Good afternoon. Thank you for joining us today for Federal Realty's First Quarter 2024 Earnings Conference Call. Joining me on the call are Don Wood, Federal's Chief Executive Officer; Jeff Berkes, President and Chief Operating Officer; Dan Guglielmone, Executive Vice President, Chief Financial Officer and Treasurer; Jan Sweetnam, Executive Vice President, Chief Investment Officer; and Wendy Seher, Executive Vice President, Eastern Region President. As well as other members of our executive team that are available to take your questions at the conclusion of our prepared remarks. A reminder that certain matters discussed on this call may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any annualized or projected information as well as statements referring to expected or anticipated events or results, including guidance. Although Federal Realty believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realty's future operations, and its actual performance may differ materially from the information in our forward-looking statements, and we can give no assurance that these expectations can be attained. The earnings release and supplemental reporting package that we issued tonight, our annual report filed on Form 10-K and other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and the results of operations. Given the number of participants on the call, we kindly ask that you limit yourself to one question during the Q&A portion of our call. If you have additional questions, please requeue. And with that, I will turn the call over to Don Wood to begin our discussion of our first quarter results. Don?

Thanks, Leah, and good afternoon, everyone. Well, it's a new year and Federal continues to charge forward. With a very solid $1.64 recorded in the quarter, along with 3.8% same-center growth when excluding term fees and lease repayments and an all-time first quarter record 567,000 square feet of retail leads to 9% higher rents. The answer to the often asked question of do demographics matter post pandemic becomes quite evident, they sure do. The level of leasing activity in the quarter is particularly notable. Our record retail leasing was impressive, but maybe more so was the 190,000 square feet of office space leased at our mixed-use properties. Supplementing the long-awaited 141,000 square foot lease to accounting consulting firm PwC at One Santana West, bringing that building to nearly half leased was nearly 50,000 square feet leased elsewhere in the mixed-use portfolio, including two deals at 915 Meeting Street at Pike & Rose, bringing that building to nearly 80% leased. The remaining vacancy at 915 Meeting Street at Pike & Rose and One Santana West represents considerably less than 2% of the value of the company. Tenant interest in the remaining space at both buildings remains solid. All in all, for the quarter, we signed 117 commercial leases, retail plus mixed-use office for over 775,000 square feet of space with strong economics, not including our residential portfolio, which itself generated record first quarter property operating income of over $17 million. Make no mistake, our product, primarily retail, but also including complementary office and residential is very desirable in the marketplace and a huge positive differentiator. Now obviously, higher interest rates take away some of that operating positivity when you get down to the FFO line, but we still grew at over 3% in the quarter and at $1.64 at the higher end of our guidance range. We did 104 comparable retail deals in the quarter that cumulatively were written at 9% higher cash basis rent than the final year of the previous tenant or 20% on a straight-line basis. And just to hammer the point home one more time, those cash-based rollover increases come on top of leases that have had what we believe to be the highest contractual rent bumps throughout their term in the sector, making that rollover all the more impressive. Contractual rent bumps for the deals done in the first quarter were roughly 2.3% blended, anchor and small shop. The weighted average contractual rent bumps for the entire retail portfolio, not just one, two, or three quarters worth, approximates 2.25% and higher when considering the office leases, best in the business as far as we can tell. The sustained leasing volume and related economics bode well for the future, especially the contractual rent bumps. Now I spoke last quarter about the upside in our occupancy, especially with respect to shop space, and felt that another 100 basis points over the 90.7% that we reported at year-end was doable. In the first quarter of 2024, we picked up 70 of those 100 basis points bringing our small shop lease percentage to 91.4%. There's more to come here. Our anchored lease percentage is 95.8%, with another 200 basis points to come there too. Those two components combined at 94.3% leased overall. Pretty strong, but as we're demonstrating, room to grow. We take a very proactive approach to leasing and often lease space well in advance of an existing lease expiration or vacancy. All in the name of improved tenant health and merchandising mix and as an insurance policy towards potential gaps in future cash flow. We've got some impactful anchor renewals coming up later this year and early next that should continue the positive trajectory. In terms of a tenant watchlist or other indications of a shift in demand, there is nothing out of the ordinary that we can point to. We have little exposure to those tenants that are most talked about these days, Express, Big Lots, JOANNs, Family Dollar, and 99 Cents Only, as they tend to cater to a lower-income demographic. Our tenants have been largely able to pass on cost of goods and labor increases to their customers. Those customers may grumble at the higher prices, but thus far, they've been both able and, more importantly, willing to pay them. In addition, our retail tenant base is very well diversified by both tenant concentration and property type. And while we'll always have one-off tenant failures, that's just part of the business, portfolio-wide collectability issues haven't been and are not expected to be outside our historical experience or specific 2024 guidance. Business looks good. The last topic I want to address before turning it over to Dan relates to external growth. While we've turned down the dial a bit on immediate development projects, the residential development of Bala Cynwyd with shopping center notwithstanding, we turned up the dial and level of intensity on sourcing acquisitions. It's an interesting and unique time in the acquisition marketplace right now. While there is limited supply of Federal Realty type opportunities out there, there's also less viable competition for those centers than there has been historically. We look for shopping centers that are generally larger in size than the average center, with opportunities for remerchandising, redevelopment, higher rents, and, yes, potential site intensification. We look for shopping centers in markets that have strengthened significantly over the past 15 years, especially post-pandemic. Markets like Phoenix, Central and South Florida, and Northern Virginia, among others. We look for shopping centers that are immediately accretive to earnings based on our cost of capital advantage, and, even more importantly, produce returns meaningfully above our long-term cost of capital. We look for shopping centers that will be immediately financed through the combination of other asset sales and our largely undrawn $1.25 billion credit facility and then refinance for the long term subsequently. We've begun our due diligence process on one such large asset currently and have a growing pipeline of others. Obviously, it remains to be seen if and how much success we'll have in this buy versus build cycle, but using both our operating strength and reputation, as well as our balance sheet strength and flexibility, is a specific focus of ours for the balance of this year and next. That's all I wanted to cover in prepared remarks this afternoon. So I'll turn it over to Dan to provide more granularity before opening up to your questions.

Thank you, Don, and hello, everyone. Our reported FFO per share of $1.64 for the first quarter was up 3.1% versus a year ago and came in at the upper end of our quarterly guidance range of $1.60 to $1.65 which we provided on our earnings call back in February. Property operating income was up 5.6%, also above our expectations, highlighting the overall strength of our real estate. Primary drivers for the strong start to 2024, POI growth in our comparable portfolio, up almost 4% excluding prior period rents and term fees driven by resiliency in our occupancy levels, continued strength in our residential portfolio, and stronger contributions from specialties and temporary leases. This was primarily offset by lighter term fees than forecast and some timing noise with respect to collection. We have an expectation of reversing that over the balance of the year. Comparable POI growth, excluding prior period rent and term fees was 3.8%. Comparable minimum rents grew 3.6%, and comparable total property revenues were up 4.1%. Portfolio occupancy levels show greater resiliency than we forecast as our lease rate increased up to 94.3%, and our occupancy rate staying at the 92% up, both metrics better than expected as retail leasing volumes hit record levels with our leasing and tenant coordination teams getting tenants open sooner and keeping tenants in place longer, testament to our ability to grind out revenue growth at the property level while curating best-in-class tenant liners. Given the tremendous start to the year from a leasing perspective, coupled with a strong pipeline of lease deals in process, which are some of the highest levels we've seen post-COVID, we are extremely well positioned to drive our occupancy metrics over the coming quarters. It's too soon to increase our targeted year-end occupancy levels, but we are in a good spot at this point in the year. Another part of our business worthy of note is our residential portfolio. It continues to be a source of strength. Same-store residential POI growth was 6% in the first quarter on the heels of a similarly strong fourth quarter. This was driven by over 5% revenue growth against 3% expense growth, leading to results well ahead of forecast. While we are dialing down new development starts are still substantial in process, the development pipeline continues to make meaningful contributions as lease-up continues at these projects. Darien residential continues to exceed expectations and is 99% leased. Darien retail is over 90% leased with several store openings set over the coming quarters. Huntington Shopping Center is 94% leased with Whole Foods and others set to open by the third quarter. As Don mentioned, 915 Pike & Rose Street and One Santana West continue solid progress at almost 80% and 50% leased, respectively. Note that global Foodservice giant Sodexo moved into its new North American headquarters of Pike & Rose during the quarter. Now on to the balance sheet and an update on our liquidity position. All of our refinancing requirements for 2024 were handled at the very start of the quarter with our $485 million, 3.25% exchangeable notes offering. This leaves us with no material maturities until 2026. We stand with over $1.33 billion of available liquidity from our $1.25 billion credit facility and cash on hand, and have redevelopment and expansions spent remaining of only $100 million for the balance of 2024. Additional funding sources this year approach almost $0.5 billion and include expanding leverage-neutral debt capacity as EBITDA comes online in the $150 million to $175 million range. Free cash flow of $50 million to $75 million as we approach pre-COVID levels and a sizable asset sale pipeline under consideration. Our leverage metrics continue to be solid as first quarter annualized net debt-to-EBITDA stands just inside 6x. That metric is targeted to improve over the 2024 to 5.7x by year-end and to 5.5x in 2025. Fixed charge coverage was 3.5x at quarter end, and that metric should also improve as incremental EBITDA comes online over the balance of 2024. Now with respect to guidance, with a solid first quarter behind us, leasing demand continuing at a stronger pace than expected, we are tightening and raising our 2024 FFO guidance from $6.76 per share at the midpoint to $6.77, with a range refined upwards to $6.67 to $6.87. This represents 3.4% bottom line FFO growth at the midpoint and almost 5% at the upper end of the range. Keep in mind, this is being done with the realization that interest rates will likely remain higher for longer and provide roughly $0.02 to $0.03 of greater headwinds in 2024 than we originally forecast 90 days ago. This upward revision in guidance is driven by stronger underlying portfolio performance than expected as leasing and occupancy metrics outperform expectations, as well as a more optimistic outlook for such difficult-to-forecast items such as parking, specialty leasing, and percentage rent. Add to that, some of our first quarter headwinds are expected to be timing issues that should reverse themselves in the coming quarters. As a result, we are also revising our comparable growth outlook upward. Comparable growth is now forecast at 2.25% to 3.5%, up from 2% to 3.5%, and our comparable growth, excluding prior period rents and term fees is now forecast at 2.75% to 4%, up from 2.5% to 4%. While we made significant progress at One Santana West and 915 Meeting Street in the first quarter, none of those leases are expected to impact our forecast in 2024. We will see the impact in 2025. More to come on that outlook as the year progresses and additional leases get signed. All other guidance assumptions as outlined on Page 27 of our 8-K remain unchanged, although please note, we do not include prospective acquisitions and dispositions activity in our guidance. We will update our forecast for that activity as it gets completed. Now before we go to Q&A, I'd like you to please listen up for, this is important, with the first quarter in the books at $1.64 per share, our quarterly FFO outlook for the second quarter is $1.63 to $1.69. Again, $1.63 to $1.69 for the second quarter. Consistent with the cadence presented on our call in February, the third and fourth quarters should increase sequentially from there reflecting the continued momentum we are seeing across our business.

Our first question comes from Juan Sanabria of BMO Capital Markets.

Good afternoon. Thank you for the time. Just wanted to ask a little bit more about the acquisitions and the funding. I think, Dan, you said that there was a fair amount of product that you're looking to maybe monetize. So hoping you could give a little more color on the dispositions and what kind of values you could get there, cap rates and the spread in terms of what you're thinking on some of these assets that you're looking at in some of these markets?

Yes. As I mentioned earlier this year, we have approximately $300 million to $400 million worth of assets that we are considering selling. The initial cap rates or yields on these assets are typically in the low 6% range. If we add a few more assets into this mix, the initial yield may go below 6%. This is appealing, and importantly, we believe the long-term internal rates of return are quite attractive compared to where we think we can invest capital in the acquisition market. Therefore, this presents a very appealing source of capital. We will see if all of these assets under consideration will be executed, but we have expanded the pool and will effectively use it as a source of capital.

Our next question comes from Dori Kesten of Wells Fargo.

You had a strong quarter in small shop leasing. Can you give us a sense if this was more driven by national or local tenant demand and then what the blended rent escalators were on that?

I mean, we did have a very strong quarter on small shop leasing, and we were able to move the needle, I think, 70 basis points. So very pleased with that with what the team has been able to pull together. It's really broad-based when you look at kind of the deals that we're making for the quarter in the small shops in terms of national, regional, and local, the categories that we're seeing, as you may guess, are restaurants in nature. We have full-service restaurants, less of the fast food because it's typically not the demographic that we're attracting in some of our centers. But certainly, casual dining and the specialty restaurants have been very active. Apparel has been active, both in value apparel and in full-service and full-price apparel, and where we also have a tremendous amount of activity is when you talk about health and wellness and you talk about beauty and anything in that wide category is very active today. So a lot of good categories that are really helping us boost the overall sales and production of our small shops.

Yes, Dori, the only thing I would add to that and really just to make the point that Wendy made, it's broad-based. As you know, we own all different kinds of open-air shopping centers and really across the board and certainly including the mixed-use stuff, we've had a very strong broad-based demand on shop space.

The rent increases for the small shops are averaging around 3%. More importantly, we've performed exceptionally well with our anchor tenants across the board, which I believe is a key differentiating factor that isn't fully recognized. Additionally, as Don mentioned, we are achieving at least 3% on office leases, bringing our overall average into the mid-2s for nearly 800,000 square feet of leasing completed this quarter. I am extremely pleased with these results.

The next question comes from Samir Khanal of Evercore ISI.

Dan, can you talk more about your guidance same-store? You're certainly tracking at the higher end, right, close to the top end. And everything you've kind of talked about and Don has talked about, it feels like you're probably tracking even above budget in many segments of the business. There are a lot of tailwinds. So help us understand what's kind of dragging that growth lower as we think about the midpoint of your same-store or even the lower end.

Yes, we have maintained our credit reserve at its current level this quarter. We are optimistic about improving this in the future. It's still early in the year, and we've only completed one quarter. Typically, we do not adjust our guidance even if we exceed expectations in a single quarter. We will see how the rest of the year progresses, and hopefully, we can achieve results closer to the upper end of our projections as we assess the performance in the second and third quarters.

Our next question comes from Michael Goldsmith of UBS.

We've heard from the industrial REITs that retailers are deferring large capital investments in large warehouses. So have you seen any of that pressure of the capital investment required for retail stores in your shopping centers? Have you seen any of that pressure leak into your space recently?

Yes, Michael, this is Don. From my perspective, there is capital pressure from retailers to build out stores, but that's something, frankly, I think we've been talking about for 10 years. I don't see a difference over the past couple of years with respect to that. In fact, frankly, I think we've been pretty successful in limiting capital necessary. So as a result of the industrial space that you're talking about or, frankly, other characteristics, the demand-supply characteristics in retail right now are such that we've been able to keep capital under control.

Our next question comes from Greg McGinniss of Scotiabank.

Cisco has taken over Splunk as one of your top office tenants. I know Splunk still had a couple of years remaining on its lease. Can you explain what happened there?

Yes, Cisco recently acquired Splunk, closing the deal just a month or two ago. They've taken over the lease, which significantly improves our credit situation with them for the remaining lease term. They haven't provided any insights on their long-term plans yet, but during their visit to Santana Row, they expressed their enthusiasm for the location. What happens after 2027 is uncertain, but I see this acquisition as a strong positive for us.

Our next question comes from Alexander Goldfarb of Piper Sandler.

Thank you. Good afternoon. Don, a question for you as you look at acquisitions. I know you guys are pretty rigorous in the way you approach acquisitions. But curious, because of what's going on now in the retail environment, dwindling availability, all the good stuff that we talk about. As you look at assets, your team underwrites assets on a, let's say, next three-year period, are they coming out at higher returns than what you would have seen sort of pre-pandemic or because of natural issues like existing lease roll and time for entitlements and all that stuff that when you're underwriting today, you're not really seeing the benefit of the tighter environment as you underwrite the stuff that comes more once you take hold that meets that occurs over time versus, hey, because of what's going on right now in the next three years, we're able to outperform 50 basis points let's say, versus what would have been pre-pandemic.

Alex, it's Jeff. The acquisitions market is interesting right now. There's probably a lot of people that would like to sell or have to sell, but wish the Fed would provide some clarity on where rates are going. That said, we really leaned into the acquisitions market over the last six months or so. And as Don indicated on his opening remarks, we've had some great success over the last few months. And we're seeing, quite frankly, a fairly good range of deals where we think we can apply all the things that we're good at, most of which Tom mentioned. But just to reiterate, our leasing and merchandising skills or redevelopment skills. The fact that we don't look at real estate, shopping centers, super specifically, we're agnostic as to format and more concerned about the strength of location and all of that. And right now, with our cost of capital advantage, there's just not as much competition out there to buy, and with our cost of capital advantage, we're seeing some really good opportunities. And yes, they do produce higher returns because not everybody has that advantage and there are buyers out there today. So we're pretty happy with what we're seeing, and we're pretty happy with what we're finding as we're underwriting in terms of our ability to get into a property and work the rent roll and really move the NOI going forward. So all good so far.

Alex, you raised an interesting point about our underwriting process and the actual results that follow. I've closely monitored this over the years, and we've consistently outperformed our leasing projections in our acquisitions. I expect this trend to continue. There is a certain level of conservatism when assessing a new property, even in familiar markets, but once we fully engage with a property, we often achieve better results than predicted. I anticipate this will keep happening, and it relates more to the specific shopping center we acquire rather than the current marketplace. We have a positive outlook regarding our potential with these properties.

Thank you. Our next question comes from Craig Mailman of Citi.

Not to beat a dead horse here with acquisitions. But I guess another question I have is just as you guys are looking at what's out there today, is it all just operating assets that you guys could, over the next three to five years, kind of remerchandise or densify and that's the play? Or are there opportunities out there like you guys have done in Assembly or Santana that are that decade to two-decade play for the company long term to harvest value? Are any of those available? Or is this just going to be kind of some near-term stuff that you see some opportunities, but maybe the upside isn't as kind of long tail then and big as some of the other kind of bigger mixed-use projects you guys have done in your history.

Yes, Craig, that's a great question. The answer lies somewhere in between. You shouldn't expect our acquisitions to become the next Assembly Row, Santana Row, or Pike & Rose. Having these assets in each of our key markets is crucial for our company, and each of these assets has significant potential for further development. With that said, we consider ourselves experts in residential projects and we're quite proficient in a specific type of office space as well. When we seek larger properties, we aim to enhance them in the ways you mentioned, such as improving merchandising and increasing rents, which are fundamentally important. Additionally, I want to add value to these assets. This added value could come from gaining additional residential entitlements or expanding retail opportunities on other parcels within the property. What I appreciate about this company is our diverse capabilities; we're not limited to just one approach. Therefore, the potential for enhancing that land and shopping center goes beyond just remanding merchants and raising rents. We consistently explore various avenues for improvement, even if we cannot quantify them from the start.

Our next question comes from Ki Bin Kim of Truist Securities.

So Don, as it seems that you might be taking a slightly less prominent role in the near term compared to acquisitions, I’m curious about some of these projects. Did you make decisions regarding leasing, maybe opting for shorter-term deals or sacrificing some rent for greater control because you have bigger plans for them in the future? How often does this happen? Additionally, if some projects are taking longer to get started, are there any near-term opportunities you’ve postponed that we might expect soon?

Ki Bin, let me clarify your question. First, I want to emphasize that there will be another development cycle for our business. While we are indeed slowing down construction starts, we are actually more active in entitling and designing future development projects on our existing properties. If you are referring to existing properties, that typically means we sacrifice some rent in order to secure entitlements for future construction, but we rarely do that. Occasionally, we might negotiate within a lease at an existing shopping center to end that lease in return for paying back unamortized improvements or similar arrangements, but those instances are infrequent. Therefore, I don't want you to think that we are giving up current income on the development side for future gains.

So I just wanted to add a little bit of color to that. We've always been sort of very strict about how we want to be able to control the property from a merchandising standpoint, from a redevelopment standpoint. So we've always highlighted that with our negotiations in this marketplace now with really demand exceeding supply, we can lean in on that a little bit further in terms of getting some of those controls that we absolutely need. And believe it or not, the discussions that we're having are easier to have with national and regional tenants because they know us. They know how we execute, they know how we invest and how we ultimately improve the property. So all of that is happening kind of concurrently at the same time.

And Ki Bin, if I'm not answering your question, or we’re not answering your question, please give us a follow afterwards. I'd love to be happy to go through it more.

Our next question comes from Mike Mueller of JPMorgan.

So Dan, given the traction on office and development leasing that you're having, and how the focus seems to be more in acquisitions as opposed to development starts. Can you give us some sort of high-level color on how you see capitalized interest trending, say, through year-end '25?

Yes, we have provided guidance for 2024, and we are maintaining that. The recent leasing activities will not affect our plans for 2024. We need to evaluate how additional leasing progresses and consider factors like possession timing and build-out timelines before we can provide insights for 2025. We will share more details later this year.

And the only thing I would say to you, Mike, on that is the 3 out of 4 from the Yankees. Congratulations for the first place on May 2. More to come, just like '25.

Our next question comes from Haendel St. Juste of Mizuho.

This is Ravi Vaidya on the line for Haendel. I just wanted to ask about the TIs. I noticed that for the new leases, there were about $10 higher per foot this quarter than last. Is there anything in particular with regarding any of the recent bankruptcy backfills or anything any other activity with leasing that may have driven that?

Yes. It is somewhat of a fluctuating figure with the number of new leases signed each quarter. Generally, it's somewhat consistent with the previous six to eight quarters, though not necessarily the last four. I wouldn't draw any conclusions from that aside from the general mix. I don't believe this indicates a trend. We think it may actually be decreasing more than increasing this quarter, despite anything else.

Our next question comes from Floris Van Dijkum of Compass Point.

Don, I appreciated your insights on leasing dynamics and your portfolio's market positioning. Can you discuss the competitive advantages you believe you have? With vacancy rates decreasing and rents increasing, could you elaborate on the additional benefits of the leases you're currently signing? Looking ahead at your lease expirations, I see that next year, around 80% of your shop leases lack options, while about 20% do. For your anchor leases, it appears that around 60% include options. As leases approach their expiration, are you opting for no options in your new transactions? Additionally, could you share details about the increases you're seeing, not only on your shop spaces but also on your anchors, beyond the overall rise in rents?

Floris, you’ve raised several important points that I want to address. First, our capability to lease is influenced by the current economic situation where costs have surged by 25% to 30% compared to 2019. Tenants need to be assured that they can pass these increased costs onto their customers, which is easier in affluent areas where customers are more willing to pay. These factors significantly affect lease negotiations for both small shops and anchors. Ideally, we wouldn't offer options since they favor tenants over landlords, but we understand the need for balance. We assess the tenant's creditworthiness, their desirability in the location, and their contribution to the shopping center's overall mix when crafting contract terms. Generally, for small shops, we see solid rent increases of approximately 2.5% to 4%. However, for anchors, the market norm isn't typically a 3% increase; instead, securing a 15% increase after five years compared to 7.5% is substantial when considering the long-term implications. We’ve successfully enhanced our anchor leases at a rate that I find very satisfying compared to pre-COVID times. I'm happy to elaborate further if you’d like, Wendy.

I think I would echo what you just said. The only thing that I will say that I get excited about is when I hear someone say you've got X amount of small shops coming up near-term because what we found from a historic standpoint is if we can just get to the real estate, we do better. So, so I think it's a very positive thing that we're getting to it soon.

Our next question comes from Lizzy Doykan of Bank of America.

I was just hoping to hear a bit more about the acquisition of the remaining joint venture interest in CocoWalk done in April. And are there more near-term JV buyout opportunities for you guys on the horizon? Or was this more of a one-off opportunity?

Yes. Look, this was a joint venture that started back in 2015, 2016. It was to redevelop CocoWalk, it was hugely successful in terms of what we accomplished there in terms of trend forming that asset into what it is today and the returns that we achieved. We had mechanisms in the joint venture to buy out our partner where they buy us out. And we bought them out, and we think, a very attractive yield for us. I think that there's probably a one-off. I don't see additional opportunities. We don't have a lot of joint ventures like that, but we'll be opportunistic when the opportunity arises. And we just felt like it was important for us to take 100% of the ownership of CocoWalk and to be able to operate it and run it and maximize the cash flows that we would achieve without having a partner in there getting fees.

Our next question comes from Tayo Okusanya of Deutsche Bank.

Good afternoon. In terms of the mixed-use development projects, I recall at a certain point there was some interest in having a life sciences component to some of the assets. Is there still a thought around that at this point?

We would be interested in adding life sciences to Assembly Row or possibly Pike & Rose. However, the financials do not align at the moment. You are aware of the industry dynamics and the supply situation in places like Somerville, Massachusetts, and Montgomery County. There is significant demand here, but whether that translates to life sciences, additional retail, or residential options remains to be seen. Our capacity to secure entitlements and utilize the land effectively is very robust. Therefore, I wouldn't anticipate life sciences being a focus in the short term, as there will likely be more valuable uses for the space.

Our next question comes from Linda Tsai of Jefferies.

You provided guidance for Q2 in the midpoint of $1.66 implies a smaller sequential increase in FFO than usual. Is there anything driving that?

Yes. And I think the previous question with regards to comparable alluded to, when we think about it, we have a tough comp in the second quarter of 2023. In the second quarter of 2023, we had all of our Bed Bath in possession, rent paying, so obviously, we had the headwinds. We had really a more optimal balance sheet. We refinanced our debt in the second quarter of last year, $275 million at 2.75%. So some of those headwinds are really what's driving, I think, the more moderate growth year-over-year in the second quarter. And we're really seeing the acceleration in FFO per share and probably in comparable as well. And I know I'm talking to Linda, I'm addressing the previous question. So we see a greater acceleration in the third and fourth quarters and a little bit of a flatter second quarter because of that more difficult comp.

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now hand over back to Leah Brady for closing remarks.

Looking forward to seeing many of you in the next few weeks. Thanks for joining us today.

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for attending, and you may now disconnect your lines.