Good afternoon. Thank you for joining us today for Federal Realty's Fourth Quarter 2021 Earnings Conference Call. Joining me on the call are Don Wood, Dan Gee, Jeff Berkes, Wendy Seher, Dawn Becker, and Melissa Solis. They'll be available to take your questions at the conclusion of our prepared remarks. A reminder that certain matters discussed on this call may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any annualized or projected information, as well as statements referring to expected or anticipated events or results included in guidance. Although Federal Realty believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realty's future operations and its actual performance may differ materially from the information in our forward-looking statements, and we can give no assurance that these expectations can be obtained.
The earnings release and supplemental reporting package that we issue tonight, our annual report filed on Form 10-K and our other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and results of operations. Our conference call tonight will be limited to 75 minutes. We kindly ask that you limit yourself to one question during the Q&A portion of our call. If you have additional questions, please re-queue. With that, I will turn the call over to Don Wood to begin the discussion of our fourth quarter results. Don?
Thank you, Leah, and congratulations to you on your promotion to Vice President of Investor Relations this month. Really well-deserved, and we're sure lucky to have you. Well, good afternoon, everybody. What makes Federal's business plan so different is our multifaceted approach to capitalize on these best located, best tenanted retail properties with a laser focus on bottom-line earnings growth. 104 individual assets with a proverbial toolbox filled with numerous ways of achieving that goal for years to come. Took a global pandemic to knock us off our horse for a time, but we're back up, and we're riding high. 2021 was the first step, where each quarter throughout the year exceeded our constantly upwardly revised expectations. That trend continued in the fourth quarter with FFO per share of $1.47, handily beating our forecasts, and of course, last year.
The shining star of the business continues to be leasing, as it's been all year, but it was taken to new levels in the fourth quarter. I need to put this into context, so bear with me for a minute. First, on a company-wide basis in the fourth quarter, we signed 149 commercial leases. That is retail and office, but not including residential leases, which itself was really strong, for nearly 900,000 sq ft of space. That includes renewals of existing tenants, along with space that either sits vacant today, is expected to be vacant in the coming months, or is for new buildings currently under construction or just completed. That's an annual base rent commitment of nearly $35 million.
Consider that over the last 10 years, an average quarter's output produced about 110,000 commercial leases and 500,000 sq ft. That means that in this quarter, we did 35% more deals for 80% more GLA than average. This is very strong quarterly volume, even in a year where each previous quarter seemed to set some sort of record. While I don't think that those fourth quarter levels are regularly repeatable, our leasing pipeline suggests that they will remain above historical averages for the foreseeable future. For the full year 2021, we did 573 commercial leases for 2.9 million sq ft and an annual rent commitment of $116 million. These activity levels are unprecedented over the very long history of this company.
This leasing volume is particularly important because it provides strong validation that the very diversified product type that we own and are creating is very highly sought after. The leasing is broad-based. It's the single biggest reason that I believe Federal Realty is better positioned post-COVID than we were before. Let me break down the quarter numbers a little bit more, and I think you'll see what I mean. Of the 149 commercial leases signed, 116 of them, or nearly 600,000 sq ft, were for comparable space, one where a tenant previously operated from. Those leases were written at an average rent of $34.34, 6% higher than the tenants they replaced.
Another 9 leases for 22,000 sq ft were written for non-comparable space at an average rent per foot of $43.53 at places like Assembly Row, phase III, CocoWalk, and Camelback Colonnade in Phoenix. It's the remaining 24 leases for 277,000 sq ft at net rent of $48.52 that really is a strong positive differentiator to our business plan. It's the office leasing at our long-established mixed-use communities. In this quarter, primarily at Assembly Row and Pike & Rose. Now, look, I certainly realize that general office leasing is not in vogue right now for good reason, given the macro levels of uncertainty surrounding back-to-work policies.
Not all office space is created equal, and it has become clearer and clearer with each quarter, heck, each month that passes, that the new class A office product that we own or are building at five of our amenity-rich mixed-use communities is in extremely high demand and commanding rents that are clearly additive to both earnings and value. Each of those five are well-established retail locations already, and the office component is an expansion, building on the success of the retail. They are Assembly Row, Pike & Rose, Bethesda Row, Santana Row, and CocoWalk. That's it. Deals with a myriad of companies in lots of different industries, headlined by our lease with Choice Hotels for their new world headquarters at Pike & Rose, are just the latest examples of companies choosing our building as a product of choice, no pun intended, for the future.
Those companies are joining others like PUMA, AvalonBay, NetApp, Bank of America, and Splunk in helping to create long-term sustainable communities in our portfolios in Somerville, Massachusetts, Montgomery County, Maryland, Silicon Valley, and Miami. Check this out. While 197,000 sq ft of the 277,000 sq ft done in the quarter was primarily in newly constructed buildings at Assembly Row and Pike & Rose, the remaining 80,000 sq ft was for comparable space at a positive 23% rollover. That strong rollover was largely driven by our first renewal and expansion at 450 Artisan Way at Assembly Row, the 100,000 sq ft office building built as part of phase one. That rent went from a blended sub-$30 triple net rent to the mid-$40s triple net.
Pretty good data point of the longer-term office upside that exists at well-executed, well-amenitized, mixed-use communities in first-tier suburbs. As I said and firmly believe, all office opportunities are not created equal. While we don't have anything to announce on this call at Santana West, there is serious interest from a number of substantial tenants where we're making some very good progress. By the way, take a look at the occupancy gains we're making on the retail portfolio-wide, which are equally impressive. At year-end, we're 93.6% leased and 91.1% occupied. That's an 80 basis point leased and a 90 basis point occupied tick up in just three months. Impressive for sure, but still a ways to go to get to our 95%+ historical bogey. Okay. What about the Omicron impact?
Well, as you would expect, there's little impact in the fourth quarter as the variant spread didn't take hold until late December and January. What the impact will be on 2022 has yet to play out. Thus far in 2022, it feels like across the board, shoppers, tenants, and other constituents seem to be viewing Omicron as temporary, and while wearing masks and being more careful, in most of our markets are marching forward with typical winter shopping patterns. Requests for rent accommodations from tenants have been few, and we've not agreed to anything significant at all at this time.
Now from a capital allocation standpoint, which after all is really what we as management teams in this industry do to add the most value, we're actively using all three levers, asset sales, acquisitions, and the continued expansion at our established properties, all in the name of bottom-line earnings growth. You'll notice from our 8-K that we closed on the sale of two shopping centers where we saw limited upside in the future. The combined proceeds of $113 million from just Leesburg Plaza and Saugus Shopping Center, sold at a blended high 5% cap rate, were used to reduce debt before year-end. On the acquisitions front, we'd like to invest several hundred million dollars in 2022 based on our identification from our hit list of targeted properties that feel like they may trade this year.
Progress early in the year has been encouraging and soliciting serious conversations. Stay tuned. Certainly on the development front, we expect to be substantially done constructing our residential over retail neighborhood in Darien, Connecticut this year. We're underway at our $190 million office tower for Choice Hotels at Pike & Rose, and we have more than a dozen property improvement redevelopments underway throughout the portfolio. By the way, Citi will be hosting a tour of our newly completed CocoWalk mixed-use project during their conference in South Florida next month. It's pretty spectacular. It's created over $60 million in value on our $200 million investment, and we'd love to see a wide variety of investors there. It's going to be an active year on all fronts at Federal.
I've got to believe the visibility of this multiple year bottom-line earnings growth plan is the most transparent in the sector. That's about all I have for prepared comments. Let me turn it over to Dan, and we'll be happy to entertain your questions after that.
Thank you, Don. Hello, everyone. Our reported FFO per share, $1.47, was up 29% from the fourth quarter of last year and roughly $0.06 above the top of our guidance range. For the year, we reported FFO per share of $5.57, a 23% increase over 2020's result. Both of those reported increases exclude the one-time debt repayment charge from 4Q 2020 in order to show a meaningful apples-to-apples comparison. Primary drivers of that outperformance versus expectations were higher percentage rent from COVID-amended leases bolstering better collection rates, a faster acceleration in occupancy than expected, stronger leasing at our residential assets, including the phase three residential at Assembly, lower real estate taxes than we had forecasted, plus financing activity which occurred later in the quarter than expected.
This was offset by higher G&A, higher property level operating expenses, primarily one-timers, and lower term fees than we forecast. For those analysts that keep track, we had $1.7 million of term fees for the quarter against a 4Q 2020 level of $3.6 million. Collections continue to improve with 97% of monthly billed rent being collected for the quarter, up from 96% reported on our third quarter call. Including abatements and deferrals, we are 99% resolved. Prior period collections were down to $5 million versus $8 million in 3Q. As a result, our collectibility adjustment was up modestly to $2 million, primarily driven by this prior period follow up. Collection of deferrals continue to outperform our expectations.
Of the $46 million of total rent we deferred since the start of COVID, $27 million has been collected, which represents roughly 90% of the amounts that were scheduled to be repaid by year-end. Don already highlighted our record-breaking quarter and year of leasing. Let me add some additional color. As he mentioned, we were 91.1% occupied as of quarter end, a 90 basis point increase over both the third quarter and year-over-year. Our lease rates stood at 93.6%, an 80 basis point increase over the third quarter and a 140 basis point increase year-over-year. The 250 basis point spread between leased and occupied should set us up for strong growth over the course of 2022. These significant gains were primarily driven by small shop leasing.
Our small shop lease percentage is up to 87.4%, a 130 basis point sequential increase in the quarter and a 280 basis point increase year over year. Solid progress in getting back to our targeted bogey of around 90% for small shop. Highlighting some of this small shop activity or deals were some of the most sought after tenants of today. Warby Parker with 3 new deals. Madewell with 2 new leases. Bonobos with 2. Foxtrot, PAIGE, Oath Pizza, another Nike Live, another GLOSSLAB, just to name a few. Anchor leasing was solidly up 50 basis points to 96.8% given broad-based activity with 12 deals totaling 320,000 sq ft of the almost 600,000 for the quarter.
Categories for new deals include grocers, discount apparel, sporting goods, home furnishings, and healthcare. On the residential side, we saw a surge in lease occupancy of 240 basis points year-over-year to 97.2% and saw strong high single digit year-over-year new lease rent growth. We feel well positioned to drive incremental NOI growth in 2022 given forecasted strength, particularly in our Boston and Silicon Valley markets. Evidence of this can also be seen where after just 7 months, our 500-unit Miscela residential tower at Assembly is already 60% leased at rents which are 15% higher than the pre-COVID lease-up rental rates of Montage, its sister resi tower next to it at Assembly Row.
In terms of redevelopment, we now have roughly $400 million of remaining spend on our $1.5 billion investment pipeline. Much of that pipeline has recently been placed into service. These projects will be a source of significant earnings growth in 2022 through 2025 as they continue to ramp up in POI contribution. In our 8-K, we have reinserted disclosure relating to the ramp up of POI at our large in-process projects and also provided some detail in a footnote on the 99% leased CocoWalk. Now to the balance sheet and an update on our liquidity position. The fourth quarter was an active one from the capital markets front. We raised another $85 million of common equity for our ATM on a forward basis at a blended gross price of $135.
We repaid mortgages totaling $117 million that encumbered the Avenue at White Marsh and Montrose Crossing, getting another $18 million of NOI to our unencumbered pool. During the quarter, we sold $121 million in assets, including the Leesburg, Virginia, and Saugus, Massachusetts assets Don mentioned, bringing our total for the year to $142 million at a blended yield in the mid-5s. As a result, we ended the year with $162 million of cash available, an undrawn $1 billion credit facility at $264 million of forward equity to be taken down in 2022, leaving us with total liquidity of over $1.4 billion. Our leverage metrics continue to improve.
Net debt to EBITDA is now down into the high 5x level for the fourth quarter annualized net of the forward equity. That metric is forecast to improve over the course of 2022 as development NOI comes online and occupancy drives higher from leases that are already executed. Again, our targeted level is in the low 5x range. Fixed charge coverage is back up to just under 4x. We have no debt maturities until mid-2023. Now on to guidance. For 2022, we are increasing our guidance range to $5.75-$5.95 per share, a 10-cent increase over our pre-previous range. This represents 5% growth at the midpoint, 7% at the high end.
This is driven by occupancy levels expecting to increase from 91% at year-end up into the mid- to upper-92% range by the end of 2022. Increased forecast for current period collections up from an average of 95% in 2021 to an average 98% over the course of 2022. Greater contribution from our redevelopment and expansion pipeline. Again, for those modeling, let me direct you to our 8-K, where we're providing our forecast of stabilized NOI ramp up by year, as well as accretion from our 2021 acquisitions being online for the full year. Additionally, of the $440 million of 2021 acquisitions, they are really outperforming our original underwriting and are expected to yield a blended 6% in 2022 versus an initial 5.5% expectation.
Please note that these deals would clearly sell at a blended sub 5 cap rate in today's environment. Now, this will be offset by lower prior period collections, where the net 2021 level is $22 million. For 2022, it is expected in the range of $5 million-$8 million. We are expecting lower net term fees. We had $8.4 million in 2021 and forecast $4 million-$6 million in 2022, more in line with historical averages. Despite over 300 basis points of headwinds from prior period collections and lower net term fees, our comparable growth forecast is 3%-5% for 2022. Other assumptions include $300 million-$400 million of redevelopment and expansions at our existing properties, $300 million-$400 million of equity to be issued inclusive of the forward equity already sold.
G&A is estimated in the $50-$54 million range for the year. We've set a credit reserve of roughly 2%, plus or minus 50 basis points. Dispositions made in 2021 contributed $8 million of NOI to 2021. That obviously won't be there in 2022. We will have lower interest income given the repayments in mid-2021 of a $30 million mortgage loan that yielded 10%. As is our custom, this guidance does not reflect any acquisitions or dispositions in 2022. We will adjust for those as we go given our opportunistic approach to both. It also does not assume any tenants moving from cash basis to accrual basis. Please note the expanded disclosure in our 8-K relating to guidance.
With respect to our goalposts for 2023 and 2024, we continue to believe that 5%-10% compounded growth from our upwardly revised 2022 FFO range is achievable. Timing and terms of the lease up at One Santana West will have a big influence on where we end up within that range. Now while we are not providing color on specific timing, $7 per share of FFO is a realistic target in the coming years. With that, operator, please open the line for questions.
At this time, we'll be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we pull for questions. Our first question comes from the line of Alexander Goldfarb with Piper Sandler. You may proceed with your question.
Hey, good afternoon. Two questions here. The first question is, you know, obviously on the apartment side, what we've seen all around is, you know, the rent rebounds and rent growth is tremendous. On the retail side, the sales recovery has been just off the charts. I mean, the mall companies have been saying, you know, it's well exceeded 2019. You guys are talking similar. It's hard to believe that this is all just a catch up of people staying in their homes, you know, during 2020 and early 2021. Do you think there's something else at work, or is this just like a one-hit wonder, we all rebounded, you know, this year or, you know, in 2021, and then sales are leveling out?
Do you think that people have sort of, and retailers themselves have rediscovered retail, and therefore this accelerated sales pace is sustainable the next several years?
Yeah, Alex, I mean, that's the question of the day. Everything we seem to see, and again, it's looking at it through our view, which is not a national view. It's really primarily a coastal view, suggests that the recovery of sales, etc., are here to stay. I do think there was something very interesting that happened through COVID in terms of people's realization of how important social was. Really important into how going out to eat and to play and to shop is. So I think a lot of that stays. The other thing, and you kind of touched on it early in the first part of the question, I want to address it, is the residential side.
You know, there is no doubt that places. Again, our residential outlook is only on a few places. It got hurt.
You know, as you think about it going into COVID, the way it's recovering is pretty interesting to me. We have a really interesting barometer. If you remember at Assembly, pre-COVID, we were opening up a big 500-unit building that we called Montage. In that building, in the fourth quarter of 2018, October, November, December of 2018, before any COVID, that building, you know, we had average rents of $3.35. Ironically, we're now opening the second building, which is also 500 units, and it's right next door. It's called Miscela. It's leasing up faster than we thought, and it's leasing up at $3.85 in that fourth quarter. 15% more than pre-COVID at Assembly Row. It's really interesting.
If you look at the deals that are happening in January and February, not a big sample size, you know, because it's January and February in Boston, but those are well over $4 a foot. There's something that's happening here with respect to lifestyle, with respect to shopping, with respect to certainly the office piece in terms of what's to come there that really feels to me like an energized pre-COVID time that to some level is here to stay.
Okay. The second question is, you know, with the recent crime waves that have happened and, you know, stores that have been targeted, I mean, your portfolio has been hit. You know, on the public earnings calls, all the companies that I've asked so far, everyone said there's a little bit more security costs, but no tenant has changed their leasing plans or is moving stores. Yet when we speak to people and some of the companies privately or, you know, speak to others that are involved in retail in urban settings, it's a different story. My question is it just that in general there's really been no fallout, there's increased security costs, but in general, there's been no leasing fallout, tenants really aren't shifting their portfolios?
Is it that, yes, in certain markets they're seeing a change, but it's not a change that is appearing nationally, you know, or retailers look at their fleets.
I can really only respond to our properties in our markets, and I can tell you there has not been a change in any of the retailers' plans for moving forward because of crime.
Okay. Thank you, Don.
Our next question comes from the line of Craig Schmidt with Bank of America. You may proceed with your question.
Yes, thank you. You guys have come out of COVID being rather aggressive, impressively so on your external growth. You, you've really taken up your acquisitions, and you continue to push on your redevelopment. I'm just wondering, though, with the continued pressure on cap rates, may you start to favor redevelopments over acquisitions just because it's tougher to buy and adding value when cap rates are so attractive is a compelling proposition.
Great question, Craig. Let Jeff jump on that first, particularly from the acquisition side.
Yeah. Hey, Craig. Good evening. I mean, I think you're right on point. We were really happy with what we got done in 2021, as Dan mentioned in his prepared remarks. We got those deals done in the first half of the year, generally speaking, which was great. All the properties we bought in 2021 have great redevelopment and value add opportunities going forward, which, as you know, we think is very important when you're buying something. The second half of the year our margins have
Mm-hmm.
Really tightened up. You know, yields now, whether you're talking about cap rate or IRR, are lower than they were pre-pandemic. You know, where public equity trades, you know, in the teens on average, it's a real head scratcher as to how you make the numbers work for, you know, your normal grocery anchored neighborhood or a community center. The numbers just don't work, especially when you look out a few years, and what the growth of the property level needs to be to support the implied growth in the equity that's issued by the asset. I think you're spot on. You know, as you know, we're careful about that kind of stuff.
We've always been really disciplined because we've never felt pressured to buy anything because we have, as Don said, so many tools in the tool bag. We'll continue doing what we've done for, you know, the last two decades that most of us have been here, and we'll be careful about what we buy and make sure it's got good go forward growth prospects, densification opportunities, lease up, re-leasing, all that kind of stuff. Certainly, if you don't have the ability to source that stuff, if you don't have the ability to take advantage of those opportunities, just growing by buying something in today's market is not a very good idea in my view.
Thank you.
Our next question comes from the line of Katy McConnell with Citi. You may proceed with your question.
Hi, everyone. Thanks. Just wondering if you could walk us through some of the key swing factors that could get you to the higher or the low end of your updated FFO guidance range, since it's still a fairly wide range for this year. What would need to happen for you to narrow that more throughout the year?
This is Jeff, and hey, Katy, how are you? Look, I think that, you know, we've given a range of 3%-5% for comparable property. You know, I think that kind of what goes in that is just, you know, collections both prior and prior period, as well as kind of going forward current. Also kind of what we do with regards to, you know, term fees, which we've kind of reduced. Our prior period rents have also been reduced. We've given a range. I think you'll see on page 33, in our guidance, we give kind of a little bit of a range with regards to, you know, G&A expense, $50 million-$54 million.
I think it's a little bit of a sense of the range of development, redevelopment capital that we can put to use, and then also, you know, how much equity we raise. You know, we've also, you know, how quickly some of the rents can come online at our developments as well as the rest of the year, how, you know, how we can get things rent started. I think there's a whole host of those. I think we've given a range of a credit reserve at around 2% ±50 basis points. That's another one, obviously, that shows up, you know, will be reflected in the 3%-5% comparable to an extent.
Those really, I think, kind of are the levers that get us there with regards to that stated, you know, range of guidance. Again, it does not include dispositions, does not include acquisitions, does not include any changes in our revenue recognition with regards to cash versus accrual.
It's Michael Bilerman here with Katy. Don, I was wondering if you can maybe just step back and just think about capital sources and uses. You have $300 million-$400 million of development and redevelopments planned that you have targeted for this year. In your opening comments, it sounded like there was a number of transactions on the acquisition front that you have underway. You list here about $300 million-$400 million of equity, which is effectively. I don't know if that equity is all common equity. I don't know if you're deeming that to be equity, selling assets. Just talk a little bit about how you think about funding that growth and how significant it could be.
You bet, Michael. The first thing you gotta remember is that we've got forward equity contracts of $250
$260 million that has already been sold that will be taken down in 2022 at some point. That's important. Incremental equity in our budget is another $140 million or so on top of that. We're also looking at selling a couple of assets that probably you should think about another $100 million or so there. What we're really certainly trying to do is be very balanced with respect to you know the capital that we would use, and again, have raised a lot of it already. That's important. We're not gonna lever up the company. We're going the other way. The notion of you know new deals and how those deals would be financed, they'll stand on their own.
We'll figure out, you know, the best way to finance those depending on what type of asset they are, you know, where we're going. With respect to the stuff that's committed, we're in really good shape because of the pre-funded equity so far and the couple of dispositions that we would do.
I guess from a volume perspective, how do you think about, you have added all the yields back to the supplemental, thank you for that. Some pretty attractive yields relative to where the acquisition market's being priced and certainly relative to where you got those deals off, you know, last year. I guess why not activate more of the stuff that's in your wheelhouse versus going out and paying lower cap rates for acquisitions and issuing equity at a discount to where your NAV is, right? I mean, you'd be diluting shareholders.
First of all, fully agree with you, Michael. What you have to first really make sure you get is all the capital that has been spent to date that is not yet producing. That is automatic FFO growth, so automatic, you know, property level growth. It is the single biggest source of growth in the next couple of years after plain old lease up of a portfolio that is still under lease in terms of where it goes. Those two things are huge. The other thing with respect to, you know, acquisitions, and this is where I could not agree with you more. They've got to make a lot of sense.
Now, I will tell you that there is one that we're looking at specifically in order to handle a you know a 1033 exchange transaction that we had a couple of years back. There are, you know, we'll step up to be able to do a deal that makes sense overall from a tax perspective. Beyond that, your point is 110% right, and I couldn't agree with you more.
Okay. Thanks. See you at CocoWalk in a few weeks.
Our next question comes from the line of Greg McGinniss with Scotiabank. You may proceed with your question.
Hey, good evening. Just looking at leasing. Leasing volumes are obviously quite strong. Rent spreads are slightly less exciting. Could you just talk about market rent growth that you're seeing relative to 2019, and then in what regions you're either seeing more strength or recovery in rent growth?
Yeah, I could start on that. Wendy, jump in wherever I screw this up. When we sit and we look at 6%, 8%, 9%, something like that, which is where we expect to be overall, that is. That's about where we are overall compared to not only 2019, but what is in place all the way through. When you look specifically to 2019, and I just did this to get comfortable with it, we are 3, 4, 5 or so % higher than 2019 overall. That doesn't mean, and I've said this 100 x, that it will always be the case, that there aren't specific deals that'll either drag that down or drag that way up.
In this particular quarter, there's a good example of that. We had a CVS inline at Barracks Road, one of our best shopping centers, that we could not accommodate a drive-through. They left the shopping center to go across the street for a drive-through. Those things happen. That was a big rent payer that wouldn't be able to be replaced without that deal. Those rollovers would've been 8% for the company. There's always a couple of things like that, and they go both ways throughout the company. Overall, you are talking about a level of demand that's in excess of the supply of our particular product. Overall, you should expect that continued growth in rents.
The other thing is, though, you've got to translate that down to the bottom line. When you hear big numbers of rollovers, but no growth at the bottom line, you've got to sit there and say, "What?" Because from my perspective, being able to expand at properties that are fully settled as great retail destinations like a Pike & Rose or like an Assembly, like a Santana Row, to be able to add buildings, to expand what you have, my gosh, that's great risk-adjusted growth. That really needs to be thought through and considered in terms of it. Both the leasing and the expansion and the PIPs, the Property Improvement Plans, all of that, when that happens, winds up, I think, we show you bottom line growth that is consistent and sustainable for a number of years.
That's the name of the game.
All right. Well, thank you. Just regarding those potential acquisitions that you and Michael were referencing, what are you seeing in the market from a cap rate perspective, and how do you think that impacts the value of your portfolio? I know, Dan, a few years ago, gave us his NAV estimate, which I believe you weren't too pleased about, him giving in the first place, but he convinced you otherwise, which we all appreciated. I'm just curious on where you think that stands now.
First of all, Greg, that's just good cop, bad cop between Dan and I. We're on the same page in terms of that. Look, I don't know. It's been so well-publicized. It's so clear that, you know, really strong shopping centers today are in the markets that we want to be in or supply generally.
Yeah.
I mean, that's, you know, that's where they are. When you take a look at the big projects that we have, when you look at, you know, what the value of CocoWalk's gonna be, when you come and see it, when you take a look at what's being added at Pike & Rose, at Assembly Row, et cetera, I think you're gonna. I think it's pretty obvious that you're talking about sub-5% across the board in this company, not at every shopping center, but across the board in total. When you look at that, you can do the math as to where you think the NAV should be. To me, that NAV is critically important.
The most important thing about that, and it ties obviously into the cap rate, where's the growth, man? How are you gonna grow it? And what's that thing gonna be like in a few years? Because that's what a buyer is paying for.
Okay. Just to follow up on that, with the new structure in place, should we expect to see some use of that structure in terms of OP units to help on the acquisition side?
You know, maybe yes, maybe no. That was an administrative change that was. Frankly, we found a relatively simple way and inexpensive way to do it, or Don found it actually, to be able to do that such that we so that we weren't at any disadvantage should the opportunities come up. I know it's not a bad thing in any way you look at it. To the extent, you know, some of the deals we're talking about or looking at can utilize that and give the particular seller more comfort, great. I couldn't handicap it with you as to, oh, yeah, that, you know, that means we'll do four deals instead of one deal or that kind of thing. It's generally a good thing.
All right. Thanks, Don.
You bet.
Our next question comes from the line of Juan Sanabria with BMO Capital. You may proceed with your question.
Hi. Thanks for the time. I think you mentioned about 150 basis points of occupancy growth in the prepared remarks from year-end to year-end, but just curious if you can give us any sense of the cadence throughout the year, typically seasonal in the first quarter, but that seems to have gone out the window with COVID here and the recovery to date. Just curious if you have any wisdom to share on how we should think about occupancy for 2022?
Yeah, I think that growth, and it's a range, you know, where we're trying to get up into that 92.5, high 90s range. I think you should just model it pro rata by quarter. I don't think there's a particular cadence in terms of how that increase will occur on the occupied metric.
Okay, great. Just on Santana West, hoping you could give us a little color on how those leasing discussions are progressing. Any expectation for signing a lease here in the near term to give us more confidence in maybe adding that incremental NOI to, like, a 2023 property NOI as that development comes on, or how should we think of the timing of that potentially?
You know, on this particular issue, I have never been so torn in my life about talking more than I should or less than I should on this. I know what I'm very comfortable with is that the conversations that are happening are a bit of a horse race right now. The notion of kinda helping one versus the other, I don't wanna signal anything on that more than to tell you that we're making some good progress. I'm not gonna put a time on it, and I can't give a little bit more, given the nature of the negotiations at this point. Sorry.
Understood. No, thank you very much.
Our next question comes from the line of Haendel St. Juste with Mizuho. You may proceed with your question.
Hey, Don. Hope you guys are well. I wanted to ask you about the cash basis tenants still pretty elevated here. I don't think there was a change versus last quarter. I guess I'm curious why we aren't seeing more progress on that given the backdrop. You're doing tons of leases, rents are going up. How do we square that versus the optimism that's fairly obvious in your voice and your outlook?
Well, what are you referring to with regards to your question regarding the cash basis tenants?
The %, I'm looking here at 26% of. Let's see.
There's no plans for us to switch them back from a cash basis to an accrual basis. You know, there's likely to be some fairly high hurdles for us to do that. Yeah, look, even pre-COVID, we had a big chunk, most of our restaurants were on a cash basis to begin with already. Yeah, I wouldn't anticipate, you know, it's not as though there's any progress. We need to see kind of repayment of deferrals. We need to see other progress with regards to consistency of payments, and then we'll make those decisions. I wouldn't anticipate anything, and that's why we have nothing in our guidance with regards to making that change from cash to accrual.
Got it. Comparably, but what was that pre-COVID? What was the range relative?
Probably around, you know, kind of the mid-teens% of ABR. You know, just the big chunk of that was restaurants and then, you know, our normal, you know, cash basis tenants, so lower quality tenants at any one point in time.
Got it. Okay, thanks for that. A question on rent commencement. Last year, certainly the focus was on rent collection. This year, more so on rent commencement. I'm just, I guess, curious as to the question of supply chain and labor constraints. Any risk of perhaps not meeting some of the rent commencement timelines and risks of signed but not yet opened rents in any sense of anything you're able to do to perhaps compress some of those timelines or work with tenants in any way? Thanks.
Yeah. The answer is yes to all the questions you just asked about that, Haendel. I mean, look, supply chain's a big deal. Are we able to do stuff about it? You bet we are, from the standpoint of certainly the components of it, whether you're talking about HVAC equipment, whether you're talking about some of the provisions in the lease where that tenant will work with us. There are things that we have done and continue to do. As Wendy loves to say, boy, you can't argue with this, is great relationships with tenants means that there's a partnership there in trying to get a store open.
That partnership means there is more likely to have a give and take in that, you know, in the build-out process of where you can find the right equipment to be able to get stuff in. We've had some real good success getting started with that. Does that mean there's no risk on the supply chain side to store openings? Of course not. Anybody that tells you differently is you know, you look them square in the eye because that's what's going on in the country right now. We're all over it, and frankly, have been all over it for quite some time, including staffing up there, including helping as best we can with relationships in the cities on the permitting side, which is always the you know, the least predictable part of this.
All hands on making sure that the 3 million sq ft of leasing that has been done at this company in the past is able to have its best chance for starting before or on the dates that we've got forecast.
Could you guys give an updated number for the signed but not yet rents? I think last quarter that figure was $25 million. Are you expecting 90% to hit this year? Can you give us a link for that?
No, we're with signed, not occupied. That's what's identified and the difference between our leased and occupied is about $23 million. We've also got a big chunk that is effectively about $17 million in our non-comparable pool or basically currently in our, we call it, redevelopment pipeline, as well as what's in our current pipeline of kind of 2022 deals that have been signed so far and going forward. That gets you up into the $50+ million of total rent starts potentially. We feel good about where we stand, and we see that as a big driver of some upside over 2022 and into 2023.
Wonderful. Thank you guys.
Our next question comes from the line of Floris van Dijkum with Compass Point. You may proceed with your question.
Thanks, guys, for taking my question. Actually, following up on what Haendel asked about as well, I mean, if I do the math, I see, you know, excluding the NOI coming online from the development pipeline, which, you know, could be, you know, up to $75 million, you're, you know, you've got more than $10 million of NOI growth sort of identified here, if I add up all of these pieces. If we start, you know, factoring this out, and obviously not all of it's gonna come online in 2022, but, you know, a significant amount, you know, will be probably back end into 2022, into 2023. We're looking here at, you know, double-digit NOI growth, you know, going into, you know, by the end of 2023, comfortably double digits.
That seems pretty attractive. Are we missing something here?
Well, keep in mind I mean, look, we'll have strong growth as the developments come online, and I think you can look at our additional disclosure on the big projects to kind of get a sense of that. Keep in mind, though, also there's the offset of capitalized interest going away as we deliver those buildings. We have signed leases there. As we deliver those spaces to the tenants, obviously we shut off the capitalized interest. That's a bit of an offset. Obviously that's what flows down to the bottom line. It's just it's not kind of how quickly we grow the NOI up top. Obviously, there's capital associated with some of the redevelopment and expansions that we've got.
As you know, Don sort of alluded to, in some of your residential leasing, presumably having a building that's signing rents 15% higher than next door, that suggests that the existing rents have some significant potential upside here as well. How long will it take, you know, do you think, in your view, to harvest some of that residential rental upside as well?
Yeah, that's a great question, Haendel, and that should be a source of positivity for 2022, particularly, you know, through the spring season into later in the year. A little bit of luck, we'll have that big building up at Assembly all leased up by the end of the year, which would be great, which would be good stuff for, you know, 2023. Really based on what's going on in Boston right now, that is a real bright spot from a life sciences perspective and a back to work perspective and a job creation perspective. That is one of our, if not our hardest, you know, strongest markets. Which is interesting because it was the market that was hurt the most during COVID.
Gotcha. That's it for me.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment while we poll for questions. Our next question comes from the line of Linda Tsai with Jefferies. You may proceed with your question.
Hi. Can you discuss expectations embedded in your NOI growth of 3%-5%? What's the balance between growth in revenues ex- and expenses?
You know, I think that we would expect expenses. We've had a good year with regards to real estate taxes and keeping them low this year, so they should have big growth from this level. I would expect that, you know, there should be kind of modest, kind of, you know, figure 3% rent expense growth in ordinary course from that perspective. Then, you know, obviously just occupancy growing, you know, with collections growing, with the offset of some prior period and lower termination fees and so forth, all factor in, and obviously some, you know, some of the credit reserve is embedded in there, beyond just the collection impact. All of those.
With regards to expenses, I would forecast kind of a traditional kind of 3% increase on both OpEx and real estate taxes. Maybe a little bit higher on the OpEx, just kinda given inflationary pressure. That's all embedded in that 3%-5%.
What are you forecasting for bad debt in 2022?
You know, like I said, our credit reserve is the, you know, call it 2% + or - 50 basis points. I think there's a bunch of. You know, traditionally, we're kind of in the 50 basis points of bad debt as a component of that credit reserve. It's gonna be elevated, I would expect. You know, probably gonna be at least north of 1%. That's what's. There's a range that's reflected in that 3%-5%. You know, it'll be elevated in 2022, even above kind of the collection impact.
Thanks. In the earlier comments, you mentioned that lease up at Miscela is getting 15% higher rents. Is there anything in particular driving that, maybe in terms of the demographics that are moving in?
No, it's job growth. It's job growth in Boston. I mean, life science is absolutely on fire. It's a return to, you know, work. It's just a powerful job creating market.
A lot of relocations into the market from other parts of the country.
Yeah.
Very impressive.
Thanks.
Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Ms. Leah Brady for closing remarks.
Thanks for joining us today. We look forward to seeing everybody at the Citi conference in a couple of weeks.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.