Federal Realty Announces Acquisition of a 637,000 Square Foot Shopping Center in San Jose, California; Purchase Solidifies the Trust's Competitive Position in the South Bay
ROCKVILLE, Md.--(BUSINESS WIRE)--March 31, 2004--Federal Realty Investment Trust (NYSE:FRT) today announced the acquisition of Westgate Mall, a 637,000 square foot shopping center in San Jose, California. The Trust acquired the fee interest in the shopping center for $97.0 million in cash from a private owner. Federal Realty expects to increase the value of the property through the re-leasing of retail space that is currently substantially below market. In addition, the Trust is evaluating potential long-term redevelopment opportunities for the shopping center.
Westgate Mall is currently 98% leased with the tenancy consisting primarily of strong national and regional merchants including Safeway, Target, Burlington Coat Factory, Ross Dress For Less, Nordstrom Rack, Barnes & Noble, Any Mountain Sporting Goods, Old Navy and Michaels.
Originally developed in 1960, expanded in 1966 and most recently renovated in 1995, Westgate Mall is situated at the corner of Saratoga and Campbell Avenues; two heavily traveled primary thoroughfares in San Jose. The in-fill trade area surrounding Westgate Mall is densely populated and affluent, with more than 190,000 people having average household incomes of $101,000 within three miles. With the acquisition of Westgate Mall, Federal Realty now controls four retail properties containing more than 1.3 million square feet in the South Bay.
"Westgate Mall is an excellent addition to our California portfolio," stated Jeffrey S. Berkes, Federal Realty's Senior Vice President and Chief Investment Officer. "Controlling a large, dominant property with below-market, in-place rents in a demographically strong trade area solidifies Federal Realty's competitive position in the South Bay. This acquisition also provides the opportunity to add value in the future through re-leasing and redevelopment. By controlling four shopping centers in the South Bay ranging from big box, to lifestyle to traditional neighborhood shopping centers, Federal Realty is able to provide a wide range of retail opportunities to existing and potential tenants and consumers."
As part of the Trust's strategy to grow its operating platform and presence in California, Jeff Berkes relocated from Federal Realty's Rockville, Maryland headquarters to its San Jose office in January 2004. Mr. Berkes joined the Trust in 1997 as a member of the Trust's acquisitions and dispositions team and was promoted to Senior Vice President in 2002 and named Chief Investment Officer in 2003. In his current capacity, Mr. Berkes is responsible for acquisitions, dispositions and other transactions involving the Trust's operating assets and plays an integral role in corporate strategic planning.
"The acquisition of Westgate Mall demonstrates Federal Realty's commitment to increasing our operating platform in strategic metropolitan California markets, thereby allowing us to better leverage our West Coast team based in San Jose," stated Donald C. Wood, Federal Realty's President and Chief Executive Officer. "The acquisition coupled with the relocation of Jeff Berkes and the bolstering of our West Coast leasing, operations and acquisition teams, strengthens our presence in California and moves us significantly closer to our goal of being a dominant retail landlord in these markets."
Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development, and redevelopment of shopping centers and Street Retail properties. Federal Realty's portfolio now contains approximately 16.9 million square feet located primarily in strategic metropolitan markets in the Northeast, Mid-Atlantic, and California. The operating portfolio was approximately 93% leased to over 2,200 national, regional, and local retailers as of December 31, 2003, with no single tenant accounting for more than 2.3% of rental revenue. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 36 consecutive years, the longest consecutive record in the REIT industry. Shares of Federal Realty are traded on the NYSE under the symbol FRT. Additional information about Federal Realty can be found on the Internet at www.federalrealty.com.
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. The factors that may impact these expectations include:
- risks that we may not undertake any redevelopment and/or re-leasing of Westgate Mall, that we may not obtain approvals necessary for any re-leasing or redevelopment of the property and that any re-leasing or redevelopment that we do pursue may not perform as anticipated;
- those risks detailed from time to time in the Company's SEC reports, including its Form 8-K filed on March 11, 2004 and its annual report on Form 10-K filed on March 15, 2004.
Federal Realty assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Federal Realty Investment Trust, Rockville
Andrew Blocher, 301-998-8166
Kristine Warner, 301-998-8212
SOURCE: Federal Realty Investment Trust