NORTH BETHESDA, Md. - Federal Realty (NYSE:FRT) Investment Trust (NYSE:FRT) has expanded its presence in Northern Virginia with the acquisition of Virginia Gateway, a 665,000-square-foot retail center in Gainesville, Virginia. The purchase price for the property, which spans 110 acres and is currently 95% occupied, was reported at $215 million.
Virginia Gateway, positioned at the crossroads of Route 29 and I-66, is known for its high visibility and easy access, making it a prime retail and entertainment destination in the region. The center is a draw for visitors due to its selection of tenants and experiences, which includes a Giant Food grocery-anchored shopping center, the Promenade with its specialty retailers, the Atlas (NYSE:ATCO) Walk town center, and major retailers such as HomeGoods, Ulta Beauty (NASDAQ:ULTA), Total Wine & More, and Hobby Lobby. Additionally, the center is complemented by shadow anchors like Super Target (NYSE:TGT) and Lowe's (NYSE:LOW).
The acquisition is seen as a strategic fit for Federal Realty, which is known for owning and operating high-quality retail-based properties in major coastal markets. Jeff Berkes, President & COO of Federal Realty, stated that Virginia Gateway's location in an affluent area and its status as a dominant regional shopping center make it a valuable addition to their portfolio. With this new property, Federal Realty's holdings in Northern Virginia increase to 3.6 million square feet.
The surrounding demographics of Gainesville, where Virginia Gateway is located, boast an average household income within a three-mile radius exceeding $184,000, which is above the company's current portfolio average. The area's economic growth is supported by the Dulles Technology Corridor, enhancing the appeal of the location.
This acquisition is based on a press release statement from Federal Realty. The company has a long-standing reputation for investing in properties where there is a high demand for retail, as evidenced by their 56 consecutive years of quarterly dividend increases to shareholders.
InvestingPro Insights
In light of Federal Realty Investment Trust 's (NYSE:FRT) recent acquisition of Virginia Gateway, a glance at the company's financial metrics and InvestingPro Tips provides additional context for investors considering the stock. With a market capitalization of $8.42 billion, Federal Realty stands as a significant player in the retail real estate market. The company's P/E ratio, as of the last twelve months leading up to Q1 2024, is a high 38.01, indicating that the stock is trading at a premium relative to earnings.
From a dividend perspective, an InvestingPro Tip highlights that FRT has not only maintained but also raised its dividend for 52 consecutive years, showcasing a strong commitment to returning value to shareholders. This is particularly noteworthy given the company's recent strategic acquisition, which may bolster its financial standing and support continued dividend growth. Additionally, the dividend yield as of mid-April 2024 stands at a healthy 4.32%, which may attract income-focused investors.
Investors should be aware that while analysts predict the company will be profitable this year, there have been three instances where analysts have revised their earnings expectations downwards for the upcoming period. This suggests that while the company has a solid track record, market participants may want to keep an eye on future earnings revisions. Moreover, the company is trading near its 52-week high, with its price at 94.31% of this peak, reflecting investor confidence in its performance and growth trajectory.
For those interested in a deeper analysis, there are more InvestingPro Tips available, which can be accessed through the dedicated page for Federal Realty at https://www.investing.com/pro/FRT. Additionally, using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription to InvestingPro, where they can find a comprehensive list of additional tips to inform their investment decisions.
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