Mall REIT Cedar Realty Trust has reached agreements to sell its entire portfolio in at least three transactions totaling $1.2 billion.
The Long Island-based company’s portfolio includes 53 properties covering approximately 7.6 million square feet of gross leasable area, spread across eight northeastern states from Virginia to Massachusetts.
The bulk of the portfolio, its 33 grocery-anchored malls, will be sold for $840 million to a joint venture between real estate investment firm DRA Advisors and commercial and industrial real estate investor KPR Centers, Cedar announced this week. 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 mall in Washington, D.C. — for $34 million and $46 million. $5 million, respectively, to undisclosed buyers. If those sales are not completed before the grocery-anchored portfolio sale closes, the DRA-KPR joint venture has also agreed to acquire those two projects for $80.5 million, Cedar said.
The REIT’s remaining assets, primarily 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. As part of 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 stockholders,” Cedar President and CEO Bruce Schanzer said in a statement.
The deals have been unanimously approved by the company’s board of directors and are expected to generate total net proceeds of more than $29 per share in cash, Cedar said, a premium to its closing price on May 2. March of $24.75. By noon 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, is reportedly considering a sale in September.
In 2017, the REIT rejected an unsolicited offer from Wheeler to merge the two companies. At the time, Cedar said the offer was “unrealistic,” citing Wheeler’s poor performance for turning it down.