For almost three decades, Rockville, Md.–based Federal Realty Investment Trust, a REIT specializing in the ownership, management, development, and redevelopment of retail assets, owned Mid Pike. The 24-acre shopping center, with a CVS Pharmacy, Bally Total Fitness, Quizno’s Subs, ?and other suburban staples, sits less than a quarter mile from the Red Line Metro subway stop ?in White Flint, Md. But last year, Federal got the property rezoned into what it hopes will be a top-notch mixed-use community with 1.7 million square fee of retail and more than 1,500 residential units. “The idea is to take the shopping center and turn it into a town center with very good urban, pedestrian-friendly blocks,” says Evan Goldman, vice president of development at Federal.
In hotter markets, like Washington, D.C., developers that are known for building office and retail are adding multifamily to their menu of options. In some cases, it’s not a new product type for them. In other instances, as with Washington-based Combined Properties and Houston-based Hines, multifamily is a new business for 2011.
As a result, some multifamily developers wonder if they’re getting crowded out. Office builders contend that isn’t the case. But there’s no doubt that everyone is trying to capture value from multifamily buildings.
“Everyone who is in the development industry is seeing that multifamily is the predominant opportunity,” says Greg Bonifield, a principal with Arlington, Va.–based developer Woodfield Investments. “They’re just getting more and more competition every day in the multifamily development world.”
For Federal, the decision to redevelop wouldn’t have been feasible without some other sort of use. “It’s really a successful shopping center today,” says Goldman. “So we couldn’t justify tearing down that center and just building a retail town center without anything above it.”