Don Wood
President & Chief Executive Officer at Federal Realty Investment Trust
Well, thank you, Leah, and good afternoon, everybody. To quote Seinfeld's Frank Costanza, "We're back baby," and it seems to me we're the real estate of choice. Let me just cut to the chase here and summarize where we are in five of these points.
We killed it in the second quarter at $1.41. We raised our 2021 total year guidance by over 10% at the midpoint. We raised our '22 guidance, the only retail real estate company to get '22 guidance, by the way, by 5% at the midpoint. We covered our dividend on a cash basis in the second quarter and raised it again for the 54th consecutive year. We had record leasing volume, more than we've ever done in any quarter in our 60-year history. So we'll put more meat on the bone for each of those points and others, but that's where this company is as we sit here in the first week of August of 2021, and we're feeling great about our market position. At $1.41 a share, we exceeded even our most optimistic internal forecast by $0.20 a share and we're up 83% over last year's worst COVID-impacted quarter, of course, it was the second quarter. In a nutshell, we didn't anticipate the bounce back in nearly all facets of our business to be so fast and so strong, and we didn't anticipate some of the onetime deals that we were working on to be executed so quickly.
We talked about the pent-up demand on the last call in the form of strong traffic and leasing demand, and that has continued unabated ever since, no pun intended. The quarterly financial impact of that optimistic consumer meant that we: one, collected more rent in the second quarter from prior periods than we thought; two, we had significantly less unpaid rent in the quarter than we thought; three, we had fewer tenant failures than we thought; and four, we had far higher percentage rent from COVID-modified deals than we thought. And as I said, we covered our dividend on an operating cash basis in the second quarter, way ahead of our expectations. Of course, all that means that we'll significantly raise 2021 earnings guidance and raise 2022 earnings guidance as well. As we've said all along, visibility toward '22 earnings was ironically better than 2021. That has proven to be the case, and Dan will talk you through guidance details in a few minutes.
And while this quarter's earnings were as strong as they were, in large part, because of the collection of big rent dollars, both past and present, the real story here is the unprecedented amount of leasing that was done and what it means for the value of our real estate into the future. Our properties are in demand across the board. We did 124 comparable deals in the quarter, more than we've ever done in any quarter in our 60-year history for 558,000 square feet at an average rent of $37.34 per foot, 8% more rent than the deals they replaced. We signed another 9 non-comparable deals, mostly in our new developments at an average rent of $44.71 per foot. That's 570,000 square feet of space leased in 1 quarter alone, 25% more than our pre-COVID quarterly average.
You might remember that we did almost as much last quarter 2. So when you put the 2 quarters together, the production in the first half of 2021 is both staggering and unprecedented cost. Big kudos here to our leasing, our legal, our support teams, nearly 1.1 million square feet at an average rent of $37 a foot, 8% more than the previous leases, growing through annual rent bumps over the next 8-plus years. That's really just the tip of the iceberg here. Another really interesting consideration is the breakdown of all that leasing between deals to renew tenants and deals with new tenants. Traditionally, 2/3 of the deals we do in any 1 period hovers around 2/3 renewals and 1/3 new tenants. Well, not in these post-COVID 6 months. It's actually nearly flipped, roughly 40% renewals and 60% new tenants.
So, what does that mean? And why is that important? Well, first, it means that we lost a heck of a lot of tenants during COVID. And since it costs more to put a new tenant in the space rather than renew an existing tenant, our current tenant capital is higher. On the face of it, that seems like bad news, but you got to dig deeper. Because what it also means is that our properties are in high demand from today's relevant and well-capitalized restaurants and retailers that are all trying to improve their sales productivity post-COVID through better real estate locations. We've always been picker than most in terms of the tenants we choose to merchandise our centers. When you couple that with the execution of the broad post-COVID property improvement plans that we've talked about over the last several quarters, that higher capital outlay will result significantly higher asset value tomorrow.
I mean think about it in a post-COVID world. Major market's first-tier high-quality suburban shopping centers with more than a smattering of new post-COVID relevant tenants doing business in revitalized shopping centers and mixed-use properties focused more on outdoor seating, on a curbside pickup, on covered walkways and improved placemaking than ever before. Places that are more fresh, more dominant, more relevant in a myriad of ways in the communities they serve for years and years to come. The value of our real estate, net of capital, is going up, and the prospects appear to be better than they were before COVID. Also, consider that at quarter end, our portfolio was 92.7% leased, yet only 89.6% occupied. That 310 basis point spread, or nearly 780,000 square feet of space representing roughly $30 million in rent, is the largest spread we've had since 2005. You might remember how 2006 and 2007 turned out, which obviously bodes well for the future, assuming inevitable tenant fallout occurs at historical levels. And by the way, just 3 years ago, we were 95%.
Okay, onward. I hope that you all saw the major acquisition announcement that we made in the press release on June 7 that laid out the 4 deals that we closed during the quarter. Overall, we have an 80% interest in the combined income stream, Grossmont Shopping Center in Greater San Diego, Camelback Colonade and Hilton Village in Greater Phoenix and Chesterbrook Shopping Center in McLean, Virginia. Gross asset value of $407 million for 1.7 million square feet on 125 acres of land in prime locations in these markets, and we strongly believe that pricing today would far exceed what we negotiated in the middle of COVID. A presentation that we put out ahead of NAREIT and our investor NAREIT investor meetings in June focused on these acquisitions in depth, including a very unique potential redevelopment opportunity at Grossmont since we control virtually the entire 63-acre parcel from a tenant perspective in less than 5 years from now. Separately, we have another deal under contract currently that we hope to close on in the quarter -- this quarter.
On the development side, residential and office leasing activity is also picking up on both coasts. It's really gratifying to see Pike & Rose quickly maturing, coming into its own and becoming the go-to place for lots of things in the region. In Montgomery County, Maryland, a county that's not doing a lot of office leasing these days, our Phase 3 office building, 909 Rose, is 77% leased with another 11% under executed LOIs. So nearly 90% committed at the point at rents in line with pro forma. That's strong in this office environment with mostly 2022 rent starts there.
Big quarter up at Assembly Row, and now we've received our certificate of occupancy for the retail portion and half of the units in Marcella, the 500-unit residential building that's part of the Phase 3 development. Tenants began moving in, in July and initial leasing pace is exceeding our expectations. 145 units are already currently leased at rates that approximate our lease-up underwriting and that seemed to be getting stronger with each week that passes. Assembly Row is the mixed-use project in our portfolio that got hurt the most during COVID and took the longest to begin to bounce back, but now feels like it's recovering as fast as the others.
Office leasing in the Puma-anchored building is also picking up with serious negotiations underway for the first time in over a year for a large portion of the remaining space. Nothing tangible yet but a good sign nonetheless. Similar situation in San Jose with our 375,000 square foot spec office building under construction and nearing completion remains on lease for the time being. At our CocoWalk in Miami, it's all about getting tenants open as we're fully leased on the retail side and mostly leased on the office side. Tenant openings will continue through the remainder of this year. We look forward to hosting an investor tour in Coconut Grove early next month. More to come on that.
In Darien, Connecticut, construction and leasing are moving forward on time and on budget with the newly built Walgreens opening during the second quarter ahead of schedule. That's important because it makes way for the remainder of the demolition of the old shopping center and started a residential over retail component of the project. Goods happening up there, too.
Let me pause there. stop. That's about only half of the prepared comments. I'll turn it over to Dan, and we'll be happy to entertain your questions after that.
