Federal Realty Announces Phase II of Santana Row; 95% Pre-leased to Best Buy and Container Store

ROCKVILLE, Md., Feb 7, 2003 (BUSINESS WIRE) -- Federal Realty Investment Trust (NYSE:FRT) announced today that Phase II of Santana Row, the Trust's urban mixed-use project in San Jose, California, will encompass the development of two pad sites consisting of approximately 84,000 square feet of retail space and the construction of 275 additional parking spaces.

The cost of Phase II is estimated at $27 million and is expected to provide a cash return on cost of approximately 16%.

The two new freestanding buildings, which are over 95% pre-leased to Best Buy and Container Store, are located at the corner of Stevens Creek and Winchester Boulevards, adjacent to Crate & Barrel. A site plan of the project, identifying Phase II, can be viewed at www.federalrealty.com. Best Buy will occupy a 52,000 square foot, two-level building on one pad site.

On the other pad site, Container Store will occupy approximately 28,000 square feet in a two-level, 32,000 square foot building. The site is currently being prepared and construction of the two buildings is expected to commence shortly. It is anticipated that both Best Buy and Container Store will be open for the 2003 holiday season.

An additional 275 parking spaces will be constructed by adding an additional level to the existing structured parking garage which services Crate & Barrel and other retailers at the northern end of Santana Row.

"The physical placement of the Best Buy and Container Store pad sites ensure that customers will have excellent access and plenty of parking without detracting from the special nature of the retail experience on the main streets of Santana Row," stated Pamela Brady, vice president, street retail leasing for Federal Realty.

"This is the first example of how all future phases of development at Santana Row will be executed," stated Donald C. Wood, Federal Realty's president and chief executive officer. "These investments will be small, justified on a return on invested capital basis, include risk mitigation measures and compete for capital with other acquisitions and redevelopment opportunities available to the Trust."

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 over 15 million square feet located in major metropolitan markets across the United States.

The operating portfolio is currently approximately 95.5% occupied by over 2,000 national, regional and local retailers with no single tenant accounting for more than 2.6% 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 35 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:

Inability to lease approximately 4,000 square feet of remaining Phase II space at the projected rental rates within the anticipated time frames;

Inability of Best Buy and Container Store to perform under the terms of their leases.

Operating costs for Phase II being higher than anticipated

Construction costs for Phase II being higher than anticipated or construction taking longer than projected; and

Those risks detailed from time to time in the Company's SEC reports, including its annual report on Form 10-K and its quarterly reports on Form 10-Q.

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
ablocher@federalrealty.com
or
Media Inquiries
Kristine Warner, 301/998-8212
kwarner@federalrealty.com

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