The two centers have an aggregate 225,139 sf and are anchored by a Giant supermarket, a Rite Aid drug store, Peebles, Fashion Bug and Auto Zone among other tenants. Cedar has a letter of intent from Giant Foods to build a new prototype store of approximately 58,000 sf at the Lake Raystown property, subject to formal approvals by its parent company. Cedar plans to accommodate "at least" that expansion and "certain other potential opportunities," according to a statement.
The two centers were originally to be acquired in connection with Cedar's public offering in October 2003. However, legal issues, including the bankruptcy of Bi-Lo, then a tenant in a building at Huntingdon Plaza, delayed the transaction. Those issues have been resolved and the Bi-Lo building is now partially leased to First Commonwealth Bank.
Without revealing the vacancy at the two centers, Cedar acknowledges in a statement that they have "certain vacancies" which it "will seek to fill in due course." Both properties are unencumbered and were purchased at a cap rate of approximately 8.5% on existing in-place net operating income. The acquisition was funded under Cedar's existing credit facility. Purchase and sale arrangements for the properties were brokered by Mount Laurel, NJ-based Metro Commercial Real Estate Inc.
"These acquisitions are very much within the focus of our company in acquiring and developing primarily supermarket-anchored shopping centers in our geographic area," says Leo Ullman, Cedar's CEO. He adds that his company "will work hard to add value to those properties based on our relationships with key tenants and our history of being able to build new stores and to fix up and reposition a center."
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