Federal Realty Announces Acquisition of Grocery Anchored Shopping Center in Maryland; Effectively Recycles Capital from Disposition of Connecticut Asset

ROCKVILLE, Md., Nov 3, 2003 (BUSINESS WIRE) -- Federal Realty Investment Trust (NYSE:FRT) today announced the acquisition of Plaza del Mercado in Montgomery County, Md. Purchased from a private owner, the Trust acquired the fee interest in the Giant Food anchored shopping center in an off-market transaction for approximately $20.0 million in cash, representing a capitalization rate of 8.1% based on management's estimate of projected cash-basis property operating income over the next 12 months.

Originally developed in 1969, Plaza del Mercado contains approximately 96,000 square feet of retail space and is anchored by an undersized, 24,000 square foot Giant Food and a CVS Pharmacy. Redevelopment opportunities, which include a potential grocer expansion and additional gross leaseable area, are projected to increase the yield and value of the property in the next few years, subject to entitlement, leasing, and redevelopment risk.

Located on Bel Pre Road, just west of Layhill Road in Silver Spring, Md., Plaza del Mercado has more than 101,000 people with average household income levels of $90,000 within three miles of the property. Projected housing growth in the property's immediate trade area over the next five years, coupled with this strong existing population density and average household incomes, complement the Trust's market leading demographics in the Washington, D.C. metropolitan area.

"The acquisition of this well-established neighborhood shopping center anchored by Washington's market leading drug store and supermarket further enhances the Trust's already dominant Washington-area portfolio," stated Jeff Berkes, Federal Realty's Chief Investment Officer. "Like our three other acquisitions in 2003, we have the opportunity to add substantial value to this property."

In a separate transaction, Federal Realty also announced the sale of a 15,000 square foot street retail asset located at 234 Greenwich Avenue in Greenwich, Conn., for $7.95 million, representing a 5.97% capitalization rate based on management's estimate of projected, cash-basis property operating income over the next 12 months. As a result of this sale, the Trust will record a gain of approximately $4.5 million in the fourth quarter of 2003. Proceeds from the sale of 234 Greenwich Avenue were used toward the purchase of Plaza del Mercado.

Commenting on the transactions, Don Wood, Federal Realty's President and Chief Executive Officer, stated, "The sale of 234 Greenwich Avenue and acquisition of Plaza del Mercado is a great example of our asset recycling program, whereby we sell stabilized properties with limited future property operating income growth at low capitalization rates and acquire shopping centers with repositioning potential at significantly higher near-term and longer-term returns. As a result, these transactions will be immediately accretive to FFO as well as accretive to our future property operating income growth rate."

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 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 proceed or obtain approvals necessary
        for any redevelopment or expansion of Plaza del Mercado, and
        that any redevelopment or expansion that we do pursue may not
        perform as anticipated;
    --  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.

SOURCE: Federal Realty Investment Trust

Federal Realty Investment Trust, Rockville
Investor Inquiries:
Andrew Blocher, 301-998-8166
ablocher@federalrealty.com
or
Media Inquiries:
Kristine Warner, 301-998-8212
kwarner@federalrealty.com