Federal Realty Investment Trust

Core operations · Operational disruption and business continuity

If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property.

Project and contract management · Project execution and delivery risks

Our development activities have inherent risks. We may also choose to delay completion of a project if market conditions do not allow an appropriate return. If conditions arise and we are not able or decide not to complete a project or if the expected cash flows of our project do not exceed the book value, an impairment of the project may be required.

Market and investment · Interest rate and yield curve risk

Of our $5.0 billion of debt outstanding as of December 31, 2025, approximately $1.4 billion bears interest at a variable rate. Increases in interest rates would increase the interest expense on our variable rate debt and reduce our cash flow, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our shareholders.

Market and investment · Asset valuation and impairment

If conditions arise and we are not able or decide not to complete a project or if the expected cash flows of our project do not exceed the book value, an impairment of the project may be required. If any new projects are not successful, it may adversely affect our financial condition and results of operations.

Capital structure and performance · Dividend policy and capital allocation

We cannot assure you we will continue to pay dividends in the current composition or at historical rates. Our ability to continue to pay dividends on our common shares at historical rates or to increase our common share dividend rate will depend on a number of factors, including our financial condition and results of future operations and the performance by our tenants under their contractual lease agreements.

Credit and liquidity · Debt service and covenant compliance

We are obligated to comply with financial and other covenants pursuant to our debt obligations that could restrict our operating activities, and the failure to comply with such covenants could result in defaults that accelerate payment under our debt agreements. If we were to breach any of our default related debt covenants and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately.

Customer and revenue · Changing customer preferences and behavior

A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations. Many retailers operating brick and mortar stores have made online sales a vital piece of their business. The shift to online shopping may cause declines in brick and mortar sales generated by certain of our tenants and may cause certain of our tenants to reduce the size or number of their retail locations in the future.

Strategic execution · Joint venture and partnership risks

We may have limited flexibility in dealing with our jointly owned investments. As of December 31, 2025, we held 18 predominantly retail real estate projects jointly with other persons. Our existing and future joint investments may subject us to special risks, including the possibility that our partners or co-investors might become bankrupt, that those partners or co-investors might have economic or other business interests or goals which are unlike or incompatible with our business interests or goals.

Market position and competition · Competitive pressure and market share loss

Competition may limit our ability to purchase new properties and generate sufficient income from tenants. Numerous commercial developers and real estate companies compete with us in seeking tenants for our existing properties and properties for acquisition. This competition may: reduce properties available for acquisition; increase the cost of properties available for acquisition; reduce rents payable to us; interfere with our ability to attract and retain tenants.

Market position and competition · Disruptive competitors and new market entrants

Retailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs and other forms of sales and marketing of goods, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants.

Strategic execution · Merger acquisition and divestiture risks

Redevelopments and acquisitions may fail to perform as expected. Our investment strategy includes the redevelopment and acquisition of high quality, retail focused properties. The redevelopment and acquisition of properties entail risks that include: our estimate of the costs to improve, reposition or redevelop a property may prove to be too low; we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify.

Strategic execution · Geographic expansion and market entry

We have properties that are geographically concentrated, and adverse economic or real estate market declines in these areas could have a material adverse effect on us. As of December 31, 2025, our tenants operated in 14 states and the District of Columbia. Any adverse situation that disproportionately affects the markets where our properties are concentrated may have a magnified adverse effect on our portfolio.

Market position and competition · Pricing pressure and margin compression

Competition may limit our ability to purchase new properties and generate sufficient income from tenants. This competition may reduce rents payable to us and lead to increased vacancy rates at our properties and adversely affect our ability to minimize expenses of operation.

Tax and financial reporting · Tax compliance and changes in tax law

Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the IRS, could have a material adverse effect on us and our investors. Changes to the tax laws or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect us and our investors.

Industry regulation · Safety and environmental regulations

All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Under various federal, state and local laws, ordinances and regulations, we and our tenants may be responsible for the disposal or treatment of hazardous or toxic substances released on or in properties we own or operate.

Stakeholder relations · Investor relations and market confidence

The market value of our debt and equity securities is subject to various factors that may cause significant fluctuations or volatility. These factors include, among others: general economic and financial market conditions; level and trend of interest rates; our ability to access the capital markets to raise additional capital; changes in our funds from operations (FFO) or earnings estimates; changes in our credit or analyst ratings.

Geopolitical and trade · Government funding and budget changes

Factors that may negatively affect economic conditions in these states include: business or government layoffs or downsizing; significant decrease in federal government spending; increased business restrictions due to health crises.

Geopolitical and trade · Trade policies tariffs and sanctions

Economic, legal, and/or competitive conditions, such as impacts from higher tariffs, changing interest rates, the cost and availability of labor, and changes in federal government spending, may impact the success of our tenants' retail operations and therefore the amount of rent and expense reimbursements we receive from our tenants.

Economic and market conditions · Inflation and deflation pressures

Factors that may negatively affect economic conditions in these states include: elevated levels of inflation over an extended period of time; increasing interest rates; introduction of new or higher tariffs; significant decrease in federal government spending; increased operating costs including insurance premiums and real estate taxes.

Natural and catastrophic events · Pandemic and public health crises

Our business is subject to risks related to the effects of public health crises, epidemics, and pandemics. Such events could: inhibit global, national and local economic activity; adversely affect our tenants' financial condition by limiting foot traffic and staffing at their businesses, which could affect their ability to pay rent; reduce our cash flow, which could impact our ability to pay dividends; temporarily or permanently reduce the demand for retail or office space.