Massapequa, N.Y. — Cedar Realty Trust (NYSE: CDR) has agreed to sell the company and its portfolio of assets through several transactions totaling $1.2 billion.
The Massapequa-based firm’s portfolio includes 53 properties with approximately 7.6 million square feet of gross leasable space. Properties are predominantly located across high-density markets in New York, New Jersey, Connecticut, Pennsylvania, Massachusetts, Washington, D.C., Virginia, Maryland and Delaware.
A fund managed by DRA Advisors and KPR Centers will acquire a portfolio of 33 grocery-anchored shopping centers from the company for $840 million. Cedar also agreed to sell its Revelry redevelopment project in Philadelphia for $34 million and its Northeast Heights redevelopment project in Washington, D.C., for $46.5 million to undisclosed buyers.
In the event the sales are not completed prior to closing of the grocery-anchored shopping center portfolio acquisition, the DRA-KPR joint venture has agreed to acquire both projects at an aggregate price of $80.5 million.
The company and its remaining assets are set to be acquired by Virginia Beach, Virginia-based Wheeler Real Estate Investment Trust Inc. (NASDAQ: WHLR) in an all-cash merger valued at $291.3 million. Upon completion of the transaction, Cedar will be wholly owned by Wheeler and the company’s common stock will no longer be publicly traded.
These transactions, which were unanimously approved by the company’s board of directors, are estimated to garner total net proceeds of more than $29 per share in cash, which will be distributed to shareholders upon completion. This represents a 16.6 percent premium to Cedar’s closing share price on March 2, and a 70.6 percent premium to the closing share price on Sept. 9, 2021 — its last day of trading prior to the announcement of plans to sell the company and its assets.
“We believe this combination of transactions represents the best possible outcome for our common shareholders and we are very pleased with the progress thus far of our dual-track review of strategic alternatives,” says Bruce Schanzer, Cedar’s president and CEO.
The transactions are not subject to financing conditions and are expected to close by the end of the second quarter. BofA Securities and JLL Securities are acting as financial advisors to Cedar, and Goodwin Procter LLP is acting as legal counsel to Cedar.
JLL is acting as Cedar’s real estate advisor with respect to the sale of the grocery-anchored shopping center portfolio, and CBRE is acting as real estate advisor to Cedar with respect to the sale of its redevelopment projects.
New York City-based DRA Advisors is an investment advisor focused on conservative, value-add real estate investments in the office, retail, multifamily and industrial sectors. The firm had approximately $12 billion in gross assets under management as of Dec. 31, 2021.
Boston-based KPR Centers is an investor in retail and industrial properties with value-add opportunity across select markets. The company’s portfolio is located across 14 states, predominantly in the Mid-Atlantic and Southeast regions of the U.S.
Wheeler Real Estate Investment Trust develops, leases, owns and manages neighborhood and grocery-anchored shopping centers, as well as freestanding retail properties. The company’s portfolio is predominantly located in the Mid-Atlantic, Southeast and Southwest regions of the U.S. Wheeler’s stock price closed at $1.99 per share on Wednesday, March 2, down from $3.37 one year ago.