Cedar Shopping Center Secures $78M Financing Deal for $105M Project
- Oct 06, 2008
The ice cold lending market has given a warmer reception to Cedar Shopping Centers Inc., which just closed a construction financing deal valued at $77.7 million for Upland Square, a 655,000-square-foot project on 108 acres in West Pottsgrove, Pa., approximately 40 miles northwest of Philadelphia. Cedar is developing the property in a joint venture with Tristate Ventures L.P. at an approximate cost of $105 million. Manufacturers and Traders Trust Co. headed up the syndicated credit facility. Key Bank National Association, Harleysville National Bank & Trust Co., Beneficial Mutual Savings Bank and National Penn Bank joined M&T bank in providing the financing for Upland Square’s construction. Borrowings under the facility, which features a three-year term with an optional one-year extension, bear interest at 225 basis points over one-month LIBOR. Located at the crossroads of Rte. 100 and State St., Upland Square was originally planned by Sapphire Development Cos., but Tristate later acquired the rights to develop the project, which has already proven to be a popular destination well in advance of its debut. Discount retailer Target has signed on for a 137,600-square-foot space on 11 acres, and Giant Stores Inc. will open a 75,500-square-foot supermarket at the development. A bevy of additional national chains have committed to occupying space on the tenant roster, including Bed Bath & Beyond, Best Buy, LA Fitness and Staples. Fameco Real Estate L.P., parent company of Tristate Ventures, is overseeing leasing activities. Construction of Upland Square is on schedule to reach completion around mid-2009. A&E Construction Inc. has been tapped to build the core and shell of three of the shopping center’s retail buildings–to be designed by the architectural firm of Ignarri-Lummis–totaling over 160,000 square feet. Cedar, holding a 60 percent interest in the joint venture, will have the option to acquire Tristate’s stake three years after the project’s stabilization, and will possess certain oversight rights and responsibilities. For its part, Tristate will also have the right to designated development fees. In addition to wrapping up financing for Upland Square, Cedar also just concluded the initial borrowing of $44 million under its $150 million secured revolving master construction facility, part of which will be applied toward the paying down of the company’s outstanding balance under its existing $300 million secured revolving credit facility. Cedar anticipates that the newly announced borrowings will allow the company to follow through with the development of previously announced projects in its pipeline. Headquartered in Port Washington, N.Y., Cedar is a fully integrated REIT that owns, operates, develops and redevelops supermarket-anchored retail properties in nine states in the Mid-Atlantic and New England. The company’s portfolio of owned and operated assets currently includes 119 properties totaling 12 million square feet of leasable space. Additionally, Cedar owns approximately 382 acres of developable land. Plymouth Meeting, Pa.-based Tristate is a privately owned real estate firm that develops and redevelops supermarket-anchored properties and power centers across the Mid-Atlantic. Its collection of owned and operated retail assets encompasses about 2 million square feet, not including an additional 1 million square feet on the company’s development agenda.