NORTH READING, MA-Federal Realty Investment Trust, a Rockville, MD firm, has acquired the 126,000-sf Atlantic Plaza shopping center from private investor NR Plaza LLC in a joint venture with Clarion Lion Properties Fund for $16.5 million. The deal marks the third acquisition of a grocery store-anchored retail property in eastern Massachusetts for the venture in the past three months.

Atlantic Plaza is anchored by Shaw's supermarket, and the acquisition is testament to the lure of Bay State supermarket-anchored shopping centers to investors. This year alone has seen a number of such properties snapped up by investors, including the JV's September acquisitions of Campus Plaza in Bridgewater and Pleasant Shops in Weymouth, anchored by Roche Brothers and Foodmaster respectively. The Franklin Plaza was acquired by Cedar Shopping Centers in November and the Alevizos Group bought Southbridge Fair earlier this year.

"The grocery store-anchored market started improving last year for the better properties," Jim Koury, senior vice president for Spaulding & Slye, tells Globest.com. "Then it swept through the market this year for the B properties."

The hot market has been a boon for sellers as well, as NR Plaza's quick turnaround of Atlantic Plaza suggests. NR Plaza picked up the property in May 2003 for $11.4 million and flipped it in a relatively short time to Federal, realizing a return in just 20 months. "Due to the enormous demand for retail property, the seller was able to achieve a substantial gain from when we brokered the property to them in 2003," Koury adds.

Federal Realty is no stranger to these parts, having acquired Dedham Plaza, Queen Anne Plaza in Norwell and Saugus Plaza in the early 90's. This year's acquisitions bring Federal Realty's Greater Boston portfolio to 948,000 sf, although the previous deals were prior to coupling with Clarion.

Federal Realty announced in July 2004 that it had formed the joint venture with Clarion Lion Properties Fund, a discretionary fund created and advised by ING Clarion Partners. The joint venture expects to acquire up to $350 million of stabilized supermarket-anchored shopping centers in the Trust's East Coast and California target markets.

"We're very active in the Boston market right now," Jeff Berkes, Federal Realty's senior vice president and chief investment officer, tells Globest.com. "Like most of our target markets, it has what we're looking for, population density, fully leased retail locations and relatively little potential for future competition."

Koury represented NR Realty in the transaction and John Galvin of Prospect Properties represented the buyer.