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

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

Index to Consolidated Financial Statements and Schedules


			Page No.
Report of Independent Registered Public Accounting Firm ( PCAOB ID Number 248)			F-2

Federal Realty Investment Trust:
Consolidated Balance Sheets as of December 31, 2022 and 2021			F-8
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020			F-9
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2022, 2021, and 2020			F-10
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020			F-11

Federal Realty OP LP:
Consolidated Balance Sheets as of December 31, 2022 and 2021			F-12
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020			F-13
Consolidated Statements of Capital for the Years Ended December 31, 2022, 2021, and 2020			F-14
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020			F-15

Notes to Consolidated Financial Statements			F-16

Financial Statement Schedules
Schedule III—Summary of Real Estate and Accumulated Depreciation			F-40
Schedule IV—Mortgage Loans on Real Estate			F-48

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

Table of Contents

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, 2022, 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, 2022, 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, 2022, and our report dated February 8, 2023 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 Internal Control over Financial Reporting. 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 8, 2023

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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, 2022 and 2021, 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, 2022, and the related notes and financial statement schedules included under Item 15(a)(2) (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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 8, 2023 expressed an unqualified opinion.

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 regarding 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.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Lease Collectibility Assessment

In order to recognize rental revenue on an accrual basis, the Trust must determine whether substantially all the rents due under a lease arrangement are collectible. If the Trust reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental revenue under that arrangement can only be recognized when cash payment from the tenant is received.

Significant judgment is exercised by the Trust when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures:

Creditworthiness of the tenant
Current economic conditions
Historical experience with the tenant and other tenants operating in the same industry

Our audit procedures related to the collectibility assessment included the following:

We assessed the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.

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We evaluated management’s accounting policies related to this assessment.
We verified the completeness of the population of tenants that management evaluated.
We researched recent publicly available information such as bankruptcy filings, industry journals, and periodicals, and for any of the Trust’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.
For a selection of tenant receivables where collectibility was deemed as probable, we inspected and evaluated management’s documentation supporting the collectibility assessment.
We recalculated the aging for a selection of tenant receivable balances using supporting documentation.
For a selection of leases, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection:

◦Verified that management’s accounting policies related to the collectibility assessment were followed.

◦Obtained from management documentation such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached.

◦Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment.

/s/ GRANT THORNTON LLP

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

New York, New York

February 8, 2023

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Report of Independent Registered Public Accounting Firm

Trustees and Unitholders

Federal Realty OP LP

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the “Operating Partnership”) as of December 31, 2022, 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 Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, 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 Operating Partnership as of and for the year ended December 31, 2022, and our report dated February 8, 2023 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Operating Partnership’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 Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’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 Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and limitations of internal control over financial reporting

/s/ GRANT THORNTON LLP

New York, New York

February 8, 2023

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Report of Independent Registered Public Accounting Firm

Trustees and Unitholders

Federal Realty OP LP

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the "Operating Partnership") as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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 Operating Partnership’s internal control over financial reporting as of December 31, 2022, 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 8, 2023 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’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 Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Critical audit matter

Lease Collectibility Assessment

In order to recognize rental revenue on an accrual basis, the Operating Partnership must determine whether substantially all the rents due under a lease arrangement are collectible. If the Operating Partnership reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental revenue under that arrangement can only be recognized when cash payment from the tenant is received.

Significant judgment is exercised by the Operating Partnership when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures:

Creditworthiness of the tenant
Current economic conditions
Historical experience with the tenant and other tenants operating in the same industry

Our audit procedures related to the collectibility assessment included the following:

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We assessed the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.
We evaluated management’s accounting policies related to this assessment.
We verified the completeness of the population of tenants that management evaluated.
We researched recent publicly available information such as bankruptcy filings, industry journals, and periodicals, and for any of the Operating Partnership’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.
For a selection of tenant receivables where collectibility was deemed as probable, we inspected and evaluated management’s documentation supporting the collectibility assessment.
We recalculated the aging for a selection of tenant receivable balances using supporting documentation.
For a selection of leases, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection:

◦Verified that management’s accounting policies related to the collectibility assessment were followed.

◦Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment.

/s/ GRANT THORNTON LLP

We have served as the Operating Partnership's auditor since 2022.

New York, New York

February 8, 2023

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Federal Realty Investment Trust

Consolidated Balance Sheets


	December 31,
	2022		2021
	(In thousands, except share and per share data)
ASSETS
Real estate, at cost
Operating (including $1,997,583 and $2,207,648 of consolidated variable interest entities, respectively)	$	9,441,945	$	8,814,791
Construction-in-progress (including $8,477 and $18,752 of consolidated variable interest entities, respectively)	662,554		607,271

	10,104,499		9,422,062
Less accumulated depreciation and amortization (including $362,921 and $389,950 of consolidated variable interest entities, respectively)	(2,715,817)		(2,531,095)
Net real estate	7,388,682		6,890,967
Cash and cash equivalents	85,558		162,132
Accounts and notes receivable, net	197,648		169,007
Mortgage notes receivable, net	9,456		9,543
Investment in partnerships	145,205		13,027
Operating lease right of use assets, net	94,569		90,743
Finance lease right of use assets, net	45,467		49,832
Prepaid expenses and other assets	267,406		237,069

TOTAL ASSETS	$	8,233,991	$	7,622,320
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable, net (including $191,827 and $335,301 of consolidated variable interest entities, respectively)	$	320,615	$	339,993

Notes payable, net	601,077		301,466
Senior notes and debentures, net	3,407,701		3,406,088
Accounts payable and accrued expenses	190,340		235,168
Dividends payable	90,263		86,538
Security deposits payable	28,508		25,331
Operating lease liabilities	77,743		72,661
Finance lease liabilities	67,660		72,032
Other liabilities and deferred credits	237,699		206,187
Total liabilities	5,021,606		4,745,464
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	178,370		213,708
Shareholders’ equity
Preferred shares, authorized 15,000,000 shares, $0.01 par:
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding	150,000		150,000
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 392,878 and 399,896 shares issued and outstanding, respectively	9,822		9,997
Common shares of beneficial interest, $0.01 par, 100,000,000 shares authorized, 81,342,959 and 78,603,305 shares issued and outstanding, respectively	818		790
Additional paid-in capital	3,821,801		3,488,794
Accumulated dividends in excess of net income	(1,034,186)		(1,066,932)
Accumulated other comprehensive income (loss)	5,757		(2,047)
Total shareholders’ equity of the Trust	2,954,012		2,580,602
Noncontrolling interests	80,003		82,546
Total shareholders’ equity	3,034,015		2,663,148
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,233,991	$	7,622,320

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

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Federal Realty Investment Trust

Consolidated Statements of Comprehensive Income


	Year Ended December 31,
	2022		2021		2020
	(In thousands, except per share data)
REVENUE
Rental income	$	1,073,292	$	948,842	$	832,171

Mortgage interest income	1,086		2,382		3,323
Total revenue	1,074,378		951,224		835,494
EXPENSES
Rental expenses	228,958		198,121		170,920
Real estate taxes	127,824		118,496		119,242
General and administrative	52,636		49,856		41,680

Depreciation and amortization	302,409		279,976		255,027
Total operating expenses	711,827		646,449		586,869

Impairment charge	—		—		(57,218)
Gain on deconsolidation of VIE	70,374		—		—
Gain on sale of real estate and change in control of interest, net of tax	93,483		89,950		98,117

OPERATING INCOME	526,408		394,725		289,524

OTHER INCOME/(EXPENSE)
Other interest income	1,072		809		1,894
Interest expense	(136,989)		(127,698)		(136,289)
Early extinguishment of debt	—		—		(11,179)
Income (loss) from partnerships	5,170		1,245		(8,062)








NET INCOME	395,661		269,081		135,888
Net income attributable to noncontrolling interests	(10,170)		(7,583)		(4,182)
NET INCOME ATTRIBUTABLE TO THE TRUST	385,491		261,498		131,706
Dividends on preferred shares	(8,034)		(8,042)		(8,042)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS	$	377,457	$	253,456	$	123,664
EARNINGS PER COMMON SHARE, BASIC



Net income available for common shareholders	$	4.71	$	3.26	$	1.62
Weighted average number of common shares	79,854		77,336		75,515
EARNINGS PER COMMON SHARE, DILUTED



Net income available for common shareholders	$	4.71	$	3.26	$	1.62
Weighted average number of common shares	80,508		77,368		75,515

NET INCOME	$	395,661	$	269,081	$	135,888
Other comprehensive income (loss) - change in value of interest rate swaps	8,569		3,917		(5,302)
COMPREHENSIVE INCOME	404,230		272,998		130,586
Comprehensive income attributable to noncontrolling interests	(10,935)		(7,903)		(3,711)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST	$	393,295	$	265,095	$	126,875

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

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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, 2019	405,896	$	159,997	75,540,804	$	759	$	3,166,522	$	(791,124)	$	(813)	$	100,791	$	2,636,132
January 1, 2020 adoption of new accounting standard	—	—		—	—		—		(510)		—		—		(510)
Net income, excluding $2,228 attributable to redeemable noncontrolling interests	—	—		—	—		—		131,706		—		1,954		133,660
Other comprehensive loss - change in value of interest rate swaps, excluding $471 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		(4,831)		—		(4,831)
Dividends declared to common shareholders ($4.22 per share)	—	—		—	—		—		(320,302)		—		—		(320,302)
Dividends declared to preferred shareholders	—	—		—	—		—		(8,042)		—		—		(8,042)
Distributions declared to noncontrolling interests, excluding $1,197 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(8,874)		(8,874)
Common shares issued, net	—	—		1,080,882	11		98,828		—		—		—		98,839


Shares issued under dividend reinvestment plan	—	—		24,491	—		2,072		—		—		—		2,072
Share-based compensation expense, net of forfeitures	—	—		114,251	1		13,242		—		—		—		13,243
Shares withheld for employee taxes	—	—		(33,034)	—		(4,052)		—		—		—		(4,052)
Conversion and redemption of downREIT OP units	—	—		—	—		(30)		—		—		(3,290)		(3,320)
Contributions from noncontrolling interests, excluding $19,335 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		120		120
Purchase of noncontrolling interests	—	—		—	—		(1,210)		—		—		(6,111)		(7,321)
Adjustment to redeemable noncontrolling interests	—	—		—	—		21,933		—		—		—		21,933
BALANCE AT DECEMBER 31, 2020	405,896	$	159,997	76,727,394	$	771	$	3,297,305	$	(988,272)	$	(5,644)	$	84,590	$	2,548,747

Net income, excluding $4,296 attributable to redeemable noncontrolling interests	—	—		—	—		—		261,498		—		3,287		264,785
Other comprehensive income - change in value of interest rate swaps, excluding $320 attributable to redeemable noncontrolling interest	—	—		—	—		—		—		3,597		—		3,597
Dividends declared to common shareholders ($4.26 per share)	—	—		—	—		—		(332,116)		—		—		(332,116)
Dividends declared to preferred shareholders	—	—		—	—		—		(8,042)		—		—		(8,042)
Distributions declared to noncontrolling interests, excluding $5,268 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(4,341)		(4,341)
Common shares issued, net	—	—		1,643,845	17		172,736		—		—		—		172,753


Shares issued under dividend reinvestment plan	—	—		19,758	—		1,955		—		—		—		1,955
Share-based compensation expense, net of forfeitures	—	—		164,553	2		14,432		—		—		—		14,434
Shares withheld for employee taxes	—	—		(29,031)	—		(2,998)		—		—		—		(2,998)
Conversion and redemption of downREIT OP units	—	—		76,786	—		7,474		—		—		(7,573)		(99)
Contributions from noncontrolling interests, excluding $74,530 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		6,583		6,583

Adjustment to redeemable noncontrolling interests	—	—		—	—		(2,110)		—		—		—		(2,110)
BALANCE AT DECEMBER 31, 2021	405,896	$	159,997	78,603,305	$	790	$	3,488,794	$	(1,066,932)	$	(2,047)	$	82,546	$	2,663,148

Net income, excluding $6,613 attributable to redeemable noncontrolling interests	—	—		—	—		—		385,491		—		3,557		389,048
Other comprehensive income - change in value of interest rate swaps, excluding $765 attributable to redeemable noncontrolling interest	—	—		—	—		—		—		7,804		—		7,804
Dividends declared to common shareholders ($4.30 per share)	—	—		—	—		—		(344,711)		—		—		(344,711)
Dividends declared to preferred shareholders	—	—		—	—		—		(8,034)		—		—		(8,034)
Distributions declared to noncontrolling interests, excluding $8,090 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(5,007)		(5,007)
Common shares issued, net	—	—		2,634,223	26		306,828		—		—		—		306,854

Exercise of stock options	—	—		366	—		35		—		—		—		35
Shares issued under dividend reinvestment plan	—	—		19,502	—		2,104		—		—		—		2,104
Share-based compensation expense, net of forfeitures	—	—		110,395	2		15,016		—		—		—		15,018
Shares withheld for employee taxes	—	—		(41,105)	—		(4,900)		—		—		—		(4,900)
Conversion of preferred shares	(7,018)	(175)		1,675	—		175		—		—		—		—
Conversion and redemption of downREIT OP units	—	—		14,598	—		1,367		—		—		(2,065)		(698)


Deconsolidation of VIE	—	—		—	—		—		—		—		972		972
Adjustment to redeemable noncontrolling interests	—	—		—	—		12,382		—		—		—		12,382
BALANCE AT DECEMBER 31, 2022	398,878	$	159,822	81,342,959	$	818	$	3,821,801	$	(1,034,186)	$	5,757	$	80,003	$	3,034,015

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

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Federal Realty Investment Trust

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
OPERATING ACTIVITIES
Net income	$	395,661	$	269,081	$	135,888
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	302,409		279,976		255,027
Impairment charge	—		—		57,218
Gain on deconsolidation of VIE	(70,374)		—		—
Gain on sale of real estate and change in control of interest, net of tax	(93,483)		(89,950)		(98,117)
Early extinguishment of debt	—		—		11,179
(Income) loss from partnerships	(5,170)		(1,245)		8,062
Straight-line rent	(18,326)		(9,397)		(4,492)
Share-based compensation expense	13,704		13,009		11,924
Other, net	(4,812)		(3,223)		(1,290)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:

(Increase) decrease in accounts receivable, net	(12,071)		1,214		(6,032)
Increase in prepaid expenses and other assets	(1,219)		(5,607)		(3,260)
Increase in accounts payable and accrued expenses	77		6,782		5,621
Increase (decrease) in security deposits and other liabilities	10,373		10,712		(1,799)
Net cash provided by operating activities	516,769		471,352		369,929
INVESTING ACTIVITIES
Acquisition of real estate	(438,494)		(366,466)		(9,589)
Capital expenditures - development and redevelopment	(309,046)		(368,786)		(433,872)
Capital expenditures - other	(107,655)		(71,728)		(68,064)
Costs associated with property sold under threat of condemnation, net	(18,031)		—		(12,924)
Proceeds from sale of real estate	133,717		137,868		183,461
Change in cash from deconsolidation of VIE	(4,192)		—		—

Investment in partnerships	(23,155)		(3,115)		(3,348)
Distribution from partnerships in excess of earnings	6,864		2,970		1,301

Leasing costs	(22,541)		(21,990)		(15,080)
(Issuance) repayment of mortgage and other notes receivable, net	(3,465)		31,129		(10,268)
Net cash used in investing activities	(785,998)		(660,118)		(368,383)
FINANCING ACTIVITIES

Costs to amend revolving credit facility	(6,375)		—		(638)
Issuance of senior notes, net of costs	—		—		1,094,283
Redemption and retirement of senior notes	—		—		(510,360)
Issuance of notes payable, net of costs	298,568		—		398,722
Repayment of mortgages, finance leases, and notes payable	(19,443)		(277,643)		(70,237)
Issuance of common shares, net of costs	307,275		172,981		99,177

Dividends paid to common and preferred shareholders	(347,284)		(335,656)		(324,596)
Shares withheld for employee taxes	(4,900)		(2,998)		(4,052)
Contributions from noncontrolling interests	—		133		—
Distributions to and redemptions of noncontrolling interests	(37,427)		(9,784)		(20,563)
Net cash provided by (used in) financing activities	190,414		(452,967)		661,736
(Decrease) increase in cash, cash equivalents, and restricted cash	(78,815)		(641,733)		663,282
Cash, cash equivalents, and restricted cash at beginning of year	175,163		816,896		153,614
Cash, cash equivalents, and restricted cash at end of year	$	96,348	$	175,163	$	816,896

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

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Federal Realty OP LP

Consolidated Balance Sheets


	December 31,
	2022		2021
	(In thousands, except unit data)
ASSETS
Real estate, at cost
Operating (including $1,997,583 and $2,207,648 of consolidated variable interest entities, respectively)	$	9,441,945	$	8,814,791
Construction-in-progress (including $8,477 and $18,752 of consolidated variable interest entities, respectively)	662,554		607,271

	10,104,499		9,422,062
Less accumulated depreciation and amortization (including $362,921 and $389,950 of consolidated variable interest entities, respectively)	(2,715,817)		(2,531,095)
Net real estate	7,388,682		6,890,967
Cash and cash equivalents	85,558		162,132
Accounts and notes receivable, net	197,648		169,007
Mortgage notes receivable, net	9,456		9,543
Investment in partnerships	145,205		13,027
Operating lease right of use assets, net	94,569		90,743
Finance lease right of use assets, net	45,467		49,832
Prepaid expenses and other assets	267,406		237,069

TOTAL ASSETS	$	8,233,991	$	7,622,320
LIABILITIES AND CAPITAL
Liabilities
Mortgages payable, net (including $191,827 and $335,301 of consolidated variable interest entities, respectively)	$	320,615	$	339,993

Notes payable, net	601,077		301,466
Senior notes and debentures, net	3,407,701		3,406,088
Accounts payable and accrued expenses	190,340		235,168
Dividends payable	90,263		86,538
Security deposits payable	28,508		25,331
Operating lease liabilities	77,743		72,661
Finance lease liabilities	67,660		72,032
Other liabilities and deferred credits	237,699		206,187
Total liabilities	5,021,606		4,745,464
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	178,370		213,708
Partner capital
Preferred units, 398,878 and 405,896 units issued and outstanding, respectively	154,788		154,963
Common units, 81,342,959 and 78,603,305 units issued and outstanding, respectively	2,793,467		2,427,686
Accumulated other comprehensive income (loss)	5,757		(2,047)
Total partner capital	2,954,012		2,580,602
Noncontrolling interests in consolidated partnerships	80,003		82,546
Total capital	3,034,015		2,663,148
TOTAL LIABILITIES AND CAPITAL	$	8,233,991	$	7,622,320

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

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Federal Realty OP LP

Consolidated Statements of Comprehensive Income


	Year Ended December 31,
	2022		2021		2020
	(In thousands, except per unit data)
REVENUE
Rental income	$	1,073,292	$	948,842	$	832,171

Mortgage interest income	1,086		2,382		3,323
Total revenue	1,074,378		951,224		835,494
EXPENSES
Rental expenses	228,958		198,121		170,920
Real estate taxes	127,824		118,496		119,242
General and administrative	52,636		49,856		41,680

Depreciation and amortization	302,409		279,976		255,027
Total operating expenses	711,827		646,449		586,869

Impairment charge	—		—		(57,218)
Gain on deconsolidation of VIE	70,374		—		—
Gain on sale of real estate and change in control of interest, net of tax	93,483		89,950		98,117

OPERATING INCOME	526,408		394,725		289,524

OTHER INCOME/(EXPENSE)
Other interest income	1,072		809		1,894
Interest expense	(136,989)		(127,698)		(136,289)
Early extinguishment of debt	—		—		(11,179)
Income (loss) from partnerships	5,170		1,245		(8,062)








NET INCOME	395,661		269,081		135,888
Net income attributable to noncontrolling interests	(10,170)		(7,583)		(4,182)
NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP	385,491		261,498		131,706
Dividends on preferred units	(8,034)		(8,042)		(8,042)
NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS	$	377,457	$	253,456	$	123,664
EARNINGS PER COMMON UNIT, BASIC



Net income available for common unit holders	$	4.71	$	3.26	$	1.62
Weighted average number of common units	79,854		77,336		75,515
EARNINGS PER COMMON UNIT, DILUTED



Net income available for common unit holders	$	4.71	$	3.26	$	1.62
Weighted average number of common units	80,508		77,368		75,515

NET INCOME	$	395,661	$	269,081	$	135,888
Other comprehensive income (loss) - change in value of interest rate swaps	8,569		3,917		(5,302)
COMPREHENSIVE INCOME	404,230		272,998		130,586
Comprehensive income attributable to noncontrolling interests	(10,935)		(7,903)		(3,711)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP	$	393,295	$	265,095	$	126,875

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

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Federal Realty OP LP

Consolidated Statements of Capital


	Preferred Units		Common Units		Accumulated Other Comprehensive Income (Loss)		Total Partner Capital		Noncontrolling Interests in Consolidated Partnerships		Total Capital


BALANCE AT DECEMBER 31, 2019	$	154,963	$	2,381,191	$	(813)	$	2,535,341	$	100,791	$	2,636,132
January 1, 2020 adoption of new accounting standard	—		(510)		—		(510)		—		(510)
Net income, excluding $2,228 attributable to redeemable noncontrolling interests	8,042		123,664		—		131,706		1,954		133,660
Other comprehensive loss - change in fair value of interest rate swaps, excluding $471 attributable to redeemable noncontrolling interests	—		—		(4,831)		(4,831)		—		(4,831)
Distributions declared to common unit holders	—		(320,302)		—		(320,302)		—		(320,302)
Distributions declared to preferred unit holders	(8,042)		—		—		(8,042)		—		(8,042)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $1,197 attributable to redeemable noncontrolling interests	—		—		—		—		(8,874)		(8,874)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs	—		98,839		—		98,839		—		98,839


Common units issued under dividend reinvestment plan	—		2,072		—		2,072		—		2,072
Share-based compensation expense, net of forfeitures	—		13,243		—		13,243		—		13,243
Common units withheld for employee taxes	—		(4,052)		—		(4,052)		—		(4,052)
Conversion and redemption of downREIT OP units	—		(30)		—		(30)		(3,290)		(3,320)
Contributions from noncontrolling interests, excluding $19,335 attributable to redeemable noncontrolling interests	—		—		—		—		120		120
Purchase of noncontrolling interest	—		(1,210)		—		(1,210)		(6,111)		(7,321)

Adjustment to redeemable noncontrolling interests	—		21,933		—		21,933		—		21,933
BALANCE AT DECEMBER 31, 2020	154,963		2,314,838		(5,644)		2,464,157		84,590		2,548,747

Net income, excluding $4,296 attributable to redeemable noncontrolling interests	8,042		253,456		—		261,498		3,287		264,785
Other comprehensive income - change in fair value of interest rate swaps, excluding $320 attributable to redeemable noncontrolling interest	—		—		3,597		3,597		—		3,597
Distributions declared to common unit holders	—		(332,116)		—		(332,116)		—		(332,116)
Distributions declared to preferred unit holders	(8,042)		—		—		(8,042)		—		(8,042)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $5,268 attributable to redeemable noncontrolling interests	—		—		—		—		(4,341)		(4,341)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs	—		172,753		—		172,753		—		172,753


Common units issued under dividend reinvestment plan	—		1,955		—		1,955		—		1,955
Share-based compensation expense, net of forfeitures	—		14,434		—		14,434		—		14,434
Common units withheld for employee taxes	—		(2,998)		—		(2,998)		—		(2,998)

Conversion of downREIT OP units	—		7,474		—		7,474		(7,573)		(99)
Contributions from noncontrolling interests, excluding $74,530 attributable to redeemable noncontrolling interests	—		—		—		—		6,583		6,583


Adjustment to redeemable noncontrolling interests	—		(2,110)		—		(2,110)		—		(2,110)
BALANCE AT DECEMBER 31, 2021	154,963		2,427,686		(2,047)		2,580,602		82,546		2,663,148
Net income, excluding $6,613 attributable to redeemable noncontrolling interests	8,034		377,457		—		385,491		3,557		389,048
Other comprehensive income - change in fair value of interest rate swaps, excluding $765 attributable to redeemable noncontrolling interest	—		—		7,804		7,804		—		7,804
Distributions declared to common unit holders	—		(344,711)		—		(344,711)		—		(344,711)
Distributions declared to preferred unit holders	(8,034)		—		—		(8,034)		—		(8,034)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $8,090 attributable to redeemable noncontrolling interests	—		—		—		—		(5,007)		(5,007)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs	—		306,854		—		306,854		—		306,854

Exercise of stock options	—		35		—		35		—		35
Common units issued under dividend reinvestment plan	—		2,104		—		2,104		—		2,104
Share-based compensation expense, net of forfeitures	—		15,018		—		15,018		—		15,018
Common units withheld for employee taxes	—		(4,900)		—		(4,900)		—		(4,900)
Conversion of preferred units	(175)		175		—		—		—		—
Conversion and redemption of downREIT OP units	—		1,367		—		1,367		(2,065)		(698)


Deconsolidation of VIE	—		—		—		—		972		972
Adjustment to redeemable noncontrolling interests	—		12,382		—		12,382		—		12,382
BALANCE AT DECEMBER 31, 2022	$	154,788	$	2,793,467	$	5,757	$	2,954,012	$	80,003	$	3,034,015

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

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Federal Realty OP LP

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
OPERATING ACTIVITIES
Net income	$	395,661	$	269,081	$	135,888
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	302,409		279,976		255,027
Impairment charge	—		—		57,218
Gain on deconsolidation of VIE	(70,374)		—		—
Gain on sale of real estate and change in control of interest, net of tax	(93,483)		(89,950)		(98,117)
Early extinguishment of debt	—		—		11,179
(Income) loss from partnerships	(5,170)		(1,245)		8,062
Straight-line rent	(18,326)		(9,397)		(4,492)
Share-based compensation expense	13,704		13,009		11,924
Other, net	(4,812)		(3,223)		(1,290)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:

(Increase) decrease in accounts receivable, net	(12,071)		1,214		(6,032)
Increase in prepaid expenses and other assets	(1,219)		(5,607)		(3,260)
Increase in accounts payable and accrued expenses	77		6,782		5,621
Increase (decrease) in security deposits and other liabilities	10,373		10,712		(1,799)
Net cash provided by operating activities	516,769		471,352		369,929
INVESTING ACTIVITIES
Acquisition of real estate	(438,494)		(366,466)		(9,589)
Capital expenditures - development and redevelopment	(309,046)		(368,786)		(433,872)
Capital expenditures - other	(107,655)		(71,728)		(68,064)
Costs associated with property sold under threat of condemnation, net	(18,031)		—		(12,924)
Proceeds from sale of real estate	133,717		137,868		183,461
Change in cash from deconsolidation of VIE	(4,192)		—		—

Investment in partnerships	(23,155)		(3,115)		(3,348)
Distribution from partnerships in excess of earnings	6,864		2,970		1,301

Leasing costs	(22,541)		(21,990)		(15,080)
(Issuance) repayment of mortgage and other notes receivable, net	(3,465)		31,129		(10,268)
Net cash used in investing activities	(785,998)		(660,118)		(368,383)
FINANCING ACTIVITIES

Costs to amend revolving credit facility	(6,375)		—		(638)
Issuance of senior notes, net of costs	—		—		1,094,283
Redemption and retirement of senior notes	—		—		(510,360)
Issuance of notes payable, net of costs	298,568		—		398,722
Repayment of mortgages, finance leases, and notes payable	(19,443)		(277,643)		(70,237)
Issuance of common units, net of costs	307,275		172,981		99,177

Dividends paid to common and preferred unit holders	(347,284)		(335,656)		(324,596)
Shares withheld for employee taxes	(4,900)		(2,998)		(4,052)
Contributions from noncontrolling interests	—		133		—
Distributions to and redemptions of noncontrolling interests	(37,427)		(9,784)		(20,563)
Net cash provided by (used in) financing activities	190,414		(452,967)		661,736
(Decrease) increase in cash, cash equivalents, and restricted cash	(78,815)		(641,733)		663,282
Cash, cash equivalents, and restricted cash at beginning of year	175,163		816,896		153,614
Cash, cash equivalents, and restricted cash at end of year	$	96,348	$	175,163	$	816,896

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

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Federal Realty Investment Trust

Federal Realty OP LP

Notes to Consolidated Financial Statements

December 31, 2022, 2021 and 2020

NOTE 1—BUSINESS AND ORGANIZATION

Federal Realty Investment Trust (the “Parent Company” and "Trust") is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operating and owns all of its assets. The Parent Company owns 100% of the limited liability company interests of, is sole member of, and exercises control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole general partner of the Operating Partnership. The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership. Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of December 31, 2022, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 103 predominantly retail real estate projects.

We operate in a manner intended to enable the Trust 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.

Impacts of COVID-19 Pandemic and General Economic Conditions

Given the ongoing workforce shortages, global supply chain bottlenecks and shortages, higher levels of inflation, and rising interest rates, we continue to monitor and address risks related to the global COVID-19 pandemic and the state of the economy. The extent of the future effects of COVID-19 and potentially worsening economic conditions on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In January 2022, we completed a reorganization into an umbrella partnership real estate investment trust, or "UPREIT." For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022, as well our 2021 Annual Report on Form 10-K filed on February 10, 2022. Immediately following the reorganization, the Parent Company had the same consolidated assets and liabilities as Federal Realty Investment Trust immediately before the reorganization. The Parent Company exercises exclusive control over the General Partner and does not have assets or liabilities other than its investment in the Operating Partnership. As a result, the UPREIT reorganization represented a merger of entities under common control in accordance with accounting principles generally accepted in the United States ("GAAP"). Accordingly, the accompanying consolidated financial statements including the notes thereto, are presented as if the UPREIT reorganization had occurred at the earliest period presented. Certain 2021, 2020, and 2019 amounts have been reclassified to conform to current period presentation.

Principles of Consolidation

As discussed in the Explanatory Note, we have combined the Annual Reports on Form 10-K of the Parent Company and the Operating Partnership into this single report. As a result, we present two sets of consolidated financial statements. Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to the primary beneficiary of a variable interest entity (“VIE”). The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent, and through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership. 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.

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

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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 our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. Lease payments are recognized on a straight-line basis from the point in time when the tenant controls the space through the term of the related lease. Variable lease payments relating to percentage rent are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent. 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 are generally recognized on the termination date if the tenant has relinquished control of the space. 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. Lease concessions (unrelated to the COVID-19 pandemic) are evaluated to determine whether the concession represents a modification of the original lease contract. Modifications generally result in a reassessment of the lease term and lease classification, and remeasurement of lease payments received. Remeasured lease payments are recognized on a straight-line basis over the remaining term of the modified lease contract.

In April 2020, the Financial Accounting Standards Board ("FASB") issued interpretive guidance relating to the accounting for lease concessions provided as a result of the COVID-19 pandemic that allows entities to treat the concession as if it was a part of the existing contract instead of applying lease modification accounting. This guidance is only applicable to the COVID-19 pandemic related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected this option relating to qualifying rent deferral and rent abatement agreements. For qualifying lease modifications with rent deferrals, this results in no change to our revenue recognition but an increase in the lease receivable balance until the deferred rent has been repaid. For qualifying lease modifications that include rent abatement concessions, this results in a direct reduction of rental income in the current period. As of December 31, 2022, we executed rent deferral agreements related to the COVID-19 pandemic representing approximately $48 million of rent. We have subsequently collected approximately $35 million of those amounts previously deferred. As of December 31, 2022, we have entered into rent abatement agreements related to the COVID-19 pandemic totaling $4 million, $26 million, and $48 million of rents due in 2022, 2021, and 2020 respectively.

When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income.

Our collection of rents has continued to improve from the initial impacts of COVID-19, including collecting rents related to prior periods. As a result, our collectibility related adjustments for the year ended December 31, 2022 resulted in an increase to rental income of $4.1 million, as compared to a $24.0 million and $106.6 million decrease to rental income during the years ended December 31, 2021 and 2020, respectively, which reflected lower levels of cash collections and elevated levels of rent abatements and disputes directly related to COVID-19. This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19. As of December 31, 2022 and 2021, the revenue from approximately 31% and 34% of our tenants (based on total commercial leases), respectively, is being recognized on a cash basis. As of December 31, 2022 and 2021, our straight-line rent receivables balance was $126.6 million and $110.7 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet.

Other revenue recognition policies

Sales of real estate are recognized upon the transfer of control, which usually occurs when the real estate is legally sold. When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control

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transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment.

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 2022, 2021 and 2020, real estate depreciation expense was $265.7 million, $245.1 million and $227.9 million, respectively, including amounts from real estate sold.

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 acquired leases, assumed debt, if any, and to current assets acquired and current liabilities assumed, if any. The value allocated to acquired 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 acquired 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 acquired 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.

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, are capitalized. 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 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.

Long-Lived Assets and Impairment

There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value.

The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income.

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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, 2022, we had $113.2 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 incremental direct costs incurred which were essential to originate a successful leasing arrangement and would not have been incurred had the leasing transaction not taken place. These costs include third party commissions related to obtaining a lease. Capitalized lease costs are amortized over the initial life 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. 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. See the "Leases" section in this note for further discussion regarding the change in accounting for lease costs.

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

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.

Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in accumulated other comprehensive income (loss) on the balance sheet and statement of shareholders' equity. 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, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected.

At December 31, 2022, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken property at 3.67%. Both swaps were designated and qualify for cash flow hedge accounting. As of December 31, 2022, our Assembly Row hotel joint venture is a party to two interest rate swap agreements that effectively fix the interest rate on the joint venture's mortgage debt at 5.206%. Both swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2022, 2021 and 2020.

Mortgage Notes Receivable

We have invested in certain mortgage loans that, because of their nature, qualify as loan receivables. At the time of investment, 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.

Mortgage notes receivable are recorded at cost, net of any valuation adjustments. Effective January 1, 2020, (upon the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," as amended and interpreted), we account for mortgage notes receivable using the "expected credit loss" model, and accordingly impairment losses are estimated and recorded for the entire

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life of the loan. Prior to the implementation of ASC 326, we recognized impairment losses as incurred. 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 and update our expected credit loss model 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 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. As our loans are collateralized by mortgages, these loans have risk characteristics similar to the risks in owning commercial real estate.

At December 31, 2022, we had three mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments of $9.5 million, and a weighted average interest rate of 10.9%.

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.

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.

Our equity method investments in the Assembly Row hotel joint venture, the La Alameda shopping center, the Chandler Festival and Chandler Gateway shopping centers, and our mortgage notes receivable are considered variable interests in a VIE (see Note 3 to the consolidated financial statements for additional information on the Chandler Festival and Chandler Gateway shopping centers). As we do not control the activities that most significantly impact the economic performance of our equity method joint ventures or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate. As of December 31, 2022 and 2021, our investment in the equity method joint ventures and maximum exposure to loss was $34.0 million and $8.9 million, respectively. As of December 31, 2022 and 2021, our investment in mortgage notes receivable and maximum exposure to loss was $9.5 million for both periods. We also own a 77.7% tenancy in common ("TIC") interest in Escondido Promenade which is recorded as an equity method investment and included in investments in partnerships" on our December 31, 2022 consolidated balance sheets. Our TIC interest in Escondido Promenade is not considered a variable interest in a variable interest entity. See Note 3 to the consolidated financial statements for additional information.

In addition, we have 19 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 related to VIEs included in our consolidated balance sheets were approximately $1.6 billion and $1.8 billion as of December 31, 2022 and 2021, respectively, and mortgages related to VIEs included in our consolidated balance sheets were approximately $191.8 million and $335.3 million, as of December 31, 2022 and 2021, respectively.

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,
	2022		2021
	(In thousands)
Beginning balance	$	213,708	$	137,720
Net income	6,613		4,296
Contributions	2,111		74,530

Other comprehensive income - change in value of interest rate swaps	765		320
Distributions & redemptions	(32,445)		(5,268)

Change in redemption value	(12,382)		2,110
Ending balance	$	178,370	$	213,708

On July 13, 2022, we acquired the 21.8% redeemable noncontrolling interest in the partnership that owns our Plaza El Segundo shopping center for $23.6 million, bringing our ownership interest to 100%.

Leases

We have ground leases at 11 properties which are accounted for as operating leases. The operating lease right of use ("ROU") assets and related liabilities are shown separately on the face of our consolidated balance sheet and reflect the present value of the minimum lease payments. A key input in the calculation is the discount rate. As the rate implied in the lease agreements is not readily determinable, we utilize our incremental borrowing rate that corresponds to the remaining term of the lease, our credit spread, and an adjustment to reflect the collateralized payment terms present in the lease. Our operating lease agreements may include options to extend the lease term or terminate it early. We include options to extend or terminate leases in the ROU operating lease asset and liability when it is reasonably certain we will exercise these options. Operating lease expense is recognized on a straight-line basis over the non-cancellable lease term and is included in rental expenses in our consolidated statements of operations. We do not record an ROU asset or lease liability for leases with terms of less than 12 months.

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 2018. As of December 31, 2022 and 2021, 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, and mortgage interest income, less rental expenses and real estate taxes. No individual commercial or residential 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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Forward Equity Sales

Our at-the-market (“ATM”) equity program allows shares to be sold through forward sales contracts. Our forward sales contracts currently meet all the conditions for equity classification; and therefore, we record common stock on the settlement date at the purchase price contemplated by the contract. Furthermore, we consider the potential dilution resulting from forward sales contracts in our earnings per share calculations. We use the treasury method to determine the dilution, if any, from the forward sales contracts during the period of time prior to settlement. See Note 8 to the consolidated financial statements for details of our forward sales transactions.

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Recent Accounting Pronouncements


Standard	Description	Effect on the financial statements or significant matters
Adopted on January 1, 2022:

ASU 2020-06, August 2020, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity	This ASU simplifies the accounting for convertible instruments by removing the requirements to separately present certain conversion features in equity, simplifying the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification, and generally requiring the use of the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive). The guidance is effective for annual period beginning after December 15, 2021, and interim periods therein.	The adoption of this standard did not have an impact to our consolidated financial statements.

ASU 2021-05, July 2021, Lessors - Certain Leases with Variable Lease Payments (Topic 842)	This ASU amends the lessor lease classification in ASC 842 for leases that include variable lease payments that are not based on an index or rate. Under the amended guidance, lessors will classify a lease with variable payments that do not depend on an index or rate as an operating lease if the lease would have been classified as a sales-type lease or a direct financing lease under the previous ASU 842 classification criteria, and sales-type or direct financing lease classification would result in a Day 1 loss. This guidance is effective for annual periods beginning after December 15, 2021, and interim periods therein.	The adoption of this standard did not have an impact to our consolidated financial statements.

Issued in 2022:
ASU 2022-03, June 2022, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820)	This ASU clarifies that contractual sale restrictions are not considered in measuring the fair value of equity securities, and requires specific disclosures for all entities with equity securities subject to a contractual sale restriction including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. In addition, the ASU prohibits an entity from recognizing a contractual sale as a separate unit of account. This guidance is effective in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted.	We are assessing the impact of this ASU on OP units issued as consideration in future acquisitions.

Issued in 2020:
Reference Rate Reform (Topic 848) and related update: ASU 2020-04, March 2020, Reference Rate Reform (Topic 848) ASU 2022-06, December 2022, Deferral of the Sunset Date	This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform. For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied. For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract. ASU 2022-06 extended the period for which this guidance can be immediately applied through December 31, 2024.	We expect to apply some of the practical expedients, as we are in the process of transitioning the $55.1 million mortgage loan on Hoboken and the $38.2 million mortgage loan related to the unconsolidated Assembly Row hotel (of which our share is $19.1 million) from LIBOR to alternative interest rates. We do not expect a significant impact to our financial results, financial position, or cash flows from this transition.

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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,
	2022		2021		2020
	(In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred	$	155,659	$	150,324	$	159,718
Interest capitalized	(18,670)		(22,626)		(23,429)
Interest expense	$	136,989	$	127,698	$	136,289
Cash paid for interest, net of amounts capitalized	$	130,912	$	123,585	$	130,248
Cash paid for income taxes	$	624	$	386	$	580
NON-CASH INVESTING AND FINANCING TRANSACTIONS:

DownREIT operating partnership units issued with acquisition	$	—	$	—	$	18,920
Mortgage loans assumed with acquisition (1)	$	—	$	—	$	8,903




DownREIT operating partnership units redeemed for common shares	$	1,385	$	7,545	$	—

Shares issued under dividend reinvestment plan	$	1,718	$	1,727	$	1,734
5.417% Series 1 Cumulative Convertible Preferred Shares redeemed for common shares	$	175	$	—	$	—

(1) See our Annual Report on Form 10-K for the year ended December 31, 2020 for additional disclosures relating to the mortgages entered into and assumed as a result of the Hoboken acquisition.


	December 31,
	2022		2021
	(In thousands)
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Cash and cash equivalents	$	85,558	$	162,132
Restricted cash (1)	10,790		13,031
Total cash, cash equivalents, and restricted cash	$	96,348	$	175,163

(1)Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets.

NOTE 3—REAL ESTATE

2022 Property Acquisitions

During the year ended December 31, 2022, we acquired the following properties:


Date Acquired	Property	City/State	Gross Leasable Area (GLA)	Purchase Price
			(in square feet)	(in millions)
April 20, 2022 & July 27, 2022	Kingstowne Towne Center	Kingstowne, Virginia	410,000	$	200.0	(1)
July 18, 2022	Hilton Village (office building)	Scottsdale, Arizona	212,000	$	53.6	(2)
July 27, 2022	The Shops at Pembroke Gardens	Pembroke Pines, Florida	391,000	$	180.5	(3)
November 18, 2022	Hoboken (301 Washington St.)	Hoboken, New Jersey	N/A	$	9.0	(4)

(1)Approximately $11.3 million and $0.3 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $20.2 million of net assets acquired were allocated to other liabilities for "below market leases."

(2)This building is adjacent to, and will be operated as part of our Hilton Village property. The land is controlled under a long-term ground lease that expires on September 30, 2075, for which we have recorded a $6.5 million "operating lease right of use asset" (net of a $0.8 million above market liability) and a $7.3 million "operating lease liability." Approximately $8.9 million of net assets acquired were allocated to other assets for "acquired lease costs" and $0.1 million of net assets acquired were allocated to other liabilities for "below market leases."

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(3)Approximately $16.3 million and $1.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $18.4 million of net assets acquired were allocated to other liabilities for "below market leases."

(4)This property, that we own a 90% ownership interest in, was acquired through our Hoboken joint venture, and is in the beginning stages of redevelopment.

On October 6, 2022, we acquired a 47.5% net interest in an unconsolidated joint venture that owns two shopping centers for a combined price of $58.9 million. On the date of acquisition, the properties had combined mortgage debt of $76.1 million, of which, our share is approximately $36.2 million. Approximately $8.0 million and $2.0 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $17.1 million of net assets acquired were allocated to other liabilities for "below market leases." Additional information on the properties is listed below:


Property	City/State	Gross Leasable Area (GLA)	Purchase Price (our share)
		(in square feet)	(in millions)
Chandler Festival	Chandler, Arizona	355,000	$	40.8
Chandler Gateway	Chandler, Arizona	262,000	$	18.1

2022 Property Dispositions

During the year ended December 31, 2022, we sold two residential properties (one included an adjacent retail pad), one retail property, one parcel of land, and one portion of a property for sales prices totaling $136.2 million, resulting in net gains totaling approximately $84.1 million.

Other Transaction

On August 25, 2022, we entered into a tenancy in common ("TIC") agreement with our partner in the partnership that owned Escondido Promenade. As a result, the Company owns a 77.7% TIC interest, and our former partner owns the remaining 22.3% interest. While the Company controlled and consolidated Escondido Promenade under the previous partnership arrangement, control is shared under the TIC agreement. The transaction is considered a transfer of our previous controlling partner interest in exchange for a non-controlling TIC interest. Accordingly, we deconsolidated the entity and recorded our TIC interest at fair value as an equity method investment. We recognized a $70.4 million "gain on deconsolidation of VIE" on our consolidated statements of operations, which is the difference between the net carrying value of the deconsolidated entity and the fair value of our TIC interest. As of August 25, 2022, the fair value of our investment in the entity was $110.0 million, and is included in "investment in partnerships" on our consolidated balance sheet as of December 31, 2022. As a part of this transaction, we made a $3.5 million loan to our co-owner, which is included in "accounts and notes receivable, net" on our consolidated balance sheet at December 31, 2022. In addition, we entered into a purchase option agreement to acquire the TIC interest from our co-owner, which was secured through an option payment of $1.5 million, and allows us to exercise our option at any time between February 1, 2023 and March 15, 2023.

2021 Property Acquisitions

On January 4, 2021, we acquired our partner's 20% interest in our joint venture arrangement related to the Pike & Rose hotel for $2.3 million, and repaid the $31.5 million mortgage loan encumbering the hotel. As a result of the transaction, we gained control of the hotel, and effective January 4, 2021, we have consolidated this asset. We also recognized a gain on acquisition of the controlling interest of $2.1 million related to the difference between the carrying value and fair value of the previously held equity interest.

On February 22, 2021, we acquired the fee interest at our Mount Vernon Plaza property in Alexandria, Virginia for $5.6 million. As a result of this transaction, the "operating lease right of use assets" and "operating lease liabilities" on our consolidated balance sheet decreased by $9.8 million. We now own the entire fee interest on this property.

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During the year ended December 31, 2021, we acquired the following properties:


Date Acquired	Property	City/State	Gross Leasable Area (GLA)	Ownership %		Gross Value
			(in square feet)			(in millions)
April 30, 2021	Chesterbrook (1)	McLean, Virginia	90,000	80	%	$	32.1	(2)
June 1, 2021	Grossmont Center (1)	La Mesa, California	933,000	60	%	$	175.0	(3)
June 14, 2021	Camelback Colonnade (1)	Phoenix, Arizona	642,000	98	%	$	162.5	(4)
June 14, 2021	Hilton Village (1)	Scottsdale, Arizona	93,000	98	%	$	37.5	(5)
September 2, 2021	Twinbrooke Shopping Centre	Fairfax, Virginia	106,000	100	%	$	33.8	(6)

(1)These acquisitions were completed through newly formed joint ventures, for which we own the controlling interest listed above, and therefore, these properties are consolidated in our financial statements.

(2)Approximately $1.9 million and $0.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $8.0 million of net assets acquired were allocated to other liabilities for "below market leases."

(3)Approximately $12.3 million and $2.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $14.7 million of net assets acquired were allocated to other liabilities for "below market leases."

(4)Approximately $11.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and $28.3 million were allocated to other liabilities for "below market leases."

(5)The land is controlled under a long-term ground lease that expires on December 31, 2076, for which we have recorded a $10.4 million "operating lease right of use asset" (net of a $1.3 million above market liability) and an $11.6 million "operating lease liability." Approximately $2.7 million and $1.1 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $3.6 million were allocated to other liabilities for "below market leases."

(6)Approximately $1.2 million and $0.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $2.7 million of net assets acquired were allocated to other liabilities for "below market leases."

2021 Property Dispositions

During the year ended December 31, 2021, we sold two properties and a portion of three properties for a total sales price of $141.6 million, which resulted in a net gain of $88.3 million.

NOTE 4—ACQUIRED LEASES

Acquired lease assets comprise of above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities comprise of below market leases where we are the lessor and above market leases where we are the lessee. As a lessor, acquired above market leases are included in prepaid expenses and other assets, and acquired below market leases are included in other liabilities and deferred credits. In accordance with our adoption of ASC Topic 842, acquired below market leases and acquired above market leases where we are the lessee are included in right of use assets. The following is a summary of our acquired lease assets and liabilities:


	December 31, 2022				December 31, 2021
	Cost		Accumulated Amortization		Cost		Accumulated Amortization
	(in thousands)
Above market leases, lessor	$	45,737	$	(33,892)	$	46,951	$	(33,617)
Below market leases, lessee	34,604		(5,847)		34,604		(5,019)
Total	$	80,341	$	(39,739)	$	81,555	$	(38,636)

Below market leases, lessor	$	(267,910)	$	91,989	$	(230,059)	$	78,327
Above market leases, lessee	(11,127)		3,208		(10,347)		2,654
Total	$	(279,037)	$	95,197	$	(240,406)	$	80,981

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The value allocated to acquired 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 acquired 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,
	2022		2021		2020
	(in thousands)
Amortization of above market leases, lessor	$	(3,437)	$	(3,150)	$	(4,060)
Amortization of below market leases, lessor	14,543		11,897		8,406
Net increase in rental income	$	11,106	$	8,747	$	4,346

Amortization of below market leases, lessee	$	828	$	828	$	828
Amortization of above market leases, lessee	(554)		(538)		(525)
Net increase in rental expense	$	274	$	290	$	303

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


						December 31, 2022

Above market leases, lessor						3.0 years
Below market leases, lessee						36.6 years
Below market leases, lessor						17.6 years
Above market leases, lessee						19.1 years

The amortization for acquired 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,
2023	$	3,869	$	15,555
2024	3,347		15,005
2025	2,277		11,507
2026	2,005		11,074
2027	1,717		10,601
Thereafter	27,387		120,098
	$	40,602	$	183,840

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NOTE 5—DEBT

The following is a summary of our total debt outstanding as of December 31, 2022 and 2021:


	Principal Balance as of December 31,				Stated Interest Rate as of		Stated Maturity Date as of
Description of Debt	2022		2021		December 31, 2022		December 31, 2022
Mortgages payable	(Dollars in thousands)
























Azalea	$	40,000	$	40,000	3.73	%	November 1, 2025
Bell Gardens	11,835		12,127		4.06	%	August 1, 2026
Plaza El Segundo	125,000		125,000		3.83	%	June 5, 2027
The Grove at Shrewsbury (East)	43,600		43,600		3.77	%	September 1, 2027
Brook 35	11,500		11,500		4.65	%	July 1, 2029
Hoboken (24 Buildings) (1)	55,060		56,450		LIBOR + 1.95%		December 15, 2029
Various Hoboken (14 Buildings)	30,876		31,817		Various (2)		Various through 2029
Chelsea	4,446		4,851		5.36	%	January 15, 2031
Hoboken (1 Building)	—		16,234		3.75	%	July 1, 2042
Subtotal	322,317		341,579
Net unamortized debt issuance costs and premium	(1,702)		(1,586)
Total mortgages payable, net	320,615		339,993
Notes payable
Term Loan (3)(5)	600,000		300,000		SOFR + 0.85%		April 16, 2024
Revolving credit facility (3)(4)(5)	—		—		SOFR + 0.775%		April 5, 2027
Various	2,957		2,635		Various (6)		Various through 2059
Subtotal	602,957		302,635
Net unamortized debt issuance costs	(1,880)		(1,169)
Total notes payable, net	601,077		301,466
Senior notes and debentures


2.75% notes	275,000		275,000		2.75	%	June 1, 2023
3.95% notes	600,000		600,000		3.95	%	January 15, 2024
1.25% notes	400,000		400,000		1.25	%	February 15, 2026
7.48% debentures	29,200		29,200		7.48	%	August 15, 2026
3.25% notes	475,000		475,000		3.25	%	July 15, 2027
6.82% medium term notes	40,000		40,000		6.82	%	August 1, 2027
3.20% notes	400,000		400,000		3.20	%	June 15, 2029
3.50% notes	400,000		400,000		3.50	%	June 1, 2030
4.50% notes	550,000		550,000		4.50	%	December 1, 2044
3.625% notes	250,000		250,000		3.625	%	August 1, 2046
Subtotal	3,419,200		3,419,200
Net unamortized debt issuance costs and premium	(11,499)		(13,112)
Total senior notes and debentures	3,407,701		3,406,088


Total debt	$	4,329,393	$	4,047,547

(1)On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on the mortgage loan at 3.67%.

(2)The interest rates on these mortgages range from 3.91% to 5.00%.

(3)Our revolving credit facility SOFR loans bear interest at Daily Simple SOFR or Term SOFR as defined in the credit agreement and our term loan bears interest at Term SOFR, plus 0.10%, plus a spread, based on our current credit rating.

(4)The maximum amount drawn under our revolving credit facility during the year ended December 31, 2022 was $330.0 million and the weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 3.2%.

(5)The Operating Partnership is the obligor under our revolving credit facility, term loan, and senior notes and debentures.

(6)The interest rates on these notes payable range from 3.00% to 11.31%.

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On June 29, 2022, we repaid the $16.1 million mortgage loan on one of the buildings at our Hoboken property, at par.

On October 5, 2022, we amended our revolving credit facility, increasing the borrowing capacity from $1.0 billion to $1.25 billion, extending the maturity date to April 5, 2027, plus two six-month extension options, transitioning the interest rate provisions from LIBOR to the secured overnight financing rate ("SOFR"), and adjusting the spread for SOFR based loans. Our SOFR based loans bear interest at Daily Simple SOFR or Term SOFR as defined in the credit agreement plus 0.10% plus a spread, based on our credit rating. The current spread is 77.5 basis points. In addition, we have an option (subject to bank approval) to increase the credit facility through an accordion feature to $1.75 billion.

During 2022, 2021 and 2020, the maximum amount of borrowings outstanding under our revolving credit facility was $330.0 million, $150.0 million and $990.0 million, respectively. The weighted average amount of borrowings outstanding was $80.3 million, $19.6 million and $138.5 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 3.2%, 0.9% and 1.5%, respectively. The revolving credit facility requires an annual facility fee which is $1.9 million under the amended credit agreement. At December 31, 2022 and December 31, 2021, our revolving credit facility had no balance outstanding.

On October 5, 2022, we also amended our unsecured term loan and borrowed an additional $300.0 million, bringing the total outstanding to $600.0 million. The term loan amendment also transitioned the interest rate provisions from LIBOR to SOFR. This SOFR based loan bears interest at Term SOFR as defined in the agreement, plus 0.10%, plus a 85 basis point spread, based on our current credit rating. The net proceeds from the term loan after underwriting fees and other costs were $298.5 million, and were used to repay the $267.0 million outstanding balance on the revolving credit facility and for general corporate purposes.

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, 2022, 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, 2022 are as follows:


	Mortgages Payable		Notes Payable			Senior Notes and Debentures		Total Principal
	(In thousands)
Year ending December 31,
2023	$	3,138	$	755		$	275,000	$	278,893
2024	3,299		600,671		(1)	600,000		1,203,970
2025	47,630		418			—		48,048
2026	26,240		76			429,200		455,516
2027	178,278		37		(2)	515,000		693,315
Thereafter	63,732		1,000			1,600,000		1,664,732
	$	322,317	$	602,957		$	3,419,200	$	4,344,474	(3)

(1)Our $600.0 million term loan matures on April 16, 2024 plus two one-year extensions, at our option.

(2)Our $1.25 billion revolving credit facility matures on April 5, 2027 plus two six-month extensions, at our option. As of December 31, 2022, there was no balance outstanding under this credit facility.

(3)The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2022.

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

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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, 2022						December 31, 2021
Carrying Value			Fair Value			Carrying Value			Fair Value
(In thousands)
Mortgages and notes payable	$	921,692		$	895,654		$	641,459		$	655,864
Senior notes and debentures	$	3,407,701		$	3,048,456		$	3,406,088		$	3,649,776

As of December 31, 2022, we have two interest rate swap agreements with notional amounts of $55.1 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the interest rate on $55.1 million of mortgage payables at 3.67% through December 15, 2029. 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, 2022 was an asset of $6.1 million and is included in "prepaid expenses and other assets" on our consolidated balance sheet. During 2022, the value of our interest rate swaps increased $7.7 million (including less than $0.1 million reclassified from other comprehensive income as an increase to interest expense). 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, 2022								December 31, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(In thousands)
Interest rate swaps	$	—	$	6,144	$	—	$	6,144	$	—	$	(1,511)	$	—	$	(1,511)

One of our equity method investees has two interest rate swaps which qualify as cash flow hedges. At December 31, 2022 and December 31, 2021, our share of the change in fair value of the related swaps included in "accumulated other comprehensive income (loss)" was an increase of $0.9 million and $0.7 million, respectively.

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. 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.

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

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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.

At December 31, 2022 and 2021, our reserves for general liability costs were $3.3 million and $5.2 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 2022 and 2021, we made payments from these reserves of $2.3 million and $1.5 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.

On December 11, 2019, we received proceeds related to the sale under the threat of condemnation at San Antonio Center as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. We indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and recorded a corresponding liability for our estimate of these costs. During 2022, we recorded a net reduction to our liability for condemnation and transaction costs to reflect the impact of a recent tenant settlement agreement and our current estimate of remaining costs. As a result, for the year ended December 31, 2022, we have recognized a gain of $9.3 million, which is included in our consolidated statements of operations. Additionally, during 2022, we incurred $18.0 million of payments to tenants, and consequently, at December 31, 2022, we have a liability of $5.0 million to reflect our estimate of the remaining consideration.

At December 31, 2022, we had letters of credit outstanding of approximately $6.7 million.

As of December 31, 2022 in connection with capital improvement, development, and redevelopment projects, we have contractual obligations of approximately $262.1 million.

We are obligated under operating lease agreements on several shopping centers and one office lease requiring minimum annual payments as follows, as of December 31, 2022:



	(In thousands)
Year ending December 31,
2023	$	5,775
2024	5,949
2025	5,815
2026	5,451
2027	5,037
Thereafter	198,973
Total future minimum operating lease payments	227,000
Less amount representing interest	(149,257)
Operating lease liabilities	$	77,743

Future minimum lease payments and their present value for properties under finance leases as of December 31, 2022, are as follows:

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	(In thousands)
Year ending December 31,
2023	$	59,713
2024	713
2025	713
2026	713
2027	748
Thereafter	68,676
Total future minimum finance lease payments	131,276
Less amount representing interest	(63,616)
Finance lease liabilities	$	67,660

A master lease for Mercer Mall includes a fixed purchase price option for $55 million in 2023. During 2022, we exercised our option to purchase the fee interest, which is expected to close in the second half of 2023.

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, 2022, our estimated maximum liability upon exercise of the put option would range from approximately $62 million to $65 million.

A master lease for Melville Mall, as amended on October 14, 2021, includes a fixed price put option at any time prior to June 30, 2025, requiring us to purchase Melville Mall for approximately $3.6 million. Additionally, we have the right to purchase Melville Mall in 2026 for approximately $3.6 million. The consideration is net of a contract amendment fee to be paid by the landlord.

The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1% interest in The Grove at Shrewsbury and approximately 6.5% 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, 2022, our estimated maximum liability upon exercise of the put option would range from $6 million to $7 million.

Effective September 18, 2023, the other member in Hoboken has the right to require us to purchase all of its 10.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $8 million to $9 million.

Effective June 14, 2026, the other member in Camelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million.

Effective October 6, 2027, the other member in the partnership that owns equity method investments in Chandler Festival and Chandler Gateway has the right to require us to purchase its 2.5% net ownership interest. Based on management's current estimate of fair value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $1 million and $2 million.

Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 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 644,554 downREIT operating partnership units are outstanding which have a total fair value of $65.1 million, based on our closing stock price on December 31, 2022.

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 2022, 2021 and 2020, 19,502 shares, 19,758 shares, and 24,491 shares, respectively, were issued under the Plan.

As of December 31, 2022, 2021, and 2020, we had 6,000,000 Depositary Shares outstanding, 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

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the liquidation preference of $25.00 per depositary share (or $25,000 per Series C Preferred share). The Series C Preferred Shares accrue dividends at a rate of 5.0% of the $25,000 liquidation preference per year and are redeemable at our option. 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.

As of December 31, 2022, we had 392,878 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, and 399,896 shares at December 31, 2021 and 2020. 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. On June 15, 2022, one of our Series 1 Preferred shareholders converted 7,018 preferred shares to 1,675 common shares. 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 February 14, 2022, 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 $500.0 million. Our ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds from ATM equity program issuances to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.

For the year ended December 31, 2022, we issued 430,473 common shares at a weighted average price per share of $111.49 for net cash proceeds of $47.4 million including paying $0.5 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. For the year ended December 31, 2021, we issued 847,471 common shares at a weighted average price per share of $104.19 for net cash proceeds of $87.0 million and paid $0.9 million in commissions and $0.4 million in additional offering expenses related to the sales of these common shares. As of December 31, 2022, we have the remaining capacity to issue up to $452.0 million in common shares under our ATM equity program.

During 2021, we entered into forward sales contracts for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $120.22. During 2021, we settled a portion of these forward sales agreements by issuing 796,300 common shares for net proceeds of $85.7 million and during 2022, we settled the remaining forward sales contracts by issuing 2,203,655 common shares for net proceeds of $259.4 million. We have no outstanding forward sales agreements as of December 31, 2022.

NOTE 9—DIVIDENDS

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


	Year Ended December 31,
	2022				2021				2020
	Declared		Paid		Declared		Paid		Declared		Paid
Common shares	$	4.300	$	4.290	$	4.260	$	4.250	$	4.220	$	4.210
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)	$	1.250	$	1.250	$	1.250	$	1.250	$	1.250	$	1.250

(1) Amount represents dividends per depositary share, each representing 1/1000th of a share.

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


	Year Ended December 31,
2022			2021			2020
Common shares
Ordinary dividend	$	3.518		$	3.358		$	3.452
Capital gain	0.772			0.680			—
Return of capital	—			0.212			0.758


	$	4.290		$	4.250		$	4.210
5.417% Series 1 Cumulative Convertible Preferred shares
Ordinary dividend	$	1.110		$	1.124		$	1.354
Capital gain	0.244			0.230			—


	$	1.354		$	1.354		$	1.354
5.0% Series C Cumulative Redeemable Preferred shares
Ordinary dividend	$	1.025		$	1.038		1.250


Capital gain	0.225			0.212			—
	$	1.250		$	1.250		$	1.250

On November 3, 2022, the Trustees declared a quarterly cash dividend of $1.08 per common share, payable January 17, 2023 to common shareholders of record on January 3, 2023.

NOTE 10— LEASES

At December 31, 2022, our 103 predominantly retail shopping center and mixed-use properties are located in 12 states and the District of Columbia. There are approximately 3,300 commercial leases and 3,000 residential leases. Our commercial tenants range from sole proprietorships to national retailers and corporations. At December 31, 2022, no one tenant or corporate group of tenants accounted for more than 2.8% 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, 2022, future minimum rentals from noncancelable commercial operating leases (excluding both tenant reimbursements of operating expenses and percentage rent based on tenants' sales) are as follows:



	(In thousands)
Year ending December 31,
2023	$	701,133
2024	649,472
2025	564,446
2026	490,884
2027	416,736
Thereafter	1,644,716
	$	4,467,387

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The following table provides additional information on our operating and finance leases where we are the lessee:


	Year Ended December 31,
	2022		2021			2020
	(In thousands)
LEASE COST:
Finance lease cost:
Amortization of right-of-use assets	$	1,251	$	1,284		$	1,284
Interest on lease liabilities	5,743		5,828			5,826
Operating lease cost	6,138		5,687			5,946
Variable lease cost	309		246			353
Total lease cost	$	13,441	$	13,045		$	13,409

OTHER INFORMATION:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for finance leases	$	5,642	$	5,723		$	5,736
Operating cash flows for operating leases	$	5,644	$	5,288		$	5,498
Financing cash flows for finance leases	$	50	$	51		$	46



			December 31,
			2022			2021
Weighted-average remaining term - finance leases			13.9 years			16.3 years
Weighted-average remaining term - operating leases			53.3 years			52.8 years
Weighted-average discount rate - finance leases			8.1		%	8.0		%
Weighted-average discount rate - operating leases			4.8		%	4.5		%
ROU assets obtained in exchange for operating lease liabilities			$	6,476		$	10,341

NOTE 11—COMPONENTS OF RENTAL EXPENSES

The principal components of rental expenses are as follows:


	Year Ended December 31,
2022			2021			2020
(In thousands)
Repairs and maintenance	$	90,343		$	78,028		$	66,845
Utilities	34,226			27,808			25,065
Management fees and costs	27,416			24,919			23,752
Payroll	19,693			18,341			16,691
Insurance	16,380			14,406			12,439
Marketing	7,814			7,481			6,432
Ground rent	5,092			4,571			4,595
Other operating	27,994			22,567			15,101
Total rental expenses	$	228,958		$	198,121		$	170,920

NOTE 12—SHARE-BASED COMPENSATION PLANS

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


	Year Ended December 31,
	2022		2021		2020
	(In thousands)

Grants of common shares, restricted stock units, and options	$	15,018	$	14,434	$	13,243
Capitalized share-based compensation	(1,314)		(1,425)		(1,319)
Share-based compensation expense	$	13,704	$	13,009	$	11,924

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As of December 31, 2022, we have grants outstanding under two share-based compensation plans. In May 2020, our shareholders approved the 2020 Performance Incentive Plan ("the 2020 Plan"), which authorized the grant of share options, common shares, and other share-based awards for up to 1,750,000 common shares of beneficial interest. Our 2010 Long Term Incentive Plan, as amended (the "2010 Plan”), which expired in May 2020, authorized the grant of share options, common shares and other share-based awards for up to 2,450,000 common shares of beneficial interest.

Option awards under the 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 the plan 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 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 2022 and 2020.

The following table provides a summary of the assumptions used to value options granted in 2021:


	Year Ended December 31,
	2021
Volatility	29.3	%
Expected dividend yield	4.1	%
Expected term (in years)	7.5
Risk free interest rate	0.9	%

The weighted-average grant-date fair value of options granted in 2021 was $16.40 per share. The following table provides a summary of option activity for 2022:


	Shares Under Option	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
				(In years)	(In thousands)
Outstanding at December 31, 2021	3,658	$	95.77
Granted	—	—
Exercised	(366)	95.77
Forfeited or expired	(1,463)	95.77
Outstanding at December 31, 2022	1,829	$	95.77	8.1	$	10
Exercisable at December 31, 2022	366	$	95.77	8.1	$	2

The following table provides a summary of restricted share activity for 2022:


	Shares	Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2021	288,996	$	112.29
Granted	116,266	125.34
Vested	(119,646)	118.81
Forfeited	(5,871)	120.62
Unvested at December 31, 2022	279,745	$	114.75

The weighted-average grant-date fair value of stock awarded in 2022, 2021 and 2020 was $125.34, $97.46 and $124.55, respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2022, 2021 and 2020, was $14.3 million, $11.0 million and $12.4 million, respectively.

On February 10, 2021, 10,441 restricted stock units were awarded to an officer that vest at the end of four years. The final awards earned are based on meeting certain market based performance criteria, and may vary from 0% to 200% of the original

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award. The weighted-average grant-date fair value of the restricted stock units awarded in 2021 was $97.01. The following table provides a summary of restricted stock unit activity for 2022:


	Shares	Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2021	10,441	$	97.01
Granted	—	—
Vested	—	—
Forfeited	—	—
Unvested at December 31, 2022	10,441	$	97.01

As of December 31, 2022, there was $19.2 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 4.5 years with a weighted-average period of 2.1 years.

Subsequent to December 31, 2022, common shares were awarded under various compensation plans as follows:


Date	Award		Vesting Term	Beneficiary
January 3, 2023	5,942	Shares	Immediate	Trustees
February 7, 2023	135,314	Restricted Shares	3-5 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 $20,500 for 2022, and 19,500 for 2021 and 2020. 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, 2022, 2021 and 2020 was approximately $869,000, $816,000 and $813,000, 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, 2022 and 2021, we are liable to participants for approximately $18.0 million and $21.0 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.

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NOTE 14—EARNINGS PER SHARE AND UNIT

We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method. The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings. For 2022 and 2021 we had 0.3 million weighted average unvested shares and units outstanding, and for 2020 we had 0.2 million which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS and EPU between common shares and units and unvested shares and units; the portion of earnings allocated to the unvested shares and units is reflected as “earnings allocated to unvested shares” or "earnings allocated to unvested units" in the reconciliation below.

The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:

exercise of 682 stock options in 2020,
conversions of downREIT operating partnership units for 2021 and 2020,
and 5.417% Series 1 Cumulative Convertible Preferred Shares and units for 2022, 2021, and 2020, and
the issuance of $1.8 million shares and units issuable under forward sales agreements in 2021.

Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS and EPU calculations as the market based performance criteria in the award has not yet been achieved.

Federal Realty Investment Trust Earnings per Share


	Year Ended December 31,
	2022		2021		2020
	(In thousands, except per share data)
NUMERATOR
Net income	$	395,661	$	269,081	$	135,888
Less: Preferred share dividends	(8,034)		(8,042)		(8,042)
Less: Income from operations attributable to noncontrolling interests	(10,170)		(7,583)		(4,182)
Less: Earnings allocated to unvested shares	(1,328)		(1,211)		(992)
Net income available for common shareholders, basic	376,129		252,245		122,672
Add: Income attributable to downREIT operating partnership units	2,810		—		—
Net income available for common shareholders, diluted	$	378,939	$	252,245	$	122,672
DENOMINATOR
Weighted average common shares outstanding—basic	79,854		77,336		75,515
Effect of dilutive securities:
Open forward contracts for share issuances	—		32		—

DownREIT operating partnership units	654		—		—
Weighted average common shares outstanding—diluted	80,508		77,368		75,515

EARNINGS PER COMMON SHARE, BASIC



Net income available for common shareholders	$	4.71	$	3.26	$	1.62
EARNINGS PER COMMON SHARE, DILUTED



Net income available for common shareholders	$	4.71	$	3.26	$	1.62

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Federal Realty OP LP Trust Earnings per Unit


	Year Ended December 31,
	2022		2021		2020
	(In thousands, except per unit data)
NUMERATOR
Net income	$	395,661	$	269,081	$	135,888
Less: Preferred unit distributions	(8,034)		(8,042)		(8,042)
Less: Income from operations attributable to noncontrolling interests	(10,170)		(7,583)		(4,182)
Less: Earnings allocated to unvested units	(1,328)		(1,211)		(992)
Net income available for common unit holders, basic	376,129		252,245		122,672
Add: Income attributable to downREIT operating partnership units	2,810		—		—
Net income available for common unit holders, diluted	$	378,939	$	252,245	$	122,672
DENOMINATOR
Weighted average common units outstanding—basic	79,854		77,336		75,515
Effect of dilutive securities:
Common unit issuances relating to open common forward contracts	—		32		—

DownREIT operating partnership units	654		—		—
Weighted average common units outstanding—diluted	80,508		77,368		75,515

EARNINGS PER COMMON UNIT, BASIC



Net income available for common unit holders	$	4.71	$	3.26	$	1.62
EARNINGS PER COMMON UNIT, DILUTED



Net income available for common unit holders	$	4.71	$	3.26	$	1.62

NOTE 15—SUBSEQUENT EVENT

On January 31, 2023, we acquired the 180,000 square foot portion of Huntington Square shopping center that was not previously owned, as well as the fee interest in the land underneath the portion of the shopping center which we control under a long-term ground lease for $35.5 million.

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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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)			$	10,211	$	18,863	$	11,627	$	10,195	$	30,506	$	40,701	$	16,582	1975 - 2001	5/30/2007	(1)
ANDORRA (Pennsylvania)			2,432		12,346		18,628		2,432		30,974		33,406		22,902		1953	1/12/1988	(1)
ASSEMBLY ROW/ASSEMBLY SQUARE MARKETPLACE (Massachusetts)			93,252		34,196		991,368		69,421		1,049,395		1,118,816		137,485		2005, 2012-2022	2005-2013	(1)
AZALEA (California)		39,850	40,219		67,117		1,918		40,219		69,035		109,254		13,549		2014	8/2/2017	(1)
BALA CYNWYD (Pennsylvania)			3,565		14,466		54,758		2,683		70,106		72,789		31,192		1955/2020	9/22/1993	(1)
BARCROFT PLAZA (Virginia)			12,617		29,603		8,338		12,617		37,941		50,558		8,656		1963, 1972, 1990, & 2000	1/13/16 & 11/7/16	(1)
BARRACKS ROAD (Virginia)			4,363		16,459		52,498		4,363		68,957		73,320		51,953		1958	12/31/1985	(1)
BELL GARDENS (California)		11,629	24,406		85,947		8,090		24,406		94,037		118,443		22,722		1990, 2003, 2006	8/2/17 & 11/29/18	(1)
BETHESDA ROW (Maryland)			46,579		35,406		174,823		44,437		212,371		256,808		104,068		1945-2008	12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10	(1)
BIRCH & BROAD (Virginia)			1,798		1,270		22,674		1,819		23,923		25,742		10,663		1960/1962	9/30/67 & 10/05/72	(1)
BRICK PLAZA (New Jersey)			—		24,715		82,169		4,385		102,499		106,884		64,220		1958	12/28/1989	(1)
BRISTOL PLAZA (Connecticut)			3,856		15,959		16,487		3,856		32,446		36,302		21,938		1959	9/22/1995	(1)
BROOK 35 (New Jersey)		11,366	7,128		38,355		5,614		7,128		43,969		51,097		12,751		1986/2004	1/1/2014	(1)
CAMELBACK COLONNADE (Arizona)			52,658		126,646		734		52,658		127,380		180,038		7,204		1977/2019	6/14/2021	(1)
CAMPUS PLAZA (Massachusetts)			16,710		13,412		737		16,710		14,149		30,859		3,810		1970	1/13/2016	(1)
CHELSEA COMMONS (Massachusetts)		4,304	8,689		19,466		3,125		8,669		22,611		31,280		10,254		1962/1969/ 2008	8/25/06, 1/30/07, & 7/16/08	(1)
CHESTERBROOK (Virginia)			13,042		24,725		3,172		13,042		27,897		40,939		1,486		1967/1991	4/30/21	(1)

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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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)			32,513	71,536	96,837	48,944	151,942	200,886	21,876	1990/1994, 1922-1973, 2018-2021	5/4/15, 7/1/15, 12/16/15, 7/26/16, 6/30/17, & 8/10/17	(1)
COLORADO BLVD (California)			2,415	3,964	7,535	2,415	11,499	13,914	10,052	1905-1988	8/14/98	(1)
CONGRESSIONAL PLAZA (Maryland)			2,793	7,424	99,671	2,793	107,095	109,888	67,014	1965/2003/2016	4/1/1965	(1)
COURTHOUSE CENTER (Maryland)			1,750	1,869	3,585	1,750	5,454	7,204	3,455	1975	12/17/1997	(1)
CROSSROADS (Illinois)			4,635	11,611	19,957	4,635	31,568	36,203	23,145	1959	7/19/1993	(1)
CROW CANYON COMMONS (California)			27,245	54,575	9,263	27,245	63,838	91,083	32,610	Late 1970's/ 1998/2006	12/29/05 & 2/28/07	(1)
DARIEN COMMONS (Connecticut)			30,368	19,523	90,301	30,368	109,824	140,192	4,526	1920-2009	4/3/13 & 7/20/18	(1)
DEDHAM PLAZA (Massachusetts)			16,354	13,413	19,609	16,354	33,022	49,376	20,497	1959	12/31/93, 12/14/16, 1/29/19, & 3/12/19	(1)
DEL MAR VILLAGE (Florida)			15,624	41,712	17,861	15,587	59,610	75,197	30,199	1982/1994/ 2007	5/30/08, 7/11/08, & 10/14/14	(1)
EAST BAY BRIDGE (California)			29,069	138,035	12,534	29,069	150,569	179,638	51,835	1994-2001, 2011/2012	12/21/2012	(1)
ELLISBURG (New Jersey)			4,028	11,309	22,022	4,013	33,346	37,359	23,410	1959	10/16/1992	(1)

FAIRFAX JUNCTION (Virgina)			16,768	23,825	3,547	16,768	27,372	44,140	3,843	1981/1986/ 2000	2/8/19 & 1/10/20	(1)
FEDERAL PLAZA (Maryland)			10,216	17,895	45,511	10,216	63,406	73,622	52,462	1970	6/29/1989	(1)
FINLEY SQUARE (Illinois)			9,252	9,544	23,530	9,252	33,074	42,326	25,593	1974	4/27/1995	(1)
FLOURTOWN (Pennsylvania)			1,345	3,943	13,018	1,507	16,799	18,306	8,227	1957	4/25/1980	(1)
FOURTH STREET (California)			13,978	9,909	3,932	13,978	13,841	27,819	3,518	1948,1975	5/19/2017	(1)
FREEDOM PLAZA (California)			—	3,255	40,841	—	44,096	44,096	2,965	2018-2020	6/15/2018	(1)
FRESH MEADOWS (New York)			24,625	25,255	44,707	24,633	69,954	94,587	50,551	1946-1949	12/5/1997	(1)

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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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
FRIENDSHIP CENTER (District of Columbia)			12,696	20,803	4,062	12,696	24,865	37,561	15,023	1998	9/21/2001	(1)
GAITHERSBURG SQUARE (Maryland)			7,701	5,271	26,088	5,973	33,087	39,060	20,489	1966	4/22/1993	(1)
GARDEN MARKET (Illinois)			2,677	4,829	7,859	2,677	12,688	15,365	10,066	1958	7/28/1994	(1)
GEORGETOWNE SHOPPING CENTER (New York)			32,202	49,586	3,730	32,202	53,316	85,518	5,686	1969/2006/ 2015	11/15/19	(1)
GOVERNOR PLAZA (Maryland)			2,068	4,905	26,671	2,068	31,576	33,644	22,416	1963	10/1/1985	(1)
GRAHAM PARK PLAZA (Virginia)			642	7,629	16,943	653	24,561	25,214	18,777	1971	7/21/1983	(1)
GRATIOT PLAZA (Michigan)			525	1,601	18,580	525	20,181	20,706	18,518	1964	3/29/1973	(1)
GREENLAWN PLAZA (New York)			10,590	20,869	2,210	10,743	22,926	33,669	5,832	1975/2004	1/13/2016	(1)
GREENWICH AVENUE (Connecticut)			7,484	5,445	10,819	7,484	16,264	23,748	6,767	1968	4/12/1995	(1)
GROSSMONT CENTER (California)			125,434	50,311	691	125,434	51,002	176,436	5,589	1961, 1963, 1982-1983, 2002	6/1/2021	(1)
HASTINGS RANCH PLAZA (California)			2,257	22,393	1,067	2,257	23,460	25,717	4,626	1958, 1984, 2006, 2007	2/1/2017	(1)
HAUPPAUGE (New York)			8,791	15,262	11,611	8,519	27,145	35,664	15,449	1963	8/6/1998	(1)
HILTON VILLAGE (Arizona)			—	85,431	218	—	85,649	85,649	2,881	1982/1989	6/14/21 & 7/18/22	(1)
HOBOKEN (New Jersey)		85,684	56,866	167,835	2,805	56,868	170,638	227,506	16,501	1887-2006	9/18/19, 11/26/19, 12/19/19, 2/12/20, & 11/18/22	(1)
HOLLYWOOD BLVD (California)			8,300	16,920	36,670	8,370	53,520	61,890	22,892	1929/1991	3/22/99 & 6/18/99	(1)
HUNTINGTON (New York)			12,194	16,008	51,607	12,294	67,515	79,809	17,994	1962	12/12/88, 10/26/07, & 11/24/15	(1)
HUNTINGTON SQUARE (New York)			—	10,075	3,851	506	13,420	13,926	5,782	1980/2004-2007	8/16/2010	(1)
IDYLWOOD PLAZA (Virginia)			4,308	10,026	3,792	4,308	13,818	18,126	10,783	1991	4/15/1994	(1)
KINGS COURT (California)			—	10,714	917	—	11,631	11,631	10,939	1960	8/24/1998	(1)

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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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
KINGSTOWNE TOWNE CENTER (Virginia)			72,234	137,466	134	72,234	137,600	209,834	2,827	1996/2001/ 2006	4/20/22 & 7/27/22	(1)
LANCASTER (Pennsylvania)			—	2,103	6,621	432	8,292	8,724	6,460	1958	4/24/1980	(1)
LANGHORNE SQUARE (Pennsylvania)			720	2,974	21,044	720	24,018	24,738	18,544	1966	1/31/1985	(1)
LAUREL (Maryland)			7,458	22,525	31,484	7,551	53,916	61,467	44,562	1956	8/15/1986	(1)
LAWRENCE PARK (Pennsylvania)			6,150	8,491	47,128	6,161	55,608	61,769	26,059	1972	7/23/1980 & 4/3/17	(1)
LINDEN SQUARE (Massachusetts)			79,382	19,247	59,103	79,346	78,386	157,732	33,750	1960-2008	8/24/2006	(1)
MELVILLE MALL (New York)			35,622	32,882	36,431	35,622	69,313	104,935	25,179	1974	10/16/2006	(1)
MERCER MALL (New Jersey)			5,917	18,358	51,788	5,868	70,195	76,063	40,726	1975	10/14/03 & 1/31/17	(1)
MONTROSE CROSSING (Maryland)			48,624	91,819	31,945	48,624	123,764	172,388	44,035	1960s, 1970s, 1996 & 2011	12/27/11 & 12/19/13	(1)
MOUNT VERNON/SOUTH VALLEY/7770 RICHMOND HWY. (Virginia)			15,769	33,501	45,682	15,851	79,101	94,952	47,780	1966/1972/ 1987/2001	3/31/03, 3/21/03, & 1/27/06	(1)
NORTH DARTMOUTH (Massachusetts)			9,366	—	3	9,366	3	9,369	2	2004	8/24/2006	(1)
NORTHEAST (Pennsylvania)			938	8,779	25,542	939	34,320	35,259	22,611	1959	8/30/1983	(1)
OLD KEENE MILL (Virginia)			638	998	12,045	638	13,043	13,681	7,309	1968	6/15/1976	(1)
OLD TOWN CENTER (California)			3,420	2,765	35,035	3,420	37,800	41,220	25,856	1962, 1997-1998	10/22/1997	(1)
OLIVO AT MISSION HILLS (California)			15,048	46,732	20,903	15,048	67,635	82,683	8,590	2017-2018	8/2/2017	(1)
PAN AM (Virginia)			8,694	12,929	10,055	8,695	22,983	31,678	18,204	1979	2/5/1993	(1)
PERRING PLAZA (Maryland)			2,800	6,461	26,183	2,800	32,644	35,444	24,815	1963	10/1/1985	(1)
PIKE & ROSE (Maryland)			31,471	10,335	761,536	33,716	769,626	803,342	103,351	1963, 2012-2022	5/18/82, 10/26/07, & 7/31/12	(1)
PIKE 7 PLAZA (Virginia)			14,970	22,799	14,342	14,914	37,197	52,111	21,950	1968	3/31/97 & 7/8/15	(1)
PLAZA DEL MERCADO (Maryland)			10,305	21,553	15,022	10,305	36,575	46,880	10,092	1969	1/13/2016	(1)

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FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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 SOL (California)			5,605	12,331	19	5,605	12,350	17,955	2,258	2009	8/2/2017	(1)
PLAZA EL SEGUNDO/THE POINT (California)		124,614	62,127	153,556	88,748	64,463	239,968	304,431	74,977	2006/2007/ 2016	12/30/11, 6/14/13, 7/26/13, & 12/27/13	(1)
QUEEN ANNE PLAZA (Massachusetts)			3,319	8,457	7,542	3,319	15,999	19,318	11,884	1967	12/23/1994	(1)
QUINCE ORCHARD (Maryland)			3,197	7,949	29,436	2,928	37,654	40,582	26,197	1975	4/22/1993	(1)
RIVERPOINT CENTER (Illinois)			15,422	104,572	2,173	15,422	106,745	122,167	19,616	1989, 2012	3/31/2017	(1)
SAN ANTONIO CENTER (California)			26,400	18,462	5,887	26,400	24,349	50,749	6,144	1958, 1964-1965, 1974-1975, 1995-1997	1/9/2015, 9/13/19	(1)
SANTANA ROW (California)			66,682	7,502	1,205,916	57,592	1,222,508	1,280,100	295,689	1999-2006, 2009, 2011, 2014, 2016-2022	3/5/97, 7/13/12, 9/6/12, 4/30/13 & 9/23/13	(1)
SYLMAR TOWNE CENTER (California)			18,522	24,637	3,160	18,522	27,797	46,319	4,791	1973	8/2/2017	(1)
THE AVENUE AT WHITE MARSH (Maryland)			20,682	72,432	34,072	20,685	106,501	127,186	49,604	1997	3/8/2007	(1)
THE GROVE AT SHREWSBURY (New Jersey)		43,168	18,016	103,115	9,200	18,021	112,310	130,331	31,948	1988/1993/ 2007	1/1/2014 & 10/6/14	(1)
THE SHOPPES AT NOTTINGHAM SQUARE (Maryland)			4,441	12,849	2,208	4,441	15,057	19,498	7,448	2005 - 2006	3/8/2007	(1)
THE SHOPS AT PEMBROKE GARDENS (Florida)			39,506	141,356	96	39,506	141,452	180,958	2,489	2007	7/27/2022	(1)
THIRD STREET PROMENADE (California)			22,645	12,709	53,725	25,125	63,954	89,079	38,262	1888-2000	1996-2000	(1)
TOWER SHOPPNG CENTER (Virginia)			7,170	10,518	5,434	7,280	15,842	23,122	11,161	1953-1960	8/24/1998	(1)
TOWER SHOPS (Florida)			29,940	43,390	29,095	29,962	72,463	102,425	28,776	1989, 2017	1/19/11 & 6/13/14	(1)
TOWN CENTER OF NEW BRITAIN (Pennsylvania)			1,282	12,285	4,219	1,827	15,959	17,786	7,643	1969	6/29/2006	(1)
TROY HILLS (New Jersey)			3,126	5,193	33,191	5,865	35,645	41,510	25,966	1966	7/23/1980	(1)

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Table of Contents


FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2022
(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
TWINBROOKE SHOPPING CENTRE (Virginia)				16,484		18,898		334		16,484		19,232		35,716		1,043		1977	9/2/2021	(1)
TYSON'S STATION (Virginia)				388		453		5,615		493		5,963		6,456		4,133		1954	1/17/1978	(1)
VILLAGE AT SHIRLINGTON (Virginia)				9,761		14,808		44,879		5,949		63,499		69,448		35,458		1940, 2006-2009	12/21/1995	(1)
WESTGATE CENTER (California)				6,319		107,284		43,641		6,319		150,925		157,244		77,351		1960-1966	3/31/2004	(1)
WESTPOST (FORMERLY KNOWN AS PENTAGON ROW) (Virginia)				—		2,955		111,100		—		114,055		114,055		61,422		1999 - 2002	1998 & 11/22/10	(1)
WHITE MARSH PLAZA (Maryland)				3,478		21,413		2,113		3,514		23,490		27,004		11,813		1987	3/8/2007	(1)
WHITE MARSH OTHER (Maryland)				27,720		—		195		27,750		165		27,915		—		1985	3/8/2007	(1)
WILDWOOD (Maryland)				9,111		1,061		17,774		9,111		18,835		27,946		10,965		1958	5/5/1969	(1)
WILLOW GROVE (Pennsylvania)				1,499		6,643		29,039		1,499		35,682		37,181		23,076		1953	11/20/1984	(1)
WILLOW LAWN (Virginia)				3,192		7,723		95,106		7,790		98,231		106,021		70,589		1957	12/5/1983	(1)
WYNNEWOOD (Pennsylvania)				8,055		13,759		22,003		8,055		35,762		43,817		28,189		1948	10/29/1996	(1)

TOTALS		$	320,615	$	1,682,853	$	3,022,488	$	5,399,158	$	1,678,321	$	8,426,178	$	10,104,499	$	2,715,817

(1)Depreciation of building and improvements is calculated based on useful lives ranging from the life of the lease to 50 years.

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Table of Contents

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

Three Years Ended December 31, 2022

Reconciliation of Total Cost

(in thousands)


Balance, December 31, 2019	$	8,298,132
Additions during period
Acquisitions	39,440
Improvements	473,679

Deductions during period
Impairment of property	(68,484)
Dispositions and retirements of property	(159,897)
Balance, December 31, 2020	8,582,870
Additions during period
Acquisitions	519,350
Improvements	424,521

Deduction during period—dispositions and retirements of property	(104,679)


Balance, December 31, 2021	9,422,062

Additions during period
Acquisitions	445,319
Improvements	399,623


Deduction during period—dispositions and retirements of property
Dispositions and retirements of property	(107,682)
Deconsolidation of VIE	(54,823)
Balance, December 31, 2022 (1)	$	10,104,499

(1)For Federal tax purposes, the aggregate cost basis is approximately $9.0 billion as of December 31, 2022.

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Table of Contents

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SCHEDULE III

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

Three Years Ended December 31, 2022

Reconciliation of Accumulated Depreciation and Amortization

(In thousands)


Balance, December 31, 2019	$	2,215,413

Additions during period—depreciation and amortization expense	229,199
Deductions during period
Impairment of property	(11,631)
Dispositions and retirements of property	(75,289)
Balance, December 31, 2020	2,357,692
Additions during period—depreciation and amortization expense	246,338
Deductions during period -dispositions and retirements of property	(72,935)


Balance, December 31, 2021	2,531,095
Additions during period—depreciation and amortization expense	266,877
Deductions during period

Dispositions and retirements of property	(59,066)
Deconsolidation of VIE	(23,089)
Balance, December 31, 2022	$	2,715,817

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Table of Contents

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE

Year Ended December 31, 2022

(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


Second mortgage on a retail shopping center in Rockville, MD	11.5%	February 2026	Interest only monthly; balloon payment due at maturity	$	58,750	(2)	$	5,075	$	4,956	$	—
Second mortgage on a retail shopping center in Rockville, MD	10.75%	February 2026	Interest only monthly; balloon payment due at maturity	58,750		(2)	4,500		4,500		—
Second mortgage on a retail shopping center in Baltimore, MD	7.0%	October 2031	Principal and interest monthly; balloon payment due at maturity	4,990		(3)	600		—		—
				$	63,740		$	10,175	$	9,456	$	—

(1)The amounts are net of any expected losses in accordance with ASU 2016-13. See note 2 to the consolidated financial statements. For Federal tax purposes, the aggregate tax basis is approximately $10.1 million as of December 31, 2022.

(2)These mortgages are both subordinate to a first mortgage of $58.8 million in total. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2022 is estimated.

(3)This mortgage is subordinate to a first mortgage of $5.0 million. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2022 is estimated.

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Table of Contents

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE - CONTINUED

Three Years Ended December 31, 2022

Reconciliation of Carrying Amount

(In thousands)



Balance, December 31, 2019	$	30,429
January 1, 2020 adoption of new accounting standard - See Note 2	(790)
Additions during period:
Acquisition of loan, net of valuation adjustments	9,560
Issuance of loans	693




Balance, December 31, 2020	39,892

Additions during period:

Issuance of loans	600
Deductions during period:
Collection and satisfaction of loans	(30,339)
Valuation adjustments	(610)
Balance, December 31, 2021	9,543


Deductions during period:

Valuation adjustments	(44)
Collection and satisfaction of loans	(43)
Balance, December 31, 2022	$	9,456

F-49

Previous: Item 16. FORM 10-K SUMMARY