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In 1982 and 1988 Federal Realty Investment Trust entered into long-term participating master leases with Levin Properties at Mid-Pike Plaza in Rockville, Maryland, Huntington Shopping Center in Long Island, New York and six centers in New Jersey. The Trust purchased Levin's fee interest in Mid- Pike Plaza and Huntington Shopping Center and Levin purchased the Trust's leasehold interest in Allwood, Blue Star, Brunswick, Clifton, Hamilton and Rutgers Shopping Centers in New Jersey via a Section 1031 tax-deferred exchange and $17.2 million of cash.
The Trust expects to capitalize on the development potential at Mid-Pike Plaza in Rockville, Maryland beginning in 2010 when the Trust has the ability to control 90% of the retail space at the property through lease expirations and recapture rights. Due to its proximity to Metrorail, the Montgomery County conference center and the desirable, in-fill nature of the site at the intersections of Rockville Pike, the new Montrose Parkway and Old Georgetown Road, the Trust anticipates seeking to entitle the approximately 20 acre site for high-density, mixed-use development, consistent with Montgomery County's Smart Growth initiatives. The fully leased Huntington Shopping Center boasts strong household incomes and population density consistent with Federal Realty's sector leading demographics and strong projected NOI growth over the next several years.
"We are strong believers that shopping center value can best be maximized when both the land and the improvements to that land are held by the same party," said Don Wood, president and chief executive officer for Federal Realty Investment Trust. "By consolidating the ownership of land and improvements at Mid-Pike Plaza and Huntington Shopping Center we expect to be able to significantly enhance value through redevelopment and re-leasing in the coming years. Similarly, by selling our leasehold interest in the other six properties with lesser prospects for growth, we expect to enhance the Trust's overall internal growth rate in the balance of our portfolio."
"This transaction has the added benefit of simplifying and strengthening our balance sheet by eliminating approximately $76 million of high interest capital lease liabilities," continued Wood.
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 18.2 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 1.0 million square feet of retail space through a joint venture in which the Trust has a 30% interest. Our operating portfolio (excluding joint venture properties) was 96.4% leased to national, regional, and local retailers as of September 30, 2007, with no single tenant accounting for more than approximately 2.9% 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 40 consecutive years, the longest record in the REIT industry. Shares of Federal Realty are traded on the NYSE under the symbol FRT.
Media Inquiries
Andrew Blocher
Senior Vice President,
Capital Markets & Investor Relations
301/998-8166
ablocher@federalrealty.com
Vikki Kayne
Vice President,
Marketing & Corporate Communications
301/998-8178
vkayne@federalrealty.com
SOURCE Federal Realty Investment Trust
