The Connecticut property, New London Mall in New London, CT, was owned by Centro Properties since 2005. Published reports say the $40.7 million selling price on the 259,000-square-foot property was $1.3 million less than Centro--also headquartered in Port Washington--had paid. Cedar also owns the nearby Groton Shopping Center.
Cedar and PCP purchased the 264,000-square-foot Maryland property, San Souci Plaza in California, MD--from WP Realty Co.--according to a release from WP. Cedar and WP, based in Bryn Mawr, PA, have a history of successful transactions together, including previous sales from WP to Cedar of Jordan Lane Shopping Center in Wethersfield, CT; Fieldstone Marketplace in New Bedford, MA; and a six-property portfolio, plus a current joint venture at Columbia Mall in Bloomsburg, PA.
According to a release from Cedar, the JV entails a 60% profits interest on PCP's part and a 40% profits interest by Cedar. The JV assumed existing first mortgage loans of approximately $54.6 million at a weighted average interest rate of 5.53%, due in 2015 and 2016, respectively. Cedar's portion of the balance of the respective purchase prices, representing approximately $7 million, was funded from the company's secured revolving credit facility.
Cedar will be the sole managing partner of the venture and will receive certain acquisition, property management, construction management and leasing fees, according to the company. The REIT will also be entitled to a "promote" fee structure, in which its profits participation would be increased to 45% if the venture reaches certain income targets.
Located on North Frontage Road at Exit 35 of the New England Thruway, the New London Mall is anchored by a 64,000-square-foot ShopRite supermarket. The ShopRite lease extends through February 2020. Other anchor tenants include Marshalls, Home Goods and PetSmart.
San Souci Plaza is anchored by a 61,466-square-foot Shoppers Food Warehouse, which has leased the space through May 2020. Its other tenants include Marshalls, Jo-Ann Fabrics and Dollar Tree.
In late January, Cedar announced it would revise the dividend on its common stock, a move the REIT says will generate approximately $21 million in retained cash flow during 2009. "The decision by our board of directors to reduce the dividend at this time is in response to the current state of the economy, the difficult retail environment and the constrained capital markets," says CEO Leo Ullman in a statement. "Given the challenges facing tenants, and the potential for impact on leasing and operations, we believe it to be prudent to preserve liquidity in order to maintain the strength of our balance sheet."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
