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News Release

Federal Realty Announces Acquisition of Central New Jersey Community Shopping Center; Property Offers Significant Redevelopment and Retenanting Opportunities

ROCKVILLE, Md.--(BUSINESS WIRE)--Oct. 15, 2003--Federal Realty Investment Trust (NYSE:FRT) today announced the acquisition, through a master lease, of Mercer Mall, a 410,000 square foot, open-air, community shopping center in Mercer County, N.J. Located on the west side of Route 1 at Province Line/Quaker Bridge Road, Mercer Mall is approximately four miles from Princeton, N.J. and 25 miles from Philadelphia, Pa., key markets in Federal Realty's strategic geographic footprint. The Property draws from a wide trade area of between three and 15 miles, having a population of approximately 300,000 people with average household incomes of over $90,000.

Federal Realty entered into a master lease with a private owner for the approximately 390,000 square foot primary portion of Mercer Mall. Under the master lease, the Trust has the option to acquire the fee interest in 20 years at a fixed price of $55 million. Federal Realty also acquired the fee interest in approximately 20,000 additional square feet of the Property, utilizing $5 million of proceeds from recent property dispositions to fund the acquisition. In addition, Federal Realty has the remaining portion of Mercer Mall, a contiguous 40,000 square foot outparcel, under contract to purchase. The Trust anticipates closing the acquisition of this outparcel later this year.

Originally constructed in 1975, Mercer Mall is currently anchored by national retailers including DSW, TJ Maxx, Ross Dress For Less, Bed Bath & Beyond, Kids "R" Us and Drug Emporium. The Property is currently 80% occupied, with the most significant vacancy being an 85,000 square foot former Kmart department store. 75,000 square feet of the former Kmart store has been re-leased to Foodarama to operate a full-service, World Class ShopRite supermarket. Federal Realty plans to add gross leaseable area to the property and lease that additional area, together with the remaining Kmart space, to another national "big box" retailer. In addition to plans to implement a comprehensive upgrade of the Property's common areas, facades, and signage, the Trust anticipates having the opportunity to recapture and re-lease the below-market, 23,600 square foot space currently leased to Drug Emporium, which recently filed for bankruptcy protection.

"Mercer Mall has a 30-year proven track record of success," stated Jeff Berkes, Federal Realty's Senior Vice President and Chief Investment Officer. "Through this acquisition we control a dominant asset with significant upside potential in a growing trade area that has high barriers to entry. The addition of ShopRite, New Jersey's premier grocer, to the tenant mix, will greatly benefit the Property, and we expect to continue to add value over the coming years by redeveloping, expanding and improving the Property's position in the market."

"This is the second acquisition we have completed this year that has been sourced as an off-market deal in a difficult acquisitions environment," commented Donald C. Wood, Federal Realty's President and Chief Executive Officer. "We were able to identify a property and structure an acquisition that met the previous owner's objectives, while providing immediate FFO accretion and enhancing the long-term Property Operating Income growth of the Trust. Mercer Mall will be an excellent addition to Federal Realty's Philadelphia-area shopping center portfolio."

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development and re-development of shopping centers and Street Retail properties. Federal Realty's portfolio contains approximately 16.2 million square feet located in major metropolitan markets across the United States. The operating portfolio was approximately 93% occupied on June 30, 2003, by over 2,000 national, regional, and local retailers with no single tenant accounting for more than 2.5% 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 New York Stock Exchange 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 the Property; and

    --  those risks detailed from time to time in the Company's SEC
        reports, including its annual report on Form 10-K, its
        quarterly reports on Form 10-Q and its Form 8-K filed on March
        25, 2003.

Federal Realty assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

    CONTACT: Federal Realty Investment Trust
             Investor Inquiries:
             Andrew Blocher, 301-998-8166
             Media Inquiries:
             Kristine Warner, 301-998-8212

    SOURCE: Federal Realty Investment Trust