Cedar Shopping Centers Inc. today announced it has entered into a joint venture with Tristate Ventures L.P., an affiliate of the Fameco real state group, for the development of a 137,000-square-foot shopping center in Stroudsburg, Pa.
The property, located at the intersection of Interstate 80 and Routes 611 and 33, is situated on nearly 18 acres and will be anchored by a 76,500-square-foot supermarket.
The estimated total project cost is approximately $37 million. Cedar will be obligated for capital contributions of up to $9.5 million, of which it has currently funded approximately $5.6 million from its existing secured revolving credit facility. Cedar will be entitled to a cumulative preferred return on its invested funds and will own a 60 percent profits interest in the venture. A "buy-sell" may be triggered by either party three years after stabilization.
The venture previously acquired the land parcels at a cost of approximately $14.9 million, subject to existing mortgage indebtedness of approximately $11.6 million; approximately $23.2 million remains available under an existing first mortgage construction/development loan in the initial amount of $27.7 million from Wachovia Bank, N.A.
The fully executed supermarket lease is for an initial period of 20 years with eight 5-year extension options. Lease negotiations for the balance of the center are pending.
Construction is expected to be completed in 2009.
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