Donald C. Wood
Chief Executive Officer at Federal Realty Investment Trust
Thanks, Leah, and good morning, everyone. An all-time record quarter for us in a number of important respects, none more important than bottom line earnings. At $1.65 per share of FFO, the 2022 second quarter handily beat our previous record of $1.60 posted three years ago in the second quarter of 2019. Even when adjusting for COVID one-timers, second quarter FFO per share matched that previous high watermark. Lots of things going very well here at Federal. We did more deals both on a comparable basis and overall in those 90 days than we've ever done in our company's 60-year history. We continue to lease up our development pipeline and increase our occupancy percentage. We ended the quarter at 94.1% leased. We've added multiple new strategic properties to our portfolio that have clear paths to future growth. And our balance sheet remains strong with $177 million of cash on hand and $0 drawn on our $1 billion line of credit at quarter end.
As we've been saying all along, the execution of our multifaceted business plan, which, in these uncertain times, does not rely on a big bet on any one particular income stream, continues to set us up extremely well for the future. The quality of our assets, combined with our sector-leading demographics and high barrier markets, tend to outperform through economic cycles, as has been the case every time in the last 25 years. So check this out because we did just get new demographic data in as of August 1. So within three miles of our centers, there are 175,000 people on average, that's 68,000 households,68,000 households, right? $150,000 of average household income. That equates to $10.2 billion of spending power within three miles of our shopping centers. And more than half of those people have a four-year college degree or better.
Who else can say that? It's about that spending power that's critical in uncertain times, in my view. And cyclicality of the economy is far different than the unprecedented restricted market shutdown due to a global pandemic. They're different. Perhaps the best way we can demonstrate our confidence in the portfolio is by standing behind and, in fact, raising our dividend to shareholders just as we have each and every year since 1967. 1967, that's 55 years, a totally unprecedented track record among REITs and among most companies in any industry, one that speaks to the commitment to our owners and to the quality of the income stream. At an annualized rate of $4.32 a share, that's a 4.1% dividend yield at the current share price, pretty darn strong for a company of this quality. Okay. Let's start with leasing during the quarter.
Over the last decade, average second quarter production for comparable properties at Federal meant doing a little less than 100 deals for just over 400,000 square feet. In the 2022 second quarter, we did 132 deals for 562,000 square feet, nearly 40% more than the average. And we've never come close to doing 132 deals in any quarter. But the fact that demand has remained this heated with a deal pipeline that looks to stay strong, speaks volumes about our properties and the markets that they're in and naturally about future earnings growth. So one of the reasons Dan is again raising annual earnings guidance $0.23 at the midpoint. So one of the more underappreciated phenomena of the strong demand is that we're able to be more proactive in terms of leasing space that's not yet vacant.
While that leasing doesn't immediately show in the occupancy stats, it will mean less downtime in the future and shopping centers that are merchandised with more relevant tenants sooner than they would otherwise be. The portfolio was 94.1% leased and 92% occupied at quarter's end with continued improvements expected by year-end, particularly on the small shop stop. At 89.3% leased, small shop space is a remarkable 580 basis points higher than the COVID low point. Our stepped-up post-COVID reinvestment effort is another critical component to future growth. It's no news to anyone on this call that the traditional generic and homogenous shopping center business is cyclical in nature and not a high-growth business. So you have to stand out to outperform over cycles. You do that by picking the right markets and positioning and merchandising in those markets, but you also have to reinvest to continually find the edge. Reinvesting is more important now than ever before.
It's why we have nearly two dozen active and meaningful development projects in planning or underway, totaling over $100 million this year and next, which will likely yield double-digit unlevered yields over the ensuing years through higher customer traffic and rents, in line with our historically observed results following property improvement projects. That reinvestment is one of the primary reasons we can continue to push rents. Leasing has been exceptionally strong at our newly development assets also, from the completion of CocoWalk to the office projects at Pike & Rose, to the residential over retail at Darien, to the residential and office Phase three at Assembly Row, each of these additions have exceeded our post-COVID expectations in terms of lease-up pace.
In the case of the residential product at Assembly, that's exceeded in both pace and rental rate. Now the one exception is Santana West, and there's no question that the cooling of the technology sector in the last 90 days, both in terms of their stock prices and getting employees back into the office has been a wet blanket on what had been strong leasing momentum. It has therefore been difficult to bring fully negotiated deals over the transom. Disappointing, yes, but important proper perspective, having a brand-new state-of-the-art office building adjacent to one of the most successful amenity-rich destinations in the tech capital of the country, isn't so bad. Particularly, since it only represents about 2% of Federal's asset value and will be an important driver of future growth when it hits. It's a matter of time. Stay tuned.
We've also remained active on the acquisition front. Following the end of the quarter, we completed the all-cash acquisitions of two very special properties in two of the markets where we're focused on expansion. The Shops at Pembroke Gardens, a 392,000 square foot dominant retail center on 41 acres at the corner of I-75 and Pines Boulevard in Pembroke Pines, Florida as an important asset to our portfolio, eight miles south and west of our equally dominant Tower Shop Center in Davie and 20 miles north of our newly completed and highly acclaimed CocoWalk mixed-use destination in Coconut Grove. Our ability to remerchandise and push rents potentially add density down the road and fortify federal as a must-talk-to-player in South Florida were all considered in this important acquisition.
The $180 million purchase will generate better than 5% return in year one with a very strong going forward NOI growth that will produce an IRR well in excess of our cost of capital. Across the country in Scottsdale, Arizona, we were able to acquire the 214,000 square foot office building directly adjacent to our Hilton Village property, giving us over 1/3 of a mile of continuous -- contiguous frontage on Scottsdale Road immediately across the main entrance to Paradise Valley, the region's most affluent, in our view, underserved community. The integration and rebranding of these properties as one, along with the proximity of work, home and retail and restaurant amenities in this post-COVID environment is expected to allow us to create a seamless, modern environment that will support greater rents and higher long-term occupancy. This $54 million acquisition will yield 6% in year 1. And like Pembroke, is expected to provide very strong NOI growth that will produce an IRR well in excess of our cost of capital.
These two acquisitions, along with the previously announced 410,000 square foot Kingstown shopping center, in Northern Virginia, represent a combined investment of $435 million at a 5.25% yield in year one and more importantly, very strong IRRs on three dominant retail destinations in three particularly fast-growing markets from a good jobs perspective. Okay. It's about it from my prepared remarks this morning, though, I want to leave you with one final thought before turning it over to Dan. Investing decisions grow tougher as economic uncertainty increases, and real estate investing is clearly a cyclical business. It's why the underlying business plan of this company has always contemplated cycles in its investment strategy. These are the times when well-leased, well-located dominant retail and mixed-use centers in supply-constrained, affluent, densely populated markets and submarkets shine. Whatever it is to come economically over the next couple of years, Federal is well positioned to outperform. Dan?
