ROCKVILLE, Md., Jan. 6, 2014 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today announced the acquisition of a controlling interest in two shopping centers totaling 285,600 square feet in affluent Monmouth County, New Jersey, for a total value of $161 million. The Grove at Shrewsbury and Brook 35 are located on busy Route 35, less than three miles from the Garden State Parkway, serving the NY Metro emerging bedroom and second home communities of Shrewsbury, Red Bank, Rumson, Fair Haven, Little Silver and Middletown. The acquisition was made using a combination of downREIT units, cash and the assumption of $68 million of fixed rate debt secured by the properties.
"These shopping centers have been at the top of our target list for over ten years. The location, tenancy, and productivity of these trophy centers, coupled with in place rents meaningfully below market, provide great visibility on long term growth," commented Jim Taylor, executive vice president and chief financial officer at Federal Realty. "Our ability to use tax deferred currency and our long term relationship with the ownership group allowed us to avoid a marketed process. Also, we are confident that our newly formed partnership with Metrovation, which will retain a non-controlling partnership interest and provide ongoing property management services, will yield additional value creation opportunities in the Metro New York region."
The Grove at Shrewsbury is the trade area's dominant shopping destination boasting demographics that enhance Federal Realty's already sector leading position, with over 138,000 people and average household incomes of $111,586 within the trade area. The fashion and upscale offerings that are unique to the center position it as the preferred choice among brands and shoppers alike. The Grove has over 40 national and regional tenants including lululemon, Brooks Brothers, Anthropologie, Pottery Barn, J.Crew, Banana Republic, and Williams-Sonoma. Constructed in 1988, the property sits on just over 25 acres on either side of Route 35 in Shrewsbury. The center is located less than two miles from the Garden State Parkway and fronts Route 35 north and south, a well-traveled commercial artery, serving the emerging NYC-bedroom communities of this upscale New Jersey Shore area.
Approximately fifteen miles to the south, Brook 35 serves a wealthy coastal trade area with very strong demographics, over 123,000 people with $101,487 average household incomes within the trade area. The strong tenant mix of over 25 national and local retailers includes Ann Taylor, Banana Republic, Coach, and Williams-Sonoma. Built in 1998, the property sits on over 10 acres on either side of busy Route 35 in Sea Girt.
"We see very meaningful synergies between The Grove, Brook 35 and the Federal Realty portfolio. The tenant line up at both centers has a strong base of top tier, top performing retailers that we already enjoy working with at many of our core centers," said Chris Weilminster, senior vice president - leasing at Federal Realty. "We see great opportunities to continue to improve the merchandising at each center and drive rental growth as leases roll over the next several years."
In 2013, Federal Realty incurred approximately $1 million ($0.02 per diluted share) of transaction related costs associated with the acquisition, which had not previously been included in the Trust's 2013 FFO per diluted share guidance. The acquisition will be accretive to the Trust's 2014 FFO per diluted share; updated 2014 guidance will be provided in the Trust's year-end earnings release.
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 20 million square feet 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 95.3% leased to national, regional, and local retailers as of September 30, 2013, with no single tenant accounting for more than approximately 3.4% 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 46 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