Brittany Schmelz – Investor Relations Don Wood – President and Chief Executive Officer Jim Taylor – Executive Vice President and Chief Financial Officer & Treasurer.

Christy McElroy – Citi Jeff Donnelly – Wells Fargo Alexander Goldfarb – Sandler ONeill Jason White – Green Street Advisors Craig Smith – Bank of America Paul Morgan – MLV Michael Mueller – JP Morgan Vincent Chao – Deutsche Bank Haendel St Juste – Morgan Stanley Nathan Isbee – Stifel.

Good day, ladies and gentlemen, and welcome to the Federal Realty Investment Trust Q4 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today’s conference is being recorded.

I would now like to introduce your host for today's conference call Ms. Brittany Schmelz. You may begin ma'am..

Good morning. I'd like to thank everyone for joining us today for Federal Realty's fourth quarter and year-end 2014 earnings conference call. Joining me on the call are Don Wood, Dawn Becker, Jim Taylor, Jeff Berkes, Chris Weilminster and Melissa Solis. They will be available to take your questions at the conclusion of our prepared remarks.

In addition to our fourth quarter and year-end 2014 supplemental disclosure package, we filed our 10-K yesterday. Both documents will provide you with significant amount, valuable information with respect to the Trust 2014 operating and financial performance. They are both currently available on our website.

Certain matters discussed in this call may begin 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.

Although, Federal Realty believes the 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 contained in our forward-looking statements, and we can give no assurance that these expectations will be attained.

Risks inherent in these assumptions include, but are not limited to, future economic conditions including interest rates, real estate conditions and the risks and cost of construction.

The earnings release and supplemental reporting package that were issued yesterday, our Annual Report filed on Form 10-K, and our other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and results of operations.

These documents are available on our website at www.federalrealty.com. And with that, I'd like to turn the call over to Don Wood to begin our discussion of our fourth quarter and year-end 2014 results.

Don?.

Thanks, Brittany. Good morning, everyone. Looking forward to seeing all or - most of you in a few weeks to Citi Conference in Florida, so it’s more about our company and our industry and I want to thank you for joining us on the call this morning. Well 2014 is in the books, it was the best year we’ve ever had and by wide margin.

I want to start by putting some context around the $4.94 per share or 7.2% year-over-year FFO growth that we just reported.

As follows 7% year-over-year growth a year ago in 2013 and 7.7% two years ago in 2012 and keep us right on track double our income in 10 years, that you will remember, was the plan we laid out on our Investor Day at Assembly Row in 2013. The consistency of this performance continues for me to be one of the thing that most proud of.

Seems to me that over the years, more and more investors everyday have come the value of that consistency and sustainability in the business that seems to be changing more and more every day. It’s particularly noteworthy in 2014 because of the way in which it was accomplished.

Research and development investments for the future usually detract from current earnings. I think drugs R&D in the pharmaceutical business or technology R&D in Amazon, but the objective is to ensure competitive advantage long into the future.

In our business, that R&D is the development of marketing and the investment in top human capital that is focused on creating new state-of-the-art retail product that we believe will keep us on the forefront of our industry for decades, not just quarters.

Whether that takes the form of the first of its kind large scale outlet, entertainment restaurant, mixed-use community like Assembly Row or whether it takes the form of the transformation of a pedestrian Strip Centre like Mid-Pike Plaza into a multi-phased mixed-use placed to be like Pike & Rose.

Like, whether it takes the form of niche 48 unit active living residential building that we were researched, that are now building in the back of Congressional Plaza. We couldn’t be more proud of our R&D if you will. Even though, the initial design, construction, lease-up and marketing did dilute earnings in 2014 and well again in 2015.

In fact, our FFO per share growth would have been double-digit without them, of course, our future wouldn’t be nearly as bright and our 10 year plan would be far or less short too. I hope, we always have us active in R&D pipeline as we do today. I know, we will for the next few years.

I think, it sets us apart in a retail real estate business that is looking more and more generic and still going for ways to grow. Let me now go though some of the major accomplishments of the fourth quarter and the year.

First, on the operating side, in addition of 7.2% FFO per share growth for the year, we grew at 8.5% for the fourth quarter when excluding the early extinguishment of debt in both quarters.

Same store growth was strong in the quarter and the year 4.5% to 5% in quarter 4.1% for the year including redevelopment which by the way is what this business plan is all about. Our portfolio of that was 95.6% leased and 94.7% occupied at the end of 2014, right where it was at the end of the third quarter.

Leasing was exceptionally strong, 83% deals were signed covering 340,000 square feet, 70 of those deals were for comparable space that is existing space when it was previous tenant and those deals were signed at $33.27 a foot. 20% better than the $27.76 the previous tenant was paying in their final year of lease.

The 13 non-comparable deals related primarily to the lease up of the point at Plaza El Segundo in California.

One of the drivers of the quarter’s leasing results included the repositioning of Crow Canyon shopping Centre in San Ramon California where an underperforming lucky food store was replaced with a new Sprouts specialty grocer and a Orchard Supply Hardware store.

Those deals followed on a new sports authority deal replacing a bankrupt Loehmann's earlier in the year and the buyout for an owner’s ground lease to give us full control of the shopping centre. You could conservatively figure that this shopping centre is worth $35 million more net of the capital that was invested than it was before these actions.

The other driver of those leasing results was the renewal of a couple of bank pads as significantly more rent than they had been paying. You know with all the talk and worry about changes in the consumer banking practices and the real estate needs. Myself included among the worriers, this part of our business has remained remarkably strong.

The testament to the continuing importance to banks of attracting customer deposits in important real estate locations. Okay, some more things I would like to talk about before turning it over to Jim.

The development updates on Assembly and Pike & Rose, the Point and Santana Row and some organizational shifts and new hires that give us the best chance of maximizing our potential. Jim will cover acquisitions and disposition. So on the development, let’s start with a sample.

The Greater Boston Community has clearly embraced the first phase of Assembly Row even if it’s buried in snow at the moment.

The retail is 97% leased, with 53 tenants opened and operating, most doing rather than either they or we had planned, and that includes the anchor system, comprised the LEGOLAND Discovery Centre, the AMC Theatre, Saks Fifth and the Restaurant who are all outperforming.

In the office building, software developer SmartBear moved into their space a couple of weeks ago.

We’ve signed ROI with a digital media software company and lots of action on remaining 4.5, we’ve seen dramatic improvement in the sales of the adjacent power centre that we call Assembly Square Marketplace, and we fully expect to improve its merchandising and profitability in the next 12 to 18 months, a direct result of success of the Row.

We’re also happy to report that the Partners HealthCare construction is on pace for occupancy that will begin in late 2016. Concrete is being poured, and T-stop is operating as expected.

The impact of this first six or eight months strong opening in Assembly is a faster ramp to a 6% unlevered view and then beyond than we had anticipated just a year ago, It’s very gratifying.

We’re just about done with design and planning for the next phase of Assembly, which will include a continuation of the retail street, residential above, a partnership with the Boutique Hotel operator and a street connection with a partner site.

Cost need to be finalized a G&P contract negotiated, and other deal terms agreed to, where we hope to be able to announce the required approvals to move ahead on our next call. Last word on Assembly is to recognize the passing of our General Manager Russ Joyner last month.

Truly one of the great guys in our business, the successful launch in this community was in no small part due to Russ’s commitment, we will miss him.

At Pike & Rose, lots and lots of onsite construction in these dates, as we broken ground on the next $250 million that we announced on this call last fall, while at the same time, we complete construction on that last building in phase 1 over the next few months, that means that two years from now, we’ll have over $510 million deployed before selling a 100 condos, that is.

On this site, in 9 buildings, 360,000 feet of retail space, 750 residential apartments, 100 Condos, 80,000 feet of Merrill Lynch anchored office, a 175 room Canopy Hotel and nearly 2,000 parking spaces. On stabilization, that investment should yield between a 7% and 8% unlevered return and we’ll still have much, much more to do on this site.

Let me bring you up to speed on where we are right now. And as I mentioned earlier, construction is few months from completion on the high-rise residential tower we call Palace. And we expect to begin leasing as planned in next quarter. Timing is great because our residential building called PerSei, is now 95% leased.

A bit disappointing to us in the short-term are the average rents we filled the building up with the first time around. They are about 9% less than we had underwritten, in part due to the heavy construction during the entire lease up period on the site and also due to lots of supply coming on the market at one time.

As a result, we decided to lower our underwritten rent expectations on the high-rise a bit and when combined with some additional scope on the site wide infrastructure that we now planed. We thought it prudent to reduce unlevered yield expectations on the first phase to the 7% to 8% range.

The nice thing about residential leases is that they are generally 12 months long and so we’ll get lots of opportunities to reprice as Pike & Rose matures and construction becomes more isolated. If Santana Row is any guide, we will more than make up for that over time.

Every bit of feedback that we get on this project improves our confidence about the regions need for destination like Pike & Rose. And as particularly evident in the retail environment, we are creating.

The Phase I retail is fully leased and has led by the extremely successful opening of iPic a luxury theatre experience that is soundly beating its and our expectations. No other iPic location has seen this level of success in its first 100 days of operation.

Out west construction and leasing on our addition to the Plaza El Segundo shopping node with a 115,000 square-foot lifestyle centre called the Point continues on budget and on schedule, with tenants beginning to open this summer. Check it out when you are in a L.A., it’s only three miles South of LAX on Sepulveda at Rosecrans.

And at Santana, construction is underway on our $115 million 225,000 square-foot office building with nearly 700 parking spaces on Winchester, Boulevard at Olsen Avenue. It’s being marketed as 500 Santana Row and will follow on the 125,000 square-feet of office base that already exist elsewhere at Santana Row.

That office base is fully leased and has some very strong rents. The continued explosion of the Silicon Valley economy, the strong job growth and a growing reputation of Santana Row add the very desirable office address, as is very bullish about doing deals in this state-of-the art building over its 18 month construction period.

All of which leads me to last topic from my prepared remarks and that’s our team and organizational setup. We are clearly playing more aggressive offense these days and growing our overall real estate holdings pretty meaningfully, given this very substantial development platform.

Accordingly we are consolidating our development efforts under newly promoted Executive Vice President Don Briggs. Many of you know Don is the guys primarily responsible for design and execution of Assembly.

We are doing this to assure and we prioritize and allocate our formidable development talent across all opportunities of the company best on the best – best risk adjusted determination of likely value creation. Don has been with us for over 15 years and represents one of the country’s most experience and most respected mixed-use developers.

He will report directly to me, as well a new position that we’ve just announced aimed at maximizing our residential profitability. You may have seen in our press release last month about Mike Ennes, who comes to us from Hilton worldwide and will join the team next month as Vice President of Residential Operations and Branding.

We’ve learned a lot and made a lot of money from the residential product that we’ve been offering at Santana Row over the last decade.

Bethesda Row, Congressional, Pike & Rose and soon Assembly need to benefit similarly, with simplify comfortably that higher end residential product in the successful mixed use environment requires a quarter back, one that can oversee our third-party residential managers while at the same time understanding, capitalizing on and integrating the different uses to provide a better residential service in private model, that’s development, we are taking a different approach to operations, while we are consolidating and centralizing our developing group in residential oversight, we decentralizing our East Coast operating group and breaking it up a little differentially.

The West Coast already operates on decentralized basis under Executive Vice President Jeff Berkes and now we’ll be dividing up our East Coast portfolio between our mixed-use division and our foundational core shopping centre division.

Our mixed-use division will be run by newly promoted Senior Vice President John Hendrickson who has been running our North East Region for the last seven years out of our Suburban Philadelphia office. John will relocate to Federal headquarters in Maryland in the next several months.

In terms of leadership of the core shopping centre division, we feel like this is a great opportunity to add a senior level shopping centre operator to our executive team, there is a lot going on at the company these days, more than ever before, and the creation of a new position to lead and grow the core shopping centre division give us the chance to expand our senior team.

Accordingly, we have instituted a search that Dawn Becker and I will be leading for a new Senior VP at the Core Shopping centre division, that division will include over 60 properties spanning from Boston to Florida and oversee nearly $300 million of property level income. We would expect to identify the executives in the next several months.

These changes and the organizations below them recognized a changing real estate landscape and better align our company to take advantage of it in a most productive way. Frankly, I couldn’t be more excited. That’s all I’ve got for prepared remarks, let me now turn it over to Jim and look forward to taking your questions after that..

Thanks, Don, and good morning everyone. As Don highlighted, our bottom-line results for both the quarter and the year represented yet another record of the Trust. As usual, a large driver was growth in the quarter which grew over 4% including redevelopment, while occupancy remains flat.

Our results also reflected the successful integration of The Grove and Brook 35 acquisitions made earlier in the year, both of which outperformed our initial underwritings. A true testament to our partner Chris Cole and the team he has brought on Board.

This year as Don also highlighted, we overcame several cents of drag from the openings of Assembly and Pike & Rose, the initial phases of which have now successfully delivered as Don has discussed in depth. Our balanced business plan continues to deliver bottom-line results while we invest in future growth.

Value that, we are delivering today that will continue to deliver in the future.

In addition, there’s a larger multi-phase multiyear projects at Pike & Rose and Assembly, we should also highlight that we delivered over $90 million of redevelopments during the year at assets like Ellisburg, Santana Row, Barracks Road and Hollywood is very attractive returns.

In addition of these projects, we continue to expand and execute upon a redevelopment pipeline of over $290 million of redevelopments like The Point at Plaza El Segundo, Westgate and even a new 48 unit apartment building that’s being built as we speak right behind this conference room.

In addition to successfully integrating The Grove and Brook 35 acquisitions, we also closed last month on the acquisition of San Antonio centre in Mountain View, California, which we announced on our last quarter’s call.

We couldn’t be more excited about the potential for additional value creation at this phenomenal location, which comprises 33 acres in one of the most dense and affluent areas of Silicon Valley.

This transaction, which was sourced off-market and structured on the tax preferred basis, truly to provide the type of acquisitions remains focused on executing.

While asset pricing remains very high, against the backdrop of record low interest rates, we continue to actively pursue a few opportunities like San Antonio centre, where importantly, we believe that there is value to be added over time.

We hope that further updates on our next call, but you can expect us to remain disciplined and focused on unearthing the right opportunities that fit our business plan.

Turning to the balance sheet, we successfully raised $250 million of 4.5% 30 year notes in November and used about $200 million of those proceeds to pay off our 565 senior notes in our $61 million mortgage on East Bay Bridge.

In so doing, we brought down the weighted average interest rate on our outstanding debt and importantly, increased our weighted average maturity by little over three years. We ended the year with $47 million of cash and nothing drawn under our $600 million revolver.

This provides us with more than adequate capacity to fund our remaining development activity without having the access to capital market. Of course, with rates recently testing all time lows, we remain well-positioned opportunistically access this market to further term out our near-term maturities and fund our development pipeline, stay tuned.

Turning to guidance, we have maintained our range, given last quarter $526 to $534. For those of you who have accused us of being sandbaggers and automatically move to the top of the range, allow me to offer some insights on why we gave the larger than usual range and the factors that will influence where we end up in that range.

First the potential sale of Houston Street assets in Texas which we are close to having under contract, as I mentioned on last quarter’s call, the sale is not included in our guidance, but will be approximately $0.33 [ph] diluted depending on the timing of the closing and how quickly we can redeploy the proceeds from the sale of this slower growing asset.

We will update you at that situation progresses. Second, given a timing of the San Antonio Centre closing occurring this past January versus December, we incurred an additional $1.5 transaction cost this year.

While we typically have cushion for such cost in any given year, we do hope to incur additional transaction costs in other opportunities that we are pursuing, some of which may be incurred prior to closing anything.

Third, we’ve made a strategic decision to continue to invest in R&D, as Don put in, investing in our people and our platform, so that we can responsibly scale into this massive pipeline of value creation that we have underway. As you would expect from us, we will not sacrifice the long-term for a few pennies in the short-term.

I believe that we have most of this investment covered in our numbers, the transactional costs and other one-time expenses could also impact our numbers by $2 or $2. Finally on the investment side, we will always aggressively pursue near-term rollover and the related temporary decline in occupancy to create long-term value.

It is always been a core tenant of our business plan and always well needs [ph], it’s not a new initiative for us.

However with recent announcements like to potential Staples Office Depot merger in the recent chapter 11 filing of RadioShack, in addition to opportunities at Assembly's tower centre that have become more real in light of Assembly’s amazing opening performance. We may get the chance to generate some real long-term re-tenanting opportunities.

Too early to tell what the extent the impact will be in 2015, but again we will keep you posted. Turning again to the larger timing assumptions factored into our guidance, we expect to deliver approximately $375 million in development and redevelopment this year.

Some of the more significant deliveries includes approximately $80 million of offset space to Pike & Rose and Assembly which is been delivered in the first and second quarter of this year. We've conservatively underwritten 2016 rent starts and hope to beat those with the final lease-up.

Approximately 77% of the retail Pike & Rose’s delivered has occupied which includes the iPic Theater, Del Frisco’s, Summer House, City Sports and Sport & Health among others. Now to the retail space which is 95% lease, we’ll continue to open as planned through the middle of this year.

Pallas, the 319-unit luxury high-rise of Pike & Rose which represents approximately $110 million of investment is slated to open this summer and is expected to lease up over the following 18 months.

Finally, we expect The Point redevelopment at Plaza El Segundo, which represents approximately $80 of investment is slated to open this mid-summer and stabilize in early 2016. Given this timing we expect our quarterly FFO to start lower in the first quarter and ramp significantly during the course of the year versus being flat.

From a capital standpoint again, we expect to find approximately $300 million of development and redevelopment expenditures through long-term debt our ATM and our line of credit.

As mentioned earlier, we remain opportunistic as it relates to rates and we’ll always look to ways in this environment to term out maturities and reduce our weighted average debt cost. In closing, we have a lot of great opportunities delivering now for the longer term and could be more excited about how we continue to execute upon that business plan.

That we laid out for you in 2013. We look forward to seeing many of you at the Wells Fargo and Citi conferences in the coming weeks. And with that operator we’d like to turn it over for questions..

[Operator Instructions] Our first question comes from Christy McElroy with Citi..

Hi, good morning, guys. Just wanted to follow up on Pike & Rose Phase 1, if I look at the midpoint of the new total cost and projected return assumptions, I get to about an annualized NOI of roughly $20 million as stabilization, or about $5 million on a quarterly basis.

Just thinking about sort of the retail and apartments that are currently online, I think you’ve mentioned per se is 95% leased, and the retail is 77% leased.

How much of that in NOI flowed through Q4 results?.

On a Q4 basis not a significant amount and remember the reason is that we continue to invest a lot in marketing plus we were leasing that apartment building up and experience related operating drag associated with that.

We expect Christy, that to continue through 2015 because importantly we’ll be delivering $110 million of the first phase is represented by building 10 which will open in the summer. We continue to spend a significant amount of marketing dollars if this project opens and we expect building 10 then to stabilize over the following 18 months..

Okay.

And then just regarding your – the decentralization of operations on the East Coast, maybe you could talk a little bit about the impact on leasing functions between the mixed-use and core shopping centre portfolios – how the leasing process will change, if at all, with this new structure? And then Jim, to your point on guidance, is there any incremental G&A associated with the change?.

Yes, Christy thanks a lot of asking me about that. What we’ve been doing for the last five years, really since the recession hit is really doing some very, very good blocking and tackling. And we divided the portfolio of between Northeast and Mid-Atlantic.

The problem with that as you get into a more aggressive offensive posture is that what we’re delivering on the mixed-use stuff takes a lot of time it’s hard and the skill set on the leasing side is a different skill set that it is on the core shopping centre side.

So being able to align that lease with specific management for those properties, we see is a real positive on both mixed-use and what it should do to the core.

Because there is a lot more – it doesn’t allow distractions between properties that do take more time – that do – have different skill set associated with them and the core, which is the horse and the thing that allow them to keep going.

So, this is an alignment of leasing with the management of each of those divisions that – I doubt it will have a significant impact in 2015, but we are resetting this up for the long-term where we are going over the next 10 years.

So, better alignment is what it’s all about, it will not change the leasing process, it will focus the leasing personnel more with their operating count of point..

And Christy, to answer your question about guidance, I think we are covered with in the range for the additional cost that we expect. But again, there could be some transitional cost or other things that we don’t yet have forecast as we bring in the new COO for the core..

Okay.

And then, Jim, you also mentioned ATM issuance to fund redevelopment spend, is there anything embedded in your guidance for ATM issuance in 2015?.

There is, we expect as we have in the past to continue - to responsibly fund our development long-term. And that includes the balance ATM issuance and long-term debt and as you see we just did last quarter. We are encouraged by were rates are generally and look to push things out responsibly from a term perspective..

So how should we think about total proceeds for 2015 from ATM?.

Yes, it tends a bit on after sales, but that expected to be in the $100 million range..

Okay. Thank you so much..

Our next question comes from Jeff Donnelly with Wells Fargo..

Good morning guys.

Don, maybe to build on Christy's question about just changing around management, what are your thoughts on planning for succession at a trend level -- maybe the industry's ability to generate good leaders? Because several of your peers have faced the prospect of finding a new CEO, and I think investors out there have been surprised at sometimes, I guess let's say, how shallow the pool is that people can choose from.

I was curious what your thoughts were?.

Well. Jeff, let me make a couple of comments, first of all, I think it’s an awesome question because I don’t think it’s a small wheel, there’s $10 billion in equity in this company and certainly investors in this company ought to have an understanding of what happens to, if I’m not in this border or whatever else.

And I can tell you, we treat this really seriously, so that every year, there is an in-depth part of our Board meeting there’s a discussion about this.

We have put in an interim plan, in case anything happens quickly with me in terms of how the Board would – what people would take over things et cetera which is really important to have as an interim plan.

What’s more importantly, in terms of a long range plan, I can tell you that I personally take it as my responsibility and the Board holds me accountable to this to develop people within this company that do have the ability to take over at some point.

And I can tell you we do have people, and I know that I am working with to try to make sure there is more than one or two that have the ability at some point in the future.

Outside of that, listen – it’s a big world and there would certainly be a vigorous external process to the extent that was when the time came, because you never want to only rely on one spot. But whether there are great people out there or not I don’t know, I certainly would expect there to be. But I wouldn’t rely on solely that is for sure..

Thanks. And maybe if I could just switch gears onto Pike & Rose. We had talked in the past about the threat of what's going on in multifamily in the DC area and how long it would take on this project. I'm just trying to get a sense of how you are thinking about that impact now for Pike & Rose.

Specifically, what are your assumptions today where your lease-up is on multifamily versus the competitors? And what was it in the past? I'm just curious how much you have narrowed the premium, if at all, that you are expecting to get at Pike & Rose?.

No, I don’t want you to make too much of this and let me make the point. I told you that as we’re leasing this up, we’ve missed our leased up per square foot numbers by 9% in that first building 9%.

Now that I think is pretty indicative of not only supply coming on in the market, but if I were asking you to move into that apartment and used all the cranes and the concrete is being poured and the construction site that it is, I suspect you would be in a better negotiating position too in terms of being able to lease it that way.

For me that I – we are trying to anticipate that into the Palace building also in about the same amount, the same thought. But I don’t want to say this, I don’t want to sell Cavalier, but big deals, because the nice thing about this 12 month lease process, as you go forward and we’ve seen it at Santana; in fact just before the meeting I asked on.

We pull together do you think what are our growth rate has been over 10 years at Santana and various different products and we don’t haven’t here, but we will and time for city, I think you’ll see what I’m saying by being able to create this kind of mixed-use environment, which other people do not have to head up to this level, we can see the people are coming in, the ability to push rams going forward is clearly better than in other type of more generics products through and through.

So always trying be upfront with what your expectations are – we didn’t feel comfortable keeping it at 8 to 9 giving what is happen with the first building being 9% off, and so just to appropriately lay out where we think we will be upon that first – is the first complete phase including Talas leased up.

We bought it to 7 and 8, but I want to think about that as a max on this project long-term, because I do believe this like a family like Santana has a great growth profile associated with it..

Just a last question, then for Jim.

And maybe this is going back a bit in time, Jim, but at the analyst day in late 2013, I think you kind of laid out a plan for Federal that have a sort of a base-rate same-store NOI growth of, call it, 3% to 3.5%, with literally that’s forms a redevelopment and acquisitions potentially taking that same-store NOI growth potential as high as 5% to 7%.

I know a lot of time hasn't elapsed, but I think you guys have been kind of running around 3.75% to 4% same-store NOI since then, give or take. So how do you think you are doing versus that original plan? Because you have been acquiring; you have been renovating.

Were you did expecting to be slightly better than this at this point? Or is it just because of the timing -- I'm just curious when you -- what your sense is..

Yeah, I think we’re right on top of where we expected and where we laid out.

I think that that aggregate NOI growth also included acquisitions which you know what I would tell you is we remain disciplined and what – what you can take from acquisitions like San Antonio Center is that we are still able to find in the low cap rate environment opportunities that we think will be accretive to our growth in the long-term.

And that’s the discipline that we’ve retained. We certainly could go out and drive a bunch of near term accretion, but diminish our long-term growth, and we are just not going to do that. But in terms of how the core is performing in what we laid out, I think we are right on track.

I think – as I’ve said before our rollover growth right now at this point of recovery is very strong.

The other thing I’d point out here is that we have been producing this really on an occupancy neutral basis which is important to highlight, because I think that on a comparative basis, it can look less robust, but when you are able to generate this type of growth on a portfolio that was 95.6% leased beginning year, 95.6% leased at the end of year.

I think it speaks volumes to the job that our leasing team is doing led by Chris and the assets themselves..

Okay. Thank you..

Our next question comes from Alexander Goldfarb with Sandler ONeill..

Good morning. And, Jim, appreciate the guidance comments. We will watch the progress throughout the year. Just a few questions here.

First of all, on the Pike & Rose, and just thinking about some of your other apartment development sites, if you guys knew that – I mean, obviously, supply doesn't suddenly come up; it's pretty apparent that people are building supply.

So if you can just talk a little bit about how your underwriting may have been off, or what lessons you learned given that rents came in almost 10% below where you expected on the project?.

Yeah. No, first of all, you’re dead on. Alex, there is – new supply is not a surprise; it’s takes on the bills in hand, and it’s was clear is to what was going to be there.

What is never clear in a particular environment or at a particular leasing meeting your strategy or when you have a person on the other side of you, what it's that those competitors are doing with their rents was – that they are doing with their concessions and you do business in a marketplace.

So, it’s not about lessons learned in this case at all, frankly, in terms of the product that was coming on. I think we’re right on. But to the extent, we are going to have competitors drop prices significantly or significantly increased their concessions we’re going to follow soon because we want to buy the building.

I do think where we did underestimate it was the impact of the construction on the site, and it’s not like as a single building. It is a building within the middle of lots of stuff happening on it and I don’t remember the last time that you’re at the site specifically.

But you know, when we do these phased projects we are going to lay if we’re confident with what we are seeing in terms of demand in the first phase and we are, despite the fact that it’s 9% lower on the actual rent by the way, they’re in still a big number. It's not like we’re – it’s not like this is a 9% off – it’s not a $1,500 month apartments.

This is expensive stuff. So, it’s still a big number, we are going to try to start the next phase as long as we’re comfortable on top of the first phase to be able to create the critical math. So, if you are going to ask – it’s really to say what it is that? We’ve learned that it would be that first set of lease-up.

We got to fill the building and the construction impact of that per se in a mixed-use project where you got lots of other construction directly adjacent to where you are asking somebody led it’s going to be more than that we got..

Okay. And then, it’s – I think continuing the apartments you guys announced a new hire to head up sort of the branding of your residential platform.

This is – should we think that you guys are going to take in-house and start doing apartment property management yourself or you are always going to outsource that or you are debating depending on how big your apartment platform becomes potentially taking that in-house..

That's great question, Alex. Thanks for asking. There was no intention whatsoever to bring that business in-house not.

The management companies, the residential management companies have spend lots of money on their infrastructure, lots of money on their systems, lots of money on fund, there were expertise are being able to do that, I would like to leverage that and pay a small couple of percent to be able to get that.

That’s not the same though as the overall senior leadership of how that's being done across a platform and that’s the point of hiring mike.

The point clearly is if you are going to build the type of stuff that we are building which is complicated we need to get a premium for that residential rent vis-à-vis what most residential companies get in terms of the rent.

We are already getting that premium, and want it to be more and so putting a senior executive in there, that can effectively go over the top by the hallow if you will to – all the properties and make sure there this not – that’s really uniformity but the creation of distinction that gives us a better chance of getting that premium and increasing that premium then I think you will pay from south 10 times over..

Okay. And then just final question, you guys have announced a lot like people changes new positions you just basically announced a headhunter search for CEO type position.

What’s driving all this, was it where there certain instances where you suddenly realize that people were too stretched out or you weren’t getting the organizational response that you wanted or is it simply as the company has grown bigger all companies have certain size they go through Grove and Brook and at certain sizes they just need more people or different organizational structures..

Its far more later, it’s exactly I mean, look at what this company has, look at what’s happening at this company in terms of its breadth, in terms of its scope and what’s most important about that, is taking the senior executives at this company and making sure that they are spending their time on the things that had the most value.

So when I sit here and I look at Chris Weilminster across the table who won’t have the direct reporting of the guy that’s going to report up through mixed-use any longer. Chris could look at there, oh my god, that’s terrible.

It’s not at all terrible those that – that those decisions need to made closer to the real estate so the Chris is effectively the senior most person spending his time on the big things that are really creating the extra expertise necessary on the big stock the same with Don over on the operating side.

So this is a bigger company that simply does have people that have been stretched and stretched and stretched. And when you’re entering the type of next five years that were entering into and what we are delivering, you want to make sure; you have your best people on the most important things. And building below that.

A team that going to effectively succeed them..

Thanks a lot..

Our next question comes from Jason White with Green Street Advisors..

Hey there, just a quick question. Then, when you look at your stock price for a trade, what do you think that trades related to NAV..

Jason, isn’t that your job?.

Yes, but I’m saying….

I’m going to turn this over to Jim. I truly don’t have a good answer for you on this. The idea what we are trying to do is we are trying as best we can to put allocate capital to projects and to opportunities that creates substantial EBIT a long away.

What is there? What’s trading in the marketplace anybody can talk about where cap rates are? And you can do the math; you’ve got all the income numbers there. So I’m going to leave that to you. I really don’t know how to give you a better answer than that, Jimmy I don’t know Jason is going to be all [indiscernible] I didn’t give him a specific number.

You’re welcome take it from here..

Jason, when you look at where cap rates are today. And that – just from a spot basis and where interest rates have gone, obviously the correlation between REIT, pricing, and interest rates is parallel than the private market, in terms of where cap rates are? And those underlying interest rates.

We continue to be really surprised by where we see assets trading. And importantly, you’ll not talk about the soft line. But I think it’s a point for broader discussion. These are often talks cap rates in the fore range.

And assets that just aren’t growing, and when you look at our company as an investment proposition and when you look at the amount of pipeline that we have underway are what we successfully delivered and derisked if you will. And the pipeline that extends beyond that.

There is huge value in that that I know that if we were looking at it in an asset environment certainly would be factored into the pricing. So hard to pin an exact number because again we’re in an all time low record interest rate environment. But I would think that we’re not fully valued relative to that stock price..

Okay. The reason I asked -- I'm wondering if you use that relationship to basically fuel your decision-making on the acquisition development -- really, the capital allocation side.

And if you either loosen up underwriting, or you get more aggressive? And then if your stock price trades relatively cheap or expensive, if your decision-making changes?.

It is absolutely, statically doest not.

We’ve really look at what we know and when we look at the assets and what we know is both the income is in place and what we think we have is good as you as anybody, is where that income is going to go, both in terms of in place leases, relative to market, but importantly what we see the redevelopment opportunities today and I would stake our development, the redevelopment team against any platform in the market in terms of understanding and underwriting that type of opportunity and, so when we look at acquisition, it’s not with the spot view or an eye on our stock price, it’s with the view towards, what will that investment do to our independent growth profile over time.

So, and that’s discipline will remain..

Okay. Just as kind of a final follow-up on that, let's say, for example, your stock traded off 15% or 20% over the next couple of weeks.

Would you still be as aggressive in looking at acquisitions as you are today? Or does that change somewhat?.

Yes, I mean again. You know we look at it from a long-term perspective and we evaluate again what we think that assets going to contribute to our long-term growth, I mean….

It takes me crazy Jason, to be doing it that way based on market fluctuations in the short-term. .

And I would.

Certainly just to make the point, I mean certainly we acknowledge what’s happening in the marketplace and look at the – when you take a look at that our return thresholds and what we need to have to create value today versus five years ago or ten years ago that’s obviously changed.

But it’s going to be in periods like that, it’s not going to be in changes in the next several weeks. That’s I think that’s the full variant..

Okay. And then just one last discussion point on Amazon expressing interest to enter brick-and-mortar in a larger way.

I'm not quite sure if that's going to happen yet, but how big is that opportunity for you as a brick-and-mortar landlord, to have potentially thousands of Amazon smaller stores floating around?.

Well, let me say couple of things.

When you – I don’t know Chris where do you want to answer this or not, you know for last 17 years whatever there was a new concept that was being talked about or whether – whenever there was somebody that was going bankrupt that going out, because oh my god, what they are going to do and one of the things l love about this business, I mean, I am sitting here in front of me with seven as our 20 radio check stores that will be given back, I am sitting here and looking at 13 staples and office depot stores that who knows what’s our future.

This is the opportunity and whether it’s Amazon, you would certainly think that new retailers whoever they might be, who want to be in brick and mortar would look hard at the locations that we have. It’s just hard to immersive if they wouldn’t and so – I do that as a extreme positives, in terms of – brick and mortar retailing.

I look at radio shack going away at the positive in terms of brick and mortar retailing and so from my perspective at least, this is what we do and the ability to be able to negotiate and create value has to happen with opportunities like this for any supply and demand. That’s why the locations are so important..

Great, thanks a lot. .

Our next question comes from Craig Smith with Bank of America..

Hi good morning. I'm going back to the new VP of residential branding.

Is this job more to enhance the existing performance of the residential properties at Federal, or is he also helping to facilitate unit growth at Federal?.

Yes.

And the only thing I would say – unit growth is much of the unit growth is baked in into the plans for the build out of Assembly, for the build out of Pike & Rose, for the build out of Santana Row, for the build out of the projects that we already have respectively under our portfolio, and so add those things are being planned and rolled out I want expertise there.

Secondly, there is no question that with respect to the existing product.

I mean the way I like to put it – Craig and you remember that – because you’ve been around a long time, like I have here and what we’ve done at San Antonio Row with respect to the growth of that project, with respect to the benefit of the residential has happened over 12 years now.

10 year or 12 years and we learned upon, I don’t want it to take that long for Pike & Rose and for Assembly and for those – the other projects that we have. So having a senior level executive over the top, that make sure lessons learned on existing – from a prior experience can be applied to our existing platform, it’s also important.

So this is a senior guy, this is the ability to do both of the things that you laid out..

And is there any potential of going beyond the Rows and Pike & Rose in terms of adding multifamily?.

Well I think you know, any piece of land that we have, whether it’s, if you are in our headquarters today Congressional you would see a building going up on the back of our parking lot, that’s the second phase of building that we did 10 years ago on the back of our parking lot.

So - in anyway possible within the retail but also residential in sometimes but small times less case in office is what we did to effectively take advantage of the real estate and take advantage of the retail environment that we created.

So it won’t just be the rows, I hope you will see it like we added up in Chelsea, Maryland – Chelsea, Massachusetts rather like you’re seeing here at congressional we’re looking at it at least we’re looking at in a number plates throughout the portfolio. But you will not see us going out, and simply becoming a residential company.

We’re a company that tries to take the real estate that we have, the product that we’re building and create the best uses with our mixed-use real estate..

Great, thanks. Thanks for that..

You bet..

Our next question comes from Paul Morgan with MLV..

where is the brand coming from –which projects over the course of the year from an FFO line?.

Yes. My comment on the Christy’s question earlier was we still have drag in the year associated with marketing. But certainly as the year progresses we’re seeing some ramp in NOI, both with the development Paul, and importantly with the redevelopment as well as that successfully delivers.

And as you think about where it is in the year I think we could see a fourth quarter 10% plus higher than the first quarter..

Okay.

And then just sticking with the first quarter for a second, do you think there is going to be a big kind of weather-related number we should watch for on the expense side?.

Early to tell you. Certainly, what we are seeing in the Northeast in the snow in Boston in particular is significant.

So we’ve had an easy Mid- Atlantic so far. So, no, I wouldn't suggest that you'd expect anything crazy at this point. But it’s February 10..

how do you think about balancing the need to build -- you know, you mentioned noncritical mass there, with a big mixed-use project like that, where you are trying to get momentum; versus what has kind of been really a gap between demand, which has kind of been driven by sluggish job growth, and supply, which has been pretty aggressive.

How do you think about the one thing where you really want to get momentum versus maybe if it were an isolated project, you wouldn't move forward?.

Yes, I don't think we are there, Paul. It's an excellent question; and, frankly, I love that you used the word balance in there, because it is a balance – the entire thing all the way through. It is the – the notion that there is not demand for the residential product is just wrong. The residential product, I mean, this – that first building is done.

it's leased up and it’s leased up in exactly the timeframe that we expect. So when you are sitting and talking about rents that are at $2.40 a foot versus $2.58 a foot or something like that, that on the balance equation is certainly not going to lead you to we are not building.

In fact, in answer to that Alex’s question earlier if we had thought harder about the construction impact and had laid out 7% to 8% at the onset here, I think you would have said Wow! That is fantastic that you are getting those kind of numbers, that's how I feel.

And so you’re right that there is that balanced question on these projects Assembly frankly have made it extremely easy for us, because on the retail side in particular is just it really has been accepted by the community, more much more than we had even hoped it to say.

And as far as I understand, I’m not talking for AvalonBay, because they don’t know their numbers, inside that I have a feeling you will see us same from that. So going to the next phase of assembly again assuming we can get the numbers where you needed, and I hope you will, expect that we will, that one is easy.

On Pike & Rose when you talk about it the way I just laid it out there is doubt we should be moving forward in my mind at least with the second phase to create the critical mass, but also because there is sufficient demand for the residential product, there’re definitely demand for the hotel product, we think the condo product it's going to fly off, who knows it will be – what it will be, but we are very cautious to the balance that you talked about.

And in both of those situation, I don’t think it’s close with respect to non going forward..

That's helpful. .

Our next question comes from Michael Mueller with JP Morgan..

Hi, Most of the smaller redevelopments look like they are stabilizing in 2015.

Can you give us a sense as to what projects you have on page 17 of the supp are likely to become active in 2015/2016?.

Mike, I can speak to what we have currently on the pipeline, which is on the proceeding phase on page 16 and what we are always continuing to do with the list of projects on 17 is try to put them in the pipeline.

So I expect as you go through the year, you will see that project or two as we’ve consistently done over the last several years, but I don’t at this point want to speak to specific lines on 17..

Okay. That was it. Thank you..

Our next question comes from Vincent Chao with Deutsche Bank..

there was a shopping center acquisition that was being discussed last quarter. Just curious if that's now off the table? I know it was sort of 50%/50% at the time..

Yeah, let me give you some thoughts on that. First of all, I do hope that 2016 would be the beneficiary effectively of the structural changes, 2016, 2017 and 2018 frankly as it heads up.

On the development side there, I know it’s not going to be about, I don’t think upward pressure on the returns as much as it is, I hope, to getting to the things that have the best chance of actually happening done and going, it’s about that prioritization where if you take a look at guys, I mean we’ve got some great guys between Don Briggs, John Tschiderer, Evan Goldman, great construction and some other folks and I don’t want anybody [indiscernible] off because I didn’t say their name.

What I am trying to say is when they go together and aren’t in silos if you will on certain type of projects, I expect better productivity so that should mean more projects, so that should mean more projects sooner and that’s the primary emphasis there. And I don’t remember the last acquisition….

As it relates to the acquisition at this point then I would rate it as a little probability. We do have other opportunities in the pipeline that we hope to be talking about very soon..

Okay, thank you very much..

Our next question comes from Haendel St Juste with Morgan Stanley..

Hey, I guess, it’s good afternoon now. Don, I don't want to make too much of this, but just one more question on Pike & Rose, if you will. Hindsight is 20/20.

Just thinking or wanted to get your perspective on if you think you might have been better off partnering with, perhaps, an apartment specialist, like you did with Avalon at Assembly Row? And I'm curious if the experience might change how you approach the multifamily phases of your mixed-use projects going forward?.

No Haendel, it doesn’t. There is – I love the notion of building apartments in markets with mixed-use with our retail street in markets that we know inside now. And I don’t want to sound apologetic I mean the idea of $2.40 a foot in the first building here under a – in this situation with the construction going.

This is good stuff and I with love in fact, we are going to have an Investor Day, I am going to announce it right here. We are going to have an Investor Day. We are going an investor day at Pike & Rose this year. Because I really do want to show everybody what we are talking about.

Now I got to tell you, I think we are fairly good, really good, apartment developers in the mixed-use context. And, so I don’t know very many people who are putting this kind of capital to work between 7 and 8 with this kind of mix of product. So, now I wouldn’t change any of that, but I will get you down here in get it through we see..

And Haendel importantly on those returns relative to where these types of assets are trading the value creation is still very significant..

I appreciate and understand that. A question on a small shop here. You guys are up at 91.8%. Getting close to a level where some of your peers have talked about their high-level, high-water mark – 92%, 93%.

I'm curious on your thoughts on where you think your small-shop occupancy could get to? And then just on pricing power as you now get to 92% -- how much more, perhaps, you could push right here?.

it depends. That is a one-off negotiation-by-negotiation dynamic, we do the best we can. Do I think that by being a more leased rather than less leased that is overall a good thing for us, yes I did there is no question about it. In terms of that, can I quantify it, for you no I don’t.

Most of the space that’s left and not leased is not obviously the best space in the portfolio. So where I would rather go is there actually not emphasize the lease rollovers as much and push hard on that other 6% or 7% that is not leased up there to be able to get it done at any rates.

And then often we hold I’ve not hold off but effectively work hard to get full rent and some of that stuff you can’t. So you may actually see lease rollovers come down a little bit as the occupancy goes little bit further again that’s the balance, that’s the overall mix between rate and volume.

But you should see I hope you will see some increases to that to the small shop number overall..

And just to follow up on that, given, as you mentioned, it is perhaps not some of your best space, and it might take a bit more effort, how should we think about, perhaps, the incremental capital you might need to invest to lease-up that space?.

We won’t do deals that don’t make sense. So you should think about it as I mean, just think about what you just said, if you’re talking about the lease attractive space in a shopping center to the extend we can do as it deals to the extend we do a small amount of capital will make it make sense we will do that.

To the extend in the spaces that we’re generally talking about here putting a lot of capital and just to get occupancy we won’t do that because makes more sense on a capital allocation basis..

Okay.

And then a quick comment, if you will, perhaps, on the 13 Office Depot/Staples that you mentioned – I'm curious on sort of what conversation you are having today; what type of opportunities you are seeing about filling the spaces; and just a point-in-time snapshot, perhaps, of today – where those rents are versus perhaps what the market for rent?.

As I said we’ve got nine Staples we’ve got four Office Depot spaces throughout the portfolio in almost uniformly when we look down we should be able to at least meet rents and frankly probably meet rent in almost all locations.

There are some conversations about downsizing state of locations which we would love to do to the extend, we’ve got demand that exceed supply in the three cases we’re talking about it we do.

Its like everything with us we like to see when they plays out but this kind of changeover whether its Staples and Depot whether its RadioShack I mean generally this is good news for us, this is not bad news and we expect that to continue..

The one thing I would add it is very early in the announcement of this conversation between the two. So there is really no conversation yet about what stores they would or wouldn’t be, if that were to happen and when we looking at our portfolio, there is only a few markets where the stores really truly overlap.

So I think Federal even though there is upside in those numbers which we believe, I am not sure that we are going to have a chance to get to them. – through as many of them as we would like..

Thank you..

Our next question comes from Nathan Isbee with Stifel..

Hi good morning, good afternoon. Don, you mentioned the long time it took for Santana to evolve. And clearly, there were some challenges early in the process there.

I'm just curious, as you look at all the different pieces that have come together there, what is Federal currently yielding on that total project?.

Guys I don’t have that here, but I suspected seven plus..

what are your thoughts about the pending new development there? You clearly have less skin in the game than others, but you still have some skin in the game..

Well, I can tell you, Nate, the last thing we do is put our head in the sand. So we’re - we’re talking with that developer who trying to assess, what that developers plans are.

What’s actually going to happen versus what’s planned, Is there something we can do to protect our assets, our shareholders and so nothing decided effectively that way yet, but we are absolutely in conversations with Paragon to make sure we build the relationship and find out what’s the – if there is place where we can the skin cat so it works for everybody..

Okay, thanks..

And I am not showing any further questions at this time. I would like to turn the conference back over to Brittany for closing remarks..

Thank you all for joining us. We look forward to seeing you at the Wells Fargo and Citi conferences in the next few weeks..

Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect and have a wonderful day..