Exhibit 8.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
November 26, 2001
Federal Realty Investment Trust
1626 East Jefferson Street
Rockville, MD 20852
Ladies and Gentlemen:
We have acted as counsel to Federal Realty Investment Trust, a Maryland
real estate investment trust (the "Company"), in connection with the sale and
issuance of up to 5,750,000 shares of the Company's 8 1/2% Series B Cumulative
Redeemable Preferred Shares, par value $0.01 per share (the "Shares") as more
fully described in the Company's Registration Statement on Form S-3 (File No.
333-63619) filed with the Securities and Exchange Commission on September 30,
1998, and the prospectus included therein (the "Prospectus"), which incorporates
by reference the Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on November 15, 2001, as amended through the date hereof
(the "8-K")), and the Company's prospectus supplement dated November 19, 2001
(the "Prospectus Supplement). In connection therewith, we have been asked to
provide you with an opinion regarding certain federal income tax matters related
to the Company. Unless otherwise defined herein or the context hereof otherwise
requires, each term used herein with initial capitalized letters has the meaning
given to such term in the Prospectus.
Basis for Opinions
The opinions set forth in this letter are based on relevant current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations thereunder (including proposed and temporary Treasury
regulations), and interpretations of the foregoing as expressed in court
decisions, legislative history, and administrative determinations of the
Internal Revenue Service (the "IRS") (including its practices and policies in
issuing private letter rulings, which are not binding on the IRS, except with
respect to a taxpayer that receives such a ruling), all as of the date hereof.
These provisions and interpretations are subject to changes (which may apply
retroactively) that might result in material modifications of our opinions.
Our opinions do not foreclose the possibility of a contrary determination
by the IRS or a court of competent jurisdiction, or of a contrary
Federal Realty Investment Trust
November 26, 2001
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position by the IRS or the Treasury Department in regulations or rulings issued
in the future. In this regard, although we believe that our opinions set forth
herein will be sustained if challenged, an opinion of counsel with respect to an
issue is not binding on the IRS or the courts, and is not a guarantee that the
IRS will not assert a contrary position with respect to such issue or that a
court will not sustain such a position asserted by the IRS.
In rendering the following opinions, we have examined such statutes,
regulations, records, certificates and other documents as we have considered
necessary or appropriate as a basis for such opinions, including (but not
limited to) the following:
(1) the Prospectus, Prospectus Supplement, and 8-K, as amended through
the date hereof;
(2) the Declaration of Trust of the Company dated May 5, 1999, as amended
through the date hereof (the "Declaration of Trust");
(3) the Bylaws of the Company, as amended to the date hereof;
(4) the articles of incorporation, bylaws and stock ownership information
for Street Retail, Inc., Street Retail West GP, Inc., SRI San Antonio,
Inc., SRI Texas, Inc., Federal Realty Partners, Inc., FRLP, Inc.,
JS&DB, Inc., FRIT Leasing & Development Services, Inc., SRI Holding
Co., Inc., San Jose Residential, Inc., Ravenswood Development
Services, Inc., FRIT Property Services, Inc.; Federal Realty
Management Services, Inc.; Santana Row Services, Inc.; and Santana
Row ROF, Inc.;
(5) the partnership agreement or limited liability company operating
agreement, as applicable, used to organize and operate the partnerships
or limited liability companies in which the Company owns an interest
(the "Partnership Subsidiaries") as set forth in Schedule A attached
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hereto; and
(6) such other instruments and documents related to the organization
and operation of the Company as we have deemed necessary or
appropriate.
The opinions set forth in this letter also are premised on certain written
representations of the Company contained in a letter to us on or about the date
hereof regarding the assets, operations and activities of the Company (the
"Management Representation Letter").
Federal Realty Investment Trust
November 26, 2001
Page 9 of 13
For purposes of rendering our opinions, we have not made an independent
investigation or audit of the facts set forth in the above referenced documents,
including the Prospectus, Prospectus Supplement, 8-K and the Management
Representation Letter. We consequently have relied upon the representations in
the Management Representation Letter that the information presented in such
documents or otherwise furnished to us is accurate and assumed that the
information presented in such documents or otherwise furnished to us is accurate
and complete in all material respects. After reasonable inquiry, however, we
are not aware of any material facts or circumstances contrary to, or
inconsistent with, the representations we have relied upon as described herein
or other assumptions set forth herein. Finally, our opinion is limited to the
tax matters specifically covered herein, and we have not addressed, nor have we
been asked to address, any other tax matters relevant to the Company.
In connection with our opinion, we have assumed, with your consent:
(1) that all of the representations and statements set forth in the
documents (including, without limitation, the Management Representation
Letter) we reviewed are true and correct, and all of the obligations
imposed by any such documents on the parties thereto, including
obligations imposed under the Company's articles of incorporation, have
been and will be performed or satisfied in accordance with their terms;
(2) the genuineness of all signatures, the proper execution of all
documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of documents submitted to us as
copies, and the authenticity of the originals from which any copies
were made;
(3) that the Company and each of the partnership, limited liability company
or corporate subsidiary entities have been and will continue to be
operated in the manner described in the relevant partnership agreement,
articles (or certificate) of incorporation or other organizational
documents and in the Prospectus, Prospectus Supplement, 8-K and
Management Representation Letter; and
(4) that we have been provided with all written agreements related to the
ownership of the stock of any corporations in which the Company owns an
interest, directly or indirectly (the "Corporate
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November 26, 2001
Page 10 of 13
Affiliates") and no oral agreements or understandings exist or have
existed between the Company and other securityholders of any of the
Corporate Affiliates or the Corporate Affiliates themselves that are
inconsistent with the Company being considered to be the beneficial
owner, directly or indirectly, of 10% or less of either (a) the
outstanding voting securities or (b) at the end of any calendar quarter
beginning on or after January 1, 2001, the total value of the
outstanding securities, of any Corporate Affiliate that does not
qualify as either a "qualified REIT subsidiary" as defined in Section
856(i) of the Code or, after January 1, 2001, a "taxable REIT
subsidiary" as defined in Section 856(l) of the Code.
Opinions
Based upon, subject to, and limited by the assumptions and qualifications
set forth herein, we are of the opinion that:
1. the Company has been organized and has operated in conformity with the
requirements for qualification as a real estate investment trust ("REIT") under
the Code for its taxable years ended December 31, 1995, December 31, 1996,
December 31, 1997, December 31, 1998, December 31, 1999 and December 31, 2000
and the Company's organization and proposed method of operation (as described in
the Prospectus, Prospectus Supplement, 8-K and Management Representation Letter)
will enable it to continue to meet the requirements for qualification and
taxation as a REIT under the Code; and
2. the discussions in (x) the Prospectus Supplement under the captions
"Federal Income Tax Consequences" and "Risk Factors - To qualify as a REIT, we
have to distribute at least 90% of our net taxable income, excluding net capital
gains"; (y) the Prospectus under the caption "Federal Income Tax
Considerations", except we note that the statement to the effect that the
Company is generally required to distribute to shareholders 95% of its taxable
income each year is not correct for tax years of the Company beginning after
December 31, 2000, for which periods the Company is generally required to
distribute to shareholders 90% of its taxable income; and (z) the Company's 8-K
under the captions "Federal Income Tax Consequences" and "Risk Factors - WE
DEPEND ON EXTERNAL SOURCES OF CAPITAL FOR FUTURE GROWTH, and - FEDERAL INCOME
Federal Realty Investment Trust
November 26, 2001
Page 11 of 13
TAX RISKS RELATING TO OPERATING AS A REAL ESTATE INVESTMENT TRUST", which is
incorporated by reference into the Prospectus, when read together, accurately
describe, in all material respects, the federal income tax consequences
anticipated to be material to a holder of shares with respect to the
acquisition, ownership, and disposition of shares.
An opinion of counsel merely represents counsel's best judgment with
respect to the probable outcome on the merits and is not binding on the IRS or
the courts. There can be no assurance that positions contrary to our opinion
will not be taken by the IRS or that a court considering the issues would not
hold contrary to such opinion.
We assume no obligation to advise you of any changes in our opinions or
of any new developments in the application or interpretation of the federal
income tax laws subsequent to the date of this opinion letter. The Company's
qualification and taxation as a REIT depend upon the Company's ability to meet
on a continuing basis, through actual annual operating and other results, the
various requirements under the Code with regard to, among other things, the
sources of its gross income, the composition of its assets, the level of its
distributions to stockholders, and the diversity of its stock ownership. We will
not review the Company's compliance with these requirements on a continuing
basis. Accordingly, no assurance can be given that the actual results of the
operations of the Company, the Corporate Affiliates and Partnership
Subsidiaries, the sources of their income, the nature of their assets, the level
of the Company's distributions to its stockholders and the diversity of the
Company's stock ownership for any given taxable year will satisfy the
requirements under the Code for qualification and taxation as a REIT.
This opinion letter has been prepared for your use in connection with the
sale and issuance of the Shares and speaks as of the date hereof. We hereby
consent to the filing of this opinion letter as Exhibit 8.1 to the Registration
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Statement and to the reference to Hogan & Hartson L.L.P. under the caption
"Legal Matters" in the Prospectus Supplement. In giving this consent, however,
we do not admit thereby that we are an "expert" within the meaning of the
Securities Act of 1933, as amended.
Very truly yours,
HOGAN & HARTSON L.L.P.
Federal Realty Investment Trust
November 26, 2001
Page 12 of 13
Schedule A
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Street Retail West I, L.P.
Street Retail West II, L.P.
Street Retail West 3, L.P.
Street Retail West 4, L.P.
Street Retail West 6, L.P.
Street Retail West 7, L.P.
Street Retail West 9, L.P.
Street Retail West 10, L.P.
Street Retail Tempe I, LLC
Street Retail Forest Hills I, LLC
Street Retail Forest Hills II, LLC
Street Retail San Antonio, LP
FR Pike 7 Limited Partnership
FR Leesburg Plaza, LLC
FR Leesburg Plaza, LP
Federal Realty Partners L.P.
SRI Old Town, LLC
Loehmann's Plaza Limited Partnership
FR Associates Limited Partnership
Andorra Associates
Berman Enterprises II Limited Partnership
Governor Plaza Associates
Shopping Center Associates
Virginia Real Estate Investors Limited Partnership
FRIT Escondido Promenade, LLC
Congressional Plaza Associates
FR Federal Plaza, LLC
FRIT San Jose Town and Country Village, LLC
580 Market, LLC
La Rive Gauche Sane Jose, LLC
Straits Santana Row, LLC