Assembly Row. Photo courtesy of Federal Realty
Federal Realty Investment Trust has collected just over half of of its rent payments due in April, and the retail and mixed-use developer said it’s set up a $10 million loan fund to help some struggling restaurants when they reopen.
Approximately 47 percent of tenants at FRIT’s 104 properties are open and operating, Federal Realty said, but virtually all tenants have sought rent relief or lease renegotiations. As of May 1, only 53 percent of April’s billed rents had been collected.
“The likelihood is that individual negotiations will resolve the vast majority of those contracts,” CEO Don Wood said in a call with analysts. “For those companies that frankly can’t pay, they’ll end up filing [bankruptcy]. We’ve seen a bunch already, and we’ll continue to see that.”
FRIT reported net income of $52.8 million during the quarter, down from $58.1 million in the first quarter of 2019. Funds from operations were $114.3 million, down from $116.9 million.
Rent collection rates ranged from 95 percent for residential tenants and 87 percent by office tenants to just 45 percent by retail tenants, according to a presentation.
The owner of Somerville’s Assembly Row said it will provide loans to support key restaurants in its portfolio that are struggling because of bans on indoor dining during the COVID-19 pandemic. The fund is designed to be more responsive than restaurants’ financial needs than the federal Payroll Protection Program, FRIT executives said in a conference call to discuss its first-quarter earnings. Many retailers and restaurants say PPP has not met their needs because it’s tied to employee retention at a time when many non-essential businesses are closed.
The loan fund will be available to “best players” for expenses such as restocking inventory, so tenants can reopen more quickly when government-ordered restrictions are lifted, executives said.
Federal Realty previously announced that it’s adding curbside pick-up areas at many of its properties, including Assembly Row and Linden Square in Wellesley, to accommodate changing consumer shopping patterns.
