August 4, 2010

Acquisitions and Portfolio Expansion

In 2010 to date, Federal Realty has committed approximately $60 million of acquisition capital to strengthen its presence in the core markets of Boston, Southern California, Long Island, New York and Bethesda, Maryland.

• Federal Realty formed a joint venture with affiliates of Taurus Investment Holdings LLC, in which the Trust has an 85% interest, to expand the Trust's concentration in Boston.  The joint venture plans to acquire, redevelop, and operate up to $200 million of urban mixed-use properties in the Back Bay section of Boston, Massachusetts. Concurrent with the formation of the partnership, the joint venture acquired 111-115 Newbury Street and 127-129 Newbury Street. Taurus Investment Holdings LLC and UrbanMeritage LLC will manage, operate and lease the buildings on behalf of the partnership.

• The Trust has committed to acquire the former Mervyn's building located adjacent to its Escondido Promenade in Escondido, California.  Mervyn's had been operating as a shadow anchor to the property since Escondido Promenade's original opening in 1987 before ceasing operations in late 2008.  Federal Realty is in significant lease discussions with two anchor users to occupy the former Mervyn's space.

• Federal Realty has contracted to acquire Huntington Square, a 268,000 square foot community shopping center, shadow-anchored by Sears, located on Long Island in East Northport, New York.  Huntington Square will increase Federal Realty's presence in Queens and Long Island to nearly 1.5 million square feet of retail space including Forest Hills, Fresh Meadows, Hauppauge Shopping Center, Huntington Shopping Center, Melville Mall, and Greenlawn Plaza.

• Federal Realty is under contract to purchase the fee interest in the land underlying a portion of Bethesda Row in Bethesda, Maryland.  The land currently underlies shops along the south side of Bethesda Avenue, stretching from the Apple to Amethyst stores, and includes a surface parking lot in the rear.  

"Upon the completion of these transactions, Federal Realty will have invested approximately $60 million with the ability to create additional value over time through releasing and redevelopment," said Jeff Berkes, executive vice president and chief investment officer.  "Strengthening our presence in our core markets by acquiring new assets and increasing our investment in our existing portfolio not only produces strong risk-adjusted returns but also provides us with better operational and ownership flexibility throughout the entire portfolio."