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CARLISLE, PA-In a series of transactions, primarily for expanded retail development in Pennsylvania, Port Washington, NY-based Cedar Shopping Centers acquired a little more than 55 acres in four locations. The REIT also purchased the remaining 50% interest in the 41,000-sf LA Fitness facility in Fort Washington.

At the same time, it sold its 20% interest in the 224,000-sf Red Lion Shopping Center in Philadelphia and agreed to purchase a 1.9-acre site in Valatie, NY for development of a new prototype drug store. The majority of the transactions confirm Cedar's "commitment to development projects at this time and represent but a small part of our current and future development pipeline," says Leo S. Ullman, CEO. The sale of its minority interest in the Philadelphia asset, "is intended to reflect an effective redeployment of our invested funds."

The largest land buys, by far, are here, and Ullman tells GlobeSt.com, "We're also looking at other sites in Central Pennsylvania. It's an area we like." For approximately $8.3 million, Cedar is buying a 42-acre tract at Walnut Bottom Road with plans to develop a shopping center of between 110,000 sf and 120,000 sf in partnership with Lemoyne-based WAM Enterprises Inc. The partnership also plans to create four to five separate parcels on the site for potential single-tenant, net-lease or sale transactions.

Cedar is also acquiring a nearly 2.5-acre Trindle Springs parcel on Carlisle Pike, that Ullman says "is near, but unrelated to the Walnut Bottom Road site." This will also be developed in joint venture with WAM. In both of the Carlisle WAM JVs, Cedar expects a preferred return at 9.25% on its invested funds and an additional participation of between 50% and 66.7% in excess current cash flow and/or proceeds of capital transactions.

In addition, Cedar has closed on the acquisition of three of four parcels, aggregating nearly 6.4 acres adjacent to its Columbia Mall in Bloomberg. The price for all of the land is about $1 million, and Ullman says it will be used for outparcels of Columbia Mall. The company also agrees to buy nearly 4.3 acres in Halifax for $600,000 to develop Halifax Commons, "a small center," Ullman says, "with a national drug store anchor, two fast food restaurants and an additional tenant, now under negotiation."

Philadelphia-based ARC Properties, which currently owns 69% of the Red Lion center, is buying Cedar's 20% stake for an undisclosed amount. Ullman says the additional 11% is owned by a foreign investment corporation, which also intends to sell to ARC. Cedar expects "a small gain" from the transaction. At the same time, ARC is selling its half-ownership of the LA Fitness facility to Cedar for an estimated $2.5 million, plus assumed debt of approximately $5 million.

Instant Insights /

Cedar Buys 55 Acres for Additional Retail Development

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