Federal Realty Investment Trust
) disclosed the buyout of a controlling stake in two shopping
centers -The Grove at Shrewsbury and Brook 35 - in New Jersey.
This retail real estate investment trust (REIT) expended $161
million for the acquisition of these assets in the prosperous
Monmouth County in New Jersey.
Federal Realty concluded the acquisition through a combination
of cash, downREIT units, and the assumption of fixed rate debt of
$68 million collateralized by the assets. The company noted
that the acquisition will be accretive to its FFO per diluted
share for full-year 2014.
These properties, which are positioned on the busy Route 35,
span 285,600 square feet of space in total. They are located
close to the Garden State Parkway and serve the flourishing NY
Metro area including Shrewsbury, Fair Haven, Red Bank, Rumson,
Little Silver and Middletown area of New Jersey.
In particular, The Grove at Shrewsbury caters to a population
of over 138,000 in that trade area, having an average household
income of $111,586. With over 40 national and regional tenants -
Lululemon Athletica Inc.
), Banana Republic and J.Crew - it is the much visited shopping
center of the trade area.
On the other hand, Brook 35 serves the affluent coastal trade
area with demographics of over 123,000 people having an average
household income of $101,487. The property houses outlets of more
than 25 renowned retailers such as Ann Taylor of
) and Banana Republic.
As a matter of fact, Federal Realty has been capitalizing on
expansion opportunities in premium markets, which has income
growth and long-term value creation potential. Thus, with solid
trade area statistics, this above mentioned transaction is a
strategic fit in this context. We expect the addition of such
trophy assets to its high-end assets portfolio to boost its
rental revenue going forward. Moreover, the enrichment of the
tenant base of this Zacks Rank #2 (Buy) stock is also
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