Cut to early 2019, when we opened a new office in Tysons, setting the stage for growth. Since then, we’ve expanded our Northern Virginia shopping center portfolio by 814,000 square feet, bringing it to nearly 3 million square feet across 16 properties. Combined, the portfolio generates more than 32 million visits annually.
Deirdre Johnson, our Senior VP of Asset Management for the region, shares. “We recognized the growth opportunity here, and because we now have boots on the ground, we’re able to execute more quickly and with a higher level of creativity. The Northern Virginia market is a powerful economic engine for the state of Virginia providing a dynamic business environment to make accretive investments. It’s a market that has a lot of job growth, and the income and educational demographics are very strong.”
Reinvestment at Work
A key to Federal’s growth and enhanced shareholder value over the years has been our overarching strategy to reinvest in our assets, aligning them with the evolving needs of the communities we serve. Our Birch & Broad development in the City of Falls Church, which has been part of our portfolio for nearly six decades and was formerly known as Falls Plaza, exemplifies this strategy within Northern Virginia.
When we set out to revitalize Birch & Broad, we took inspiration from our successful mixed-use developments to enrich the grocery-anchored center, making it a destination for extended stays. Key to this transformation was the addition of an outdoor fireplace and communal dining areas, which complemented our fast casual dining options and significantly contributed to attracting new customers. These amenities have fostered a welcoming environment for friends, families, and remote workers, encouraging repeat visits and sustaining customer engagement beyond the pandemic. Additionally, the elevated shopping environment has resulted in an occupancy rate of 100%.
“Our suburban properties like Birch & Broad have taken on an even greater significance in these post-Covid times,” Deirdre explains. “These are the places that serve multiple functions including business meetings, community gathering spots and family dining destinations.”
Refreshing Ideas
In Arlington, we are wrapping up the rebranding of Westpost at National Landing, our mixed-use neighborhood formerly known as Pentagon Row.
New signage will be installed this summer throughout the property aligning it with the growth and opportunities presented by the thriving National Landing district, home to Amazon’s game-changing HQ2 development.
Meanwhile, Chesterbrook, an 89,000-square-foot grocery-anchored center in McLean acquired in 2021, is undergoing a complete transformation. Remerchandising efforts will accompany onsite renovations including outdoor dining amenities like Adirondack chairs and communal tables as well as social areas that will include swings. Four new tenants have already joined the mix and construction is underway for five additional stores to open this fall.
Our Northern Virginia blueprint includes adding housing at retail properties where it makes sense. We recently rezoned our 228,000-square-foot Pan Am center for up to 400 apartments and have identified Birch & Broad and our newer Fairfax Junction asset as possible housing candidates in the future.
Keeping Pace with Change
Federal Realty is also leveraging remerchandising strategies – even in well-leased centers – to ensure that we remain relevant in communities undergoing rapid change. Kingstowne Towne Center, a 410,000-square-foot property in Alexandria that we purchased in 2022, is just one example. With a new hospital and urban village under construction, and Amazon’s HQ2 nearby, more growth is headed to the already popular neighborhoods nearby.
“Kingstowne is 98 percent leased, but each lease expiration is a study of what’s best for the next 10 years because the market is only getting stronger,” Deirdre remarks. “That means we’re looking hard at the use as well as the merchant, its business plan execution and its level of sales to determine how we elevate merchandising at the property and increase our already strong market share.”
Shaping Tomorrow, One Shovel at a Time
For Deirdre, who previously had commuted from Charlottesville to North Bethesda a couple of times a week, settling in a new location was the right decision, she says. Looking at the Northern Virginia office’s accomplishments five years later, it’s hard to argue with her.
“Upon opening our Northern Virginia office, we envisioned significant acquisitions while simultaneously implementing value-add redevelopment and property improvement strategies within our existing portfolio,” Deirdre observes. “The successful implementation of our business plan reflects the hard work, commitment, and talent of our Virginia Team. To say that I am thankful to work for an innovative company like Federal Realty comprised of the best people in retail real estate is an understatement.”
