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News Release

Federal Realty Acquires Additional Retail Parcel at Bethesda Row

ROCKVILLE, Md. (January 25, 2006) – Federal Realty Investment Trust (NYSE:FRT) today announced the acquisition of 4900 Hampden Lane, a fully-leased 35,000 square foot retail parcel adjacent to Bethesda Row, Federal Realty's popular retail and dining destination in Bethesda, Md. Federal Realty acquired the fee interest in the property for $12 million in cash from a private owner.

Acquisition of the Hampden Lane property further enhances Federal Realty's ownership in Bethesda Row, as the Trust now operates 475,000 square feet of retail and office space in the eight-block area of Elm Street, Arlington Road, Bethesda Avenue, and Woodmont Avenue in downtown Bethesda.

4900 Hampden Lane is anchored by Washington Sports Club, and is located at the northwest corner of Woodmont Avenue and Elm Street directly across Elm Street from Bethesda Row's Austin Grill and diagonal from Jaleo Restaurant. Four small shop spaces at the newly acquired parcel are leased to Community Auto, Super Cleaners, Bethesda Dance, and Ritz Camera. Federal Realty anticipates increasing the value of the property over time through a combination of redevelopment and re-leasing activities.

"The Trust views this acquisition as an opportunity to continue to create value for Bethesda residents and visitors," said Jeff Berkes, senior vice president and chief investment officer for Federal Realty. "We have demonstrated our ability to enhance the value of surrounding communities through our redevelopment and retail leasing expertise and are always looking to expand on our already successful projects through the acquisition and improvement of nearby retail space.”

About Federal Realty

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development, and redevelopment of high quality retail assets. Federal Realty's portfolio (excluding joint venture properties) contains approximately 17.6 million square feet located primarily in strategic metropolitan markets in the Northeast, Mid-Atlantic, and California. In addition, the Trust has an ownership interest in approximately 0.5 million square feet of retail space through its joint venture with Clarion Lion Properties Fund in which the Trust has a 30% interest. Our operating portfolio (excluding joint venture properties) was 95.5% leased to national, regional, and local retailers as of September 30, 2005, with no single tenant accounting for more than 2.2% of annualized base rent. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 38 consecutive years, the longest consecutive record in the REIT industry. Shares of Federal Realty are traded on the NYSE under the symbol FRT.

Safe Harbor Language

Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Current Report on Form 8-K filed on March 2, 2005, and include the following:

  • risks that our tenants will not pay rent or that we may be unable to renew leases or re-let space at favorable rents as leases expire;
  • risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that any redevelopment or renovation project that we do pursue may not perform as anticipated;
  • risks that the number of properties we acquire for our own account, and therefore the amount of capital we invest in acquisitions, may be impacted by our real estate partnership;
  • risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that we may have environmental risks at our properties, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
  • risks that our growth will be limited if we cannot obtain additional capital;
  • risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and
  • risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT.

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events, or otherwise. You should review the risks contained in our annual report on Form 10-K, our quarterly reports on Form 10-Q, and the risks contained in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 2, 2005.

Investor and Media Inquiries
Andrew Blocher
Vice President,
Capital Markets & Investor Relations

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Senior Director,
Marketing & Corporate Communications