Federal Realty Acquires Six Shopping Centers From Its JV Partner, Poised For Incremental Growth And Additional Value Creation
ROCKVILLE, Md., Jan. 14, 2016 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today announced the acquisition of the 70% interest owned by affiliates of a discretionary fund advised by ING Clarion Partners in a joint venture that owns six neighborhood and community centers. Federal Realty purchased the 70% interest in the venture for approximately $154M, consisting of $130 million of cash and assumption of the allocable share of mortgage debt. With this acquisition, Federal Realty has successfully concluded the venture that was formed in 2004 and increased its ownership of the 820,000 square foot portfolio from 30% to 100%. The portfolio includes two properties near Boston, Massachusetts (Atlantic Plaza and Campus Plaza); one asset in the New York Metro region (Greenlawn Plaza on Long Island) and three centers in the Washington DC market (Free State Shopping Center and Plaza del Mercado in Suburban Maryland, and Barcroft Plaza in Northern Virginia).
"This transaction concludes a very successful joint venture between Clarion's fund and the Trust," said Jim Taylor, executive vice president and chief financial officer at Federal Realty. "During our period of ownership, we were able to realize substantial value for both our partner and our shareholders. The acquisition was completed off market at a price we believe is very favorable in today's competitive environment for a portfolio with strong NOI growth and significant upside over the long term, given the properties' locations, convenient access and strong demographics."
The three mile average household income of the portfolio averages $119,000, which is approximately 15% higher than The Trust's portfolio average of $105,000. In addition, the properties are located in mature submarkets with restrictive zoning rules, which further enhances their connection to and draw from the surrounding communities.
"We know these centers well. They are core locations in dense markets with strong anchor tenants that are relied upon retail destinations in their communities," said Jeff Mooallem, senior vice president and managing director at Federal Realty. "In addition, new leases with tenants like LA Fitness at Plaza del Mercado and a new grocery store at Greenlawn Plaza will allow us to enhance the merchandising mix over time. This acquisition will enable us to better position these properties for the future and create value for our shareholders, as well as for the communities served by these properties."
About Federal Realty:
Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, our mission is to deliver long term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Our expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 90 properties include over 2,700 tenants, in approximately 21 million square feet, and over 1500 residential units.
Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 48 consecutive years, the longest record in the REIT industry. Federal Realty shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.FederalRealty.com.
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