PHILADELPHIA-A JV of Cedar Shopping Centers and RioCan Real Estate Investment Trust has entered into a definitive purchase agreement to for five grocery and new format retail centers from Pennsylvania Real Estate Investment for approximately $134 million. The five properties are 97% occupied and all sales are expected to close by year’s end.
Purchase of an additional sixth property is subject to certain conditions, including terms of an existing partnership between a third party joint-venture partner and PREIT. And purchase of a seventh property is also in the works. It will be owned by Cedar and RioCan on a 50-50 basis (through separate joint venture arrangements) with the expectation that the parties will eventually redevelop this property.
The aggregate purchase price for all seven properties, including the two properties in which PREIT owns joint venture interests, would be approximately $200 million. Certain earn-out arrangements for lease-up of vacant premises during the next two years could potentially result in a further increase of the aggregate purchase price.
Leo S. Ullman, Cedar's CEO, said in a statement, “These properties will greatly enhance the portfolio of the Cedar/RioCan joint venture, with an overwhelming preponderance of credit tenants including a number of supermarket and club anchors in strong, high demographic markets. We also anticipate the potential to create additional value over time through our redevelopment, re-tenanting and de-malling capabilities that have historically proven to be successful."
PREIT, led by chairman and CEO Ronald Rubin, will continue to provide certain property management and leasing services for the properties for a three-year period under an agreement to be entered into with the joint venture, terminable by the parties after twelve months. Cedar will retain overall asset and financial management responsibilities.
Three of the initial five properties to be acquired by the Cedar/RioCan joint venture are located in Pennsylvania, one in New Jersey and one in Virginia. The remaining two properties potentially to be acquired are also in Pennsylvania. Four of the properties are anchored or shadow-anchored by supermarkets or a club store. The aggregate owned-GLA of the initial five properties is approximately 936,000 square feet; for the seven properties, the total owned-GLA is approximately 1.8 million square feet.
The initial five properties consist of the following:
Monroe Marketplace in Selinsgrove, PA, a 335,000-square-foot shopping center built anchored by a 76,000-square-foot Giant Food Stores supermarket, a 68,000-square-foot Kohl's Department Store and a 51,000-square-foot Dick's Sporting Goods and shadow-anchored by a 127,000-square-foot Target.
Creekview Shopping Center in Warrington, PA, a 136,000-square-foot shopping center anchored by a 49,000-square-foot Genardi's Supermarket and a 25,000-square-foot Bed, Bath & Beyond and shadow-anchored by an approximate 163,000-square-foot Lowe's Home Improvement Center and a 126,000-square-foot Target.
Pitney Road Plaza in Lancaster, PA, which is anchored by a 46,000-square-foot Best Buy store and shadow-anchored by a Costco and a Lowe's Home Improvement Center.
Sunrise Plaza in Forked River, NJ, a 254,000-square-foot shopping center anchored by a 131,000-square-foot Home Depot, a 96,000-square-foot Kohl's Department Store and a 20,000-square-foot Staples.
New River Valley Center in Christiansburg, VA, a 165,000-square-foot shopping center anchored by a 30,000-square-foot Best Buy, a 30,000-square-foot Ross Stores, a 24,000-square-foot Bed, Bath & Beyond, a 20,000-square-foot Staples, an 18,000-square-foot PetSmart and a 15,000-square-foot Old Navy.
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