PHILADELPHIA — Philadelphia-based Pennsylvania Real Estate Investment Trust (PREIT) has agreed to sell its interest in seven power center to Cedar Shopping Centers. In the first part of the transaction, PREIT will sell five of its wholly owned centers for approximately $134 million. The properties total 936,000 square feet and include Sunrise Plaza in Forked River, N.J.; Pitney Road Plaza in Lancaster, Pa.; Monroe Marketplace in Selinsgrove, Pa.; Creekview Center in Warrington, Pa.; and New River Valley Center in Forked River, N.J.
In the second part of the deal, PREIT will sell its 50 percent interest in two shopping centers. The first is Whitehall Mall in Allentown, Pa., and the second is Red Rose Commons in Lancaster. The two properties contain a total of 821,000 square feet, and PREIT's interest in them is worth approximately $34 million. Its proportionate share the the properties' mortgage debt is $18 million.
A portion of the proceeds from this deal will be used to repay the properties' mortgages and to release two properties securing PREIT's 2010 credit facility. Additional proceeds will be used for general corporate purposes. The transactions are expected to close during the fourth quarter of 2010 or the first quarter of 2011, but they are subject to approval by PREIT's creditors and joint venture partners.
PREIT will retain ownership of land parcels at the shopping centers it wholly owned, but a stipulation in the agreement states that Cedar could acquire them at a formulated price. In addition, PREIT will serve as management and leasing agent for the properties for a 3-year term.
— Coleman Wood