CEDAR SHOPPING CENTERS, INC.
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
CONTACT: LEO S. ULLMAN
PRESIDENT
(516) 767-6492
FOR IMMEDIATE RELEASE:
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CEDAR REAFFIRMS 2005 FFO GUIDANCE AND CONFIRMS COMPLETION OF DUE
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DILIGENCE ON THE PURCHASE OF 25 PRIMARILY DRUG STORE-ANCHORED PROPERTIES
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PORT WASHINGTON, N.Y., April 7, 2005 - Cedar Shopping Centers, Inc. (the
"Company"), a real estate investment trust listed on the New York Stock Exchange
(NYSE: "CDR"), which earlier this week closed on issues of 2.99 million
additional shares of Common Stock (including the exercise by underwriters of the
over-allotment option for 390,000 shares) and 1.2 million additional shares of
its 8 7/8% Series A Cumulative Redeemable Preferred Stock, totaling
approximately $70 million in net proceeds to the Company, today reaffirmed its
prior 2005 FFO guidance at $1.10-$1.20 per share/OP unit.
Leo Ullman, CEO of Cedar stated, "We believe the amounts raised effectively
match expected expenditures for acquisitions which we expect to close before
July 1. The properties should be nicely accretive. We believe the modest equity
raises, consisting of an add-on to our existing preferred stock issue, coupled
with a common stock issue of less than 3 million shares, will stand us in good
stead for some time to come. We felt that the uncertainties surrounding the
stock market movements, interest rate increases, oil prices and inflation make
it a matter of prudence to protect our acquisition and development pipelines and
the built-in value for our shareholders, by these types of quick and modest
moves without undue dilution or dislocation of our shareholders. Indeed, we have
been able to maintain our guidance for 2005 at $1.10-$1.20."
The Company previously announced on February 7, 2005, its agreement to acquire
27 primarily drug store-anchored properties in Ohio, Pennsylvania, New York, and
Connecticut for approximately $90 million, and to acquire within the next two
years an additional six properties presently in various stages of development.
The agreement has since been amended to cover 25 rather than 27 properties. The
Company's deposit became non-refundable on April 5. Closing of the purchase
transaction is expected this month.
The purchase price will now be approximately $88 million, excluding closing
costs and other adjustables, for the 25 "stabilized" properties, which include
single-tenant properties net-leased to CVS (6), Staples (1), McDonald's and
Waffle House (on one parcel), Family Dollar (1) and First Merit Bank (1). Of the
remaining properties, eleven (11) are anchored by Discount Drug Mart, a regional
30-year old chain of 63 drug and convenience stores. The 25 "stabilized"
properties represent a total of approximately 717,000 sq. ft., and are
approximately 95% leased. The six development properties represent approximately
250,000 sq. ft. in the aggregate, at a purchase price of approximately $40
million.
The acquisitions, including closing costs, are expected now to be funded by (i)
the assumption of approximately $16 million in long-term fixed-rate
property-specific financing; (ii) approximately $37 million in new first
mortgage financing at 90 basis points over 10-year Treasuries; (iii)
approximately $19 million to be drawn down from the Company's existing revolving
floating-rate credit facility; and (iv) approximately $16 million in Operating
Partnership units (convertible on a one-to-one basis into common stock of the
Company). The agreement provides for restrictions on the sale of certain
properties in the portfolio for five years.
The Company also confirmed that the new +/-92,000 sq. ft. Giant Foods
supermarket at the Camp Hill Shopping Center is expected to be delivered in
September of this year.
Cedar Shopping Centers, Inc. is a self-managed real estate investment trust
which to date owns and operates 33 primarily supermarket-anchored shopping
centers with approximately 5 million square feet of gross leasable area, located
in Pennsylvania, New Jersey, Massachusetts, Maryland, and Connecticut.
Forward-Looking Statements:
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Certain statements contained in this Press Release may constitute
forward-looking statements within the meaning of the securities laws. Such
forward- looking statements involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance, or achievements of
the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: General and specific economic and
business conditions, which will, among other things, affect demand for rental
space, the availability and creditworthiness of prospective tenants, lease rents
and the availability of financing; adverse changes in the Company's real estate
markets, including, among other things, competition with other companies; risks
of real estate development and acquisition; risks of adverse operating results
and creditworthiness of current tenants; governmental actions and initiatives;
and environmental/safety requirements. Such forward-looking statements speak
only as of the date hereof. The Company does not intend, and disclaims any duty
or obligation, to update or revise any forward-looking statements set forth in
this release to reflect any change in expectations, change in information, new
information, future events, or circumstances on which such information was
based.