Federal Realty Investment Trust plans to break ground this spring on a six-story, 217-unit apartment building at the Bala Cynwyd on City Avenue shopping center following the success of the first 87 apartments built at the retail property.
The first phase of the residential project, named the Delwyn, was completed in 2020 and is 97% leased. In January 2021, Federal Realty tenant Lord & Taylor closed its department store at 121 E. City Ave. and vacated the two-story, 120,000-square-foot property, giving the Maryland-based real estate firm an opening to demolish that building and add more apartments at the retail center.
“We’re obviously happy with the way [the Delwyn] has delivered quality residential units to the Bala Cynwyd market, and we feel there’s an opportunity given the lack of lease-ability for a 1960s-era department store,” said Mark Brennan, vice president of regional development at Federal Realty Investment Trust.
Brennan declined to share the estimated cost of the 217-unit project, but said Federal Realty’s investment in recent years, including the first phase of residential, totals nearly $170 million. The 69-year-old retail destination, previously known as the Bala Cynwyd Shopping Center, underwent an $8 million rebrand last year.
The upcoming project is planned to be completed by summer 2026 and would have 16,000 square feet of ground-floor retail space and a two-level parking garage. The retail space would likely have multiple tenants, possibly restaurants or service retail like banks, dry cleaners or small fitness boutiques, Brennan said.
Existing tenants at the shopping center include Acme, Michaels, L.A. Fitness, Olive Garden, Five Guys and Honeygrow.
“There’s just not a lot of users in today’s market that find that size and dimensions in their current prototype,” Brennan said. “There wasn’t really an opportunity in this retail market find a user or users to take a 120,000-square-foot, two-level department store.”
Planned amenities at the new apartment building include a rooftop patio, courtyard, golf simulator and work-from-home stations.
There are now about 1,700 apartments in the pipeline along City Avenue. The increased density was made possible following Lower Merion Township’s upzoning of properties along the commercial corridor about a decade ago.
“It unlocks an opportunity to deliver a Class A mixed-use project of this size in this incredible location on City Avenue,” Brennan said.
Federal Realty’s property is near the northwest corner of City Avenue and Belmont Avenue, about a mile from I-76 and a half-mile from the Bala SEPTA regional rail station. Brennan views the site favorably to attract both shoppers and residents who commute into the city.
Adding more residential aligns with similar projects Federal Realty (NYSE: FRT) has planned or has developed elsewhere. In Willow Grove, Federal Realty has plans for 260 apartments as part of the third phase of a major overhaul to the Willow Grove Shopping Center. Brennan said Federal Realty expects to receive land development approval by the end of the year.
Federal Realty has built similar residential developments at shopping centers in Darien, Connecticut, outside New York, and elsewhere outside Northeast cities like Boston and Washington, D.C. Federal Realty’s residential portfolio is 96% leased, according to a recent filing with the U.S. Securities and Exchange Commission.
“I think our track record of adding residential to these opportunities and first-ring suburbs of major markets primarily along the East Coast is something we’ve done successfully over the past decade-plus,” Brennan said.
