Cedar Shopping Centers to Purchase Five Primarily Supermarket-Anchored Properties for $92 Million
PORT WASHINGTON, N.Y., Sept. 16 /PRNewswire-FirstCall/ -- Cedar Shopping Centers, Inc. (NYSE: CDR) and RioCan Real Estate Investment Trust (TSX: REI:UN) ("RioCan") today announced that it has entered into a definitive agreement to acquire a portfolio of five primarily supermarket-anchored properties for approximately $92 million, exclusive of closing costs and adjustments. Four of the properties are anchored by Giant Food Stores supermarkets. Three of the properties are located in Pennsylvania, one in Maryland and one in Virginia. The gross leasable area of the portfolio is approximately 678,000 sq. ft.
The properties will be acquired by the existing joint venture between Cedar (20%) and RioCan (80%) from selling entities affiliated with the Edens & Avant group of Columbia, South Carolina, and will be delivered "free and clear." The joint venture expects to arrange fixed-rate financing for a period of up to ten years on the properties at a rate presently estimated at 5.5% and at a loan-to-value percentage of approximately 55%.
The properties include the following:
- Gettysburg Marketplace, Gettysburg, PA (approximately 38 miles southwest of Harrisburg, PA), an 85,500 sq. ft. center, built in 1998, and anchored by a 67,000 sq. ft. Giant Food Stores supermarket.
- York Marketplace, York PA (approximately 20 miles south of Harrisburg), a 305,000 sq. ft. center renovated in 2004, with a 125,000 sq. ft. Lowe's, a 75,000 sq. ft. Giant Food Stores supermarket, a 23,500 sq. ft. Office Max, and a 20,000 sq. ft. Super Shoes as its anchors.
- Northland Center, State College, PA (approximately 90 miles northeast of Harrisburg), a 108,000 sq. ft. center, built in 1988, and anchored by a 65,000 sq. ft. Giant Food Stores supermarket.
- Marlboro Crossroads, Upper Marlboro, MD (approximately 20 miles southeast of Washington, DC), a 68,000 sq. ft. center, built in 1993, and anchored by a 61,000 sq. ft. Giant Food Stores supermarket.
- Towne Crossings, Midlothian, VA (approximately 12 miles west of Richmond, VA), a 111,000 sq. ft. center, built in 1980, and anchored by a 40,000 sq. ft. Bed, Bath & Beyond and a 20,000 sq. ft. Michael's store.
The properties presently feature overall occupancy of approximately 96%.
The joint venture is expected to fund the purchase price of $92 million, plus closing costs and adjustments presently estimated at $1.75 million, with a first mortgage loan estimated at approximately $52 million (approximately 55% of the purchase price) plus additional cash equity of approximately $41 million. Assuming such financing, Cedar's equity contribution would be approximately $8.4 million, and RioCan's, approximately $33.6 million. In the absence of such financing, or pending such financing, Cedar's contribution would be $18.75 million and RioCan's, approximately $75 million.
It is expected that Cedar's share of such equity contributions would be funded from its secured revolving credit facility for stabilized properties on which the outstanding balance, as previously reported, has been reduced to a current level of approximately $6 million.
Mike Winters, Cedar's Vice President of Acquisitions, stated, "We are delighted to acquire this excellent portfolio of quality properties from Edens & Avant for our joint venture with RioCan. This portfolio featuring high-quality, highly-creditworthy anchor tenancies with long leases and little vacancy, further confirms our continuing commitment to primarily supermarket-anchored properties within our geographic focus. It represents another step in the expansion and enhancement of a strong portfolio for our joint venture."
About Cedar Shopping Centers
Cedar Shopping Centers, Inc. is a fullyintegrated real estate investment trust which focuses primarily on the ownership, operation, development and redevelopment of "bread and butter"® supermarketanchored shopping centers in coastal midAtlantic and New England states. The Company presently owns (both whollyowned and in joint venture) and manages approximately 13.4 million square feet of GLA at 119 shopping center properties, of which more than 75% are anchored by supermarkets and/or drugstores with average remaining lease terms of approximately 11 years.
For additional financial and descriptive information on the Company, its operations and its portfolio, please refer to the Company's website at www.cedarshoppingcenters.com.
About RioCan
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $8.6 billion as at June 30, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 269 retail properties, including 11 under development, containing an aggregate of over 60 million square feet. RioCan owns an 80% interest in eight grocery anchored shopping centres in the United States and owns a 14% equity interest in Cedar. For further information, please refer to RioCan's website at www.riocan.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forwardlooking statements include, without limitation, statements containing the words "anticipates", "believes", "expects", "intends", "future", and words of similar import which express our beliefs, expectations or intentions regarding future performance or future events or trends. While forwardlooking statements reflect good faith beliefs, expectations or intentions, they are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forwardlooking statements as a result of factors outside of our control. Certain factors that might cause such differences include, but are not limited to, the following: real estate investment considerations, such as the effect of economic and other conditions in general and in our market areas in particular; the financial viability of our tenants (including an inability to pay rent, filing for bankruptcy protection, closing stores and/or vacating the premises); the continuing availability of acquisition, development and redevelopment opportunities, on favorable terms; the availability of equity and debt capital (including the availability of construction financing) in the public and private markets; the availability of suitable joint venture partners and potential purchasers of our properties if offered for sale; the ability of our joint venture partners to fund their respective shares of property acquisitions, tenant improvements and capital expenditures; changes in interest rates; the fact that returns from acquisition, development and redevelopment activities may not be at expected levels or at expected times; risks inherent in ongoing development and redevelopment projects including, but not limited to, costs overruns resulting from weather delays, changes in the nature and scope of development and redevelopment efforts, changes in governmental regulations relating thereto, and market factors involved in the pricing of material and labor; the need to renew leases or relet space upon the expiration or termination of current leases and incur applicable required replacement costs; and the financial flexibility of ourselves and our joint venture partners to repay or refinance debt obligations when due and to fund tenant improvements and capital expenditures. For more information regarding risks that may cause our actual results to differ materially from any forward looking statements, please see the discussion under "Risk Factors" contained in the prospectus supplement, the accompanying prospectus and the other information contained in our publicly available filings with the SEC, including our Annual Report on Form 10K for the year ended December 31, 2009. We do not undertake any responsibility to update any of these factors or to announce publicly any revisions to forward looking statements, whether as a result of new information, future events or otherwise.
SOURCE Cedar Shopping Centers, Inc.
Share this article