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Deal of the Week

Cedar Shopping Centers, Inc. completed a $78 million syndicated property-specific construction financing for Upland Square, a 655,000-square-foot shopping center in West Pottsgrove, Pa. The project is a 60/40 joint venture between Cedar and Tristate Ventures, L.P. It has an estimated aggregate cost of approximately $105 million. The financing facility features a three-year term, with a one-year extension option. Borrowings under the facility will carry an interest rate of 225 basis points over one month LIBOR. The syndicate lenders on this credit facility include M&T Bank, Key Bank National Association, Harleysville National Bank and Trust Co., Beneficial Mutual Savings Bank and National Penn Bank.

The company also completed the initial borrowing of $44 million under its $150 million secured revolving master construction credit facility. A portion of the proceeds from the borrowing will be used to repay the outstanding balance under Cedar’s existing $300 million secured revolving credit facility collateralized by stabilized properties.

“The terms of these deals closely resemble our model, in that it requires 50 percent pre-leasing, it requires us to put up 30 percent of the project cost in our own equity and it requires that the debt service coverage is in place with anchor tenant leases,” says Leo S. Ullman, chairman, CEO and president of Cedar Shopping Centers. Ullman noted, however, that securing the construction financing took nearly seven months and required the company to visit the participating banks. But “we think we had basically taken care of our development financing requirements for the next two years or more and we think that’s a very prudent thing to do,” he added.

Other Notable Deals

iCap Realty arranged a $16.2 million loan for the refinancing of a 10-unit convenience store portfolio located throughout Georgia. The loan featured a 10-year term and a 25-year amortization rate… Pennsylvania Real Estate Investment Trust obtained $40 million in additional funding under its previously announced unsecured term loan, which has an outstanding balance of $170 million. The company swapped $130 million of the loan to an average fixed-rate of 5.33 percent. The remaining $40 million will feature a stated term rate of LIBOR plus 2.50 percent. The company also exercised a 14-month extension option on its $500 million senior unsecured credit facility. The new expiration date on the facility is March 2010. The facility features an interest rate of LIBOR plus 1.40 percent… Ramco-Gershenson Properties Trust extended its $150 million unsecured revolving credit facility through December 2009. Pricing remained unchanged at LIBOR plus 115 to 150 basis points, depending on the company’s overall leverage. Ramco-Gershenson also has an option to extend the facility through 2010.

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