EXETER TOWNSHIP, PA. — A joint venture between Toronto-based RioCan Real Estate Investment Trust (REIT) and Port Washington, N.Y.-based Cedar Shopping Centers has closed on the $53 million acquisition of Exeter Commons shopping center in Exeter Township. The 361,000-square-foot center was completed in 2009. Its anchors include a 171,000-square-foot Lowe's Home Improvement Warehouse and an 82,000-square-foot Giant Food Stores, both of which are under 20-year leases. Other tenants include Staples, Petco, Famous Footwear, Five Below, Sleepy's, Five Guys Burgers & Fries, Hallmark, Red Robin, Affinity Bank and Sonic. Occupancy was 98 percent at the time of closing. The purchase was funded, in part, by a $30 million loan provided by New York Life Insurance Co. The loan carries a 10-year term, a 30-year amortization schedule and a 5.3 percent interest rate. Marcus & Millichap's Brad Nathanson represented the undisclosed seller.
RioCan REIT holds an 80 percent stake in the joint venture, with Cedar Shopping Centers holding the other 20 percent. The partnership was formed last October with RioCan's $181 million acquisition of an 80 percent stake in a portfolio of seven grocery-anchored shopping centers located in Connecticut, Massachusetts and Pennsylvania that were previously wholly owned by Cedar. The portfolio contains a total of 1.1 million square feet of space. At the time, RioCan also acquired a 15 percent interest in Cedar in the form of 6.7 million shares of stock. This past spring, RioCan acquired a greater interest with its purchase of 1.4 million additional shares of Cedar stock.
This marks the joint venture's second shopping center acquisition outside of the initial investment. In December, the two companies, in the same 80/20 split, purchased Town Square Shopping Center in Temple, Pa., for $19.3 million. The 127,636-square-foot shopping center was developed in 2008 and anchored by Giant Food Stores.
RioCan is currently Canada's largest REIT. It has a total capitalization of approximately $8.6 billion and owns the country's largest portfolio of shopping centers, which comprises 265 properties and more than 60 million square feet. In addition to its activity in the Northeast with Cedar Shopping Centers, the company is active in Texas. Last month, RioCan entered into a similar agreement with Inland Western Real Estate Trust in which RioCan would acquire an 80 percent interest in a portfolio of retail centers owned by Inland. The portfolio contains eight shopping centers totaling approximately 1.1 million square feet. The centers are located in the Dallas-Fort Worth, Houston and Austin markets.
— Coleman Wood