Amid fast-evolving retail environment with store closures and bankruptcies rampant, Federal Realty Investment Trust FRT is undertaking concerted measures to redevelop and re-merchandise its portfolio. Most recently, the company announced a plan to revamp Old Keene Mill, a 90,000-square-foot community shopping center in Springfield, VA, per a report from Washington Business Journal.
Particularly, Federal Realty plans to “completely revamp the physical character” of this center, which is currently anchored by Whole Foods, Walgreens and Planet Fitness. The company will add gathering spaces with exclusive features, like an outdoor fireplace and “communal village design.” Renovations will include new façades and signage, wide sidewalks and furnished pavilions that will help people socialize and connect.
The renovations will likely boost the property’s value and lure shoppers. Situated at the intersection of Old Keene Mill Road and Rolling Road in Burke/West Springfield, the community shopping center also boasts a wide range of dining options like Austin Grill, BGR The Burger Joint and Mezeh Mediterranean Grill, besides being anchored by reputed retailers. Apart from these, the center offers a vast spectrum of convenient services -- from banking to spa services.
Admittedly, the onslaught of e-commerce on physical retailers has made them rationalize their store fleet, while others unable to contend with online giants are filing bankruptcies. Consequently, retail real estate landlords, such as Kimco Realty Corp KIM, Macerich Company MAC, Taubman Centers TCO and Federal Realty, are witnessing a choppy environment.
Amid this, Federal Realty has been undertaking remerchandising and redevelopment efforts to retain the relevance of its properties. Moreover, amid challenges in the retail real estate market, the company is diversifying its retail properties to mixed-use ones by adding residential space. Nevertheless, although repositioning and redevelopment are a strategic fit for long-term growth, such initiatives involve considerable upfront costs and tend to drag down near-term profitability.
Currently, Federal Realty carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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