VINELAND, NJ-Pennsylvania Real Estate Investment Trust has closed on the acquisition of Cumberland Mall, a 925,00-sf enclosed mall regional shopping center here. The sale price for the transaction, which had originally been announced late last year, was approximately $59.5 million, or about $64 per sf.

The seller was Cumberland Mall Associates, a local partnership that includes Ronald Rubin and George Rubin. Ronald Rubin is chairman, CEO and a trustee of the Philadelphia-based PREIT, and George Rubin is vice chairman and a trustee of PREIT. The mall has been managed for Cumberland Mall Associates for the past seven years by PREIT-Rubin Inc.

"It's a strong mall located in a growth market," says Jonathan Weller, another PREIT vice chairman. "Our position in this geographic market is solidified with this acquisition. With the tenant mix and the strong potential for increased rent, we expect an improved return on our investment."

With the transaction, PREIT assumed two mortgages, the first with Wachovia Bank for $43.9 million at an interest rate of 6.5%, maturing in December 2012. The second mortgage, with SunTrust Bank for $3.8 million, carries an interest rate of 5% and a maturity date of February 2014.

Approximately $900,000 in cash was also paid for a 1.7-acre vacant outparcel adjacent to the mall, and the rest of the purchase price, approximately $11 million was paid in the form of about 273,000 PREIT operating partnership units. The units were valued on the basis of the average closing price of PREIT's common shares on the 10 trading days prior to the deal's closing.

According to company officials, a committee of non-management trustees studied the transaction on behalf of PREIT before it closed. The committee got an independent appraisal to determine the fairness of the purchase price. The deal was underwritten to generate an unleveraged return of approximately 10.2% on cost, based on anticipated operating income in 2005.

Cumberland Mall is anchored by three department stores, Boscov's, JC Penney and Value City. Its in-line tenant roster of 62 stores, currently 98.8% leased, includes American Eagle Outfitters, Gap, Old Navy and Victoria's secret. The mall generated per-sf sales of nearly $330 this past year. The site also includes several outparcel tenants, including BJ's Wholesale Club, which owns its land and building, and Home Depot and Regal Cinemas, which own their buildings and have ground leases with PREIT.