REIT Details $400M in Residential-Over-Retail Projects

Federal Realty Investment Trust (North Bethesda, Md.) is touting its growing resi-over-retail development platform, disclosing how that strategy is being implemented at four high-profile developments across the country. Such projects are “designed to create long-term value by layering residential density onto existing retail properties,” the REIT said in a news release.

The company’s four major projects along those lines are:

Location/ Cost/ Housing Units/ Completion
Bala Cynwyd, Pa. $90-95M 217 2026
Hoboken, N.J. $45-48M 45 2027
Santana Row #12,
San Jose, Calif. $140-148M 258 2028
Willow Grove, Pa. $110-120M 261 2028
Totals: $385-411M 781

Federal Realty spelled out how the strategy will unfold in Willow Grove, Pa. Roughly 130,000 square feet of existing retail will be repositioned through demolition and redevelopment into a six-story mixed-use building with 261 residential units, a 438-space parking garage and an additional 52,000 square feet of retail space. Construction is expected to begin in the second quarter of this year and be done about two years later.

“This is a strategy we’ve been refining for more than two decades,” said Federal Realty President and CEO Don Wood. “Adding thoughtfully designed residential density to our retail properties creates a more desirable living environment, drives daily traffic, strengthens retailer performance and generates attractive risk-adjusted returns. It is a repeatable model that allows us to create growth from within our existing portfolio and build long-term value.”

As a result, Federal Realty said it continues to identify additional opportunities across its portfolio where residential density may be introduced over time, creating a multi-year runway for internally generated growth.

Overall, the REIT has 104 properties that are home to about 3700 commercial tenants and roughly 2700 residential units.