FEDERAL REALTY INVESTMENT TRUST MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

 This section generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on February 11, 2021.  Forward-Looking Statements Certain statements in this section or elsewhere in this report may be deemed "forward-looking statements". See "Item 1A. Risk Factors" in this report for important information regarding these forward-looking statements and certain risk and uncertainties that may affect us. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in "Item 8. Financial Statements and Supplementary Data" of this report. Overview We are an equity real estate investment trust ("REIT") specializing in the ownership, management, and redevelopment of high quality retail and mixed-use properties located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, California, and South Florida. As of December 31, 2021, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects comprising approximately 25.1 million square feet. In total, the real estate projects were 93.6% leased and 91.1% occupied at December  
31, 2021
. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 54 consecutive years. Summary Financial Information The following table includes select financial information that is helpful in understanding the trends in financial condition and the results of operations discussed throughout this Item 7. and "Item 8. Financial Statements and Supplementary Data." 32

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  Table of Contents                                                                               Year Ended December 31,                                                                     2021                2020                2019                                                                   (In thousands, except per share data and ratios) Operating Data: Rental income                                                  $  
948,842
$ 832,171 $ 932,738 Property operating income (1) $
634,607
$ 545,332 $ 637,030 Gain on sale of real estate and change in control of interest, net of tax $ 89,950 $ 98,117 $ 116,393 Operating income $ 394,725 $ 289,524 $ 470,911 Net income available for common shareholders $ 253,456 $ 123,664 $ 345,824 Net cash provided by operating activities $ 471,352 $ 369,929 $ 461,919 Net cash used in investing activities $ (660,118) $ (368,383) $ (316,532) Net cash (used in) provided by financing activities $ (452,967)

$ 661,736 $ (100,105)

Earnings for common share, diluted:

  Net income available to common shareholders                    $      3.26  

$ 1.62 $ 4.61

  Dividends declared per common share                            $      4.26          $     4.22          $     4.14 Other Data: Funds from operations available to common shareholders (2)     $   434,743  

$ 333,849 $ 465,819
Funds from operations available for common shareholders, per diluted share (2)

                                              $      5.57          $     4.38          $     6.17 EBITDAre (3)                                                   $   589,792          $  501,813          $  599,567 Ratio of EBITDAre to combined fixed charges and preferred share dividends (3)(4)                                                   3.6x                2.7x                4.2x                                                       As of December 31,                                           2021             2020             2019                                                       (In thousands) Balance Sheet Data: Real estate, at cost                  $ 9,422,062      $ 8,582,870      $ 8,298,132 Total assets                          $ 7,622,320      $ 7,607,624      $ 6,794,992  Total debt                            $ 4,047,547      $ 4,291,375      $ 3,356,594  Total shareholders' equity            $ 2,663,148      $ 2,548,747      $ 2,636,132 Number of common shares outstanding        78,603           76,727          

75.541

   (1)Property operating income is a non-GAAP measure that consists of rental income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of operating income to property operating income for 2021, 2020, and 2019 is as follows:                                                                  2021               2020               2019                                                                                (in thousands) Operating income                                             $ 394,725          $ 289,524          $ 470,911 General and administrative                                      49,856             41,680             42,754 Depreciation and amortization                                  279,976            255,027            239,758 Impairment charge                                                    -             57,218                  - 

Gain on sale of real estate and change in control of interest, net of tax

                                           (89,950)           (98,117)          (116,393) Property operating income                                    $ 634,607      

$ 545,332 $ 637,030

   (2)Funds from operations "FFO" is a supplemental non-GAAP measure. See "Liquidity and Capital Resources" in this Item 7. for further discussion. (3)EBITDA for Real Estate ("EBITDAre") is a non-GAAP measure that NAREIT defines as: net income computed in accordance with GAAP plus net interest expense, income tax expense, depreciation and amortization, gain or loss on sale of real estate, impairments of real estate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated                                        33 --------------------------------------------------------------------------------   Table of Contents affiliates. We calculate EBITDAre consistent with the NAREIT definition. As EBITDA is a widely known and understood measure of performance, management believes EBITDAre represents an additional non-GAAP performance measure, independent of a company's capital structure that will provide investors with a uniform basis to measure the enterprise value of a company. EBITDAre also approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDAre for the periods presented is as follows:                                                              2021               2020               2019                                                                            (In thousands) Net income                                               $ 269,081          $ 135,888          $ 360,542 Interest expense                                           127,698            136,289            109,623 Other interest income                                         (809)            (1,894)            (1,266) Early extinguishment of debt                                     -             11,179                  - Provision (benefit) for income tax                             118               (194)               772 Depreciation and amortization                              279,976            255,027            239,758 

Gain on sale of real estate and change in control of interest

                                                   (89,950)           (98,117)          (116,779) Impairment charge                                                -             57,218                  - 

Adjustments of EBITDA Re of unconsolidated affiliates 3,678

    6,417              6,917 EBITDAre                                                 $ 589,792          $ 501,813          $ 599,567   (4)Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount/ premiums and debt costs, costs related to the early extinguishment of debt, and the portion of rent expense representing an interest factor. Excluding the $11.2 million early extinguishment of debt charge from fixed charges in 2020, the ratio of EBITDAre to combined fixed charges and preferred share dividends is 2.9x. Excluding the $11.9 million charge related to the buyout of the Kmart lease at Assembly Square Marketplace in 2019, our ratio of EBITDAre to combined fixed charges and preferred share dividends remained 4.2x. Impacts of COVID-19 Pandemic We continue to monitor and address risks related to the COVID-19 pandemic. Since March 2020 when the World Health Organization characterized COVID-19 as a global pandemic, we have been and continue to be impacted by COVID-19 and the actions taken by federal, state, and local government to prevent its spread. These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased reopenings and capacity limitations, and now generally lifted restrictions. While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the pace of recovery. Closures and restrictions, along with general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they are able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. While improving, our cash flow and results of operations in the year ended December 31, 2021 continued to be materially adversely impacted, with vacancy levels remaining above historical levels. Although virtually all of our leases required the tenants to pay rent even while they were not operating, we entered into numerous agreements to abate, defer, and/or restructure tenant rent payments for varying periods of time, all with the objective of collecting as much cash as reasonably possible and maintaining occupancy to the maximum extent. We believe those actions will position many of our tenants to be able to return to payment of contractual rent as soon as possible after the impacts from the pandemic have subsided. We believe that the actions we have taken to improve our financial position and maximize our liquidity, as described further in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2020 Annual Report on Form 10-K, will continue to mitigate the impact to our cash flow caused by tenants not timely paying contractual rent. Throughout 2021, we continued to maintain levels of cash significantly in excess of the cash balances we have historically maintained which has adversely impacted our financial results; however, we believe that such action was prudent to position us with what we expect to be sufficient liquidity to allow us to continue fully operating as our operating revenues begin to return to more typical levels. As of December 31, 2021, there is no outstanding balance on our $1.0 billion revolving credit facility, and we have cash and cash equivalents of $162.1 million.                                         34 --------------------------------------------------------------------------------   Table of Contents Additional discussion of the impact of COVID-19 on our results and long-term operations can be found throughout Item 7 and   Item 1A  . Risk Factors. Corporate Responsibility We actively endeavor to operate and develop our properties in a sustainable, responsible, and effective manner with the objective being to drive long-term growth and aid in value creation for our shareholders, tenants, employees, and local communities. We have aligned our program and efforts with the United Nations Sustainable Development Goals, as described in our ESG Policy and our 2020 Corporate Responsibility Report, which are provided only for informational purposes on our website and not incorporated herein.  Our development activities have been heavily focused on owning, developing and operating properties that are certified under the U.S. Green Building Council's® ("USGBC") Leadership in Energy and Environmental Design™ (LEED®) rating system which serves as a third-party verification that a building or community was designed and built to mitigate its environmental footprint. We currently have 18 LEED certified buildings and our Pike & Rose project has achieved LEED for Neighborhood Development Stage 3 Gold certification. The COVID-19 pandemic has also increased our focus on owning, developing and operating healthier buildings. To that end, our new corporate headquarters space at our 909 Rose Avenue building has earned a Fitwel certification developed by the U.S. Centers for Disease Control and Prevention (CDC) together with the General Services Administration (GSA). This certification assesses a building's impact on seven distinct categories related to overall health and well-being. We are also committed to implementing sustainable business practices at our operating properties that focus on energy efficiency, water conservation and waste minimization and have established energy and greenhouse gas (GHG) emissions reduction targets. To achieve these targets, we are actively addressing energy efficiency projects on site such as upgrading to LED lighting; and to address emissions we are procuring green energy, reducing electric consumption, and increasing our onsite solar generation capacity. We have installed on-site solar systems at 25 of our properties with a capacity of over 13 MW with more projects actively in progress. Our current capacity placed us in the top 5 among real estate companies for onsite capacity in the most recent Solar Energy Industry Association's annual Solar Means Business Report. We are also actively installing electric vehicle car charging stations in numerous properties throughout our portfolio. We currently have over 300 charging stations in operation with more under construction. We also understand that we face risks presented by climate change and are working to evaluate our risk exposure. In our 2020 Corporate Responsibility Report, we provided a disclosure pursuant to the Task Force on Climate Related Financial Disclosure and we intend to provide that disclosure annually. We are also highly committed to our employees and fostering a work environment that promotes growth, development and personal well-being. Our four core values are accountability, excellence, innovation and integrity and we seek to attract and retain talented professionals who embrace those values. All of our efforts with respect to corporate responsibility are overseen by our Board of Trustees. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as "GAAP", requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management's best judgment, after considering past and current events and economic conditions. In addition, information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third party experts. Actual results could differ from these estimates. A discussion of possible risks which may affect these estimates is included in "Item 1A. Risk Factors" of this report. Management considers an accounting estimate to be critical if changes in the estimate could have a material impact on our consolidated results of operations or financial condition. Our significant accounting policies are more fully described in Note 2 to the consolidated financial statements; however, the most critical accounting policies, which are most important to the portrayal of our financial condition and results of operations, and involve the use of complex estimates and significant assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows:                                        35 --------------------------------------------------------------------------------   Table of Contents Collectibility of Lease Income Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant's credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. For example, in the event that our collectibility determinations were not accurate and we were required to write off additional receivables equaling 1% of rental income, our rental income and net income would decrease by $9.5 million. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income. Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19. These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased re-openings and capacity limitations, and now generally lifted restrictions. While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the recovery. Closures and restrictions, along with the general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19. Accordingly, during the years ended December 31, 2021 and 2020, we recognized collectibility related adjustments of $24.0 million and $106.6 million, respectively. This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $0.7 million and $12.7 million, respectively of straight-line rent receivables related to tenants changed to a cash basis of revenue recognition during the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, the revenue from approximately 34% and 35% of our tenants (based on total commercial leases), respectively, is being recognized on a cash basis. As of December 31, 2021 and 2020, our straight-line rent receivables balance was $110.7 million and $103.3 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet. Other revenue recognition policies When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment. The existence and amount of variable consideration can vary significantly among transactions. Historically, our property sales have had variable consideration of less than 1% of total expected consideration; however, we had one transaction in 2019 where the variable consideration was approximately $45.5 million. Real Estate Acquisitions Upon acquisition of operating real estate properties, we estimate the fair value of assets and liabilities acquired including land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, and current assets and liabilities, if any.  Based on these estimates, we allocate the purchase price to the applicable assets and liabilities. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the statement of operations. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any acquired lease value is written off to rental income.                                        36 --------------------------------------------------------------------------------   Table of Contents During 2021, we acquired properties with a total purchase price of $440.9 million. $4.6 million, or 1% of the total purchase price was allocated to above market lease assets and $57.3 million, or 13% was allocated to below market lease liabilities. If the amounts allocated in 2021 to below market lease liabilities and building assets were each reduced by 5% of the total purchase price, annual below market lease liability amortization increasing rental income would decrease by approximately $2.5 million (using the weighted average life of below market liabilities at each respective acquired property) and annual depreciation expense would decrease by approximately $0.6 million (using a depreciable life of 35 years). Long-Lived Assets and Impairment There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management's evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, taking into account the anticipated hold period, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. We are also required to estimate the anticipated hold period. A change in the expected holding period from a long term hold to a short term would cause a significant change in the undiscounted cash flows and could result in an impairment charge. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. Recently Adopted and Recently Issued Accounting Pronouncements See Note 2 to the consolidated financial statements. 2021 Acquisitions and Dispositions On January 4, 2021, we acquired our partner's 20% interest in our joint venture arrangement related to the Pike & Rose hotel for $2.3 million, and repaid the $31.5 million mortgage loan encumbering the hotel. As a result of the transaction, we gained control of the hotel, and effective January 4, 2021, we have consolidated this asset. We also recognized a gain on acquisition of the controlling interest of $2.1 million related to the difference between the carrying value and fair value of the previously held equity interest. On February 22, 2021, we acquired the fee interest at our Mount Vernon Plaza property in Alexandria, Virginia for $5.6 million. As a result of this transaction, the "operating lease right of use assets" and "operating lease liabilities" on our consolidated balance sheet decreased by $9.8 million. We now own the entire fee interest on this property. During the year ended December 31, 2021, we acquired the following properties:                                                                                                  Gross Leasable Date Acquired                  Property                          City/State                        Area (GLA)               Ownership %             Gross Value                                                                                                 (in square feet)                                   (in millions) April 30, 2021                 Chesterbrook (1)                  McLean, Virginia                          90,000                     80  %       $        32.1    (2) June 1, 2021                   Grossmont Center (1)              La Mesa, California                      933,000                     60  %       $       175.0    (3) June 14, 2021                  Camelback Colonnade (1)           Phoenix, Arizona                         642,000                     98  %       $       162.5    (4) June 14, 2021                  Hilton Village (1)                Scottsdale, Arizona                       93,000                     98  %       $        37.5    (5) September 2, 2021              Twinbrooke Shopping Centre        Fairfax, Virginia                        106,000                    100  %       $        33.8    (6)   (1)These acquisitions were completed through newly formed joint ventures, for which we own the controlling interest listed above, and therefore, these properties are consolidated in our financial statements. (2)Approximately $1.9 million and $0.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $8.0 million of net assets acquired were allocated to other liabilities for "below market leases."                                        37 --------------------------------------------------------------------------------   Table of Contents (3)Approximately $12.3 million and $2.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $14.7 million of net assets acquired were allocated to other liabilities for "below market leases." (4)Approximately $11.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and $28.3 million were allocated to other liabilities for "below market leases." (5)The land is controlled under a long-term ground lease that expires on December 31, 2076, for which we have recorded a $10.4 million "operating lease right of use asset" (net of a $1.3 million above market liability) and an $11.6 million "operating lease liability." Approximately $2.7 million and $1.1 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $3.6 million were allocated to other liabilities for "below market leases." (6)Approximately $1.2 million and $0.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $2.7 million of net assets acquired were allocated to other liabilities for "below market leases." During the year ended December 31, 2021, we sold two properties and a portion of three properties for a total sales price of $141.6 million, which resulted in a net gain of $88.3 million. 2021 Significant Debt and Equity Transactions On February 24, 2021, we replaced our existing at-the-market ("ATM") equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. On May 7, 2021, we amended this ATM equity program, which reset the limit to $500.0 million. The new ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes. For the year ended December 31, 2021, we issued 847,471 common shares at a weighted average price per share of $104.19 for net cash proceeds of $87.0 million including paying $0.9 million in commissions and $0.4 million in additional offering expenses related to the sales of these common shares. We also entered into forward sales contracts for the year ended December 31, 2021 for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $120.22. During 2021, we settled a portion of the forward sales agreements entered into during the year by issuing 796,300 common shares for net proceeds of $85.7 million. The forward price that we will receive upon physical settlement of the remaining forward sale agreements is subject to the adjustment for (i) commissions, (ii) a floating interest rate factor equal to a specified daily rate less a spread, (iii) the forward purchasers' stock borrowing costs and (iv) scheduled dividends during the term of the forward sale agreements. The remaining open forward shares may be settled at any time on or before multiple required settlement dates ranging from June 2022 to December 2022. As of December 31, 2021, we had the capacity to issue up to $175.0 million in common shares under our ATM equity program. On April 16, 2021, we repaid $100.0 million of our existing $400.0 million term loan, amended the agreement on the remaining $300.0 million to lower the current spread over LIBOR from 135 basis points to 80 basis points based on our current credit rating, and extended the initial maturity date to April 16, 2024, along with two one-year extensions, at our option. In 2021, we repaid the following mortgage loans, at par, prior to their original maturity date: Property                       Repayment Date            Principal                                                        (in millions) Sylmar Towne Center            February 5, 2021       $         16.2 Plaza Del Sol                  September 1, 2021      $          7.9 Montrose Crossing              October 12, 2021       $         64.1 The AVENUE at White Marsh      November 2, 2021       $         52.7   Capitalized Costs Certain external and internal costs directly related to the development, redevelopment and leasing of real estate, including pre-construction costs, real estate taxes, insurance, and construction costs and salaries and related costs of personnel directly involved, are capitalized. We capitalized external and internal costs related to both development and redevelopment activities of $356 million and $10 million, respectively, for 2021 and $404 million and $9 million, respectively, for 2020. We capitalized external and internal costs related to other property improvements of $64 million and $4 million, respectively, for 2021 and $64 million and $3 million, respectively, for 2020. We capitalized external and internal costs related to leasing activities of $19 million and $3 million, respectively, for 2021 and $11 million and $2 million, respectively, for 2020. The amount of capitalized                                        38 --------------------------------------------------------------------------------   Table of Contents internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were $10 million, $3 million, and $3 million, respectively, for 2021 and $9 million, $3 million, and $2 million, respectively, for 2020. Total capitalized costs were $456 million for 2021 and $494 million for 2020, respectively. Corporate Reorganization In January of 2022, we completed the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report. Prior to the UPREIT Reorganization, our business was conducted through the Predecessor. This Annual Report pertains to the business and results of operations of the Predecessor for its fiscal year ended December 31, 2021. As a result of the UPREIT reorganization, the Parent Company became the successor issuer to the Predecessor under the Exchange Act. The Parent Company and the Partnership have elected to co-file this Annual Report of the Predecessor to ensure continuity of information to investors. For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022. Outlook Our long-term growth strategy is focused on growth in earnings, funds from operations, and cash flows primarily through a combination of the following: •growth in our comparable property portfolio, •growth in our portfolio from property development and redevelopments, and •expansion of our portfolio through property acquisitions. While the ongoing COVID-19 pandemic is impacting us in the short-term, our long-term focus has not changed. Our comparable property growth is primarily driven by increases in rental rates on new leases and lease renewals, changes in portfolio occupancy, and the redevelopment of those assets. Over the long-term, the infill nature and strong demographics of our properties provide a strategic advantage allowing us to maintain relatively high occupancy and generally increase rental rates. However, our occupancy levels and ability to increase rental rates will be adversely impacted in the short-term as a result of COVID-19. We believe the locations and nature of our centers and diverse tenant base partially mitigates any potential negative changes in the economic environment. However, any significant reduction in our tenants' abilities to pay base rent, percentage rent or other charges, will adversely affect our financial condition and results of operations. We seek to maintain a mix of strong national, regional, and local retailers. At December 31, 2021, no single tenant accounted for more than 2.7% of annualized base rent. Federal, state, and local governments have taken various actions to mitigate the spread of COVID-19, including initially ordering closures of non-essential businesses and ordering residents to generally stay at home. While many of these restrictions have since been lifted, they required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct in their stores. These closures and restrictions, along with general concerns over the spread of COVID-19 have impacted the tenants' ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. While we are seeing signs of considerable improvement, these economic hardships have adversely impacted our business, and continue to have a negative effect on our financial results during 2021. With very few exceptions, our leases require tenants to continue to pay rent even while closed as a result of the pandemic, and while many tenants did not pay rents and other charges during a portion of 2020, the majority of our tenants have resumed paying all or a portion of their rent and/or other charges as their businesses were able to reopen. Our percentage of contractual rent actually collected has continued to increase since the low point in April 2020, including some tenants paying past due amounts. As of December 31, 2021, we have entered into agreements with approximately 32% of our tenants (based on total commercial leases) to defer rent payments to later periods, largely through 2022, although some extend beyond. While increasing monthly cash collection rates is a positive trend driven by government mandated restrictions gradually being lifted and improved outlook by some tenants, we expect that our rent collections will continue to be below our tenants' contractual rent obligations and historical levels into 2022, which will continue to adversely impact our results of operations. We are also experiencing a lower level of occupancy than in our past, largely due to the pandemic, which will adversely impact our results until we can release the space and the tenant commences paying rent as well as limit future vacancies caused by the pandemic. We are, however, experiencing strong demand for our commercial space as evidenced by the 2.1 million square feet of comparable space retail leasing we've completed in 2021, as well as our overall leased percentage at 93.6%, compared to our occupied percentage of only 91.1%. We have begun to see impacts of overall supply chain disruptions affecting the broader economy, including significantly longer lead times, limited availability, and increased costs for certain construction and other materials that support our leasing, development, and redevelopment activities. If disruptions continue to worsen, they could result in extended timeframes and/or increased costs for completion of our projects and tenant build-outs, which could delay the commencement of rent payments under new leases. Similarly, if our tenants experience significant disruptions in supply chains supporting their own products, or staffing issues due to labor shortages, their ability to pay rent may be adversely affected. We continue to                                        39 --------------------------------------------------------------------------------   Table of Contents monitor these macroeconomic developments and are working with our tenants and our vendors to limit the overall impact to our business. The extent of such impact from COVID-19 will depend on future developments, which are highly uncertain and cannot be predicted. Depending upon the duration of tenant closures, future operating restrictions, and the overall economic downturn resulting from COVID-19, we may find that even deferred rents are difficult to collect, and we may experience higher vacancy levels. While the duration and severity of the economic impact resulting from COVID-19 is unknown, we seek to position the Trust to continue to participate in the resulting economic recovery.  We continue to have several development projects in process being delivered as follows: •Phase III of Assembly Row includes 277,000 square feet of office space, 56,000 square feet of retail space, and 500 residential units. The expected costs for Phase III are between $465 million and $485 million with spaces being delivered beginning in the second quarter of 2021. At December 31, 2021, 162,000 square feet of office space has been delivered, all of the units in the residential building have been delivered, and 23,000 square feet of retail space has opened. •Phase III at Pike & Rose includes a 212,000 square foot office building (which includes 7,000 square feet of ground floor retail space). The building is expected to cost between $128 million and $135 million. At December 31, 2021, approximately 162,000 square feet of office and retail space has been delivered, of which approximately 45,000 square feet is our new corporate headquarters. •Phase IV at Pike & Rose is a 276,000 square foot office building (which includes 10,000 square feet of ground floor retail space). Approximately 105,000 square feet of the office space is pre-leased to a single tenant. The building is expected to cost between $185 million and $200 million, and begin delivering in late 2023. •The first phase of construction on Santana West includes an eight story 376,000 square foot office building, which is expected to cost between $250 million and $270 million. •Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $313 million that we expect to stabilize over the next several years.  The above includes our best estimates based on information currently known, however, the completion of construction, final costs, and the timing of leasing and openings may be further impacted by the current environment including the duration and severity of the economic impacts of COVID-19 and supply chain disruptions affecting the broader economy. The development of future phases of Assembly Row, Pike & Rose and Santana Row will be pursued opportunistically based on, among other things, market conditions, tenant demand, and our evaluation of whether those phases will generate an appropriate financial return. We continue to review acquisition opportunities that complement our portfolio and provide long-term growth opportunities. Initially, some of our acquisitions do not contribute significantly to earnings growth; however, we believe they provide long-term re-leasing growth, redevelopment opportunities, and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance the property acquisition. Generally, our acquisitions are initially financed by available cash and/or borrowings under our revolving credit facility which may be repaid later with funds raised through the issuance of new equity or new long-term debt. We may also finance our acquisitions through the issuance of common shares, preferred shares, or units in our operating partnership (see "Corporate Reorganization" discussion in this Item 7), as well as through assumed mortgages and property sales. At December 31, 2021, the leasable square feet in our properties was 93.6% leased and 91.1% occupied. The leased rate is higher than the occupied rate due to leased spaces that are being redeveloped or improved or that are awaiting permits and, therefore, are not yet ready to be occupied. Our occupancy and leased rates are subject to variability over time due to factors including acquisitions, the timing of the start and stabilization of our redevelopment projects, lease expirations and tenant closings and bankruptcies. Comparable Properties Throughout this section, we have provided certain information on a "comparable property" basis. Information provided on a comparable property basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties that are currently under development or are being repositioned for significant redevelopment and investment. For the year ended December 31, 2021 and the comparison of 2021 and 2020, all or a portion of 95 properties were considered comparable properties and seven were considered non-comparable properties. For the year ended December 31, 2021, two portions of properties were moved from non-comparable properties to comparable properties, one                                        40 --------------------------------------------------------------------------------   Table of Contents property and two portions of properties were moved from acquisitions to comparable properties, one property was moved from comparable properties to non-comparable properties, two properties and one portion of a property were removed from comparable properties as they were sold, and two portions of properties were removed from non-comparable properties, as they were sold, compared to the designations as of December 31, 2020. While there is judgment surrounding changes in designations, we typically move non-comparable properties to comparable properties once they have stabilized, which is typically considered 90% physical occupancy or when the growth expected from the redevelopment has been included in the comparable periods. We typically remove properties from comparable properties when the repositioning of the asset has commenced and has or is expected to have a significant impact to property operating income within the calendar year. Acquisitions are moved to comparable properties once we have owned the property for the entirety of comparable periods and the property is not under development or being repositioned for significant redevelopment and investment. Comparable property information replaces our previous same center designations.                                        41

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   Table of Contents       YEAR ENDED DECEMBER 31, 2021 COMPARED TO YEAR ENDED DECEMBER 31, 2020                                                                                                           Change                                                           2021                2020             Dollars               %                                                                           (Dollar amounts in thousands) Rental income                                         $  948,842          $ 832,171          $ 116,671              14.0  %  Mortgage interest income                                   2,382              3,323               (941)            (28.3) % Total property revenue                                   951,224            835,494            115,730              13.9  % Rental expenses                                          198,121            170,920             27,201              15.9  % Real estate taxes                                        118,496            119,242               (746)             (0.6) % Total property expenses                                  316,617            290,162             26,455               9.1  % Property operating income (1)                            634,607            545,332             89,275              16.4  % General and administrative expense                       (49,856)           (41,680)            (8,176)             19.6  % Depreciation and amortization                           (279,976)          (255,027)           (24,949)              9.8  % Impairment charge                                              -            (57,218)            57,218             100.0  % Gain on sale of real estate and change in control of interest                                                  89,950             98,117             (8,167)             (8.3) % Operating income                                         394,725            289,524            105,201              36.3  % Other interest income                                        809              1,894             (1,085)            (57.3) % Interest expense                                        (127,698)          (136,289)             8,591              (6.3) % Early extinguishment of debt                                   -            (11,179)            11,179             100.0  % Income (loss) from partnerships                            1,245             (8,062)             9,307             115.4  %  Total other, net                                        (125,644)          (153,636)            27,992             (18.2) %  Net income                                               269,081            135,888            133,193              98.0  %

Net income attributable to noncontrolling interests (7,583)

  (4,182)            (3,401)             81.3  % Net income attributable to the Trust                  $  261,498          $ 131,706          $ 129,792              98.5  %   

(1) Property operating income is a non-GAAP measure. See “Summary Financial Information” in this Item 7 for further discussion.

  Property Revenues Total property revenue increased $115.7 million, or 13.9%, to $951.2 million in 2021 compared to $835.5 million in 2020. The percentage occupied at our shopping centers was 91.1% at December 31, 2021 compared to 90.2% at December 31, 2020. The most significant driver of the increase in property revenues is the generally lifted COVID-19 restrictions during 2021, as compared to 2020 when COVID-19 government imposed closures and restrictions were generally still in effect. Changes in the components of property revenue are discussed below. Rental Income Rental income consists primarily of minimum rent, cost reimbursements from tenants and percentage rent, and is net of collectibility related adjustments. Rental income increased $116.7 million, or 14.0%, to $948.8 million in 2021 compared to $832.2 million in 2020 due primarily to the following: •an $82.6 million decrease in collectibility related impacts including rent abatements across all properties, primarily due to higher collection rates in 2021 as tenants begin to recover from the initial impacts of COVID-19, and moving a large number of tenants from accrual basis to cash basis in 2020, •an increase of $32.2 million primarily from 2021 acquisitions (see Note 3 to the consolidated financial statements for additional information), and •an increase of $25.4 million from non-comparable properties driven by the opening of Phase III at Assembly Row in 2021 and our Phase III office building at Pike & Rose in 2020, redevelopment related occupancy increases at CocoWalk, the opening of our new office building at Santana Row in early 2020, higher net termination fees, and the opening of Freedom Plaza in 2020, partially offset by                                        42 --------------------------------------------------------------------------------   Table of Contents •a decrease of $17.1 million from property sales, and •a decrease of $6.1 million at comparable properties due primarily to lower average occupancy of approximately $14.1 million, lower net termination fees and legal fee income of $5.1 million, and a $2.1 million decrease in recoveries primarily related to real estate tax recoveries, partially offset by higher percentage rent, specialty leasing, and parking income of $7.2 million, primarily due to the impact of COVID-19 related closures and restrictions in 2020, and higher rental rates of $6.7 million. Mortgage Interest Income Mortgage interest income decreased $0.9 million, or 28.3%, to $2.4 million in 2021 compared to $3.3 million in 2020 primarily due to the payoff of two mortgage notes receivable in May 2021 (see Note 2 to the consolidated financial statements for additional information). Property Expenses Total property expenses increased $26.5 million, or 9.1%, to $316.6 million in 2021 compared to $290.2 million in 2020. Changes in the components of property expenses are discussed below. Rental Expenses Rental expenses increased $27.2 million, or 15.9%, to $198.1 million in 2021 compared to $170.9 million in 2020. This increase is primarily due to the following: •an increase of $19.3 million from comparable properties due to higher repairs and maintenance costs, demolition costs, and utilities, as 2020 had lower costs as a result of COVID-19 impacts, higher snow removal costs, and higher insurance costs, •an increase of $8.8 million primarily from 2021 acquisitions, and •an increase of $6.1 million from non-comparable properties driven by the opening of Phase III at Assembly Row in 2021, the Phase III office building at Pike & Rose in 2020, the CocoWalk redevelopment in late 2020, and the opening of our new office building at Santana Row in early 2020, partially offset by •a decrease of $5.0 million from our property sales. As a result of the changes in rental income and rental expenses as discussed above, rental expenses as a percentage of rental income increased to 20.9% for the year ended December 31, 2021 from 20.5% for the year ended December 31, 2020. Real Estate Taxes Real estate tax expense decreased $0.7 million, or 0.6% to $118.5 million in 2021 compared to $119.2 million in 2020 due primarily to the following: •a decrease of $3.5 million from our property sales, and •a decrease of $3.3 million from comparable properties primarily due to a true-up of supplemental taxes at several of our California properties billed in 2020 and prior year tax refunds recorded in 2021, partially offset by •an increase of $3.1 million from 2021 acquisitions, and •an increase of $2.9 million from non-comparable properties due primarily to the opening of Phase III at Assembly Row in 2021, the opening of our new office building at Santana Row in early 2020, increases in assessments as a result of our redevelopment activities, and the Phase III office building at Pike & Rose in 2020. Property Operating Income Property operating income increased $89.3 million, or 16.4%, to $634.6 million in 2021 compared to $545.3 million in 2020. This increase is primarily due to the lifting of COVID-19 restrictions during 2021, which resulted in lower collectibility related adjustments and higher specialty leasing, percentage rent, and parking income. Also contributing to the increases were property acquisitions, placing redevelopment properties into service, the opening of Phase III at Assembly Row in 2021, and the opening of our new office building at Santana Row in early 2020, partially offset by lower average occupancy, property dispositions, higher repairs and maintenance and utilities expense, and higher snow removal expense.                                        43 --------------------------------------------------------------------------------   Table of Contents Other Operating  General and Administrative Expense General and administrative expense increased $8.2 million, or 19.6%, to $49.9 million in 2021 from $41.7 million in 2020. This increase is due primarily to higher personnel related costs. Depreciation and Amortization Depreciation and amortization expense increased $24.9 million, or 9.8%, to $280.0 million in 2021 from $255.0 million in 2020. This increase is due primarily to 2021 property acquisitions, accelerated depreciation related to the demolition of one of our buildings in the early stages of redevelopment, the opening of Phase III of Assembly Row and the Pike & Rose, placing redevelopment properties into service, and the acquisition of the previously unconsolidated Pike & Rose hotel joint venture in January 2021, partially offset by 2020 property sales and the lower write-off of lease related assets for vacating tenants. Impairment Charge The $57.2 million impairment charge for the year ended December 31, 2020 relates to The Shops at Sunset Place. See Note 3 to the consolidated financial statements for further discussion. Gain on Sale of Real Estate and Change in Control of Interest The $90.0 million gain on sale of real estate for the year ended December 31, 2021 is due to the sale of two properties and portions of three properties, as well as the $2.1 million gain relating to the acquisition of the previously unconsolidated Pike & Rose hotel join venture (see Note 3 to the consolidated financial statements for additional information). The $98.1 million gain on sale of real estate, net of tax for the year ended December 31, 2020 is due to the sale of three properties and one building. Operating Income Operating income increased $105.2 million, or 36.3%, to $394.7 million in 2021 compared to $289.5 million in 2020. This increase is primarily due to the lifting of COVID-19 restrictions, which resulted in lower collectibility related adjustments and higher specialty leasing, percentage rent, and parking income compared to 2020. Also contributing to the increases were the prior year impairment charge related to The Shops at Sunset Place, property acquisitions, placing redevelopment properties into service, the opening of Phase III at Assembly Row in 2021, and the opening of our new office building at Santana Row in early 2020, partially offset by lower average occupancy, higher personnel related costs, property dispositions, higher repairs and maintenance and utilities expense, a lower gain on sales of real estate, and higher snow removal expense. Other Interest Expense Interest expense decreased $8.6 million, or 6.3%, to $127.7 million in 2021 compared to $136.3 million in 2020. This decrease is due primarily to the following: •a decrease of $6.2 million due to a lower overall weighted average borrowing rate, and •a decrease of $3.2 million due to lower weighted average borrowings, partially offset by •a decrease of $0.8 million in capitalized interest. Gross interest costs were $150.3 million and $159.7 million in 2021 and 2020, respectively. Capitalized interest was $22.6 million and $23.4 million in 2021 and 2020, respectively. Early Extinguishment of Debt The $11.2 million early extinguishment of debt charge for the year ended December 31, 2020 relates to the make-whole premium paid as part of the early redemption of our $250 million 3.00% senior notes on December 31, 2020 and the related write-off of the unamortized discount and debt fees.                                        44 --------------------------------------------------------------------------------   Table of Contents Income (loss) from Partnerships Income (loss) from partnerships increased $9.3 million or 115.4% to $1.2 million of income in 2021 compared to a loss of $8.1 million in 2020. This increase is due primarily to the acquisition of the previously unconsolidated Pike & Rose hotel joint venture in January 2021 and improved operating results at our restaurant joint ventures and at our Assembly Row hotel joint venture, largely the result of the easing of COVID-19 closures and restrictions. Net income attributable to noncontrolling interests Net income attributable to noncontrolling interests increased $3.4 million, or 81.3%, to $7.6 million in 2021 compared to $4.2 million in 2020. The increase is primarily due to The Shops at Sunset Place prior year impairment charge and 2021 acquisitions.  Discussions of year-to-year comparisons between 2020 and 2019 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on February 11, 2021.  Liquidity and Capital Resources Due to the nature of our business and strategy, we typically generate significant amounts of cash from operations which is largely paid to our common and preferred shareholders in the form of dividends because as a REIT, we are generally required to make annual distributions to shareholders of at least 90% of our taxable income (cash dividends paid in 2021 were approximately $337.4 million). Remaining cash flow from operations after dividend payments is used to fund recurring and non-recurring capital projects (such as tenant improvements and redevelopments), and regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities). We maintain a $1.0 billion revolving credit facility to fund short term cash flow needs and also look to the public and private debt and equity markets, joint venture relationships, and property dispositions to fund capital expenditures on a long-term basis. During 2021, we have continued to see improvements in overall cash collections from tenants as compared to 2020, although not yet at pre-COVID-19 levels (see further discussion under the "Outlook" section of this Item 2). While the overall economic impacts of the pandemic are unknown, we have taken multiple steps to strengthen our financial position, maximize liquidity, and to provide maximum flexibility during these uncertain times, including maintaining levels of cash in excess of the cash balances we have historically maintained. As of December 31, 2021, there is no balance outstanding on our $1.0 billion unsecured revolving credit facility and we had cash and cash equivalents of $162.1 million. We also had outstanding forward sales agreements for net proceeds of $264.0 million as of December 31, 2021, and the capacity to issue up to $175.0 million in common shares under the ATM program. We have no debt maturing until June 2023. For the year ended 2021, the weighted average amount of borrowings outstanding on our revolving credit facility was $19.6 million, and the weighted average interest rate, before amortization of debt fees, was 0.9%. Our overall capital requirements during 2022 will be impacted by the extent and duration of COVID-19 related closures and restrictions, impacts on our cash collections, and overall economic impacts that might occur including supply chain issues. Cash requirements will also be impacted by acquisition opportunities and the level and general timing of our redevelopment and development activities. While the amount of future expenditures will depend on numerous factors, we expect to continue to see elevated levels of investment as we continue to invest in our overall portfolio to better position our properties for a post-COVID environment, costs to prepare vacant space for new tenants, and investments to complete the current phase and start on the next phase of our larger mixed-use development projects although at a slightly reduced level from 2021, largely due to deliveries in 2021 of our third phase of Assembly Row. We believe that the cash on our balance sheet together with rents we collect, as well as our $1.0 billion revolving credit facility will allow us to continue to operate our business through the remainder of the COVID-19 pandemic. Given our ability to access the capital markets, we also expect debt or equity to be available to us. We also have the ability to delay the timing of certain development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy. While we have seen improvements from the initial negative impacts of the COVID-19 pandemic, it has continued to affect our overall business during the year ended December 31, 2021, and we expect it will continue to negatively impact our business in the short term, we intend to operate with and to maintain our long term commitment to a conservative capital structure that will                                        45

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   Table of Contents allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings. Summary of Cash Flows                                                                                  Year Ended December 31,                                                                                 2021                   2020                                                                                     (In thousands) Net cash provided by operating activities                               $     471,352              $ 369,929 Net cash used in investing activities                                        (660,118)              (368,383) Net cash (used in) provided by financing activities                          (452,967)               661,736 (Decrease) increase in cash and cash equivalents                             (641,733)               663,282 Cash, cash equivalents, and restricted cash, beginning of year                816,896                153,614 Cash, cash equivalents, and restricted cash, end of year                $     175,163              $ 816,896    Net cash provided by operating activities increased $101.4 million to $471.4 million during 2021 from $369.9 million during 2020. The increase was primarily attributable to higher net income before non-cash items and the timing of cash receipts including higher accounts receivable and lower prepaid rent balances in 2020 as a result of the COVID-19 pandemic. Net cash used in investing activities increased $291.7 million to $660.1 million during 2021 from $368.4 million during 2020. The increase was primarily attributable to: •a $356.9 million increase in acquisition of real estate primarily due to 2021 property acquisitions (see Note 3 to the consolidated financial statements for additional information), and •a $45.6 million decrease in proceeds from sales of real estate, resulting from the sale of two properties and a portion of three properties in 2021, as compared to the sale of three properties, one building, and the two remaining condominium units at our Pike & Rose property in 2020, partially offset by •a $54.5 million decrease in net capital expenditures and leasing costs, •a $41.4 million increase in net repayments and acquisitions of mortgages and other notes receivable primarily due to the $31.1 million payoff of two mortgage notes receivable in May 2021, as compared to the $9.6 million acquisition of two mortgage notes receivable in September 2020, and •$12.9 million paid in 2020 relating to the partial sale under threat of condemnation at San Antonio Center in 2019. Net cash provided by financing activities decreased $1.1 billion to $453.0 million used during 2021 from $661.7 million provided during 2020. The decrease was primarily attributable to: •a $1.1 billion decrease due to net proceeds of $700.1 million from the issuance of $400.0 million of 3.50% unsecured senior notes and the $300.0 million reopening of our 3.95% unsecured senior notes in May 2020, and $394.2 million in net proceeds from our $400.0 million of 1.25% unsecured senior notes in October 2020, •$398.7 million in net proceeds from our unsecured term loan in May 2020, •a $207.4 million increase in repayment of mortgages, finance leases, and notes payable primarily due to the $140.9 million net repayments of four mortgage loans in 2021 (see Note 5 to the consolidated financial statements for more information), the $100.0 million repayment of our $400.0 million term loan which was amended in April 2021, and the $31.5 million repayment of the mortgage loan encumbering the Pike & Rose hotel in January 2021, partially offset by the $60.6 million payoff of the mortgage loan on The Shops at Sunset Place in December 2020 and the $3.6 million payoff of the mortgage loan on 29th Place, both in December 2020, and •an $11.1 million increase in dividends paid to shareholders due to an increase in the common share dividend rate and an increase in the number of common shares outstanding, partially offset by, •$510.4 million from the December 2020 redemptions of our $250.0 million 2.55% unsecured senior notes and our $250.0 million 3.00% unsecured senior notes, with a make-whole premium of $10.4 million,                                        46 --------------------------------------------------------------------------------   Table of Contents •$73.8 million increase in net proceeds from the issuance of 1.6 million common shares under our ATM program for net proceeds of $172.7 million (see Note 8 to our consolidated financial statements for additional details on these transactions), as compared to 1.1 million common shares for net proceeds of $98.8 million in 2020, and •a $10.8 million decrease in distributions to and redemptions of noncontrolling interests primarily due to the 2020 acquisition of one of our partner's interests in the partnership that owns our Plaza El Segundo property for $7.3 million. Cash Requirements The following table provides a summary of material cash requirements comprising our fixed, noncancelable obligations as of December 31, 2021:                                                                                   Cash Requirements by Period                                                                                          Next Twelve          Greater than                                                                        Total               Months            Twelve Months                                                                                         (In thousands) Fixed and variable rate debt (principal only) (1)                  $ 4,063,414          $    4,095              4,059,319 

Fixed and variable rate debt – our share of unconsolidated real estate partnerships (principal only) (2)

                                 28,560                 418                 28,142 Lease obligations (minimum rental payments) (3)                        352,162              11,001                341,161 Redevelopments/capital expenditure contracts                           319,171             267,490                 51,681  Real estate commitments (4)                                             98,691                   -                 98,691  Total estimated cash requirements                                  $ 

4,861,998 $ 283.004 $ 4,578,994

_____________________

 (1)The weighted average interest rate on our fixed and variable rate debt is 3.3% as of December 31, 2021. (2)The weighted average interest rate on the fixed and variable rate debt related to our unconsolidated real estate partnerships is 4.24% as of December 31, 2021. (3)This includes minimum rental payments related to both finance and operating leases. (4)This includes the liability related to the sale under threat of condemnation at San Antonio Center as further discussed in Note 7 to the consolidated financial statements. In addition to the amounts set forth in the table above and other liquidity requirements previously discussed, the following potential commitments exist: (a)Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63% interest in Congressional Plaza at the interest's then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management's current estimate of fair market value as of December 31, 2021, our estimated liability upon exercise of the put option would range from approximately $67 million to $71 million. (b)Under the terms of various other partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. As of December 31, 2021, a total of 666,831 downREIT operating partnership units are outstanding. (c)Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0% and 11.8% ownership interests at the interests' then-current fair market value. If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from approximately $25 million to $28 million. (d)The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1% interest in The Grove at Shrewsbury and approximately 6.5% interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $6 million to $7 million. (e)Effective September 18, 2023, the other member in Hoboken has the right to require us to purchase all of its 10% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million.                                        47 --------------------------------------------------------------------------------   Table of Contents (f)Effective June 14, 2026, the other member in Cambelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million. (g)Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 million. (h)At December 31, 2021, we had letters of credit outstanding of approximately $4.8 million.  Off-Balance Sheet Arrangements At December 31, 2021, we have two real estate related equity method investments with total debt outstanding of $79.8 million, of which our share is $28.6 million. Our investment in these ventures at December 31, 2021 was $8.9 million. Other than the items disclosed in the Cash Requirements table, we have no off-balance sheet arrangements as of December 31, 2021 that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements, or capital resources.                                         48 --------------------------------------------------------------------------------   Table of Contents Debt Financing Arrangements The following is a summary of our total debt outstanding as of December 31, 2021:                                                 Original           

Principal Balance Stated Interest

                                                   Debt              as of December         Rate as of December Description of Debt                              Issued                31, 2021                 31, 2021                   Maturity Date                                                      (Dollars in thousands) Mortgages payable Secured fixed rate  Azalea                                              Acquired       $       40,000                      3.73  %                 November 1, 2025 Bell Gardens                                        Acquired               12,127                      4.06  %                   August 1, 2026 Plaza El Segundo                                125,000                   125,000                      3.83  %                     June 5, 2027 The Grove at Shrewsbury (East)                   43,600                    43,600                      3.77  %                September 1, 2027 Brook 35                                         11,500                    11,500                      4.65  %                     July 1, 2029 Hoboken (24 Buildings) (1)                       56,450                    56,450                LIBOR + 1.95%                December 15, 2029 Various Hoboken (14 Buildings)                      Acquired               31,817                  Various (2)             Various through 2029 Chelsea                                             Acquired                4,851                      5.36  %                 January 15, 2031 Hoboken (1 Building) (3)                            Acquired               16,234                      3.75  %                     July 1, 2042 Subtotal                                                                  341,579 Net unamortized debt issuance costs and premium                                                                

(1,586)

 Total mortgages payable, net                                              

339.993

 Notes payable Revolving credit facility (4)                 1,000,000                         -               LIBOR + 0.775%                 January 19, 2024 Term Loan                                       400,000                   300,000                LIBOR + 0.80%                   April 16, 2024 Various                                           7,239                     2,635                     11.31  %             Various through 2028 Subtotal                                                                  302,635 Net unamortized debt issuance costs                                        

(1,169)

 Total notes payable, net                                                  

301.466

 Senior notes and debentures Unsecured fixed rate  2.75% notes                                     275,000                   275,000                      2.75  %                     June 1, 2023 3.95% notes                                     600,000                   600,000                      3.95  %                 January 15, 2024 1.25% notes                                     400,000                   400,000                      1.25  %                February 15, 2026 7.48% debentures                                 50,000                    29,200                      7.48  %                  August 15, 2026 3.25% notes                                     475,000                   475,000                      3.25  %                    July 15, 2027 6.82% medium term notes                          40,000                    40,000                      6.82  %                   August 1, 2027 3.20% notes                                     400,000                   400,000                      3.20  %                    June 15, 2029 3.50% notes                                     400,000                   400,000                      3.50  %                     June 1, 2030 4.50% notes                                     550,000                   550,000                      4.50  %                 December 1, 2044 3.625% notes                                    250,000                   250,000                     3.625  %                   August 1, 2046 Subtotal                                                                3,419,200 Net unamortized debt issuance costs and premium                                                               

(13,112)

 Total senior notes and debentures, net                                                                     3,406,088  Total debt, net                                                    $    4,047,547   _____________________ 1)On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on the mortgage loan at 3.67%. 2)The interest rates on these mortgages range from 3.91% to 5.00%. 3)This mortgage loan has a fixed interest rate, however, the rate resets every five years until maturity. The current interest rate is fixed until July 1, 2022, and the loan is prepayable at par anytime after this date. 4)The maximum amount drawn under our revolving credit facility during 2021 was $150.0 million and the weighted average effective interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 0.9%. Our revolving credit facility, unsecured term loan, and other debt agreements include financial and other covenants that may limit our operating activities in the future. As of December 31, 2021, we were in compliance with all of the financial and other covenants related to our revolving credit facility, term loan, and senior notes. Additionally, we were in compliance with all of the financial and other covenants that could trigger a loan default on our mortgage loans. If we were to breach any of these financial and other covenants and did not cure the breach within an applicable cure period, our lenders could require us to repay                                        49 --------------------------------------------------------------------------------   Table of Contents the debt immediately and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares. Our organizational documents do not limit the level or amount of debt that we may incur. The following is a summary of our scheduled principal repayments as of December 31, 2021:                 Unsecured                 Secured          Total                                  (In thousands) 2022         $       744               $   3,351      $     4,095 2023             275,758                   3,549          279,307 2024             900,659   (1) (2)         3,688          904,347 2025                 383                  48,033           48,416 2026             429,254                  26,657          455,911 Thereafter     2,115,037                 256,301        2,371,338              $ 3,721,835               $ 341,579      $ 4,063,414    (3)  

_____________________

 1)Our $300.0 million term loan matures on April 16, 2024, plus two one-year extensions, at our option. 2)Our $1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option. As of December 31, 2021, there was no outstanding balance under this credit facility. 3)The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2021. Interest Rate Hedging We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes. Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in "accumulated other comprehensive loss" on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected. As of December 31, 2021, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken portfolio at 3.67%. Our Assembly Row hotel joint venture is also a party to two interest rate swap agreements that effectively fix their debt at 5.206%. All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted our earnings in 2021, 2020 and 2019. REIT Qualification We intend to maintain our qualification as a REIT under Section 856(c) of the Code. As a REIT, we generally will not be subject to corporate federal income taxes on income we distribute to our shareholders as long as we satisfy certain technical requirements of the Code, including the requirement to distribute at least 90% of our taxable income to our shareholders.                                        50 --------------------------------------------------------------------------------   Table of Contents Funds From Operations Funds from operations ("FFO") is a supplemental non-GAAP financial measure of real estate companies' operating performance. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization, and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO: •does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); •should not be considered an alternative to net income as an indication of our performance; and •is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends. We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs. An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis. The reconciliation of net income to FFO available for common shareholders is as follows:                                                                                  Year Ended December 31,                                                                         2021                 2020               2019                                                                           (In thousands, except per share data) Net income                                                        $     269,081          $ 135,888          $ 360,542 Net income attributable to noncontrolling interests                      (7,583)            (4,182)            (6,676) 

Gain on sale of real estate and change in control of interests, net

                                                                     (89,892)           (91,922)          (116,393) Impairment charge, net                                                        -             50,728                  - Depreciation and amortization of real estate assets                     243,711            228,850            215,139 Amortization of initial direct costs of leases                           26,051             20,415             19,359 Funds from operations                                                   441,368            339,777            471,971 Dividends on preferred shares (1)                                        (8,042)            (8,042)            (7,500) Income attributable to operating partnership units                        2,998              3,151              2,703 Income attributable to unvested shares                                   (1,581)            (1,037)            (1,355) 

Funds from operations available for common shareholders (2) $ 434,743 $ 333,849 $ 465,819

  Weighted average number of common shares, diluted (1)(2)(3)              78,072             76,261             75,514  Funds from operations available for common shareholders, per diluted share (2)                                                 $        5.57          $    4.38          $    6.17   _____________________ (1)For the year ended December 31, 2019, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and included in "weighted average common shares, diluted." (2)For the year ended December 31, 2020, FFO available for common shareholders includes a $11.2 million charge related to early extinguishment of debt. If this charge was excluded, our FFO available for common shareholders for 2020 would have been $345.0 million, and FFO available for common shareholders, per diluted share would have been $4.52. For the year ended December 31, 2019, FFO available for common shareholders includes an $11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace. If this charge was excluded, our FFO                                        51

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   Table of Contents available for common shareholders for 2019 would have been $477.7 million, and FFO available for common shareholders, per diluted share would have been $6.33. (3)The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. 

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