Renamed Pike & Rose, the project will
have $1 billion invested in it, all in.

ROCKVILLE, MD-Federal Realty Investment Trust expects to break ground within 90 days on its long-anticipated redevelopment of Mid-Pike Plaza here, CEO Don Wood tells The REIT has committed $250 million to the project’s first phase, which will include 500 apartment units above 150,000 square feet of retail. There will also be 80,000 square feet of office in phase one.

The entire project will be more than twice the size of phase one, Wood says. The approved master plan calls for 1.7 million square feet of office and retail and more than 1,500 residential units.

Federal Realty doesn’t intend to finance the entire project, which is expected to take eight years to complete. “We expect there will be $1 billion invested by the time it’s all done,” he says. The REIT is currently searching for a partner for the later phases. Phase one will deliver in 2014. Mid-Pike Plaza, which is still a bustling retail destination in this submarket, will be renamed Pike & Rose.

The REIT owns a significant portion of Rockville Pike. Specifically, it owns 1.2 million-square feet of retail within a mile on the Pike, including Montrose Crossing, which it acquired at the beginning of the year.

The Rockville Pike stretch meets Federal Realty’s criteria for retail real estate investment, Wood says—namely, anything it invests in must be located in high-income areas that have high-barriers to entry. “This country is over retailed,” he says. “However, that’s a macro observation. There are still pockets of strong opportunity around the country.”