FRT: 10-K Risk Factor Changes

Of our $5.0 billion of debt outstanding as of December 31, 2025, approximately $1.4 billion bears interest at a variable rate. We have entered into interest rate swaps on $500.6 million of this variable rate debt to effectively fix the rate and limit our exposure to variable rates. We have a $1.25 billion revolving credit facility, which bears interest at SOFR plus 77.5 basis points, of which $310.0 million was outstanding at December 31, 2025, and we have a $250.0 million term loan that bears interest at SOFR plus 85 basis points, of which no amount was outstanding at December 31, 2025. We may borrow additional funds at variable interest rates in the future. Increases in interest rates would increase the interest expense on our variable rate debt and reduce our cash flow, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our shareholders. We may enter into additional hedging arrangements or other transactions for all or a portion of our variable rate debt to limit our exposure to rising interest rates. However, the amounts we are required to pay under variable rate debt to which hedging or similar arrangements relate may increase in the event of non-performance by the counterparties to any such hedging arrangements. In addition, an increase in market interest rates may lead purchasers of our debt securities and preferred shares to demand a higher annual yield, which could adversely affect the market price of our outstanding debt securities and preferred shares and the cost and/or timing of refinancing or issuing additional debt securities or preferred shares.

Of our $4.5 billion of debt outstanding as of December 31, 2024, approximately $852.1 million bears interest at a variable rate, of which, $600.0 million is our unsecured term loan that bears interest at a variable rate of SOFR plus 85 basis points plus 0.10%. The remaining $252.1 million is comprised of a $200.0 million mortgage payable that bears interest at a variable rate of SOFR plus 95 basis points, which is effectively fixed by three interest rate swap agreements through the initial maturity date, and $52.1 million in mortgages payable that bear interest at a variable rate of SOFR plus 195 basis points and are effectively fixed by two interest rate swap agreements. We also have a $1.25 billion revolving credit facility, on which no balance was outstanding at December 31, 2024, that bears interest at SOFR plus 77.5 basis points, plus 0.10%. We may borrow additional funds at variable interest rates in the future. Increases in interest rates would increase the interest expense on our variable rate debt and reduce our cash flow, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our shareholders. We may enter into additional hedging arrangements or other transactions for all or a portion of our variable rate debt to limit our exposure to rising interest rates. However, the amounts we are required to pay under variable rate debt to which hedging or similar arrangements relate may increase in the event of non-performance by the counterparties to any such hedging arrangements. In addition, an increase in market interest rates may lead purchasers of our debt securities and preferred shares to demand a higher annual yield, which could adversely affect the market price of our outstanding debt securities and preferred shares and the cost and/or timing of refinancing or issuing additional debt securities or preferred shares.