Federal Realty Investment Trust (FRT), the Rockville, MD-based retail real estate investment trust (“REIT”) announced the acquisition of a controlling interest in San Antonio Shopping Center for a total value of $62.2 million. In fact, Federal Realty has been eyeing this 376,000 square-foot shopping center, located in Mountain View, CA, for quite some time.
Given its size, geographical advantage and long-tem potential, this property is expected to deliver considerable value for the company, going forward. San Antonio Shopping Center includes around 30 national, regional and local tenants, including Wal-Mart Stores Inc. (WMT) and Kohl’s Corp. (KSS). The 33 acres property boasts the kind of demographics which will enhance Federal Realty’s already good, sector-leading position, with 136,879 people and average household income of $141,452 within a radius of 3 miles.
Further, due to the presence of leading companies, the Mountain View area has turned into a center for job growth in the Silicon Valley region. Importantly, most of these companies are located within 5 miles of San Antonio Shopping Center.
Notably, Federal Realty utilized a combination of $18 million cash, $18.7 million assumption of fixed rate debt and around 58,000 down-REIT units for the acquisition.
The excellent demographic advantages and presence of cluster of top-notch tenants in the San Antonio Shopping Center along with the geographical advantage of the Mountain View area make this acquisition a perfect fit with the company’s perceived strategies.
Currently, Federal Realty, Wal-Mart and Kohl’s carry a Zacks Rank #3 (Hold). One better-ranked stocks in the retail REIT space include The Macerich Co. (MAC), and it holds a Zacks Rank #2 (Buy).
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