GlobeSt.com

Eight of the nine centers in the Cedar/Homburg JV are in Pennsylvania and the other is in Massachusetts. The portfolio is valued at $169.5 million, which represents a cap rate of approximately 7%, and the properties are subject to about $106 million in first-mortgage financing. Cedar retains a 20% interest and obtains $53.2 million in net cash proceeds from Homburg's 80% interest.

All of the centers are anchored by a Giant or Stop & Shop supermarket. The Pennsylvania properties are 110,000-sf Pennsboro Commons in Enola, 90,000-sf Stonehedge Square in Carlisle, 86,000-sf Meadows Marketplace in Hershey, 55,000-sf Aston Center in Aston, 56,000-sf Ayr Town Center in McConnellsburg, 107,000-sf Parkway Plaza in Mechanicsburg, 68,000-sf Scott Town Center in Bloomsburg, and 68,000-sf Spring Meadow Shopping Center in Wyomissing. The ninth property is the 194,000-sf Fieldstone Marketplace in New Bedford, MA.

Under the agreement, Cedar receives fees for property management, leasing and other operational functions. In addition, it is entitled to a "promote," applicable to each property, which allows it to increase ownership to 40% based on a look-back leveraged cash internal rate of return of nearly 9.3% and to 50% when the leveraged cash internal rate of return reaches 10.5%. The JV expects to hold the properties for between five and seven years, but, under a buy-sell arrangement, either party can sell properties 18 months after the close of the deal.