Cedar Buys Point at Carlisle Plaza for $11M

CARLISLE, PA-Cedar Shopping Centers Inc., has completed due diligence for acquiring the 183,000-sf Point at Carlisle Plaza for $11 million, or just more than $60 per sf. The closing is expected within 30 days.

A 60,000-sf Bon Ton's and a 23,000-sf Office Max anchor the center, located at 800 E. High St. A 21,000-sf Dunham's sporting goods store is scheduled to open this fall. During a recent conference call, Leo Ullman, CEO of the Port Washington, NY-based shopping center REIT, said the center "is expected to eventually be a candidate for substantial redevelopment and possible 'de-malling,' and affords us the opportunity of future value enhancement at this location," which is just 12 miles west of its Camp Hill center. A call to Ullman was not returned by deadline.

According to published reports, the center was built in the late 1960s. The seller, an affiliate of Wexford-based Michael Joseph Development Corp., paid $5.8 million for the property in 2002 and redeveloped the asset.

The property is unencumbered, and Cedar expects to fund the acquisition from its existing floating-rate secured credit facility. In a statement, Ullman says, "it is being acquired at a very attractive yield, well in excess of 8%, unleveraged cash-on-cash." The property is expected to become a collateral-based property under Cedar's credit facility. Earlier this month, Cedar raised $83.5 million in a common stock offering.

After utilizing the proceeds from that offering to reduce the balance outstanding under the credit facility "in contemplation of certain reported acquisitions," the statement says, "the credit facility presently has availability of $126 million." The reported acquisition is an eight-property portfolio, which includes centers in Virginia and Pennsylvania, for an estimated $93.8 million. The Carlisle center along with another pending one will raise the REIT's Pennsylvania portfolio to 30 properties.