Shopping-center REIT Cedar Realty Trust has reached agreements to sell off its entire portfolio in at least three transactions totaling $1.2 billion.
The Long Island-based firm’s portfolio includes 53 properties spanning approximately 7.6 million square feet of gross leasable area, spread across eight northeastern states from Virginia to Massachusetts.
The largest chunk of the portfolio, its 33 grocery-anchored shopping centers, will be sold for $840 million to a joint venture between real estate investment firm DRA Advisors and retail and industrial property investor KPR Centers, Cedar announced this week.
Cedar said it is in talks to sell two of its redevelopment projects — the former Riverview Plaza mall in South Philadelphia and the East River Park shopping center in Washington, D.C. — will go for $34 million and $46.5 million, respectively, to undisclosed buyers. If those sales are not completed before the sale of the grocery-anchored portfolio closes, the DRA-KPR joint venture has agreed to acquire both of those projects, too, for $80.5 million, Cedar said.
The REIT’s remaining assets, mostly other shopping centers, will be sold to Wheeler Real Estate Investment Trust in an all-cash merger that values those properties at $291.3 million. Under the transaction, Cedar will be owned by Wheeler and the company’s common stock will no longer be publicly traded.
”We believe this combination of transactions represents the best possible outcome for our common shareholders,” Bruce Schanzer, Cedar’s president and CEO, said in a statement.
The deals were unanimously approved by the company’s board of directors and are estimated to garner total net proceeds of more than $29 per share in cash, Cedar said, a premium over its March 2 closing price of $24.75. By midday Friday, its stock had jumped to $28.53.
JLL is advising the REIT on the sale of the grocery-anchored shopping center portfolio and CBRE is handling the sale of the redevelopment projects.
Cedar, founded in 1984, was reported to be considering a sale in September.
In 2017, the REIT rejected an unsolicited offer from Wheeler to combine the two companies. At the time, Cedar said the offer was “unrealistic,” citing Wheeler’s poor returns for rejecting it.