Welcome to the Federal Realty's fourth quarter yearend 2013 earnings conference call. My name is Freida and I'll be your operator for today's call. (Operator Instructions) I will now turn the call over to Kristina Lennox. Kristina, you may begin.

Thank you, and good morning, everyone. Thanks for participating on Federal Realty's fourth quarter and yearend 2013 earnings conference call. Joining me on the call are Don Wood, Dawn Becker, Jim Taylor, Jeff Berkes, Chris Weilminster and Melissa Solis. These and other members of our management team are available to take your questions at the conclusion of our prepared remarks. In addition to our fourth quarter and yearend 2013 supplemental disclosure package, we also filed our 10-K yesterday, both documents provide you with a significant amount of valuable information with respect to the Trust's 2013 operating and financial performance and both are currently available on our website. Certain matters discussed on this call may be deemed 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 we 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 operation. And with that, I'd like to turn the call over to, Don, to begin our discussion.

Thanks, Kristina, and good morning, everybody. This was a very good quarter and this was a very good year, and it sets us up beautifully to really create a lot of real estate value along with earnings over the next few years. At a time when many real estate companies are struggling to find ways to grow, our table is set. It's set right now, with the best-in-class core business that grows at 3%-plus even on an occupancy neutral basis. With hundreds and millions of dollars in new products set for delivery in 2014, the new iconic acquisitions in New Jersey with below market rents, with nearly $800 million of new debt and equity raised and capital raised in 2013, and among a lowest cost in any REIT, which will maintain and in fact improve on balance sheet flexibility during this heavy development period. The markets we operate in remains very active with leasing activity particularly strong in Northern California and Boston. 2013's completed deals, which overall were written at 20% higher rents than the prior tenant, 25% in the fourth quarter, will serve as a great start to 2014 growth and buffer some of the inevitable dilution that comes from delivering development projects. So before we go on and talk more about 2014, let's pause a minute and layoff some of the key 2013 fourth quarter and full year numbers. First of all, please note that twice during 2013 we retired debt early, to take advantage of the unprecedented low rates available on unsecured public bonds, as a result we incurred prepayment charges of $0.05 a share in the second quarter, $0.15 a share in the fourth quarter. I'm excluding those charges from the remainder of my remarks for clear and more relevant comparability. Accordingly, we generated FFO per…

Thanks, Don, and good morning, everyone. As Don reviewed, 2013's performance really underscores the five key talents of our business plan that we outlined at our Investor Day at Assembly Row. One, the strong continued performance in the core portfolio. Two, additional identified redevelopments that further enhance that core, in fact, we identified this year over $100 million of additional projects. Three, opportunistic acquisitions of high-quality assets such as the Grove at Shrewsbury and Brook 35. Four, and importantly, significant progress on the $500 million strategic mixed-used pipeline that we have, with over two-thirds of that delivering this year. These are projects that set us up very well for years to come. And five, importantly, a strong balance sheet that provides us maximum flexibility to fund this growth. As Don mentioned, the $1.18 for the quarter and the $4.61 of FFO for the Trust do represent record results. This builds on a multi-year track record of successive bottomline growth in a sector where no other shopping center company has recovered the prior peak. What makes this relevant performance even more remarkable is that we've achieved this bottomline growth this year, while investing significantly in our future growth. We are not holding back our growth through asset recycling or balance sheet fixes, we're delivering it now. As Don discussed, the primary driver of our performance this year has always been our core portfolio. This portfolio continues to produce growth principally through contractual rent bumps and strong rollover versus merely occupancy gains. As I will discuss further on our outlook, we expect to push rollover in 2014 to take advantage of the strong tenant demand that we see for our centers. Overall, our rental revenue increased to $620 million and our POI reached $447 million, both record results for the Trust. Our…

(Operator Instructions) And our first question comes from Steve Sakwa. Steve Sakwa - International Strategy & Investment Group: Two questions. Jim, the capital plan are in the guidance for 2014, have you assumed any equity issuance and what have you assumed in kind of terms of new fixed-rate debt borrowings.

So we're going to remain opportunistic during the year in terms of what we have assumed. We're about a $150 million of equity and we'll look to raise the balance of our development spend, probably through a reopen of our existing issue or another issue later in the year. Steve Sakwa - International Strategy & Investment Group: And then it's a little bit of nuance question. As you kind of look at the rollover schedule back on Page 23, there is a big, big difference, if tenants assume exercise of lease options and if they don't and it obviously skews the square footage, and the expiring rents considerably. How do we just sort of think about that? I mean is it as simple as looking back at the percentage of renewals versus new leases done in 2013? How do you think about the lease spreads in '14 and '15?

That's a good question, Steve, I'll tell you, and it has come before. The nice thing about this portfolio is you've got a history there and you can almost count on in any particular period of time, we're going to do something like 1.3 million or 1.4 million square feet of space. That just as seems like that's growing from 1.2 or 1.3 a little bit some years ago, but basically it's only a mix of tenants that exercise options and tenants that don't, and there is tenant in there. Basically, if you're using number like that you'll be pretty close, number one. Number two, with respect to that mix, historically, if you look, we are pretty close to two-thirds renewals and one-third new leases. Obviously any year could be different to that, but that's a pretty good way to kind of think about our business. 2013 was a great year in terms of rollover, just a great year. I think it would be hard to match that again with rollovers like that. But it's going to be a good year again. And it has started out that way in the beginning part of 2014. So make it a good year just don't make it a best of all time.

And Steve, I think as Don pointed out, we do historically, when you go back and you look over several years, get after a lot more space and what suggested by the federal.

And our next question comes from Mike Mueller.

Actually I tried to get out of the queue. Steve touched on my question.

And our next question comes from Jeff Donnelly.

Actually a few question, one on your guidance for 2014, Jim, you have a lot of moving pieces going on this year. I know you don't give quarterly guidance, but are you able to maybe just talk about how we should be thinking about some of these moving pieces, maybe one of the most influential ones coming and going? And I guess should we be thinking about earnings in terms of I guess will call it a quarterly rent or is it going to be more choppy than that?

Let me first say, we are confident in our guidance overall for the year. As always been the case for the company, we typically have a ramp from the quarters to the final quarter. I think that will probably be exaggerated a bit this year given that we will be expanding some of that development drag earlier in the year and not realizing much NOI contribution from development until the latter part of the year. And then the second part of that is because of the rollover I mentioned, we do have some tenants taking occupancy later in the year under signed deals that will further enhanced that growth. So year-over-year you might see more of a ramp in 2014 than you're seeing in prior years. And then to your other point, yes, we are delivering a lot of development and we will have some volatility in the quarters due to things like the precise timing of the demolition of mid-Pike. If that moves by couple of weeks that can swing things by $1 million quarter-to-quarter, but overall for the year, we feel confident with the guidance. We feel good about what we're seeing the year set up in terms of the core and certainly feel very good about the development progress and the leasing progress at the projects that we're delivering.

I'm curious, are you willing to share maybe where you see your Q4 sorting out, it's just sort of that that's going to be base if you will for your 2015?

Not at this point, Jeff. Not.

And just to switch gears on acquisition, you made some acquisitions obviously during the quarter using some attractively price currency. Can you maybe just talk a little bit about the strategy of those properties? But then stepping back, do they maybe foreshadow a change in your approach to acquisitions because they don't strike me at first class as necessarily maybe under managed or redevelopment candidates. So does that imply maybe more of willingness to buy assets that might be a bit flatter as long as that pricing is right?

No, it doesn't imply that at all, Jeffrey. Let's talk about this a bit. A year ago we would have talked about East Bay Bridge, right, which is a big power center in San Francisco. And I think you could ask exactly the same question a year go about East Bay Bridge. These particular assets that we bought have great long-term growth prospects. And I guess, I really want to just reiterate, and I think this makes us different than a lot of retail companies. We will buy any type of retail real estate, other than malls, which is not our business that's where we see a growing stream of cash flows. A way to get to that growing stream of cash flows is either through releasing which absolutely the Grove and Brook 35 pads associated with them or from redevelopment. And it's a cash flow business, and so we look real hard at that. And for us to buy the right properties, whether they pretty like the Grove or ugly like East Bay Bridge, what's pretty about both of them is where we see the cash flow projections. And as long as they are in areas, where we believe are improving areas and areas where demand is going to exceed supply, you're going to see us buying. I think this is the right down the middle of the plate for what it is that we identify from the acquisition side.

One thing I would highlight again on in this transaction, Jeff, is it's a structured deal. We were able to utilize currency, which was attractive here to the seller. And if you think about some of the other opportunities that Jeff Berkes has on the West Coast and we happy around East Coast, is there is a similar team in terms of the tax structuring and other things these sellers want to achieve.

And just one last question, maybe to switch coasts out to Santana, is I was just out there recently meeting with some property owners in the immediate area and they were telling me that demand for space is really picking up in that area, particularly around Santana. Are you guys seeing activity on remaining called sites at your project and maybe have you revisited the opportunity to buy in either, homes that are to the west of your core property or even across to the street that old Century Theater or across Winchester?

Have you been sitting in our management meetings? Jeff, careful how you answer, but answer. Will you?

Yes. I mean things out here in Northern California are going very well, as I am sure you know that our job growth is still strong and people are still spending money, in a lot of cases, a lot of money. And we're seeing that in many different ways. We are obviously seeing at the retail stores at Santana Row and the restaurant sales volumes, we're seeing that at Misora, where Don mentioned, we're kind of in the middle of our lease up. That project is being very, very well received by the apartment renter community here. And again as Don mentioned, we're a bit above our pro forma so far on rents. So yes, we are seeing a lot of positive things going on around here. Now, would we start buying single-family homes on the east side of Santana Row? No, I don't think so. But you probably know, too, that we're in the middle of a rezoning of Santana Row, which is going to allow us to public process and like any public process who knows what the outcome is, right. But assuming we get what we want it's going to allow us to develop the south end of the property and complete if you will Santana Row and effectively take advantage of a lot of the demand that's going on out here today. And what we are seeing in addition to strong demand for the rental apartments, and the stores and the restaurants is something we are really seeing in all of the markets in which we operate, and started seeing a few years ago, the different way that people look at office space. And historically, office space has been sort of the commodity product and with traffic in a lot of these major cities on the coast and also I think maybe a little bit of a different mindset from the employee and employer, the other thing we are seeing is a huge, huge premium being placed on office space that offers an amenity base. So if you live out here, you have an opportunity to get a job at Google or Yahoo or eBay or Apple, those huge companies all have their own campuses. But there is a ton of companies that obviously can't afford to do that and what we have here in Santana Row, and quite frankly, what we have in a lot of our mixed-use properties is a built-in campus that's heavily amenitized. So I am not sure yet what we're going to do or when we're going to do it, but we're definitely setting ourselves up to be flexible and take advantage of what you pointed out, which is strong, strong demand around our mixed-use properties here at Santana specifically.

Our next question comes from Christy McElroy.

I'm wondering if you could confirm that you have applied to be the master developer for the Union Square revitalization in Somerville. Can you just talk generally about that essential project and what it might mean for Somerville and for Assembly Row?

I can talk a little bit about it, Christy. Yes, I mean there is an opportunity, that's a broad-based opportunity in Union Square, that section of Somerville to effectively to redeveloping and create the kind of urban fabric that we've done in some other places. And so with a full service office up there including most importantly, frankly, Don Briggs, and the relationships that we've build and the understanding of Somerville, we want to have a look at that. It's early in the process. These things take long time as you know. We're not spending any money at this point. We're simply trying to look at whether we can be part or whether we should be part of what we'll ultimately be a pretty cool urbanization if you will of a great area of Somerville.

Regarding the Pike & Rose residential delivery, I know you said you're opening your leasing office next month, what percentage are you sort of budgeting to be pre-released that opening and then sort of yearend?

On the residential?

Yes, on the residential.

Let me just to be clear, so we've got 212 units, I believe in the first building.

Actually, it's 174.

We have 174 units at Building 12 at Pike & Rose. The sales office will open up something like March 1, something like that. We've got a real long list together, and in fact, hundreds long today of interested parties. We don't have money down on any, but a couple of people. We just have to be there. I do believe the demand that has been anecdotal demand in what's happened so far is going to mean real strong demand and lease up. Now, we're going to have to see, but going through that the number that we expect to be by the end of the year of that 174, its how many, Dawn, do you know?

It's 15 to 24 month as we're averaging about 100 and 120-ish range.

So if you think about starting around May and going from May through the end of the year at 15 to 22 month that will give you a pretty good idea. Then the rest will finish up in '15.

And then just lastly, following-up on Jeff's question, and your answer, Don, about buying retail real estate with growing cash flows, how does sort of urban street retail fit into that like, Manhattan, Chicago, especially as retailers are kind of focusing a lot on having sort of flagship base to drive overall brand, how do you think about street retail?

Listen, it's one of the areas that make a lot of sense. The problem is how do you execute it. And the more urban the streets get whether you're talking about Lincoln Road or whether you are talking about Chicago, wherever you are talking about, it's hard to get any critical mass. And we found that out the hard way frankly, and in the 90s. You can buy one-off buildings and that's fine, except it doesn't allow you to really impact the street. The street is going to be what the street is and you'll rise when things are good and you'll fall when things are not as good. And I do look at those streets as positive things generally over the next decade or two or three. But we prefer to be able to create that environment or at least have significant impact on that environment, because that helps us drive rents. It's a very hard to do that on a one-off basis on those streets. So that's a hair in the overall argument for us.

And our next question comes from Alexander Goldfarb.

And we'll continue the theme Jeff Donnelly's questions. On Santana Row, just given how the tech boom this cycle has a lot longer legs than it did back in the dotcom, how are you guys thinking about building out the rest of Santana? Especially as demand for office space increases and makes office right now sort of a valuable asset class. Is there a push from your end to try and capture that as quickly as you can or is that sort of classic Federal and just sort of follow a patient, prudent pace and not be forced by what's going on with the market at the moment?

Great question, Alex. Let me start on this, Jeff, and please correct me wherever you would like to. Its classic Federal plus, the reality is Alex, what we've spend, as you know, a long time building and growing and massaging on that 40 acres at Santana Row is it's humming pretty well. And as Jeff was saying, there is clearly not only a market that looks pretty good out there, but there are market trends that look real good for us and our type of projects when it comes to the amenity base. So we're working real hard. We're working plans right now for the end of that street, we would love to be able to go to investment committee and then effectively to the board and be able to talk about something late this year to be able to get started out there, and that is directly at the end of the street. I think it would have an office component. I think it would have residential component. I think it will have a resell component. And I do not think that that has all embedded today as we sit here on February whatever it is to be able to give you more specifics on that. But there is absolutely a sense of urgency from the standpoint of careful urgency and there is the plus the classic Federal to being able to develop at the end of street. And what's probably going to be what we seem to see is the very strong Silicon Valley market, that probably has five, six, seven years or less.

So basically around NAREIT time or this earnings call, a year from now, you will be able to give us a lot more color on what's going to go on in the South end.

That would be very, very helpful. That would be our hope, yes.

The second question is you guys talked about pushing more turnover this year, which is a theme you know that a number of your brethren have also been emphasizing, but 2013 was obviously a very good landlords market as well. Do you see it as simply a continuation of the leverage that you guys had in '13 or your view is that the demand is even greater in '14 and then there is even a great ability for you guys as landlords to push turnover and get in more productive tenants?

Neither of those choices, it's the third choice. Opportunity has presented itself. And I'll give you very specific example, when we bought East Bay Bridge, there are clearly tenants there that do extremely well and there are other tenants there that don't. We're working hard and effectively, we have made progress and being able to replace two of those tenants with much better economics, much better merchandising, be able to create a much better shopping center. We will be able to get there this year we believe. Two boxes, we'll go dark this year. That's great news. Will occupancy dip? Sure. Who cares? That's all about creating value there. I could say that about the same in Melville, Long Island, where we're very close to a deal to replace one of the boxes. What we are talking about generally, the reason we're talking about it here or Jim mentioned it proactively in this call is because they are anchor boxes and they take big pieces of space. So they will move the occupancy number. To the extent, we have that and don't have anything to fill it, its bad news. In every case, we are sitting there with a very, very good with great alternatives where demand exceeds supply. And so you'll see some of these occupancy hit this year, but you'll see, from my perspective, great value creation at those shopping centers.

So most of those spaces you have already backfilled or you are in talks with the signed contractors.

We are working deals. Nothing is a done deal, it never is at the stage in that type, when there is another tenant that's still in operating, but we're real confident effectively when the demand exceeds supply that we will get our deals done.

And the final is just a Jim Taylor question. Jim, on the guidance that you laid out and the $0.13 to $0.15 hit for this year for everything going on, you spoke about, if I got my notes right $0.01 to $0.02 from demolition, $0.02 to $0.03 from lost NOI. I would sort of think that would be the same, but I didn't hear you mention an offset from having increased capitalized interest, so if you could just run back through those?

There is not much of an increase because of capitalized interest, because of how we are funding it. We are not writing out on the line with cheap debt and capitalizing at a higher rate, Alex. So there is not a spread there. In terms of the impact at midpoint, we now have to expand demolition cost, years ago when I learned GAAP, they were capitalized. But we won't be taking that. In addition, year-over-year, we're loosing about $0.02 to $0.03 of NOI at that center as we take it down. So those really are the components there. And again, as I mentioned, we'll have more marketing cost as we bring up on these great mixed-use platforms and build customer awareness and build shopping practices. There will be more marketing dollars that we spend as we open these projects then we'll spend on a recurring basis. And finally the other big component to add again is we'll be opening up multifamily projects and leasing them into stabilization, but as they open and we stop capitalizing that interest, NOI initially will be below where that capitalized interest would be on that, and then back to the capitalized interest, it ends up being a wash based on how we are financing it.

And the next question comes from Nathan Isbee.

Federal doesn't report sales numbers like, as you call it, your mall brethren, but you do have a fair amount of retailers that do report sales. I'm just curious, if you can give us some anecdotal figures on how sales and traffic trends look?

I will. It's a particular piece of mind, Nat, because I wish in the shopping center business and the shopping center world it was more common to have tenants report. I mean basically of our 20 million square feet, we have about 6 million square feet that reports. So I hate that. And when you look at where it is, we've got almost complete reporting with great information to be able to analyze and talk about at Santana and there will be at the mixed-use projects that we're doing, but our acquired shopping centers over the years, they don't generally. So it's a real mix bag. What we see, I can tell you overall is modest sales growth and flat traffic, and when I say flat traffic the only data we have are our specific counters that we do have at Santana or on the East Coast specific traffic studies that we do and counts that we do, but nothing that is statistically significant or frankly able to be relied on. So what my comments are anecdotal comments. I also feel really good frankly that the sales productivity generally that we're seeing that there is a wider grouping of tenants that do really well and others that don't do as well rather than we see that is part of why there are tenants like Loehmann's that are going away, that it is why there are the opportunity to do stuff with the Office Depot, OfficeMax consolidation that's happening in the industry, because they are underperforming and there are transactions happening to handle those type of tenancies. I love that the newer, the better tenants, that we frankly invest capital in some cases to grow are doing better than we thought that they would be doing at this point in time. So I guess that's not really much different than what I've said over the years. It really always is a tale of two cities in some respects and why you really do have to merchandise with the tenants for the next 10 years, and not the tenants with the last 10.

So I mean, I guess the world is changing and from a merchandising perspective aside from usual suspects that we all know about, has Federal changed your approach in terms of what you want, what you're going to work to get out, et cetera?

Chris, you can add to this. But certainly, I think the answer is, yes. I think when we look at the importance of amenities to the other uses, so the residential use or an office use and everything else, and we really think hard about what are retail uses that are important and to the future, not to the past. It is why you see us investing in the restaurant industry generally, the way we do to use that bankers. And by the way, the thing I love about them compared to traditional anchors, is that they are not subsidized deals effectively. So now that doesn't mean a restaurant is an anchor, it means a grouping of restaurants, is an anchor. It means, when one or two or three of them go away, because the restaurant business is hard, so what, because you're looking at it as a portfolio of seven or 10 or 12 restaurants. So that whole strategy, I think we've gotten really good at. I think we've gotten good at that by in part necessity the type of product that we're building, but also because we've been doing it for a long time. And so we've got leasing people who are specializing effectively in that different part of world. I think if you look at health clubs, I think we talked about health clubs 10 years ago or 15 year ago, they were completely different types of business in terms of the business model than they are today, and where they're going forward, how they're going forward. The Bally's model of 1999 is not that, it's not a pre-funded model. So I do think, Nate, you are seeing, and we have our eyes always, on the future largely because the type of thing that we're investing in and building, often have other uses that are dependent on getting the merchandising just right.

I would just add to that, our culture with regard to leasing is all about merchandise mix. It's how do we create the best mousetrap that best serves the needs of the signing community and brings that consumer to our project over other shopping centers around us. I would point to one very specific example, which we're ecstatic about up at Mercer Mall in Princeton. We're taking out one of our electronics retailers, which as we all know is a challenged category right now, because of the internet sales and the competition in that specific category, and replacing it with Nordstrom Rack. We're putting in an amazing soft goods brand that will complement Bed Bath and Beyond, and our Ross, and our T.J. Maxx and the other smaller soft goods retailers there. We're actually downsizing that center as well DSW who has too much space and bringing in another very complementary category or tenant called Charming Charlie's. So we're always looking opportunistically at how we can improve our tenant mix in this environment to bring the consumer and better mix for our existing retailers to drive traffic and sales.

And then just as a follow-up, there's been a lot of changes in the peer group, so some REITs getting smaller concentrating on certain geographies, others getting bigger, expanding nationally. Just curious from your perspective, how much would you say geographic concentration matters in retail in general and perhaps how that differs with your portfolio?

I do believe it matters. I believe it matters for the most fundamental reason that has nothing to do with synergies or kind of the obvious things. I believe it matters, because this is a local business, and there is no point than I am more sure of, after doing this here for 15 years, then we do a far better job when we have a concentrated group of shopping centers in an area that we know like the back of our hand. And it follows in the type of things that we're building, it follows in the limited number of markets we're in, it follows in the type of things within those markets that we are buying. I firmly believe that that benefit at the local knowledge and local operations, if you will, from leasing to development to property management, all of those things, that's where your make your incremental money much more than in a very expanded generic type of business plan. At least that's our experience.

And then just finally on Assembly, the Partners Health deal, I'm just curious, bringing in 4,700 workers to that site. How the site is currently designed, if it can handle that many incremental cars, people, et cetera, and what you might be doing to address that?

One of the main reasons that Partners choose that site was something that we've been trying to address for seven years, and that's getting a T-Stop to stop there and it does. And so the dynamics of that piece of land truly completely changed in terms of accessibility and logistics, the day that the MBTA in Massachusetts have turned that stop. It changed the site. That's huge. In addition to that when you take a look at the brand new infrastructure and road that are built, and part of it, $15 million of which was funded was one of the first shovel-ready projects in the country, and was federally funded which is at Grant Park Avenue that goes right through it. Now, there is no question that both the T-Stop, the new infrastructure around the property and most importantly the highway infrastructure, which is right there and that's been underutilized in terms of that site in that area forever is able to handle it and enthusiastically so after being underutilized for decades.

So no incremental infrastructure close to get them in?

More than there's been. I mean we paid fees for the T. We paid if off.

And our next question comes from Jason White.

Just to stick on the tenant front for a minute. It seems that food uses have been taking up a lot of space post-recession with a lot of internet challenged categories kind of going away. How much food use can strip centers or retail centers really support long-term without other categories coming in and backfilling some space that's going away?

Yes. I love that question. It depends. The one thing that I was kind of worried about when I talk about our belief in food categories is I don't put enough parentheses around this or explanatory comments. It depends on the right food uses, it depends on the supply that's available in the surrounding communities, it absolutely depends on the operator who is good at it effectively doing. And just like anything else, of course, it can absolutely be -- we can too much, we can over-absorb, if you will. So there are a lot of places that we see the right type of food uses and hitting a giant lacking in that community, and this wasn't me, this was my predecessors. And my predecessors said, you're telling me, you can drive up and down Stevens Creek Boulevard, and there was every path to replace in the world on Stevens Creek Boulevard in between every car dealership in the world. But there was no amalgamation of quality differentiating price point experiential restaurants. That's what Santana brought. That's why it so powerful. If you look at the pure numbers, the square footage of food uses that was available there before it was tons. You wouldn't have said, well, god, we need more food, we need the right type of food. And that applies today, Jason. So to the extent people talk about, well, yes, we're doing a lot more food, in just a big generic way you got to dig down and figuring out, are they really hitting a consumer need in that particular community.

And then one more question on Assembly Row, as you dabble in the outlet world. Have you identified any other properties that might be a good fit for big redevelopment and outlet type deal?

I love the dabble in the outlet world. Can I just address that for a second? I feel like I need to. We are not dabbling any outlet world with respect to Assembly. What we're creating in Assembly is different, it really is. It's not going to be a typical outlet center. It's not going to be a typical mixed-use center. It's not going to be an entertainment center. What we are doing there is trying to put together usage and the type of retailers that we think that community dramatically lacks. And that's why the merchandising mix is what we think works and makes sense there. Now, there is no question that as part of our dabbling in the outlet world, we develop some pretty darn good relationships with retailers and pieces of retailers, that's not their full-line stores, but they're outlet concept. So we have developed and increased our relationships there. It would be very unusual for us not to take advantage. You'd be mad at us, if we didn't take advantage of those new found relationships and use them throughout other parts of Federal Realty's portfolio. But the notion of taking other parts of Federal Realty portfolio and converting them to outlet malls would be the wrong way to think about it.

And then lastly, just in terms of dispositions this year, do you guys have anything contemplated?

Yes, we got a couple of them, that we're going through the pre-marketing on shopping centers that really don't fit us anymore. In some cases it's rent growth in terms of what we see there, in another place it's geographical. But we're looking hard at probably selling two this year, two shopping centers.

And your next question comes from Craig Schmidt.

On the two new, New Jersey properties, how long will it be before you can really tap into the below-market rents and also improve the overall leasing? And I guess on a follow-up, what will Metrovation be working on beyond the two New Jersey projects?

I love the question, Craig. First of all, the first answer to your first question is 37 days. And I say that a little tongue-in-cheek, but not really, what I am trying to say there is already in the first two deals that we have negotiated, we are beating our underwriting pro forma, because the demand to get into that shopping center, particularly the Grove, absolutely exceeds the supply available. Now, that doesn't mean we are emptying out the Grove and releasing it with lots of new tenants at 40% more rent. The Metrovation folks have done an amazing job of creating a pretty darn good merchandising there. But you know, they are now, and this goes to your second part of the question, our trick is to take this great work that these folks have done and the great talents of these folks and to not take any of the negatives away, but add to them the platform that is Federal. The relationships that Federal Realty has and we have bigger portfolio, and a lot of the tenants that are at the Grove and Brook 35 are tenants that make a lot of sense for sense for us for Santana, for Bethesda Row, for Charlottesville, for Barracks Road. There are a bunch of those type of shopping centers and retail centers in our portfolio that that will really open up opportunities for the Grove. So as they come up, Craig, you should continue to expect to see improving NOI there. Now, that team, which with, albeit at a much slower platform and much left to work with effectively in terms of resources has done a great job there and we would like them to help us, help do a better job at Brick Shopping Center, which is in the marketplace, we've own Brick for a long time, but its one of those shopping centers that we manage from Philadelphia. While going back to what I said before, it's hard to imagine that those folks, even though Brick Shopping Center is a power type center with some small shop, it's a very different type of shopping center, those folks right there, they're going to run. That should help us in very end, with our plan for the ultimate plan for the redevelopment and add shopping centers. So the team and the resources that we're getting, we're working really hard to make sure we don't screw up if you will the great parts of them, but to supplement the benefits of having a bigger platform in Federal.

Craig, there is another part of your question in terms of investment opportunities and Chris Cole in particular is already keying up the ancillary opportunities to the existing assets as well as other investment opportunities in the Greater New York Metro region, sort of enhancing what we're already turning up with Harold and team. So we're excited about that prospect as well.

And our next question comes from Haendel St. Juste.

Can you talk about your estimated occupancy cost ratio and target occupancy cost ratio for centers like Santana, Bethesda? Morgan Stanley: Can you talk about your estimated occupancy cost ratio and target occupancy cost ratio for centers like Santana, Bethesda?

I guess I can. I can tell you that first of all overall at Federal, overall at Federal, the occupancy ratio was around 8. And I very much believe that overall, even today that could be 11 or 12. Now, within the portfolio, when you break it down to the Santana, the Bethesda and a grocery-anchored shopping center, which is obviously very different. I mean you have got huge differences associated with that. And I'll talk Bethesda, and let Jeff do Santana. When I look at Bethesda today and see what had happened with our rents. Our rents and our sales -- our sales are much better than they used to be. Our rents are higher. The rental growth has been higher than the sales growth over a long period of time. But the business is better in there, are healthier business than there used to be. The businesses can afford higher occupancy costs and there is the fundamental problem that you have in your job you're trying to make everybody comparable. The reality is that our work on the merchandising, our work on putting the right tenants together is partly -- not partly, largely, so that they are able to pay higher rent and higher occupancy ratios. So we try hard to get the right type of tenants including the ones that are operating the best way. So at Bethesda today, I think that probably overall occupancy in the 9s. And I think there is more room to go there than almost anywhere else. I don't know about Santana, how do you feel, Jeff.

Yes, it's one of those things that's difficult to paint with the broad brush, because there is a high degree of variability depending on the tenant type, whether it's a sit-down or a quick-serve restaurant, whether it's vertically integrated retailer or not, I think on average our occupancy cost ratios at Santana are 200 basis points higher than they are at Bethesda, but it's something we look really hard at and work with the tenants on. We want to make sure we're getting as much rent as possible. We also want to make sure we have successful businesses obviously, and a lot of that discussion goes into the structuring of the lease and percentage rent breakpoints and that kind of thing. And there is also a bit of a moving target too, as the sales per square foot productivity moves up, what a tenant can afford to pay in rents and what the occupancy cost ratio can look like on those incremental sales once they get over a level where their fixed costs are covered changes to. So it's highly variable. But I think that's a low-double digits number at Santana with probably some room to grow as sales here have grown, right. We've seen significant sales growth over the last two or three years. There is definitely a little bit of headwind there.

And on Mercer Mall and Barracks Road, the yield went down on Mercer and up on Barracks Road versus last quarter. Can you talk a little bit about what's changed at those two projects? And then also what moved the anticipated stabilization on the Shops at Willow Lawn from 2013 to 2014?

Let me handle your question on Barracks and Mercer. Really nothing has changed on those. I mean as you can the numbers, the capital we're talking about is relatively small and really what happens is you have little movement as you start refining your numbers. Barracks is probably a little bit more definitive, because we are closer to the end, so we have a very clear cost side of the equation. We know what the revenue is, we know what the cost releasing contingencies looks a little bit better than we have anticipated. Mercer is nothing more than the normal, little bit of moving around as you're progressing through the process and just rounding as we're reflecting it there.

And what was the last question? Willow?

And Willow Lawn has pushed back a bit on stabilization as we're getting the restaurant anchors in this year. So we'll have some additional leasing activity around that.

And then last one, can you talk about new developments, how can you show 3% to 4% same-store NOI growth in the second year with little, or I guess, no rollover?

You know, I've said this before, and until I am proven wrong, and I don't think I will be, I believe our business, the shopping center business is a 1.5% to 2% grower. That's what I think it is. I think Federal is a 3% grower. Occupancy neutral over a long period of time, that's what our business is. Within that period of time, occupancy is never neutral, number one. And there are cycles effectively, it's not as pronounced as in some of the other sectors, but there are cycles. Right now it's good cycle. And I think these numbers are really, really strong. I don't think that in the business, in general, that shopping center business can sustain 3.5% and 4% growth occupancy neutral. I don't think it's that type of business.

And to get to some of the products that we're delivering to and why we're excited about these mixed-used environments is that they do tend to grow not just with what the retail ground floor is doing and that percentage rents and other things that we generate above the fixed minimum rent on the ground floor. Importantly, we're driving growth in things like the multifamily and the other uses that are part of that environment. And that's how we see those assets even after we deliver it continue to grow kind of better than a typical shopping center.

And our next question comes from Tayo Okusanya. Tayo Okusanya- Jefferies & Company: Just a couple of quick ones on Assembly. First of all, wanted to get a sense of how well the AVB assets are doing there and how that could shape how you start to think about Phase 2 of the project although Phase 2 is still a couple of years out?

First, Tayo, would you please call Tim Naughton and ask about the AvalonBay and how they're doing there. Those are his units and he is working on, I can tell you anecdotally, what we hear and what Dawn Becker will tell us from being on the sites. They're doing really well. They have dramatically beaten their pro forma's in terms of rents. But again, how many of them are done, where they are, let AvalonBay report on that project. I can tell you there is kind of no doubts in our mind that it is very hard, very hard and this kind of shows it in a mixed-used project to get truly paid for partners that are in the other uses. That are just in the other units, it's very hard for AVB to come and underwrite, what we believe they can do if we deliver the street right. The same with hotels, the same with office, it's same with everything else. It's very hard, which is why we do tend to do the residential, in particular ourselves on these projects. Because we believe if we do the street right, it gives a great premium that comes from there. At Assembly, at the time, we wanted to validate this site. It was a place that was 400 miles away, if you will, from where we headquarter, and so that's why they got the deal. Going forward, I mean we'll look real hard at doing those ourselves.

As we talked about at our Investor Day, those rents are in the low $3 a foot and they were underwritten originally in the mid-teens. So they're hitting the ball out of the park. Tayo Okusanya - Jefferies & Company: And then I may have missed it, but did you make any commentary about the office building in phase one and the lease above upon asset?

No, we started that building later and we're working real hard to kind of catch up, so that that building is effectively all closed in when we open the street. We want that all of it to now feel like a construction site, so we're working hard and we're making real good progress that way. A lot of activity particularly since the Partners stuff was reported in the Boston Globe with other office users looking hard. So we've got a lot of activity, but I don't have a lease done that I can report to you yet. Tayo Okusanya - Jefferies & Company: And then just one last one, just some of the recent commentary about RadioShack closing 500 stores, just kind of curious what you think about that, if there's any potential impact to your portfolio?

I don't want to sound callous here, but I'm probably been a sound callous here. Retailers come and retailers go. We have a few in the portfolio.

We have a few in our portfolio, they're in very good centers. And if it come back, we will have no problem replacing them.

Overall they're below market rent.

And our last question comes from Paul Morgan. Paul Morgan - MLV & Company: You talked in the past about kind of lumpiness in the lease spread metric driven by occasional anchor leases that have been long and flat in view. And I'm just wondering whether kind of the ramp up in this reported spreads over the last couple of quarters has been driven by that, especially in the fourth quarter? And it seems like you suggested that it might be tough to replicate kind of what you did last quarter in 2014? And is there any color in kind of what drove the spread last quarter?

Go back, Paul, in my prepared remarks I kind of went through that. I went through that how broad-based, if you will, that the increase, the 25%, was. And in fact I had said that's rare, that it is that broad-based. And I do believe that broad-based type of increase probably continues into 2014, but it can't continue forever. That is record stuff. I mean when you talk about that kind of lease productivity. So I just don't want you as an investor or an analyst to effectively say, oh, man, this company does 25% lease rollovers and that's would I ought a model in for the next three years. I just don't think that's realistic. Is not a commentary at all on the marketplace, it's simply commentary that that is kind of record stuff. And it's just unrealistic to think that that's the way this business is going to grow constantly. I think you're going to see some good stuff in 2014 too, but not in the tippy-top 1 percentile of how we can perform on that measure. Paul Morgan - MLV & Company: The remerchandising you said is going to eat into occupancy early in the year, that leasing activity isn't reflected in the fourth quarter. It seems like I heard during the call, you said, those aren't really done deals yet, even though obviously you're excited enough to take space out that you think you're going to get probably good spreads there too, but that really wasn't part of the fourth quarter, is that right?

It's just a matter of timing. And I couldn't tell you exactly, when this year the boxes go dark. When you have to fix that space, you turn it over to your new tenants, they've build out their space. It's just takes time. So the reality is through most of the year maybe it's through the specific date of 12/31, I don't know that there will be that process going on, which will affect the occupancy stats. I don't really have more color than that. And I don't know if you've got too. That's kind of all we got. Paul Morgan - MLV & Company: And just lastly, in the weather on East Coast, to what extent is it impacting anything related to the developments, the timing and/or how should we think about it in terms of a first quarter expense impact?

I'll take the second part of that question, and clearly the snow costs are beginning to pile up in the quarter. We have another snow storm coming in, and while we recover most in that there is some linkage, where we have multifamily or where we have 10 shops in place. And so I do expect some headwind in the first quarter due to snow, and still feel good about our guidance for the year, but certainly we'll be doing that. In terms of the timing of the development and the impact of weather to date, we're on time and on budget as I said earlier. And obviously, we can't predict perfectly what will be happening in the future. We don't see any major obstacles through our schedule.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. And you may now disconnect.