From Asset Sales to Acquisitions: How Is Federal Realty Repositioning?

Federal Realty’s FRT $170 million in recent property sales supports its capital recycling strategy, helping refine the portfolio and generate funds for growth. The sale of two non-core assets allows the REIT to reinvest in higher-return opportunities and expand selectively in attractive markets.

Specifically, Federal Realty sold Pallas at Pike & Rose in North Bethesda, MD, along with Bristol Plaza in Bristol, CT, generating about $170 million in total proceeds. These sales fit into a broader plan to rotate capital out of stabilized properties and into assets with stronger growth prospects. The deals also build on earlier 2025 dispositions, such as Levare at Santana Row and a Hollywood Boulevard retail portfolio in Los Angeles, lifting total disposition proceeds to $316 million for the year at a blended yield of about 5.7%.

Management has emphasized that unlocking value from stabilized or peripheral properties allows Federal Realty to self-fund growth initiatives without overleveraging. This is a key benefit for sustaining dividend growth and balancing its capital structure.  

Looking beyond disposals, Federal Realty has been active on the acquisition front. In early December, the company announced the acquisition of Village Pointe, a leading open-air lifestyle center in Omaha, NE, underscoring its strategy to selectively add retail assets with strong demand fundamentals. Earlier in October, Federal Realty also closed on Annapolis Town Center in Anne Arundel County, MD, for about $187 million, bolstering its portfolio of dominant, open-air retail destinations. 

Operational performance through the third quarter of 2025 reflected solid fundamentals, with stable occupancy, record leasing velocity and improved funds from operations, all signaling resilience in its core retail and mixed-use footprint. With capital recycling well underway and disciplined investments in quality retail environments, Federal Realty appears focused on driving long-term sustainable growth and returns for shareholders.

Shares of this Zacks Rank #3 (Hold) company have rallied 6.4% in the past six months against the industry’s decline of 1.9%.

Stocks to Consider

Some better-ranked stocks from the retail REIT sector are Simon Property Group, Inc. SPG and Phillips Edison & Company, Inc. PECO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Simon Property Group’s 2025 FFO per share has been raised six cents over the past month to $12.64.

The consensus estimate for Phillips Edison & Company’s 2025 FFO per share has been revised upward marginally to $2.58 over the past two months.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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