Federal Realty Acquires Controlling Interest in Montrose Crossing

ROCKVILLE, Md., Jan. 9, 2012 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today announced the acquisition of an 89.9% controlling interest in Montrose Crossing, a 357,000 square foot, grocery-anchored shopping center in Rockville, Maryland for $127 million.  The property is located at the northeast corner of Rockville Pike and Montrose Parkway/Randolph Road, the same intersection that borders Federal Realty's Mid-Pike Plaza, soon to be developed as Pike & Rose.  With the acquisition, Federal Realty controls 1.2 million square feet of existing retail space on Rockville Pike within a mile of Montrose Crossing - at Congressional Plaza, Federal Plaza and Mid-Pike Plaza - with expectations of expanding that presence with the development of Pike & Rose, which is scheduled to break ground in mid-2012.  The intersection of Rockville Pike and Montrose Parkway/Randolph Road has average daily traffic counts of approximately 100,000 cars in highly affluent Montgomery County, Maryland.

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"Montrose Crossing has been a prime acquisition target of our firm for decades," commented Don Wood, president and chief executive officer of Federal Realty. "It's a dominant shopping center with very productive tenant sales that has historically competed aggressively with our own Congressional Plaza, Federal Plaza and Mid-Pike Plaza. With the addition of Montrose Crossing, we now have a product on the Pike that will work in terms of focus and merchandising strategy for nearly every retailer."

Montrose Crossing is anchored by a 73,000 square foot Giant Food, Old Navy, Marshalls and Sports Authority, and contains a variety of restaurants, service tenants and other retail uses.  The property is shadow-anchored by a 148,000 square foot Target.  Montrose Crossing was built in various stages beginning in the 1960s, and was most recently expanded, with the addition of Bob's Furniture in 2011 and the planned addition of AC Moore in 2012. 

Under current zoning, Montrose Crossing could be expanded with commercial and residential uses subject to governmental tests and in place lease terms.  Additional density could be granted as Montgomery County, Maryland continues updating its zoning laws to promote smart growth in and around existing Metro stations.  Tenants at the property produce strong sales with rents that are generally below current market rates.  The property is encumbered by a new $80 million, 10-year, secured mortgage at a rate of 4.2%. 

At closing, in late December 2011, Federal Realty incurred approximately $2.4 million ($0.04 per diluted share) of closing costs associated with the acquisition, which had not previously been included in the Trust's 2011 FFO per diluted share guidance.  Montrose Crossing is expected to be accretive to Federal Realty's earnings beginning in 2012, and is expected to provide value creation for the Trust in both the medium and longer term.

About Federal Realty
In 2012, Federal Realty celebrates 50 years of being a proven leader in the ownership, operation, and redevelopment of high quality retail real estate in the country's best markets.   Federal Realty's portfolio (excluding joint venture properties) contained approximately 18.6 million square feet at September 30, 2011, located primarily in strategically selected 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 93.3% leased to national, regional, and local retailers as of September 30, 2011, with no single tenant accounting for more than approximately 2.6% 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 44 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P MidCap 400 company and its shares are traded on the NYSE under the symbol FRT.  For more information, please visit www.federalrealty.com.

SOURCE Federal Realty Investment Trust