Retail merchandizing is beginning to take shape at Assembly Row in Somerville, Mass, according to Federal Realty Investment Trust CEO Don Wood, who says the REIT has fully approved and signed Letters of Intent (LOIs) with Saks Off Fifth, American Eagle and Puma.
Wood confirmed the new tenants in a quarterly conference call with analysts, during which he said the firm has executed leases and signed LOI’s for more than half of the project’s phase one retail.
“I just got back from a couple of days of back to back meetings with our key partners of the Somerville site, including AvalonBay, management representing the transit authority, our general contractor and mayor, and feel very, very good about our time table and the product that we are going to deliver there,” Wood said.
Announced tenants include Brooks Brothers and Chico’s, as well as a 60,000 square foot lease for a 12-screen theatre from AMC Theatres (AMC), which was the first anchor to sign onto the project a little over a year ago.
Assembly Row is currently planned to have 500,000 square feet of retail, 2,100 residential units and 1.75 million square feet of office space.
Wood was asked about Federal Realty’s contingency on the purchase of the 12-acre former Ikea site at Assembly Square, which requires a zoning change to allow for a supermarket.
“Does that imply that a Wal-Mart or a Target or even Wegmans, which has been sort of looking around this market?” asked Jeff Donnelly of Wells Fargo.
“No, it doesn’t imply that at all,” responded Wood. “Its simply a matter of flexibility and us trying to look at all options. I don’t want to land bank 12 acres next to it. I want to get some good idea of what the opportunities are for value creation and so we want them to do that, we want maximum flexibility, that’s what’s this is all about.”
“Any update on the Kraft family’s interest in the adjoining soccer stadium?” asked Donnelly in a follow-up.
“We’ve seen a lot of talk about it in the press,” Wood replied. “We know there is continued demand and maybe even stronger demand than we thought, but who knows, in terms of the execution or something of that size.”
Andrew Schaeffer with Sandler O’Neill shifted the focus to Assembly Row’s office component, and asked if Federal Realty had considered bringing on a partner for the office component in the same way it brought AvalonBay on for the multi-family portion of the development.
“We control nearly 50 acres there, so the idea of future phases with a larger office component will undoubtedly have an office partner,” said Wood. “It’s a $40 million incremental investment and only 90,000 square feet of space, so we should control that first phase including the timing.”