FFO, considered the prime measure for financial performance for REITS, increased 5.2% to $26.4 million from $25.1 million for the first quarter of 2000. On a per-diluted-share basis, funds from operations increased 6.5% from $0.62 in 2000 to $0.66 in 2001. Net operating income, which includes interest income from mortgage notes receivable, was $50 million, a 4.2% increase from the $48 million reported for 2000.

"We're pleased with the strong operating performance we continue to see from our core properties; both shopping centers and main street assets," says Steven J. Guttman, Federal Realty's chairman and CEO. "In addition, we made significant progress in the financing, construction and leasing of our main street development properties so far this year. We are well on our way to meeting analyst consensus FFO expectations of $2.65 per share in 2001."

Rental income increased for the first quarter from $64.2 million in 2000 to $67.1 million in 2001, a 4.5% increase. On a same-center basis--which ignores the impact of properties acquired, developed or sold during the analyzed periods--rental income increased 6.5% from $62 million to $66 million, according to the company. The growth of same-center rental income was the leading factor driving improvements in both net operating income and FFO.

On the development front, construction continues on the Arlington, VA-based Pentagon Row project. Bed, Bath and Beyond opened for business in building A on April 6 and the building's other tenant, Harris Teeter grocery store, is expected to open this summer. The project's remaining three buildings are expected to open by the end of the year.

The REIT reports that leasing remains strong at Santana Row, its San Jose, CA mixed-use community. So far, signed letters of intent signed account for approximately 250,000 sf of retail space in the project's first phase. Federal Realty also signed ground lease with Hotel Valencia Group, which will build a 214-room boutique hotel at the center of the project, and also closed a a $295 million construction loan for the project's first phase, which is expected to open in mid-2002.