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Federal Realty Investment Trust
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Greetings, and welcome to the Federal Realty Investment Trust First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]
I would now like to turn the conference over to your host, Leah Brady.
Good morning. Thank you for joining us today for Federal Realty's First Quarter 2021 Earnings Conference Call. Joining me on the call are Don Wood; Dan G.; Jeff Berkes; Wendy Seher; Dawn Becker; and Melissa Solis. They will be available to take your questions at the conclusion of our prepared remarks. A reminder that 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, including guidance. 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 in our forward-looking statements, and we can give no assurance that these expectations can be achieved. 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 operations. We've also provided some additional information for you in our investor presentation, which is available on our website. Given the number of participants on the call, we kindly ask that you limit your questions to one or two per person, and feel free to jump back in the queue if you have additional questions.
With that, I will turn the call over to Don Wood to begin the discussion of our first quarter results. Don?
Thanks, Leah. Good afternoon, everybody. Good morning. What a difference a couple of months makes. The natural positive annual sentiment of spring, fall and winter, coupled with the productive team rolled out, stimulus money and end-in-sight mentality, it's really got a long way in validating our optimism for a strong 2022 and 2023. First quarter FFO per share of $1.17 was sequentially better than the 2020 fourth quarter of $1.14, a positive surprise for us and the result of far fewer tenant failure than anticipated during the quarter and far better cash recoveries than anticipated. As a result, we're confident enough to update our 2022 earnings guidance and provide some clarity on the next three quarters of 2021. Dan will cover that in a few minutes. Pent-up consumer demand is real. We see it in virtually all of our properties in all of our markets despite government-imposed restrictions that still persist in our market. And when coupled with government stimulus cash, it's really powerful. PPP and other COVID-related programs that many of our tenants have taken advantage of has served an important role in buying time and getting both current and deferred rent paid. The $29 billion Restaurant Revitalization Fund, earmarked specifically for restaurants and similar places of business, as part of the massive COVID relief build will undoubtedly also create a strong tailwind for that retail category. So with the GYMS Act that, if authorized, will allow the Small Business Administration to make COVID-related grants to privately owned fitness facilities. These programs, among others, are particularly good news for Federal's lifestyle-oriented properties, which are recovering very nicely. It's quickly become a very optimistic time in our business. Now as you would expect from me, a warning about over exuberance this year is in order as many retailers, particularly small owners, along with theaters and gyms are in a weakened state. And while buoyed by temporary stimulus, need more growth in their sales than they're currently generating to be viable long-term businesses. Having said that, they'll certainly get the opportunity to succeed because traffic is back in large numbers across the board. Perhaps the greatest indication of a bright future is the continuation of exceptionally strong leasing volumes, including first quarter deals for over 0.5 million square feet of comparable space, 35% more deals than last year's largely pre-COVID first quarter for 9% more GLA, actually 24% more GLA than the average of our first quarter production over the last five years. By any measure, we're doing a lot of leases.
The fact that it was also done at 9% higher rents than the previous tenants were paying for the same space bodes extremely well for 2022 and beyond when those deals are earnings contributors. The rate and volume of new deals as opposed to renewals was particularly impressive. 54 new deals for more than 220,000 square feet at 18% more rent than the previous tenant would pay. What's particularly encouraging to me is how broad-based our leasing continues to be. In the first quarter, we did grocery and drugstore deals with Giant, Whole Foods and CVS. We did box deals with Dick's and Bed, Bath. We did fitness deals with Crunch and Planet Fitness. We did lifestyle deals with CB2, American Eagle, Madewell, Athleta, Blue Bottle Cafe Coffee and a couple of dozen restaurant specialty service-oriented retailers. Strong demand all across the board, particularly in California. In fact, let me take some time today to focus in on California because it really is a microcosm of our portfolio, particularly our nonessential lifestyle product and, in my opinion, a leading indicator into the future of the Bethesda Rows, the Pike & Roses, the Assembly Rows in our portfolio. Whether good or bad, things always seem to come first to this huge and complex market. First, the governor there has previously announced that all COVID restrictions will be removed next month. This is great news. We did 50% more new deals in California in the first quarter than we did in the fourth quarter, which itself was strong. As you know, we're heavily invested in and around Silicon Valley in the north and in the Greater Los Angeles area in the south and are fully committed to investing in California in the future. Tenant demand and consumer traffic are among the highest anywhere in our portfolio, and 2021 should be an all-time record for us in terms of the number of new retail leases we expect to do there.
It's really hard to short great real estate in California despite the headwinds. Let me start with San Jose and Silicon Valley, which has become a beneficiary of urban and suburban migration in San Francisco to the north. Santana Row car traffic, as measured by our parking systems, rose 69% in April compared with January and is fast approaching pre-COVID levels. Residential occupancy is back up over 95% after dipping to a COVID low point of 91% in the middle of last year. And as you may have seen late last month, Santana Row was the recipient of the first large Silicon Valley COVID era office lease site as Fortune 500 cloud-led software company, NetApp, decided to relocate their headquarters to Santana Row in 700 Santana Row, the 300,000 square foot building not yet populated but previously leased to Splunk. The stated reason: to better facilitate a winning employee experience in a more connected space. In other words, state-of-the-art facilities in a fully amenitized environment that makes retaining employees and hiring great talent easier. No lost economics to us versus the Splunk deal, but two more years of term and a better diversified tenant base. And by the way, another candidate for additional office space at Santana as their Silicon Valley footprint grows. Splunk, of course, remains fully committed to Santana Row at 500 Santana Row. Now across the street at Santana West, our 375,000 square foot spec office building under construction, remains unleased -- leased and has certainly been set back in terms of timing of lease-up with the pause in overall office leasing during COVID. But we remain, and in fact, are more optimistic about its leasing prospects than we've been since COVID hit and are encouraged by the office-centric back-to-work comments made by the Silicon Valley tone setters like Google, Amazon, Apple, Netflix there. These and others are all hiring in the South Bay and are showing a heightened desire for newly constructed office space with walkable amenities and ample park.
In Southern California, our Primestor portfolio, which caters to a largely Latino population in Los Angeles, remains among the top-performing group of shopping centers among all Federal centers nationwide in terms of rent collection and property operating income compared with pre-COVID levels. Big assets like Plaza El Segundo and The Point are recovering nicely and serve the beach cities of Manhattan, Formosa and Redondo Beaches, places which are even more attractive to live in than they were pre-COVID. So I guess a somewhat obvious conclusion here is that California is as big and complex an economy as any region can be, actually bigger and more complex than most countries. And as with every major market, varies greatly within the submarkets where the supply and demand characteristics of the specific real estate dictate performance. We've got some great real estate sale there. All right. A few other proactive comments before turning it over to Dan. While always a key part of our business plan, we've turned up the heat on the number and the scope of shopping center redevelopments and repositionings that are or about to be underway. A combined capital budget in excess of $75 million over 17 projects aimed at ensuring relevant best-in-class community-centric centers in a post-COVID environment. More gathering areas, more outdoor seating, more designated curbside pickup spots, better landscaping, covered walkways, you get the idea. Everything aimed at ensuring our properties are the consolidators in their given submarket. In terms of our developments, we're really looking forward to showing off the new CocoWalk when investors are back to traveling regularly. Today, tenants continue to open where the retail space is 98% and office space 82%, underleased or executed LOI.
The initial market acceptance of this revitalized center at Coconut Grove has been phenomenal and should only get better over the next 12 months as more and more retailers open their doors. Heading north to Darien, Connecticut, we're very bullish about our mixed-use neighborhood that's well under construction here, especially given its perfect location for a hybrid New York City work model. For those of you who live near or are familiar with our project, you should start to be able to get a sense of what that mixed-use development is going to feel like as construction and leasing move forward as anticipated. Office leasing activity has picked up markedly this past quarter at 909 Rose -- Pike & Rose, where 75% of both POI and GLA at a 219,000 square foot office building is either under lease or executed LOI. Not only activity, but deal-making feels so much more productive than it did just a few weeks ago. In Assembly Row, PUMA is just a couple of months away from opening their new U.S. headquarters and welcoming employees back to work. And we'll begin to market our -- and separately, we'll begin to market our residential project there in earnest this month. Like the CocoWalk Pike & Rose, office leasing activity has picked up here, too, but not to the same extent. The Boston Metropolitan area is poised for recovery, but clearly lagged behind the others by what feels like several weeks or a month. Okay. From developments and redevelopments to acquisitions. We closed on our first acquisition in 2021 last week in the form of Chesterbrook Shopping Center in the affluent first ring DC suburb of McLean, Virginia. We paid $26 million in initial five cap for an 80% controlling interest in this 83% leased Safeway-anchored center and with a market repositioning plan and up under market in-place rents, we expect strong short-term growth and significant value add. We're also under contract and in our due diligence period for several other acquisitions that, absent negative surprises, will close later in the year. I'm not ready to talk further about them at this point, but more to come here over the next few months. Okay. That's about all I have for my prepared remarks today.
Let me turn it over to Dan, and we'll be happy to entertain your questions after that.
Thank you, Don, and good morning -- good afternoon, everyone. Good evening. To echo Don's initial comments, we have been the beneficiary of the broad-based recovery that the entire open-air retail real estate industry has experienced in the first quarter. We significantly outperformed the quarter, reporting FFO per share of $1.17, up 3% sequentially from 4Q and well ahead of our internal expectations. We went from the dark days of December and January, where government-mandated shutdowns in our markets impacted over 90% of Federal's assets and we experienced weaker consumer traffic and collections than prior months, to 90 days later, where, after another round of PPP supporting our tenants, successful vaccine rollout and a reopening of our markets, all make things seem somewhat sustainable. Given this increased stability, we were able to beat our internal forecast by higher revenues and POI, broadly from higher collections than forecast both in the current period and from prior periods as well; less fallout from small shop tenants than expected; higher term fees and percentage rent and forecast, offset by higher property level expenses, primarily due to snow. Positive trend in COVID-19 collectability reserves continues as we had just $14.8 million in the quarter, down 20% sequentially versus 4Q. We expect that progress to continue over the course of the year. $10 million of that amount is driven by our strategic decision to be more accommodative with our tenants. More on that in a moment. We continue to improve on collections, achieving 90% for the quarter, steady progress despite weakness in January due to the aforementioned shutdowns. Our strategic decision to be more accommodative to our tenants differentiates us from many of our peers. In our disclosure, you'll see negotiated abatements in the form of temporary percentage rent and other arrangements, totaling $10 million or about 5% of billed rent for the quarter. That accounts for roughly 50% of our uncollected rent.
Those agreements are scheduled to burn off over the balance of the year and into 2022. Combined collections, deferrals and abatements totaled 96%, leaving about 4% of our billed monthly rents unresolved relative to the steady-state pre-COVID 1% to 2% low. Another area where we outperformed our forecast is occupancy. Our tenants have demonstrated surprising resiliency for a combination of better-than-expected renewal activity and fewer tenant failures. Our leased occupancy metric stands at 91.8% at quarter end, and our occupied metric dipped below 90% to 89.5%, both stronger levels than we predicted to start the year. Our leased-to-occupied spread has increased 230 basis points and represents roughly $20 million of PR upside in the future. But given the strong pace of leasing activity, my gut tells me that spread should grow in the coming quarters. While we still expect continued pressure on our occupancy over the next quarter or 2, we do not expect the trough to be as deep as previously feared as continued leasing activity and volumes we have achieved over the last three quarters, plus our strong forward leasing pipeline should set us up for a more pronounced growth in '22. Now to the balance sheet and an update on liquidity. We ended the first quarter with $1.8 billion of total available capital comprised of $780 million of cash and an undrawn $1 billion revolver. We amended our term loan in April, pushing the maturity out to 2024 with the option to extend through 2026. We reduced the spread from 135 to 80 basis points over LIBOR and paid down the loan balance to leave $300 million outstanding. We completed the sale for $20 million of our Grand Park Plaza land parcel to a regionally based townhome developer. Please note that we do have a participation interest here, which could provide some additional upside given the strength in the suburban DC housing market. We have further solidified our well-laddered maturity schedule with only $125 million of debt maturing between now and mid-2023, all which is secured and is earmarked for repayment from cash on hand. This will increase our unencumbered pool to 92% of EBITDA.
And lastly, as we have done programmatically every year since 2011, we sold common equity through our ATM program, $124 million at a blended share price of $105 in start of the year. Our remaining to spend on our $1.2 billion in-process development pipeline stands at just over $360 million. As we have throughout the past year, we sit with significant dry powder. Now on to guidance for '21 and '22. Now please keep in mind before I start that there is still a high degree of uncertainty in our forecast given the continued impact of the pandemic on our business. But with that being said, we are providing 2021 guidance in a range of $4.54 to $4.70 per share. Despite a strong first quarter, some of that outperformance is not expected to be recurring. Let me be a bit more helpful. Think of 2Q roughly flat to 1Q at $1.15 to $1.20 per share. Now the second half of the year will be negatively impacted primarily from the delivery of our large residential project at Assembly Row due to the negative POI during lease-up as well as reduced capitalized interest. As a result, figure the third quarter at roughly $1.10 to $1.15, and the fourth quarter back towards the first half's run rate of $1.15 to $1.20, which gets you to the midpoint of our range at $4.62 per share, a $0.10 increase from the 2021 guidepost we provided on last quarter's call. Assumptions behind this guidance. Comparable growth of roughly 2% as we expect some choppiness over the next quarter or 2, and we do not expect to have term fees in 2021 at the same levels of 2020 or 2019, which were both north of $14 million. Please note that comparable growth as a metric continues to have limited utility in this environment. Collectability metrics should improve over the course of the year, but will not return to pre-COVID levels until sometime in '22.
As discussed, we expect lower occupancy levels in the next quarter or two before stabilizing later in the year, but remain optimistic that it will not be as bad as previously viewed. Targeting a trough at 88% range for occupied percentage with a leased percentage remaining above 90%. G&A will average roughly $11 million to $12 million in the quarter. On the capital side, we project spend on development and redevelopment of roughly $350 million to $400 million. The contributions from our large development projects will be modestly negative in 2021 as POI from CocoWalk's lease-up will be more than offset by bringing online the Phase IIIs for both Pike & Rose and Assembly Row, including the aforementioned resi building, which, as I mentioned, are initially dilutive during lease-up. We project another $150 million of opportunistic equity issuance on our ATM over the course of the year, and as our custom, this guidance assumes no acquisitions or dispositions over the balance of '21. We will adjust those as we go. However, our recently acquired Chesterbrook shopping center, demographically strong McLean, Virginia is included in these numbers. For 2022, we are providing a range of $5.05 to $5.25, which represents close to double-digit FFO growth in 2022. This is being driven by lower COVID-19 collection challenges as deferrals are repaid and abatement agreements earn off, the expectation of growing occupancy levels back into the low 90s and stronger contributions from our development pipeline as leasing activity more meaningfully translates to POI. More detail on 2022 as we get further into the year.
And with that, operator, Please open up the line for questions.
[Operator Instructions] Our first question is with Sameer Khanal with Evercore ISI. Please proceed with your question.
Hey, good afternoon everyone. Don, can you provide some color on the guidance for the year? Mainly, what are you assuming to get to the low end here the 450?
Well, I think there's a fair amount of uncertainty still as we're, I think, relying upon, I think, better performance for PPP money and so forth. Let's wait and see how well our tenants do when -- later in the year to see how well they perform without PPP money and so forth. I think that the expectations that, that cash collects generally kind of are consistent with where we are. We have more weakness or weakness in occupancy where we're probably at the lower end of the range, closer to the 88% is a driver there. And then it's also how does continued lease-up perform over the course of the year.
Okay. Got it. And then I guess, Don, for my second question is on transaction. I mean, how do you think about your acquisition strategy today sort of on the other side of COVID? I mean do you find yourself targeting kind of non-gateway markets given the migration trends we've been seeing? Or it's sort of the same as what you've done, kind of are you targeting sort of close to markets at this point?
Yes. No, Samir, it's a great question. It's -- there's a number of things that have become really clear [indiscernible] COVID, from my perspective. And that is the migration that is so talked about is largely from the city to the first ring suburbs. And so when I sit, I see what is happening in the places that we're at, I know that we're going to continue to invest in those places for all the reasons that we felt good about them for all those years. So the first thing is, you should feel -- you should understand that Federal is very committed to the markets that we're in for future acquisitions. The second is -- it's an interesting concept. I've talked in the past about Arizona. I've talked in the past about south and west acquisitions. But you know what that's mostly about is the reality that for stuff that we want, and that will not change, it is the high-quality stuff that has for leasing and redevelopment potential.
We need a few more ponds to fish in, if you will, because we all are in just seven or eight markets. And it is pretty clear that markets like Phoenix and Scottsdale, markets potentially like Dallas, maybe Atlanta, we'll see, certainly, South Florida have the similar characteristics to those markets that have worked real well for us.
So the stuff that we've got tied up that I can't give you too much on, I can tell you one of those assets are in the existing markets that we're in, one of those markets is a new one in terms of the Southwest, as you might imagine. So I hope we get both of them over the transom there. But really what that's about is when you invested in Federal, You invest in Federal to look for those markets with high barriers to entry, lots of jobs, great education that includes the ones we're in. And yes, it includes a few new ones, potentially over the next several years. So try and think about it that way.
Thanks so much.
Our next question is with Derek Johnston from Deutsche Bank. Please proceed with your question.
Hi, everyone. Thank you. Okay, it's no secret that you have the highest ABR among your property type of peers. Would rent slowing a bit lower actually be that bad of a thing given the significant spread of peers and, of course, acknowledging the quality? So I guess the question is, how do you look at balancing occupancy and rent growth in this emerging post-COVID environment?
Well, it's a great question, Derek. And as you think about it, the conversations about rents has to be talked about in the same conversation as productivity. When you think about what the occupancy cost is for a particular retailer, that retailer is looking to make money and create value. And that's going to be very dependent upon what it is that they do in top line, either on-site or in their total business as well as the cost structure throughout the whole business. So I know what I just said is obvious, but it feels like we sometimes so focused on the absolute rent number, we don't focus on the business that effectively is there that is creating value for that particular company, owners and shareholders. So from a rent perspective, I can tell you, I feel pretty darn good that we will actually have enhanced demand. We have seen enhanced demand at our properties.
Now that doesn't mean you won't make accommodations, if you will, during COVID. We certainly will and have demonstrated that we'll do that probably to a greater extent than others are willing to do that. But that's only because we have great faith in our properties going forward. So we're always going to try to get the best economic deal that we can that works for that particular tenant. The key is to find the right tenants, to find those tenants that are those that can do the volumes and those that cannot just pay the highest rents, that can do the volumes to create the synergies within a shopping center that make the whole effectively impacted by each of the parks.
So that's not a -- I don't know how to answer your question in terms of is it so bad if rents rolled out. I don't think about it that way. We think about it as from a shopping center perspective, how do we make the overall total sales of that shopping center go up. And -- because if that happens, whether, again, it's online or a combination of online or in-store, if that happens, rent is a byproduct of that. It's not the leading indicator.
So when you go for a lead indicator, it feels to me like you're competing in a business based on being the cheapest guy. That's not a business I want to have anything to do with running. That's no fun. I've got to be able to be the guy that you want to come to because you can make the most money. And if all you're looking at is cheap rents to be able to do that, I think it's pretty myopic.
Thanks, Don. Very helpful. Hey, I'll pass the baton. Thank you.
Our next question is with Alexander Goldfarb with Piper Sandler. Please proceed with your question.
Hey, good evening. So two questions. First, Don, there've been a number of stories, articles, etc., on labor shortages caused by basically people who would, I guess, back restaurants are paid more to sit at home with the extended unemployment than actually taking jobs. Across your portfolio, are any of your sort of lifestyle tenants, your experience with tenants who would -- are heavy on the labor front as part of their offering. Are any of those tenants expressing to you an issue with the ability to hire labor or, across your tenants, they're not having -- they're not seeing that impact?
Oh, no. Well, first of all, there's two questions there, Alex. First, are they expressing it to us? No, not particularly, but I don't know why they would. And that's not the same question. Are they experiencing problems in getting labor? And the answer to that is obviously yes. But I don't need to know that as a landlord because it's not particularly germane to me as a landlord in the short period during COVID. But it's absolutely impacting. I bet you, most people who have either been to a restaurants, not even restaurants, to a store, and kind of seen the understaffing that persists right now and the quality of the labor force, it's a problem. I would not candy coat that one bit.
Now it's good to be the landlord effectively because we're talking about commitments for the long term, and I do not expect this to be a persistent in terms of being able to find it. But right now, with unemployment where it is, with the state of mind that kind of -- the country has been in during this, I absolutely believe that there are numerous businesses, not just restaurants that are struggling to find qualified help.
Okay. And then the second question is, you laid out guidance for this year and guidance next year. So I don't think we are expecting the 2022. But Don, knowing you over the years, you don't lay out anything unless you're absolutely certain that you could achieve it, which then suggests that your real 2022 number is above the 525 that you laid out at the top end. So just help us walk through why we shouldn't believe the real number is better than the range that you laid out.
Well, I guess the basic reason is your logic is flawed. I mean, number one, I'm certainly not laying something out because whatever your words where they are absolutely positive, I seriously do. I mean, here's where we are. We've got lots of accommodative deals that we'll be burning off. We know that when they burn off, they will return to rent. Now hopefully, those tenants will be able to pay that full rent and continue to do that.
We know that certainly, we've got development projects that are being delivered. Of course, when you deliver a big residential building there's dilution associated with it. I mean we all know that. That's how it works on your way to creating a bunch of value there. We know that the volume of leasing that we've already done and rolling into what income stream that's going to produce is pretty predictable. And so kind of like I said on the last call, Alex, '22 for us is, in many respects, more predictable than it is in '21 for any particular period. And I think that's still hangs out there.
Now to the -- again, here comes the bridge from those comments to -- and therefore, we need to flow through the numbers of 2022 that we've laid out, I don't know how to get there. I mean, there is -- we tried to put out a range there as best we see it today based on those things going away, the accommodations going away, the developments coming on, their impact, positive or negative, associated with it and the leasing that is being done, those three primary things. And we get comfortable that for that period of time, we should be in that range. Lots of things can go wrong from there, and a few things could go right.
So you're right. I mean, let me tell you, we're going to do all we can to blow through those numbers. But please don't take that as a de facto given that, that can happen because I don't have that much of a crystal ball. And I don't know if that's helpful or not, but just the way you characterized it didn't suggest the way I feel.
Well, no. I mean, it's a positive for you, right? You guys had in pre-COVID had tended [ph] raise, and that was the hallmark for you guys. And it's based over time of your track record, which is kudos to you, right?
Look, I appreciate that. And you can bet that that's what we will try to do all the way through. But it is -- I just didn't want you to take it as far as it did with respect to the undoubtedly, this is what's going to happen because you'd be a whole lot better than I am or any of us are if you'd be able to be that precise.
Okay. Thank you.
Thank you.
Our next question is with Katy McConnell from Citi. Please proceed with the question.
Great, thank you. Well, first of all, we really appreciate the added disclosure on both 2021 and 2022 guidance. So just digging into the drivers a little more, can you provide some goalposts around how much development completion and lease up is contributing to the range each year? And I assume you got one of the main drivers of the wider range in 2022, in particular.
We focused on 2022 or 2021? 2021, the contributions to -- from development are going to be actually negative as we at Highland. It's actually going to be -- what we're focused on is on '22, we've got primary drivers being the two big buildings at Assembly. They will begin to contribute in 2022, but will not fully contribute until 2023. Cocowalk should begin to stabilize in 2022. And we did a fully -- a full run rate at some point over the course of the year, as should, at some point, the building here at Pike & Rose. I think that there should be probably contribution in and around, an additional 10 million of additional incremental relative to '21 contribution over the course of the year. But Katy, your question is dead right. The -- if you think about us delivering -- Assembly is an easy one to understand, right? We're going to deliver this year a big residential building. The pace of lease-up, how you get through 500 units is going to determine, in some respects, how quickly the dilution burns off when you start being accretive, what kind of rents we're getting, etcetera.
And there's a lot of question around how that's going to work. I don't know that we're going to be doing 20 to 30 units, say, a month or we're going to be able to do 40 or 45 units a month and at what rent. So if you kind of roll that through a model, you've got a -- just from that big project, you've certainly got range. But our range for 2022 is way beyond that. It really has to include some basic assumptions on lease-up of the portfolio. As you know, as Dan said, we'll be at 88% or 89% later this year. We've got to get that back up to 92% or 93%. The pace by which that happens is going to very much determine that. But I do feel great, frankly, about the -- not only the direction that we're headed but because of the volume that we're doing and the rate of the progress we're making on the development that while we can't be precise with respect to exactly how that income stream is going to come on, we certainly know what the direction of it is. And within a range that I actually think is pretty tight, given the fact that we're nine to 20 -- 18 months out, I think it's pretty tight. And so all of those things considering, I think we got a pretty good -- can give you more visibility than we've been able to give you since the beginning of the pandemic.
Don, it's Michael Bilerman. I too wanted to thank you for giving us a lot of the details on the guidance and the actual numbers. Is it -- you can jump down my throat if I ask you to put that in the supplemental each quarter?
Michael, that's a bait and switch. You had Katy start and ask a question. And then you jumped right in there. If I knew that, we would have put you at the end of the line for Pete's sake.
Oh, geez. I thought we were friends.
I'm just kidding, for Pete's sake. No, you can certainly ask that. And that is certainly something that Dan G and Melissa Solis and the financial side of this company will certainly come to a conclusion with the help of our general counsel as to what should go in there. So I don't have anything to say with respect to that today, Michael.
Well, it would be great. That way, there's no confusion over the numbers. These conference calls could take 10, could quickly be heard of as a 15 or something. But my question was, you talked on the call earlier, and you focused on California. You spent a lot of time talking about Santana Row and Prime store. Was the focus more so on what you have today? Or do you want to highlight California as an area of the country that you wanted to deploy incremental capital outside of Santana Row and Prime store? I just wanted to know sort of the background to it.
No, that's very fair. And the answer is -- the short answer is both. And so I hope we are making incrementally new investments in California. But you know why we brought that up, and I spent so much time on that?
So Berkes and I have been going back and forth on -- I'll send out an article to him that I read. He'll say it's only telling half the story and yell at me. We would -- we sit there and debate how important California is as a market today and where it's going to be tomorrow. What are we really seeing with respect to leasing demand? Is that changing? Is the state -- is everybody moving to Texas? How is this all really playing out. And we really came down to this very good understanding that the headlines are far more exaggerated than effectively the supply and demand characteristics of the markets that we're in that we can certainly talk about with knowledge because we're out there doing those leases.
And as a result, the ability to find other places where we would like to continue to invest. We do have another one that we're looking at really, really closely in Southern California that I hope we can get over to pull over the transom because I think the long-term opportunity is amazing. So I wanted to go through that really as a headline buster, if you will. And I do think it's a great microcosm of -- and a predictor of what you will see as the Massachusetts economy opens back up. It is interesting, if you look at weather. So as you head north, you can say, okay, Pike & Rose is behind Florida, but ahead of Boston. Austin is behind Pike & Rose, and we can see where it's going relative to California. The warmer it gets, the nicer the weather, by far, seems to be the biggest predictor of traffic levels and sales.
Okay. Thanks for the color, Don.
Thank you, Michael, and we are friends.
I know. Take care.
Our next question is with Greg McGinniss with Scotiabank. Please proceed with your question.
Hey, good evening. First, Don, on development, maybe residential more specifically. I understand there's some uncertainties on the speed of residential lease-up at Assembly Row. Just curious what the expected stabilized yield is there. And then also, how do you feel about starting additional residential development at this time? And when might you break ground on future development phases?
So Greg, that's fair. The stabilized yield, I don't feel differently about. It might take another year to get there? Sure. I mean, the greatest -- the best part of residential, and I'm sure you hear it on every residential call, is the same thing as the worst part of residential for 1-year leases. A little bit less, a little bit more.
So it's not like you build something in a great market, but at the long time and you're stuck in purgatory forever, as happens on the retail side and certainly happens in the office side. And so I know today, it is, as we've talked about as you've indicated here, it is our toughest market from a residential perspective, to be able to make progress. And that is where we're opening up a new project. So there is less predictability in terms of that timing and where we go. I do believe we'll be where we said we'd be as upon stabilization, even if that stabilization is later than obviously, than it would have been pre-COVID. We'll have to see, we'll have to play that out.
In terms of investing in residential in other places. Sure, we will. I still feel -- I feel very good about that at our mixed-use properties. Again, not stand-alone, but where they are at our mixed-use properties. The real question there is what are we going to do -- are we going to be able to make the number of work with construction prices, which are absolutely, at this point in time, out of control. And whether that is a long-term phenomenon or a short-term phenomenon is to be seen.
Clearly, supply chain of materials has been completely disrupted in the last year globally, and that impacts prices. So we have to see where that will go. But at Bala Cynwyd, for example, in our shopping center there outside of Philadelphia and Lower Merion Township, we're leasing up our small project, and we really want to do a small project there as a precursor to see what kind of demand we would have for a larger project that would include residential on the Lord & Taylor site that is there.
One of the best pieces of the land in all -- in the whole Federal portfolio. And I am extremely bullish on what has the initial demand on -- even during COVID of the small project that we did there. And on the township and the design process of what we're building. So it comes at -- we're an economic company. It comes down to can we make money? And can we add value to the extent we can with residential in our existing properties, we will still do that.
Okay. And one for Dan here. On the accommodative tenant agreements that you were talking about, Just curious what the total magnitude and cadence of those agreements are going to be as they burn off, I guess, later this year and into '22? And what types of tenants were those provided to?
Primarily, we've talked about this on calls before. I mean, we've made accommodative with a fair amount of restaurants operating during COVID, tying kind of doing a greater of fixed rent that's less than their contractual rent for a temporary period of time or a percentage of sales. But we'll see how well they burn off in particular because it depends on how -- whether or not we get the upside of the percentage rent. And then it should burn off over time ratably. It's not -- those accommodative agreements are not all $10 million of abatements that we had during the quarter. But that should burn off ratably probably over the next, I would say, 12 to 18 months.
Okay. So these are not new agreements. It's just continuation of ones that were already in place?
Yes, correct.
Okay, thank you. Thanks for the time.
Our next question is with Juan Sanabria with BMO Capital Markets. Please proceed with your question.
Hi, thanks for the time. I just hoping to -- if you could give us a little color on the leased versus occupancy spread. You kind of talked about a $20 million number. And how much of that is truly additive versus kind of musical chairs in between tenants or space? And how you think the timing of that in terms of coming online?
That's primarily -- is additive. Not a lot of musical chairs, not a lot of moving around the tenants; it's additive [ph].
Could you say that one more time? Sorry.
Juan, I was just -- you'll see that starting in the second half of '21 and '22 in terms of the timing.
Great, thank you. And then on the leasing side, you had a huge number on the leasing spread for new deals, 18%. Anything unusual in the numbers in the quarter that kind of skewed that? Or Is that kind of how you're thinking about future volumes for the balance of the year maybe?
No, I don't know how it will come out from the rest of the year, but I can tell you, there's always a few deals in there that are especially good, including a couple that we had this time up at Assembly Row. But I think that's kind of what you see with us. There's always a couple of good ones in there. And just -- and there might be a -- there's a quarter where we got a couple of bad ones in there. But overall, I kind of like the trajectory that you see.
Thank you.
Our next question is with Craig Schmidt with Bank of America. Please proceed with your question.
Yeah, thank you. I wanted to talk -- I mean, the increase in the leasing volume, I know you talked a lot of new lease, but are they more essential? Are they more discretionary? And are you seeing new names to your portfolio? Or are these people that have properties and are looking to expand in your portfolio?
Yes. Let me start on that. I'd love either Jeff or Wendy to add on to my point, but -- to my comments. But a couple of things, Craig. The thing that keeps striking me throughout this process is how broad-based the leasing has been. I've been looking for places to say, okay, here's a category that is very active right now. And this other category is not doing deals. I'm not seeing that. I'm seeing this broad-based.
Now what I know is the number of deals that you're seeing at some of like the essential -- sorry, the nonessential, the lifestyle type projects are particularly good. And I think that's a factor or a notion of, there's a -- I believe there is a groundswell that is becoming more and more accepted that these first-tier suburbs with places that are -- that can be more than just your shopping center that are effectively an integral part of your life are a place to be. So what we're really trying to do and seen some really good success there is for getting new leases from tenants that have been not -- are new to market and we've seen that in a large way at Santana, I know Jeff can talk more about that. We've seen that in a huge way on the Pike & Rose, Village at Sherlington, First Row suburbs outside of Washington, D.C. for new food concepts.
Certainly, for some gym concepts that have been newly capitalized along the way and even apparel. So this is about as broad as it's been. We certainly have grocery deals in there, a CVS deal in there along the way. But it's -- I'm most excited to tell you the truth, not about the boxes. The boxes are fine, and they've got a lot of leverage and they're the national companies that will pay the rent and isn't that exciting? It's really exciting when you're killed by COVID, not particularly exciting going forward. And there's not a lot of growth in it. It is kind of what it is. I'm excited by the small shop potentials at consolidating places that are either mixed use or dominant in the dominant shopping centers in their markets because that's where I think there'll be value to add significantly over the next few years. Jeff or Wendy? Craig always asks the best questions.
I know. And Craig, I appreciate the question because truth be told, with the amount of activity that we've had this quarter and what's bubbling up, I was a little eager to jump in, in terms of leasing. So I appreciate it. Very true, broad-based is what certainly we're seeing all over the East not just at lifestyle centers, certainly, but our community centers, our neighborhood centers, our power centers.
As Don said, we maintain a strong, steady and healthy level of anchor activity, which has been very good and supportive and kind of continuous. The spike had been on the smaller shops, all the way from the mom-and-pops from Taco Bambas which is a coveted taco player in Northern Virginia that just signed a deal with us in Congressional in Rockville, to Athleta, to Room & Board, to American Eagle to Gregory's Coffee who's joining us in Long Island. So new names.
In addition, where we had strong tenants like a Starbucks, we're doing several deals with them where they're taking their focus on these first-ring suburbs and they're investing and we're investing in creating some opportunities for them that would also maintain and provide a drive-through. So that's kind of what we've done for the quarter. In conjunction with that, what I'm also pretty excited about is what I see in the pipeline. And that is, again, broad-based all the way across our property formats and robust. So not just in renewals, but in net new deals. So I'm very encouraged by what I'm seeing lately.
Yes. And Craig, really same on the West Coast, whether it's up at Santana within the prime store portfolio or some of our other Southern California properties, both on the new deal and renewal side. And then both in, let's call it, the more traditional neighborhood and community center-type small shop like Wendy's talking about or the more, let's call it, lifestyle-oriented tenant like we'll see it at The Point where we did an every deal or up at Santana where we've done a number of new market clothing retailer deals, which we've mentioned on prior calls. And restaurants. We have a restaurant under construction, first unit out of San Francisco. We have another restaurant under construction that's new to market. Notable chef, it's the fourth restaurant that he's opening. First one in California.
So really encouraged not only by what we've accomplished so far in, let's call it, the last three quarters or so coming -- as we started to come out of COVID. But if you look at the pipeline of deals that are being negotiated right now, that's very strong. I couldn't be happier about that.
Great. Thanks for the detail in that. And then I guess just one other thing. The big difference for me between fourth quarter and first quarter has been the change on the impact from government restrictions. I think January was described earlier in the call, the dark day. And then we look at your ADR, open at 98% in April 30th. How much of February and March were closer to that April performance versus the January performance?
That's a great question. And overall, I -- it's a pretty straight line. And again, I kind of think the straight line that took you from January to April, it's heavily weather-dependent, too. I mean, look, the issue is if you say, what do I worry about? I mean, the government stimulus has clearly been helpful. There will be more to come. That's clearly helpful. But for businesses to be long term viable, those government restrictions have to go away and those businesses have to see if they can survive long term. That, to me, is still a question mark, right? You can't have a business that's 25% open, paying rent because the stimulus is allowing them to pay rent. But the stimulus goes away, you've got -- you can't make any money at 25% or 50%.
So it's really -- that's what is yet to be seen. The encouraging side of that drag, and it's happened all the way through. It's the traffic that has come out has been impressive. And so these people have the opportunity to buy and to eat and to spend, I believe they will. At least those retailers will not have much of an excuse if those folks are there and the government restrictions were gone to be able to make money in their businesses.
Okay. And just one quick one. Just given the acceleration of the business, when might Federal be able to cover their dividend with operating cash flow?
You should expect 2022. I'm not sure which quarter yet in 2022, the third or the fourth quarter. But later in 2022 is where we hope to be there.
Great, thank you.
Our next question is with Haendel St. Juste with Mizuho. Please proceed with your question.
Okay, thank you. Good evening out there. So first, a little bit of a follow-up on question on leasing. The blended rents in the quarter were up 9%. I'm curious how that compares to your mixed use versus more anchors. And also what is your sense of how that plays out, that dynamic, that spread perhaps, given the demand and pricing trend you're seeing in the mixed-use and gross rented portfolios? Thanks.
Haendel, you may have to do the second part first. So in the first part of your question, We did better in the mixed-use properties in terms of the new deals moving forward than we did in the more basic shopping centers, the essential stuff. And that's kind of in line with what I was talking about a few minutes ago. But the second part of your question, I just didn't get. I don't think Dan did either.
Sure. No, I was getting at sort of what you were seeing within those two segments today, comparatively to the 9% overall for the portfolio. Then what's your sense of how that plays out over the near term, given the demand and pricing trends you're seeing at in each piece of the portfolio.
I do have a point of view on that. The -- when you say near term, I'm not sure if we're talking about the next three quarters or so because the answer from my perspective then is I don't know. You'll see -- it will depend, as I said earlier on the call, to the deals that got -- the particular deals that got done in a particular quarter as it kind of always does. But longer term, I would expect to see better growth from the 25% nonessential part of the company than I would the 75%. But the 75% is critical to not only the stability of the company, but some level of growth so that the remaining 25 kind of takes that and builds on. That's how we look at it and see it over the next, let's say, three years. I don't know, Jeff or Wendy, if you want to add anything to that.
No, I think you've got it, Don.
Okay. Fair enough. A question then maybe for you, Dan. Can you talk about the restaurant and movie theater rents, how they trended in April and what that implies for your full year '21 guide? And then maybe also remind us what percent of the outstanding reserves are tied to those two industries. Thanks.
I didn't quite get your question, Haendel. You're a little low.
I asked if you could talk about restaurant and movie theater trends, how they trended in April and what that implies for the full year '21 guide. And then also, if you could remind us what percent of the outstanding reserves are tied to those two industries.
I would say our reserves, probably about 40% of the reserves. I'm just getting -- it is a specific number. I don't have it in my pink slips.
You may want to do that offline.
Yes. We need to take this offline. I'm happy to answer it following the phone call, Haendel. That's a detail we didn't prepare for.
Got it. Got it. Maybe I can substitute a different second question. I don't know if I missed it, but did you guys disclose the cap rate on the gross percent you acquired in Virginia and maybe some thoughts on the long-term opportunity and returns there?
Five going in. You should expect that to be at least a six and three quarters and maybe a 7% within just a few years.
Got it. Is that from occupancy or occupancy plus rents?
Yes and yes. Primarily rent. To the extent we get to remerchandise the shopping center, which we very much expect to do just to be able to provide McLean, Virginia with the kind of product that we'd like it to, it should be a great addition. You've been in a Wildwood in Bethesda, right? McLean needs one.
Yeah. Got it, all right. That was all for me, thank you.
Our next question is with Mike Mueller with JPMorgan. Please proceed with your question.
Yeah, hi. Few of them here. First, Dan, I think you talked about prior period rent collections that were in the number of benefit this quarter. Can you throw out what that number was? And then also, I know you don't put acquisitions in guidance for '21 or '22, but can you help us think about the cash on hand? You're raising incremental equity. You talked about $350 million to $400 million development spend this year. How significant could acquisitions be? And to the extent they're not, I mean, what development spend looks like in 2022 just thinking about burning through the cash?
Yes. Sure, I'll do the two questions together. I'll take the first one quickly. We had about $8 million of prior period rent. We had projected some prior period rents to be paid. That was a bit more than we expected. We've had prior period rents in the second quarter and the third quarter. The third quarter and fourth quarter of last year and so forth, it's hard to predict kind of what that level will be on a go-forward basis this year. So that's a little bit also some of the variability what we're expecting, not much prior period rent we had to do collecting.
And on the second piece with regards to the cash. Look, we're trying to keep a -- we've got spend that we're expecting this year. We've got some opportunities from an acquisition perspective in the quarter. We had $800 million and an undrawn line of credit. I mean, we have plenty of dry powder. And I think we really can be pretty tactical with regards to how we deploy that capital. And we've got -- that's not a concern for us at the moment in terms of how we pay for the opportunities that we'll see over the course of the next 12 to 18 months.
Like we got about $170 million left after this year on the existing developments that are underway now. And I think that -- I don't know it's about $250 million or so left for this year on our existing, maybe $300 million.
Yes.
So if you think about $450 million or some kind of number like that to finish up the existing developments that we have, again, the $800 million on the -- of cash on the balance sheet. And so the acquisitions that we're looking at, I don't -- I'm not ducking this. I simply don't really want to give you a size of that right now because I don't want to -- I don't want people to know what assets we're looking at right now. So the -- effectively in two different markets, nothing crazy big. So don't think that certainly enough that the -- plenty that the cash could handle. So let me leave it there, if I can, so I don't get in trouble with Dan for purpose.
Got it. Yeah, no. That's good. That's helpful. Thanks.
Yup.
Our next question is with Ki Bin Kim. Please proceed with your question.
Thanks. You already discussed some of the tenant demand you're seeing in the house broad-based. But I'm just curious, like high level, are you getting the types of tenants that you want, the credit quality that you want? And how high on the pedestal is merchandising mix in an environment like this when you have inventory to sell?
Ki Bin, it's -- I mean, that is the secret sauce of a business, right, our business, how we balance occupancy with merchandising mix with the credit of that particular tenant. So the way we look at it, first of all, gosh, you're never going to convince me that merchandising is not among the most important things to do in a retail environment. We all know that even after the pandemic, there's too much -- there' too many choices for places to shop out there. We've got to be the one of choice if we're going to have any possibility of pushing rents, which we want to do.
And so what we're -- so just like the $75 million that we're spending on redevelopment projects, which are all about much more than new rooms and parking lots. These are about places to hang so that you can be there in the morning, at night or long-term periods or short-term periods to use this as part of your life. If you do that, then we -- the biggest part of that is getting the right tenants that let you have that type of lifestyle. What we've seen is great demand from a very wide variety of tenants like that. I think Jeff Berkes has talked about them.
Now when you're talking about restaurants, is the credit great in a restaurant? No. Is the fact that 110,000 restaurants in the country went away during COVID a positive? Yes. Because supply/demand is reaching a much better balance in that very important category for the type of assets that we have. And I -- frankly, we're doubling down on restaurants. I love it. I love the idea of being the consolidator to have a place where those key gathering places have those choices. And when you go out and spend your time, I think you would agree. You may worry about who's going to fill a P.O. box if that business doesn't work three years from now, five years from now.
But I think we've proven -- I think the country has proven that restaurants, outdoor dining is here to stay and effectively making -- we've got the places for that particular group. We also have the places, and we've been seeing it in terms of those digitally native brands that want only a few places to make sure that their brand is appropriately reflected. We've gotten more than our fair share of that, certainly at the Road property.
So I think it's -- going back to where we started, there's a lot of -- it's not that there's a lot of choice, if you will, for any particular tenant. It is that the best tenants do seem to be coming, and we get a shot at them. And if we get a shot at them, we got a shot at creating the best place. And that's how we can push rents and create value. So from my perspective, very encouraged by what we've seen over the last nine months, frankly, in terms of our places and demand at our places.
Ki Bin, it's Jeff. And just to kind of add on to what Don is saying. One thing, and we've discussed this on past calls I think. One thing that's different about this crisis than 2009-2010 and even if you dial back to the tech bubble bursting in Silicon Valley, right, when we're delivering first phase of Santana Row is there is a ridiculous amount of capital on the sidelines. And whether it's money to fund new restaurants or new restaurant concepts, it certainly wasn't around when we delivered Santana Row back in the day, which is why we had to invest in those restaurants ourselves.
We're seeing this time just completely different availability of capital for new business and new business formation, particularly in the restaurant category. We're also seeing it in the fitness, and I would call it the healthcare and wellness segment, where we've seen a few new concepts come that are very well backed, very well financially backed. And a couple of fitness operators that didn't have legacy issues for whatever reason, that have invested a ridiculous amount of equity, capital in the fitness sector. And really a lot different from that perspective than prior downturns. So we're not relaxing our credit quality standards at all. And quite frankly, we haven't needed to.
Thanks for that. Very colorful answer. Just one quick one. Are there any changes to some of the leasing language that gives kind of more hours? Whether that be sales based?
So in terms of our contracts, I mean, it depends. So if we're talking about tenants that we have that have a proven history with us and strong sales and we see them as a key fundamental of the places and the environments that we want to continue to build upon with that foundation, we -- as Dan had said, we had mentioned that we can be creative, provided that it's going to benefit the tenant and that we're going to be able to share in that upside as well. As it relates to other tenants going forward, new coming in, It depends on the center and it depends on the concept.
We sometimes don't mind, depending upon the capital allocation if it's very limited or 0 where we can make an opportunity for a tenant, they can try us, we can try them and see how that marriage works. And we maintain control over the shopping center. So that can oftentimes be a win-win. So it really depends. I'm sounding like I'm not answering you, but it really depends on the operator. And it also depends what we're seeing more today than we've seen in the past is if we had choices, right? If we have choices between two great operators, and that happens, it's happening more often than not now. So all those factors come into play as we continue to kind of emerge post-COVID.
Okay, thank you.
Our next question is with Linda Tsai with Jeffries. Please proceed with your question.
Hi. Just to clarify, [indiscernible] prior period rents in 1Q, were those from both deferrals and cash basis tenants paying back?
It's cash basis and it's paying back.
Okay. Got it. And then so within guidance, there's some assumption, some level of that baked in as well?
Exactly. Exactly. So, a low range for the lower end, yes. And maybe we continue on. We've seen in the third, fourth and this quarter, reasonable prior period rent collections. We don't expect that to continue at the pace that we've had. We expect that certainly to burn off. And so we have different assumptions in there. But yes, we don't expect $8 million every quarter for the balance of the year. That should shrink to a much smaller number by the fourth quarter.
Thanks. And then your comment on Bala Cynwyd as the precursor to gauge demand for larger residential projects, how is progress at Bala Cynwyd versus expectations?
There in terms of -- so let me actually answer that, Linda, really the right way. Everything stopped in terms of demand between April of 2020 and November, December of 2020. So from that perspective, we're behind, as you would expect us to be. What I was talking about is now you look at this spring and what's happening there in February and March and April, better than we expected. So clearly, a trough and now, like the rest of the country, I guess, this renewed ability to come out and make decisions, including living decisions. And so we should be leased up fully there within the next few months.
Thanks.
Our next question is from Floris Van Dijukum with Compass Point. Please proceed with your question.
Thanks guys for taking my question. I hope David Simon was listening to your comments earlier, Don, about productive real estate generating high rents. I think that's part of his spiel as well. Wanted to -- the talk -- ask about the past due rent collection, $8 million. It's an $0.11 impact this quarter. Obviously, you -- again, you've baked in some of that going down the road. Could you quantify all of the past due rents from existing tenants that you have in your portfolio? And how much potential there is of that, that you haven't collected.
Well, we've got a receivable of how big? About $80 million. We do not expect to put $80 million. But yes, that's what the receivable is -- the gross receivable. So I mean, it could be -- that's not in our forecast.
Got it. It's just -- it's a portion of that, that you're -- a small portion. So it's like 20% of that? Is that sort of the ballpark of what I'm hearing? Is the right assumption for past due rents to be collected or is it higher?
No, it's -- I don't have that number kind of offhand. What I guess I could do is follow up with you off-line.
Okay. Okay. And a follow-up question maybe. So obviously, the ATM issuance, I think you did $87 million during the quarter and some post the quarter. I think you mentioned on the call, $124 million in total. Maybe talk about the average price and maybe the implications for where your share price is relative to your NAV as well?
Yes. Look, it was in my comments. We transacted -- sold stock at $105 million. $88 million of that was in the cash market, $36 million of that was in the [indiscernible]. And honestly, I think we're in and around kind of our estimate for NAV. Not too far off where kind of -- but hey, look, that's a moving target for us.
Hey, Floris, the one thing about us, I guess you probably -- I know you know about us, but I hope you appreciate that about us is that we try to do some every year. And effectively, obviously, we're not going to do it down at levels that are significantly dilutive. But in every year, as a REIT, we want to stay very active in acquisitions, development and property improvement plan. We want to stay very active at being able to lease to the best tenants. We want to stay very active in making sure that the dividend gets paid.
This company believes in the future and a long-term future. And when you do that, you want to issue equity in modest amounts. But each year, in each period as you can. And so doing it at $105, I think we're worth more than that. I think you think we're worth more than that. I think everybody thinks we're worth more than that. But effectively, in being in that range to be able to utilize the ATM to create some level of equity inclusion, we think is prudent and is on balance, an important part of the overall capital plan.
Thanks, Don. Appreciate it.
Our next question is with Chris Lucas with Capital One Securities. Please proceed with your question.
Hey, good evening everybody. Sorry for the long call, but I do have a couple of quick questions. Don, first, congratulations on Chesterbrook. Hard to find an asset that actually improves your demographics but you did it. And the other comment I would make is that, that could have used the Federal truck when I was in [indiscernible].
Exactly. That's why I think you should be really happy or you will be really happy when you see the growth that we generate from it. I think it's a low bar.
I would agree. The one thing that I did want to talk a little bit about is just on the apartment lease rate. Nice improvement since the fourth quarter. Just curious, was that just snapback in demand? Or would you have to do any significant incentivizing to drive that improved activity?
Significant incentivizing up in Boston. Very little activity at all in California, which is snapping back beautifully and the same here at Pike & Rose. In fact, the leader, by the way, among those three in terms of rent growth and -- or lack of rent ammunition is Pike & Roses.
Okay. And then, Dan, two quick ones for you. I'd be remiss if I didn't ask what these term fees were for the quarter.
Yes. They were flat to last year. About $2.8 million in each of those first quarter of 2020 and first quarter '21. That was above what we had forecasted.
Right. I was going to say. So have you, in your guidance for this year, have you upped your expectations for lease term fees?
No. I mean, look, I think that we've got a range at the high end of the range. And at the low end of the range, it's kind of our average over the last 10, 15 years. So figure that. We won't -- we're not anticipating getting to $14 million in any of those cases.
Okay. And then last question for me. Can you kind of give us a little more color on sort of the ins and outs of what Splunk is? The sort of timing is Splunk sort of, I guess, lease fee versus -- or how they're making up the difference between sort of when that app starts paying you rent or however that work. Can you kind of go through some of the timing issues and what -- I'm assuming it's a net neutral, but just can you kind of walk through the timing of the transaction there?
You bet. Jeff, can you take that?
Yes. Chris, I think Don said this in his opening comments, but we're made whole and there's no lapse in rent payment between when the Splunk stops and NetApp starts to made whole from that perspective.
So Jeff, I appreciate. Yeah, go.
So basically -- I was just going to say that basically, the make whole was in a cash payment effectively or NAS and that we had a straight-line receivable that we had to write off. So those things kind of netted effectively, but we added two years of term and a big number.
Okay. So that's the second quarter transaction, so less straight line, more cash. That's not a bad thing.
Say that one more time to make sure I got that.
So it's a second quarter event, right?
Yes. True.
Yes. And so -- but the net is you're less straight line but more cash, which is a good thing.
Yes, correct.
Yes. And 2Q is correct.
Okay, thank you. That's all I had. I appreciate it.
Thanks, Chris.
Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Leah Brady for closing remarks.
Thanks everyone for joining us today. We look forward to seeing you at NAREIT and please reach out to the virtual meeting. Thanks.
This concludes today's conference. It disconnect your lines at this time. Thank you for your participation.