Cedar Shopping Centers Buying Shopping Centers

Cedar Shopping Centers, a real estate investment trust in Port Washington, is in growth mode. The REIT is known for developing and redeveloping shopping centers and also taking what Cedar's chief executive Leo S. Ullman calls "tired old malls" and revitalizing them.

On Monday Cedar announced that through a joint venture with RioCan Real Estate Investment Trust ofToronto, Canada, it agreed to purchase five anchored shopping centers from Pennsylvania Real Estate Investment Trust for $134 million.  

Of these properties, three are in Pennsylvania, one in New Jersey, and one in Virginia.  Combined they offer 936,000 square feet of leasable space.

In addition, Cedar announced plans with RioCan to purchase two additional shopping centers, partially owned by PREIT, both in Pennsylvania, totaling up to 821,000 square feet. The purchase price for all seven properties, if completed, is pegged at $200 million . 

Ullman said that the properties would "greatly enhance the portfolio of the Cedar/RioCan joint venture, with an overwhelming preponderance of credit tenants including a number of supermarket and club anchors in strong, high demographic markets."

Ullman also expects to enhance additional value over time through its redevelopment and re-tenanting strategies. Then there are Cedar's "de-malling" tactics – "taking the roof off the enclosed mall and turning the stores inside out," Ullman said. This eliminates the costs for heating, security, events and other costs associated with mall rent. 

Cedar stock was virtually unchanged (up 2 cents or 0.36 percent) in very light trading on Monday.