Federal Realty Completes Sale of Levare Apartments at Santana Row

Rhea-AI Summary

Federal Realty Investment Trust (NYSE:FRT) has sold Levare, a 108-unit Class A residential building at Santana Row in San Jose, California, for $74 million. The property, delivered in 2011 and 95% leased at sale, was disposed of as part of the company's strategy to reallocate capital toward higher-return opportunities.

Santana Row, Silicon Valley's premier mixed-use destination, spans over 2.5 million square feet featuring retail, office, residential, and hotel spaces. The development includes 50+ shops, 30 restaurants, 662 rental homes, 219 condominiums, a 215-key hotel, and approximately 1 million square feet of Class A office space, attracting over 8.5 million annual visits.

Positive

• Sale of Levare apartments for $74 million enables capital reallocation to higher-return opportunities
• Property maintained strong 95% occupancy rate at time of sale
• Transaction demonstrates ability to monetize mature assets at optimal timing
• Santana Row continues to show sustained demand across asset classes with 8.5 million annual visits

Negative

• Reduction in rental income stream from the disposed property
• Loss of exposure to the strong San Jose multifamily market through this asset

Insights

Real Estate Investment Analyst

FRT monetizes mature asset at Santana Row for $74M, demonstrating capital recycling strategy while maintaining control of prime mixed-use development.

Federal Realty's $74 million sale of the Levare apartment building represents strategic capital recycling at work. At 108 units with 95% occupancy, this 14-year-old Class A property has likely reached optimal valuation in its lifecycle. The $685,000 per-unit pricing achieved is notable in today's cautious multifamily investment climate.

What's particularly significant is how this transaction aligns with REIT best practices. Rather than holding stabilized assets indefinitely, Federal is selectively harvesting mature properties while maintaining control of the broader 2.5 million square foot Santana Row mixed-use ecosystem. This preserves their dominant position in this high-traffic Silicon Valley destination (with 8.5 million annual visits) while freeing capital for potentially higher-yield deployments.

The transaction demonstrates that despite broader market uncertainties, prime assets in irreplaceable locations still command institutional interest. The sale doesn't diminish Federal's Santana Row footprint substantially, as they retain 662 rental homes and 1 million square feet of Class A office space within the development.

This disciplined approach to capital recycling should enhance Federal's financial flexibility while potentially improving overall portfolio returns - exactly what sophisticated REITs should be doing at this point in the real estate cycle.

Disposition of stabilized asset reinforces long-term value creation strategy

N. BETHESDA, Md., May 14, 2025 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today announced the sale of Levare, a 108-unit Class A residential building located within Santana Row in San Jose, California, for $74 million.

Delivered in 2011, Levare has played a meaningful role in the evolution of Santana Row and reached a point in its lifecycle where Federal Realty could monetize its value and reallocate capital toward higher-return opportunities. The property was 95% leased at the time of sale.

"This transaction reflects our ability to unlock value at the right time and put capital to work where we see the greatest long-term upside," said Jan Sweetnam, Executive Vice President, Chief Investment Officer at Federal Realty. "It's a great example of our broader focus on maximizing returns while continuing to elevate high-performing assets like Santana Row."

"Levare represents the type of high-quality, well-located multifamily asset that continues to draw strong institutional interest, even in a selective investment environment," said Will Purcell, Director at Eastdil Secured. "Its location within Santana Row—one of the most vibrant and proven mixed-use destinations in the country—made it a particularly compelling offering."

Santana Row is Silicon Valley's most prominent mixed-use destination, encompassing more than 2.5 million square feet across retail, office, residential, and hotel uses in San Jose, California. The neighborhood includes over 50 shops, 30 restaurants, 662 rental homes, 219 privately owned condominiums, a 215-key boutique hotel, and approximately 1 million square feet of Class A office space—including the adjacent Santana West. With more than 8.5 million annual visits, Santana Row continues to demonstrate sustained demand across asset classes and remains a key contributor to Federal Realty's long-term value creation.

About Federal Realty

Southern California. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 103 properties include approximately 3,500 tenants, in 27 million commercial square feet, and approximately 3,100 residential units. 

Federal Realty has increased its quarterly dividends to its shareholders for 57 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.

Investor Inquiries: Jill Sawyer Senior Vice President, Investor Relations 301.998.8265 jsawyer@federalrealty.com

Media Inquiries: Brenda Pomar Senior Director, Corporate Communications 301.998.8316 bpomar@federalrealty.com

 

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SOURCE Federal Realty Investment Trust

FAQ

How much did Federal Realty (FRT) sell the Levare apartments for?

Federal Realty sold the Levare apartments for $74 million.

What is the occupancy rate of Levare apartments at the time of sale?

The Levare apartments were 95% leased at the time of sale.

How many units does Levare at Santana Row have?

Levare is a 108-unit Class A residential building.

What is the total square footage of Santana Row development?

Santana Row encompasses more than 2.5 million square feet across retail, office, residential, and hotel uses.

How many annual visitors does Santana Row receive?

Santana Row receives more than 8.5 million annual visits.