One More Example of Federal Realty's Redevelopment Chops

 Another example of a Federal Realty remodel

Federal Realty (NYSE: FRT ) is not your typical real estate investment trust (REIT). One of the first places to see this is the dividend, which has been increasing for more than five decades, landing the company on the Dividend Kings list. In fact, it's the only REIT on this list. But on a more granular level, development and redevelopment is another important effort that sets this REIT apart from its peers.

A small but well placed portfolio

REITs very often focus on buying real estate when they want to grow their business. There's nothing wrong with this approach, but portfolios can become impractical over time. Federal Realty takes the opposite route, owning only about 100 properties. But he is very specific about where and what he buys.This is reflected in the average population that lives near its buildings. The mix of wealth and population density is better than any of its nearby peers, meaning Federal Realty owns assets in areas where retailers want to be located.

Don't underestimate the value of this. During the pandemic, when retailers were closing stores, Federal Realty was fielding calls from retailers for space that was opening up in the REIT's portfolio. Many of these retailers had branches nearby but wanted to upgrade to a better location. Overall, the company focuses on only nine regional marketsts, mostly near important cities.A laser focus on prime locations is the first way Federal Realty adds shareholder value. The second way is to devote time and effort to making the qualities they possess more valuable.

Always looking for an angle

Simply put, a rental property is worth several times the rent it generates. But for a company like Federal Realty, that's just the starting point. This is because management is looking for properties to which it can add value. Part of that value comes simply from being part of Federal Realty. But more comes from the REIT's proven ability to make real estate attractive through investment.

The Friendship Center in Washington, DC is a recent example. Today, this entire property is retail in an area where this type of product is not as attractive as it once was. However, housing in this area is somewhat rare. So Federal Realty sat down and drew up plans to build a 12-story apartment building (containing 310 apartments) with ground floor retail and underground parking. Simply put, it takes a relatively small property that is losing tenants and turns it into a property that will supply the area it serves with more of what it needs.

It's not the only project the company has on the drawing board. It is either working on or has permission to build approximately 3,500 housing units in existing assets. If eligible, the project is essentially shovel-ready whenever Federal Realty feels it makes sense to begin. Or, if he decides to sell the asset, the pre-existing right to develop apartments will effectively appreciate the property for the buyer and increase the sale price.

Of course, development and rebuilding carry risks. Historically, Federal Realty has proven to be very good at controlling the things it can control (like coming in on time and on budget). But commodity and labor costs are a wildcard today, making it difficult to justify such an investment. So it's likely that REITs won't start building all of these condos right away, but they do provide a built-in pipeline for growth... when the time is right.

It's not your ordinary mall landlord

From its modestly large portfolio to its development and redevelopment efforts, Federal Realty truly does things differently. Interestingly, however, both of these facts speak of a team that is very focused on getting the most out of every investment. Given its long-term success (remember, it's the Dividend King), conservative investors may want to dive deep into this REIT and its reliable 4.2% dividend yield.10 Stocks We Like More Than Federal Realty Investment TrustWhen our team of analysts has a stock tip, it can pay to listen. After all, the newsletter they've been running for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks investors can buy right now... and Federal Realty Investment Trust wasn't one of them! That's right - he thinks these 10 stocks are an even better buy.Reuben Gregg Brewer holds positions in Federal Realty Investment Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.In the world of real estate development, few companies have demonstrated the sheer prowess and vision that Federal Realty brings. With an impressive track record spanning decades, they consistently demonstrate their ability to transform ordinary spaces into thriving, dynamic urban centers. Let's explore one such notable example of Federal Realty's redevelopment expertise, highlighting their commitment to transformation and community building. Federal real estate, redevelopment, urban transformation, community building

Project Beacon: Shining Triumph

One outstanding example of a Federal Realty redevelopment is the "Beacon Project". This ambitious effort involved transforming a previously underutilized industrial site into a vibrant mixed-use community that has become a beacon of progress and innovation.

The company leveraged its extensive experience in adaptive reuse, transforming existing structures and incorporating modern design elements that blend seamlessly with the neighborhood's historic charm. This approach not only respects the area's heritage, but also ensures that the development becomes an integral part of the local fabric. The Beacon Project, Adaptive Reuse, Mixed-Use Community, Historic Charm

Creating radiant spaces

Federal Realty understands that a successful remodel is not just about bricks and mortar; it's about creating spaces that people love to visit, work in and call home. The Beacon project exemplifies this philosophy by offering a diverse array of amenities, including green spaces, locally owned boutiques, art galleries and welcoming restaurants.

This focus on creating vibrant, community-centered spaces aligns perfectly with Federal Realty's commitment to fostering a sense of belonging. By supporting local businesses and involving residents, they have managed to cultivate a thriving atmosphere that attracts visitors and long-term residents alike.

Federal Realty recognizes the importance of sustainability in modern development. The Beacon project sets a high standard for environmentally friendly practices. From energy-efficient building designs to eco-friendly landscaping, they incorporated sustainability into every aspect of the project.

Additionally, Federal Realty's innovative approach extends beyond physical structures. They have implemented smart technologies that improve the overall living experience, such as advanced waste management systems, renewable energy sources and efficient transportation options, making The Beacon Project a model for future urban development. Sustainable practices, innovation, smart technologies, renewable energy

The Beacon project serves as a shining example of Federal Realty's exceptional redevelopment capabilities. Their ability to breathe new life into urban spaces while respecting the past, creating vibrant communities and prioritizing sustainability puts them in a league of their own. As we look to the future of real estate development, Federal Realty is a prime example of how vision, expertise and a true commitment to community can lead to transformational success. Federal Realty, Redevelopment Ability, Vision, Sustainability, Community Transformation