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News Release

Federal Realty Announces Addition of Two Grocery-Anchored Shopping Centers to Joint Venture With Clarion Lion Properties Fund

ROCKVILLE, Md., June 8 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today announced the acquisition of Barcroft Plaza, a grocery-anchored neighborhood shopping center in the Washington, D.C. metropolitan area, for $25.1 million in an off-market transaction. The property was acquired for the Trust's joint venture with Clarion Lion Properties Fund. The venture placed non-recourse, property-secured financing of $16.6 million on the asset at closing. In addition, the Trust today announced the contribution of Greenlawn Plaza to the venture, a property that the Trust acquired in an off-market transaction in 2000 that has been successfully redeveloped and stabilized. Located in Greenlawn, N.Y., Greenlawn Plaza was valued at $20.4 million and the venture placed non- recourse, property-secured financing of $13.6 million on the asset at closing.

"These properties mark the fifth and sixth additions of well-located, grocery-anchored shopping centers to our joint venture with Clarion Lion Properties Fund, and are the first additions since our renegotiation of the joint venture terms earlier this year," said Jeff Berkes, Federal Realty's Executive Vice President and Chief Investment Officer. "The six stabilized grocery-anchored shopping centers that now comprise the venture were all acquired in off-market transactions, demonstrating the Trust's disciplined approach to the acquisition market."

Barcroft Plaza is anchored by Harris Teeter grocery store and is fully leased. The approximately 90,000 square foot shopping center was constructed in 1972, expanded in 1990 and renovated in 1999. The property is located inside the Capital Beltway at the intersection of Columbia Pike (Route 236) and Lincolnia Road in Fairfax County. Within a three-mile radius around the property, there are more than 200,000 people with average household incomes of $92,000.

Greenlawn Plaza is anchored by Waldbaum's grocery store and is also fully leased. The Trust acquired the 102,000 square foot shopping center in 2000 and renovated it in 2004. The property is located on Pulaski Road in Suffolk County on Long Island. There are more than 80,000 people having average household incomes of $121,000 within a three-mile radius around the property.

Federal Realty announced in July 2004 that it had formed a joint venture with Clarion Lion Properties Fund, a discretionary fund created and advised by ING Clarion Partners. The terms of the joint venture were renegotiated in March 2006. The joint venture now owns six properties containing 658,000 square feet, which represent more than one-third of the venture's $350 million investment target. Additional details on the venture and the complete joint venture agreement are included in the Form 8-Ks filed with the Securities and Exchange Commission by Federal Realty on July 12, 2004, and March 8, 2006.

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 17.5 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 0.7 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 96.2% leased to national, regional, and local retailers as of March 31, 2006, with no single tenant accounting for more than approximately 2.5% 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 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 most recent annual report on Form 10-K (as amended), 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 completion of anticipated or ongoing property redevelopments or renovations may cost more, take more time to complete, or fail to perform as expected;
  • 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 environmental issues may develop at our properties and result in unanticipated costs, 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 may be 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 carefully review the risks and risk factors included in our most current annual report on Form 10-K (as amended) and our quarterly reports on Form 10-Q.

SOURCE Federal Realty Investment Trust

CONTACT: Andrew Blocher, Vice President, Capital Markets & Investor Relations, +1-301-998-8166, ablocher@federalrealty.com, or Vikki Quinn, SCMD, Vice President, Marketing & Corporate Communications, +1-301-998-8178, vquinn@federalrealty.com, both of Federal Realty Investment Trust