Cedar Shopping Centers to Purchase Massachusetts Center for $23.5 Million

PORT WASHINGTON, N.Y., Feb. 8, 2011 /PRNewswire/ -- Cedar Shopping Centers, Inc. (NYSE: CDR) today announced that it has entered into a definitive agreement to purchase Northwoods Crossing in Taunton, Massachusetts, on behalf of the joint venture between Cedar (20%) and RioCan Real Estate Investment Trust of Toronto, Canada (TSX: REI.UN) ("RioCan") (80%).  

Cedar also entered into a definitive contract to sell Fairfield Plaza, a non-core property, in New Milford, Connecticut.

Cedar's CEO, Leo Ullman, stated "The acquisition and disposition announced today reflect continued execution of our business plan:  purchase at accretive prices of core properties with food-based market leaders as our anchor tenants, featuring long leases, excellent credit, high occupancy, and stable cash flows in Atlantic coastal markets with substantial barriers to entry.  Further, we benefit from fee-structured income in our joint ventures to drive strong returns.  At the same time, we will continue to upgrade the portfolio by disposing of non-core properties in secondary markets.

Northwoods Crossing

Northwoods Crossing is a 160,000 sq. ft. shopping center on approximately 42 acres off Route 495, less than 40 miles from Boston and across from the largest office park in New England.  It is anchored by a 115,000 sq. ft. BJ's Wholesale Club with a lease extending to 2023 and a 19,000 sq. ft. Tractor Supply with a lease extending to 2025.  The property is 100% leased.  Other tenants include Dollar Tree, Ruby Tuesday's and Wendy's.

The property can be expanded by an additional 15,000 sq. ft.  In the event that the joint venture in fact builds and leases such additional square footage, the seller will be entitled to an "earnout" at 8.5% on the base rental income.  

The purchase price, exclusive of closing costs and adjustments, is approximately $23.5 million and is subject to existing non-recourse financing of approximately $14.5 million at 6.35%, maturing in 2016.

Cedar's investment will be approximately $1.8 million above the existing debt, which it expects to fund from its secured revolving credit facility.  RioCan's share of the equity investment above the existing debt will be approximately $7.2 million.  This will be the 22nd property owned by the Cedar/RioCan joint venture.

The closing, which is subject to lender approvals and standard closing conditions, is expected to be completed in the second quarter of 2011.  

Non-Core Asset Sale

Cedar has agreed to sell Fairfield Plaza in New Milford, Connecticut, a 72,000 sq. ft. center anchored by T.J. Maxx and Staples to an affiliate of Urstadt Biddle Properties, Inc. for $10.84 million.

The property was acquired by Cedar in May 2005 for approximately $9.25 million as part of a portfolio of 25 properties.  The purchase is subject to assumption of an existing first mortgage loan in the amount of approximately $5 million held by KeyBank National Association.

The Company expects to receive net cash proceeds of approximately $5.8 million, subject to closing costs and adjustments, and to realize a reportable gain of approximately $500,000 upon completion of the sale.  The proceeds will be used to reduce amounts outstanding under the Company's credit facility.

About Cedar Shopping Centers, Inc.

Cedar Shopping Centers, Inc. is a fully-integrated real estate investment trust which focuses primarily on ownership, operation, development and redevelopment of "bread & butter"® supermarket-anchored shopping centers in coastal mid-Atlantic and New England states. The Company presently owns (both exclusively or in joint venture) and manages approximately 15.9 million square feet of GLA at 133 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 $10.1 billion as at December 31, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 296 retail properties, including 10 under development, containing an aggregate of over 66 million square feet. RioCan owns an 80% interest in 31 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.

SOURCE Cedar Shopping Centers, Inc.