ACTIVITIES
Net borrowings (repayment) under revolving credit facility, net of costs	41,000				(56,916		)		53,500
Issuance of senior notes, net of costs	572,134				241,795				456,151
Redemption and retirement of senior notes	(161,930		)		—				(219,228		)
Repayment of mortgages, capital leases, and notes payable	(56,328		)		(49,559		)		(181,315		)
Issuance of common shares, net of costs	118,583				329,103				110,855
Issuance of preferred shares, net of costs	144,991				—				—
Dividends paid to common and preferred shareholders	(282,995		)		(267,694		)		(243,314		)
Shares withheld for employee taxes	(4,229		)		(4,451		)		(9,211		)
Contributions from noncontrolling interests	13,449				662				—
Distributions to and redemptions of noncontrolling interests	(15,230		)		(24,102		)		(9,626		)
Net cash provided by (used in) financing activities	369,445				168,838				(42,188		)
(Decrease) increase in cash and cash equivalents	(8,180		)		2,322				(26,905		)
Cash and cash equivalents at beginning of year	23,368				21,046				47,951
Cash and cash equivalents at end of year	$	15,188			$	23,368			$	21,046

The accompanying notes are an integral part of these consolidated statements.

F-7

Federal Realty Investment Trust

Notes to Consolidated Financial Statements

December 31, 2017, 2016 and 2015

NOTE 1—BUSINESS AND ORGANIZATION

Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties. Our properties are located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of December 31, 2017, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects.

We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Certain 2016 and 2015 amounts have been reclassified to conform to current period presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.

Revenue Recognition and Accounts Receivable

Our leases with tenants are classified as operating leases. Substantially all such leases contain fixed escalations which occur at specified times during the term of the lease. Base rents are recognized on a straight-line basis from when the tenant controls the space through the term of the related lease, net of valuation adjustments, based on management’s assessment of credit, collection and other business risk. Percentage rents, which represent additional rents based upon the level of sales achieved by certain tenants, are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved and the percentage rents are collectible. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement. Lease termination fees for which the tenant has relinquished control of the space are generally recognized on the termination date. When a lease is terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is generally recognized evenly over the remaining term of the modified lease agreement.

We make estimates of the collectability of our accounts receivable related to minimum rents, straight-line rents, expense reimbursements and other revenue. Accounts receivable is carried net of this allowance for doubtful accounts. Our determination as to the collectability of accounts receivable and correspondingly, the adequacy of this allowance, is based primarily upon evaluations of individual receivables, current economic conditions, historical experience and other relevant factors. The allowance for doubtful accounts is increased or decreased through bad debt expense. Accounts receivable are written-off when they are deemed to be uncollectible and we are no longer actively pursuing collection. At December 31, 2017 and 2016, our allowance for doubtful accounts was $11.8 million and $11.9 million, respectively.

In some cases, primarily relating to straight-line rents, the collection of accounts receivable extends beyond one year. Our experience relative to unbilled straight-line rents is that a portion of the amounts otherwise recognizable as revenue is never billed to or collected from tenants due to early lease terminations, lease modifications, bankruptcies and other factors. Accordingly, the extended collection period for straight-line rents along with our evaluation of tenant credit risk may result in

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the nonrecognition of a portion of straight-line rental income until the collection of such income is reasonably assured. If our evaluation of tenant credit risk changes indicating more straight-line revenue is reasonably collectible than previously estimated and realized, the additional straight-line rental income is recognized as revenue. If our evaluation of tenant credit risk changes indicating a portion of realized straight-line rental income is no longer collectible, a reserve and bad debt expense is recorded. At December 31, 2017 and 2016, accounts receivable include approximately $93.1 million and $80.6 million, respectively, related to straight-line rents.

We are currently under construction on 221 condominium units at our Assembly Row and Pike & Rose properties. Gains or losses on the sale of these condominium units are recognized in accordance with the provisions of ASC Topic 360-20, “Property, Plant and Equipment – Real Estate Sales.” We account for contracted condominium sales under the percentage-of completion method, based on an evaluation of the criteria specified in ASC Topic 360-20 including: the legal commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, whether sufficient units have been contracted to ensure the project will not revert to a rental project, the ability to reasonably estimate the aggregate project sale proceeds and aggregate project costs, and the determination that the buyer has made an adequate initial and continuing cash investment under the contract. When the percentage-of-completion criteria have not been met, no profit is recognized. The application of these criteria can be complex and requires us to make assumptions. See "Recent Accounting Pronouncements," for discussion of change in timing of revenue recognition with the adoption of ASU 2014-09 on January 1, 2018.

Real Estate

Land, buildings and improvements are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range generally from 35 years to a maximum of 50 years on buildings and major improvements. Minor improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 2 to 20 years. Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as incurred. Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter. If a tenant vacates its space prior to contractual termination of its lease, the undepreciated balance of any tenant improvements are written off if they are replaced or have no future value. In 2017, 2016 and 2015, real estate depreciation expense was $193.3 million, $173.2 million and $156.5 million, respectively, including amounts from real estate sold and assets under capital lease obligations.

Sales of real estate are recognized only when sufficient down payments have been obtained, possession and other attributes of ownership have been transferred to the buyer and we have no significant continuing involvement. The application of these criteria can be complex and requires us to make assumptions. We believe these criteria were met for all real estate sold during the periods presented.

Our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and/or appraised values. When we acquire operating real estate properties, the purchase price is allocated to land, building, improvements, leasing costs, intangibles such as in-place leases, assumed debt, if any, and to current assets and liabilities acquired, if any. The value allocated to in-place leases is amortized over the related lease term and reflected as rental income in the consolidated statements of comprehensive income. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any in-place lease value is written off to rental income.

Transaction costs related to asset acquisitions, such as broker fees, transfer taxes, legal, accounting, valuation, and other professional and consulting fees, are capitalized as part of the acquisition cost. The acquisition of an operating shopping center typically qualifies as an asset acquisition. See "Recent Accounting Pronouncements" for further discussion.

When applicable, as lessee, we classify our leases of land and building as operating or capital leases. We are required to use judgment and make estimates in determining the lease term, the estimated economic life of the property and the interest rate to be used in determining whether or not the lease meets the qualification of a capital lease and is recorded as an asset.

We capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved. Additionally, we capitalize interest costs related to development and redevelopment activities. Capitalization of these costs begin when the activities and related expenditures commence and cease when the project is substantially complete and ready for its intended use at which time the project is placed in service and depreciation commences. Additionally, we make estimates as to the

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probability of certain development and redevelopment projects being completed. If we determine the development or redevelopment is no longer probable of completion, we expense all capitalized costs which are not recoverable.

We review for impairment on a property by property basis. Impairment is recognized on properties held for use when the expected undiscounted cash flows for a property are less than its carrying amount at which time the property is written-down to fair value. Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less costs to sell.

Cash and Cash Equivalents

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity, when purchased, under three months. Cash balances in individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation (the “FDIC”). At December 31, 2017, we had $19.6 million in excess of the FDIC insured limit.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist primarily of lease costs, prepaid property taxes and acquired above market leases. Capitalized lease costs are direct costs incurred which were essential to originate a lease and would not have been incurred had the leasing transaction not taken place and include third party commissions and salaries and related costs of personnel directly related to time spent obtaining a lease. Capitalized lease costs are amortized over the life of the related lease. If a tenant vacates its space prior to the contractual termination of its lease, the unamortized balance of any previously capitalized lease costs are written off.

Debt Issuance Costs

Costs related to the issuance of debt instruments are deferred and are amortized as interest expense over the estimated life of the related issue using the straight-line method which approximates the effective interest method. If a debt instrument is paid off prior to its original maturity date, the unamortized balance of debt issuance costs are written off to interest expense or, if significant, included in “early extinguishment of debt.” Debt issuance costs related to our revolving credit facility are classified as an asset and are included in "prepaid expenses and other assets" in our consolidated balance sheets. All other debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability.

Derivative Instruments

At times, we may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes.

The interest rate swaps associated with our cash flow hedges are recorded at fair value on a recurring basis. We assess effectiveness of our cash flow hedges both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into interest expense as interest is incurred on the related variable rate debt; within the next twelve months, we expect to reclassify less than an estimated $0.1 million as an increase to interest expense. Our cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, we evaluate the default risk of the counterparty by monitoring the credit worthiness of the counterparty. When ineffectiveness exists, the ineffective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recognized in earnings in the period affected. Hedge ineffectiveness did not impact earnings in 2017, 2016 or 2015, and we do not anticipate it will have a significant effect in the future.

See Note 6 for additional disclosures relating to our two existing interest rate swap agreements.

Mortgage Notes Receivable

We have made certain mortgage loans that, because of their nature, qualify as loan receivables. At the time the loans were made, we did not intend for the arrangement to be anything other than a financing and did not contemplate a real estate investment. We evaluate each investment to determine whether the loan arrangement qualifies as a loan, joint venture or real estate investment and the appropriate accounting thereon. Such determination affects our balance sheet classification of these investments and the recognition of interest income derived therefrom. We receive additional interest, however, we never receive in excess of 50% of the residual profit in the project, and because the borrower has either a substantial investment in the

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project or has guaranteed all or a portion of our loan (or a combination thereof), the loans qualify for loan accounting. The amounts under these arrangements are presented as mortgage notes receivable at December 31, 2017 and 2016.

Mortgage notes receivable are recorded at cost, net of any valuation adjustments. Interest income is accrued as earned. Mortgage notes receivable are considered past due based on the contractual terms of the note agreement. On a quarterly basis, we evaluate the collectability of each mortgage note receivable based on various factors which may include payment history, expected fair value of the collateral securing the loan, internal and external credit information and/or economic trends. A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due under the existing contractual terms. When a loan is considered impaired, the amount of the loss accrual is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows. Since our loans are collateralized by a first mortgage, the loans have risk characteristics similar to the risks in owning commercial real estate.

At December 31, 2017 and 2016, we had two mortgage notes receivable, with aggregate carrying amounts of $30.4 million and $29.9 million, respectively, with a weighted average interest rate of 10.0% and 9.9%, respectively, which were secured by first mortgages on retail buildings.

Share Based Compensation

We grant share based compensation awards to employees and trustees typically in the form of restricted common shares, common shares, and options. We measure share based compensation expense based on the grant date fair value of the award and recognize the expense ratably over the requisite service period, which is typically the vesting period. See Note 12 for further discussion regarding our share based compensation plans and policies. Effective January 1, 2017, we adopted ASU 2016-09, "Compensation-Stock Compensation," which impacts accounting for forfeitures and the classification for shares withheld for employee taxes on the Statement of Cash Flows. See "Recent Accounting Pronouncements" for further discussion.

Variable Interest Entities

Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

We have 17 entities that meet the criteria of a VIE in which we hold a variable interest. For each of these entities we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of the entities. As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for each of these entities, all are consolidated in our financial statements. Net real estate assets and mortgage payables related to variable interest entities included in our consolidated balance sheets were approximately $1.4 billion and $460.4 million, respectively, as of December 31, 2017, and $1.0 billion and $439.1 million, respectively, as of December 31, 2016.

In addition, our equity method investments in the Pike & Rose hotel joint venture and the La Alameda shopping center are also considered variable interests in a VIE. As we do not control the activities that most significantly impact the economic performance of the joint ventures, we are not the primary beneficiary and do not consolidate. As of December 31, 2017 and 2016 our investment in the joint ventures and maximum exposure to loss was $23.9 million and $13.5 million, respectively.

We have also evaluated our mortgage notes receivable investments and determined that the entities obligated under the mortgage notes are not VIEs. Our equity method investments and mortgage notes receivable balances are presented separately in our consolidated balance sheets.

Redeemable Noncontrolling Interests

We have certain noncontrolling interests that are redeemable for cash upon the occurrence of an event that is not solely in our control and therefore are classified outside of permanent equity. We adjust the carrying amounts of these noncontrolling interests that are currently redeemable to redemption value at the balance sheet date. Adjustments to the carrying amount to reflect changes in redemption value are recorded as adjustments to additional paid-in capital in shareholders' equity. These amounts are classified within the mezzanine section of the consolidated balance sheets.

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The following table provides a rollforward of the redeemable noncontrolling interests:

	Year Ended
	December 31,
	2017				2016
	(In thousands)
Beginning balance	$	143,694			$	137,316
Contributions	11,109				—
Net income	3,874				2,713
Distributions & Redemptions	(6,914		)		(16,426		)
Change in redemption value	(10,606		)		20,091
Ending balance	$	141,157			$	143,694

On January 12, 2017, we exercised our purchase option on non-controlling interests in San Antonio Center for $2.6 million of cash and 44,195 of downREIT operating partnership units.

On February 12, 2016, we acquired the 10% noncontrolling interest in the partnership that owns our Hollywood Blvd project for $13.0 million, bringing our ownership interest to 100%.

Income Taxes

We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.

We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Code”). A TRS is subject to federal and state income taxes. Our TRS activities have not been material.

With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2013. As of December 31, 2017 and 2016, we had no material unrecognized tax benefits. While we currently have no material unrecognized tax benefits, as a policy, we recognize penalties and interest accrued related to unrecognized tax benefits as income tax expense.

Segment Information

Our primary business is the ownership, management, and redevelopment of retail and mixed-use properties. We review operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. We evaluate financial performance using property operating income, which consists of rental income, other property income and mortgage interest income, less rental expenses and real estate taxes. No individual property constitutes more than 10% of our revenues or property operating income and we have no operations outside of the United States of America. Therefore, we have aggregated our properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.

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Recent Accounting Pronouncements

Standard		Description		Date of Adoption		Effect on the financial statements or significant matters
Recently adopted:
ASU 2016-09, March 2016, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting		This ASU simplifies the accounting for share-based payment transactions, including a policy election option with respect to accounting for forfeitures either as they occur or estimating forfeitures (as was previously required), as well as increasing the amount an employer can withhold to cover income taxes on equity awards. Additionally, it requires the cash paid to a taxing authority when shares are withheld to pay employee taxes to be classified as a "financing activity" rather than an "operating activity," as was done previously on the Statement of Cash Flows.		January 2017		The adoption of this standard resulted in accounting for forfeitures as they occur, and we have recorded the cumulative impact on the adoption date as a $0.1 million adjustment to additional paid-in capital and accumulated dividends in excess of net income. The amounts reclassified from "operating activities" to "financing activities" for shares withheld for employee taxes was $4.5 million and $9.2 million, respectively, for 2016 and 2015.
ASU 2017-01, January 2017, Business Combinations (Topic 805): Clarifying the Definition of a Business		This ASU changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets. Given this change in definition, we believe most of our shopping center acquisitions will no longer be considered business combinations, but rather asset acquisitions.		January 2017		The largest impact of this standard is that transaction costs are capitalized for asset acquisitions rather than expensed when they are considered business combinations. Based on acquisitions in the last several years, transaction costs for a single shopping center acquisition have typically ranged from $0.2 million to $2.4 million with significantly higher transaction costs expected for an acquisition of a larger portfolio. We are applying the new guidance prospectively. Our acquisitions during the year ended December 31, 2017 (further discussed in Note 3) qualified as asset acquisitions and consequently, all transaction costs were capitalized after the adoption date.
Adopted Subsequent to December 31, 2017:
ASU 2016-15, August 2016, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments		This ASU provides classification guidance for eight specific topics including debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investees.		January 2018		This standard will require classification changes, however, it is not expected to have a significant impact to our consolidated financial statements.
ASU 2016-18, November 2016, Statement of Cash Flows (Topic 203) - Restricted Cash		This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or cash equivalents. Amounts generally described as restricted cash and equivalents should be included with cash and cash equivalents when reconciling the beginning and end of period total amounts on the statement of cash flows.		January 2018		This standard will require reclassification of certain restricted cash amounts on the consolidated statement of cash flows, but is not expected to have a significant impact to our consolidated financial statements.

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Standard		Description		Date of Adoption		Effect on the financial statements or significant matters
Revenue from Contracts with Customers (Topic 606) and related updates: ASU 2014-09, May 2014, Revenue from Contracts with Customers ASU 2015-14, August 2015, Revenue from Contracts with Customers: Deferral of the Effective Date ASU 2016-08, March 2016, Revenue from Contracts with Customers: Principal versus Agent Considerations ASU 2016-10, April 2016, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing ASU 2016-12, May 2016, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients ASU 2016-20, December 2016, Revenue from Contracts with Customers: Technical Corrections and Improvements		In May 2014, the the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." ASU 2014-09 as amended and interpreted by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20, supersedes nearly all existing revenue recognition guidance under GAAP and replaces it with a core revenue recognition principle, that an entity will recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and creates a five-step model for revenue recognition in accordance with this principle. ASU 2014-09 also requires new disclosures in both interim and annual reporting periods. The guidance in ASU 2014-09 does not apply to contracts within the scope of ASC 840, Leases. ASU 2016-08 clarifies how to identify the unit of accounting for the principal versus agent evaluation, how to apply the control principle to certain types of arrangements, such as service transactions, and reframed the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. ASU 2016-10 clarifies the existing guidance on identifying performance obligations and licensing implementation. ASU 2016-12 adds practical expedients related to the transition for contract modifications and further defines a completed contract, clarifies the objective of the collectability assessment and how revenue is recognized if collectability is not probable, and when non-cash considerations should be measured. ASU 2016-20 corrects or improves guidance in thirteen narrowly focused aspects of the guidance. The standard allows for either "full retrospective" adoption, meaning the standard is applied to all of the periods presented, or "modified retrospective" adoption, meaning the cumulative impact of applying the standard is recognized in accumulated dividends in excess of net income on the date of application.		January 2018		Currently, gains on contracted condominium sales are recognized using the percentage-of-completion method, with the gain recognized once certain criteria have been met in advance of legal closing (see further discussion in the "Revenue Recognition" section of Note 2 to the consolidated financial statements). Under the new guidance, condominium sale gains will be recognized as the condominium units are legally sold, which will typically be upon closing. The reversal of the gain will be recognized through equity, and will be reflected in accumulated dividends in excess of net income. Most of our revenue is accounted for under the leasing standard, and therefore is not subject to this standard. With the exception of condominium sales, the adoption of the standard will not have a significant impact on our consolidated financial statements. We will implement the new revenue recognition guidance retrospectively with the cumulative effect recognized in accumulated dividends in excess of net income at the date of initial application.

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Standard		Description		Date of Adoption		Effect on the financial statements or significant matters
ASU 2017-05, February 2017, Other Income - Gains and Losses from the Recognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets		This ASU clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and also clarifies that all businesses are derecognized using the deconsolidation guidance. Additionally, it defines an insubstance nonfinancial asset as a financial asset that is promised to a counterparty in a contract in which substantially all of the fair value of the assets promised in the contract is concentrated in nonfinancial assets, which excludes cash or cash equivalents and liabilities. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest, however, the new guidance eliminates the use of carryover basis and generally requires a full gain to be recognized for prospective disposals of nonfinancial assets.		January 2018		The new guidance is expected to impact the gain recognized when a real estate asset is sold to a non-customer and a noncontrolling interest is retained. Based on our historical transactions, this standard is not expected to have a significant impact to our consolidated financial statements.
ASU 2017-09, May 2017, Compensation-Stock Compensation (Topic 718): Scope of Modification Accoutning		The ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, an entity will not apply modification accounting if the awards' fair value, vesting conditions, and the classification of the award as equity or a liability are the same immediately before and after the change. The new guidance is applied prospectively to awards granted or modified after the adoption date.		January 2018		This standard is not expected to have a significant impact to our consolidated financial statements.
Not Yet Adopted:
ASU 2016-02, February 2016, Leases (Topic 842)		This ASU significantly changes the accounting for leases by requiring lessees to recognize assets and liabilities for leases greater than 12 months on their balance sheet. The lessor model stays substantially the same; however, there were modifications to conform lessor accounting with the lessee model, eliminate real estate specific guidance, further define certain lease and non-lease components, and change the definition of initial direct costs of leases requiring significantly more leasing related costs to be expensed upfront.		January 2019		We are currently assessing the impact of this standard to our consolidated financial statements.
ASU 2016-13, June 2016, Financial Instruments - Credit Losses (Topic 326)		This ASU changes the impairment model for most financial assets and certain other instruments, requiring the use of an "expected credit loss" model and adding more disclosure requirements.		January 2020		We are currently assessing the impact of this standard to our consolidated financial statements.

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Consolidated Statements of Cash Flows—Supplemental Disclosures

The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:

	Year Ended December 31,
	2017				2016				2015
	(In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred	$	125,684			$	113,016			$	110,675
Interest capitalized	(25,559		)		(18,022		)		(18,122		)
Interest expense	$	100,125			$	94,994			$	92,553
Cash paid for interest, net of amounts capitalized	$	105,201			$	90,185			$	116,335
Cash paid for income taxes	$	352			$	296			$	274
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Mortgage loans refinanced	$	166,823			$	—			$	—
Mortgage loans assumed with acquisition	$	79,401			$	34,385			$	89,516
DownREIT operating partnership units issued with acquisition	$	5,918			$	—			$	7,742
DownREIT operating partnership units redeemed for common shares	$	2,569			$	18,679			$	4,114
Shares issued under dividend reinvestment plan	$	2,017			$	2,017			$	1,977

Capitalized lease costs are direct costs incurred which were essential to originate a lease and would not have been incurred had the leasing transaction not taken place. These costs include third party commissions and salaries and personnel costs related to obtaining a lease. Capitalized lease costs are amortized over the initial term of the related lease which generally ranges from three to ten years. We view these lease costs as part of the up-front initial investment we made in order to generate a long-term cash inflow and therefore, we classify cash outflows related to leasing costs as an investing activity in our consolidated statements of cash flows.

NOTE 3—REAL ESTATE

A summary of our real estate investments and related encumbrances is as follows:

		Cost				Accumulated Depreciation and Amortization				Encumbrances
		(In thousands)
December 31, 2017
Retail and mixed-use properties		$	7,500,929			$	(1,821,046	)		$	470,720
Retail properties under capital leases		123,346				(46,140		)		71,556
Residential		10,786				(9,358		)		20,785
		$	7,635,061			$	(1,876,544	)		$	563,061
December 31, 2016
Retail and mixed-use properties		$	6,621,170			$	(1,677,938	)		$	449,896
Retail properties under capital leases		127,359				(42,308		)		71,590
Residential		10,544				(8,988		)		21,221
		$	6,759,073			$	(1,729,234	)		$	542,707

Retail and mixed-use properties includes the residential portion of Assembly Row, Bethesda Row, Chelsea Commons, Congressional Plaza, Pike & Rose, Santana Row, and Towson Residential (Flats @ 703). The residential property investment is our investment in Rollingwood Apartments.

2017 Property Acquisitions and Dispositions

On February 1, 2017, we acquired a leasehold interest in Hastings Ranch Plaza, a 274,000 square foot shopping center in Pasadena, California for $29.5 million. The land is subject to a long-term ground lease that expires on April 30, 2054. Approximately $21.5 million of assets acquired were allocated to lease intangibles and included within other assets. Approximately $15.2 million of net assets acquired were allocated to lease liabilities and included in other liabilities.

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On March 31, 2017, we acquired the fee interest in Riverpoint Center, a 211,000 square foot shopping center in the Lincoln Park neighborhood of Chicago, Illinois for $107.0 million. Approximately $1.0 million and $12.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively.

We leased three parcels of land at our Assembly Row property to two ground lessees. Both lessees exercised purchase options under the related ground leases. The sale transaction related to the purchase option on one of our ground leases was completed on April 4, 2017 for a sales price of $36.0 million. On June 28, 2017, the sale transactions related to the purchase options on our other two ground lease parcels were completed for a total sales price of $17.3 million. The net gain recognized in connection with these transactions was approximately $15.4 million. At December 31, 2016, the total cost basis of the related land was $33.9 million and is included in "assets held for sale" on our consolidated balance sheet.

On May 19, 2017, we acquired the fee interest in a 71,000 square foot, mixed-use property located in Berkeley, California based on a gross value of $23.9 million. The acquisition was completed through a newly formed entity for which we own a 90% controlling interest. Approximately $0.8 million and $0.3 million of net assets acquired were allocated to other assets for "above market leases" and other liabilities for "below market leases," respectively, and approximately $2.4 million was allocated to noncontrolling interests.

On August 2, 2017, we acquired an approximately 90% interest in a joint venture that owns six shopping centers in Los Angeles County, California based on a gross value of $357 million, including the assumption of $79.4 million of mortgage debt. Approximately $7.8 million of assets acquired were allocated to lease intangibles and included within other assets, approximately $36.2 million of net assets acquired were allocated to lease liabilities and included in other liabilities, and approximately $30.6 million was allocated to noncontrolling interests. That joint venture also acquired a 24.5% interest in La Alameda, a shopping center in Walnut Park, California for $19.8 million. The property has $41.0 million of mortgage debt, of which the joint venture's share is approximately $10 million. Additional information on the properties is listed below:

Property		City/State		GLA
				(in square feet)
Azalea		South Gate, CA		222,000
Bell Gardens		Bell Gardens, CA		330,000
La Alameda		Walnut Park, CA		245,000
Olivo at Mission Hills (1)		Mission Hills, CA		155,000
Plaza Del Sol		South El Monte, CA		48,000
Plaza Pacoima		Pacoima, CA		204,000
Sylmar Towne Center		Sylmar, CA		148,000
				1,352,000
(1) Property is currently being redeveloped. GLA reflects approximate square footage once the property is open and operating.

The following unaudited pro forma financial data includes the total revenues, operating expenses (including approximately $11.5 million and $11.4 million of depreciation and amortization expense for the years ended December 31, 2017 and 2016, respectively), and interest expense/financing costs related to the properties acquired on August 2, 2017 as if they had occurred on January 1, 2016. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it represent the results of income for future periods.

		Year Ended December 31,
		2017				2016
		(in millions) (unaudited)
Total revenue		$	872.9			$	826.6
Net income available for common shareholders		284.6				244.3

On August 25, 2017, we sold our property located at 150 Post Street in San Francisco, California for a sales price of $69.3 million, resulting in a gain of $45.2 million.

On September 25, 2017, we sold our North Lake Commons property in Lake Zurich, Illinois for a sales price of $15.6 million, resulting in a gain of $4.9 million.

On December 28, 2017, we sold a parcel of land at our Bethesda Row property in Bethesda, Maryland for a sales price of $8.5 million, resulting in a gain of $6.5 million.

F-17

For the year ended December 31, 2017, we recognized a $5.4 million gain, net of $1.4 million of income taxes, related to the sale of condominiums at our Assembly Row property based on the percentage-of-completion method. In connection with recording the gain, we recognized a receivable of $67.1 million as of December 31, 2017. The closing of the Assembly Row condominium sales is expected to commence in 2018. As of December 31, 2017, no gain has been recognized for contracted condominium sales at Pike & Rose, as not all of the criteria necessary for profit recognition have been met.

2016 Property Acquisitions and Disposition

On January 13, 2016, we acquired our partner's 70% interest in our joint venture arrangement (the "Partnership") with affiliates of a discretionary fund created and advised by Clarion Partners ("Clarion") for $153.7 million, which included the payment of $130.0 million of cash and the assumption of mortgage loans totaling $34.4 million. As a result of the transaction, we gained control of the six underlying properties, and effective January 13, 2016, have consolidated the properties. We also recognized a gain on acquisition of the controlling interest of $25.7 million related to the difference between the carrying value and fair value of the previously held equity interest. Approximately $7.3 million and $4.9 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. We incurred $0.2 million of acquisition costs, of which $0.1 million were incurred in 2016, and included in "general and administrative expenses" on the consolidated statements of comprehensive income in 2016 and 2015.

On May 12, 2016, an unconsolidated joint venture that we hold an interest in sold a building in Coconut Grove, Florida. Our share of the gain, net of noncontrolling interests, was $0.5 million.

On July 26, 2016, we acquired an additional building in the Coconut Grove neighborhood of Miami, Florida for $5.9 million through our CocoWalk LLC entity. We incurred $0.2 million in acquisition costs which are included in "general and administrative expenses" in 2016.

On November 7, 2016, we acquired a building adjacent to our Barcroft Plaza property for $5.3 million, and incurred $0.1 million of acquisition costs which are included in "general and administrative expenses" in 2016.

NOTE 4—ACQUIRED IN-PLACE LEASES

Acquired lease assets are included in prepaid expenses and other assets and comprise above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities are included in other liabilities and deferred credits and comprise below market leases where we are the lessor and above market leases where we are the lessee. The following is a summary of our acquired lease assets and liabilities:

	December 31, 2017								December 31, 2016
	Cost				Accumulated Amortization				Cost				Accumulated Amortization
	(in thousands)
Above market leases, lessor	$	52,393			$	(31,406	)		$	45,327			$	(28,085	)
Below market leases, lessee	34,604				(1,705		)		13,237				(924		)
Total	$	86,997			$	(33,111	)		$	58,564			$	(29,009	)
Below market leases, lessor	$	(193,085	)		$	56,716			$	(138,253	)		$	48,928
Above market leases, lessee	(9,084		)		560				(2,796		)		271
Total	$	(202,169	)		$	57,276			$	(141,049	)		$	49,199

F-18

The value allocated to in-place leases where we are the lessor is amortized over the related lease term and reflected as additional rental income for below market leases or a reduction of rental income for above market leases in the consolidated statements of comprehensive income. The related amortization of in-place leases where we are the lessee is reflected as additional rental expense for below market leases or a reduction of rental expenses for above market leases in the consolidated statements of comprehensive income. The following is a summary of acquired lease amortization:

	Year Ended December 31,
	2017				2016				2015
	(in thousands)
Amortization of above market leases, lessor	$	(6,005	)		$	(6,726	)		$	(4,425	)
Amortization of below market leases, lessor	10,726				8,551				7,130
Net increase in rental income	$	4,721			$	1,825			$	2,705
Amortization of below market leases, lessee	$	781			$	255			$	255
Amortization of above market leases, lessee	(290		)		(135		)		(135		)
Net increase in rental expense	$	491			$	120			$	120

The following is a summary of the remaining weighted average amortization period for our acquired lease assets and acquired lease liabilities:

		December 31, 2017
Above market leases, lessor		4.7 years
Below market leases, lessee		41.6 years
Below market leases, lessor		19.8 years
Above market leases, lessee		16.9 years

The amortization for acquired in-place leases during the next five years and thereafter, assuming no early lease terminations, is as follows:

		Acquired Lease Assets				Acquired Lease Liabilities
		(In thousands)
Year ending December 31,
2018		$	5,810			$	9,990
2019		3,829				9,488
2020		3,182				8,494
2021		2,804				7,869
2022		2,381				7,484
Thereafter		35,880				101,568
		$	53,886			$	144,893

F-19

NOTE 5—DEBT

The following is a summary of our total debt outstanding as of December 31, 2017 and 2016:

			Principal Balance as of December 31,								Stated Interest Rate as of			Stated Maturity Date as of
Description of Debt			2017				2016				December 31, 2017			December 31, 2017
Mortgages payable			(Dollars in thousands)
The Grove at Shrewsbury (West)			$	10,545			$	10,792			6.38	%		March 1, 2018
Rollingwood Apartments			20,820				21,283				5.54	%		May 1, 2019
The Shops at Sunset Place			66,603				68,634				5.62	%		September 1, 2020
29th Place			4,341				4,553				5.91	%		January 31, 2021
Sylmar Towne Center			17,362				—				5.39	%		June 6, 2021
Plaza Del Sol			8,579				—				5.23	%		December 1, 2021
THE AVENUE at White Marsh			52,705				52,705				3.35	%		January 1, 2022
Montrose Crossing			71,054				72,726				4.20	%		January 10, 2022
Azalea			40,000				—				3.73	%		November 1, 2025
Bell Gardens			13,184				—				4.06	%		August 1, 2026
Plaza El Segundo			125,000				175,000				3.83	%		June 5, 2027
The Grove at Shrewsbury (East)			43,600				42,536				3.77	%		September 1, 2027
Brook 35			11,500				11,500				4.65	%		July 1, 2029
Chelsea			6,268				6,576				5.36	%		January 15, 2031
Subtotal			491,561				466,305
Net unamortized premium and debt issuance costs			(56		)		4,812
Total mortgages payable			491,505				471,117
Notes payable
Term loan			275,000				275,000				LIBOR + 0.90%			November 21, 2018
Revolving credit facility			41,000				—				LIBOR + 0.825%			April 20, 2020
Various			4,819				5,247				11.31	%		Various through 2028
Subtotal			320,819				280,247
Net unamortized debt issuance costs			(554		)		(1,096		)
Total notes payable			320,265				279,151
Senior notes and debentures
5.90% notes			—				150,000				5.90	%		April 1, 2020
2.55% notes			250,000				250,000				2.55	%		January 15, 2021
3.00% notes			250,000				250,000				3.00	%		August 1, 2022
2.75% notes			275,000				275,000				2.75	%		June 1, 2023
3.95% notes			300,000				300,000				3.95	%		January 15, 2024
7.48% debentures			29,200				29,200				7.48	%		August 15, 2026
3.25% notes			475,000				—				3.25	%		July 15, 2027
6.82% medium term notes			40,000				40,000				6.82	%		August 1, 2027
4.50% notes			550,000				450,000				4.50	%		December 1, 2044
3.625% notes			250,000				250,000				3.625	%		August 1, 2046
Subtotal			2,419,200				1,994,200
Net unamortized discount and debt issuance costs			(17,760		)		(17,606		)
Total senior notes and debentures			2,401,440				1,976,594
Capital lease obligations
Various			71,556				71,590				Various			Various through 2106
Total debt and capital lease obligations			$	3,284,766			$	2,798,452

On June 5, 2017 we refinanced the $175.0 million mortgage loan on Plaza El Segundo at a face amount of $125.0 million and repaid the remaining $50.0 million at par. The new mortgage loan bears interest at 3.83% and matures on June 5, 2027.

On June 23, 2017, we issued $400.0 million aggregate principal amount of fixed rate senior unsecured notes in two separate series. We issued $300.0 million of 3.25% notes that mature on July 15, 2027, which were offered at 99.083% of the principal amount, with a yield to maturity of 3.358%. Additionally, we issued $100.0 million of 4.50% notes due December 1, 2044. The 4.50% notes were offered at 105.760% of the principal amount, with a yield to maturity of 4.143%, and have the same terms and are of the same series as the senior notes first issued on November 14, 2014. Our net proceeds from the June note offering after net issuance premium, underwriting fees and other costs was approximately $399.5 million.

F-20

In connection with the acquisition of six shopping centers in Los Angeles County, California on August 2, 2017 (as further discussed in Note 3), we assumed mortgage loans with a face amount of $79.4 million and a fair value of $80.1 million. The mortgage loans are secured by the individual properties with the following contractual terms:

		Principal				Stated Interest Rate			Maturity Date
		(in millions)
Sylmar Towne Center		$	17.5			5.39	%		June 6, 2021
Plaza Del Sol		8.6				5.23	%		December 1, 2021
Azalea		40.0				3.73	%		November 1, 2025
Bell Gardens		13.3				4.06	%		August 1, 2026

On August 31, 2017, we refinanced the $41.8 million mortgage loan on The Grove at Shrewsbury (East) at a face amount of $43.6 million. The new mortgage loan bears interest at 3.77% and matures on September 1, 2027.

On December 21, 2017, we issued $175.0 million aggregate principal amount of 3.25% senior unsecured notes due July 15, 2027. The notes have the same terms and are of the same series as the $300.0 million senior notes issued on June 23, 2017. The notes were offered at 99.404% of the principal amount, with a yield to maturity of 3.323%. Our net proceeds from the December note offering after issuance discount, underwriting fees and other costs were approximately $172.5 million. The proceeds were used on December 31, 2017 to repay our $150.0 million 5.90% notes prior to the original maturity date of April 1, 2020. The redemption price of $164.1 million included a make-whole premium of $11.9 million and accrued but unpaid interest of $2.2 million. The make-whole premium is included in "early extinguishment of debt" in 2017.

During 2017, 2016 and 2015, the maximum amount of borrowings outstanding under our $800.0 million revolving credit facility was $344.0 million, $251.5 million and $324.0 million, respectively. The weighted average amount of borrowings outstanding was $147.5 million, $77.3 million and $109.7 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 1.9%, 1.3% and 1.1%, respectively. The revolving credit facility requires an annual facility fee of $1.0 million. At December 31, 2017, our revolving credit facility had $41.0 million outstanding, and had no balance outstanding at December 31, 2016.

Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2017, we were in compliance with all default related debt covenants.

Scheduled principal payments on mortgages payable, notes payable, senior notes and debentures as of December 31, 2017 are as follows:

	Mortgages Payable					Notes Payable					Senior Notes and Debentures				Total Principal
	(In thousands)
Year ending December 31,
2018	$	16,228				$	275,506		(1)		$	—			$	291,734
2019	25,820					563					—				26,383
2020	65,539					41,624			(2)		—				107,163
2021	30,541					694					250,000				281,235
2022	117,018					771					250,000				367,789
Thereafter	236,415					1,661					1,919,200				2,157,276
	$	491,561				$	320,819				$	2,419,200			$	3,231,580			(3)

---

(1)	Our $275.0 million unsecured term loan matures on November 21, 2018, subject to a one-year extension at our option.

(2)	Our $800.0 million revolving credit facility matures on April 20, 2020, subject to two six-month extensions at our option. As of December 31, 2017, there was $41.0 million outstanding under this credit facility.

(3)	The total debt maturities differ from the total reported on the consolidated balance sheet as of December 31, 2017 due to the unamortized premium/(discount) and debt issuance costs on mortgage loans, notes payable, and senior notes.

F-21

Future minimum lease payments and their present value for property under capital leases as of December 31, 2017, are as follows:

	(In thousands)
Year ending December 31,
2018	$	5,800
2019	5,800
2020	5,800
2021	5,800
2022	5,810
Thereafter	142,425
	171,435
Less amount representing interest	(99,879		)
Present value	$	71,556

NOTE 6—FAIR VALUE OF FINANCIAL INSTRUMENTS

A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows:

1.	Level 1 Inputs—quoted prices in active markets for identical assets or liabilities

2.	Level 2 Inputs—observable inputs other than quoted prices in active markets for identical assets and liabilities

3.	Level 3 Inputs—prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) 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. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:

	December 31, 2017								December 31, 2016
Carrying Value				Fair Value				Carrying Value				Fair Value
(In thousands)
Mortgages and notes payable	$	811,770			$	824,419			$	750,268			$	760,260
Senior notes and debentures	$	2,401,440			$	2,498,445			$	1,976,594			$	2,015,973

As of December 31, 2017, we have two interest rate swap agreements with a notional amount of $275.0 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the variable portion of our $275.0 million term loan at 1.72% through November 1, 2018. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at December 31, 2017 was an asset of less than$0.1 million and is included in "prepaid expenses and other assets" on our consolidated balance sheets, and at December 31, 2016 was a liability of $2.6 million, and is included in "accounts payable and accrued expenses." The value of our interest rate swaps increased $2.6 million and $1.5 million (including $1.8 million and $3.5 million respectively, reclassified from other comprehensive income/(loss) to earnings) for 2017 and 2016, respectively. These changes in value are included in

F-22

"accumulated other comprehensive income (loss)." A summary of our financial assets/(liabilities) that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:

	December 31, 2017																December 31, 2016
	Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
	(In thousands)
Interest rate swaps	$	—			$	22			$	—			$	22			$	—			$	(2,577	)		$	—			$	(2,577	)

NOTE 7—COMMITMENTS AND CONTINGENCIES

We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to 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. Other than as described below, 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 November 2016, we were included as a defendant in a class action lawsuit, in the circuit court for Montgomery County, Maryland, related to predatory towing by a third party company we had retained to provide towing services at several of our properties in Montgomery County, Maryland. We, individually and collectively with other members of the more than 500 property owner defendant class, have undertaken numerous legal actions to challenge property owner liability in this case, including challenging the certification of the class as a matter of law; however, all of these legal actions have been unsuccessful. Given the costs and risks of continuing litigation on this matter, we elected to participate in a settlement for which our share is approximately $0.4 million. We expect that this settlement amount will be reimbursed by insurance. The settlement did not cover liability for certain tows that were included in the lawsuit that the defendant class believes cannot be pursued because of the statute of limitations. Accordingly, we do not believe we should have any additional liability for these remaining tows; however, if we are unsuccessful in dismissing these tows from the litigation, our liability would be approximately $0.2 million assuming payment on the same terms as the settlement.

We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability. We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts. Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported. Management considers a number of factors, including third-party actuarial analysis, previous experience in our portfolio, and future increases in costs of claims, when making these determinations. If our liability costs exceed these accruals, it will reduce our net income.

We reserve for estimated losses, if any, associated with warranties given to a buyer at the time real estate is sold or other potential liabilities relating to that sale, taking any insurance policies into account. These warranties may extend up to ten years and require significant judgment. If changes in facts and circumstances indicate that warranty reserves are understated, we will accrue additional reserves at such time a liability has been incurred and the costs can be reasonably estimated. Warranty reserves are released once the legal liability period has expired or all related work has been substantially completed. During 2016, the legal liability period relating to our latent defect warranty on condominiums sold at Santana Row expired. Upon expiration, we released the remaining $4.9 million warranty reserve which is included in "gain on sale of real estate and change in control of interests" in the consolidated statement of comprehensive income for the year ended December 31, 2016.

At December 31, 2017 and 2016, our reserves for general liability costs were $3.3 million and $2.8 million, respectively, and are included in “accounts payable and accrued expenses” in our consolidated balance sheets. Any potential losses which exceed our estimates would result in a decrease in our net income. During 2017 and 2016, we made payments from these reserves of $1.4 million and $2.0 million, respectively. Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over-time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses.

F-23

At December 31, 2017, we had letters of credit outstanding of approximately $1.3 million.

As of December 31, 2017 in connection with capital improvement, development, and redevelopment projects, the Trust has contractual obligations of approximately $326.6 million.

We are obligated under ground lease agreements on several shopping centers requiring minimum annual payments as follows, as of December 31, 2017:

	(In thousands)
Year ending December 31,
2018	$	4,583
2019	4,737
2020	4,749
2021	4,757
2022	4,873
Thereafter	188,132
	$	211,831

A master lease for Mercer Mall includes a fixed purchase price option for $55 million in 2023. If we fail to exercise our purchase option, the owner of Mercer Mall has a put option which would require us to purchase Mercer Mall for $60 million in 2025.

Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63% interest in Congressional Plaza at the interest’s then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2017, our estimated maximum liability upon exercise of the put option would range from approximately $81 million to $85 million.

A master lease for Melville Mall includes a fixed purchase price option in 2021 for $5 million. If we fail to exercise our purchase option, the owner of Melville Mall has a put option which would require us to purchase Melville Mall in 2023 for $5 million.

The other member in Montrose Crossing has the right to require us to purchase all of its 10.1% interest in Montrose Crossing at the interest's then-current fair market value. If the other member fails to exercise its put option, we have the right to purchase its interest on or after December 27, 2021 at fair market value. Based on management’s current estimate of fair market value as of December 31, 2017, our estimated maximum liability upon exercise of the put option would range from approximately $12 million to $13 million.

Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0% and 11.8% ownership interests at the interests' then-current fair market value. If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value. Based on management’s current estimate of fair market value as of December 31, 2017, our estimated maximum liability upon exercise of the put option would range from approximately $26 million to $29 million.

Effective January 1, 2017, the other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.8% interest in The Grove at Shrewsbury and approximately 8.8% interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2017, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million.

Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. A total of 787,962 downREIT operating partnership units are outstanding which have a total fair value of $104.6 million, based on our closing stock price on December 31, 2017.

NOTE 8—SHAREHOLDERS’ EQUITY

We have a Dividend Reinvestment Plan (the “Plan”), whereby shareholders may use their dividends and optional cash payments to purchase shares. In 2017, 2016 and 2015, 17,911 shares, 15,619 shares and 16,524 shares, respectively, were issued under the Plan.

On September 29, 2017, we issued 6,000,000 Depository Shares, each representing 1/1000th interest of 5.0% Series C Cumulative Redeemable Preferred Share, par value $0.01 per share ("Series C Preferred Shares"), at the liquidation preference of $25.00 per depository share (or $25,000 per Series C Preferred share) in an underwritten public offering. The Series C

F-24

Preferred Shares accrue dividends at a rate of 5.0% of the $25,000 liquidation preference per year and are redeemable at our option on or after September 29, 2022. Additionally, they are not convertible and holders of these shares generally have no voting rights, unless we fail to pay dividends for six or more quarters. The net proceeds after underwriting fees and other costs were approximately $145.0 million.

As of December 31, 2017, 2016, and 2015, we had 399,896 shares of 5.417% Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) outstanding that have a liquidation preference of $25 per share and par value $0.01 per share. The Series 1 Preferred Shares accrue dividends at a rate of 5.417% per year and are convertible at any time by the holders to our common shares at a conversion rate of $104.69 per share. The Series 1 Preferred Shares are also convertible under certain circumstances at our election. The holders of the Series 1 Preferred Shares have no voting rights.

On November 4, 2016, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $400.0 million. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay amounts of outstanding under our revolving credit facility and/or for general corporate purposes. For the year ended December 31, 2017, we issued 826,517 common shares at a weighted average price per share of $132.56 for net cash proceeds of $108.3 million and paid $1.1 million in commissions and $0.2 million in additional offering expenses related to the sales of these common shares. For the year ended December 31, 2016, we issued 1,156,571 common shares at a weighted average price per share of $152.92 for net cash proceeds of $174.8 million and paid $1.8 million in commissions and $0.2 million in additional offering expenses related to the sales of these common shares. As of December 31, 2017, we had the capacity to issue up to $261.3 million in common shares under our ATM equity program.

NOTE 9—DIVIDENDS

The following table provides a summary of dividends declared and paid per share:

	Year Ended December 31,
	2017								2016								2015
	Declared				Paid				Declared				Paid				Declared				Paid
Common shares	$	3.960			$	3.940			$	3.840			$	3.800			$	3.620			$	3.550
5.417% Series 1 Cumulative Convertible Preferred shares	$	1.354			$	1.354			$	1.354			$	1.354			$	1.354			$	1.354
5.0% Series C Cumulative Redeemable Preferred shares (1)	$	0.368			$	—			$	—			$	—			$	—			$	—
(1) Amount represents dividends per depository share, each representing 1/1000th of a share.

A summary of the income tax status of dividends per share paid is as follows:

	Year Ended December 31,
2017				2016				2015
Common shares
Ordinary dividend	$	3.940			$	3.800			$	3.515
Capital gain	—				—				0.035
	$	3.940			$	3.800			$	3.550
5.417% Series 1 Cumulative Convertible Preferred shares
Ordinary dividend	$	1.354			$	1.354			$	1.340
Capital gain	—				—				0.014
	$	1.354			$	1.354			$	1.354

On November 1, 2017, the Trustees declared a quarterly cash dividend of $1.00 per common share, payable January 16, 2018 to common shareholders of record on January 2, 2018.

F-25

NOTE 10—OPERATING LEASES

At December 31, 2017, our 104 predominantly retail shopping center and mixed-use properties are located in 12 states and the District of Columbia. There are approximately 3,000 leases with tenants providing a wide range of retail products and services. These tenants range from sole proprietorships to national retailers; no one tenant or corporate group of tenants accounts for more than 2.9% of annualized base rent.

Our leases with commercial property and residential tenants are classified as operating leases. Commercial property leases generally range from three to ten years (certain leases with anchor tenants may be longer), and in addition to minimum rents, may provide for percentage rents based on the tenant’s level of sales achieved and cost recoveries for the tenant’s share of certain operating costs. Leases on apartments are generally for a period of 1 year or less.

As of December 31, 2017, minimum future commercial property rentals from noncancelable operating leases, before any reserve for uncollectible amounts and assuming no early lease terminations, at our operating properties are as follows:

	(In thousands)
Year ending December 31,
2018	$	593,461
2019	537,822
2020	474,369
2021	401,869
2022	328,302
Thereafter	1,402,509
	$	3,738,332

NOTE 11—COMPONENTS OF RENTAL INCOME AND EXPENSE

The principal components of rental income are as follows:

	Year Ended December 31,
	2017				2016				2015
	(In thousands)
Minimum rents
Retail and commercial	$	585,178			$	549,552			$	509,825
Residential	55,416				49,465				42,797
Cost reimbursement	171,528				158,042				148,110
Percentage rent	11,148				10,977				11,911
Other	18,191				18,547				15,169
Total rental income	$	841,461			$	786,583			$	727,812

Minimum rents include the following:

	Year Ended December 31,
	2017				2016				2015
	(In millions)
Straight-line rents	$	12.9			$	8.1			$	7.6
Net amortization of above and below market leases	$	4.7			$	1.8			$	2.7

F-26

The principal components of rental expenses are as follows:

	Year Ended December 31,
2017				2016				2015
(In thousands)
Repairs and maintenance	$	67,996			$	64,942			$	62,420
Utilities	25,763				24,968				23,003
Management fees and costs	22,297				20,823				18,639
Payroll	14,922				13,832				12,673
Marketing	9,007				8,520				9,046
Insurance	7,762				7,758				7,875
Ground rent	3,826				2,561				2,540
Bad debt expense	2,591				2,375				1,168
Other operating	10,726				12,547				10,229
Total rental expenses	$	164,890			$	158,326			$	147,593

NOTE 12—SHARE-BASED COMPENSATION PLANS

A summary of share-based compensation expense included in net income is as follows:

	Year Ended December 31,
	2017				2016				2015
	(In thousands)
Grants of common shares and options	$	12,371			$	11,227			$	12,074
Capitalized share-based compensation	(1,385		)		(1,310		)		(868		)
Share-based compensation expense	$	10,986			$	9,917			$	11,206

As of December 31, 2017, we have grants outstanding under two share-based compensation plans. In May 2010, our shareholders approved the 2010 Performance Incentive Plan, as amended (the "2010 Plan”), which authorized the grant of share options, common shares and other share-based awards for up to 2,450,000 common shares of beneficial interest. Our 2001 Long Term Incentive Plan (the “2001 Plan”), which expired in May 2010, authorized the grant of share options, common shares and other share-based awards of 3,250,000 common shares of beneficial interest.

Option awards under both plans are required to have an exercise price at least equal to the closing trading price of our common shares on the date of grant. Options and restricted share awards under these plans generally vest over three to seven years and option awards typically have a ten-year contractual term. We pay dividends on unvested shares. Certain options and share awards provide for accelerated vesting if there is a change in control. Additionally, the vesting on certain option and share awards can accelerate in part or in full upon retirement based on the age of the retiree or upon termination without cause.

The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities, term, dividend yields, employee exercises and estimated forfeitures are primarily based on historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each share award is determined based on the closing trading price of our common shares on the grant date. No options were granted in 2017 and 2015.

The following table provides a summary of the weighted-average assumption used to value options granted in 2016:

Volatility		18.8	%
Expected dividend yield		2.8	%
Expected term (in years)		6.0
Risk free interest rate		1.5	%

F-27

The following table provides a summary of option activity for 2017:

	Shares Under Option			Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
								(In years)		(In thousands)
Outstanding at December 31, 2016	259,119			$	56.66
Granted	—			—
Exercised	(152,634	)		65.37
Forfeited or expired	—			—
Outstanding at December 31, 2017	106,485			$	44.18			1.2		$	9,451
Exercisable at December 31, 2017	105,939			$	43.62			1.1		$	9,451

The weighted-average grant-date fair value of options granted in 2016 was $19.52 per share. The total cash received from options exercised during 2017, 2016 and 2015 was $10.0 million, $4.5 million and $2.0 million, respectively. The total intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $10.7 million, $4.2 million and $2.1 million, respectively.

The following table provides a summary of restricted share activity for 2017:

	Shares			Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2016	217,353			$	142.70
Granted	109,815			139.31
Vested	(87,704	)		131.55
Forfeited	(2,293	)		142.09
Unvested at December 31, 2017	237,171

The weighted-average grant-date fair value of stock awarded in 2017, 2016 and 2015 was $139.31, $152.70 and $141.08, respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2017, 2016 and 2015, was $12.5 million, $13.8 million and $26.1 million, respectively.

As of December 31, 2017, there was $17.6 million of total unrecognized compensation cost related to unvested share-based compensation arrangements (i.e. options and unvested shares) granted under our plans. This cost is expected to be recognized over the next 6.4 years with a weighted-average period of 2.2 years.

Subsequent to December 31, 2017, common shares were awarded under various compensation plans as follows:

Date		Award				Vesting Term		Beneficiary
January 2, 2018		5,416		Shares		Immediate		Trustees
February 7, 2018		92,552		Restricted shares		3-4 years		Officers and key employees
February 7, 2018		488		Options		5 years		Officers and key employees

NOTE 13—SAVINGS AND RETIREMENT PLANS

We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Code. Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $18,000 for 2017, 2016, and 2015. Under the plan, we contribute 50% of each employee’s elective deferrals up to 5% of eligible earnings. In addition, we may make discretionary contributions within the limits of deductibility set forth by the Code. Our full-time employees are immediately eligible to become plan participants. Employees are eligible to receive matching contributions immediately on their participation; however, these matching payments will not vest until their third anniversary of employment. Our expense for the years ended December 31, 2017, 2016 and 2015 was approximately $632,000, $602,000 and $504,000, respectively.

A non-qualified deferred compensation plan for our officers and certain other employees was established in 1994 that allows the participants to defer a portion of their income. As of December 31, 2017 and 2016, we are liable to participants for approximately $12.8 million and $10.5 million, respectively, under this plan. Although this is an unfunded plan, we have purchased certain investments to match this obligation. Our obligation under this plan and the related investments are both included in the accompanying consolidated financial statements.

F-28

NOTE 14—EARNINGS PER SHARE

We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For 2017, 2016, and 2015 we had 0.2 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below.

In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options in 2017, and no anti-dilutive stock options in 2016 or 2015. The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.

	Year Ended December 31,
	2017				2016				2015
	(In thousands, except per share data)
NUMERATOR
Income from continuing operations	$	219,948			$	226,425			$	190,094
Less: Preferred share dividends	(2,458		)		(541		)		(541		)
Less: Income from continuing operations attributable to noncontrolling interests	(7,666		)		(7,648		)		(8,205		)
Less: Earnings allocated to unvested shares	(942		)		(702		)		(797		)
Income from continuing operations available for common shareholders	208,882				217,534				180,551
Gain on sale of real estate and change in control of interests, net	77,632				31,133				28,330
Net income available for common shareholders, basic and diluted	$	286,514			$	248,667			$	208,881
DENOMINATOR
Weighted average common shares outstanding—basic	72,117				70,877				68,797
Effect of dilutive securities:
Stock options	116				172				184
Weighted average common shares outstanding—diluted	72,233				71,049				68,981
EARNINGS PER COMMON SHARE, BASIC
Net income available for common shareholders	$	3.97			$	3.51			$	3.04
EARNINGS PER COMMON SHARE, DILUTED
Net income available for common shareholders	$	3.97			$	3.50			$	3.03
Income from continuing operations attributable to the Trust	$	212,282			$	218,777			$	181,889

F-29

NOTE 15—SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data is as follows:

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	(In thousands, except per share data)
2017
Revenue	$	207,389			$	208,049			$	217,953			$	223,957
Operating income	$	81,544			$	83,090			$	84,497			$	83,157
Net income(1)	$	58,070			$	78,133			$	108,882			$	52,785
Net income attributable to the Trust(1)	$	56,190			$	76,291			$	106,777			$	50,656
Net income available for common shareholders(1)	$	56,055			$	76,156			$	106,600			$	48,645
Earnings per common share—basic(1)	$	0.78			$	1.05			$	1.47			$	0.67
Earnings per common share—diluted(1)	$	0.78			$	1.05			$	1.47			$	0.67
	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	(In thousands, except per share data)
2016
Revenue	$	198,344			$	197,981			$	201,157			$	204,109
Operating income	$	76,922			$	80,135			$	80,461			$	83,477
Net income(2)	$	79,063			$	58,898			$	61,198			$	59,724
Net income attributable to the Trust(2)	$	76,955			$	55,941			$	58,977			$	58,037
Net income available for common shareholders(2)	$	76,820			$	55,806			$	58,841			$	57,902
Earnings per common share—basic(2)	$	1.10			$	0.79			$	0.82			$	0.81
Earnings per common share—diluted(2)	$	1.10			$	0.78			$	0.82			$	0.80

(1)

Second quarter 2017 includes a $15.4 million gain related to the sale of three ground lease parcels at our Assembly Row property in Somerville, Massachusetts. Third quarter 2017 includes a $50.8 million gain on sale of real estate from our 150 Post Street and North Lake Commons properties. Fourth quarter 2017 includes a $6.5 million gain related to the sale of a parcel of land at our Bethesda Row property. Additionally, second, third, and fourth quarter 2017 include net percentage-of-completion gains of $3.3 million, $0.6 million, and $1.5 million, respectively, related to condominiums under binding contract at our Assembly Row property. All of these transactions are further discussed in Note 3. Fourth quarter 2017 includes a $12.3 million early extinguishment of debt charge as further discussed in Note 5.

(2)	First quarter 2016 includes a $25.7 million gain on change in control of interests from our Clarion Partners acquisition as further discussed in Note 3. Third quarter 2016 includes a $4.9 million gain on sale from the reversal of our warranty reserve on condominiums sold at Santana Row as further discussed in Note 7.

F-30

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
29TH PLACE (Virginia)		VA		$	4,312			$	10,211			$	18,863			$	11,973			$	10,195			$	30,852			$	41,047			$	12,144			1975 - 2001		5/30/2007		35 years
ANDORRA (Pennsylvania)		PA						2,432				12,346				11,161				2,432				23,507				25,939				19,028				1953		1/12/1988		35 years
ASSEMBLY ROW/ASSEMBLY SQUARE MARKETPLACE (Massachusetts)		MA						93,252				34,196				564,077				69,421				622,104				691,525				43,659				2005, 2012-2017		2005-2013		35 years
ATLANTIC PLAZA (Massachusetts)		MA						6,293				17,109				2,325				6,293				19,434				25,727				1,863				1960		1/13/2016		35 years
AZALEA (California)		CA		39,609				40,219				67,117				4				40,219				67,121				107,340				1,049				2014		8/2/2017		35 years
BALA CYNWYD (Pennsylvania)		PA						3,565				14,466				23,443				2,581				38,893				41,474				20,299				1955		9/22/1993		35 years
BARCROFT PLAZA (Virginia)		VA						12,617				29,603				3,279				12,617				32,882				45,499				2,030				1963, 1972, 1990, & 2000		1/13/16 & 11/7/16		35 years
BARRACKS ROAD (Virginia)		VA						4,363				16,459				47,088				4,363				63,547				67,910				42,077				1958		12/31/1985		35 years
BELL GARDENS (California)		CA		12,682				18,021				82,470				159				18,021				82,629				100,650				1,843				1990, 2003, 2006		8/2/2017		35 years
BETHESDA ROW (Maryland)		MD						46,579				35,406				144,089				43,896				182,178				226,074				73,883				1945-2008		12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10		35 - 50 years
BRICK PLAZA (New Jersey)		NJ						—				24,715				51,757				3,945				72,527				76,472				47,932				1958		12/28/1989		35 years
BRISTOL PLAZA (Connecticut)		CT						3,856				15,959				11,849				3,856				27,808				31,664				17,680				1959		9/22/1995		35 years
BROOK 35 (New Jersey)		NJ		11,263				7,128				38,355				2,043				7,128				40,398				47,526				5,494				1986/2004		1/1/2014		35 years
CAMPUS PLAZA (Massachusetts)		MA						16,710				13,412				429				16,710				13,841				30,551				1,243				1970		1/13/2016		35 years
CHELSEA COMMONS (Massachusetts)		MA		6,037				9,417				19,466				14,015				9,396				33,502				42,898				8,509				1962/1969/2008		8/25/06, 1/30/07, & 7/16/08		35 years

F-31

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
COCOWALK (Florida)		FL						35,063				71,476				9,881				34,406				82,014				116,420				6,536				1990/1994, 1922-1973		5/4/15, 7/1/15, 12/16/15, 7/26/16, 6/30/17, & 8/10/17		35 years
COLORADO BLVD (California)		CA						5,262				4,071				10,184				5,262				14,255				19,517				10,678				1905-1988		12/31/96 & 8/14/98		35 years
CONGRESSIONAL PLAZA (Maryland)		MD						2,793				7,424				92,104				1,020				101,301				102,321				53,731				1965/2003		4/1/1965		35 years
COURTHOUSE CENTER (Maryland)		MD						1,750				1,869				1,532				1,750				3,401				5,151				1,923				1975		12/17/1997		35 years
CROSSROADS (Illinois)		IL						4,635				11,611				16,882				4,635				28,493				33,128				16,494				1959		7/19/1993		35 years
CROW CANYON COMMONS (California)		CA						27,245				54,575				8,525				27,245				63,100				90,345				21,704				Late 1970's/ 1998/2006		12/29/05 & 2/28/07		35 years
DARIEN (Connecticut)		CT						29,809				18,302				1,862				29,809				20,164				49,973				3,075				1920-2009		4/3/2013		35 years
DEDHAM PLAZA (Massachusetts)		MA						14,841				12,918				13,317				14,841				26,235				41,076				15,380				1959		12/31/93 & 12/14/16		35 years
DEL MAR VILLAGE (Florida)		FL						15,624				41,712				8,057				15,587				49,806				65,393				20,432				1982/1994/2007		5/30/08, 7/11/08, & 10/14/14		35 years
EAST BAY BRIDGE (California)		CA						29,079				138,035				11,772				29,079				149,807				178,886				25,229				1994-2001, 2011/2012		12/21/2012		35 years
EASTGATE CROSSING (North Carolina)		NC						1,608				5,775				26,981				1,608				32,756				34,364				19,622				1963		12/18/1986		35 years
ELLISBURG (New Jersey)		NJ						4,028				11,309				19,211				4,013				30,535				34,548				20,099				1959		10/16/1992		35 years
ESCONDIDO PROMENADE (California)		CA						19,117				15,829				14,530				19,117				30,359				49,476				16,037				1987		12/31/96 & 11/10/10		35 years
FALLS PLAZA (Virginia)		VA						1,798				1,270				10,943				1,819				12,192				14,011				8,664				1960/1962		9/30/67 & 10/05/72		25 years
FEDERAL PLAZA (Maryland)		MD						10,216				17,895				41,769				10,216				59,664				69,880				42,794				1970		6/29/1989		35 years
FINLEY SQUARE (Illinois)		IL						9,252				9,544				19,604				9,252				29,148				38,400				19,836				1974		4/27/1995		35 years
FLOURTOWN (Pennsylvania)		PA						1,345				3,943				11,666				1,345				15,609				16,954				5,981				1957		4/25/1980		35 years
FOURTH STREET (California)		CA						13,928				9,909				39				13,928				9,948				23,876				248				1948,1975		5/19/2017		35 years

F-32

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
FREE STATE SHOPPING CENTER (Maryland)		MD						18,581				41,658				4,538				18,581				46,196				64,777				3,741				1970		1/13/2016		35 years
FRESH MEADOWS (New York)		NY						24,625				25,255				40,395				24,633				65,642				90,275				37,948				1946-1949		12/5/1997		35 years
FRIENDSHIP CENTER (District of Columbia)		DC						12,696				20,803				4,616				12,696				25,419				38,115				11,917				1998		9/21/2001		35 years
GAITHERSBURG SQUARE (Maryland)		MD						7,701				5,271				14,468				5,973				21,467				27,440				17,830				1966		4/22/1993		35 years
GARDEN MARKET (Illinois)		IL						2,677				4,829				6,909				2,677				11,738				14,415				7,569				1958		7/28/1994		35 years
GOVERNOR PLAZA (Maryland)		MD						2,068				4,905				20,319				2,068				25,224				27,292				20,241				1963		10/1/1985		35 years
GRAHAM PARK PLAZA (Virginia)		VA						1,237				15,096				18,874				1,169				34,038				35,207				28,053				1971		7/21/1983		35 years
GRATIOT PLAZA (Michigan)		MI						525				1,601				17,702				525				19,303				19,828				17,270				1964		3/29/1973		25.75 years
GREENLAWN PLAZA (New York)		NY						10,590				20,869				245				10,590				21,114				31,704				1,756				1975/2004		1/13/2016		35 years
GREENWICH AVENUE (Connecticut)		CT						7,484				5,444				1,199				7,484				6,643				14,127				4,170				1968		4/12/1995		35 years
HASTINGS RANCH PLAZA (California)		CA						—				22,393				236				—				22,629				22,629				699				1958, 1984, 2006, 2007		2/1/2017		35 years
HAUPPAUGE (New York)		NY						8,791				15,262				5,018				8,419				20,652				29,071				11,724				1963		8/6/1998		35 years
HERMOSA AVENUE (California)		CA						1,116				280				4,648				1,368				4,676				6,044				3,298				1922		9/17/1997		35 years
HOLLYWOOD BLVD (California)		CA						8,300				16,920				21,719				8,370				38,569				46,939				14,755				1929/1991		3/22/99 & 6/18/99		35 years
HUNTINGTON (New York)		NY						12,194				16,008				19,144				12,194				35,152				47,346				15,825				1962		12/12/88, 10/26/07, & 11/24/15		35 years
HUNTINGTON SQUARE (New York)		NY						—				10,075				2,106				—				12,181				12,181				3,317				1980/2004-2007		8/16/2010		35 years
IDYLWOOD PLAZA (Virginia)		VA						4,308				10,026				2,579				4,308				12,605				16,913				8,928				1991		4/15/1994		35 years
KINGS COURT (California)		CA						—				10,714				954				—				11,668				11,668				8,776				1960		8/24/1998		26 years
LANCASTER (Pennsylvania)		PA		4,907				—				2,103				12,010				75				14,038				14,113				8,212				1958		4/24/1980		22 years
LANGHORNE SQUARE (Pennsylvania)		PA						720				2,974				18,432				720				21,406				22,126				15,170				1966		1/31/1985		35 years

F-33

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
LAUREL (Maryland)		MD						7,458				22,525				27,344				7,464				49,863				57,327				37,461				1956		8/15/1986		35 years
LAWRENCE PARK (Pennsylvania)		PA						6,150				8,491				20,524				6,161				29,004				35,165				24,693				1972		7/23/1980 & 4/3/17		22 years
LEESBURG PLAZA (Virginia)		VA						8,184				10,722				17,582				8,184				28,304				36,488				14,689				1967		9/15/1998		35 years
LINDEN SQUARE (Massachusetts)		MA						79,382				19,247				50,074				79,347				69,356				148,703				22,208				1960-2008		8/24/2006		35 years
MELVILLE MALL (New York)		NY						35,622				32,882				20,096				35,622				52,978				88,600				12,458				1974		10/16/2006		35 years
MERCER MALL (New Jersey)		NJ		55,548				29,738				51,047				45,957				29,738				97,004				126,742				41,330				1975		10/14/03 & 1/31/17		25 - 35 years
MONTROSE CROSSING (Maryland)		MD		71,054				48,624				91,819				19,678				48,624				111,497				160,121				24,840				1960s, 1970s, 1996 & 2011		12/27/11 & 12/19/13		35 years
MOUNT VERNON/SOUTH VALLEY/7770 RICHMOND HWY. (Virginia)		VA						10,068				33,501				41,132				10,230				74,471				84,701				34,011				1966/1972/1987/2001		3/31/03, 3/21/03, & 1/27/06		35 years
NORTH DARTMOUTH (Massachusetts)		MA						9,366				—				3				9,366				3				9,369				—				2004		8/24/2006
NORTHEAST (Pennsylvania)		PA						1,152				10,596				18,679				1,153				29,274				30,427				20,496				1959		8/30/1983		35 years
OLD KEENE MILL (Virginia)		VA						638				998				6,212				638				7,210				7,848				5,418				1968		6/15/1976		33.33 years
OLD TOWN CENTER (California)		CA						3,420				2,765				30,997				3,420				33,762				37,182				21,217				1962, 1997-1998		10/22/1997		35 years
OLIVO AT MISSION HILLS (California)		CA						15,048				46,732				10,358				15,048				57,090				72,138				213				2017		8/2/2017		35 years
PAN AM (Virginia)		VA						8,694				12,929				7,610				8,695				20,538				29,233				15,159				1979		2/5/1993		35 years
PENTAGON ROW (Virginia)		VA						—				2,955				100,369				—				103,324				103,324				46,051				1999 - 2002		1998 & 11/22/10		35 years
PERRING PLAZA (Maryland)		MD						2,800				6,461				21,836				2,800				28,297				31,097				23,112				1963		10/1/1985		35 years
PIKE & ROSE (Maryland)		MD						31,471				10,335				543,484				29,903				555,387				585,290				23,148				1963, 2012-2017		5/18/82, 10/26/07, & 7/31/12		50 years
PIKE 7 PLAZA (Virginia)		VA						14,970				22,799				6,929				14,914				29,784				44,698				16,745				1968		3/31/97 & 7/8/15		35 years

F-34

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
PLAZA DEL MERCADO (Maryland)		MD						10,305				21,553				14,329				10,305				35,882				46,187				2,341				1969		1/13/2016		35 years
PLAZA DEL SOL (California)		CA		8,746				5,605				12,331				—				5,605				12,331				17,936				212				2009		8/2/2017		35 years
PLAZA EL SEGUNDO/THE POINT (California)		CA		124,151				62,127				153,556				65,337				64,463				216,557				281,020				39,623				2006/2007/2016		12/30/11, 6/14/13, 7/26/13, & 12/27/13		35 years
PLAZA PACOIMA (California)		CA						38,138				12,227				—				38,138				12,227				50,365				225				2010		8/2/2017		35 years
QUEEN ANNE PLAZA (Massachusetts)		MA						3,319				8,457				6,519				3,319				14,976				18,295				9,881				1967		12/23/1994		35 years
QUINCE ORCHARD (Maryland)		MD						3,197				7,949				27,772				2,928				35,990				38,918				19,478				1975		4/22/1993		35 years
RIVERPOINT CENTER (Illinois)		IL						15,422				104,575				82				15,422				104,657				120,079				2,626				1989, 2012		3/31/2017		35 years
ROCKVILLE TOWN SQUARE (Maryland)		MD		4,455				—				8,092				43,010				—				51,102				51,102				16,823				2005 - 2007		2006 - 2007		50 years
ROLLINGWOOD APTS. (Maryland)		MD		20,785				552				2,246				7,988				572				10,214				10,786				9,358				1960		1/15/1971		25 years
SAM'S PARK & SHOP (District of Columbia)		DC						4,840				6,319				1,679				4,840				7,998				12,838				5,158				1930		12/1/1995		35 years
SAN ANTONIO CENTER (California)		CA						39,920				32,466				1,334				39,920				33,800				73,720				4,714				1958, 1964-1965, 1974-1975, 1995-1997		1/9/2015		35 years
SANTANA ROW (California)		CA						66,682				7,502				788,049				57,578				804,655				862,233				182,514				1999-2006, 2009, 2011, 2014, 2016-2017		3/5/97, 7/13/12, 9/6/12, 4/30/13 & 9/23/13		40 - 50 years
SAUGUS PLAZA (Massachusetts)		MA						4,383				8,291				2,588				4,383				10,879				15,262				6,702				1976		10/1/1996		35 years
SYLMAR TOWNE CENTER (California)		CA		18,010				18,522				24,636				376				18,522				25,012				43,534				389				1973		8/2/2017		35 years
THE AVENUE AT WHITE MARSH (Maryland)		MD		52,489				20,682				72,432				23,014				20,685				95,443				116,128				32,066				1997		3/8/2007		35 years
THE GROVE AT SHREWSBURY (New Jersey)		NJ		53,218				18,016				103,115				3,886				18,021				106,996				125,017				13,884				1988/1993/2007		1/1/2014 & 10/6/14		35 years

F-35

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2017 (Dollars in thousands)
COLUMN A				COLUMN B				COLUMN C								COLUMN D				COLUMN E												COLUMN F				COLUMN G		COLUMN H		COLUMN I
Descriptions				Encumbrance				Initial cost to company								Cost Capitalized Subsequent to Acquisition				Gross amount at which carried at close of period												Accumulated Depreciation and Amortization				Date of Construction		Date Acquired		Life on which depreciation in latest income statements is computed
Land				Building and Improvements				Land				Building and Improvements				Total
THE SHOPPES AT NOTTINGHAM SQUARE (Maryland)		MD						4,441				12,849				254				4,441				13,103				17,544				4,912				2005 - 2006		3/8/2007		35 years
THE SHOPS AT SUNSET PLACE (Florida)		FL		69,149				64,499				50,853				8,160				64,499				59,013				123,512				6,629				1999		10/1/2015		35 years
THIRD STREET PROMENADE (California)		CA						22,645				12,709				43,309				25,125				53,538				78,663				32,281				1888-2000		1996-2000		35 years
TOWER SHOPPNG CENTER (Virginia)		VA						7,170				10,518				4,240				7,280				14,648				21,928				8,738				1953-1960		8/24/1998		35 years
TOWER SHOPS (Florida)		FL						29,940				43,390				24,219				29,962				67,587				97,549				15,761				1989		1/19/11 & 6/13/14		35 years
TOWN CENTER OF NEW BRITAIN (Pennsylvania)		PA						1,282				12,285				1,679				1,470				13,776				15,246				5,087				1969		6/29/2006		35 years
TOWSON RESIDENTIAL (FLATS @703) (Maryland)		MD						2,328				—				20,048				2,328				20,048				22,376				221				2016-2017		3/8/2007		35 years
TROY (New Jersey)		NJ						3,126				5,193				28,424				5,865				30,878				36,743				21,234				1966		7/23/1980		22 years
TYSON'S STATION (Virginia)		VA						388				453				3,825				475				4,191				4,666				3,737				1954		1/17/1978		17 years
VILLAGE AT SHIRLINGTON (Virginia)		VA		6,646				9,761				14,808				40,418				4,234				60,753				64,987				27,322				1940, 2006-2009		12/21/1995		35 years
WESTGATE CENTER (California)		CA						6,319				107,284				39,726				6,319				147,010				153,329				48,562				1960-1966		3/31/2004		35 years
WHITE MARSH PLAZA (Maryland)		MD						3,478				21,413				645				3,478				22,058				25,536				8,491				1987		3/8/2007		35 years
WHITE MARSH OTHER (Maryland)		MD						31,953				1,843				140				31,983				1,953				33,936				811				1985		3/8/2007		35 years
WILDWOOD (Maryland)		MD						9,111				1,061				10,291				9,111				11,352				20,463				8,839				1958		5/5/1969		33.33 years
WILLOW GROVE (Pennsylvania)		PA						1,499				6,643				22,115				1,499				28,758				30,257				26,206				1953		11/20/1984		35 years
WILLOW LAWN (Virginia)		VA						3,192				7,723				84,407				7,790				87,532				95,322				56,879				1957		12/5/1983		35 years
WYNNEWOOD (Pennsylvania)		PA						8,055				13,759				21,092				8,055				34,851				42,906				23,196				1948		10/29/1996		35 years
TOTALS				$	563,061			$	1,459,351			$	2,425,230			$	3,750,480			$	1,427,777			$	6,207,284			$	7,635,061			$	1,876,544

F-36

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2017 Reconciliation of Total Cost (in thousands)
Balance, December 31, 2014	$	5,608,998
Additions during period
Acquisitions	291,726
Improvements	281,471
Deduction during period—dispositions and retirements of property	(117,789		)
Balance, December 31, 2015	6,064,406
Additions during period
Acquisitions	229,296
Improvements	483,932
Deduction during period—dispositions and retirements of property	(18,561		)
Balance, December 31, 2016	6,759,073
Additions during period
Acquisitions	555,476
Improvements	492,541
Deduction during period—dispositions and retirements of property	(172,029		)
Balance, December 31, 2017 (1)	$	7,635,061

---

(1)	For Federal tax purposes, the aggregate cost basis is approximately $6.7 billion as of December 31, 2017.

F-37

FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2017 Reconciliation of Accumulated Depreciation and Amortization (in thousands)
Balance, December 31, 2014	$	1,467,050
Additions during period—depreciation and amortization expense	156,513
Deductions during period—dispositions and retirements of property	(49,522		)
Balance, December 31, 2015	1,574,041
Additions during period—depreciation and amortization expense	173,244
Deductions during period—dispositions and retirements of property	(18,051		)
Balance, December 31, 2016	1,729,234
Additions during period—depreciation and amortization expense	193,340
Deductions during period—dispositions and retirements of property	(46,030		)
Balance, December 31, 2017	$	1,876,544

F-38

FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE Year Ended December 31, 2017 (Dollars in thousands)
Column A		Column B		Column C		Column D		Column E						Column F						Column G						Column H
Description of Lien		Interest Rate		Maturity Date		Periodic Payment Terms		Prior Liens						Face Amount of Mortgages						Carrying Amount of Mortgages(1)						Principal Amount of Loans Subject to delinquent Principal or Interest
Mortgage on retail buildings in Philadelphia, PA		8% or 10% based on timing of draws, plus participation		May 2021		Interest only monthly; balloon payment due at maturity		$	—					$	21,179					$	21,179			(2)		$	—
Mortgage on retail buildings in Philadelphia, PA		10% plus participation		May 2021		Interest only monthly; balloon payment due at maturity		—						9,250						9,250						—
								$	—					$	30,429					$	30,429					$	—

---

(1)	For Federal tax purposes, the aggregate tax basis is approximately $30.4 million as of December 31, 2017.

(2)	This mortgage is available for up to $25.0 million.

F-39

FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - CONTINUED Three Years Ended December 31, 2017 Reconciliation of Carrying Amount (in thousands)
Balance, December 31, 2014	$	50,988
Additions during period:
Issuance of loans	368
Deductions during period:
Collection and satisfaction of loans	(10,692		)
Amortization of discount	954
Balance, December 31, 2015	41,618
Deductions during period:
Collection and satisfaction of loans	(11,714		)
Balance, December 31, 2016	29,904
Additions during period:
Issuance of loans	525
Balance, December 31, 2017	$	30,429

F-40