Federal Realty Acquires Alabama Retail Hub The Summit for $508 Million

Federal Realty Investment Trust (NYSE: FRT) has acquired The Summit, a 100-acre, approximately 870,000-square-foot open-air retail property in Birmingham, Alabama, for $508 million. The property, developed over more than 30 years, is described as Alabama's most-visited retail destination, attracting nearly 9 million annual visits from a trade area extending 100 miles.

Located at a key intersection with significant highway access, The Summit serves a metropolitan market of over 1.2 million people. The immediate five-mile radius boasts an average household income of approximately $193,000. The center houses over 110 tenants, including prominent brands like Apple, Trader Joe's, RH, Nordstrom Rack, Alo Yoga, and Sephora. Notably, over 30 tenants operate their sole Alabama location at The Summit, and recent lease commitments from retailers such as Aritzia and Reformation indicate its continued draw for brands entering or expanding within the state.

The acquisition is expected to be immediately accretive to Federal Realty's Funds From Operations (FFO) per share. Don Wood, President and CEO of Federal Realty, stated that opportunities to acquire dominant assets like The Summit are infrequent and that this addition enhances the company's portfolio and retailer relationships. The property is currently 92% occupied, with signed leases expected to increase occupancy in the coming months.

Federal Realty plans to fund the acquisition through a combination of asset sale proceeds, free cash flow, and funds from recently issued convertible notes. This acquisition expands the company's Central Region portfolio to seven properties, totaling approximately 2.7 million square feet across multiple states.