Federal Realty Highlights $400 Million Resi-Over-Retail Pipeline

Rhea-AI Summary

Federal Realty (NYSE:FRT) highlighted a $400 million residential development pipeline built by layering housing over retail assets. Active projects total 781 units with aggregate estimated cost of $385–411M and blended yields approaching 7%.

The Willow Grove redevelopment will replace ~130,000 sq ft retail with a six-story mixed-use building: 261 units, a 438-space parking structure, and 52,000 sq ft retail; construction is expected to begin in Q2 2026 with estimated delivery in 2028. The company also cites entitlements or near-term entitlements for nearly 3,500 additional residential units across its portfolio.

Positive

• $400M active residential development pipeline
• 781 units currently underway across four projects
• Pipeline underwritten to blended yields approaching 7%
• Nearly 3,500 additional units have entitlements or expected entitlements

Negative

• Estimated total development cost up to $411M
• Major project deliveries concentrated in 2028 (timing risk)
• Willow Grove construction not starting until Q2 2026 (near-term execution)

Key Figures

Active residential pipeline: $400 million Willow Grove cost: $110–120M Willow Grove units: 261 residential units +5 more

8 metrics

Active residential pipeline $400 million Residential development projects underway across multiple markets

Willow Grove cost $110–120M Estimated cost range for Willow Grove mixed-use redevelopment

Willow Grove units 261 residential units Six-story mixed-use building at Willow Grove, Pennsylvania

Willow Grove retail 52,000 sq ft Additional retail space planned in Willow Grove project

Active project costs $385–411M Total cost range for four active residential projects

Active project units 781 units Total residential units across Bala Cynwyd, Hoboken, Santana Row, Willow Grove

Blended yields Approaching 7% Underwritten blended yields for active residential projects

Future entitlements 3,500 residential units Entitled or near-term entitled units for future projects

Market Reality Check

Price: $108.44 Vol: Volume 531,210 is below t...

low vol

$108.44 Last Close

Volume Volume 531,210 is below the 20-day average of 997,923, suggesting no outsized trading response. low

Technical Shares at $107.99 are trading above the 200-day MA of $98.30, reflecting an established upward trend before this update.

Peers on Argus

FRT gained 0.27% as peers showed mixed moves: BRX +1.24%, ADC +0.62%, EPRT +0.60...

FRT gained 0.27% as peers showed mixed moves: BRX +1.24%, ADC +0.62%, EPRT +0.60%, while NNN at -0.14% and KRG at -0.46% indicate no clear sector-wide direction.

Historical Context

5 past events · Latest: Feb 23 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 23	Leadership promotion	Positive	-1.3%	Promotion of Jeff Kreshek to EVP, Western Region President & COO.
Feb 12	Earnings results	Positive	+0.1%	Strong 2025 results and 2026 Core FFO growth guidance of ~5–6%.
Feb 05	Asset dispositions	Positive	+0.9%	Sale of Misora and Courthouse Center, lifting recycling to nearly $475M.
Jan 23	Tax disclosure	Neutral	-0.2%	Release of 2025 tax treatment for common and preferred distributions.
Jan 08	Earnings scheduling	Neutral	-1.1%	Announcement of Q4 2025 earnings release date and conference call.

Pattern Detected

Recent news and earnings have generally seen modest price reactions, with some divergence on leadership and scheduling updates.

Recent Company History

Over the past several weeks, Federal Realty has reported strong 2025 earnings with Nareit FFO of $7.22 per diluted share and issued 2026 Core FFO guidance of $7.42–$7.52. It advanced its capital recycling program, selling assets for nearly $475M, and announced leadership changes in its Western region. Routine items like tax distribution details and earnings-call scheduling also appeared. Today’s densification-focused development update builds on this framework of internal growth, capital recycling, and portfolio optimization highlighted in earlier releases.

Market Pulse Summary

This announcement details Federal Realty’s Resi-Over-Retail strategy, highlighting about $400M of ac...

Analysis

This announcement details Federal Realty’s Resi-Over-Retail strategy, highlighting about $400M of active residential projects and a total of 781 units underway at key properties such as Willow Grove and Santana Row. With underwritten blended yields approaching 7% and entitlements for nearly 3,500 additional units, the update emphasizes internally generated growth. Investors may watch execution milestones, leasing performance in new mixed-use assets, and future capital recycling activity tied to these developments.

Key Terms

mixed-use, cap rates, entitlements

3 terms

mixed-use technical

"into a six-story mixed-use building with 261 residential units"

A mixed-use property combines multiple types of space—such as homes, shops, offices, and sometimes hotels or restaurants—within the same building or development, like a small neighborhood stacked together under one roof. For investors it matters because mixing uses can diversify income streams, boost foot traffic and demand, and spread risk across different tenant types, but also brings added complexity from zoning rules, management needs, and varied lease terms.

cap rates financial

"monetize mature residential assets at cap rates in the 4% to low-5% range"

Cap rates, or capitalization rates, are a way to measure the potential return on a real estate investment. They are calculated by dividing the annual income a property generates by its current market value, similar to how a rental property's profit compares to its price. Investors use cap rates to compare different properties and assess how much they might earn relative to their investment.

entitlements regulatory

"secured entitlements or expects near-term entitlements for nearly 3,500 additional residential units"

Entitlements are legal rights to receive money, benefits or assets under a law, contract or plan—think of them like a ticket that guarantees access to a specific payment or service. For investors, entitlements matter because they represent predictable future cash flows or obligations (for example pension payments, government benefits, dividend rights or licensed royalties), which affect a company’s value, balance-sheet obligations and future earnings prospects.

AI-generated analysis. Not financial advice.

Company advances densification platform designed to generate long-term growth from existing assets

NORTH BETHESDA, Md., Feb. 26, 2026 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today highlighted its growing Resi-Over-Retail development platform, a proven strategy designed to create long-term value by layering residential density onto its existing retail properties. The company currently has approximately $400 million of residential development projects underway across multiple markets, with the Willow Grove redevelopment representing the latest project within this expanding pipeline.

This project in Willow Grove, Pennsylvania includes repositioning approximately 130,000 square feet of existing retail through demolition and redevelopment into a six-story mixed-use building with 261 residential units, a 438-space parking structure, and an additional 52,000 square feet of retail space. Construction is expected to begin in Q2 2026.

"This is a strategy we've been refining for more than two decades," said Don Wood, President and Chief Executive Officer. "Adding thoughtfully designed residential density to our retail properties creates a more desirable living environment, drives daily traffic, strengthens retailer performance, and generates attractive risk-adjusted returns. It is a repeatable model that allows us to create growth from within our existing portfolio and build long-term value."

The Willow Grove project represents the latest opportunity in Federal Realty's active residential development pipeline, reflecting a structured approach to adding residential density at existing retail properties. Unlike traditional ground-up development, Federal Realty's Resi-Over-Retail strategy leverages existing land positions, established retail demand, and well-merchandised environments, allowing for enhanced value while mitigating development risk.

Building on this approach, Federal Realty continues to identify additional opportunities across its portfolio where residential density may be thoughtfully introduced over time, creating a multi-year runway for internally generated growth. Current active residential development underway includes:

Project	Location	Cost1	Units1	Status2
Bala Cynwyd	Bala Cynwyd, PA	$90-95M	217	Est. Delivery 2026
301 Washington Street	Hoboken, NJ	$45-48M	45	Est. Delivery 2027
Santana Row Lot 12	San Jose, CA	$140-148M	258	Est. Delivery 2028
Willow Grove	Willow Grove, PA	$110-120M	261	Est. Delivery 2028
Total		$385-411M	781

Collectively, these projects are underwritten to blended yields approaching 7%¹. In addition to projects underway, the company has secured entitlements or expects near-term entitlements for nearly 3,500 additional residential units across its existing portfolio for future projects.

The strategy builds on Federal Realty's decades of experience integrating residential uses into retail-centric environments, including flagship mixed-use properties such as Santana Row (CA), Pike & Rose (MD), Assembly Row (MA) and Bethesda Row (MD), as well as residential additions at Congressional Plaza (MD) and Bala Cynwyd (PA). This operational expertise represents a meaningful competitive advantage and supports the company's ability to execute densification projects with attractive risk-adjusted returns across multiple markets.

Consistent with this approach, Federal Realty has demonstrated the ability to monetize mature residential assets at cap rates in the 4% to low-5% range, recycling proceeds into higher-yielding acquisition and development opportunities while maintaining balance sheet discipline. Recent residential dispositions at Santana Row and Pike & Rose generated attractive pricing and reinforced the company's disciplined capital allocation framework.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets and select underserved regions with strong economic and demographic fundamentals. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. This includes a portfolio of open-air shopping centers and mixed-use destinations—such as Santana Row, Pike & Rose and Assembly Row—which together reflect the company's ability to create distinctive, high-performing environments that serve as vibrant destinations for their communities. As of December 31, 2025, Federal Realty's 104 properties include approximately 3,700 tenants in 28.8 million commercial square feet, and approximately 2,700 residential units.

Federal Realty has increased its quarterly dividends to its shareholders for 58 consecutive years, the longest record in the REIT industry. The company 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.   

Safe Harbor Statement

Certain matters discussed within this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Federal Realty believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and includes Note 1 on page 17 of the company's Form 8-K filed on February 12, 2026.

¹ See page 17 of the company's Form 8-K filed on February 12, 2026 for additional information regarding assumptions and calculations.
² Estimated delivery refers to the expected timing of construction completion and availability for initial tenant occupancy.

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

View original content to download multimedia:https://www.prnewswire.com/news-releases/federal-realty-highlights-400-million-resi-over-retail-pipeline-302698981.html

SOURCE Federal Realty Investment Trust

FAQ

How much is Federal Realty (FRT) investing in its current Resi-Over-Retail pipeline as of Feb 26, 2026?

Direct answer: Federal Realty has approximately $400 million of residential development projects underway. According to the company, the active pipeline totals $385–411M across four projects underwriting blended yields approaching 7%.

What are the key details of the Willow Grove (FRT) redevelopment and its timeline?

Direct answer: Willow Grove will be a six-story mixed-use building with 261 units and 52,000 sq ft retail. According to the company, demolition and redevelopment will include a 438-space parking structure with construction expected to begin in Q2 2026.

How many residential units does Federal Realty (FRT) have under active development and expected delivery years?

Direct answer: Federal Realty has 781 units active across four projects with delivery windows from 2026 to 2028. According to the company, projects include estimated deliveries in 2026, 2027, and 2028, with the largest deliveries in 2028.

What yield does Federal Realty (FRT) expect from its Resi-Over-Retail projects?

Direct answer: The company underwrote the active residential projects to blended yields approaching 7%. According to the company, that blended underwriting underpins its strategy to recycle proceeds and pursue higher-yielding opportunities.

How does Federal Realty (FRT) plan to expand residential density across its portfolio beyond current projects?

Direct answer: Federal Realty reports entitlements or near-term entitlements for nearly 3,500 additional units across its portfolio. According to the company, this creates a multi-year runway to introduce residential density over time at existing retail properties.

What recent disposition cap rates does Federal Realty (FRT) cite for mature residential assets?

Direct answer: The company reports monetizing mature residential assets at cap rates in the 4% to low-5% range. According to the company, those dispositions funded reinvestment into acquisition and development while preserving balance sheet discipline.