Federal Realty Acquires Retail Stake for $127M

ROCKVILLE, MD-Federal Realty Investment Trust is expanding its already considerable presence on Rockville Pike with the acquisition of a majority stake in Montrose Crossing, for $127 million. The 89.9% controlling interest of the 357,000-square foot, grocery-anchored shopping center brings the REIT’s total footprint in this part of Rockville to 1.2 million square feet.

Montrose Crossing has been a prime acquisition target of the REIT for decades, says Don Wood, president and chief executive officer of Federal Realty, in a statement.

"It's a dominant shopping center with very productive tenant sales that has historically competed aggressively with our own Congressional Plaza, Federal Plaza and Mid-Pike Plaza. With the addition of Montrose Crossing, we now have a product on the Pike that will work in terms of focus and merchandising strategy for nearly every retailer."

Montrose Crossing is located at the northeast corner of Rockville Pike and Montrose Parkway/Randolph Rd., the same intersection that borders Federal Realty's Mid-Pike Plaza, soon to be developed as Pike & Rose in mid-2012. The Rockville Pike and Montrose Parkway/Randolph Rd. intersection has average daily traffic counts of approximately 100,000 cars. It is anchored by a 73,000 square foot Giant Food, Old Navy, Marshalls and Sports Authority, and shadow-anchored by a 148,000-square foot Target.

Montrose Crossing was originally constructed in the 1960s, and then expanded, most recently with the addition of Bob's Furniture in 2011 and the planned addition of AC Moore in 2012. The property is encumbered by a new $80 million, 10-year, secured mortgage at a rate of 4.2%.