Cedar Adds Six PA Centers for $94M Plus

NEW CUMBERLAND, PA-Cedar Shopping Centers has acquired a five-property portfolio of Pennsylvania shopping centers aggregating 353,000 sf from Harrisburg-based Caldwell Development Co. for approximately $90 million, or $255 per sf. In a separate transaction, the Port Washington, NY-based REIT, which has a divisional office here, paid $4.2 million, or $70 per sf, for Fairview Commons, which is immediately adjacent to its existing Fairview Plaza shopping center here.

All centers in the Caldwell portfolio are anchored and occupied by a Giant supermarket on leases that extend for a minimum of 20 years with a number of five-year renewal options. The portfolio is 100% leased, according to Leo Ullman, Cedar's CEO.

The largest of the Caldwell properties is 106,550-sf Parkway Plaza Shopping Center on 12.8 acres in Mechanicsburg. In addition to the 67,000-sf Giant unit, there are a freestanding Rite Aid, Wendy's, Kinder Care Learning Center and Fulton Bank, all on pad sites, along with Holiday Hair, Blockbuster, GNC, a UPS store and a Giant gas station. Parkway was built in 1998. The other four properties were built between 2003 and 2005.

Giant is the sole tenant at the 55,000-sf Aston Town Center in Aston, a Philadelphia suburb. The 67,850-sf Spring Meadow Shopping Center in Wyomissing has a 65,000-sf Giant unit and a Giant gas station. Ayr Town Center in McConnellsburg is 55,600 sf and contains a 50,000-sf Giant unit along with a Giant gas station. The 68,000-sf Scott Town Center on 11.4 acres in Bloomsburg is anchored by a 54,333-sf leased Giant supermarket and also contains a Giant gas station, which is owned by Giant.

Each of these properties is encumbered by an existing first mortgage, and Cedar will assume all but one of the loans as a part of the purchase price. It will take on about $43.1 million in debt and defease a $7.9-million loan and replace it with new first-mortgage financing. The balance of the buy is funded by Cedar's secured revolving credit facility.

Giant Food Stores leases approximately 17,000 sf for storage at the 60,000-sf Fairview Commons, which is also 100% occupied. Other tenants are Family Dollar, Movie Gallery and Dairy Queen. A 60,000-sf Giant supermarket now anchors Cedar's 72,000-sf Fairview Plaza. The two properties share ingress and egress across their parking lots. "We plan to redevelop Fairview Commons, and, at some point, expand the existing Giant," Ullman tells GlobeSt.com, "but we have no commitment to do so yet." This asset is unencumbered.

All of the acquisitions are expected to close in first quarter 2007. Calling them "strategic properties," Ullman says, "They are located in the heart of our company's portfolio concentration."

Prior to the close of these acquisitions, Cedar's Pennsylvania portfolio consists of about 36 properties aggregating more than five million sf. As GlobeSt.com reported, it also recently acquired a majority stake in a Philadelphia property, currently leased to the IRS, with plans to eventually develop up to 650,000 sf of retail.