Real Estate Investment Trust Spends $65 Million on Six Shopping Centers

Real Estate Investment Trust Spends $65 Million on Six Shopping Centers-Image via Wikipedia

Cedar Shopping Centers, Inc. (NYSE: CDR) (“Cedar”) today announced that it has closed on 10-year fixed-rate first mortgage financing on six primarily supermarket-anchored properties purchased in October of this year on behalf of the joint venture between Cedar (20%) and RioCan Real Estate Investment Trust of Toronto, Canada (TSX: REI.UN) (“RioCan”) (80%).

The properties and the respective amounts of the loans are as follows:

  • Cross Keys Place (Sewell, NJ) – $14,600,000
  • Gettysburg Marketplace (Gettysburg, PA) – $10,917,500
  • York Marketplace (York, PA) – $16,060,000
  • Northland Center (State College, PA) – $6,297,500
  • Marlboro Crossroads (Upper Marlboro, MD) – $6,875,000
  • Towne Crossing (Midlothian, VA) – $10,450,000

The approximate loan-to-value for each of the respective loans is 55%.

The Cross Keys loan was provided by Bank of America, N.A.; the other five loans were arranged by Goldman Sachs Commercial Mortgage Capital, L.P.  In each case, the loans are at par (no fees) and for a term of 10-years with amortization schedules of 30 years.  The weighted average interest rate for the six loans is 5.06%.  None of the loans are either cross-collateralized or cross-defaulted in any manner and all are non-recourse, subject to normal exceptions.

The closings of the loans resulted in refunds of a portion of equity investments previously made at closings of the acquisition of the respective properties.  Such refunds were in amounts to Cedar of approximately $13.2 million, and to RioCan of approximately $51.7 million.

Cross Keys Place is a 148,000 sq. ft. retail strip shopping center anchored by Sports Authority, Bed, Bath & Beyond, AC Moore, Old Navy and PetCo.

Gettysburg Marketplace is an 85,000 sq. ft. shopping center anchored by a Giant Food Stores supermarket.

York Marketplace is a 305,000 sq. ft. shopping center anchored by Lowe’s, a Giant Food Stores supermarket, Office Max and Super Shoes.

Northland Center is a 108,000 sq. ft. shopping center anchored by a Giant Food Stores supermarket.

Towne Crossings is an 111,000 sq. ft. shopping center anchored by Bed, Bath & Beyond and Michael’s.

Marlboro Crossroads is a 68,000 sq. ft. shopping center anchored by a Giant Food Stores supermarket.

The Cedar (20%) / RioCan (80%) joint venture today also announced that it has entered into a $50 million senior secured revolving credit facility for which lead arrangers were TD Securities and RBC Capital Markets; the lenders are the Toronto-Dominion Bank and Royal Bank of Canada.  The credit facility has a one-year term with a one-year extension option.  Interest under the facility is at LIBOR plus 3%.  The facility, which carries an unused balance fee of 50 basis points, is intended to be used for acquisitions by the joint venture as and when appropriate.

About Cedar Shopping Centers

Cedar Shopping Centers, Inc. is a fullyintegrated real estate investment trust which focuses primarily on the ownership, operation, development and redevelopment of “bread and butter”® supermarketanchored shopping centers in coastal midAtlantic and New England states.  The Company presently owns (both exclusively or in joint venture) and manages approximately 15.4 million square feet of GLA at 132 shopping center properties, of which more than 75% are anchored by supermarkets and/or drugstores with average remaining lease terms of approximately 11 years.

For additional financial and descriptive information on the Company, its operations and its portfolio, please refer to the Company’s website at www.cedarshoppingcenters.com.

About RioCan

RioCan is Canada’s largest real estate investment trust with a total capitalization of approximately $10.0 billion as at September 30, 2010. It owns and manages Canada’s largest portfolio of shopping centres with ownership interests in a portfolio of 289 retail properties, including 11 under development, containing an aggregate of over 66 million square feet. RioCan owns an 80% interest in 28 grocery anchored and new format retail centres in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan’s website at www.riocan.com.

Forward-Looking Statements

Statements made or incorporated by reference in this press release include certain “forward-looking statements”.  Forward-looking statements include, without limitation, statements containing the words “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import which express the Company’s beliefs, expectations or intentions regarding future performance or future events or trends. While forward-looking statements reflect good faith beliefs, expectations, or intentions, they are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements as a result of factors outside of the Company’s control. Certain factors that might cause such differences include, but are not limited to, the following: real estate investment considerations, such as the effect of economic and other conditions in general and in the Company’s market areas in particular; the financial viability of the Company’s tenants (including an inability to pay rent, filing for bankruptcy protection, closing stores and/or vacating the premises); the continuing availability of acquisition, development and redevelopment opportunities, on favorable terms; the availability of equity and debt capital (including the availability of construction financing) in the public and private markets; the availability of suitable joint venture partners and potential purchasers of the Company’s properties if offered for sale; the ability of the Company’s joint venture partners to fund their respective shares of  property acquisitions, tenant improvements and capital expenditures; changes in interest rates; the fact that returns from acquisition, development and redevelopment activities may not be at expected levels or at expected times; risks inherent in ongoing development and redevelopment projects including, but not limited to, cost overruns resulting from weather delays, changes in the nature and scope of development and redevelopment efforts, changes in governmental regulations relating thereto, and market factors involved in the pricing of material and labor; the need to renew leases or re-let space upon the expiration or termination of current leases and incur applicable required replacement costs; and the financial flexibility of the Company and its joint venture partners to repay or refinance debt obligations when due and to fund tenant improvements and capital expenditures.

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