Don Wood
Chief Executive Officer at Federal Realty Investment Trust
Thank you, Leah and congratulations to you on your promotion to Vice President of Investor Relations this month. Really well deserved and we are sure lucky to have you.
Well, good afternoon, everybody. What makes Federal's business plan so different is our multifaceted approach to capitalize on these best located, best tenanted retail properties with a laser focus on bottom line earnings growth, 104 individual assets with a proverbial toolbox filled with numerous ways of achieving that goal for years to come. Took a global pandemic to knock us off our horse for a time, but we are back up and we are riding high.
2021 was the first step, where each quarter throughout the year exceeded our constantly upwardly revised expectations. That trend continued in the fourth quarter, with FFO per share of $1.47 handily beating our forecast, and of course, last year. The shining star of the business continues to be leasing as it's been a whole year, but it was taken to new levels in the fourth quarter. I need to put this into context, so bear with me for a minute.First, on a company-wide basis in the fourth quarter, we signed 149 commercial leases, that is retail and office but not including residential leases, which itself was really strong, for nearly 900,000 square feet of space. That includes renewals of existing tenants, along with space that here sits vacant today, is expected to be vacant in the coming months or as for new buildings currently under construction or just completed. That's an annual base rent commitment of nearly $35 million.
Consider that over the last 10 years, an average quarter's outlook produced about 110,000 commercial -- 110 commercial leases and 500,000 square feet. That means that in this quarter, we did 35% more deals or 80% more GLA than average. This is very strong quarterly volume even in a year where each previous quarter seemed to set some sort of record. And while I don't think that those fourth quarter levels are regularly repeatable, our leasing pipeline suggests that they will remain above historical averages for the foreseeable future.For the full year 2021, we did 573 commercial leases for 2.9 million square feet and an annual rent commitment of $116 million. These activity levels are unprecedented over the very long history of this company. But this leasing volume is particularly important because it provides strong validation at the very diversified product type that we own and are creating very highly sought after. And the leasing is broad-based. It's the single biggest reason that I believe Federal Realty is better positioned post-COVID than we were before.
Let me breakdown the quarter numbers a little bit more. I think you will see what I mean. Of the 149 commercial leases signed, 116 of them or nearly 600,000 square feet were for comparable space, one where a tenant previously operated from. Those leases were written at an average rent of $34.34, 6% higher than the tenants they replaced. Another nine leases or 22,000 square feet were written for non-comparable space at an average rent per foot of $43.53 at places like Assembly Row Phase 3, CocoWalk and Camelback Colonnade in Phoenix. But it's the remaining 24 leases or 277,000 square feet at net rent of $48.52 that really is a strong positive differentiator to our business plan. It's the office leasing at our long-established mixed-use communities in this quarter, primarily at Assembly Row and Pike & Rose.
Now look, I certainly realized that general office leasing does not evolve right now for good reason, given the macro levels of uncertainty surrounding back-to-work policies. But not all office space is created equal and it has become clearer and clearer with each quarter and each month that passes that the new Class A office product that we own or are building at five of our amenity-rich mixed use communities is in extremely high demand and commanding rents that are clearly additive to both earnings and value. Each of those five are well-established retail locations already and the office component is in expansion, building on the success of the retail. They are Assembly Row, Pike & Rose, Bethesda Row, Santana Row and CocoWalk. That's it.Deals with a myriad of companies and lots of different industries, headlined by our lease with Choice Hotels for their new world headquarters at Pike & Rose are just the latest examples of company choosing our building as the product of choice, no pun intended for the future. Those companies are joining others like Puma, Avalon Bay, NetApp, Bank of America and Splunk in helping to create long-term sustainable communities in our portfolios in Somerville, Massachusetts, Montgomery County, Maryland, Silicon Valley and Miami.
And check this out. While 197,000 feet of the 277,000 feet done in the quarter was primarily at newly constructed buildings at Assembly and Pike & Rose, the remaining 80,000 was for comparable space at a positive 23% rollover. That strong rollover was largely driven by our first renewal and expansion at 450 Artisan Way at Assembly Row, the 100,000 square foot office building built as part of Phase 1. That rent went from a blended sub-$30 triple net rent to the mid-40s triple net. Pretty good data point of the longer term office upside that exists at well executed, well-amenitized mixed use communities in first-tier suburbs. As I said and firmly believe all office opportunities are not created equal.And while we don't have anything to announce on this call at Santana West, there is serious interest from a number of substantial tenants where we are making some very good progress. And by the way, take a look at the occupancy gains we are making on the retail portfolio portfolio-wide, which are equally impressed. At year end, we are 93.6% leased and 91.1% occupied. That's an 80 basis point leased and a 90 basis point occupied pickup in just three months, impressive for sure, but still a ways to go to get to our 95% plus historical bogie.
Okay. So what about the Omicron impact? Well, as you would expect, there is little impact in the fourth quarter as the variant spread didn't take hold until late December and January. And what the impact will be on 2022 has yet to play out. But thus far in 2022, it feels like across the board, shoppers, tenants and other constituents seem to be viewing Omicron as temporary. And while wearing mask and being more careful in most of our markets, are marching forward with typical winter shopping patterns. Requests for rent accommodations from tenants have been few and we have not agreed to anything significant at all at this time.Now, from a capital allocation standpoint, which after all is really what we as management teams in this industry do to add the most value, we are actively using all three levers: asset sales, acquisitions and the continued expansion in our established properties, all in the name of bottom line earnings growth. You will notice from our 8-K that we closed on the sale of two shopping centers where we saw limited upside in the future. The combined proceeds of $113 million in just Leesburg Plaza and Saugus Shopping Center sold at a blended high 5% cap rate were used to reduce debt before year end.
On the acquisitions front, we would like to invest several hundred million dollars in 2022 based on our identification from our hit list of targeted properties that feel like they may trade this year. Progress early in the year has been encouraging and soliciting serious conversations. Stay tuned.And certainly, on the development front, we expect to be substantially done constructing our residential of our retail neighborhood in Darien, Connecticut this year. We are underway at our $190 million office tower for Choice Hotels at Pike & Rose. And we have more than a dozen property improvement redevelopments underway throughout the portfolio. By the way, Citi will be hosting a tour of our newly completed CocoWalk mixed-use project during their conference in South Florida next month. It's pretty spectacular. It's created over $60 million in value on our $200 million investment and we would love to see a wide variety of investments there.
It's going to be an active year on all fronts at Federal. I got to believe the visibility of this multiple year bottom line earnings growth plan is the most transparent in the sector. That's all about all I have for prepared comments. Let me turn it over to Dan and we will be happy to entertain your questions after that.
