Cedar Realty Trust is selling a portfolio of 33 grocery-anchored shopping centers for $840M and has agreed to sell itself, excluding those assets and two redevelopment projects it will also sell, to a separate investor for $291.3M.
The buyer of the retail portfolio is a joint venture between a DRA Advisors fund and KPR Centers. Wheeler Real Estate Investment Trust will buy Cedar and its remaining assets. The company's remaining assets include 53 properties totaling about 7.6M SF.
The deals will be all-cash and not subject to financing, according to Cedar, and will fetch $29 per share, or a 16.6% premium over the company stock's closing price on Wednesday. The company's board of directors has approved the sales, which Cedar shareholders will vote on soon.
Grocery-anchored shopping centers have been highly prized during the pandemic, with owners pivoting to that property type as the sale of food for consumption at home has risen.
"When we started [our] strategy over five years ago, it was nearly a 50-50 split of our annual base rent coming from our grocery-anchored shopping centers versus our non-grocer," Kimco CEO Conor Flynn said during the company's most recent earnings call. "Today, 80% of our annual base rent comes from shopping centers that have a grocer."
The Cedar deals are also the latest in a surge of M&A activity among REITs, including both sales and companies exploring the possibilities of acquisitions and mergers.
In late February, Healthcare Realty Trust agreed to buy Healthcare Trust of America for about $35 a share, creating a medical office giant with 727 properties totaling 44M SF.
Seritage Growth Properties reportedly began exploring a possible sale around the same time. The REIT, formed in 2015, owns an interest in 170 retail properties totaling about 10M SF nationwide, along with land holdings.
Private investors are interested in REITs as well. Monarch Alternative Capital recently made an all-cash, unsolicited bid to buy Paramount Group, which owns office properties in New York and San Francisco.
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