Federal Realty Investment Trust Acquires The Summit in Birmingham, Alabama, for $508 Million

Federal Realty Investment Trust (NYSE: FRT) announced Oct. 1 that it has acquired The Summit, an open-air retail destination in Birmingham, Alabama, for $508 million, or $498 million on a net basis. The company said the purchase is immediately accretive to funds from operations (FFO) per share.

The 100-acre, approximately 870,000-square-foot property was acquired from its original developer, Bayer Properties, and was developed over more than 30 years. The transaction is the first sale in The Summit's history. Federal Realty said the center draws nearly 9 million visits annually from a trade area extending 100 miles in every direction, according to Placer.ai.

Federal Realty Investment Trust Deal Details

The $508 million price equates to roughly $584 per square foot on a gross basis and about $572 per square foot on a net basis. The property is 92% occupied, and the company said signed leases already in place will raise occupancy over the next several months.

Federal Realty expects to fund the acquisition on a long-term basis with a combination of asset sale proceeds, free cash flow and proceeds from its recently issued convertible notes.

"Opportunities to buy truly irreplaceable, dominant assets like The Summit don't come along often, and we can't be more excited about adding this property to our portfolio," said Don Wood, President and Chief Executive Officer of Federal Realty. "This acquisition is immediately accretive to FFO, has exceptional mark-to-market opportunities over the next 5 years, and enhances and expands our already deep retailer relationships that we will be able to use to benefit many of our other assets."

The Summit's Location and Tenant Mix

The Summit sits at the intersection of Interstate 459 and U.S. 280 in Birmingham, between Mountain Brook and Vestavia Hills, two of the city's more affluent communities. The surrounding metropolitan market has more than 1.2 million residents, and average household income within five miles is approximately $193,000.

The center has more than 110 tenants, including Apple, Trader Joe's, RH, Nordstrom Rack, Alo Yoga, Sephora and North Italia. More than 30 of those tenants operate their only Alabama location at the property. Recent commitments from Aritzia, Reformation and LoveShackFancy add to the tenant roster, and Federal Realty described the property as an entry point for retailers expanding into Alabama.

Expanding Federal Realty's Central Region

With the addition of The Summit, Federal Realty's Central Region now includes seven properties and approximately 2.7 million square feet across Chicago, Kansas City, Omaha and Birmingham.

Wood named The Summit alongside other assets in the company's portfolio, including Town Center Crossing and Plaza in Leawood, Kansas; Village Pointe in Omaha, Nebraska; Santana Row in San Jose, California; Assembly Row in Somerville, Massachusetts; and CocoWalk in Coconut Grove, Florida. "Adding The Summit to our collection of market-dominant assets... positions the company extremely well for growth over the next several years," Wood said.

Federal Realty owns 103 properties with approximately 3,700 tenants in 28.8 million commercial square feet, along with about 2,700 residential units. The Summit adds roughly 3% to the company's commercial square footage. Founded in 1962, the company has increased its quarterly dividends per common share for 59 consecutive years on an annualized basis, which it describes as the longest record in the REIT industry. It is a member of the S&P 500 index.

Capital Recycling and Recent Operating Results

The financing plan draws in part on asset sales. Federal Realty has completed $225 million of retail asset sales year to date, including $66 million in the second quarter, at a blended 5% cap rate.

For the second quarter of 2026, the company reported Nareit FFO of $162.8 million, or $1.88 per diluted share, compared with $165.5 million, or $1.91 per share, a year earlier. Portfolio occupancy was 93.8%, with a 96.1% leased rate at quarter-end, and small-shop occupancy reached 92.3%, the company's highest level since 2007. Management expected overall occupancy to rise into the mid- to upper-94% range by year-end as signed leases commence.

The Summit's 92% occupancy is below the company's reported portfolio levels, making lease-up a central part of the acquisition.

Contacts

Investor inquiries about the transaction may be directed to Jill Sawyer, Senior Vice President, Investor Relations, at Federal Realty.

Sources

• Federal Realty Investment Trust press release via PR Newswire: https://www.prnewswire.com/news-releases/federal-realty-acquires-the-summit-alabamas-premier-retail-destination-302896582.html
• Federal Realty Investment Trust investor relations: https://ir.federalrealty.com/news-releases/news-release-details/federal-realty-acquires-summit-alabamas-premier-retail