Federal Realty Investment Trust is beginning a $350 million additional phase of development at Somerville’s Assembly Row in the form of 447 luxury apartments, 117 condos, 167,000 square feet of retail shops and a 155-room hotel.

“The early success of Assembly Row made really clear to us that commercial and residential demand in and around the site wasn’t satisfied with the first phase,” Federal Realty CEO Donald Wood said today during a conference call to discuss the company’s first-quarter results.

The retail shops will occupy the lower levels of the 700,000-square-foot Partners Healthcare build-to-suit office complex already under construction.

The hotel will be a joint venture with a New England developer, Wood said. The 117 luxury condos would be built on eight floors above the hotel, adding “far more of an urban condo product” than is widely available outside of Boston, he said. Completion is expected in late 2017 or early 2018.

The 300,000-square-foot first phase of the 66-acre development on the Mystic River opened in spring 2014 and is 100-percent leased to outlet-style stores, a cinema and restaurants. The first phase also included a 132,000 square foot office building, 450 Artisan Way, which is 50 percent leased.

The initial phase includes 445 AvalonBay apartments built above the retail shops. That complex is currently 86 percent leased with average rents of $2,520, according to AvalonBay Communities’ first-quarter report.

At full buildout, the $1.5 billion project would include 500,000 square feet of retail, 1.75 million square feet of office space, 2,100 residential units and the hotel.