e10vkza
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2009
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMMISSION FILE NUMBER: 001-31817
CEDAR SHOPPING CENTERS, INC.
(Exact name of registrant as specified in its charter)
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Maryland
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42-1241468 |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number) |
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44 South Bayles Avenue, Port Washington, NY
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11050-3765 |
(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (516) 767-6492
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on |
Title of each class |
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which registered |
Common Stock, $0.06 par value
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New York Stock Exchange |
8-7/8% Series A Cumulative Redeemable
Preferred Stock, $25.00 Liquidation Value
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New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act.
Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes o No þ
Based on the closing sales price on June 30, 2009 of $4.52 per share, the aggregate market value of
the voting stock held by non-affiliates of the registrant was approximately $196,177,000.
The number of shares outstanding of the registrants Common Stock $.06 par value was 62,007,366 on
February 28, 2010.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrants definitive proxy statement relating to its 2010 annual meeting of
shareholders are incorporated herein by reference.
CEDAR SHOPPING CENTERS, INC.
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AS AMENDED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
Cedar Shopping Centers, Inc. (the Company) is issuing revised historical financial statements and
certain related data that had been included in its Annual Report on Form 10-K for the year ended
December 31, 2009 for the matters described below. The effect of such matters was reflected,
retroactively as appropriate, in the Companys consolidated financial statements included in each
of the Companys Quarterly Reports on Form 10-Q for the periods ended March 31, 2010 (the First
Quarterly Report) and June 30, 2010 (the Second Quarterly Report). Such Annual Report was filed
with the Securities and Exchange Commission (the SEC) on March 15, 2010 (the Original Filing);
the Company filed its First Quarterly Report on May 10, 2010 and its Second Quarterly Report on
August 5, 2010.
Subsequent to December 31, 2009, the Company determined that at the time it acquired certain
properties during 2003 through 2009, it had underprovided for certain identifiable intangible lease
liabilities relating to fixed-price renewal options that were at below-market rates. At the time
such properties were acquired, the Company determined the fair value of such renewal options to be
immaterial, based upon the Companys assessment of a very low probability that any of such renewal
options would be exercised. Accordingly, the Company assigned a zero value to such renewal options.
The Company has reconsidered these determinations and has concluded that option renewal periods
should have been valued with respect to certain of the leases, as further described in Note 2 in
the notes to the consolidated financial statements. Using the updated assumptions, the Company
determined that the December 31, 2009 carrying amounts of unamortized intangible lease liabilities
and real estate, net, were understated by $8,429,000 and $7,688,000, respectively (the latter
amount net of $741,000, representing the cumulative understated
depreciation expense for the period 2003 through 2009). In addition, total equity and limited partners interest in the Operating Partnership
were overstated by $723,000 and $18,000, respectively, as of December 31, 2009, reflecting the
aforementioned cumulative depreciation adjustment. The Company determined that the aforementioned
adjustments were immaterial to any full years consolidated financial statements; however, the
Company did determine that recording the adjustments entirely in the quarterly period ended March
31, 2010 would have been material to the consolidated statement of operations for that period.
Accordingly, as provided by the SECs Staff Accounting Bulletin No. 108, Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,
such adjustments were reflected retroactively in the consolidated financial statements included in
the First Quarterly Report (including revisions of prior-period amounts to conform to the 2010
presentation). Under SEC requirements, these revisions are required for previously-issued annual
financial statements for each of the three years shown in the Original Filing if those financial
statements are incorporated by reference in subsequent filings made under the Securities Act of
1933, as amended.
2
In addition, subsequent to December 31, 2009, the Company sold or has treated as held for sale
two properties, one each reflected in the consolidated financial statements included in the First
and Second Quarterly Reports. In compliance with the provisions of Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the
results of operations of these two properties were reported as components of discontinued
operations for each of the periods presented (including reclassifications of prior-period amounts
to conform to the 2010 presentation), as further described in Note 3 in the notes to consolidated
financial statements. Under SEC requirements, the same retroactive reclassifications are required
for previously-issued annual financial statements for
each of the three years shown in the Original Filing, if those financial statements are
incorporated by reference in subsequent filings made under the Securities Act of 1933, as amended.
This Report on Form 10-K/A is being filed to revise the information contained in Items 1 and 2 in
Part I, Items 6, 7, 7A and 8 in Part II, and the financial statement schedule in Part IV of the
Original Filing in their entirety to conform to the 2010 presentations included in the First and
Second Quarterly Reports. This Report on Form 10-K/A does not attempt to modify or update any other
disclosures set forth in the Original Filing, except as required to reflect the aforementioned
amended information. In addition, except for the amended information included herein, this Form
10-K/A speaks as of the filing date of the Original Filing and does not update or discuss any other
developments affecting the Company subsequent to the date of the Original Filing.
3
Part I.
Items 1 and 2. Business and Properties
General
Cedar Shopping Centers, Inc. (the Company), organized in 1984, is a fully-integrated real
estate investment trust which focuses primarily on ownership, operation, development and
redevelopment of supermarket-anchored shopping centers in mid-Atlantic and Northeast coastal
states. At December 31, 2009, the Company owned and managed (both wholly-owned and in joint
venture) a portfolio of 117 operating properties totaling approximately 12.8 million square feet of
gross leasable area (GLA), including 93 wholly-owned properties comprising approximately 9.3
million square feet, 13 properties owned in joint venture (consolidated) comprising approximately
1.7 million square feet, seven properties transferred or to be transferred to a managed joint
venture (unconsolidated) comprising approximately 1.2 million square feet, and four ground-up
developments comprising approximately 0.6 million square feet. Excluding the four ground-up
development properties, the 113 property portfolio was approximately 91% leased at December 31,
2009; the 99 property stabilized portfolio was approximately 95% leased at that date. The Company
also owned approximately 196 acres of land parcels, a significant portion of which is under
development. In addition, the Company has a 76.3% interest in another unconsolidated joint venture,
which it does not manage, which owns a single-tenant office property in Philadelphia, Pennsylvania.
The Company has elected to be taxed as a real estate investment trust (REIT) under
applicable provisions of the Internal Revenue Code of 1986, as amended (the Code). To qualify as
a REIT under those provisions, the Company must have a preponderant percentage of its assets
invested in, and income derived from, real estate and related sources. The Companys objectives are
to provide to its shareholders a professionally-managed, diversified portfolio of commercial real
estate investments (primarily supermarket-anchored shopping centers), which will provide
substantial cash flow, currently and in the future, taking into account an acceptable modest risk
profile, and which will present opportunities for additional growth in income and capital
appreciation.
The Company, organized as a Maryland corporation, has established an umbrella partnership
structure through the contribution of substantially all of its assets to Cedar Shopping Centers
Partnership L.P. (the Operating Partnership), organized as a limited partnership under the laws
of Delaware. The Company conducts substantially all of its business through the Operating
Partnership. At December 31, 2009, the Company owned 96.3% of the Operating Partnership and is its
sole general partner. The approximately 2,006,000 limited Operating Partnership Units (OP Units)
are economically equivalent to the Companys common stock and are convertible into the Companys
common stock at the option of the holders on a one-to-one basis.
The Company derives substantially all of its revenues from rents and operating expense
reimbursements received pursuant to long-term leases. The Companys operating results therefore
depend on the ability of its tenants to make the payments required by the terms of their leases.
The Company focuses its investment activities on supermarket-anchored community shopping centers.
The Company believes that, because of the need of consumers to purchase food and other staple goods
and services generally available at such centers, its type of necessities-based properties should
provide
4
relatively stable revenue flows even during difficult economic times.
In connection with the transactions with RioCan (more fully described below), the Company will
seek to acquire primarily stabilized supermarket-anchored properties in its primary market areas
during the next two years in a joint venture owned 20% by the Company. The Company has historically
sought opportunities to acquire properties suited for development and/or redevelopment, and, to a
lesser extent than in the past, stabilized properties, where it can utilize its experience in
shopping center construction, renovation, expansion, re-leasing and re-merchandising to achieve
long-term cash flow growth and favorable investment returns.
The Company, the Operating Partnership, their subsidiaries and affiliated partnerships are
separate legal entities. For ease of reference, the terms we, our, us, Company and
Operating Partnership (including their respective subsidiaries and affiliates) refer to the
business and properties of all these entities, unless the context otherwise requires. The Companys
executive offices are located at 44 South Bayles Avenue, Port Washington, New York 11050-3765
(telephone 516-767-6492). The Company also currently maintains property management, construction
management and/or leasing offices at several of its shopping-center properties. The Companys
website can be accessed at www.cedarshoppingcenters.com, where a copy of the Companys Forms 10-K,
10-Q, 8-K and other filings with the Securities and Exchange Commission (SEC) can be obtained
free of charge. These SEC filings are added to the website as soon as reasonably practicable. The
Companys Code of Ethics, corporate governance guidelines and committee charters are also available
on the website.
Recent Developments and Significant Transactions
Public Offering of Common Stock
On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its
common stock at $6.60 per share, and realized net proceeds after offering expenses of approximately
$47.0 million. On March 3, 2010, the underwriters exercised their over-allotment option to the
extent of 697,800 shares, and the Company realized additional net proceeds of $4.4 million. In
connection with the offering, RioCan (see below) acquired 1,350,000 shares of the Companys common
stock, including 100,000 shares acquired in connection with the exercise of the over-allotment
option, and the Company realized net proceeds of $8.9 million.
Reinstatement of Dividend
In December 2009, following a review of the state of the economy and the Companys financial
position, the Companys Board of Directors determined to resume payment of a quarterly cash
dividend in the amount of $0.09 per share ($0.36 per share on an annualized basis) on the Companys
common stock, which was paid on January 20, 2010 to shareholders of record as of the close of
business on December 31, 2009.
5
RioCan
On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate
Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed
on the Toronto Stock Exchange (RioCan), pursuant to which the Company (1) sold to RioCan
6,666,666 shares of the Companys common stock at $6.00 per share in a private placement for an
aggregate of $40 million (RioCan agreeing that it would not sell any of such shares for a period of
one year), (2) issued to RioCan warrants to purchase 1,428,570 shares of the Companys common stock
at an exercise price of $7.00 per share, exercisable over a two-year period, (3) entered into an
80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of seven
supermarket-anchored properties presently owned by the Company, and (ii) then to acquire additional
primarily supermarket-anchored properties in the Companys primary market areas during the next two
years, in the same joint venture format, and (4) entered into a standstill agreement with respect
to increases in RioCans ownership of the Companys common stock for a three-year period. In
addition, subject to certain exceptions, the Company has agreed that it will not issue any new
shares of common stock unless RioCan is offered the right to purchase an additional number of
shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In
connection with the formation of the joint venture, the Company recorded an
impairment charge of $23.6 million relating to the seven properties transferred or to be
transferred to the joint venture.
The private placement investment by RioCan and the issuance of the warrants by the Company
were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in
Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were
transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of
approximately $33 million (in connection with the closing, a repayment of $25.9 million was
required under the Companys secured revolving development property credit facility). The remaining
five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of
the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and
Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in
January and February 2010, resulting in net proceeds to the Company of approximately $16 million.
The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania,
Shaws Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport,
Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the
Company of an additional approximately $16 million.
In connection with the transfers of the seven properties to the joint venture and the private
placement transactions, the Company will have received aggregate net proceeds of approximately $105
million, after estimated closing and transaction costs, which have been or will be used to
repay/reduce the outstanding balances under the Companys secured revolving credit facilities.
Amended and Restated Credit Facility
On November 10, 2009, the Company closed an amended and restated secured revolving stabilized
property credit facility in the amount of $265 million (subsequently increased to $285 million),
with Bank of America, N.A. continuing as administrative agent, together with three other lead
lenders and other participating banks. The facility, as amended, is expandable to $400 million
6
subject to certain conditions, including acceptable collateral. This amended and restated facility
replaced the existing facility that was due to expire on January 30, 2010, and will continue to be
available to fund acquisitions, certain development and redevelopment activities, capital
expenditures, mortgage repayments, dividend distributions, working capital and other general
corporate purposes. The new facility has a maturity date of January 31, 2012, subject to a
one-year extension option. As a result of the application of the net proceeds from, among other
things, the transfers of two of the remaining properties to the RioCan joint venture and the sales
of shares of the Companys common stock in February and March 2010, the Companys availability
under this facility has increased to approximately $104 million as of March 3, 2010.
Joint Venture With PCP
On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New London
Mall in New London, Connecticut, an approximate 259,000 square foot supermarket-anchored shopping
center, for a purchase price of approximately $40.7 million. The purchase price included the
assumption of an existing $27.4 million first mortgage bearing interest at 4.9% per annum and
maturing in 2015. The total joint venture partnership contribution was approximately $14.0 million,
of which the Companys 40% share ($5.6 million) was funded from its secured revolving stabilized
property credit facility. The Company is the managing partner of the venture and receives certain
acquisition, property management, construction management and leasing fees. In addition, the
Company will be entitled to a promote fee structure, pursuant to which its profits participation
would be increased to 44% if the venture reaches certain income targets. The Companys joint
venture partners are affiliates of Prime Commercial Properties PLC (PCP), a London-based real
estate/development company.
On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned
joint venture acquired San Souci Plaza in California, Maryland, an approximate 264,000 square
foot supermarket-anchored shopping center, for a purchase price of approximately $31.8
million. The purchase price included the assumption of an existing $27.2 million first mortgage
bearing interest at 6.2% per annum and maturing in 2016. The total joint venture partnership
contribution was approximately $5.8 million, of which the Companys 40% share ($2.3 million) was
funded from its secured revolving stabilized property credit facility. The Company is the managing
partner of the venture and receives certain acquisition, property management, construction
management and leasing fees. In addition, the Company will be entitled to a promote fee
structure, pursuant to which its profits participation would be increased to 44% if the venture
reaches certain income targets.
Discontinued Operations
During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as held for
sale, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland
and New York, aggregating 416,000 square feet of GLA, including the 6,000 square foot
McDonalds/Waffle House, located in Medina, Ohio, the 10,000 square foot CVS property located in
Westfield, New York, the 24,000 square foot Staples property located in Oswego, New York, the
32,000 square foot Discount Drug Mart Plaza located in Hudson, Ohio, the 38,000 square foot
Discount Drug Mart Plaza located in Dover, Ohio, the 84,000 square foot Gabriel Brothers property
located in Kent, Ohio, the 40,000 square foot Discount Drug Mart Plaza located in Carrollton, Ohio,
the 20,000 square foot Pondside Plaza located in Geneseo, New York, the 50,000 square foot Discount
Drug Mart Plaza located in Powell,
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Ohio, the 7,000 square foot Family Dollar convenience center
located in Zanesville, Ohio, and the 105,000 square foot Long Reach Village property located in
Columbia, Maryland. The aggregate of the sales prices for the 11 properties is approximately $33.3
million, and the properties are subject to property-specific mortgage loans payable of
approximately $22.4 million. In connection with these transactions, the Company recorded impairment
charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has
realized gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The
carrying values of the assets and liabilities of these properties, principally the net book values
of the real estate and the related mortgage loans payable, have been reclassified as held for
sale on the Companys consolidated balance sheets at December 31, 2009 and 2008. In addition, the
properties results of operations have been classified as discontinued operations for all periods
presented.
The Companys Properties
The following tables summarize information relating to the Companys properties as of December
31, 2009:
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Unconsolidated |
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joint venture |
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Real estate to |
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Number of |
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GLA |
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Building and |
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Accumulated |
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Net book |
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managed |
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be transferred |
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State |
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properties |
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(Sq. ft.) |
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Land |
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improvements |
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Total cost |
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depreciation |
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value |
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properties |
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to a joint venture |
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Pennsylvania |
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52 |
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6,645,891 |
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168,934,000 |
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683,956,000 |
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$ |
852,890,000 |
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88,133,000 |
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$ |
764,757,000 |
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8,638,000 |
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53,417,000 |
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Massachusetts |
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8 |
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1,486,033 |
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27,231,000 |
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115,543,000 |
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142,774,000 |
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11,128,000 |
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131,646,000 |
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76,815,000 |
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Connecticut |
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9 |
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1,217,789 |
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33,426,000 |
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128,636,000 |
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162,062,000 |
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16,208,000 |
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145,854,000 |
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9,511,000 |
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Virginia |
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13 |
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815,969 |
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28,878,000 |
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102,531,000 |
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131,409,000 |
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15,316,000 |
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116,093,000 |
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Ohio |
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20 |
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710,444 |
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18,165,000 |
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78,230,000 |
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96,395,000 |
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10,838,000 |
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85,557,000 |
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Maryland |
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7 |
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835,972 |
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28,843,000 |
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78,867,000 |
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107,710,000 |
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8,150,000 |
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99,560,000 |
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New Jersey |
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4 |
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825,276 |
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13,764,000 |
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74,865,000 |
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88,629,000 |
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9,615,000 |
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79,014,000 |
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New York |
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3 |
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226,043 |
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13,809,000 |
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38,418,000 |
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52,227,000 |
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3,196,000 |
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49,031,000 |
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Michigan |
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1 |
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77,688 |
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2,443,000 |
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9,813,000 |
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12,256,000 |
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1,295,000 |
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10,961,000 |
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Total operarting portfolio |
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117 |
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12,841,105 |
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335,493,000 |
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1,310,859,000 |
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1,646,352,000 |
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163,879,000 |
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1,482,473,000 |
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8,638,000 |
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139,743,000 |
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Projects under development
and land held for future
expansion and development |
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n/a |
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n/a |
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20,873,000 |
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5,456,000 |
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26,329,000 |
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26,329,000 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
117 |
|
|
|
12,841,105 |
|
|
$ |
356,366,000 |
|
|
$ |
1,316,315,000 |
|
|
$ |
1,672,681,000 |
|
|
$ |
163,879,000 |
|
|
$ |
1,508,802,000 |
|
|
|
8,638,000 |
|
|
$ |
139,743,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated joint venture not managed
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,475,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unconsolidated joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
14,113,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
The Company has a 76.3% interest in an unconsolidated joint venture, which it does not manage, which owns a single-tenant office
property located in Philadelphia, PA. |
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized |
|
|
Percentage of |
|
|
|
of |
|
|
|
|
|
|
Percentage |
|
|
Annualized |
|
|
Base rent |
|
|
annualized |
|
Tenant (a) |
|
stores |
|
|
GLA |
|
|
of GLA |
|
|
base rent |
|
|
per sq. ft. |
|
|
base rents |
|
Top ten tenants (b): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Giant Foods (c) |
|
|
22 |
|
|
|
1,328,000 |
|
|
|
10.3 |
% |
|
|
21,503,000 |
|
|
$ |
16.19 |
|
|
|
16.1 |
% |
Farm Fresh (c) |
|
|
6 |
|
|
|
364,000 |
|
|
|
2.8 |
% |
|
|
3,880,000 |
|
|
|
10.66 |
|
|
|
2.9 |
% |
Stop & Shop (c) |
|
|
5 |
|
|
|
325,000 |
|
|
|
2.5 |
% |
|
|
3,494,000 |
|
|
|
10.75 |
|
|
|
2.6 |
% |
Discount Drug Mart |
|
|
14 |
|
|
|
346,000 |
|
|
|
2.7 |
% |
|
|
3,280,000 |
|
|
|
9.48 |
|
|
|
2.5 |
% |
Shaws (c) |
|
|
4 |
|
|
|
241,000 |
|
|
|
1.9 |
% |
|
|
2,716,000 |
|
|
|
11.27 |
|
|
|
2.0 |
% |
L.A. Fitness |
|
|
4 |
|
|
|
168,000 |
|
|
|
1.3 |
% |
|
|
2,496,000 |
|
|
|
14.86 |
|
|
|
1.9 |
% |
CVS |
|
|
10 |
|
|
|
113,000 |
|
|
|
0.9 |
% |
|
|
2,335,000 |
|
|
|
20.66 |
|
|
|
1.7 |
% |
Food Lion (c) |
|
|
7 |
|
|
|
243,000 |
|
|
|
1.9 |
% |
|
|
1,921,000 |
|
|
|
7.91 |
|
|
|
1.4 |
% |
Staples |
|
|
7 |
|
|
|
145,000 |
|
|
|
1.1 |
% |
|
|
1,821,000 |
|
|
|
12.56 |
|
|
|
1.4 |
% |
Shop Rite |
|
|
2 |
|
|
|
118,000 |
|
|
|
0.9 |
% |
|
|
1,599,000 |
|
|
|
13.55 |
|
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-total top ten tenants (d) |
|
|
81 |
|
|
|
3,391,000 |
|
|
|
26.4 |
% |
|
|
45,045,000 |
|
|
|
13.28 |
|
|
|
33.7 |
% |
Remaining tenants |
|
|
1,171 |
|
|
|
8,184,000 |
|
|
|
63.7 |
% |
|
|
88,464,000 |
|
|
|
10.81 |
|
|
|
66.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-total all tenants |
|
|
1,252 |
|
|
|
11,575,000 |
|
|
|
90.1 |
% |
|
|
133,509,000 |
|
|
|
11.53 |
|
|
|
100.0 |
% |
Vacant space (e) |
|
|
n/a |
|
|
|
1,266,000 |
|
|
|
9.9 |
% |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (including vacant
space) |
|
|
1,252 |
|
|
|
12,841,000 |
|
|
|
100.0 |
% |
|
|
133,509,000 |
|
|
|
10.40 |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Incudes unconsolidated managed joint venture
properties. |
|
(b) |
|
Based on annualized base rent. |
|
(c) |
|
Several of the tenants listed above share common ownership with other tenants including,
without limitation, (1) Giant Foods and Stop & Shop, (2) Farm Fresh, Shaws, Shop n Save (GLA of 53,000; annualized
base rent of $495,000), Shoppers Food Warehouse (GLA of 120,000; annualized base rent of
$1,206,000) and Acme (GLA of 172,000; annualized base rent of $756,000), and (3) Food Lion and
Hannaford (GLA of 43,000; annualized base rent of $405,000). |
|
(d) |
|
Includes tenants at ground-up development properties. |
|
(e) |
|
Includes vacant space at properties undergoing development and/or redevelopment activities. |
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
Tenants |
|
|
|
|
|
|
Percentage |
|
|
Annualized |
|
|
Annualized |
|
|
of annualized |
|
Year of lease |
|
with leases |
|
|
GLA |
|
|
of GLA |
|
|
expiring |
|
|
expiring base |
|
|
expiring |
|
expiration (a) |
|
expiring |
|
|
expiring |
|
|
expiring |
|
|
base rents |
|
|
rents per sq. ft. |
|
|
base rents |
|
Month-to-Month |
|
|
81 |
|
|
|
211,000 |
|
|
|
1.8 |
% |
|
$ |
2,759,000 |
|
|
$ |
13.08 |
|
|
|
2.1 |
% |
2010 |
|
|
160 |
|
|
|
800,000 |
|
|
|
6.9 |
% |
|
|
9,731,000 |
|
|
|
12.16 |
|
|
|
7.3 |
% |
2011 |
|
|
179 |
|
|
|
1,013,000 |
|
|
|
8.8 |
% |
|
|
11,498,000 |
|
|
|
11.35 |
|
|
|
8.6 |
% |
2012 |
|
|
174 |
|
|
|
838,000 |
|
|
|
7.2 |
% |
|
|
9,700,000 |
|
|
|
11.58 |
|
|
|
7.3 |
% |
2013 |
|
|
141 |
|
|
|
752,000 |
|
|
|
6.5 |
% |
|
|
9,207,000 |
|
|
|
12.24 |
|
|
|
6.9 |
% |
2014 |
|
|
148 |
|
|
|
1,347,000 |
|
|
|
11.6 |
% |
|
|
12,785,000 |
|
|
|
9.49 |
|
|
|
9.6 |
% |
2015 |
|
|
100 |
|
|
|
1,046,000 |
|
|
|
9.0 |
% |
|
|
9,661,000 |
|
|
|
9.24 |
|
|
|
7.2 |
% |
2016 |
|
|
48 |
|
|
|
605,000 |
|
|
|
5.2 |
% |
|
|
5,838,000 |
|
|
|
9.65 |
|
|
|
4.4 |
% |
2017 |
|
|
37 |
|
|
|
487,000 |
|
|
|
4.2 |
% |
|
|
6,191,000 |
|
|
|
12.71 |
|
|
|
4.6 |
% |
2018 |
|
|
40 |
|
|
|
723,000 |
|
|
|
6.2 |
% |
|
|
8,590,000 |
|
|
|
11.88 |
|
|
|
6.4 |
% |
2019 |
|
|
37 |
|
|
|
562,000 |
|
|
|
4.9 |
% |
|
|
6,127,000 |
|
|
|
10.90 |
|
|
|
4.6 |
% |
2020 |
|
|
29 |
|
|
|
932,000 |
|
|
|
8.1 |
% |
|
|
7,621,000 |
|
|
|
8.18 |
|
|
|
5.7 |
% |
Thereafter |
|
|
78 |
|
|
|
2,259,000 |
|
|
|
19.5 |
% |
|
|
33,801,000 |
|
|
|
14.96 |
|
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All tenants (b) |
|
|
1,252 |
|
|
|
11,575,000 |
|
|
|
100.0 |
% |
|
|
133,509,000 |
|
|
|
11.53 |
|
|
|
100.0 |
% |
Vacant space (c) |
|
|
n/a |
|
|
|
1,266,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
1,252 |
|
|
|
12,841,000 |
|
|
|
n/a |
|
|
$ |
133,509,000 |
|
|
$ |
10.40 |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Incudes unconsolidated managed joint venture
properties. |
|
(b) |
|
Includes tenants at ground-up development properties. |
|
(c) |
|
Includes vacant space at properties undergoing development and/or redevelopment activities. |
The terms of the Companys retail leases generally vary from tenancies at will to 25
years, excluding renewal options. Anchor tenant leases are typically for 10 to 25 years, with one
or more renewal options available to the lessee upon expiration of the initial lease term. By
contrast, smaller store leases are typically negotiated for 5-year terms. The longer terms of major
tenant leases serve to protect the Company against significant vacancies and to assure the presence
of strong tenants which draw consumers to its centers. The shorter terms of smaller store leases
allow the Company under appropriate circumstances to adjust rental rates periodically for non-major
store space and, where possible, to upgrade or adjust the overall tenant mix.
Most leases contain provisions requiring tenants to pay their pro rata share of real estate
taxes, insurance and certain operating costs. Some leases also provide that tenants pay percentage
rent based upon sales volume generally in excess of certain negotiated minimums.
Giant Food Stores, LLC (Giant Foods), which is owned by Ahold N.V., a Netherlands
corporation, leased approximately 10%, 9% and 9% of the Companys GLA at December 31, 2009, 2008
and 2007, respectively, and accounted for approximately 12%, 12% and 13% of the Companys total
revenues during 2009, 2008 and 2007, respectively. Giant Foods, in combination with Stop & Shop,
Inc., which is also owned by Ahold N.V., accounted for approximately
15%, 15% and 15% of the
Companys total revenues during 2009, 2008 and 2007, respectively. Of these amounts, 3%,
10
respectively, were attributable to Giant Foods revenues at the seven properties transferred or to
be transferred to the RioCan joint venture, for each of the periods presented. No other tenant
leased more than 10% of GLA at December 31, 2009, 2008 or 2007, or contributed more than 10% of
total revenues during 2009, 2008 or 2007. No individual property had a net book value equal to more
than 10% of total assets at December 31, 2009, 2008 or 2007.
Depreciation on all of the Companys properties is calculated using the straight-line method
over the estimated useful lives of the respective real properties and improvements, which range
from three to forty years.
The Companys executive offices are located at 44 South Bayles Avenue, Port Washington, New
York, in which it presently occupies approximately 8,600 square feet leased from a partnership
owned 43.6% by the Companys Chairman. Under the terms of the lease, as amended, which will expire
in February 2020, the Company will add an additional 6,400 square feet by the end of 2010. The
Company believes that the terms of its lease are at market.
Competition
The Company believes that competition for the acquisition and operation of retail shopping and
convenience centers is highly fragmented. It faces competition from institutional investors, public
and private REITs, owner-operators engaged in the acquisition, ownership and leasing of shopping
centers, as well as from numerous local, regional and national real estate developers and owners in
each of its markets. It also faces competition in leasing available space at its properties to
prospective tenants. Competition for tenants varies depending upon the characteristics of each
local market in which the Company owns and manages properties. The Company believes that the
principal competitive factors in attracting tenants in its market areas are location, price and
other lease terms, the presence of anchor tenants, the mix, quality and sales results of other
tenants, and maintenance, appearance, access and traffic patterns of its properties.
Environmental Matters
Under various federal, state, and local laws, ordinances and regulations, an owner or operator
of real estate may be required to investigate and clean up hazardous or toxic substances or other
contaminants at property owned, leased, managed or otherwise operated by such person, and may be
held liable to a governmental entity or to third parties for property damage, and for investigation
and clean up costs in connection with such contamination. The cost of investigation, remediation or
removal of such substances may be substantial, and the presence of such substances, or the failure
to properly remediate such conditions, may adversely affect the owners, lessors or operators
ability to sell or rent such property or to arrange financing using such property as collateral. In
connection with the ownership, operation and management of real estate, the Company may potentially
become liable for removal or remediation costs, as well as certain other related costs and
liabilities, including governmental fines and injuries to persons and/or property.
The Company believes that environmental studies conducted at the time of acquisition with
respect to all of its properties have not revealed environmental liabilities that would have a
material adverse affect on its business, results of operations or liquidity. However, no assurances
can be given
11
that existing environmental studies with respect to any of the properties reveal all
environmental liabilities, that any prior owner of or tenant at a property did not create a
material environmental condition not known to the Company, or that a material environmental
condition does not otherwise exist at any one or more of its properties. If a material
environmental condition does in fact exist, it could have an adverse impact upon the Companys
financial condition, results of operations and liquidity.
Employees
As of December 31, 2009, the Company had 102 employees (95 full-time and 7 part-time). The
Company believes that its relations with its employees are good.
12
Part II.
Item 6. Selected Financial Data (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
|
2006 |
|
|
2005 |
|
Operations data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
180,115,000 |
|
|
$ |
168,943,000 |
|
|
$ |
148,952,000 |
|
|
$ |
122,356,000 |
|
|
$ |
76,931,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
|
54,815,000 |
|
|
|
47,868,000 |
|
|
|
39,269,000 |
|
|
|
34,053,000 |
|
|
|
21,866,000 |
|
General and administrative |
|
|
10,166,000 |
|
|
|
8,586,000 |
|
|
|
9,041,000 |
|
|
|
6,086,000 |
|
|
|
5,132,000 |
|
Impairments |
|
|
23,636,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminated projects and acquisition transaction costs |
|
|
4,367,000 |
|
|
|
855,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
54,044,000 |
|
|
|
48,488,000 |
|
|
|
40,637,000 |
|
|
|
33,550,000 |
|
|
|
19,870,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
147,028,000 |
|
|
|
105,797,000 |
|
|
|
88,947,000 |
|
|
|
73,689,000 |
|
|
|
46,868,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
33,087,000 |
|
|
|
63,146,000 |
|
|
|
60,005,000 |
|
|
|
48,667,000 |
|
|
|
30,063,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income and expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and amortization of deferred
financing costs |
|
|
(49,504,000 |
) |
|
|
(44,646,000 |
) |
|
|
(38,203,000 |
) |
|
|
(33,524,000 |
) |
|
|
(15,858,000 |
) |
Equity in income of unconsolidated joint ventures |
|
|
1,098,000 |
|
|
|
956,000 |
|
|
|
634,000 |
|
|
|
70,000 |
|
|
|
|
|
Gain on sales of real estate |
|
|
521,000 |
|
|
|
|
|
|
|
|
|
|
|
141,000 |
|
|
|
|
|
Interest income |
|
|
63,000 |
|
|
|
284,000 |
|
|
|
788,000 |
|
|
|
641,000 |
|
|
|
91,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income and expense |
|
|
(47,822,000 |
) |
|
|
(43,406,000 |
) |
|
|
(36,781,000 |
) |
|
|
(32,672,000 |
) |
|
|
(15,767,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before discontinued operations |
|
|
(14,735,000 |
) |
|
|
19,740,000 |
|
|
|
23,224,000 |
|
|
|
15,995,000 |
|
|
|
14,296,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
|
(2,833,000 |
) |
|
|
1,058,000 |
|
|
|
643,000 |
|
|
|
851,000 |
|
|
|
430,000 |
|
Gain on sales of discontinued operations |
|
|
557,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(17,011,000 |
) |
|
|
20,798,000 |
|
|
|
23,867,000 |
|
|
|
16,846,000 |
|
|
|
14,726,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
(772,000 |
) |
|
|
(2,157,000 |
) |
|
|
(1,415,000 |
) |
|
|
(1,202,000 |
) |
|
|
(1,270,000 |
) |
Limited partners interest in Operating Partnership |
|
|
912,000 |
|
|
|
(468,000 |
) |
|
|
(627,000 |
) |
|
|
(389,000 |
) |
|
|
(296,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributible to Cedar Shopping Centers, Inc. |
|
|
(16,871,000 |
) |
|
|
18,173,000 |
|
|
|
21,825,000 |
|
|
|
15,255,000 |
|
|
|
13,160,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred distribution requirements |
|
|
(7,876,000 |
) |
|
|
(7,877,000 |
) |
|
|
(7,877,000 |
) |
|
|
(7,877,000 |
) |
|
|
(7,186,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common shareholders |
|
$ |
(24,747,000 |
) |
|
$ |
10,296,000 |
|
|
$ |
13,948,000 |
|
|
$ |
7,378,000 |
|
|
$ |
5,974,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.49 |
) |
|
$ |
0.21 |
|
|
$ |
0.30 |
|
|
$ |
0.20 |
|
|
$ |
0.23 |
|
Discontinued operations |
|
|
(0.05 |
) |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.54 |
) |
|
$ |
0.23 |
|
|
$ |
0.32 |
|
|
$ |
0.22 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Cedar Shopping Centers, Inc. common shareholders,
net of limited partners interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(22,552,000 |
) |
|
$ |
9,284,000 |
|
|
$ |
13,333,000 |
|
|
$ |
6,570,000 |
|
|
$ |
5,564,000 |
|
(Loss) income from discontinued operations |
|
|
(2,195,000 |
) |
|
|
1,012,000 |
|
|
|
615,000 |
|
|
|
808,000 |
|
|
|
410,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(24,747,000 |
) |
|
$ |
10,296,000 |
|
|
$ |
13,948,000 |
|
|
$ |
7,378,000 |
|
|
$ |
5,974,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends to common shareholders |
|
$ |
9,742,000 |
|
|
$ |
40,027,000 |
|
|
$ |
39,775,000 |
|
|
$ |
29,333,000 |
|
|
$ |
20,844,000 |
|
Per common share |
|
$ |
0.2025 |
|
|
$ |
0.9000 |
|
|
$ |
0.9000 |
|
|
$ |
0.9000 |
|
|
$ |
0.9000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,193,000 |
|
|
|
32,926,000 |
|
|
|
23,988,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,197,000 |
|
|
|
33,055,000 |
|
|
|
24,031,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
Item 6. Selected Financial Data (a) (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
|
2006 |
|
|
2005 |
|
Balance sheet data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, net |
|
$ |
1,508,802,000 |
|
|
$ |
1,412,783,000 |
|
|
$ |
1,297,860,000 |
|
|
$ |
974,032,000 |
|
|
$ |
795,537,000 |
|
Real estate to be transferred to a joint venture |
|
|
139,743,000 |
|
|
|
194,952,000 |
|
|
|
165,277,000 |
|
|
|
166,639,000 |
|
|
|
124,005,000 |
|
Real estate held for sale discontinued operations |
|
|
21,380,000 |
|
|
|
42,267,000 |
|
|
|
43,911,000 |
|
|
|
44,050,000 |
|
|
|
33,079,000 |
|
Investment in unconsolidated joint ventures |
|
|
14,113,000 |
|
|
|
4,976,000 |
|
|
|
3,757,000 |
|
|
|
3,644,000 |
|
|
|
|
|
Other assets |
|
|
101,080,000 |
|
|
|
80,050,000 |
|
|
|
92,290,000 |
|
|
|
66,797,000 |
|
|
|
46,623,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,785,118,000 |
|
|
$ |
1,735,028,000 |
|
|
$ |
1,603,095,000 |
|
|
$ |
1,255,162,000 |
|
|
$ |
999,244,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages and loans payable |
|
$ |
945,974,000 |
|
|
$ |
913,430,000 |
|
|
$ |
757,979,000 |
|
|
$ |
474,072,000 |
|
|
$ |
460,506,000 |
|
Mortgage loans payable real estate to be transferred to a joint venture |
|
|
94,018,000 |
|
|
|
77,307,000 |
|
|
|
70,458,000 |
|
|
|
70,599,000 |
|
|
|
56,874,000 |
|
Mortgage loans payable discontinued operations |
|
|
12,455,000 |
|
|
|
22,736,000 |
|
|
|
23,077,000 |
|
|
|
23,402,000 |
|
|
|
10,411,000 |
|
Other liabilities |
|
|
106,269,000 |
|
|
|
116,361,000 |
|
|
|
105,654,000 |
|
|
|
74,206,000 |
|
|
|
47,477,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,158,716,000 |
|
|
|
1,129,834,000 |
|
|
|
957,168,000 |
|
|
|
642,279,000 |
|
|
|
575,268,000 |
|
Limited partners interest in Operating Partnership |
|
|
12,638,000 |
|
|
|
14,257,000 |
|
|
|
15,570,000 |
|
|
|
19,608,000 |
|
|
|
16,657,000 |
|
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cedar Shopping Centers, Inc. shareholders equity |
|
|
538,456,000 |
|
|
|
523,521,000 |
|
|
|
557,849,000 |
|
|
|
574,311,000 |
|
|
|
390,164,000 |
|
Noncontrolling interests |
|
|
75,308,000 |
|
|
|
67,416,000 |
|
|
|
72,508,000 |
|
|
|
18,964,000 |
|
|
|
17,155,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
613,764,000 |
|
|
|
590,937,000 |
|
|
|
630,357,000 |
|
|
|
593,275,000 |
|
|
|
407,319,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,785,118,000 |
|
|
$ |
1,735,028,000 |
|
|
$ |
1,603,095,000 |
|
|
$ |
1,255,162,000 |
|
|
$ |
999,244,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic earnings per share |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,193,000 |
|
|
|
32,926,000 |
|
|
|
23,988,000 |
|
Additional shares assuming conversion of OP Units (basic) |
|
|
2,014,000 |
|
|
|
2,024,000 |
|
|
|
1,985,000 |
|
|
|
1,737,000 |
|
|
|
1,202,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic FFO per share |
|
|
48,248,000 |
|
|
|
46,499,000 |
|
|
|
46,178,000 |
|
|
|
34,663,000 |
|
|
|
25,190,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted earnings per share |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,197,000 |
|
|
|
33,055,000 |
|
|
|
24,031,000 |
|
Additional shares assuming conversion of OP Units (diluted) |
|
|
2,014,000 |
|
|
|
2,024,000 |
|
|
|
1,990,000 |
|
|
|
1,747,000 |
|
|
|
1,206,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted FFO per share |
|
|
48,248,000 |
|
|
|
46,499,000 |
|
|
|
46,187,000 |
|
|
|
34,802,000 |
|
|
|
25,237,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations (FFO) (b) |
|
$ |
24,581,000 |
|
|
$ |
56,859,000 |
|
|
$ |
56,190,000 |
|
|
$ |
41,954,000 |
|
|
$ |
25,923,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (assuming conversion of OP Units) (basic and diluted): |
|
$ |
0.51 |
|
|
$ |
1.22 |
|
|
$ |
1.22 |
|
|
$ |
1.21 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
51,942,000 |
|
|
$ |
60,815,000 |
|
|
$ |
53,503,000 |
|
|
$ |
40,858,000 |
|
|
$ |
26,738,000 |
|
Investing activities |
|
$ |
(70,026,000 |
) |
|
$ |
(151,390,000 |
) |
|
$ |
(192,432,000 |
) |
|
$ |
(190,105,000 |
) |
|
$ |
(323,225,000 |
) |
Financing activities |
|
$ |
27,017,000 |
|
|
$ |
75,517,000 |
|
|
$ |
143,735,000 |
|
|
$ |
158,011,000 |
|
|
$ |
296,823,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Square feet of GLA |
|
|
12,840,000 |
|
|
|
12,035,000 |
|
|
|
11,897,000 |
|
|
|
9,949,000 |
|
|
|
8,435,000 |
|
Percent leased (including development/redevelopment and
other non-stabilized properties) |
|
|
91 |
% |
|
|
92 |
% |
|
|
93 |
% |
|
|
93 |
% |
|
|
91 |
% |
Average annualized base rent per leased square foot |
|
$ |
11.53 |
|
|
$ |
11.03 |
|
|
$ |
10.74 |
|
|
$ |
10.53 |
|
|
$ |
10.40 |
|
|
|
|
(a) |
|
The data presented reflect certain reclassifications of prior period amounts to comform to the
2009 presentation, principally (i) the retrospective reclassification, for all periods presented,
of the balances related to minority interests in consolidated joint ventures and limited partners
interest in the Operating Partnership into the consolidated equity accounts, as appropriate, (ii)
to refelect the reclassifications of the assets and liabilities of the properties transferred and
to be transferred to the RioCan joint venture as real estate to be transferred to a joint
venture, (iii) to reflect the reclassifications of the assets, liabilities and operating results
for the sale and/or treatment as held for sale of certain operating properties and the treatment
thereof as discontinued operations, and (iv) to reflect the retroactive valuation adjustments
related to lease renewal options. The reclassifications and retroactive adjustments had no material
impact on the previously-reported net income atttributable to common shareholders or earnings per
share. |
|
(b) |
|
See Item 7 Managements Discussion and Analysis of Financial Condition and Results of
Operations for a reconciliation of Funds From Operations (FFO) to net (loss) income attributable
to common shareholders. |
14
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Companys consolidated
financial statements and related notes thereto included elsewhere in this report.
Executive Summary
The Company is a fully-integrated real estate investment trust which focuses
primarily on ownership, operation, development and redevelopment of supermarket-anchored shopping
centers in mid-Atlantic and Northeast coastal states. At December 31, 2009, the Company owned and
managed (both wholly-owned and in joint venture) a portfolio of 117 operating properties totaling
approximately 12.8 million square feet of gross leasable area (GLA), including 93 wholly-owned
properties comprising approximately 9.3 million square feet, 13 properties owned in joint venture
(consolidated) comprising approximately 1.7 million square feet, seven properties transferred or to
be transferred to a managed joint venture (unconsolidated) comprising approximately 1.2 million
square feet, and four ground-up developments comprising approximately 0.6 million square feet.
Excluding the four ground-up development properties, the 113 property portfolio was approximately
91% leased at December 31, 2009; the 99 property stabilized portfolio was approximately 95%
leased at that date. The Company also owned approximately 196 acres of land parcels, a significant
portion of which is under development. In addition, the Company has a 76.3% interest in another
unconsolidated joint venture, which it does not manage, which owns a single-tenant office property
in Philadelphia, Pennsylvania.
The Company, organized as a Maryland corporation, has established an umbrella partnership
structure through the contribution of substantially all of its assets to the Operating Partnership,
organized as a limited partnership under the laws of Delaware. The Company conducts substantially
all of its business through the Operating Partnership. At December 31, 2009, the Company owned
96.3% of the Operating Partnership and is its sole general partner. OP Units are economically
equivalent to the Companys common stock and are convertible into the Companys common stock at the
option of the holders on a one-to-one basis.
The Company derives substantially all of its revenues from rents and operating expense
reimbursements received pursuant to long-term leases. The Companys operating results
therefore depend on the ability of its tenants to make the payments required by the terms of their
leases. The Company focuses its investment activities on supermarket-anchored community shopping
centers. The Company believes that, because of the need of consumers to purchase food and other
staple goods and services generally available at such centers, its type of necessities-based
properties should provide relatively stable revenue flows even during difficult economic times. In
January 2009, the Companys Board of Directors reduced the quarterly dividend payable in February
by one-half to an annual rate of $0.45 per share and in April 2009 suspended the dividend for the
balance of the year for a projected annual saving of approximately $37 million. This decision was
in response to the then current state of the economy, the difficult retail environment, the
constrained capital markets and the need to renew the Companys secured revolving stabilized
property credit facility. In December 2009, following a review of the state of the economy and the
Companys financial position, the Companys Board of Directors determined to resume payment of a
cash dividend in the amount $0.09 per share ($0.36 per share on an annualized basis) on the
Companys common stock, which was paid on January 20, 2010 to shareholders of record as of the
close of business on December 31, 2009.
15
In connection with the RioCan transactions (more fully described below), the Company will seek
to acquire primarily stabilized supermarket-anchored properties in its primary market areas during
the next two years in a joint venture owned 20% by the Company. The Company has historically sought
opportunities to acquire properties suited for development and/or redevelopment, and, to a lesser
extent than in the past, stabilized properties, where it can utilize its experience in shopping
center construction, renovation, expansion, re-leasing and re-merchandising to achieve long-term
cash flow growth and favorable investment returns.
Significant Transactions
RioCan
On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate
Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed
on the Toronto Stock Exchange (RioCan), pursuant to which the Company (1) sold to RioCan
6,666,666 shares of the Companys common stock at $6.00 per share in a private placement for an
aggregate of $40 million (RioCan agreeing that it would not sell any of such shares for a period of
one year), (2) issued to RioCan warrants to purchase 1,428,570 shares of the Companys common stock
at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000),
(3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of
seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire
additional primarily supermarket-anchored properties in the Companys primary market areas during
the next two years, in the same joint venture format, and (4) entered into a standstill agreement
with respect to increases in RioCans ownership of the Companys common stock for a three-year
period. In addition, subject to certain exceptions, the Company has agreed that it will not issue
any new shares of common stock unless RioCan is offered the right to purchase that additional
number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In
connection with the formation of the joint venture, the Company recorded an impairment charge of
$23.6 million relating to the seven properties transferred or to be transferred to the joint
venture.
The private placement investment by RioCan and the issuance of the warrants by the Company
were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in
Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were
transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of
approximately $33 million (in connection with the closing, a repayment of $25.9 million was
required under the Companys secured revolving development property credit facility). The remaining
five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of
the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and
Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in
January and February 2010, resulting in
net proceeds to the Company of approximately $16 million. The remaining three properties
(Loyal Plaza Shopping Center located in Williamsport, Pennsylvania, Shaws Plaza located in
Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport, Connecticut) are to be
transferred during the first half of 2010, resulting in net proceeds to the Company of an
additional approximately $16 million.
16
In connection with the transfers of the seven properties to the joint venture and the private
placement transactions, the Company will have received aggregate net proceeds of approximately $105
million, after estimated closing and transaction costs, which have been or will be used to
repay/reduce the outstanding balances under the Companys secured revolving credit facilities. In
connection with these transactions, the Company incurred costs and fees of approximately $6.0
million, including fees to the Companys investment advisor ($3.5 million), the value assigned to
the warrants ($1.6 million), and other costs and expenses aggregating $0.9 million. In addition,
the Company agreed to pay to its investment advisor a fee of 1% of the gross cost of future
acquisitions made by the joint venture for a two-year period, up to a maximum of $3.0 million.
Amended and Restated Credit Facility
On November 10, 2009, the Company closed an amended and restated secured revolving stabilized
property credit facility in the amount of $265 million (subsequently increased to $285 million),
with Bank of America, N.A. continuing as administrative agent, together with three other lead
lenders and other participating banks. The facility, as amended, is expandable to $400 million,
subject to certain conditions, including acceptable collateral. This amended and restated facility
replaced the existing facility that was due to expire on January 30, 2010, and will continue to
be available to fund acquisitions, certain development and redevelopment activities, capital
expenditures, mortgage repayments, dividend distributions, working capital and other general
corporate purposes. The new facility has a maturity date of January 31, 2012, subject to a
one-year extension option. As a result of the application of the net proceeds from, among other
things, the transfers of two of the remaining properties to the RioCan joint venture and the sales
of shares of the Companys common stock in February and March 2010, the Companys availability
under this facility has increased to approximately $104 million as of March 3, 2010.
Joint Venture With PCP
On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New London
Mall in New London, Connecticut, an approximate 259,000 square foot supermarket-anchored shopping
center, for a purchase price of approximately $40.7 million. The purchase price included the
assumption of an existing $27.4 million first mortgage bearing interest at 4.9% per annum and
maturing in 2015. The total joint venture partnership contribution was approximately $14.0 million,
of which the Companys 40% share ($5.6 million) was funded from its secured revolving stabilized
property credit facility. The Company is the managing partner of the venture and receives certain
acquisition, property management, construction management and leasing fees. In addition, the
Company will be entitled to a promote fee structure, pursuant to which its profits participation
would be increased to 44% if the venture reaches certain income targets. The Companys joint
venture partners are affiliates of Prime Commercial Properties PLC (PCP), a London-based real
estate/development company.
On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned
joint venture acquired San Souci Plaza in California, Maryland, an approximate 264,000 square foot
supermarket-anchored shopping center, for a purchase price of approximately $31.8 million. The
purchase price included the assumption of an existing $27.2 million first mortgage bearing interest
at 6.2% per annum and maturing in 2016. The total joint venture partnership contribution was
approximately $5.8 million, of which the Companys 40% share ($2.3 million) was funded from its
17
secured revolving stabilized property credit facility. The Company is the managing partner of the
venture and receives certain acquisition, property management, construction management and leasing
fees. In addition, the Company will be entitled to a promote fee structure, pursuant to
which its profits participation would be increased to 44% if the venture reaches certain income
targets.
Discontinued Operations
During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as held for
sale, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland
and New York, aggregating 416,000 square feet of GLA, including the 6,000 square foot
McDonalds/Waffle House, located in Medina, Ohio, the 10,000 square foot CVS property located in
Westfield, New York, the 24,000 square foot Staples property located in Oswego, New York, the
32,000 square foot Discount Drug Mart Plaza located in Hudson, Ohio, the 38,000 square foot
Discount Drug Mart Plaza located in Dover, Ohio, the 84,000 square foot Gabriel Brothers property
located in Kent, Ohio, the 40,000 square foot Discount Drug Mart Plaza located in Carrollton, Ohio,
the 20,000 square foot Pondside Plaza located in Geneseo, New York, the 50,000 square foot Discount
Drug Mart Plaza located in Powell, Ohio, the 7,000 square foot Family Dollar convenience center
located in Zanesville, Ohio, and the 105,000 square foot Long Reach Village property located in
Columbia, Maryland. The aggregate sales prices for the 11 properties are approximately $33.3
million and the properties are subject to property-specific mortgage loans payable of approximately
$22.4 million. In connection with these transactions, the Company recorded impairment charges
aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has realized
gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The carrying values
of the assets and liabilities of these properties, principally the net book values of the real
estate and the related mortgage loans payable, have been reclassified as held for sale on the
Companys consolidated balance sheets at December 31, 2009 and 2008. In addition, the properties
results of operations have been classified as discontinued operations for all periods presented.
Summary of Critical Accounting Policies
The preparation of the consolidated financial statements in conformity with GAAP requires the
Company to make estimates and judgments that affect the reported amounts of assets and liabilities,
revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing
basis, management evaluates its estimates, including those related to revenue recognition and the
allowance for doubtful accounts receivable, real estate investments and purchase accounting
allocations related thereto, asset impairment, and derivatives used to hedge interest-rate risks.
Managements estimates are based both on information that is currently available and on various
other assumptions management believes to be reasonable under the circumstances. Actual results
could differ from those estimates and those estimates could be different under varying assumptions
or conditions.
The Company has identified the following critical accounting policies, the application of
which requires significant judgments and estimates:
18
Revenue Recognition
Rental income with scheduled rent increases is recognized using the straight-line method over
the respective terms of the leases. The aggregate excess of rental revenue recognized on a
straight-line basis over base rents under applicable lease provisions is included in straight-line
rents receivable on the consolidated balance sheet. Leases also generally contain provisions under
which the tenants reimburse the Company for a portion of property operating expenses and real
estate taxes incurred; such income is recognized in the periods earned. In addition, certain
operating leases contain contingent rent provisions under which tenants are required to pay a
percentage of their sales in excess of a specified amount as additional rent. The Company defers
recognition of contingent rental income until those specified targets are met.
The Company must make estimates as to the collectibility of its accounts receivable related to
base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes
accounts receivable by considering tenant creditworthiness, current economic conditions, and
changes in tenants payment patterns when evaluating the adequacy of the allowance for doubtful
accounts receivable. These estimates have a direct impact on net income, because a higher bad debt
allowance would result in lower net income, whereas a lower bad debt allowance would result in
higher net income.
Real Estate Investments
Real estate investments are carried at cost less accumulated depreciation. The provision for
depreciation is calculated using the straight-line method based on estimated useful lives.
Expenditures for maintenance, repairs and betterments that do not materially prolong the normal
useful life of an asset are charged to operations as incurred. Expenditures for betterments that
substantially extend the useful lives of real estate assets are capitalized. Real estate
investments include costs of development and redevelopment activities, and construction in
progress. Capitalized costs, including interest and other carrying costs during the construction
and/or renovation periods, are included in the cost of the related asset and charged to operations
through depreciation over the assets estimated useful life. The Company is required to make
subjective estimates as to the useful lives of its real estate assets for purposes of determining
the amount of depreciation to reflect on an annual basis. These assessments have a direct impact on
net income. A shorter estimate of the useful life of an asset would have the effect of increasing
depreciation expense and lowering net income, whereas a longer estimate of the useful life of an
asset would have the effect of reducing depreciation expense and increasing net income.
A variety of costs are incurred in the acquisition, development and leasing of a property,
such as pre-construction costs essential to the development of the property, development costs,
construction costs, interest costs, real estate taxes, salaries and related costs, and other costs
incurred during the period of development. After a determination is made to capitalize a cost, it
is allocated to the specific component of a project that is benefited. The Company ceases
capitalization on the portions substantially completed and occupied, or held available for
occupancy, and capitalizes only those costs associated with the portions under construction. The
Company considers a construction project as substantially completed and held available for
occupancy upon the completion of tenant improvements, but not later than one year from cessation of
major development activity. Determination of when a development project is substantially complete
and capitalization must cease involves a degree of judgment. The effect of a longer capitalization
period would be to increase capitalized costs and would result in higher net income, whereas the
effect of a shorter capitalization period would be to reduce capitalized costs and would result in
lower net income.
19
The Company allocates the fair value of real estate acquired to land, buildings and
improvements. In addition, the fair value of in-place leases is allocated to intangible lease
assets and liabilities. The principal impact on the Companys financial statements of the adoption
of recent updated accounting guidance related to business combinations, which became effective
January 1, 2009, is that the Company has expensed most transaction costs relating to its
acquisition activities.
The fair value of the tangible assets of an acquired property is determined by valuing the
property as if it were vacant, which value is then allocated to land, buildings and improvements
based on managements determination of the relative fair values of such assets. In valuing an
acquired propertys intangibles, factors considered by management include an estimate of carrying
costs during the expected lease-up periods, such as real estate taxes, insurance, other operating
expenses, and estimates of lost rental revenue during the expected lease-up periods based on its
evaluation of current market demand. Management also estimates costs to execute similar leases,
including leasing commissions, tenant improvements, legal and other related costs.
The values of acquired above-market and below-market leases are recorded based on the present
values (using discount rates which reflect the risks associated with the leases acquired) of the
differences between the contractual amounts to be received and managements estimate of market
lease rates, measured over the terms of the respective leases that management deemed appropriate at
the time of the
acquisitions. Such valuations include a consideration of the non-cancellable terms of the
respective leases as well as any applicable renewal period(s). The fair values associated with
below-market rental renewal options are determined based on the Companys experience and the
relevant facts and circumstances that existed at the time of the acquisitions. The values of
above-market leases are amortized to rental income over the terms of the respective non-cancelable
lease periods. The portion of the values of below-market leases associated with the original
non-cancelable lease terms are amortized to rental income over the terms of the respective
non-cancelable lease periods. The portion of the values of the leases associated with below-market
renewal options that are likely of exercise are amortized to rental income over the respective
renewal periods. The value of other intangible assets (including leasing commissions, tenant
improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If
a lease were to be terminated prior to its stated expiration or not renewed, all unamortized
amounts relating to that lease would be recognized in operations at that time.
Management is required to make subjective assessments in connection with its valuation of real
estate acquisitions. These assessments have a direct impact on net income, because (i) above-market
and below-market lease intangibles are amortized to rental income, and (ii) the value of other
intangibles is amortized to expense. Accordingly, higher allocations to below-market lease
liability and other intangibles would result in higher rental income and amortization expense,
whereas lower allocations to below-market lease liability and other intangibles would result in
lower rental income and amortization expense.
Management reviews each real estate investment for impairment whenever events or circumstances
indicate that the carrying value of a real estate investment may not be recoverable. The review of
recoverability is based on an estimate of the future cash flows that are expected to result from
the real estate investments use and eventual disposition. These estimates of cash flows consider
factors such as expected future operating income, trends and prospects, as well as the effects of
leasing demand,
20
competition and other factors. If an impairment event exists due to the projected
inability to recover the carrying value of a real estate investment, an impairment loss is recorded
to the extent that the carrying value exceeds estimated fair value. A real estate investment held
for sale is carried at the lower of its carrying amount or estimated fair value, less the cost of a
potential sale. Depreciation and amortization are suspended during the period the property is held
for sale. Management is required to make subjective assessments as to whether there are impairments
in the value of its real estate properties. These assessments have a direct impact on net income,
because an impairment loss is recognized in the period that the assessment is made.
Stock-Based Compensation
The Companys 2004 Stock Incentive Plan (the Incentive Plan) establishes the procedures for
the granting of incentive stock options, stock appreciation rights, restricted shares, performance
units and performance shares. The maximum number of shares of the Companys common stock that may
be issued pursuant to the Incentive Plan, as amended, is 2,750,000, and the maximum number of
shares that may be granted to a participant in any calendar year is 250,000. Substantially all
grants issued pursuant to the Incentive Plan are restricted stock grants which specify vesting
(i) upon the third anniversary of the date of grant for time-based grants, or (ii) upon the
completion of a designated period of performance for performance-based grants. Timebased grants
are valued according to the market price for the Companys common stock at the date of grant. For
performance-based grants, the Company engages an independent appraisal company to determine the
value of the shares at the date of grant, taking into account the underlying contingency risks
associated with the performance criteria. These value estimates have a direct impact on net income,
because higher valuations would result in lower net income, whereas lower valuations would result
in higher net income. The value of such grants is being amortized on a straight-line basis over the
respective vesting periods, as adjusted for fluctuations in the market value of the Companys
common stock.
Results of Operations
Differences in results of operations between 2009 and 2008, and between 2008 and 2007,
respectively, were primarily the result of the Companys property acquisition/disposition program
and continuing development/redevelopment activities. During the period January 1, 2008 through
December 31, 2009, the Company acquired six shopping and convenience centers aggregating
approximately 790,000 square feet of GLA, purchased the joint venture minority interests in four
properties, and acquired approximately 181.7 acres of land for development, expansion and/or future
development, for a total cost of approximately $189.0 million. In addition, the Company placed into
service six ground-up developments having an aggregate cost of approximately $194.3 million. The
Company sold or treated as held for sale 11 properties (primarily drug store/convenience centers)
aggregating approximately 416,000 square feet of GLA for an aggregate sales price of approximately
$33.3 million. In addition, in connection with the RioCan transactions, the Company has transferred
or will be transferring seven properties to a joint venture with RioCan, aggregating approximately
1,167,000 square feet of GLA, and in connection with which it will have realized approximately $65
million in proceeds. Net (loss) income was ($17.0) million, $20.8 million and $23.9 million for
2009, 2008 and 2007, respectively.
21
Comparison of 2009 to 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
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|
|
|
|
Properties |
|
|
|
|
|
|
|
|
|
|
Increase |
|
Percent |
|
Acquisitions |
|
held in |
|
|
2009 |
|
2008 |
|
(decrease) |
|
change |
|
and other (ii) |
|
both years |
Total revenues |
|
$ |
180,115,000 |
|
|
$ |
168,943,000 |
|
|
$ |
11,172,000 |
|
|
|
7 |
% |
|
$ |
11,888,000 |
|
|
|
(716,000 |
) |
Property operating expenses |
|
|
54,815,000 |
|
|
|
47,868,000 |
|
|
|
6,947,000 |
|
|
|
15 |
% |
|
|
4,284,000 |
|
|
|
2,663,000 |
|
Depreciation and amortization |
|
|
54,044,000 |
|
|
|
48,488,000 |
|
|
|
5,556,000 |
|
|
|
11 |
% |
|
|
7,548,000 |
|
|
|
(1,992,000 |
) |
General and administrative |
|
|
10,166,000 |
|
|
|
8,586,000 |
|
|
|
1,580,000 |
|
|
|
18 |
% |
|
|
n/a |
|
|
|
n/a |
|
Impairment charges |
|
|
23,636,000 |
|
|
|
|
|
|
|
23,636,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Terminated projects and acquisition
transaction costs |
|
|
4,367,000 |
|
|
|
855,000 |
|
|
|
3,512,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Non-operating income and
expense, net (i) |
|
|
47,822,000 |
|
|
|
43,406,000 |
|
|
|
4,416,000 |
|
|
|
10 |
% |
|
|
n/a |
|
|
|
n/a |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations |
|
|
726,000 |
|
|
|
1,058,000 |
|
|
|
(332,000 |
) |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Impairment charges |
|
|
3,559,000 |
|
|
|
|
|
|
|
3,559,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Gain on sales of discontinued operations |
|
|
557,000 |
|
|
|
|
|
|
|
557,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
(i) |
|
Non-operating income and expense consists principally of interest expense (including
amortization of deferred financing costs),
equity in income of unconsolidated joint ventures, and gain on sales of land parcels. |
|
(ii) |
|
Includes principally (a) the results of properties acquired after January 1, 2008, (b)
unallocated property and construction management compensation and benefits (including stock-based
compensation), (c) results of a property in Wyoming, Michigan where the then existing building
improvements were demolished in the second quarter of 2008 as part of the redevelopment plans for
the property and (d) results of ground-up development
and re-development properties recently placed into service. |
Properties held in both periods. The Company held 100 properties throughout 2009 and
2008.
Total revenues decreased primarily as a result of (i) a decrease in non-cash straight-line
rents primarily as a result of early lease terminations ($1.1 million), (ii) a decrease in non-cash
amortization of intangible lease liabilities primarily as a result of the completion of scheduled
amortization at certain properties ($0.9 million) (which also resulted in a decrease in
depreciation and amortization expense), (iii) a decrease in percentage rent ($153,000), and (iv) a
decrease in base rents ($56,000), partially offset by (v) an increase in tenant recoveries ($1.2
million), predominately the result of an increase in billable property operating expenses, and (vi)
an increase in other income ($258,000), predominately the result of lease termination income of
$800,000 received in December 2009. In connection with the worsening economic climate beginning in
the latter part of 2008 and continuing into 2009, the Company received a number of requests from
tenants for rent relief. While the Company did in fact grant such relief in selected limited
circumstances, the aggregate amount of such relief granted had a limited impact on results of
operations. However, there can be no assurance that the amount of such relief will not become more
significant in future periods.
Property operating expenses increased primarily as a result of (i) a net increase ($1.5
million) in expenses billable to tenants, primarily as a result of (a) an increase in real estate
taxes from reassessments at recently-acquired or redeveloped properties ($1.4 million), (b) an
increase in snow
22
removal costs ($1.3 million), partially offset by (c) a decrease in insurance expense ($0.4
million), (d) a decrease in repairs and maintenance expenses ($0.2 million), (e) a decrease in
landscaping expense ($0.1 million), and (f) a decrease in a number of smaller operating expense
categories ($0.5 million), and (ii) an increase in the provision for doubtful accounts primarily as
a result of the more challenging economic conditions in 2009 for a
number of non-core tenants ($1.5
million), which is partially offset by (iii) a decrease in expenses not billable to tenants ($0.3
million).
Depreciation and amortization expenses included under acquisitions and other reflects the
acceleration of depreciation expense ($6.1 million) at two properties at which the Company
demolished portions of buildings as part of the redevelopment plans for those properties.
General and administrative expenses increased primarily as a result of increases in
stock-based compensation expense through increased amortization of an increased number of
restricted stock grants and mark-to-market adjustments relating to stock-based compensation.
Impairments for 2009 relates to the net impairment charges recorded in connection with the
seven properties transferred or to be transferred to the RioCan joint venture, as more fully
discussed elsewhere in this report.
Terminated projects and acquisition transaction costs for 2009 includes (i) the acquisition
transaction costs associated with the two acquisitions completed during 2009 ($1.3 million, of
which the noncontrolling interests share was $0.8 million), (ii) the decision to terminate
potential development opportunities in Milford, Delaware and Ephrata, Pennsylvania (an aggregate of
$2.8 million), and (iii) the costs primarily associated with a cancelled acquisition. Terminated
projects and acquisition transaction costs for 2008 include (i) the decision to terminate potential
development opportunities primarily in Ephrata, Pennsylvania and Roanoke, Virginia (an aggregate of
$652,000) and (ii) costs incurred related to a canceled potential joint venture ($203,000).
Non-operating income and expense, net, increased primarily a result of (i) higher amortization
of deferred financing costs ($1.9 million) resulting from (a) extending the secured revolving
stabilized property credit facility, originally in January 2009 and again in November 2009, and (b)
the secured revolving development property credit facility and the property-specific construction
facility, having closed in June 2008 and September 2008, respectively, being outstanding throughout
all of 2009, (ii) higher loan balances outstanding principally to fund the equity portions of
acquisitions and development activities ($3.0 million), and
(iii) reduction in interest income ($0.2
million), partially offset by (iv) gain on sales of land parcels ($0.5 million) and (v) an increase
in equity in income of unconsolidated joint venture ($0.1 million).
Discontinued operations for 2009 and 2008 include the results of operations and, where
applicable, gain on sales ($557,000) and impairment charges ($3.6 million), for properties
(primarily drug store/convenience centers) which the Company sold or treated as held for sale
during 2009 and subsequent to December 31, 2009, located in Ohio, Maryland and New York,
aggregating 416,000 square feet of GLA, as more fully discussed elsewhere in this report.
23
Comparison of 2008 to 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties |
|
|
|
|
|
|
|
|
|
|
Increase |
|
Percent |
|
Acquisitions |
|
held in |
|
|
2008 |
|
2007 |
|
(decrease) |
|
change |
|
and other (ii) |
|
both years |
Total revenues |
|
$ |
168,943,000 |
|
|
$ |
148,952,000 |
|
|
$ |
19,991,000 |
|
|
|
13 |
% |
|
$ |
21,174,000 |
|
|
|
(1,183,000 |
) |
Property operating expenses |
|
|
47,868,000 |
|
|
|
39,269,000 |
|
|
|
8,599,000 |
|
|
|
22 |
% |
|
|
7,080,000 |
|
|
|
1,519,000 |
|
Depreciation and amortization |
|
|
48,488,000 |
|
|
|
40,637,000 |
|
|
|
7,851,000 |
|
|
|
19 |
% |
|
|
7,887,000 |
|
|
|
(36,000 |
) |
General and administrative |
|
|
8,586,000 |
|
|
|
9,041,000 |
|
|
|
(455,000 |
) |
|
|
-5 |
% |
|
|
n/a |
|
|
|
n/a |
|
Terminated projects and acquisition
transaction costs |
|
|
855,000 |
|
|
|
|
|
|
|
855,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Non-operating income and
expense, net (i) |
|
|
43,406,000 |
|
|
|
36,781,000 |
|
|
|
6,625,000 |
|
|
|
18 |
% |
|
|
n/a |
|
|
|
n/a |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations |
|
|
1,058,000 |
|
|
|
643,000 |
|
|
|
415,000 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
|
(i) |
|
Non-operating income and expense consists principally of interest expense (including
amortization of deferred financing costs), equity in income of an unconsolidated joint venture. |
|
(ii) |
|
Includes principally (a) the results of properties acquired after January 1, 2007, (b)
unallocated property and construction management compensation and benefits (including stock-based
compensation), (c) results of a property in Wyoming, Michigan where the then existing building
improvements were demolished in the second quarter of 2008 as part of the redevelopment plans for
the property and (d) results of ground-up development and re-development properties recently
placed into service. |
Properties held in both periods. The Company held 79 properties throughout 2008 and 2007.
Total revenues decreased primarily as a result of (i) a decrease in tenant recoveries
primarily due to a higher collection rate in 2007 due to billing system improvements made in 2006
and 2007 ($681,000), (ii) a decrease in percentage rent ($589,000), (iii) a net decrease ($16,000)
in non-cash amortization of intangible lease liabilities (iv) a decrease in straight-line rental
income ($1,046,000), which is partially offset by an increase in base rent ($932,000), and (v) an
increase in other income ($217,000). In connection with the worsening economic climate beginning in
the latter part of 2008 and continuing into 2009, the Company received a number of requests from
tenants for rent relief. While the Company did in fact grant such relief in selected limited
circumstances, the aggregate amount of such relief granted had a limited impact on results of
operations.
Property operating expenses increased as a result of (i) an increase in real estate and other
property-related taxes, related principally to reassessments of properties previously acquired and
completed development and re-developed projects ($545,000), (ii) an increase in the provision for
doubtful accounts primarily due to a higher collection rate in 2007 due to billing system
improvements made in 2006 and 2007 ($827,000), (iii) an increase in non-billable expenses
($401,000), (iii) an increase in a number of other operating
expenses ($190,000), which is
partially offset by (iv) a decrease in snow removal costs ($444,000).
General and administrative expenses decreased primarily as a result of the retirement of a
senior executive in 2007 and the initial compensation/relocation costs of his replacement
($1,535,000 in
24
the aggregate), off-set by increased compensation costs, increased professional fees and the
Companys continued growth in 2008.
Terminated projects and acquisition transaction costs for 2008 includes (i) the decision to
terminate potential development opportunities primarily in Ephrata, Pennsylvania and Roanoke,
Virginia (an aggregate of $652,000) and (ii) costs incurred related to a canceled potential joint
venture ($203,000).
Non-operating income and expense, net, increased primarily as a result of (i) increased
interest costs from borrowings related to property acquisitions and acquisitions of a joint venture
partners interest ($5,885,000), (ii) higher amortization
of deferred financing costs ($556,000),
(iii) lower interest income ($505,000) as a result of lower prevailing interest rates and a change
in the cash management plan, partially off-set by (iv) earnings from an unconsolidated joint
venture acquired in November 2006 and an additional investment in the unconsolidated joint venture
made in April 2008 ($321,000).
Discontinued operations for 2008 and 2007 include the results of operations for properties
(primarily drug store/convenience centers) which the Company sold or treated as held for sale
during 2009 and subsequent to December 31, 2009, located in Ohio, Maryland and New York,
aggregating 416,000 square feet of GLA, as more fully discussed elsewhere in this report.
Liquidity and Capital Resources
The Company funds operating expenses and other short-term liquidity requirements, including
debt service, tenant improvements, leasing commissions, collateralization of certain interest rate
swap obligations, preferred and common dividend distributions, if made, and distributions to
minority interest partners, primarily from operations. The Company has also used its secured
revolving stabilized property credit facility for these purposes. The Company expects to fund
long-term liquidity requirements for property acquisitions, development and/or redevelopment costs,
capital improvements, and maturing debt initially with its credit facilities and construction
financing, and ultimately through a combination of issuing and/or assuming additional mortgage
debt, the sale of equity securities, the issuance of additional OP Units, and the sale of
properties or interests therein (including joint venture arrangements).
Throughout most of 2009 there has been a fundamental contraction of the U.S. credit and
capital markets, whereby banks and other credit providers have tightened their lending standards
and severely restricted the availability of credit. Accordingly, for this and other reasons, there
can be no assurance that the Company will have the availability of mortgage financing on completed
development projects, additional construction financing, net proceeds from the contribution of
properties to joint ventures, or proceeds from the refinancing of existing debt.
In April 2009, the Companys Board of Directors determined to suspend payment of cash
dividends with respect to its common stock and OP Units for the balance of 2009 (the quarterly
dividends paid in February had already been reduced by one-half). Based on the number of shares of
common stock and OP Units outstanding at the time, the cash savings throughout 2009 was estimated
to aggregate approximately $37 million. This decision was in response to the state of the economy,
the difficult retail environment, the constrained capital markets and the need to renew the
Companys
25
secured revolving stabilized property credit facility. In December 2009, following a review of the
state of the economy and the Companys financial position, the Companys Board of Directors
determined to resume payment of a cash dividend in the amount $0.09 per share ($0.36 per share on
an annualized basis) on the Companys common stock, which was paid on January 20, 2010 to
shareholders of record as of the close of business on December 31, 2009.
In November 2009, the Company closed an amended and restated secured revolving stabilized
property credit facility with Bank of America, N.A., continuing as agent, together with three other
lead lenders and other participating banks, with commitments from participants of $265.0 million
(increased to $285.0 million in January 2010). The facility, as amended, is expandable to $400
million, subject to certain conditions, including acceptable collateral. The principal terms of the
new facility include (i) an availability based primarily on appraisals, with a 67.5% advance rate,
(ii) an interest rate based on LIBOR plus 350 bps, with a 200 bps LIBOR floor (under the prior
arrangement, the interest rate was based on LIBOR plus a bps spread depending upon the Companys
leverage ratio, as defined, which had been 135 bps prior to the new facility), (iii) a leverage
ratio limited to 67.5%, (iv) an unused portion fee of 50 bps (previously 25 bps), and (v) a
maturity date of January 31, 2012, subject to a one-year extension option. In connection was the
new facility, the Company paid participating lender fees and closing and transaction costs of
approximately $9.0 million.
Borrowings outstanding under the facility aggregated $188.0 million at December 31, 2009, such
borrowings bore interest at an average rate of 5.5% per annum, and the Company had pledged 34 of
its shopping center properties as collateral for such borrowings.
The secured revolving stabilized property credit facility has been and will be used to fund
acquisitions, certain development and redevelopment activities, capital expenditures, mortgage
repayments, dividend distributions, working capital and other general corporate purposes. The
facility is subject to customary financial covenants, including limits on leverage as discussed
above and distributions (limited to 95% of funds from operations, as defined), and other financial
statement ratios. Based on covenant measurements and collateral in place as of December 31, 2009,
the Company was permitted to draw up to approximately $204.3 million, of which approximately $16.3
million remained available as of that date. As a result of the application of the net proceeds
from, among other things, the transfers of two of the remaining properties to the RioCan joint
venture (more fully described above) and the sales of shares of the Companys common stock in
February and March 2010 (more fully described below), such availability has increased to
approximately $104 million as of March 3, 2010.. As of December 31, 2009, the Company was in
compliance with the financial covenants and financial statement ratios required by the terms of the
secured revolving stabilized property credit facility.
The Company has a $150 million secured revolving development property credit facility with
KeyBank, National Association (as agent) and several other banks, pursuant to which the Company has
pledged certain of its development projects and redevelopment properties as collateral for
borrowings thereunder. The facility, as amended, is expandable to $250 million, subject to certain
conditions, including acceptable collateral, and will expire in June 2011, subject to a one-year
extension option. Borrowings under the facility bear interest at the Companys option at either
LIBOR or the agent banks prime rate, plus a spread of 225 bps or 75 bps, respectively. Advances
under the facility are calculated at the least of 70% of aggregate project costs, 70% of as
stabilized appraised values, or costs incurred in excess of a 30% equity requirement on the part
of the Company. The facility also requires an unused
26
portion fee of 15 bps. This facility has been and will be used to fund in part the Companys and
certain joint ventures development activities. In order to draw funds under this construction
facility, the Company must meet certain pre-leasing and other conditions. Borrowings outstanding
under the facility aggregated $69.7 million at December 31, 2009, and such borrowings bore interest
at a rate of 2.5% per annum. As of December 31, 2009, the Company was in compliance with the
financial covenants and financial statement ratios required by the terms of the secured revolving
development property credit facility.
The Company has a $77.7 million construction facility with Manufacturers and Traders Trust
Company (as agent) and several other banks, pursuant to which the Company has guaranteed and
pledged its joint venture development project in Pottsgrove, Pennsylvania as collateral for
borrowings to be made thereunder. This facility will expire in September 2011, subject to a
one-year extension option. Borrowings outstanding under the facility aggregated $61.2 million at
December 31, 2009, and such borrowings bore interest at an average rate of 2.5% per annum.
Borrowings under the facility bear interest at the Companys option at either LIBOR plus a spread
of 225 bps, or the agent banks prime rate. As of December 31, 2009, the Company was in compliance
with the financial covenants and financial statement ratios required by the terms of the
construction facility.
Mortgage loans payable at December 31, 2009 consisted of fixed-rate notes totaling $606.1
million, with a weighted average interest rate of 5.8%, and variable-rate debt totaling $82.2
million, with a weighted average interest rate of 3.4%. Total mortgage loans payable and secured
revolving credit facilities have an overall weighted average interest rate of 5.3% and mature at
various dates through 2029. For 2010, the Company has approximately $8.0 million of scheduled debt
principal amortization payments and $12.3 million of balloon payments.
The terms of several of the Companys mortgage loans payable require the Company to deposit
certain replacement and other reserves with its lenders. Such restricted cash is generally
available only for property-level requirements for which the reserves have been established, and is
not available to fund other property-level or Company-level obligations.
On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate
Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed
on the Toronto Stock Exchange (RioCan), pursuant to which the Company (1) sold to RioCan
approximately 6,667,000 shares of the Companys common stock at $6.00 per share in a private
placement (RioCan agreeing that it would not sell any of such shares for a period of one year), (2)
issued to RioCan warrants to purchase approximately 1,429,000 shares of the Companys common stock
at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000),
(3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of
seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire
additional primarily supermarket-anchored properties in the Companys primary market areas during
the next two years, in the same joint venture format, and (4) entered into a standstill agreement
with respect to increases in RioCans ownership of the Companys common stock for a three-year
period. In addition, subject to certain exceptions, the Company has agreed that it will not issue
any new shares of common stock unless RioCan is offered the right to purchase that additional
number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In
connection with the formation of the joint venture,
27
the Company recorded an impairment charge of $23.6 million relating to the seven properties
transferred or to be transferred to the joint venture.
The private placement investment by RioCan and the issuance of the warrants by the Company
were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in
Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were
transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of
approximately $33 million (in connection with the closing, a repayment of $25.9 million was
required under the Companys secured revolving development property credit facility). The remaining
five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of
the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and
Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in
January and February 2010, resulting in net proceeds to the Company of approximately $16 million.
The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania,
Shaws Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport,
Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the
Company of an additional approximately $16 million. In connection with the transfers of the seven
properties to the joint venture and the private placement transactions, the Company will have
received aggregate net proceeds of approximately $105 million, after estimated closing and
transaction costs, which have been or will be used to repay/reduce the outstanding balances under
the Companys secured revolving credit facilities. In connection with these transactions, the
Company incurred costs and fees of approximately $6.0 million, including fees to the Companys
investment advisor ($3.5 million), the value assigned to the warrants (approximately $1.6 million),
and other costs and expenses aggregating $0.9 million. In addition, the Company agreed to pay to
its investment advisor a fee of 1% of the gross cost of future acquisitions made by the joint
venture for a two-year period, up to a maximum of $3.0 million.
On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its common
stock at $6.60 per share, and realized net proceeds after offering expenses of approximately $47.0
million. On March 3, 2010, the underwriters exercised their over-allotment option to the extent of
697,800 shares, and the Company realized additional net proceeds of $4.4 million. In connection
with the offering, RioCan acquired 1,350,000 shares of the Companys common stock, including
100,000 shares acquired in connection with the exercise of the over-allotment option, and the
Company realized net proceeds of $8.9 million.
In September 2009, the Company entered into a Standby Equity Purchase Agreement (the SEPA
Agreement) with an investment company for sales of its shares of common stock aggregating up to
$30 million over a two-year commitment period; the commitment is expandable at the Companys option
to $45 million. Through December 31, 2009, 422,000 shares had been sold pursuant to the SEPA
Agreement, at an average price of $5.93 per share, and the Company realized net proceeds, after
allocation of other issuance expenses, of approximately $2.3 million. In January and February 2010,
an additional 718,000 shares of the Companys common stock had been sold pursuant to the SEPA
Agreement at an average selling price of $6.97 per share, and the Company had realized net proceeds
of approximately $5.0 million.
28
The Company expects to have sufficient liquidity to effectively manage its business. Such
liquidity sources include, amongst others (i) cash on hand, (ii) operating cash flows, (iii)
availability under its secured revolving credit facilities, (iv) property-specific financings, (v)
sales of properties and (vi) proceeds from contributions of properties to joint ventures, and/or
issuances of shares of common or preferred stock.
Contractual obligations and commercial commitments
The following table sets forth the Companys significant debt repayment, interest and
operating lease obligations at December 31, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity Date |
|
|
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
Thereafter |
|
|
Total |
|
Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans payable
(i) (ii) |
|
$ |
20,335,000 |
|
|
$ |
90,962,000 |
|
|
$ |
39,533,000 |
|
|
$ |
64,091,000 |
|
|
$ |
119,458,000 |
|
|
$ |
353,910,000 |
|
|
$ |
688,289,000 |
|
Stabilized property credit facility (iii) |
|
|
|
|
|
|
|
|
|
|
187,985,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187,985,000 |
|
Development property credit facility (iii) |
|
|
|
|
|
|
69,700,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,700,000 |
|
Interest payments (iv) |
|
|
48,498,000 |
|
|
|
47,193,000 |
|
|
|
44,142,000 |
|
|
|
28,709,000 |
|
|
|
22,908,000 |
|
|
|
23,016,000 |
|
|
|
214,466,000 |
|
Operating lease obligations |
|
|
1,150,000 |
|
|
|
1,213,000 |
|
|
|
1,219,000 |
|
|
|
1,234,000 |
|
|
|
1,250,000 |
|
|
|
21,519,000 |
|
|
|
27,585,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
69,983,000 |
|
|
$ |
209,068,000 |
|
|
$ |
272,879,000 |
|
|
$ |
94,034,000 |
|
|
$ |
143,616,000 |
|
|
$ |
398,445,000 |
|
|
$ |
1,188,025,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
|
Does not include: (a) the $15.3 million mortgage loan payable by the Companys 76.3% owned
unconsolidated joint venture, which is due in May 2011, (b) mortgage loans payable applicable to
the seven properties transferred or to be transferred to the RioCan joint venture, or (c) mortgage
loans payable
applicable to discontinued operations. |
|
(ii) |
|
Mortgage loans payable for 2011 includes $61.2 million applicable to property-specific
structured financing which is subject to a one-year extension option. |
|
(iii) |
|
Subject to a one-year extension option. |
|
(iv) |
|
Represents interest payments expected to be incurred on the Companys consolidated debt
obligation as of December 31, 2009 inclusive of capitalized interest. For variable rate debt, the
rate in effect at December 31, 2009 is assumed to remain in effect until the maturities of the
respective obligations. Does not include interest payments to be incurred on debt obligations
applicable to unconsolidated joint ventures or discontinued operations. |
In addition, the Company plans to spend between $30 million and $35 million during 2010
in connection with development and redevelopment activities in process as of December 31, 2009.
Net Cash Flows
Operating Activities
Net cash flows provided by operating activities amounted to $51.9 million during 2009,
compared to $60.8 million during 2008 and $53.5 million during 2007. The changes in operating cash
flows during 2009, 2008 and 2007 were primarily the result of the Companys development and
redevelopment activities, and property acquisitions or dispositions.
29
Investing Activities
Net cash flows used in investing activities were $70.0 million in 2009, $151.4 million in 2008
and $192.4 million in 2007, and were primarily the result of the Companys acquisition/disposition
activities. During 2009, the Company acquired two shopping and convenience centers and incurred
expenditures for property improvements, an aggregate of $108.3 million. The Company realized
proceeds from the transfers of two properties to the RioCan joint venture ($32.1 million) and from
the sales of properties treated as discontinued operations ($6.8 million). During 2008, the Company
acquired four shopping and convenience centers, acquired land for development, expansion and/or
future development and incurred expenditures for property improvements, an aggregate of $131.9
million. The Company also purchased the joint venture minority interests in four properties for
$17.5 million. During 2007, the Company acquired 20 shopping and convenience centers and land for
development, expansion and/or future development, and incurred expenditures for property
improvements, an aggregate of $187.5 million.
Financing Activities
Net cash flows provided by financing activities were $27.0 million in 2009, $75.5 million in
2008 and $143.7 million in 2007. During 2009, the Company received proceeds of mortgage financings
of $60.9 million, proceeds from sales of common stock of $40.9 million, $12.2 million in
contributions from noncontrolling interests (minority interest partners) $5.0 million in proceeds
from a standby equity advance (not settled as of December 31, 2009), offset by net repayments to
its revolving credit facilities of $46.8 million, repayment of mortgage obligations of $18.2
million (including $8.9 million of mortgage balloon payments), preferred and common stock
distributions of $12.9 million, the payment of financing costs of $10.0 million, and distributions
paid to noncontrolling interests (minority and limited partner interests) of $4.1 million. During
2008, the Company received net advance proceeds of $114.1 million from its revolving credit
facilities, $106.7 million in net proceeds from mortgage financings, and $6.3 million in
contributions from noncontrolling interests (minority interest partners), offset by the repayment
of mortgage obligations of $93.3 million (including $84.8 million of mortgage balloon payments),
preferred and common stock distributions of $47.9 million, distributions paid to noncontrolling
interests (minority and limited partner interests) of $5.2 million, the payment of financing costs
of $5.1 million, and the redemption of noncontrolling interests (a limited partners OP Units) of
$0.1 million. During 2007, the Company received net advance proceeds of $122.0 million from its
stabilized property credit facility, $53.2 million in contributions from noncontrolling interests
(minority interest partners), $34.5 million in net proceeds from mortgage financings, and
$3.9 million in net proceeds from public offerings, offset by preferred and common stock
distributions of $47.6 million, the repayment of mortgage obligations of $16.2 million (including
$7.6 million of mortgage balloon payments), the payment of financing costs of $3.2 million, and
distributions paid to noncontrolling interests (minority and limited partner interests) of
$2.9 million.
Funds From Operations
Funds From Operations (FFO) is a widely-recognized non-GAAP financial measure for REITs that
the Company believes, when considered with financial statements determined in accordance with GAAP,
is useful to investors in understanding financial performance and providing a relevant basis for
comparison among REITs. In addition, FFO is useful to investors as it captures features particular
to real
30
estate performance by recognizing that real estate generally appreciates over time or maintains
residual value to a much greater extent than do other depreciable assets. Investors should review
FFO, along with GAAP net income, when trying to understand an equity REITs operating performance.
The Company presents FFO because the Company considers it an important supplemental measure of its
operating performance and believes that it is frequently used by securities analysts, investors and
other interested parties in the evaluation of REITs. Among other things, the Company uses FFO or an
adjusted FFO-based measure (i) as a criterion to determine performance-based bonuses for members of
senior management, (ii) in performance comparisons with other shopping center REITs, and (iii) to
measure compliance with certain financial covenants under the terms of the Loan Agreements relating
to the Companys credit facilities.
The Company computes FFO in accordance with the White Paper on FFO published by the National
Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income applicable
to common shareholders (determined in accordance with GAAP), excluding gains or losses from debt
restructurings and sales of properties, plus real estate-related depreciation and amortization, and
after adjustments for partnerships and joint ventures (which are computed to reflect FFO on the
same basis).
FFO does not represent cash generated from operating activities and should not be considered
as an alternative to net income applicable to common shareholders or to cash flow from operating
activities. FFO is not indicative of cash available to fund ongoing cash needs, including the
ability to make cash distributions. Although FFO is a measure used for comparability in assessing
the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the
computation of FFO may vary from one company to another. The following table sets forth the
Companys calculations of FFO for 2009, 2008 and 2007:
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Net (loss) income attributable to common shareholders |
|
$ |
(24,747,000 |
) |
|
$ |
10,296,000 |
|
|
$ |
13,948,000 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
55,391,000 |
|
|
|
49,732,000 |
|
|
|
42,068,000 |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners interest |
|
|
(912,000 |
) |
|
|
468,000 |
|
|
|
627,000 |
|
Minority interests in consolidated joint ventures |
|
|
772,000 |
|
|
|
2,157,000 |
|
|
|
1,415,000 |
|
Minority interests share of FFO applicable to
consolidated joint ventures |
|
|
(5,787,000 |
) |
|
|
(6,134,000 |
) |
|
|
(2,139,000 |
) |
Equity in income of unconsolidated joint ventures |
|
|
(1,098,000 |
) |
|
|
(956,000 |
) |
|
|
(634,000 |
) |
FFO from unconsolidated joint ventures |
|
|
1,519,000 |
|
|
|
1,296,000 |
|
|
|
905,000 |
|
Gain on sales of discontinued operations |
|
|
(557,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations |
|
$ |
24,581,000 |
|
|
$ |
56,859,000 |
|
|
$ |
56,190,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per common share (assuming conversion of OP Units) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
0.51 |
|
|
$ |
1.22 |
|
|
$ |
1.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic earnings per share |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,193,000 |
|
Additional shares assuming conversion of OP Units (basic) |
|
|
2,014,000 |
|
|
|
2,024,000 |
|
|
|
1,985,000 |
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic FFO per share |
|
|
48,248,000 |
|
|
|
46,499,000 |
|
|
|
46,178,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted earnings per share |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,197,000 |
|
Additional shares assuming conversion of OP Units (diluted) |
|
|
2,014,000 |
|
|
|
2,024,000 |
|
|
|
1,990,000 |
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted FFO per share |
|
|
48,248,000 |
|
|
|
46,499,000 |
|
|
|
46,187,000 |
|
|
|
|
|
|
|
|
|
|
|
Inflation
Low to moderate levels of inflation during the past several years have favorably impacted the
Companys operations by stabilizing operating expenses. However, the Companys properties have
tenants whose leases include expense reimbursements and other provisions to minimize the effect of
inflation. At the same time, low inflation has had the indirect effect of reducing the Companys
ability to increase tenant rents upon the signing of new leases and/or lease renewals.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
One of the principal market risks facing the Company is interest rate risk on its credit
facilities. The Company may, when advantageous, hedge its interest rate risk using derivative
financial instruments. The Company is not subject to foreign currency risk.
The Company is exposed to interest rate changes primarily through (i) the variable-rate credit
facilities used to maintain liquidity, fund capital expenditures, development/redevelopment
activities, and expand its real estate investment portfolio, (ii) property-specific variable-rate
construction financing, and (iii) other property-specific variable-rate mortgages. The Companys
objectives with respect to interest rate risk are to limit the impact of interest rate changes on
operations and cash flows,
32
and to lower its overall borrowing costs. To achieve these objectives,
the Company may borrow at fixed rates and may enter into derivative financial instruments such as
interest rate swaps, caps, etc., in order to mitigate its interest rate risk on a related
variable-rate financial instrument. The Company does not
enter into derivative or interest rate transactions for speculative purposes. At December 31,
2009, the Company had approximately $28.9 million of mortgage loans payable and $23.9 million of
secured revolving stabilized property credit facility subject to interest rate swaps which
converted LIBOR-based variable rates to fixed annual rates ranging from 5.2% to 6.8% per annum. In
addition, the Company had an interest rate swap applicable to anticipated permanent financing of
$28.0 million for its development joint venture project in Stroudsburg, Pennsylvania. On January
20, 2010, the Company paid approximately $5.5 million to terminate interest rate swaps applicable
to approximately $23.9 million of secured revolving stabilized property credit facility as well as
the interest rate swap applicable to anticipated permanent financing for its development joint
venture project in Stroudsburg, Pennsylvania.
At December 31, 2009, long-term debt consisted of fixed-rate mortgage loans payable and
variable-rate debt (principally the Companys variable-rate credit facilities). The average
interest rate on the $606.1 million of fixed-rate indebtedness outstanding was 5.8%, with
maturities at various dates through 2029. The average interest rate on the $339.9 million of
variable-rate debt (including $257.7 million in advances under the Companys revolving credit
facilities) was 4.4%. The secured revolving stabilized property credit facility matures in January
2012, subject to a one-year extension option. The secured revolving development property credit
facility matures in June 2011, subject to a one-year extension option. With respect to $151.9
million of variable-rate debt outstanding at December 31, 2009, if interest rates either increase
or decrease by 1%, the Companys interest cost would increase or decrease respectively by
approximately $1.5 million per annum. With respect to the
remaining $188.0 million of variable-rate debt
outstanding at December 31, 2009, represented by the Companys secured revolving stabilized
property credit facility, interest is based on LIBOR with a 200 bps LIBOR floor. Accordingly, if
interest rates either increase or decrease by 1%, the Companys interest cost applicable on this
line would increase by approximately $1.9 million per annum only if LIBOR was in excess of 2.0% per
annum.
33
Item 8. Financial Statements and Supplementary Data
|
|
|
|
|
35 |
|
|
|
|
|
36 |
|
|
|
|
|
37 |
|
|
|
|
|
38 |
|
|
|
|
|
40 |
|
|
|
|
|
41 - 79 |
|
|
|
|
|
80 - 86 |
All other schedules have been omitted because the required information is not present, is not
present in amounts sufficient to require submission of the schedule, or is included in the
consolidated financial statements or notes thereto.
34
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Cedar Shopping Centers, Inc.
We have audited the accompanying consolidated balance sheets of Cedar Shopping Centers, Inc. (the
Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations,
equity, and cash flows for each of the three years in the period ended December 31, 2009. Our
audits also included the financial statement schedule listed in the Index at Item 8. These
financial statements and schedule are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Cedar Shopping Centers, Inc. at December 31, 2009
and 2008, and the consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, the 2009, 2008 and 2007 financial
statements and related financial statement schedule have been restated to correct for the
accounting of certain lease intangibles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), Cedar Shopping Centers, Inc.s internal control over financial reporting as
of December 31, 2009, based on criteria established in Internal Control Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated
March 15, 2010 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG LLP
New York, New York
March 15, 2010
except for Notes 2 and 3,
as to which the date is August 12, 2010
35
CEDAR SHOPPING CENTERS, INC.
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
Assets |
|
|
|
|
|
|
|
|
Real estate: |
|
|
|
|
|
|
|
|
Land |
|
$ |
356,366,000 |
|
|
$ |
326,623,000 |
|
Buildings and improvements |
|
|
1,316,315,000 |
|
|
|
1,209,967,000 |
|
|
|
|
|
|
|
|
|
|
|
1,672,681,000 |
|
|
|
1,536,590,000 |
|
Less accumulated depreciation |
|
|
(163,879,000 |
) |
|
|
(123,807,000 |
) |
|
|
|
|
|
|
|
Real estate, net |
|
|
1,508,802,000 |
|
|
|
1,412,783,000 |
|
|
|
|
|
|
|
|
|
|
Real estate to be transferred to a joint venture |
|
|
139,743,000 |
|
|
|
194,952,000 |
|
Real estate held for sale discontinued operations |
|
|
21,380,000 |
|
|
|
42,267,000 |
|
Investment in unconsolidated joint ventures |
|
|
14,113,000 |
|
|
|
4,976,000 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
17,164,000 |
|
|
|
8,231,000 |
|
Restricted cash |
|
|
14,075,000 |
|
|
|
14,004,000 |
|
Rents and other receivables, net |
|
|
9,745,000 |
|
|
|
5,818,000 |
|
Straight-line rents |
|
|
14,545,000 |
|
|
|
12,255,000 |
|
Other assets |
|
|
8,809,000 |
|
|
|
9,403,000 |
|
Deferred charges, net |
|
|
36,742,000 |
|
|
|
30,339,000 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,785,118,000 |
|
|
$ |
1,735,028,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Mortgage loans payable |
|
$ |
688,289,000 |
|
|
$ |
608,940,000 |
|
Mortgage loans payable real estate to be transferred to a joint venture |
|
|
94,018,000 |
|
|
|
77,307,000 |
|
Mortgage loans payable real estate held for sale discontinued operations |
|
|
12,455,000 |
|
|
|
22,736,000 |
|
Secured revolving credit facilities |
|
|
257,685,000 |
|
|
|
304,490,000 |
|
Accounts payable and accrued liabilities |
|
|
46,902,000 |
|
|
|
46,548,000 |
|
Unamortized intangible lease liabilities |
|
|
53,733,000 |
|
|
|
63,048,000 |
|
Liabilities real estate held for sale and real estate to be
transferred to a joint venture |
|
|
5,634,000 |
|
|
|
6,765,000 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,158,716,000 |
|
|
|
1,129,834,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners interest in Operating Partnership |
|
|
12,638,000 |
|
|
|
14,257,000 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Cedar Shopping Centers, Inc. shareholders equity: |
|
|
|
|
|
|
|
|
Preferred stock ($.01 par value, $25.00 per share
liquidation value, 12,500,000 shares authorized, 3,550,000
shares issued and outstanding) |
|
|
88,750,000 |
|
|
|
88,750,000 |
|
Common stock ($.06 par value, 150,000,000 shares authorized
52,139,000 and 44,468,000 shares, respectively, issued and
outstanding) |
|
|
3,128,000 |
|
|
|
2,668,000 |
|
Treasury stock (981,000 and 713,000 shares, respectively, at cost) |
|
|
(9,688,000 |
) |
|
|
(9,175,000 |
) |
Additional paid-in capital |
|
|
621,299,000 |
|
|
|
576,086,000 |
|
Cumulative distributions in excess of net income |
|
|
(162,041,000 |
) |
|
|
(127,552,000 |
) |
Accumulated other comprehensive loss |
|
|
(2,992,000 |
) |
|
|
(7,256,000 |
) |
|
|
|
|
|
|
|
Total Cedar Shopping Centers, Inc. shareholders equity |
|
|
538,456,000 |
|
|
|
523,521,000 |
|
|
|
|
|
|
|
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
67,229,000 |
|
|
|
58,150,000 |
|
Limited partners interest in Operating Partnership |
|
|
8,079,000 |
|
|
|
9,266,000 |
|
|
|
|
|
|
|
|
Total noncontrolling interests |
|
|
75,308,000 |
|
|
|
67,416,000 |
|
|
|
|
|
|
|
|
Total equity |
|
|
613,764,000 |
|
|
|
590,937,000 |
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,785,118,000 |
|
|
$ |
1,735,028,000 |
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
36
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Rents |
|
$ |
144,231,000 |
|
|
$ |
136,217,000 |
|
|
$ |
119,321,000 |
|
Expense recoveries |
|
|
34,469,000 |
|
|
|
31,543,000 |
|
|
|
27,864,000 |
|
Other |
|
|
1,415,000 |
|
|
|
1,183,000 |
|
|
|
1,767,000 |
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
180,115,000 |
|
|
|
168,943,000 |
|
|
|
148,952,000 |
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating, maintenance and management |
|
|
33,955,000 |
|
|
|
28,989,000 |
|
|
|
24,000,000 |
|
Real estate and other property-related taxes |
|
|
20,860,000 |
|
|
|
18,879,000 |
|
|
|
15,269,000 |
|
General and administrative |
|
|
10,166,000 |
|
|
|
8,586,000 |
|
|
|
9,041,000 |
|
Impairments |
|
|
23,636,000 |
|
|
|
|
|
|
|
|
|
Terminated projects and acquisition transaction costs |
|
|
4,367,000 |
|
|
|
855,000 |
|
|
|
|
|
Depreciation and amortization |
|
|
54,044,000 |
|
|
|
48,488,000 |
|
|
|
40,637,000 |
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
147,028,000 |
|
|
|
105,797,000 |
|
|
|
88,947,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
33,087,000 |
|
|
|
63,146,000 |
|
|
|
60,005,000 |
|
Non-operating income and expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, including amortization of
deferred financing costs |
|
|
(49,504,000 |
) |
|
|
(44,646,000 |
) |
|
|
(38,203,000 |
) |
Interest income |
|
|
63,000 |
|
|
|
284,000 |
|
|
|
788,000 |
|
Equity in income of unconsolidated joint ventures |
|
|
1,098,000 |
|
|
|
956,000 |
|
|
|
634,000 |
|
Gain on sales of land parcels |
|
|
521,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income and expense |
|
|
(47,822,000 |
) |
|
|
(43,406,000 |
) |
|
|
(36,781,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before discontinued operations |
|
|
(14,735,000 |
) |
|
|
19,740,000 |
|
|
|
23,224,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
|
(2,833,000 |
) |
|
|
1,058,000 |
|
|
|
643,000 |
|
Gain on sales of discontinued operations |
|
|
557,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations |
|
|
(2,276,000 |
) |
|
|
1,058,000 |
|
|
|
643,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(17,011,000 |
) |
|
|
20,798,000 |
|
|
|
23,867,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less, net (income) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
(772,000 |
) |
|
|
(2,157,000 |
) |
|
|
(1,415,000 |
) |
Limited partners interest in Operating Partnership |
|
|
912,000 |
|
|
|
(468,000 |
) |
|
|
(627,000 |
) |
|
|
|
|
|
|
|
|
|
|
Total net (income) loss attributable to noncontrolling interests |
|
|
140,000 |
|
|
|
(2,625,000 |
) |
|
|
(2,042,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Cedar Shopping Centers, Inc. |
|
|
(16,871,000 |
) |
|
|
18,173,000 |
|
|
|
21,825,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred distribution requirements |
|
|
(7,876,000 |
) |
|
|
(7,877,000 |
) |
|
|
(7,877,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common shareholders |
|
$ |
(24,747,000 |
) |
|
$ |
10,296,000 |
|
|
$ |
13,948,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share attributable to common shareholders (basic
and diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.49 |
) |
|
$ |
0.21 |
|
|
$ |
0.30 |
|
Discontinued operations |
|
|
(0.05 |
) |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.54 |
) |
|
$ |
0.23 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Cedar Shopping Centers, Inc.
common shareholders, net of limited partners interest: |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(22,552,000 |
) |
|
$ |
9,284,000 |
|
|
$ |
13,333,000 |
|
(Loss) income from discontinued operations |
|
|
(2,732,000 |
) |
|
|
1,012,000 |
|
|
|
615,000 |
|
Gain on sales of discontinued operations |
|
|
537,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(24,747,000 |
) |
|
$ |
10,296,000 |
|
|
$ |
13,948,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
|
|
44,193,000 |
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
37
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Equity
Years ended December 31, 2009, 2008 and 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cedar Shopping Centers, Inc. Shareholders |
|
|
|
Preferred stock |
|
|
Common stock |
|
|
|
|
|
|
|
|
|
|
Cumulative |
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
$25.00 |
|
|
|
|
|
|
|
|
|
|
Treasury |
|
|
Additional |
|
|
distributions |
|
|
other |
|
|
|
|
|
|
|
|
|
|
Liquidation |
|
|
|
|
|
|
$0.06 |
|
|
stock, |
|
|
paid-in |
|
|
in excess of |
|
|
comprehensive |
|
|
|
|
|
|
Shares |
|
|
value |
|
|
Shares |
|
|
Par value |
|
|
at cost |
|
|
capital |
|
|
net income |
|
|
(loss) income |
|
|
Total |
|
Balance, December 31, 2006 |
|
|
3,550,000 |
|
|
$ |
88,750,000 |
|
|
|
43,773,000 |
|
|
$ |
2,626,000 |
|
|
$ |
(6,378,000 |
) |
|
$ |
564,639,000 |
|
|
$ |
(75,472,000 |
) |
|
$ |
146,000 |
|
|
$ |
574,311,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,825,000 |
|
|
|
|
|
|
|
21,825,000 |
|
Unrealized loss on change in fair value
of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82,000 |
) |
|
|
(82,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,743,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
186,000 |
|
|
|
11,000 |
|
|
|
(1,814,000 |
) |
|
|
3,949,000 |
|
|
|
|
|
|
|
|
|
|
|
2,146,000 |
|
Net proceeds from sale of common stock |
|
|
|
|
|
|
|
|
|
|
275,000 |
|
|
|
17,000 |
|
|
|
|
|
|
|
4,115,000 |
|
|
|
|
|
|
|
|
|
|
|
4,132,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
|
|
|
|
4,000 |
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,877,000 |
) |
|
|
|
|
|
|
(7,877,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(39,775,000 |
) |
|
|
|
|
|
|
(39,775,000 |
) |
Additional noncontrolling interests shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(354,000 |
) |
|
|
|
|
|
|
|
|
|
|
(354,000 |
) |
Adjustment of Mezz OP Units to
redemption value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,478,000 |
|
|
|
|
|
|
|
3,478,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2007 |
|
|
3,550,000 |
|
|
|
88,750,000 |
|
|
|
44,238,000 |
|
|
|
2,654,000 |
|
|
|
(8,192,000 |
) |
|
|
572,394,000 |
|
|
|
(97,821,000 |
) |
|
|
64,000 |
|
|
|
557,849,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,173,000 |
|
|
|
|
|
|
|
18,173,000 |
|
Unrealized loss on change in fair value
of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,320,000 |
) |
|
|
(7,320,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,853,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
225,000 |
|
|
|
13,000 |
|
|
|
(983,000 |
) |
|
|
3,342,000 |
|
|
|
|
|
|
|
|
|
|
|
2,372,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
1,000 |
|
|
|
|
|
|
|
67,000 |
|
|
|
|
|
|
|
|
|
|
|
68,000 |
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,877,000 |
) |
|
|
|
|
|
|
(7,877,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(40,027,000 |
) |
|
|
|
|
|
|
(40,027,000 |
) |
Additional noncontrolling interests shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase/redemption of noncontrolling
interests shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
283,000 |
|
|
|
|
|
|
|
|
|
|
|
283,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2008 |
|
|
3,550,000 |
|
|
|
88,750,000 |
|
|
|
44,468,000 |
|
|
|
2,668,000 |
|
|
|
(9,175,000 |
) |
|
|
576,086,000 |
|
|
|
(127,552,000 |
) |
|
|
(7,256,000 |
) |
|
|
523,521,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,871,000 |
) |
|
|
|
|
|
|
(16,871,000 |
) |
Unrealized gain on change in fair value
of cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,264,000 |
|
|
|
4,264,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,607,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
570,000 |
|
|
|
34,000 |
|
|
|
(513,000 |
) |
|
|
3,070,000 |
|
|
|
|
|
|
|
|
|
|
|
2,591,000 |
|
Net proceeds from the sales of common stock
and issuance of warrants |
|
|
|
|
|
|
|
|
|
|
7,089,000 |
|
|
|
425,000 |
|
|
|
|
|
|
|
40,465,000 |
|
|
|
|
|
|
|
|
|
|
|
40,890,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
|
|
|
|
12,000 |
|
|
|
1,000 |
|
|
|
|
|
|
|
130,000 |
|
|
|
|
|
|
|
|
|
|
|
131,000 |
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,876,000 |
) |
|
|
|
|
|
|
(7,876,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,742,000 |
) |
|
|
|
|
|
|
(9,742,000 |
) |
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,548,000 |
|
|
|
|
|
|
|
|
|
|
|
1,548,000 |
|
Additional noncontrolling interests shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2009 |
|
|
3,550,000 |
|
|
$ |
88,750,000 |
|
|
|
52,139,000 |
|
|
$ |
3,128,000 |
|
|
$ |
(9,688,000 |
) |
|
$ |
621,299,000 |
|
|
$ |
(162,041,000 |
) |
|
$ |
(2,992,000 |
) |
|
$ |
538,456,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests |
|
|
|
|
|
|
|
|
|
|
Limited |
|
|
|
|
|
|
|
|
|
|
Minority |
|
|
partners |
|
|
|
|
|
|
|
|
|
|
interests in |
|
|
interest in |
|
|
|
|
|
|
|
|
|
|
consolidated |
|
|
Operating |
|
|
|
|
|
|
Total |
|
|
|
joint ventures |
|
|
Partnership |
|
|
Total |
|
|
equity |
|
Balance, December 31, 2006 |
|
$ |
9,132,000 |
|
|
$ |
9,832,000 |
|
|
$ |
18,964,000 |
|
|
$ |
593,275,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
1,415,000 |
|
|
|
238,000 |
|
|
|
1,653,000 |
|
|
|
23,478,000 |
|
Unrealized loss on change in fair value
of cash flow hedges |
|
|
(200,000 |
) |
|
|
(2,000 |
) |
|
|
(202,000 |
) |
|
|
(284,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income |
|
|
1,215,000 |
|
|
|
236,000 |
|
|
|
1,451,000 |
|
|
|
23,194,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,146,000 |
|
Net proceeds from sale of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,132,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
(45,000 |
) |
|
|
(45,000 |
) |
|
|
|
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,877,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
(1,063,000 |
) |
|
|
(681,000 |
) |
|
|
(1,744,000 |
) |
|
|
(41,519,000 |
) |
Additional noncontrolling interests shares |
|
|
53,118,000 |
|
|
|
570,000 |
|
|
|
53,688,000 |
|
|
|
53,688,000 |
|
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
194,000 |
|
|
|
194,000 |
|
|
|
(160,000 |
) |
Adjustment of Mezz OP Units to
redemption value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,478,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2007 |
|
|
62,402,000 |
|
|
|
10,106,000 |
|
|
|
72,508,000 |
|
|
|
630,357,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
2,157,000 |
|
|
|
183,000 |
|
|
|
2,340,000 |
|
|
|
20,513,000 |
|
Unrealized loss on change in fair value
of cash flow hedges |
|
|
(336,000 |
) |
|
|
(129,000 |
) |
|
|
(465,000 |
) |
|
|
(7,785,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income |
|
|
1,821,000 |
|
|
|
54,000 |
|
|
|
1,875,000 |
|
|
|
12,728,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,372,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
(68,000 |
) |
|
|
(68,000 |
) |
|
|
|
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,877,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
(3,427,000 |
) |
|
|
(717,000 |
) |
|
|
(4,144,000 |
) |
|
|
(44,171,000 |
) |
Additional noncontrolling interests shares |
|
|
6,364,000 |
|
|
|
|
|
|
|
6,364,000 |
|
|
|
6,364,000 |
|
Purchase/redemption of noncontrolling
interests shares |
|
|
(9,010,000 |
) |
|
|
|
|
|
|
(9,010,000 |
) |
|
|
(9,010,000 |
) |
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
(109,000 |
) |
|
|
(109,000 |
) |
|
|
174,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2008 |
|
|
58,150,000 |
|
|
|
9,266,000 |
|
|
|
67,416,000 |
|
|
|
590,937,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
772,000 |
|
|
|
(361,000 |
) |
|
|
411,000 |
|
|
|
(16,460,000 |
) |
Unrealized gain on change in fair value
of cash flow hedges |
|
|
|
|
|
|
79,000 |
|
|
|
79,000 |
|
|
|
4,343,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive loss |
|
|
772,000 |
|
|
|
(282,000 |
) |
|
|
490,000 |
|
|
|
(12,117,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation activity, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,591,000 |
|
Net proceeds from the sales of common stock
and issuance of warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,890,000 |
|
Conversion of OP units into common stock |
|
|
|
|
|
|
(131,000 |
) |
|
|
(131,000 |
) |
|
|
|
|
Preferred distribution requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,876,000 |
) |
Distributions to common shareholders/
noncontrolling interests |
|
|
(3,905,000 |
) |
|
|
(167,000 |
) |
|
|
(4,072,000 |
) |
|
|
(13,814,000 |
) |
Reallocation adjustment of limited
partners interest |
|
|
|
|
|
|
(607,000 |
) |
|
|
(607,000 |
) |
|
|
941,000 |
|
Additional noncontrolling interests shares |
|
|
12,212,000 |
|
|
|
|
|
|
|
12,212,000 |
|
|
|
12,212,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2009 |
|
$ |
67,229,000 |
|
|
$ |
8,079,000 |
|
|
$ |
75,308,000 |
|
|
$ |
613,764,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
39
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(17,011,000 |
) |
|
$ |
20,798,000 |
|
|
$ |
23,867,000 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash provisions: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in income of unconsolidated joint ventures |
|
|
(1,098,000 |
) |
|
|
(956,000 |
) |
|
|
(634,000 |
) |
Distributions from unconsolidated joint ventures |
|
|
921,000 |
|
|
|
834,000 |
|
|
|
529,000 |
|
Impairments |
|
|
23,636,000 |
|
|
|
|
|
|
|
|
|
Terminated projects |
|
|
3,094,000 |
|
|
|
463,000 |
|
|
|
|
|
Impairment discontinued operations |
|
|
3,559,000 |
|
|
|
|
|
|
|
|
|
Gain on sales of real estate |
|
|
(1,078,000 |
) |
|
|
|
|
|
|
|
|
Straight-line rents |
|
|
(2,874,000 |
) |
|
|
(2,876,000 |
) |
|
|
(3,451,000 |
) |
Depreciation and amortization |
|
|
55,391,000 |
|
|
|
50,013,000 |
|
|
|
42,310,000 |
|
Amortization of intangible lease liabilities |
|
|
(13,522,000 |
) |
|
|
(14,409,000 |
) |
|
|
(10,892,000 |
) |
Amortization/market price adjustments relating to stock-based compensation |
|
|
2,433,000 |
|
|
|
1,099,000 |
|
|
|
1,306,000 |
|
Amortization of deferred financing costs |
|
|
3,648,000 |
|
|
|
1,790,000 |
|
|
|
1,233,000 |
|
Increases/decreases in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Rents and other receivables, net |
|
|
(2,555,000 |
) |
|
|
1,822,000 |
|
|
|
(2,548,000 |
) |
Prepaid expenses and other |
|
|
(5,168,000 |
) |
|
|
153,000 |
|
|
|
(4,265,000 |
) |
Accounts payable and accrued liabilities |
|
|
2,566,000 |
|
|
|
2,084,000 |
|
|
|
6,048,000 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
51,942,000 |
|
|
|
60,815,000 |
|
|
|
53,503,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for real estate and improvements |
|
|
(108,300,000 |
) |
|
|
(131,874,000 |
) |
|
|
(187,497,000 |
) |
Proceeds from transfers to unconsolidated joint venture |
|
|
32,089,000 |
|
|
|
|
|
|
|
|
|
Net proceeds from sales of real estate |
|
|
6,752,000 |
|
|
|
|
|
|
|
|
|
Purchase of consolidated joint venture minority interests |
|
|
|
|
|
|
(17,454,000 |
) |
|
|
|
|
Investment in unconsolidated joint venture |
|
|
(350,000 |
) |
|
|
(1,097,000 |
) |
|
|
(8,000 |
) |
Construction escrows and other |
|
|
(217,000 |
) |
|
|
(965,000 |
) |
|
|
(4,927,000 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(70,026,000 |
) |
|
|
(151,390,000 |
) |
|
|
(192,432,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (repayments)/advances (to)/from revolving credit facilities |
|
|
(46,805,000 |
) |
|
|
114,050,000 |
|
|
|
121,970,000 |
|
Proceeds from mortgage financings |
|
|
60,950,000 |
|
|
|
106,738,000 |
|
|
|
34,493,000 |
|
Mortgage repayments |
|
|
(18,203,000 |
) |
|
|
(93,317,000 |
) |
|
|
(16,177,000 |
) |
Payments of debt financing costs |
|
|
(9,973,000 |
) |
|
|
(5,062,000 |
) |
|
|
(3,187,000 |
) |
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from consolidated joint venture minority interests, net |
|
|
12,212,000 |
|
|
|
6,383,000 |
|
|
|
53,229,000 |
|
Distributions to consolidated joint venture minority interests |
|
|
(3,905,000 |
) |
|
|
(3,427,000 |
) |
|
|
(1,063,000 |
) |
Redemption of Operating Partnership Units |
|
|
|
|
|
|
(122,000 |
) |
|
|
|
|
Distributions to limited partners |
|
|
(227,000 |
) |
|
|
(1,822,000 |
) |
|
|
(1,788,000 |
) |
Proceeds from the sales of common stock |
|
|
40,890,000 |
|
|
|
|
|
|
|
3,910,000 |
|
Proceeds from standby equity advance not settled |
|
|
5,000,000 |
|
|
|
|
|
|
|
|
|
Preferred stock distributions |
|
|
(7,876,000 |
) |
|
|
(7,877,000 |
) |
|
|
(7,877,000 |
) |
Distributions to common shareholders |
|
|
(5,046,000 |
) |
|
|
(40,027,000 |
) |
|
|
(39,775,000 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
27,017,000 |
|
|
|
75,517,000 |
|
|
|
143,735,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
8,933,000 |
|
|
|
(15,058,000 |
) |
|
|
4,806,000 |
|
Cash and cash equivalents at beginning of period |
|
|
8,231,000 |
|
|
|
23,289,000 |
|
|
|
18,483,000 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
17,164,000 |
|
|
$ |
8,231,000 |
|
|
$ |
23,289,000 |
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
40
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 1. Organization and Basis of Preparation
Cedar Shopping Centers, Inc. (the Company) was organized in 1984 and elected to be taxed as
a real estate investment trust (REIT) in 1986. The Company focuses primarily on ownership,
operation, development and redevelopment of supermarket-anchored shopping centers predominately in
coastal mid-Atlantic and New England states. At December 31, 2009, the Company owned and managed
117 operating properties.
Cedar Shopping Centers Partnership, L.P. (the Operating Partnership) is the entity through
which the Company conducts substantially all of its business and owns (either directly or through
subsidiaries) substantially all of its assets. At December 31, 2009, the Company owned a 96.3%
economic interest in, and was the sole general partner of, the Operating Partnership. The limited
partners interest in the Operating Partnership (3.7% at December 31, 2009) is represented by
Operating Partnership Units (OP Units). The carrying amount of such interest is adjusted at the
end of each reporting period to an amount equal to the limited partners ownership percentage of
the Operating Partnerships net equity. The approximately 2,006,000 OP Units outstanding at
December 31, 2009 are economically equivalent to the Companys common stock and are convertible
into the Companys common stock at the option of the respective holders on a one-to-one basis.
As used herein, the Company refers to Cedar Shopping Centers, Inc. and its subsidiaries on a
consolidated basis, including the Operating Partnership or, where the context so requires, Cedar
Shopping Centers, Inc. only.
In July 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standard No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally
Accepted Accounting Principles, also known as the FASB Accounting Standards Codification (the
Codification), which establishes the exclusive authoritative reference for accounting principles
generally accepted in the United States (GAAP) for use in financial statements. The Codification
supersedes all existing non-Securities and Exchange Commission (SEC) accounting and reporting
standards, although SEC rules and interpretive releases remain as additional authoritative GAAP for
U.S. registrants. The Codification does not change GAAP, but is intended to simplify user access by
providing all the authoritative literature related to a particular topic in one place. The
Codification, which became effective for financial statements issued after September 15, 2009, did
not have an effect on the Companys financial statements. Although the Company has continued to
provide a general description of the relevant accounting literature applicable to its significant
accounting policies, it has ceased including the specific FASB pronouncement references in its
financial statement footnotes.
41
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
The consolidated financial statements include the accounts and operations of the Company, the
Operating Partnership, its subsidiaries, and certain joint venture partnerships in which it
participates. The Company consolidates all variable interest entities (VIEs) for which it is the
primary beneficiary. Generally, a VIE is an entity with one or more of the following
characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to
finance its activities without additional subordinated financial support, (b) as a group, the
holders of the equity investment at risk (i) lack the ability to make decisions about an entitys
activities through voting or similar rights, (ii) have no obligation to absorb the expected losses
of the entity, or (iii) have the right to receive the expected residual returns of the entity, or
(c) the equity investors have voting rights that are not proportional to their economic interests,
and substantially all of the entitys activities either involve, or are conducted on behalf of, an
investor that has disproportionately few voting rights. The current accounting guidance requires a
VIE to be consolidated in the financial statements of the entity that is determined to be the
primary beneficiary of the VIE, i.e., the entity that will receive a majority of the VIEs expected
losses, expected residual returns, or both. In determining whether the Company is the primary
beneficiary of a VIE, it considers qualitative and quantitative factors including, but not limited
to: (i) the amount and characteristics of the Companys investment, (ii) the obligation or
likelihood for the Company or other investors to provide financial support, (iii) the Companys and
the other investors ability to control or significantly influence key decisions for the VIE, and
(iv) the similarity with, and significance to, the business activities of the Company and the other
investors. Significant judgments related to these determinations include estimates about the
current and future fair values and performance of real estate held by these VIEs and general market
conditions.
With respect to its 13 consolidated operating joint ventures, the Company has general
partnership interests of 20% in nine properties, 40% in two properties, 50% in one property and 75%
in one property. As (i) such entities are not VIEs, and (ii) the Company is the sole general
partner and exercises substantial operating control over these entities, the Company has determined
that such entities should be consolidated for financial statement purposes. Current accounting
guidance provides a framework for determining whether a general partner controls, and should
consolidate, a limited partnership or similar entity in which it owns a minority interest.
The Companys three 60%-owned joint ventures for development projects in Limerick, Pottsgrove
and Stroudsburg, Pennsylvania, are consolidated as they are deemed to be VIEs and the Company is
the primary income or loss beneficiary in each case. At December 31, 2009, these VIEs owned real
estate with a carrying value of $134.9 million. At that date, two of the VIEs had property-specific
mortgage loans payable aggregating $62.5 million, and the real estate owned by one of the VIEs
collateralized the secured revolving development property credit facility in the amount of $7.7
million.
42
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
With respect to its unconsolidated joint ventures, the Company has a 20% interest in a joint
venture with RioCan (more fully described below) formed initially for the acquisition of seven
shopping center properties owned by the Company. Two of the properties were transferred to the
joint venture prior to December 31, 2009, two of the properties were transferred in January and
February 2010 and the three remaining properties are expected to be transferred during the first
half of 2010. In addition, the Company has a 76.3% interest in a joint venture which owns a
single-tenant office property in Philadelphia, Pennsylvania. Although the Company exercises
influence over these joint ventures, it does not have operating control. In the case of the RioCan
joint venture, although the Company provides management and other services, RioCan has significant
management participation rights. The Company has determined that these joint ventures are not VIEs.
The Company accounts for its investment in these joint ventures under the equity method.
At December 31, 2009, the Company had deposits of $0.9 million on three land parcels to be
purchased for future development. Although each of the deposits is considered a VIE, the Company
has not consolidated any of them as the Company is not the primary income or loss beneficiary in
each case.
Note 2. Intangible Lease Asset/Liability
The Company determined that at the time it acquired certain properties during 2003 through
2009, it had underprovided for certain identifiable intangible lease liabilities relating to
fixed-price renewal options that were at below-market rates. At the time such properties were
acquired, the Company determined the fair value of such renewal options to be immaterial, based
upon the Companys assessment of a very low probability that any of such renewal options would be
exercised. Accordingly, at the time of acquisition, the Company assigned a zero value to such
renewal options. The Company has reconsidered these determinations, and concluded that option
renewal periods should have been valued with respect to certain of the leases. Using the updated
assumptions, the Company determined the December 31, 2009 carrying amounts of unamortized
intangible lease liabilities and real estate, net, to be understated by $8,429,000 and $7,688,000,
respectively (the latter amount net of $741,000, representing the
cumulative understated depreciation expense for the period 2003
through, 2009). In addition, total equity and limited partners interest in the
Operating Partnership were overstated by $723,000 and $18,000, respectively, as of December 31,
2009, reflecting the aforementioned cumulative depreciation adjustment. At the time the adjustment
was identified, the Company determined that the aforementioned adjustments were immaterial to any
full years consolidated financial statements; however, the Company did determine that recording
the adjustments entirely in any quarterly period subsequent to December 31, 2009 would be material
to the consolidated statement of operations for that period. Accordingly, as provided by the SECs
Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements, such adjustments have been
retroactively reflected in the
43
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
consolidated balance sheets at December 31, 2009 and 2008 and the
consolidated statements of operations for each of the three years in the period ended December 31,
2009.
The following tables summarize the impact of these adjustments on the Companys consolidated
financial statements:
44
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
|
|
|
|
|
|
Inangible lease |
|
|
Discontinued |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
operations |
|
|
|
|
|
|
As reported |
|
|
adjustment |
|
|
adjustment (a) |
|
|
As revised |
|
Real estate |
|
$ |
1,675,322,000 |
|
|
$ |
8,429,000 |
|
|
$ |
(11,070,000 |
) |
|
$ |
1,672,681,000 |
|
Less accumulated depreciation |
|
|
(164,615,000 |
) |
|
|
(741,000 |
) |
|
|
1,477,000 |
|
|
|
(163,879,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, net |
|
$ |
1,510,707,000 |
|
|
$ |
7,688,000 |
|
|
$ |
(9,593,000 |
) |
|
$ |
1,508,802,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for sale discontinued operations |
|
$ |
11,599,000 |
|
|
$ |
|
|
|
$ |
9,781,000 |
|
|
$ |
21,380,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized intangible lease liabilities |
|
$ |
46,643,000 |
|
|
$ |
8,429,000 |
|
|
$ |
(1,339,000 |
) |
|
$ |
53,733,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities real estate held for sale |
|
$ |
4,295,000 |
|
|
$ |
|
|
|
$ |
1,339,000 |
|
|
$ |
5,634,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners interest in Operating Partnership |
|
$ |
12,656,000 |
|
|
$ |
(18,000 |
) |
|
$ |
|
|
|
$ |
12,638,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
$ |
614,487,000 |
|
|
$ |
(723,000 |
) |
|
$ |
|
|
|
$ |
613,764,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008 |
|
|
|
|
|
|
|
Inangible lease |
|
|
Discontinued |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
operations |
|
|
|
|
|
|
As reported |
|
|
adjustment |
|
|
adjustment (a) |
|
|
As revised |
|
Real estate |
|
$ |
1,539,213,000 |
|
|
$ |
8,429,000 |
|
|
$ |
(11,052,000 |
) |
|
$ |
1,536,590,000 |
|
Less accumulated depreciation |
|
|
(124,387,000 |
) |
|
|
(529,000 |
) |
|
|
1,109,000 |
|
|
|
(123,807,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, net |
|
$ |
1,414,826,000 |
|
|
$ |
7,900,000 |
|
|
$ |
(9,943,000 |
) |
|
$ |
1,412,783,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for sale discontinued operations |
|
$ |
32,063,000 |
|
|
$ |
|
|
|
$ |
10,204,000 |
|
|
$ |
42,267,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unamortized intangible lease liabilities |
|
$ |
56,122,000 |
|
|
$ |
8,429,000 |
|
|
$ |
(1,503,000 |
) |
|
$ |
63,048,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities real estate held for sale |
|
$ |
5,262,000 |
|
|
$ |
|
|
|
$ |
1,503,000 |
|
|
$ |
6,765,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners interest in Operating Partnership |
|
$ |
14,271,000 |
|
|
$ |
(14,000 |
) |
|
$ |
|
|
|
$ |
14,257,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
$ |
591,452,000 |
|
|
$ |
(515,000 |
) |
|
$ |
|
|
|
$ |
590,937,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2009 |
|
|
|
|
|
|
|
Inangible lease |
|
|
Discontinued |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
operations |
|
|
|
|
|
|
As reported |
|
|
adjustment |
|
|
adjustment (a) |
|
|
As revised |
|
Depreciation and amortization expense (a) |
|
$ |
54,257,000 |
|
|
$ |
212,000 |
|
|
$ |
(425,000 |
) |
|
$ |
54,044,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) attributable to common shareholders |
|
$ |
(24,543,000 |
) |
|
$ |
(204,000 |
) |
|
$ |
|
(b) |
|
$ |
(24,747,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) |
|
$ |
(0.53 |
) |
|
$ |
(0.01 |
) |
|
$ |
|
|
|
$ |
(0.54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2008 |
|
|
|
|
|
|
|
Inangible lease |
|
|
Discontinued |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
operations |
|
|
|
|
|
|
As reported |
|
|
adjustment |
|
|
adjustment (a) |
|
|
As revised |
|
Depreciation and amortization expense (a) |
|
$ |
48,741,000 |
|
|
$ |
211,000 |
|
|
$ |
(464,000 |
) |
|
$ |
48,488,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
|
$ |
10,498,000 |
|
|
$ |
(202,000 |
) |
|
$ |
|
(b) |
|
$ |
10,296,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) |
|
$ |
0.24 |
|
|
$ |
(0.01 |
) |
|
$ |
|
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2007 |
|
|
|
|
|
|
|
Inangible lease |
|
|
Discontinued |
|
|
|
|
|
|
|
|
|
|
liability |
|
|
operations |
|
|
|
|
|
|
As reported |
|
|
adjustment |
|
|
adjustment (a) |
|
|
As revised |
|
Depreciation and amortization expense (a) |
|
$ |
41,004,000 |
|
|
$ |
150,000 |
|
|
$ |
(517,000 |
) |
|
$ |
40,637,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
|
$ |
14,092,000 |
|
|
$ |
(144,000 |
) |
|
$ |
|
(b) |
|
$ |
13,948,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) |
|
$ |
0.32 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Includes other retroactive adjustments for the sales of properties, where the applicable net
assets and results of operations have been treated as held for sale and income (loss) from
discontinued operations, respectively. |
|
(b) |
|
Net of noncontrolling interests (limited partners interest). |
45
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
The Company allocates the fair value of real estate acquired to land, buildings and
improvements. In addition, the fair value of in-place leases is allocated to intangible lease
assets and liabilities.
The fair value of the tangible assets of an acquired property is determined by valuing the
property as if it were vacant, which value is then allocated to land, buildings and improvements
based on managements determination of the relative fair values of these assets. In valuing an
acquired propertys intangibles, factors considered by management include an estimate of carrying
costs during the expected lease-up periods, such as real estate taxes, insurance, other operating
expenses, and estimates of lost rental revenue during the expected lease-up periods based on its
evaluation of current market demand. Management also estimates costs to execute similar leases,
including leasing commissions, tenant improvements, legal and other related costs.
The values of acquired above-market and below-market leases are recorded based on the present
values (using discount rates which reflect the risks associated with the leases acquired) of the
differences between the contractual amounts to be received and managements estimate of market
lease rates, measured over the terms of the respective leases that management deemed appropriate at
the time of the acquisitions. Such valuations include a consideration of the non-cancellable terms
of the respective leases as well as any applicable renewal period(s). The fair values associated
with below-market rental renewal options are determined based on the Companys experience and the
relevant facts and circumstances that existed at the time of the acquisitions. The values of
above-market leases are amortized to rental income over the terms of the respective non-cancelable
lease periods. The portion of the values of below-market leases associated with the original
non-cancelable lease terms are amortized to rental income over the terms of the respective
non-cancelable lease periods. The portion of the values of the leases associated with below-market
renewal options that are likely of exercise are amortized to rental income over the respective
renewal periods. The value of other intangible assets (including leasing commissions, tenant
improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If
a lease were to be terminated prior to its stated expiration or not renewed, all unamortized
amounts relating to that lease would be recognized in operations at that time.
With respect to the Companys 2009 acquisitions, the fair values of in-place leases and other
intangibles have been allocated to the intangible asset and liability accounts. Such allocations
are preliminary and are based on information and estimates available as of the respective dates of
acquisition. As final information becomes available and is refined, appropriate adjustments are
made to the purchase price allocations, which are finalized within twelve months of the respective
dates of acquisition. Unamortized intangible lease liabilities relate primarily to below-market
leases, and amounted to $53.7 million and $63.0 million at December 31, 2009 and 2008,
respectively.
46
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
As a result of recording the intangible lease assets and liabilities, (i) revenues were
increased by $13.2 million, $14.1 million and $10.6 million for 2009, 2008 and 2007, respectively,
relating to the amortization of intangible lease liabilities, and (ii) depreciation and
amortization expense was increased correspondingly by $13.7 million, $14.2 million and $12.6
million for 2009, 2008 and 2007, respectively.
The unamortized balance of intangible lease liabilities of $53.7 million at December 31, 2009
is net of accumulated amortization of $51.9 million, and will be credited to future operations
through 2043 as follows:
|
|
|
|
|
2010 |
|
$ |
8,544,000 |
|
2011 |
|
|
7,044,000 |
|
2012 |
|
|
6,363,000 |
|
2013 |
|
|
5,956,000 |
|
2014 |
|
|
5,335,000 |
|
Thereafter |
|
|
20,491,000 |
|
|
|
|
|
|
|
$ |
53,733,000 |
|
|
|
|
|
Note 3. Discontinued operations
During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as held for
sale, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland
and New York, including the McDonalds/Waffle House property, located in Medina, Ohio, the CVS
property located in Westfield, New York, the Staples property located in Oswego, New York, the
Hudson Ohio Discount Drug Mart Plaza, the Dover Ohio Discount Drug Mart Plaza, the Gabriel Brothers
property located in Kent, Ohio, the Carrollton Ohio Discount Drug Mart Plaza, the Pondside Plaza
located in Geneseo, New York, the Powell Ohio Discount Drug Mart Plaza, the 7,000 square foot
Family Dollar convenience center located in Zanesville, Ohio, and the 105,000 square foot Long
Reach Village property located in Columbia, Maryland. The aggregate sales prices for the 11
properties is approximately $33.3 million, including property-specific mortgage loans payable of
approximately $22.4 million. In connection with these transactions, the Company recorded impairment
charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has
realized gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The
carrying values of the assets and liabilities of these properties, principally the net book values
of the real estate and the related mortgage loans payable to be assumed, have been reclassified as
held for sale on the Companys consolidated balance sheets at December 31, 2009 and 2008. In
addition, the properties results of operations have been classified as discontinued operations
for all periods presented.
47
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
The following is a summary of the results of operations from discontinued operations for 2009,
2008 and 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Rents |
|
$ |
3,754,000 |
|
|
$ |
4,203,000 |
|
|
$ |
4,134,000 |
|
Expense recoveries |
|
|
1,223,000 |
|
|
|
1,334,000 |
|
|
|
1,361,000 |
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
4,977,000 |
|
|
|
5,537,000 |
|
|
|
5,495,000 |
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating, maintenance and management |
|
|
950,000 |
|
|
|
848,000 |
|
|
|
1,053,000 |
|
Real estate and other property-related taxes |
|
|
753,000 |
|
|
|
795,000 |
|
|
|
800,000 |
|
Depreciation and amortization |
|
|
1,368,000 |
|
|
|
1,525,000 |
|
|
|
1,673,000 |
|
Interest expense |
|
|
1,180,000 |
|
|
|
1,311,000 |
|
|
|
1,326,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,251,000 |
|
|
|
4,479,000 |
|
|
|
4,852,000 |
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations before
impairment charges |
|
|
726,000 |
|
|
|
1,058,000 |
|
|
|
643,000 |
|
Impairment charges |
|
|
(3,559,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
$ |
(2,833,000 |
) |
|
$ |
1,058,000 |
|
|
$ |
643,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sales of discontinued operations |
|
$ |
557,000 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
Note 4. Summary of Significant Accounting Policies
The accompanying financial statements are prepared on the accrual basis in accordance with
GAAP, which requires management to make estimates and assumptions that affect the disclosure of
contingent assets and liabilities, the reported amounts of assets and liabilities at the date of
the financial statements, and the reported amounts of revenue and expenses during the periods
covered by the financial statements. Actual results could differ from these estimates.
The consolidated financial statements reflect certain reclassifications of prior period
amounts to conform to the 2009 presentation, principally (i) the retrospective reclassification,
for all periods presented, of the balances related to minority interests in consolidated joint
ventures and limited partners interest in the Operating Partnership into the consolidated equity
accounts, as appropriate (certain non-controlling interests of the Company will continue to be
classified in the mezzanine section of the balance sheet as these redeemable OP Units (Mezz OP
Units) do not meet the requirements for equity classification), (ii) to reflect the
reclassifications of the assets and liabilities of the properties transferred and to be transferred
to the RioCan joint venture as real estate to be transferred to a joint venture, (iii) to reflect
the retroactive valuation adjustments relating to lease renewal options, and (iv) to reflect the
sale and/or treatment as
48
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
held for sale of certain operating properties and the treatment thereof
as discontinued operations. The reclassifications had no material impact on previously-reported
net income attributable to common shareholders or earnings per share.
Real Estate Investments and Discontinued Operations
Real estate investments are carried at cost less accumulated depreciation. The provision for
depreciation is calculated using the straight-line method based upon the estimated useful lives of
the respective assets of between 3 and 40 years. Depreciation expense amounted to $50.2 million,
$44.5 million and $37.4 million for 2009, 2008 and 2007, respectively. Expenditures for
betterments that substantially extend the useful lives of the assets are capitalized. Expenditures
for maintenance, repairs, and betterments that do not substantially prolong the normal useful life
of an asset are charged to operations as incurred, and amounted to $2.2 million, $2.2 million
and $1.7 million for 2009, 2008 and 2007, respectively.
Upon the sale (or classification as held for sale) or other disposition of assets, the cost
and related accumulated depreciation and amortization are removed from the accounts and the
resulting gain or impairment loss, if any, is reflected as discontinued operations. In addition,
prior periods financial statements would be reclassified to reflect the sold properties
operations as discontinued.
Real estate investments include costs of development and redevelopment activities, and
construction in progress. Capitalized costs, including interest and other carrying costs during the
construction and/or renovation periods, are included in the cost of the related asset and charged
to operations through depreciation over the assets estimated useful life. Interest and financing
costs capitalized amounted to $6.3 million, $6.7 million and $4.1 million for 2009, 2008 and 2007,
respectively. A variety of costs are incurred in the acquisition, development and leasing of a
property, such as pre-construction costs essential to the development of the property, development
costs, construction costs, interest costs, real estate taxes, salaries and related costs, and other
costs incurred during the period of development. After a determination is made to capitalize a
cost, it is allocated to the specific component of a project that is benefited. The Company ceases
capitalization on the portions substantially completed and occupied, or held available for
occupancy, and capitalizes only those costs associated with the portions under development. The
Company considers a construction project to be substantially completed and held available for
occupancy upon the completion of tenant improvements, but not later than one year from cessation of
major construction activity.
Management reviews each real estate investment for impairment whenever events or circumstances
indicate that the carrying value of a real estate investment may not be recoverable. The review of
recoverability is based on an estimate of the future cash flows that are expected to result from
the real estate investments use and eventual disposition. These cash flows consider factors such
as expected future operating income, trends and prospects, as well as the effects of
49
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
leasing
demand, competition and other factors. If an impairment event exists due to the projected inability
to recover the carrying value of a real estate investment, an impairment loss is recorded to the
extent that the carrying value exceeds estimated fair value. Real estate investments held for sale
are carried at the lower of their respective carrying amounts or estimated fair values, less costs
to sell. Depreciation and amortization are suspended during the periods held for sale.
In October 2009, the Company entered into the RioCan transactions (more fully described
below), and recorded a net impairment charge aggregating $23.6 million based on the indicated
values and costs of the contract of sale of an 80% interest in seven properties transferred or to
be transferred to the RioCan joint venture. Insofar as the Company has and will have a continued
involvement with these properties (it exercises significant influence through 20% interest retained
and provides property management and other services), the accounting treatment presentation on the
accompanying consolidated balance sheet is to reflect the Companys applicable carrying values as
real estate to be transferred to a joint venture retroactively for all periods presented, whereas
the accounting treatment presentation on the accompanying consolidated statements of operations is
to reflect the results of the properties operations prospectively following their transfer to the
joint venture as equity in income of unconsolidated joint ventures with no reclassification
adjustments for discontinued operations.
Revenues included in the accompanying statement of operations for the seven properties
transferred or to be transferred to the RioCan joint venture aggregated $18.6 million, $17.7
million and $16.6 million, respectively, for 2009, 2008 and 2007.
During 2009, the Company wrote-off costs incurred in prior years for (i) potential development
opportunities in Milford, Delaware and Ephrata, Pennsylvania that the Company determined would not
go forward (an aggregate of $2.8 million) and (ii) costs incurred related to the acquisitions of
San Souci Plaza and New London Mall (net of minority interest share) and the costs primarily
associated with a cancelled acquisition (an aggregate of $1.5 million).
During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as held for
sale, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland
and New York. In connection with these transactions, the Company recorded impairment charges
aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009).
Conditional asset retirement obligation
A conditional asset retirement obligation is a legal obligation to perform an asset retirement
activity in which the timing and/or method of settlement is conditional on a future event that may
or may not be within the control of the Company. The Company would record a liability for a
conditional asset retirement obligation if the fair value of the obligation can be reasonably
estimated. Environmental studies conducted at the time of acquisition with respect to all of the
Companys properties did not reveal any material environmental liabilities, and the
50
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Company is
unaware of any subsequent environmental matters that would have created a material liability. The
Company believes that its properties are currently in material compliance with applicable
environmental, as well as non-environmental, statutory and regulatory requirements. There were no
conditional asset retirement obligation liabilities recorded by the Company during the three years
ended December 31, 2009.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash in banks and short-term investments with original
maturities of less than ninety days, and include cash at consolidated joint ventures of $7.4
million and $1.9 million at December 31, 2009 and 2008, respectively.
Restricted Cash
The terms of several of the Companys mortgage loans payable require the Company to deposit
certain replacement and other reserves with its lenders. Such restricted cash is generally
available only for property-level requirements for which the reserves have been established, is not
available to fund other property-level or Company-level obligations, and amounted to $14.1 million
and $14.0 million at December 31, 2009 and 2008, respectively.
Rents and Other Receivables
Management has determined that all of the Companys leases with its various tenants are
operating leases. Rental income with scheduled rent increases is recognized using the straight-line
method over the respective terms of the leases. The aggregate excess of rental revenue
recognized on a straight-line basis over the contractual base rents is included in
straight-line rents on the consolidated balance sheet. Leases also generally contain provisions
under which the tenants reimburse the Company for a portion of property operating expenses and real
estate taxes incurred; such income is recognized in the periods earned. In addition, certain
operating leases contain contingent rent provisions under which tenants are required to pay, as
additional rent, a percentage of their sales in excess of a specified amount. The Company defers
recognition of contingent rental income until those specified sales targets are met.
The Company must make estimates as to the collectibility of its accounts receivable related to
base rent, straight-line rent, percentage rent, expense reimbursements and other revenues. When
management analyzes accounts receivable and evaluates the adequacy of the allowance for doubtful
accounts, it considers such things as historical bad debts, tenant creditworthiness, current
economic trends, and changes in tenants payment patterns. The allowance for doubtful accounts was
$5.3 million and $3.0 million at December 31, 2009 and 2008, respectively. The provision for
doubtful accounts (included in operating, maintenance and
51
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
management expenses) was $3.9 million,
$1.9 million and $0.7 million in 2009, 2008 and 2007, respectively.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk
consist primarily of cash and cash equivalents in excess of insured amounts and tenant receivables.
The Company places its cash and cash equivalents with high quality financial institutions.
Management performs ongoing credit evaluations of its tenants and requires certain tenants to
provide security deposits.
Giant Food Stores, LLC (Giant Foods), which is owned by Ahold N.V., a Netherlands
corporation, accounted for approximately 12%, 12% and 13% of the Companys total revenues in 2009,
2008 and 2007, respectively. Giant Foods, in combination with Stop & Shop, Inc., which is also
owned by Ahold N.V., accounted for approximately 15%, 15% and 15% of the Companys total revenues
in 2009, 2008 and 2007, respectively. Of these amounts, 3%, respectively, were attributable to
Giant Foods revenues at the seven properties transferred or to be transferred to the RioCan joint
venture, for each of the periods presented.
Total revenues from properties located in Pennsylvania, Massachusetts and Connecticut amounted
to 47.0%, 13.3%, 11.6%, 49.0%, 14.0%, 8.7%, and 55.2%, 11.3%, 8.2%, of consolidated total revenues
in 2009, 2008 and 2007, respectively.
Other Assets
Other assets at December 31, 2009 and 2008 are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
Cumulative mark-to-market adjustments
related to stock-based compensation |
|
$ |
2,100,000 |
|
|
$ |
1,965,000 |
|
Prepaid expenses |
|
|
5,279,000 |
|
|
|
4,643,000 |
|
Deposits |
|
|
1,430,000 |
|
|
|
2,795,000 |
|
|
|
|
|
|
|
|
|
|
$ |
8,809,000 |
|
|
$ |
9,403,000 |
|
|
|
|
|
|
|
|
Deferred Charges, Net
Deferred charges at December 31, 2009 and 2008 are net of accumulated amortization and are
comprised of the following:
52
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
Lease origination costs (i) |
|
$ |
17,696,000 |
|
|
$ |
16,945,000 |
|
Financing costs (ii) |
|
|
16,833,000 |
|
|
|
10,772,000 |
|
Other |
|
|
2,213,000 |
|
|
|
2,622,000 |
|
|
|
|
|
|
|
|
|
|
$ |
36,742,000 |
|
|
$ |
30,339,000 |
|
|
|
|
|
|
|
|
|
|
|
(i) |
|
Lease origination costs include the amortized balance of intangible lease
assets resulting from purchase accounting allocations of $9,992,000 and
$11,397,000, respectively. |
|
(ii) |
|
Financing costs are incurred in connection with the Companys credit facilities and other
long-term debt. |
Deferred charges are amortized over the terms of the related agreements. Amortization
expense related to deferred charges (including amortization of deferred financing costs included in
non-operating income and expense) amounted to $7.3 million, $5.4 million and $4.2 million for 2009,
2008 and 2007, respectively. The unamortized balances of deferred lease origination costs and
deferred financing costs are net of accumulated amortization of $13.8 million and $12.3 million,
respectively, and will be charged to future operations as follows (lease origination costs through
2033, and financing costs through 2029):
|
|
|
|
|
|
|
|
|
|
|
Lease |
|
|
|
|
|
|
origination |
|
|
Financing |
|
|
|
costs |
|
|
costs |
|
Non-amortizing (i) |
|
$ |
397,000 |
|
|
$ |
174,000 |
|
2010 |
|
|
2,590,000 |
|
|
|
5,265,000 |
|
2011 |
|
|
2,257,000 |
|
|
|
5,044,000 |
|
2012 |
|
|
1,987,000 |
|
|
|
4,155,000 |
|
2013 |
|
|
1,747,000 |
|
|
|
917,000 |
|
2014 |
|
|
1,431,000 |
|
|
|
497,000 |
|
Thereafter |
|
|
7,287,000 |
|
|
|
781,000 |
|
|
|
|
|
|
|
|
|
|
$ |
17,696,000 |
|
|
$ |
16,833,000 |
|
|
|
|
|
|
|
|
|
|
|
(i) |
|
Represents (a) lease origination costs applicable to leases with commencement dates beginning
after December 31, 2009 and (b) financing costs applicable to commitment fees/deposits to
mortgage loans after December 31, 2009. |
Income Taxes
The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as
amended (the Code). A REIT will generally not be subject to federal income taxation
on that portion of its income that qualifies as REIT taxable income, to the extent that it
distributes at least 90% of such REIT taxable income to its shareholders and complies with
53
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
certain
other requirements. As of December 31, 2009, the Company was in compliance with all REIT
requirements.
The Company follows a two-step approach for evaluating uncertain tax positions. Recognition
(step one) occurs when an enterprise concludes that a tax position, based solely on its technical
merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines
the amount of benefit that more-likely-than-not will be realized upon settlement. Derecognition of
a tax position that was previously recognized would occur when a company subsequently determines
that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use
of a valuation allowance as a substitute for derecognition of tax positions is prohibited. The
Company has not identified any uncertain tax positions requiring accrual.
Derivative Financial Instruments
The Company occasionally utilizes derivative financial instruments, principally interest rate
swaps, to manage its exposure to fluctuations in interest rates. The Company has established
policies and procedures for risk assessment, and the approval, reporting and monitoring of
derivative financial instrument activities. Derivative financial instruments must be effective in
reducing the Companys interest rate risk exposure in order to qualify for hedge accounting. When
the terms of an underlying transaction are modified, or when the underlying hedged item ceases to
exist, all changes in the fair value of the instrument are marked-to-market with changes in value
included in net income for each period until the derivative instrument matures or is settled. Any
derivative instrument used for risk management that does not meet the hedging criteria is
marked-to-market with the changes in value included in net income. The Company has not entered
into, and does not plan to enter into, derivative financial instruments for trading or speculative
purposes. Additionally, the Company has a policy of entering into derivative contracts only with
major financial institutions. As of December 31, 2009, the Company believes it has no significant
risk associated with non-performance of the financial institutions which are the counterparties to
its derivative contracts. Additionally, based on the rates in effect as of December 31, 2009, if a
counterparty were to default, the Company would receive a net interest benefit. At December 31,
2009, the Company had approximately $28.9 million of mortgage loans payable and $23.9 million of
secured revolving stabilized property credit facility subject to interest rate swaps which
converted LIBOR-based variable rates to fixed annual rates ranging from 5.2% to 6.8% per annum. At
that date, the Company had accrued liabilities (included in accounts payable and accrued expenses
on the consolidated balance sheet) for (i) $2.8 million relating to the fair value of interest rate
swaps applicable to existing mortgage loans payable of $28.9 million and secured revolving
stabilized property credit facility of $23.9 million, and (ii) $3.1 million relating to an interest
rate swap applicable to anticipated permanent financing of $28.0 million for its development joint
venture project in Stroudsburg, Pennsylvania, bearing an effective date of June 1, 2010, a
termination date of June 1, 2020, and a fixed rate of 5.56%. Charges and/or credits relating to the
changes in fair values of such interest
54
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
rate swaps are made to accumulated other comprehensive
(loss) income, noncontrolling interests (minority interests in consolidated joint ventures and
limited partners interest), or operations
(included in interest expense), as appropriate. Currently, all but one of the Companys
derivative instruments are designated as effective hedging instruments.
The following is a summary of the derivative financial instruments held by the Company at
December 31, 2009 and 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional values |
|
|
|
|
Balance |
|
Fair value |
|
Designation/ |
|
|
|
|
|
|
|
December 31, |
|
|
Expiration |
|
sheet |
|
December 31, |
|
Cash flow |
|
Derivative |
|
Count |
|
|
2009 |
|
|
2008 |
|
|
dates |
|
location |
|
2009 |
|
|
2008 |
|
Non-qualifying (1) |
|
Interest |
|
|
1 |
|
|
$ |
23,891,000 |
|
|
$ |
|
|
|
2011 |
|
Accounts payable and |
|
$ |
1,297,000 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying (1) |
|
rate swaps |
|
|
8 |
|
|
$ |
56,925,000 |
|
|
$ |
61,796,000 |
|
|
2010 - 2020 |
|
accrued expenses |
|
$ |
4,655,000 |
|
|
$ |
10,590,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The notional values and fair values for December 31, 2008 includes all nine of the
Companys interest rate swaps as qualifying. |
These interest rate swaps are used to hedge the variable cash flows associated with existing
variable-rate debt. Amounts reported in accumulated other comprehensive loss related to derivatives
will be reclassified to interest expense as interest payments are made on the Companys
variable-rate debt and totaled approximately $1.6 million and $0.4 million for the years ended
December 31, 2009 and 2008, respectively.
The following presents the effect of the Companys derivative financial instruments on the
consolidated statements of operations and the consolidated statements of equity for 2009, 2008 and
2007, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of gain (loss) recognized in other |
|
|
|
|
|
comprehensive (loss) income (effective portion) |
|
Designation/ |
|
|
|
Years ended December 31, |
|
Cash flow |
|
Derivative |
|
2009 |
|
|
2008 |
|
|
2007 |
|
Non-qualifying |
|
Interest rate |
|
$ |
106,000 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying |
|
swaps |
|
$ |
4,237,000 |
|
|
$ |
(7,785,000 |
) |
|
$ |
(284,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of gain (loss) recognized in interest expense |
|
|
|
|
|
(ineffectve portion) |
|
Non-qualifying |
|
Interest rate |
|
$ |
107,000 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying |
|
swaps |
|
$ |
67,000 |
|
|
$ |
(223,000 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Earnings/Dividends Per Share
Basic earnings per share (EPS) is computed by dividing net income attributable to the
Companys common shareholders by the weighted average number of common shares outstanding for the
period (including restricted shares and shares held by Rabbi Trusts). Fully-diluted EPS reflects
the potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into shares of common stock. The calculation of the
number of such additional shares was anti-dilutive for 2009 and 2008; such additional shares
amounted to 4,000 for 2007. Accordingly, fully-dilutive EPS was the same as basic EPS for those
years.
Dividends to common shareholders in 2009, 2008 and 2007 were $9,742,000 ($0.2025 per share), $40,027,000 ($0.90 per share), and $39,775,000 ($0.90 per share), respectively.
Stock-Based Compensation
The Companys 2004 Stock Incentive Plan (the Incentive Plan) establishes the procedures for
the granting of incentive stock options, stock appreciation rights, restricted shares, performance
units and performance shares. The maximum number of shares of the Companys common stock that may
be issued pursuant to the Incentive Plan is 2,750,000, and the maximum number of shares that may be
granted to a participant in any calendar year may not exceed 250,000. Substantially all grants
issued pursuant to the Incentive Plan are restricted stock grants which specify vesting (i) upon
the third anniversary of the date of grant for time-based grants, or (ii) upon the completion of a
designated period of performance for performance-based grants. Time-based grants are valued
according to the market price for the Companys common stock at the date of grant. For
performance-based grants, the Company generally engages an independent appraisal company to
determine the value of the shares at the date of grant, taking into account the underlying
contingency risks associated with the performance criteria.
In October 2006, the Company issued 35,000 shares of common stock as performance-based grants,
which were to vest if the total annual return on an investment in the Companys common stock
(TSR) over the three-year period ending December 31, 2008 was equal to, or greater than, an
average of 8% per year. The independent appraisal determined the value of the performance-based
shares to be $12.07 per share, compared to a market price at the date of grant of $16.49 per share.
With respect to the awards granted in 2006, the Company did not attain an average 8% TSR for such
three-year period as provided by the Incentive Plan for vesting. However, the Compensation
Committee of the Companys Board of Directors took into account (1) that factors outside of the
Companys control resulted in the failure to achieve the requisite return, and (2) that the Company
had outperformed its peer group during such three-year period. Accordingly, the Committee believed
that it was appropriate to vest some of the awards and allowed 40% of the awards, or an aggregate
of 14,000 shares, to vest. The decision had no impact on the Companys results of operations.
In February 2007, the Company issued 37,000 shares of common stock as performance-based
grants, which were to vest if the total annual return on an investment in the Companys
56
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
common
stock over the three-year period ending December 31, 2009 was equal to, or greater than, an average
of 8% per year. The independent appraisal determined the value of the performance-based shares to
be $10.09 per share, compared to a market price at the date of grant of $16.45 per share. With
respect to the awards granted in 2007, the Company did not attain an average 8% TSR for such
three-year period as provided by the Incentive Plan for vesting and, accordingly, none of these
shares vested.
In January 2008 and June 2008, the Company issued 53,000 shares and 7,000 shares of common
stock, respectively, as performance-based grants, which will vest if the total annual return on an
investment in the Companys common stock over the three-year period ending
December 31, 2010 is equal to, or greater than, an average of 8% per year. The independent
appraisal determined the value of the January 2008 performance-based shares to be $6.05 per share,
compared to a market price at the date of grant of $10.07 per share; similar methodology determined
the value of the June 2008 performance-based shares to be $10.31 per share, compared to a market
price at the date of grant of $12.13 per share.
In January 2009, the Company issued 218,000 shares of common stock as performance-based
grants, which will vest if the total annual return on an investment in the Companys common stock
over the three-year period ending December 31, 2011 is equal to, or greater than, a blended measure
of (i) an average of 6% TSR per year on the Companys common stock, and (ii) the median TSR per
year of the Companys peer group. The independent appraisal determined the value of the
performance-based shares to be $5.96 per share, compared to a market price at the date of grant of
$7.02 per share.
The additional restricted shares issued during 2009, 2008 and 2007 were time-based grants, and
amounted to 397,000 shares, 187,000 shares and 149,000 shares, respectively. The value of all
grants is being amortized on a straight-line basis over the respective vesting periods
(irrespective of achievement of the performance grants) adjusted, as applicable, for fluctuations
in the market value of the Companys common stock. Those grants of restricted shares that are
transferred to Rabbi Trusts are classified as treasury stock on the Companys consolidated balance
sheet. The following table sets forth certain stock-based compensation information for 2009, 2008
and 2007, respectively:
57
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Restricted share grants |
|
|
615,000 |
|
|
|
247,000 |
|
|
|
186,000 |
|
Average per-share grant price |
|
$ |
4.95 |
|
|
$ |
9.39 |
|
|
$ |
14.44 |
|
Recorded as deferred compensation, net |
|
$ |
3,032,000 |
|
|
$ |
2,306,000 |
|
|
$ |
2,694,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization relating to stock-based compensation |
|
$ |
2,921,000 |
|
|
$ |
2,389,000 |
|
|
$ |
2,154,000 |
|
Adjustments to reflect changes in market price of
Companys common stock |
|
|
(488,000 |
) |
|
|
(1,290,000 |
) |
|
|
(848,000 |
) |
|
|
|
|
|
|
|
|
|
|
Total charged to operations |
|
$ |
2,433,000 |
|
|
$ |
1,099,000 |
|
|
$ |
1,306,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested, beginning of period |
|
|
508,000 |
|
|
|
380,000 |
|
|
|
203,000 |
|
Grants |
|
|
615,000 |
|
|
|
247,000 |
|
|
|
186,000 |
|
Vested during period |
|
|
(104,000 |
) |
|
|
(97,000 |
) |
|
|
(9,000 |
) |
Forfeitures/cancellations |
|
|
(39,000 |
) |
|
|
(22,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested, end of period |
|
|
980,000 |
|
|
|
508,000 |
|
|
|
380,000 |
|
|
|
|
|
|
|
|
|
|
|
Average value of non-vested shares (based on
grant price) |
|
$ |
7.54 |
|
|
$ |
12.27 |
|
|
$ |
14.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of shares vested during the
period (based on grant price) |
|
$ |
1,496,000 |
|
|
$ |
1,365,000 |
|
|
$ |
120,000 |
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2009, 1,547,000 shares remained available for grants pursuant to the
Incentive Plan, and $2,876,000 remained as deferred compensation, to be amortized over various
periods ending in October 2012.
During 2001, pursuant to the 1998 Stock Option Plan (the Option Plan), the Company granted
to the then directors options to purchase an aggregate of approximately 13,000 shares of common
stock at $10.50 per share, the market value of the Companys common stock on the date of the grant.
The options are fully exercisable and expire in 2011. In connection with the adoption of the
Incentive Plan, the Company agreed that it would not grant any more options under the Option Plan.
In connection with an acquisition of a shopping center in 2002, the Operating Partnership
issued warrants to purchase approximately 83,000 OP Units to a then minority interest partner in
the property. Such warrants have an exercise price of $13.50 per unit, subject to certain
anti-dilution adjustments, are fully vested, and expire in 2012.
In connection with the RioCan transactions (more fully described below), the Company issued to
RioCan warrants to purchase 1,428,570 shares of the Companys common stock, at an exercise price of
$7.00 per share, exercisable over a two-year period.
58
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
401(k) Retirement Plan
The Company has a 401(k) retirement plan (the Plan), which permits all eligible employees to
defer a portion of their compensation under the Code. Pursuant to the provisions of the Plan, the
Company may make discretionary contributions on behalf of eligible employees. The Company made
contributions to the Plan of $248,000, $243,000 and $219,000 in 2009, 2008 and 2007, respectively.
59
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Supplemental consolidated statement of cash flows information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
2009 |
|
2008 |
|
2007 |
Supplemental disclosure of cash activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
50,413,000 |
|
|
$ |
49,006,000 |
|
|
$ |
41,023,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Additions to deferred compensation plans |
|
|
3,032,000 |
|
|
|
2,306,000 |
|
|
|
2,694,000 |
|
Issuance of non-interest-bearing purchase money mortgage (a) |
|
|
|
|
|
|
(13,851,000 |
) |
|
|
|
|
Assumption of mortgage loans payable acquisitions |
|
|
(54,565,000 |
) |
|
|
(34,631,000 |
) |
|
|
(143,346,000 |
) |
Assumption of mortgage loans payable disposition |
|
|
9,932,000 |
|
|
|
|
|
|
|
|
|
Assumption of interest rate swap liabilities |
|
|
|
|
|
|
(2,288,000 |
) |
|
|
|
|
Issuance of warrants |
|
|
1,643,000 |
|
|
|
|
|
|
|
|
|
Issuance of OP Units |
|
|
|
|
|
|
|
|
|
|
(570,000 |
) |
Conversion of OP Units into common stock |
|
|
131,000 |
|
|
|
68,000 |
|
|
|
45,000 |
|
Adjustment of Mezz OP Units into common stock |
|
|
|
|
|
|
|
|
|
|
3,478,000 |
|
Purchase accounting allocations: |
|
|
|
|
|
|
|
|
|
|
|
|
Intangible lease assets |
|
|
7,057,000 |
|
|
|
10,301,000 |
|
|
|
34,781,000 |
|
Intangible lease liabilities |
|
|
(3,215,000 |
) |
|
|
(4,636,000 |
) |
|
|
(33,707,000 |
) |
Net valuation decrease in assumed mortgage loan
payable (b) |
|
|
1,649,000 |
|
|
|
143,000 |
|
|
|
191,000 |
|
Other non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accrued interest rate swap liabilities |
|
|
4,638,000 |
|
|
|
(8,206,000 |
) |
|
|
(286,000 |
) |
Accrued real estate improvement costs |
|
|
(7,868,000 |
) |
|
|
8,407,000 |
|
|
|
1,806,000 |
|
Accrued construction escrows |
|
|
(1,006,000 |
) |
|
|
(479,000 |
) |
|
|
1,024,000 |
|
Accrued financing costs and other |
|
|
(22,000 |
) |
|
|
(26,000 |
) |
|
|
|
|
Capitalization of deferred financing costs |
|
|
1,486,000 |
|
|
|
988,000 |
|
|
|
393,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deconsolidation of properties transferred to joint venture: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, net |
|
|
42,829,000 |
|
|
|
|
|
|
|
|
|
Other assets/liabilties, net |
|
|
1,277,000 |
|
|
|
|
|
|
|
|
|
Investment in and advances to unconsolidated joint venture |
|
|
8,610,000 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
A $14,575,000 non-interest-bearing mortgage was issued in connection with a purchase of
land, and was valued at a net amount of $13,851,000. This reflected a valuation decrease of
$724,000 to a market rate of 9.25% per annum |
|
(b) |
|
The net valuation decrease in an assumed mortgage loan payable resulted from adjusting the
contract rate of interest (4.9% per annum) to a market rate of interest (6.1% per annum). |
Fair Value Measurements
In September 2006, the accounting guidance relating to fair value measurements and disclosures
was updated. The updated guidance defines fair value, establishes a framework for measuring fair
value in accordance with GAAP, and expands disclosures about fair value measurements. The updated
guidance was effective on January 1, 2008 for financial assets, financial liabilities, and all
nonfinancial assets and liabilities that are recognized or disclosed at fair value in financial
statements on a recurring basis at least annually. The updated guidance was effective for all
other nonfinancial assets and liabilities on January 1, 2009, and its adoption did not have a
material effect on the Companys consolidated financial statements. These
60
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
standards did not materially affect how the Company determines fair value, but resulted in
certain additional disclosures.
The guidance establishes a fair value hierarchy that prioritizes observable and unobservable
inputs used to measure fair value into three levels:
|
|
|
Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets. |
|
|
|
|
Level 2 Inputs to the valuation methodology include quoted prices for similar
assets and liabilities in active markets, and inputs that are observable for the asset
or liability, either directly or indirectly, for substantially the full term of the
financial instrument. |
|
|
|
|
Level 3 Inputs to the valuation methodology are unobservable and significant to
the fair value measurement. |
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority
to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible while also considering counterparty credit risk in the assessment of fair value. Financial
assets and liabilities measured at fair value in the consolidated financial statements consist of
interest rate swaps. The fair values of interest rate swaps are determined using widely accepted
valuation techniques, including discounted cash flow analysis, on the expected cash flows of each
derivative. The analysis reflects the contractual terms of the swaps, including the period to
maturity, and uses observable market-based inputs, including interest rate curves (significant
other observable inputs). The fair value calculation also includes an amount for risk of
non-performance using significant unobservable inputs such as estimates of current credit spreads
to evaluate the likelihood of default. The Company has concluded, as of December 31, 2009, that
the fair value associated with the significant unobservable inputs relating to the Companys risk
of non-performance was insignificant to the overall fair value of the interest rate swap agreements
and, as a result, the Company has determined that the relevant inputs for purposes of calculating
the fair value of the interest rate swap agreements, in their entirety, were based upon
significant other observable inputs. Nonfinancial assets and liabilities measured at fair value
in the consolidated financial statements consist of real estate to be transferred to a joint
venture and real estate held for sale- discontinued operations.
The carrying amounts of cash and cash equivalents, restricted cash, rents and other
receivables, other assets, accounts payable and accrued expenses approximate fair value. The
valuation of the liability for the Companys interest rate swaps ($5.9 million at December 31,
2009), which is measured on a recurring basis, was determined to be a Level 2 within the valuation
hierarchy, and was based on independent values provided by financial institutions. The valuation of
the assets for the Companys real estate to be transferred to a joint venture and real estate held
for sale discontinued operations ($139.7 million and $21.4 million, respectively, at December 31,
2009), which is measured on a nonrecurring basis, have been determined to be a
61
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Level 2 within the valuation hierarchy, and were based on the respective contracts of transfer
and/or sale.
The fair value of the Companys fixed rate mortgage loans was estimated using significant
other observable inputs such as available market information and discounted cash flows analyses
based on borrowing rates the Company believes it could obtain with similar terms and maturities.
As of December 31, 2009 and 2008, the aggregate fair values of the Companys fixed rate mortgage
loans were approximately $579.2 million and $513.3 million, respectively; the carrying values of
such loans were $606.1 million and $555.6 million, respectively, at those dates.
Recently-Issued Accounting Pronouncements
In January 2009, the Company adopted the updated accounting guidance related to business
combinations, which (i) establishes the acquisition-date fair value as the measurement objective
for all assets acquired, liabilities assumed, and any contingent consideration, (ii) requires
expensing of most transaction costs that were previously capitalized, and (iii) requires the
acquiror to disclose the information needed to evaluate and understand the nature and financial
effect of the business combination to investors and other users. The principal impact of the
adoption of this guidance on the Companys financial statements, which is being applied
prospectively, is that the Company has expensed most transaction costs relating to its acquisition
activities ($1,273,000 for the year ended December 31, 2009 of which the noncontrolling interests
share was $764,000).
In January 2009, the Company adopted the updated accounting guidance related to noncontrolling
interests in consolidated financial statements, which clarifies that a noncontrolling interest in a
subsidiary (minority interests or certain limited partners interest, in the case of the Company),
subject to the classification and measurement of redeemable securities, is an ownership interest in
a consolidated entity which should be reported as equity in the parent companys consolidated
financial statements. The updated guidance requires a reconciliation of the beginning and ending
balances of equity attributable to noncontrolling interests and disclosure, on the face of the
consolidated income statement, of those amounts of consolidated net income attributable to the
noncontrolling interests, eliminating the past practice of reporting these amounts as an adjustment
in arriving at consolidated net income. The updated guidance is to be applied prospectively as of
January 1, 2009, but requires retroactive application of the presentation and disclosure
requirements for all periods presented, and early adoption was not permitted. The Company has
reclassified, for all periods presented, the balances related to minority interests in consolidated
joint ventures and limited partners interest in the Operating Partnership into the consolidated
equity accounts, as appropriate (certain non-controlling interests of the Company will continue to
be classified in the mezzanine section of the balance sheet as such Mezz OP Units do not meet the
requirements for equity classification, since certain of the holders of OP Units have registration
rights that provide such holders with the right to
62
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
demand registration under the federal securities law of the common stock of the Company issuable
upon conversion of such OP Units). The Company will adjust the carrying value of the Mezz OP Units
each period to equal the greater of its historical carrying value or its redemption value. Through
December 31, 2009, there have been no cumulative net adjustments recorded to the carrying amounts
of the Mezz OP Units.
In January 2009, the Company adopted the updated accounting guidance related to disclosures
about derivative instruments and hedging activities, which is intended to improve financial
standards for derivative instruments and hedging activities by requiring enhanced disclosures to
enable investors to better understand their effects on an entitys financial position, financial
performance, and cash flows. Among other requirements, entities are required to provide enhanced
disclosures about (1) how and why an entity uses derivative instruments, (2) the accounting
treatment for derivative instruments and related hedged items, and (3) how derivative instruments
and related hedged items affect an entitys financial position, financial performance and cash
flows. Other than the enhanced disclosure requirements, the adoption of this guidance did not have
a material effect on the Companys consolidated financial statements.
In January 2009, the Company adopted the updated accounting guidance related to determining
whether instruments granted in share-based payment transactions are participating securities, which
states that unvested share-based payment awards that contain nonforfeitable rights to dividends or
dividend equivalents (whether paid or unpaid) are participating securities and shall be included in
the computation of earnings per share. The adoption of this guidance had no impact on the Companys
consolidated financial statements as unvested restricted stock awards are included in the
computations of both basic and diluted earnings per share.
In January 2009, the Company adopted the updated guidance on initial recognition and
measurement, subsequent measurement and accounting, and disclosure of assets and liabilities
arising from contingencies in a business combination. The adoption of this guidance did not have a
material effect on the Companys consolidated financial statements.
In April 2009, the Company adopted the updated accounting guidance related to interim
disclosures about fair value of financial instruments (the prior guidance had required annual
disclosures of the fair value of all instruments, recognized or unrecognized, except for those
specifically excluded, when practical to do so). The updated guidance requires a publicly-traded
company to include disclosures about the fair value of its financial instruments whenever it issues
summarized financial information for interim reporting periods. The updated guidance must be
applied prospectively and does not require disclosures for earlier periods presented for
comparative periods at initial adoption. Other than the enhanced disclosure requirements, the
adoption of this guidance did not have a material effect on the Companys consolidated financial
statements.
63
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
In April 2009, the Company adopted additional updated accounting guidance relating to fair
value measurements and disclosures, which clarifies the guidance for fair value measurements when
the volume and level of activity for the asset or liability have significantly decreased, and
includes guidance on identifying circumstances that indicate a transaction is not orderly. The
adoption of this guidance did not have a material effect on the Companys consolidated financial
statements.
In June 2009, the FASB issued updated accounting guidance for determining whether an entity
is a VIE, and requires the performance of a qualitative rather than a quantitative analysis to
determine the primary beneficiary of a VIE. The updated guidance requires an entity to consolidate
a VIE if it has (i) the power to direct the activities that most significantly impact the entitys
economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive
benefits from the VIE that could be significant to the VIE. This guidance is effective for fiscal
years beginning after November 15, 2009 and early adoption is not permitted. The Company will adopt
the updated guidance as of January 1, 2010 and does not believe the adoption of this guidance will
have a material effect on the consolidated financial statements.
In January 2010, the FASB issued updated guidance on fair value measurements and disclosures,
which requires disclosure of details of significant asset or liability transfers in and out of
Level 1 and Level 2 measurements within the fair value hierarchy and inclusion of gross purchases,
sales, issuances, and settlements in the rollforward of assets and liabilities valued using Level 3
inputs within the fair value hierarchy. The guidance also clarifies and expands existing disclosure
requirements related to the disaggregation of fair value disclosures and inputs used in arriving at
fair values for assets and liabilities using Level 2 and Level 3 inputs within the fair value
hierarchy. This guidance is effective for interim and annual reporting periods beginning after
December 15, 2009, except for the gross presentation of the Level 3 rollforward, which is required
for annual reporting periods beginning after December 15, 2010, and for the respective interim
periods within those years. The Company does not expect the adoption of this guidance will have a
material effect on the consolidated financial statements.
In January 2010, the FASB issued updated guidance on accounting for distributions to
shareholders with components of stock and cash, which clarifies the treatment of the stock portion
of a distribution to shareholders that allows the election to receive cash or stock. This guidance
is effective for interim and annual reporting periods beginning after December 15, 2009. The
Company does not expect the adoption of this guidance will have a material effect on the
consolidated financial statements.
64
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 5. Real Estate
Real estate at December 31, 2009 and 2008 is comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
Cost |
|
|
|
|
|
|
|
|
Balance, beginning of year (a) |
|
$ |
1,536,590,000 |
|
|
$ |
1,384,187,000 |
|
Properties acquired |
|
|
73,152,000 |
|
|
|
98,337,000 |
|
Improvements and betterments |
|
|
69,086,000 |
|
|
|
56,373,000 |
|
Write-off of fully-depreciated assets |
|
|
(6,147,000 |
) |
|
|
(2,307,000 |
) |
|
|
|
|
|
|
|
Balance, end of the year |
|
$ |
1,672,681,000 |
|
|
$ |
1,536,590,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
Balance, beginning of the year (a) |
|
|
(123,807,000 |
) |
|
$ |
(86,326,000 |
) |
Depreciation expense |
|
|
(46,219,000 |
) |
|
|
(39,788,000 |
) |
Write-off of fully-depreciated assets |
|
|
6,147,000 |
|
|
|
2,307,000 |
|
|
|
|
|
|
|
|
Balance, end of the year |
|
$ |
(163,879,000 |
) |
|
$ |
(123,807,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
$ |
1,508,802,000 |
|
|
$ |
1,412,783,000 |
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Restated to reflect (i) the reclassifications of properties transferred or to be transferred to
the RioCan joint venture and properties treated as discontinued operations, and (ii) the
retroactive valuation adjustments relating to lease renewal options. |
Real estate net book value at December 31, 2009 and 2008 included projects under
development and land held for expansion and/or future development of $128.6 million and $132.8
million, respectively.
Wholly-owned properties
During 2008, the Company acquired four shopping and convenience centers (including the
remaining portion of a shopping center in addition to the supermarket anchor store it had acquired
in 2005), purchased the joint venture minority interests in four properties, and acquired land for
development, expansion and/or future development.
In April 2008, Value City, the only tenant at the Value City Shopping center, vacated its
premises at the end of the lease term. In keeping with the Companys redevelopment plans for the
property, the vacant building was subsequently razed and the Company took a one-time depreciation
charge of $1.9 million. The property is no longer included as one of the Companys operating
properties. During the fourth quarter of 2008, the Company determined not to proceed with the
development of a land parcel in Ephrata, Pennsylvania, and the land was reclassified to real
estate held for sale in all periods presented.
65
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
The 2008 property acquisitions are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
Acquisition |
|
Property |
|
properties |
|
|
cost |
|
Operating properties (i) |
|
|
3 |
|
|
$ |
43,215,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land for projects under development,
expansion and/or future development |
|
|
6 |
|
|
|
55,122,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
98,337,000 |
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
|
The three operating properties acquired in 2008 were acquired individually and not
as part of a portfolio and had acquisition costs of less than $20.0 million each. |
Joint Venture Activities
2009 Transactions
PCP. On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New
London Mall in New London, Connecticut, a supermarket-anchored shopping center, for a purchase
price of approximately $40.7 million. The purchase price included the assumption of an existing
$27.4 million first mortgage bearing interest at 4.9% per annum and maturing in 2015. The total
joint venture partnership contribution was approximately $14.0 million, of which the Companys 40%
share ($5.6 million) was funded from its secured revolving stabilized property credit facility. The
Company is the managing partner of the venture and receives certain acquisition, property
management, construction management and leasing fees. In addition, the Company will be entitled to
a promote fee structure, pursuant to which its profits participation would be increased to 44% if
the venture reaches certain income targets. The Companys joint venture partners are affiliates of
Prime Commercial Properties PLC (PCP), a London-based real estate/development company.
On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned
joint venture acquired San Souci Plaza in California, Maryland, a supermarket-anchored shopping
center, for a purchase price of approximately $31.8 million. The purchase price included the
assumption of an existing $27.2 million first mortgage bearing interest at 6.2% per annum and
maturing in 2016. The total joint venture partnership contribution was approximately $5.8 million,
of which the Companys 40% share ($2.3 million) was funded from its secured revolving stabilized
property credit facility. The Company is the managing partner of the venture and receives certain
acquisition, property management, construction management and leasing fees. In addition, the
Company will be entitled to a promote fee structure, pursuant to which its profits participation
would be increased to 44% if the venture reaches certain income targets.
66
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
RioCan. On October 26, 2009, the Company entered into definitive agreements with RioCan Real
Estate Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust
listed on the Toronto Stock Exchange (RioCan), pursuant to which the Company (1) sold to RioCan
approximately 6,667,000 shares of the Companys common stock at $6.00 per share in a private
placement (RioCan agreeing that it would not sell any of such shares for a period of one year), (2)
issued to RioCan warrants to purchase approximately 1,429,000 shares of the Companys common stock
at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000),
(3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of
seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire
additional primarily supermarket-anchored properties in the Companys primary market areas during
the next two years, in the same joint venture format, and (4) entered into a standstill agreement
with respect to increases in RioCans ownership of the Companys common stock for a three-year
period. In addition, subject to certain exceptions, the Company has agreed that it will not issue
any new shares of common stock unless RioCan is offered the right to purchase that additional
number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In
connection with the formation of the joint venture, the Company recorded an impairment charge of
$23.6 million relating to the seven properties transferred or to be transferred to the joint
venture.
The private placement investment by RioCan and the issuance of the warrants by the Company
were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in
Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were
transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of
approximately $33 million (in connection with the closing, a repayment of $25.9 million was
required under the Companys secured revolving development property credit facility). The remaining
five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of
the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and
Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in
January and February 2010, resulting in net proceeds to the Company of approximately $16 million.
The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania,
Shaws Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport,
Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the
Company of an additional approximately $16 million. In connection with the transfers of the seven
properties to the joint venture and the private placement transactions, the Company will have
received aggregate net proceeds of approximately $105 million, after estimated closing and
transaction costs, which have been or will be used to repay/reduce the outstanding balances under
the Companys secured revolving credit facilities. In connection with these transactions, the
Company incurred costs and fees of approximately $6.0 million, including fees to the Companys
investment advisor ($3.5 million), the value assigned to the warrants (approximately $1.6 million),
and other costs and expenses aggregating $0.9 million. In addition, the Company agreed to pay to
its investment advisor a fee of 1% of the gross cost of future acquisitions made by the joint
venture for a two-
67
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
year period, up to a maximum of $3.0 million. At December 31, 2009, the Company was owed
approximately $2.3 million ($1.6 million related to contingent consideration) relating to
post-closing adjustments applicable to the two properties transferred to the joint venture prior to
that date, which is included in rents and other receivables, net on the consolidated balance sheet.
2008 Transactions
On January 3, 2008, the Company entered into a joint venture agreement for the
redevelopment/retenanting of its existing shopping center located in Bloomsburg, Pennsylvania,
including adjacent land parcels comprising an additional 46 acres. The required equity contribution
from the Companys joint venture partner was $4.0 million for a 25% interest in the property. The
Company used the funds to reduce the outstanding balance on its secured revolving stabilized
property credit facility.
On March 7, 2008, a 60%-owned development joint venture of the Company acquired land in
Pottsgrove, Pennsylvania, for a shopping center development project. The $28.4 million purchase
price, including closing costs, was funded by the issuance of a non-interest-bearing purchase money
mortgage of $14.6 million, which was repaid when property-specific construction financing was
concluded in September 2008. The balance of the purchase price was funded by the Companys capital
contribution to the joint venture which was funded from its secured revolving stabilized property
credit facility. As of December 31, 2008, the Companys equity capital requirement of $28.7 million
had been met, funded from its secured revolving stabilized property credit facility. The remaining
costs of development and construction of this project are being funded by the property-specific
construction financing.
On March 18, 2008, the Company acquired the remaining 70% interests in Fairview Plaza, Halifax
Plaza and Newport Plaza, and the remaining 75% interest in Loyal Plaza, previously owned in joint
venture with the same partner, and consolidated for financial reporting purposes, for a purchase
price of approximately $17.5 million, which was funded from its secured revolving stabilized
property credit facility. The total outstanding mortgage loans payable on the properties were
approximately $27.3 million at the time. The excess of the purchase price and closing costs over
the carrying value of the minority interest partners accounts (approximately $8.4 million) was
allocated to the Companys intangible asset and liability accounts.
On April 23, 2008 the Company entered into a joint venture for the construction and
development of a shopping center located in Hamilton Township (Stroudsburg), Pennsylvania. The
Company is committed to paying a development fee of $500,000 to the joint venture partner, and has
provided approximately $40.5 million to date of equity capital, with a preferred rate of return of
9.25% per annum on its investment, and has a 60% profits interest in the joint venture. The
required equity contribution from the Companys joint venture partner was $400,000. As of December
31, 2008, the Companys joint venture equity requirement had been funded from its
68
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
secured revolving stabilized property credit facility. Prior to the formation of the venture,
the partner had previously acquired the land parcels at a cost of approximately $15.4 million,
incurring mortgage indebtedness of approximately $10.8 million (including purchase money mortgages
payable to the seller of $3.9 million). In addition, the partner had entered into an interest rate
swap agreement with respect to its existing construction/development loan facility, as well as a
future swap agreement applicable to anticipated permanent financing of $28.0 million. The joint
venture is deemed to be a variable interest entity with the Company as the primary income or loss
beneficiary; accordingly, the Company has consolidated the property. The minority interest partners
in the Pottsgrove and Stroudsburg joint ventures are principally the same individuals.
On September 12, 2008, the Company entered into a joint venture for the construction and
development of a shopping center located in Limerick, Pennsylvania. The Company is committed to
paying a development fee of $333,000 to the joint venture partner, and has provided approximately
$3.3 million to date of equity capital, with a preferred rate of return of 9.5% per annum on its
investment, and has a 60% profits interest in the joint venture. The required equity contribution
from the Companys joint venture partner is $217,000. Financing for the balance of the project
costs is being funded from the Companys secured revolving development property credit facility.
The joint venture purchased the land parcels on October 27, 2008 and, in addition, reimbursed the
seller for certain construction-in-progress costs incurred to date, for a total acquisition cost of
approximately $8.4 million. The joint venture is deemed to be a variable interest entity with the
Company as the primary income or loss beneficiary; accordingly, the Company will consolidate the
property.
In February 2008, the Company and Homburg Invest Inc., a publicly-traded Canadian corporation
listed on the Toronto and Euronext Amsterdam Stock Exchanges (Homburg), entered into an agreement
in principle to form a group of joint ventures into which the Company would contribute 32 of its
properties (mostly drug store-anchored convenience centers and including all 27 of the Companys
Ohio properties). Richard Homburg, a director of the Company, is Chairman and CEO of Homburg. On
November 3, 2008, the Company announced that it had been advised by Homburg that Homburg would not
proceed with a proposed joint venture for 32 properties, as previously contemplated and disclosed
by the Company and the Company expensed all costs it had incurred of approximately $203,000. While
Homburg had substantially completed physical, financial and legal due diligence with respect to the
properties, it cited the unprecedented current events that have taken place in the U.S. capital
markets and the virtual collapse of the world capital markets as the basis for its decision.
Homburg noted that it and its affiliates rely on Canadian, U.S. and European capital and retail
markets for equity as well as short-term and long-term funding sources. The Company had previously
entered into a nine property 20% owned joint venture with Homburg during 2007.
69
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Real Estate Pledged
At December 31, 2009 a substantial portion of the Companys real estate was pledged as
collateral for mortgage loans payable and the revolving credit facilities, as follows:
|
|
|
|
|
|
|
Net book |
|
Description |
|
value |
|
Collateral for mortgage loans payable |
|
$ |
1,015,739,000 |
|
Collateral for revolving credit facilities |
|
|
467,347,000 |
|
Unencumbered properties |
|
|
25,716,000 |
|
|
|
|
|
Total |
|
$ |
1,508,802,000 |
|
|
|
|
|
Pro Forma Financial Information (unaudited)
During the period January 1, 2008 through December 31, 2009, the Company acquired six shopping
and convenience centers aggregating approximately 790,000 square foot of GLA, purchased the joint
venture minority interests in four properties, and acquired approximately 181.7 acres of land for
development, expansion and/or future development, for a total cost of approximately $189.0 million.
In addition, the Company placed into service six ground-up developments having an aggregate cost of
approximately $194.3 million. The Company sold or held for sale 11 primarily drug store/convenience
centers aggregating approximately 416,000 square foot of GLA for an aggregate sales price of
approximately $33.3 million. The following table summarizes, on an unaudited pro forma basis, the
combined results of operations of the Company for 2009 and 2008, respectively, as if all of these
property acquisitions and sales were completed as of January 1, 2008. This unaudited pro forma
information does not purport to represent what the actual results of operations of the Company
would have been had all the above occurred as of January 1, 2008, nor does it purport to predict
the results of operations for future periods.
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
2009 |
|
2008 |
Revenues |
|
$ |
180,886,000 |
|
|
$ |
179,493,000 |
|
Net (loss) income attributable to common shareholders |
|
$ |
(22,399,000 |
) |
|
$ |
9,328,000 |
|
|
|
|
|
|
|
|
|
|
Per common share |
|
$ |
(0.48 |
) |
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
46,234,000 |
|
|
|
44,475,000 |
|
Note 6. Rentals Under Operating Leases
Annual future base rents due to be received under non-cancelable operating leases in effect at
December 31, 2009 are approximately as follows (excluding those base rents applicable
70
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
to properties transferred or to be transferred to the RioCan joint venture and properties treated
as discontinued operations):
|
|
|
|
|
2010 |
|
$ |
114,566,000 |
|
2011 |
|
|
107,227,000 |
|
2012 |
|
|
99,100,000 |
|
2013 |
|
|
92,248,000 |
|
2014 |
|
|
81,943,000 |
|
Thereafter |
|
|
503,237,000 |
|
|
|
|
|
|
|
$ |
998,321,000 |
|
|
|
|
|
Total future minimum rents do not include expense recoveries for real estate taxes and
operating costs, or percentage rents based upon tenants sales volume. Such other rental amounted
to approximately $35.9 million, $33.4 million and $30.0 million for 2009, 2008 and 2007,
respectively. In addition, such amounts do not include amortization of intangible lease
liabilities.
71
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 7. Mortgage Loans Payable and Secured Revolving Credit Facilities
Secured debt is comprised of the following at December 31, 2009 and 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009 |
|
|
December 31, 2008 |
|
|
|
|
|
|
|
Interest rates |
|
|
|
|
|
|
Interest rates |
|
|
|
Balance |
|
|
Weighted |
|
|
|
|
|
|
Balance |
|
|
Weighted |
|
|
|
|
Description |
|
outstanding |
|
|
average |
|
|
Range |
|
|
outstanding |
|
|
average |
|
|
Range |
|
Fixed-rate mortgages (a) |
|
$ |
606,108,000 |
|
|
|
5.8 |
% |
|
|
5.0% - 8.5 |
% |
|
$ |
555,638,000 |
|
|
|
5.8 |
% |
|
|
5.0% - 8.5 |
% |
Variable-rate mortgages |
|
|
82,181,000 |
|
|
|
3.4 |
% |
|
|
2.5% - 5.9 |
% |
|
|
53,302,000 |
|
|
|
4.4 |
% |
|
|
2.5% - 5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property-specific mortgages |
|
|
688,289,000 |
|
|
|
5.6 |
% |
|
|
|
|
|
|
608,940,000 |
|
|
|
5.7 |
% |
|
|
|
|
Stabilized property credit facility |
|
|
187,985,000 |
|
|
|
5.5 |
% |
|
|
|
|
|
|
250,190,000 |
|
|
|
2.7 |
% |
|
|
|
|
Development property credit facility |
|
|
69,700,000 |
|
|
|
2.5 |
% |
|
|
|
|
|
|
54,300,000 |
|
|
|
3.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
945,974,000 |
|
|
|
5.3 |
% |
|
|
|
|
|
$ |
913,430,000 |
|
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-rate mortgages related to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate transferred or to be transferred
to a joint venture |
|
$ |
94,018,000 |
|
|
|
5.8 |
% |
|
|
4.8% - 7.2 |
% |
|
$ |
77,307,000 |
|
|
|
5.6 |
% |
|
|
4.8% - 7.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for sale discontinued
operations |
|
$ |
12,455,000 |
|
|
|
5.5 |
% |
|
|
5.2% - 5.7 |
% |
|
$ |
22,736,000 |
|
|
|
5.5 |
% |
|
|
5.2% - 5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Restated to reflect the reclassifications of properties transferred or to be transferred
to the RioCan joint venture and properties treated as discontinued operations. |
Mortgage loans payable
Mortgage loan activity for 2009 and 2008 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
|
2009 |
|
|
2008 |
|
Balance, beginning of year (a) |
|
$ |
608,940,000 |
|
|
$ |
567,472,000 |
|
New mortgage borrowings |
|
|
43,950,000 |
|
|
|
106,738,000 |
|
Acquisition debt assumed (b) |
|
|
52,963,000 |
|
|
|
27,488,000 |
|
Repayments |
|
|
(17,564,000 |
) |
|
|
(92,758,000 |
) |
|
|
|
|
|
|
|
Balance, end of the year |
|
$ |
688,289,000 |
|
|
$ |
608,940,000 |
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Restated to reflect the reclassifications of properties transferred or to be transferred to
the RioCan joint venture and properties treated as discontinued operations. |
|
(b) |
|
Includes net reductions of $1.6 million and $0.1 million, respectively, relating to purchase
acounting allocations. |
During 2009, the Company assumed $53.0 million of fixed-rate mortgage loans payable in
connection with acquisitions, with interest rates of 6.1% and 6.2% per annum, with an average of
6.2% per annum. These principal amounts and rates of interest represent the fair values at the
respective dates of acquisition. The stated contract amounts were $27.4 million and $27.2 million
at the respective dates of acquisition, bearing interest at rates of 4.9% and 6.2% per annum, with
an average of 5.5% per annum.
72
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
During 2009, the Company refinanced one property that had collateralized the secured revolving
stabilized property credit facility. The new fixed-rate mortgage, aggregating $17.0 million, bears
interest at 6.8% per annum. The Company used the mortgage proceeds to reduce the balance
outstanding under the secured revolving stabilized property credit facility.
In addition, the Company has a $77.7 million construction facility with Manufacturers and
Traders Trust Company (as agent) and several other banks, pursuant to which the Company has
guaranteed and pledged its joint venture development project in Pottsgrove, Pennsylvania as
collateral for borrowings to be made thereunder. This facility will expire in September 2011,
subject to a one-year extension option. Borrowings outstanding under the facility aggregated $61.2
million at December 31, 2009, and such borrowings bore interest at an average rate of 2.5% per
annum. Borrowings under the facility bear interest at the Companys option at either LIBOR plus a
spread of 225 bps, or the agent banks prime rate. As of December 31, 2009, the Company was in
compliance with the financial covenants and financial statement ratios required by the terms of the
construction facility.
During 2008, the Company (i) borrowed an aggregate of $56,351,000 of new fixed-rate mortgage
loans, bearing interest at rates ranging from 5.4% to 9.25% per annum, with an average of 6.8% per
annum (these amounts include a $14,575,000 non-interest-bearing purchase money mortgage issued in
connection with the purchase of land, and recorded as $13,851,000 reflecting an imputed interest
rate of 9.25% per annum), and (ii) borrowed $50,387,000 in variable-rate mortgage loans bearing
interest at LIBOR plus spreads of 225 bps and 275 bps (the latter with a floor of 5.9%). In
addition, the Company assumed $24,488,000 of fixed-rate mortgage loans payable in connection with
acquisitions, with interest rates ranging from 5.0% to 8.5% per annum, with an average of 7.0% per
annum. These principal amounts and rates of interest represent the fair values at the respective
dates of acquisition. The stated contract amounts were $24,631,000 at the respective dates of
acquisition, bearing interest at rates ranging from 5.0% to 8.5% per annum, with an average of 6.9%
per annum. The Company also assumed $2,915,000 in variable-rate mortgage loans bearing interest at
LIBOR plus a spread of 190 bps.
Scheduled principal payments on mortgage loans payable and secured revolving credit facilities
at December 31, 2009, due on various dates from 2010 to 2029, are as follows:
|
|
|
|
|
2010 |
|
|
20,335,000 |
|
2011 |
|
|
160,662,000 |
|
2012 |
|
|
227,518,000 |
|
2013 |
|
|
64,091,000 |
|
2014 |
|
|
119,458,000 |
|
Thereafter |
|
|
353,910,000 |
|
|
|
|
|
|
|
$ |
945,974,000 |
|
|
|
|
|
73
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Secured Revolving Stabilized Property Credit Facility
In November 2009, the Company closed an amended and restated secured revolving stabilized
property credit facility with Bank of America, N.A., continuing as administrative agent, together
with three other lead lenders and other participating banks, with commitments from participants of
$265.0 million (increased to $285.0 million in January 2010). The facility, as amended, is
expandable to $400 million, subject to certain conditions, including acceptable collateral. The
principal terms of the new facility include (i) an availability based primarily on appraisals, with
a 67.5% advance rate, (ii) an interest rate based on LIBOR plus 350 bps, with a 200 bps LIBOR floor
(under the prior arrangement, the interest rate was based on LIBOR plus a bps spread depending upon
the Companys leverage ratio, as defined, which had been 135 bps prior to the new facility), (iii)
a leverage ratio limited to 67.5%, (iv) an unused portion fee of 50 bps (previously 25 bps), and
(v) a maturity date of January 31, 2012, subject to a one-year extension option. In connection with
the new facility, the Company paid participating lender fees and closing and transaction costs of
approximately $9.0 million.
Borrowings outstanding under the facility aggregated $188.0 million at December 31, 2009, such
borrowings bore interest at an average rate of 5.5% per annum, and the Company had pledged 34 of
its shopping center properties as collateral for such borrowings.
The secured revolving stabilized property credit facility has been and will be used to fund
acquisitions, certain development and redevelopment activities, capital expenditures, mortgage
repayments, dividend distributions, working capital and other general corporate purposes. The
facility is subject to customary financial covenants, including limits on leverage as discussed
above and distributions (limited to 95% of funds from operations, as defined), and other financial
statement ratios. Based on covenant measurements and collateral in place as of December 31, 2009,
the Company was permitted to draw up to approximately $204.3 million, of which approximately $16.3
million remained available as of that date. As a result of the application of the net proceeds
from, among other things, the transfers of two of the remaining properties to the RioCan joint
venture (more fully described above) and the sales of shares of the Companys common stock in
February 2010 (more fully described below), such availability will have increased to approximately
$104 million as of March 3, 2010. As of December 31, 2009, the Company was in compliance with the
financial covenants and financial statement ratios required by the terms of the secured revolving
stabilized property credit facility.
Secured Revolving Development Property Credit Facility
The Company has a $150 million secured revolving development property credit facility with
KeyBank, National Association (as agent) and several other banks, pursuant to which the Company has
pledged certain of its development projects and redevelopment properties as
collateral for borrowings thereunder. The facility, as amended, is expandable to $250 million,
subject to certain conditions, including acceptable collateral, and will expire in June 2011,
74
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
subject to a one-year extension option. Borrowings under the facility bear interest at the
Companys option at either LIBOR or the agent banks prime rate, plus a spread of 225 bps or 75
bps, respectively. Advances under the facility are calculated at the least of 70% of aggregate
project costs, 70% of as stabilized appraised values, or costs incurred in excess of a 30% equity
requirement on the part of the Company. The facility also requires an unused portion fee of 15 bps.
This facility has been and will be used to fund in part the Companys and certain joint ventures
development activities. In order to draw funds under this construction facility, the Company must
meet certain pre-leasing and other conditions. Borrowings outstanding under the facility aggregated
$69.7 million at December 31, 2009, and such borrowings bore interest at a rate of 2.5% per annum.
As of December 31, 2009, the Company was in compliance with the financial covenants and financial
statement ratios required by the terms of the secured revolving development property credit
facility.
Note 8. Preferred and Common Stock
The Companys 8-7/8% Series A Cumulative Redeemable Preferred Stock has no stated maturity, is
not convertible into any other security of the Company, and is redeemable at the Companys option
at a price of $25.00 per share, plus accrued and unpaid distributions.
In connection with the RioCan transactions (more fully described above), the Company (1) sold
approximately 6,667,000 shares of its common stock to RioCan at $6.00 per share in a private
placement, and realized net proceeds of $38.6 million, and (2) issued to RioCan warrants to
purchase approximately 1,429,000 shares of its common stock at an exercise price of $7.00 per
share, exercisable over a two-year period.
In September 2009, the Company entered into a Standby Equity Purchase Agreement (the SEPA
Agreement) with an investment company for sales of its shares of common stock aggregating up to
$30 million over a two-year commitment period; the commitment is expandable at the Companys option
to $45 million. Under the terms of the SEPA Agreement, the Company may sell, from time to time,
shares of its common stock at a discount to market of 1.75%. The amount of these daily sales is
generally limited to the lesser of 20% of the average daily trading volume or $1.0 million. In
connection with these sales transactions, the Company agreed to pay an investment advisor a 0.75%
placement agent fee.
In addition, the Company may require the investment company to advance from time to time up to
$5.0 million provided, however, that the Company may only request these larger advances
approximately once a month. With respect to such advances, the common stock sales are at a discount
to market of 2.75% and the placement agent fee is 1.25%. As the Company has a conditional
obligation to issue a variable number of shares of its common stock, advances are
initially recorded as a liability, and as shares are sold on a daily basis and the advance is
settled, such liability is reflected in equity.
75
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Through December 31, 2009, 422,000 shares had been sold pursuant to the SEPA Agreement, at an
average price of $5.93 per share, and the Company realized net proceeds, after allocation of other
issuance expenses, of approximately $2.3 million. At December 31, 2009, there was an unsettled
advance liability of $5.0 million, which is included in accounts payable and accrued liabilities on
the consolidated balance sheet. Such advance was settled in January and February 2010 by the sale
of 718,000 shares of the Companys common stock at an average selling price of $6.97 per share.
In January 2007, in connection with 7,500,000 shares of the Companys common stock that it
sold in December 2006, the underwriters exercised their over-allotment option to the extent of
275,000 shares, and the Company realized additional net proceeds of $4.1 million.
On September 12, 2007, stockholders approved amendments to the Companys Articles of
Incorporation increasing the number of authorized shares of common stock to 150,000,000 and the
number of authorized shares of preferred stock to 12,500,000.
Note 9. Commitments and Contingencies
With respect to the Companys 20% joint-venture interest in nine properties in partnership
with affiliates of Homburg Invest Inc., the terms of the partnership agreements include buy/sell
provisions with respect to equity ownership interests which can be exercised by either party. The
buy/sell provisions allow either party to provide notice that it intends to purchase the
non-initiating partys interest at a specific price premised on a value for the entire venture. The
non-initiating party may either accept that offer or instead may reject that offer and become the
purchaser of the initiating partys interest at the initially offered price.
With respect to the Companys 20% joint-venture interest in the properties transferred or to
be transferred to the RioCan joint venture, the terms of the partnership agreements include
buy/sell provisions with respect to equity ownership interests which can be exercised by either
party during the period ending in December 2012 or upon certain change-of-control circumstances.
The buy/sell provisions allow either party to provide notice that it intends to purchase the
non-initiating partys interest at a specific price premised on a value for the entire venture. The
non-initiating party may either accept that offer or instead may reject that offer and become the
purchaser of the initiating partys interest at the initially offered price.
The Company is a party to certain legal actions arising in the normal course of business.
Management does not expect there to be adverse consequences from these actions that would be
material to the Companys consolidated financial statements.
Under various federal, state, and local laws, ordinances, and regulations, an owner or
operator of real estate may be required to investigate and clean up hazardous or toxic substances,
or petroleum product releases, at its properties. The owner may be liable to governmental entities
76
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
or to third parties for property damage, and for investigation and cleanup costs incurred by such
parties in connection with any contamination. Management is unaware of any environmental matters
that would have a material impact on the Companys consolidated financial statements.
The Companys executive offices are located at 44 South Bayles Avenue, Port Washington, New
York, in which it presently occupies approximately 8,600 square feet leased from a partnership
owned 43.6% by the Companys Chairman. Under the terms of the lease, as amended, which will expire
in February 2020, the Company will add an additional 6,400 square feet by the end of 2010. Future
minimum rents payable under the terms of the lease, as amended, amount to $484,000, $545,000,
$560,000, $575,000, $591,000 and $3.3 million during the years 2010 through 2014, and thereafter,
respectively. In addition, several of the Companys properties and portions of several others are
owned subject to ground leases which provide for annual payments subject, in certain cases, to
cost-of-living or fair market value adjustments, through 2014, as follows: 2010 $660,000 2011
$668,000, 2012 $659,000, 2013 $659,000, 2014 $659,000 and thereafter $18.2 million.
77
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 10. Selected Quarterly Financial Data (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year |
|
March 31 |
|
|
June 30 |
|
|
September 30 |
|
|
December 31 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues as previously reported |
|
$ |
46,895,000 |
|
|
$ |
44,776,000 |
|
|
$ |
45,850,000 |
|
|
$ |
46,791,000 |
|
Revenues from discontinued operations (a) |
|
|
(1,434,000 |
) |
|
|
(1,225,000 |
) |
|
|
(1,138,000 |
) |
|
|
(400,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
45,461,000 |
|
|
$ |
43,551,000 |
|
|
$ |
44,712,000 |
|
|
$ |
46,391,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) as previously reported |
|
$ |
5,779,000 |
|
|
$ |
1,964,000 |
|
|
$ |
3,814,000 |
|
|
$ |
(28,356,000 |
) |
Net income (loss) from lease liability adjustment |
|
|
(53,000 |
) |
|
|
(53,000 |
) |
|
|
(53,000 |
) |
|
|
(53,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
5,726,000 |
|
|
$ |
1,911,000 |
|
|
$ |
3,761,000 |
|
|
$ |
(28,409,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders as previously reported |
|
$ |
3,999,000 |
|
|
$ |
(316,000 |
) |
|
$ |
1,447,000 |
|
|
$ |
(29,673,000 |
) |
Net income (loss) from lease liability adjustment |
|
|
(51,000 |
) |
|
|
(51,000 |
) |
|
|
(51,000 |
) |
|
|
(51,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders |
|
$ |
3,948,000 |
|
|
$ |
(367,000 |
) |
|
$ |
1,396,000 |
|
|
$ |
(29,724,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) (b) |
|
$ |
0.09 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues as previously reported |
|
$ |
43,635,000 |
|
|
$ |
42,915,000 |
|
|
$ |
43,322,000 |
|
|
$ |
44,608,000 |
|
Revenues from discontinued operations (a) |
|
|
(1,417,000 |
) |
|
|
(1,411,000 |
) |
|
|
(1,381,000 |
) |
|
|
(1,328,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
42,218,000 |
|
|
$ |
41,504,000 |
|
|
$ |
41,941,000 |
|
|
$ |
43,280,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) as previously reported |
|
$ |
5,928,000 |
|
|
$ |
3,733,000 |
|
|
$ |
5,806,000 |
|
|
$ |
5,542,000 |
|
Net income (loss) from lease liability adjustment |
|
|
(53,000 |
) |
|
|
(52,000 |
) |
|
|
(53,000 |
) |
|
|
(53,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
5,875,000 |
|
|
$ |
3,681,000 |
|
|
$ |
5,753,000 |
|
|
$ |
5,489,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders as previously reported |
|
$ |
3,112,000 |
|
|
$ |
1,224,000 |
|
|
$ |
3,277,000 |
|
|
$ |
2,885,000 |
|
Net income (loss) from lease liability adjustment |
|
|
(51,000 |
) |
|
|
(49,000 |
) |
|
|
(51,000 |
) |
|
|
(51,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shareholders |
|
$ |
3,061,000 |
|
|
$ |
1,175,000 |
|
|
$ |
3,226,000 |
|
|
$ |
2,834,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share (basic and diluted) (b) |
|
$ |
0.07 |
|
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
|
|
(a) |
|
Represents revenues from discontinued operations which were previously included in
revenues as previously reported. |
|
(b) |
|
Difference between the sum of the four quraterly per share amounts and the annual per share
amount are attributable to the effect of the weighted average outstanding share calculations for
the respective periods. |
Note 11. Subsequent Events
On January 20, 2010, the Company paid approximately $5.5 million to terminate interest rate
swaps applicable to approximately $23.9 million of mortgage loans payable as well as the interest
rate swap applicable to anticipated permanent financing of $28.0 million, both for its development
joint venture project in Stroudsburg, Pennsylvania.
On January 26, 2010, the Cedar/RioCan joint venture acquired the Town Square Plaza shopping
center in Temple, Pennsylvania, an approximately 128,000 square foot supermarket-anchored shopping
center which was completed in 2008, and which is anchored by a 73,000 square foot Giant Foods
supermarket. The purchase price for the property, which is presently unencumbered, was
approximately $19 million, excluding closing costs.
On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its common
stock at $6.60 per share, and realized net proceeds after offering expenses of approximately $47.0
million. On March 3, 2010, the underwriters exercised their over-allotment
78
Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
option to the extent of 698,000 shares, and the Company realized additional net proceeds of $4.4
million. In connection with the offering, RioCan acquired 1,350,000 shares of the Companys common
stock, including 100,000 shares acquired in connection with the exercise of the over-allotment
option, and the Company realized net proceeds of $8.9 million.
On March 10, 2010, the Company exercised its option to expand the SEPA Agreement to $45.0
million.
79
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year built/ |
|
|
Gross |
|
|
Initial cost to the Company |
|
|
|
|
|
|
|
Year |
|
|
Percent |
|
|
Year last |
|
|
leasable |
|
|
|
|
|
|
Building and |
|
Property |
|
State |
|
|
acquired |
|
|
owned |
|
|
renovated |
|
|
area |
|
|
Land |
|
|
Improvements |
|
Wholly-Owned Stabilized Properties (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Academy Plaza |
|
PA |
|
|
2001 |
|
|
|
100 |
% |
|
|
1965/1998 |
|
|
|
152,727 |
|
|
|
2,406,000 |
|
|
|
9,623,000 |
|
Annie Land Plaza |
|
VA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1999 |
|
|
|
42,500 |
|
|
|
809,000 |
|
|
|
4,015,000 |
|
Camp Hill |
|
PA |
|
|
2002 |
|
|
|
100 |
% |
|
|
1958/2005 |
|
|
|
472,458 |
|
|
|
4,460,000 |
|
|
|
17,857,000 |
|
Carbondale Plaza |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
1972/2005 |
|
|
|
129,915 |
|
|
|
1,586,000 |
|
|
|
7,289,000 |
|
Carmans Plaza |
|
NY |
|
|
2007 |
|
|
|
100 |
% |
|
|
1954/2007 |
|
|
|
194,481 |
|
|
|
8,539,000 |
|
|
|
35,804,000 |
|
Carlls Corner |
|
NJ |
|
|
2007 |
|
|
|
100 |
% |
|
|
1960s-1999/ |
|
|
|
129,582 |
|
|
|
3,034,000 |
|
|
|
15,293,000 |
|
Circle Plaza |
|
PA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1979/1991 |
|
|
|
92,171 |
|
|
|
561,000 |
|
|
|
2,884,000 |
|
Clyde Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
34,592 |
|
|
|
451,000 |
|
|
|
2,326,000 |
|
Coliseum Marketplace |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1987/2005 |
|
|
|
98,359 |
|
|
|
2,924,000 |
|
|
|
14,416,000 |
|
CVS at Bradford |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1996 |
|
|
|
10,722 |
|
|
|
291,000 |
|
|
|
1,466,000 |
|
CVS at Celina |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
1998 |
|
|
|
10,195 |
|
|
|
418,000 |
|
|
|
1,967,000 |
|
CVS at Erie |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1997 |
|
|
|
10,125 |
|
|
|
399,000 |
|
|
|
1,783,000 |
|
CVS at Kinderhook |
|
NY |
|
|
2007 |
|
|
|
100 |
% |
|
|
2007 |
|
|
|
13,225 |
|
|
|
1,678,000 |
|
|
|
|
|
CVS at Portage Trail |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
1996 |
|
|
|
10,722 |
|
|
|
341,000 |
|
|
|
1,603,000 |
|
East Chestnut |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1996 |
|
|
|
21,180 |
|
|
|
800,000 |
|
|
|
3,699,000 |
|
Elmhurst Square |
|
VA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1961-1983 |
|
|
|
66,250 |
|
|
|
1,371,000 |
|
|
|
5,994,000 |
|
Enon Discount Drug Mart Plaza |
|
OH |
|
|
2007 |
|
|
|
100 |
% |
|
|
2005-2006 |
|
|
|
42,876 |
|
|
|
904,000 |
|
|
|
3,426,000 |
|
Fairfield Plaza |
|
CT |
|
|
2005 |
|
|
|
100 |
% |
|
|
2001/2005 |
|
|
|
72,279 |
|
|
|
1,816,000 |
|
|
|
7,891,000 |
|
Fairview Plaza |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1992 |
|
|
|
69,579 |
|
|
|
2,128,000 |
|
|
|
8,483,000 |
|
FirstMerit Bank at Akron |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
1996 |
|
|
|
3,200 |
|
|
|
169,000 |
|
|
|
734,000 |
|
FirstMerit Bank at Cuyahoga Falls |
|
OH |
|
|
2006 |
|
|
|
100 |
% |
|
|
1973/2003 |
|
|
|
18,300 |
|
|
|
264,000 |
|
|
|
1,304,000 |
|
Gahanna Discount Drug Mart Plaza |
|
OH |
|
|
2006 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
48,992 |
|
|
|
1,379,000 |
|
|
|
5,385,000 |
|
General Booth Plaza |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1985 |
|
|
|
73,320 |
|
|
|
1,935,000 |
|
|
|
9,493,000 |
|
Gold Star Plaza |
|
PA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1988 |
|
|
|
71,720 |
|
|
|
1,644,000 |
|
|
|
6,519,000 |
|
Golden Triangle |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1960/2005 |
|
|
|
202,943 |
|
|
|
2,320,000 |
|
|
|
9,713,000 |
|
Groton Shopping Center |
|
CT |
|
|
2007 |
|
|
|
100 |
% |
|
|
1969 |
|
|
|
117,986 |
|
|
|
3,070,000 |
|
|
|
12,320,000 |
|
Grove City Discount Drug Mart Plaza |
|
OH |
|
|
2007 |
|
|
|
100 |
% |
|
|
2005 |
|
|
|
40,848 |
|
|
|
874,000 |
|
|
|
3,394,000 |
|
Halifax Plaza |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1994 |
|
|
|
51,510 |
|
|
|
1,412,000 |
|
|
|
5,799,000 |
|
Hamburg Commons |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
1988-1993 |
|
|
|
99,580 |
|
|
|
1,153,000 |
|
|
|
4,678,000 |
|
Hannaford Plaza |
|
MA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1965/2006 |
|
|
|
102,459 |
|
|
|
1,874,000 |
|
|
|
8,453,000 |
|
Hilliard Discount Drug Mart Plaza |
|
OH |
|
|
2007 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
40,988 |
|
|
|
1,200,000 |
|
|
|
3,977,000 |
|
Hills & Dales Discount Drug Mart Plaza |
|
OH |
|
|
2007 |
|
|
|
100 |
% |
|
|
1992-2007 |
|
|
|
33,553 |
|
|
|
786,000 |
|
|
|
2,967,000 |
|
Jordan Lane |
|
CT |
|
|
2005 |
|
|
|
100 |
% |
|
|
1969/1991 |
|
|
|
181,730 |
|
|
|
4,291,000 |
|
|
|
21,176,000 |
|
Kempsville Crossing |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1985 |
|
|
|
94,477 |
|
|
|
2,207,000 |
|
|
|
11,000,000 |
|
Kenley Village |
|
MD |
|
|
2005 |
|
|
|
100 |
% |
|
|
1988 |
|
|
|
51,894 |
|
|
|
726,000 |
|
|
|
3,512,000 |
|
Kings Plaza |
|
MA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1970/1994 |
|
|
|
168,243 |
|
|
|
2,413,000 |
|
|
|
12,604,000 |
|
Kingston Plaza |
|
NY |
|
|
2006 |
|
|
|
100 |
% |
|
|
2006 |
|
|
|
18,337 |
|
|
|
2,891,000 |
|
|
|
|
|
LA Fitness Facility |
|
PA |
|
|
2002 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
41,000 |
|
|
|
2,462,000 |
|
|
|
|
|
Liberty Marketplace |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
68,200 |
|
|
|
2,665,000 |
|
|
|
12,639,000 |
|
Lodi Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
38,576 |
|
|
|
704,000 |
|
|
|
3,393,000 |
|
Mason Discount Drug Mart Plaza |
|
OH |
|
|
2008 |
|
|
|
100 |
% |
|
|
2005/2007 |
|
|
|
52,896 |
|
|
|
1,298,000 |
|
|
|
5,022,000 |
|
McCormick Place |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
1995 |
|
|
|
46,000 |
|
|
|
847,000 |
|
|
|
4,022,000 |
|
Mechanicsburg Giant |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
51,500 |
|
|
|
2,709,000 |
|
|
|
12,159,000 |
|
Metro Square |
|
MD |
|
|
2008 |
|
|
|
100 |
% |
|
|
1999 |
|
|
|
71,896 |
|
|
|
3,121,000 |
|
|
|
12,341,000 |
|
Newport Plaza |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1996 |
|
|
|
66,789 |
|
|
|
1,721,000 |
|
|
|
7,758,000 |
|
Oak Ridge |
|
VA |
|
|
2006 |
|
|
|
100 |
% |
|
|
2000 |
|
|
|
38,700 |
|
|
|
960,000 |
|
|
|
4,254,000 |
|
Oakland Commons |
|
CT |
|
|
2007 |
|
|
|
100 |
% |
|
|
1962/1995 |
|
|
|
89,850 |
|
|
|
2,504,000 |
|
|
|
15,662,000 |
|
Oakland Mills |
|
MD |
|
|
2005 |
|
|
|
100 |
% |
|
|
1960s/2004 |
|
|
|
58,224 |
|
|
|
1,611,000 |
|
|
|
6,292,000 |
|
Palmyra Shopping Center |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1960/1995 |
|
|
|
112,108 |
|
|
|
1,488,000 |
|
|
|
6,566,000 |
|
Pickerington Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
47,810 |
|
|
|
1,186,000 |
|
|
|
5,396,000 |
|
Pine Grove Plaza |
|
NJ |
|
|
2003 |
|
|
|
100 |
% |
|
|
2001/2002 |
|
|
|
79,306 |
|
|
|
1,622,000 |
|
|
|
6,489,000 |
|
80
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount at which carried at |
|
|
|
|
|
|
|
(continued) |
|
Subsequent |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
cost |
|
|
|
|
|
|
Building and |
|
|
|
|
|
|
Accumulated |
|
|
Amount of |
|
Property |
|
capitalized |
|
|
Land |
|
|
improvements |
|
|
Total |
|
|
depreciation (4) |
|
|
Encumbrance |
|
Wholly-Owned Stabilized Properties (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Academy Plaza |
|
$ |
1,561,000 |
|
|
$ |
2,406,000 |
|
|
$ |
11,184,000 |
|
|
$ |
13,590,000 |
|
|
$ |
2,319,000 |
|
|
$ |
9,365,000 |
|
Annie Land Plaza |
|
|
12,000 |
|
|
|
809,000 |
|
|
|
4,027,000 |
|
|
|
4,836,000 |
|
|
|
506,000 |
|
|
|
(2 |
) |
Camp Hill |
|
|
42,879,000 |
|
|
|
4,424,000 |
|
|
|
60,772,000 |
|
|
|
65,196,000 |
|
|
|
7,948,000 |
|
|
|
65,000,000 |
|
Carbondale Plaza |
|
|
4,858,000 |
|
|
|
1,586,000 |
|
|
|
12,147,000 |
|
|
|
13,733,000 |
|
|
|
1,891,000 |
|
|
|
(3 |
) |
Carmans Plaza |
|
|
(961,000 |
) |
|
|
8,416,000 |
|
|
|
34,966,000 |
|
|
|
43,382,000 |
|
|
|
2,942,000 |
|
|
|
33,345,000 |
|
Carlls Corner |
|
|
31,000 |
|
|
|
2,964,000 |
|
|
|
15,394,000 |
|
|
|
18,358,000 |
|
|
|
1,231,000 |
|
|
|
5,908,000 |
|
Circle Plaza |
|
|
32,000 |
|
|
|
561,000 |
|
|
|
2,916,000 |
|
|
|
3,477,000 |
|
|
|
194,000 |
|
|
|
(2 |
) |
Clyde Discount Drug Mart Plaza |
|
|
1,128,000 |
|
|
|
673,000 |
|
|
|
3,232,000 |
|
|
|
3,905,000 |
|
|
|
513,000 |
|
|
|
1,939,000 |
|
Coliseum Marketplace |
|
|
3,410,000 |
|
|
|
3,586,000 |
|
|
|
17,164,000 |
|
|
|
20,750,000 |
|
|
|
2,713,000 |
|
|
|
12,228,000 |
|
CVS at Bradford |
|
|
16,000 |
|
|
|
291,000 |
|
|
|
1,482,000 |
|
|
|
1,773,000 |
|
|
|
257,000 |
|
|
|
775,000 |
|
CVS at Celina |
|
|
|
|
|
|
418,000 |
|
|
|
1,967,000 |
|
|
|
2,385,000 |
|
|
|
288,000 |
|
|
|
1,429,000 |
|
CVS at Erie |
|
|
|
|
|
|
399,000 |
|
|
|
1,783,000 |
|
|
|
2,182,000 |
|
|
|
249,000 |
|
|
|
1,114,000 |
|
CVS at Kinderhook |
|
|
1,930,000 |
|
|
|
2,502,000 |
|
|
|
1,106,000 |
|
|
|
3,608,000 |
|
|
|
69,000 |
|
|
|
2,480,000 |
|
CVS at Portage Trail |
|
|
8,000 |
|
|
|
341,000 |
|
|
|
1,611,000 |
|
|
|
1,952,000 |
|
|
|
245,000 |
|
|
|
843,000 |
|
East Chestnut |
|
|
3,000 |
|
|
|
800,000 |
|
|
|
3,702,000 |
|
|
|
4,502,000 |
|
|
|
713,000 |
|
|
|
1,988,000 |
|
Elmhurst Square |
|
|
235,000 |
|
|
|
1,371,000 |
|
|
|
6,229,000 |
|
|
|
7,600,000 |
|
|
|
815,000 |
|
|
|
4,045,000 |
|
Enon Discount Drug Mart Plaza |
|
|
1,161,000 |
|
|
|
1,135,000 |
|
|
|
4,356,000 |
|
|
|
5,491,000 |
|
|
|
386,000 |
|
|
|
(2 |
) |
Fairfield Plaza |
|
|
1,889,000 |
|
|
|
2,202,000 |
|
|
|
9,394,000 |
|
|
|
11,596,000 |
|
|
|
1,355,000 |
|
|
|
5,106,000 |
|
Fairview Plaza |
|
|
234,000 |
|
|
|
2,129,000 |
|
|
|
8,716,000 |
|
|
|
10,845,000 |
|
|
|
1,516,000 |
|
|
|
5,479,000 |
|
FirstMerit Bank at Akron |
|
|
1,000 |
|
|
|
168,000 |
|
|
|
736,000 |
|
|
|
904,000 |
|
|
|
121,000 |
|
|
|
(2 |
) |
FirstMerit Bank at Cuyahoga Falls |
|
|
8,000 |
|
|
|
264,000 |
|
|
|
1,312,000 |
|
|
|
1,576,000 |
|
|
|
176,000 |
|
|
|
(2 |
) |
Gahanna Discount Drug Mart Plaza |
|
|
1,739,000 |
|
|
|
1,738,000 |
|
|
|
6,765,000 |
|
|
|
8,503,000 |
|
|
|
868,000 |
|
|
|
4,998,000 |
|
General Booth Plaza |
|
|
73,000 |
|
|
|
1,935,000 |
|
|
|
9,566,000 |
|
|
|
11,501,000 |
|
|
|
1,773,000 |
|
|
|
5,409,000 |
|
Gold Star Plaza |
|
|
83,000 |
|
|
|
1,644,000 |
|
|
|
6,602,000 |
|
|
|
8,246,000 |
|
|
|
942,000 |
|
|
|
2,417,000 |
|
Golden Triangle |
|
|
9,526,000 |
|
|
|
2,320,000 |
|
|
|
19,239,000 |
|
|
|
21,559,000 |
|
|
|
3,561,000 |
|
|
|
20,999,000 |
|
Groton Shopping Center |
|
|
58,000 |
|
|
|
3,073,000 |
|
|
|
12,375,000 |
|
|
|
15,448,000 |
|
|
|
1,341,000 |
|
|
|
11,622,000 |
|
Grove City Discount Drug Mart Plaza |
|
|
2,014,000 |
|
|
|
1,241,000 |
|
|
|
5,041,000 |
|
|
|
6,282,000 |
|
|
|
496,000 |
|
|
|
(2 |
) |
Halifax Plaza |
|
|
162,000 |
|
|
|
1,347,000 |
|
|
|
6,026,000 |
|
|
|
7,373,000 |
|
|
|
960,000 |
|
|
|
3,324,000 |
|
Hamburg Commons |
|
|
5,210,000 |
|
|
|
1,153,000 |
|
|
|
9,888,000 |
|
|
|
11,041,000 |
|
|
|
1,277,000 |
|
|
|
5,180,000 |
|
Hannaford Plaza |
|
|
353,000 |
|
|
|
1,874,000 |
|
|
|
8,806,000 |
|
|
|
10,680,000 |
|
|
|
1,076,000 |
|
|
|
(2 |
) |
Hilliard Discount Drug Mart Plaza |
|
|
1,110,000 |
|
|
|
1,307,000 |
|
|
|
4,980,000 |
|
|
|
6,287,000 |
|
|
|
429,000 |
|
|
|
(2 |
) |
Hills & Dales Discount Drug Mart Plaza |
|
|
105,000 |
|
|
|
786,000 |
|
|
|
3,072,000 |
|
|
|
3,858,000 |
|
|
|
301,000 |
|
|
|
(2 |
) |
Jordan Lane |
|
|
545,000 |
|
|
|
4,291,000 |
|
|
|
21,721,000 |
|
|
|
26,012,000 |
|
|
|
3,345,000 |
|
|
|
13,080,000 |
|
Kempsville Crossing |
|
|
129,000 |
|
|
|
2,207,000 |
|
|
|
11,129,000 |
|
|
|
13,336,000 |
|
|
|
2,123,000 |
|
|
|
6,122,000 |
|
Kenley Village |
|
|
45,000 |
|
|
|
726,000 |
|
|
|
3,557,000 |
|
|
|
4,283,000 |
|
|
|
953,000 |
|
|
|
(2 |
) |
Kings Plaza |
|
|
72,000 |
|
|
|
2,408,000 |
|
|
|
12,681,000 |
|
|
|
15,089,000 |
|
|
|
1,219,000 |
|
|
|
7,811,000 |
|
Kingston Plaza |
|
|
2,344,000 |
|
|
|
2,891,000 |
|
|
|
2,344,000 |
|
|
|
5,235,000 |
|
|
|
186,000 |
|
|
|
3,727,000 |
|
LA Fitness Facility |
|
|
5,176,000 |
|
|
|
2,462,000 |
|
|
|
5,176,000 |
|
|
|
7,638,000 |
|
|
|
849,000 |
|
|
|
5,790,000 |
|
Liberty Marketplace |
|
|
238,000 |
|
|
|
2,695,000 |
|
|
|
12,847,000 |
|
|
|
15,542,000 |
|
|
|
1,746,000 |
|
|
|
9,373,000 |
|
Lodi Discount Drug Mart Plaza |
|
|
68,000 |
|
|
|
704,000 |
|
|
|
3,461,000 |
|
|
|
4,165,000 |
|
|
|
633,000 |
|
|
|
2,363,000 |
|
Mason Discount Drug Mart Plaza |
|
|
2,978,000 |
|
|
|
1,849,000 |
|
|
|
7,449,000 |
|
|
|
9,298,000 |
|
|
|
668,000 |
|
|
|
(2 |
) |
McCormick Place |
|
|
44,000 |
|
|
|
849,000 |
|
|
|
4,064,000 |
|
|
|
4,913,000 |
|
|
|
858,000 |
|
|
|
2,621,000 |
|
Mechanicsburg Giant |
|
|
|
|
|
|
2,709,000 |
|
|
|
12,159,000 |
|
|
|
14,868,000 |
|
|
|
1,471,000 |
|
|
|
9,667,000 |
|
Metro Square |
|
|
10,000 |
|
|
|
3,121,000 |
|
|
|
12,351,000 |
|
|
|
15,472,000 |
|
|
|
520,000 |
|
|
|
9,162,000 |
|
Newport Plaza |
|
|
346,000 |
|
|
|
1,672,000 |
|
|
|
8,153,000 |
|
|
|
9,825,000 |
|
|
|
1,165,000 |
|
|
|
4,338,000 |
|
Oak Ridge |
|
|
27,000 |
|
|
|
960,000 |
|
|
|
4,281,000 |
|
|
|
5,241,000 |
|
|
|
437,000 |
|
|
|
3,459,000 |
|
Oakland Commons |
|
|
15,000 |
|
|
|
2,504,000 |
|
|
|
15,677,000 |
|
|
|
18,181,000 |
|
|
|
1,375,000 |
|
|
|
(2 |
) |
Oakland Mills |
|
|
29,000 |
|
|
|
1,611,000 |
|
|
|
6,321,000 |
|
|
|
7,932,000 |
|
|
|
1,159,000 |
|
|
|
4,918,000 |
|
Palmyra Shopping Center |
|
|
342,000 |
|
|
|
1,488,000 |
|
|
|
6,908,000 |
|
|
|
8,396,000 |
|
|
|
1,240,000 |
|
|
|
(2 |
) |
Pickerington Discount Drug Mart Plaza |
|
|
675,000 |
|
|
|
1,305,000 |
|
|
|
5,952,000 |
|
|
|
7,257,000 |
|
|
|
969,000 |
|
|
|
4,150,000 |
|
Pine Grove Plaza |
|
|
18,000 |
|
|
|
1,622,000 |
|
|
|
6,507,000 |
|
|
|
8,129,000 |
|
|
|
1,107,000 |
|
|
|
5,797,000 |
|
81
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year built/ |
|
|
Gross |
|
|
Initial cost to the Company |
|
|
|
|
|
|
|
Year |
|
|
Percent |
|
|
Year last |
|
|
leasable |
|
|
|
|
|
|
Building and |
|
Property |
|
State |
|
|
acquired |
|
|
owned |
|
|
renovated |
|
|
area |
|
|
Land |
|
|
Improvements |
|
Wholly-Owned Stabilized Properties (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polaris Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2001 |
|
|
|
50,283 |
|
|
|
1,242,000 |
|
|
|
5,816,000 |
|
Port Richmond Village |
|
PA |
|
|
2001 |
|
|
|
100 |
% |
|
|
1988 |
|
|
|
154,908 |
|
|
|
2,942,000 |
|
|
|
11,769,000 |
|
Price Chopper Plaza |
|
MA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1960s-2004 |
|
|
|
101,824 |
|
|
|
3,551,000 |
|
|
|
18,412,000 |
|
Rite Aid at Massillon |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
1999 |
|
|
|
10,125 |
|
|
|
442,000 |
|
|
|
2,014,000 |
|
River View Plaza I, II and III |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1991/1998 |
|
|
|
244,225 |
|
|
|
9,718,000 |
|
|
|
40,356,000 |
|
Smithfield Plaza |
|
VA |
|
|
2005-2008 |
|
|
|
100 |
% |
|
|
1987/1996 |
|
|
|
134,664 |
|
|
|
2,947,000 |
|
|
|
12,737,000 |
|
South Philadelphia |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1950/2003 |
|
|
|
283,415 |
|
|
|
8,222,000 |
|
|
|
36,314,000 |
|
St. James Square |
|
MD |
|
|
2005 |
|
|
|
100 |
% |
|
|
2000 |
|
|
|
39,903 |
|
|
|
688,000 |
|
|
|
3,838,000 |
|
Stadium Plaza |
|
MI |
|
|
2005 |
|
|
|
100 |
% |
|
|
1960s/2003 |
|
|
|
77,688 |
|
|
|
2,341,000 |
|
|
|
9,175,000 |
|
Suffolk Plaza |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1984 |
|
|
|
67,216 |
|
|
|
1,402,000 |
|
|
|
7,236,000 |
|
Swede Square |
|
PA |
|
|
2003 |
|
|
|
100 |
% |
|
|
1980/2004 |
|
|
|
98,792 |
|
|
|
2,268,000 |
|
|
|
6,232,000 |
|
The Brickyard |
|
CT |
|
|
2004 |
|
|
|
100 |
% |
|
|
1990 |
|
|
|
274,553 |
|
|
|
6,465,000 |
|
|
|
29,308,000 |
|
The Commons |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
2003 |
|
|
|
175,121 |
|
|
|
3,098,000 |
|
|
|
14,047,000 |
|
The Point |
|
PA |
|
|
2000 |
|
|
|
100 |
% |
|
|
1972/2001 |
|
|
|
250,697 |
|
|
|
2,700,000 |
|
|
|
10,800,000 |
|
The Point at Carlisle Plaza |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1965/2005 |
|
|
|
182,859 |
|
|
|
2,233,000 |
|
|
|
11,190,000 |
|
Timpany Plaza |
|
MA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1970s-1989 |
|
|
|
183,775 |
|
|
|
3,412,000 |
|
|
|
19,240,000 |
|
Trexler Mall |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1973/2004 |
|
|
|
339,363 |
|
|
|
6,932,000 |
|
|
|
32,815,000 |
|
Ukrops at Fredericksburg |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1997 |
|
|
|
63,000 |
|
|
|
3,213,000 |
|
|
|
12,758,000 |
|
Ukrops at Glen Allen |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2000 |
|
|
|
43,000 |
|
|
|
6,769,000 |
|
|
|
683,000 |
|
Valley Plaza |
|
MD |
|
|
2003 |
|
|
|
100 |
% |
|
|
1975/1994 |
|
|
|
190,939 |
|
|
|
1,950,000 |
|
|
|
7,766,000 |
|
Virginia Center Commons |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
9,763 |
|
|
|
992,000 |
|
|
|
3,860,000 |
|
Virginia Little Creek |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1996/2001 |
|
|
|
69,620 |
|
|
|
1,650,000 |
|
|
|
8,350,000 |
|
Wal-Mart Center |
|
CT |
|
|
2003 |
|
|
|
100 |
% |
|
|
1972/2000 |
|
|
|
155,842 |
|
|
|
|
|
|
|
11,834,000 |
|
Washington Center Shoppes |
|
NJ |
|
|
2001 |
|
|
|
100 |
% |
|
|
1979/1995 |
|
|
|
157,290 |
|
|
|
2,061,000 |
|
|
|
7,314,000 |
|
West Bridgewater Plaza |
|
MA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1970/2007 |
|
|
|
133,039 |
|
|
|
2,823,000 |
|
|
|
14,901,000 |
|
Westlake Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2005 |
|
|
|
55,775 |
|
|
|
1,004,000 |
|
|
|
3,905,000 |
|
Yorktowne Plaza |
|
MD |
|
|
2007 |
|
|
|
100 |
% |
|
|
1970/2000 |
|
|
|
158,982 |
|
|
|
5,940,000 |
|
|
|
25,505,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Wholly-Owned Stabilized Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,663,534 |
|
|
|
177,427,000 |
|
|
|
739,015,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties Owned in Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homburg Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aston Center |
|
PA |
|
|
2007 |
|
|
|
20 |
% |
|
|
2005 |
|
|
|
55,000 |
|
|
|
4,319,000 |
|
|
|
17,070,000 |
|
Ayr Town Center |
|
PA |
|
|
2007 |
|
|
|
20 |
% |
|
|
2005 |
|
|
|
55,600 |
|
|
|
2,442,000 |
|
|
|
9,748,000 |
|
Fieldstone Marketplace |
|
MA |
|
|
2005 |
|
|
|
20 |
% |
|
|
1988/2003 |
|
|
|
193,970 |
|
|
|
5,229,000 |
|
|
|
21,440,000 |
|
Meadows Marketplace |
|
PA |
|
|
2004 |
|
|
|
20 |
% |
|
|
2005 |
|
|
|
91,538 |
|
|
|
1,914,000 |
|
|
|
|
|
Parkway Plaza |
|
PA |
|
|
2007 |
|
|
|
20 |
% |
|
|
1998-2002 |
|
|
|
106,628 |
|
|
|
4,647,000 |
|
|
|
19,420,000 |
|
Pennsboro Commons |
|
PA |
|
|
2005 |
|
|
|
20 |
% |
|
|
1999 |
|
|
|
107,384 |
|
|
|
3,608,000 |
|
|
|
14,254,000 |
|
Scott Town Center |
|
PA |
|
|
2007 |
|
|
|
20 |
% |
|
|
2004 |
|
|
|
67,933 |
|
|
|
2,959,000 |
|
|
|
11,800,000 |
|
Spring Meadow Shopping Center |
|
PA |
|
|
2007 |
|
|
|
20 |
% |
|
|
2004 |
|
|
|
67,950 |
|
|
|
4,111,000 |
|
|
|
16,410,000 |
|
Stonehedge Square |
|
PA |
|
|
2006 |
|
|
|
20 |
% |
|
|
1990/2006 |
|
|
|
88,677 |
|
|
|
2,732,000 |
|
|
|
11,614,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
834,680 |
|
|
|
31,961,000 |
|
|
|
121,756,000 |
|
PCP Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New London Mall |
|
CT |
|
|
2009 |
|
|
|
40 |
% |
|
|
1967/1997 |
|
|
|
257,814 |
|
|
|
14,891,000 |
|
|
|
24,967,000 |
|
San Souci Plaza |
|
MD |
|
|
2009 |
|
|
|
40 |
% |
|
|
1985 - 1997 |
|
|
|
264,134 |
|
|
|
14,849,000 |
|
|
|
18,445,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
521,948 |
|
|
|
29,740,000 |
|
|
|
43,412,000 |
|
Joint Ventures (other): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CVS at Naugatuck |
|
CT |
|
|
2008 |
|
|
|
50 |
% |
|
|
2008 |
|
|
|
13,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Joint Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,369,853 |
|
|
|
61,701,000 |
|
|
|
165,168,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stabilized Portfiolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,033,387 |
|
|
|
239,128,000 |
|
|
|
904,183,000 |
|
82
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount at which carried at |
|
|
|
|
|
|
|
(continued) |
|
Subsequent |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
cost |
|
|
Building and |
|
|
Accumulated |
|
|
Amount of |
|
Property |
|
capitalized |
|
|
Land |
|
|
improvements |
|
|
Total |
|
|
depreciation (4) |
|
|
Encumbrance |
|
Wholly-Owned Stabilized Properties (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Polaris Discount Drug Mart Plaza |
|
$ |
30,000 |
|
|
$ |
1,242,000 |
|
|
$ |
5,846,000 |
|
|
$ |
7,088,000 |
|
|
$ |
1,132,000 |
|
|
|
4,451,000 |
|
Port Richmond Village |
|
|
568,000 |
|
|
|
2,843,000 |
|
|
|
12,436,000 |
|
|
|
15,279,000 |
|
|
|
2,607,000 |
|
|
|
14,683,000 |
|
Price Chopper Plaza |
|
|
604,000 |
|
|
|
4,111,000 |
|
|
|
18,456,000 |
|
|
|
22,567,000 |
|
|
|
1,308,000 |
|
|
|
(3 |
) |
Rite Aid at Massillon |
|
|
6,000 |
|
|
|
442,000 |
|
|
|
2,020,000 |
|
|
|
2,462,000 |
|
|
|
280,000 |
|
|
|
1,437,000 |
|
River View Plaza I, II and III |
|
|
3,714,000 |
|
|
|
9,718,000 |
|
|
|
44,070,000 |
|
|
|
53,788,000 |
|
|
|
7,600,000 |
|
|
|
(2 |
) |
Smithfield Plaza |
|
|
215,000 |
|
|
|
2,919,000 |
|
|
|
12,980,000 |
|
|
|
15,899,000 |
|
|
|
1,347,000 |
|
|
|
10,405,000 |
|
South Philadelphia |
|
|
2,532,000 |
|
|
|
8,222,000 |
|
|
|
38,846,000 |
|
|
|
47,068,000 |
|
|
|
7,862,000 |
|
|
|
(2 |
) |
St. James Square |
|
|
523,000 |
|
|
|
688,000 |
|
|
|
4,361,000 |
|
|
|
5,049,000 |
|
|
|
815,000 |
|
|
|
(2 |
) |
Stadium Plaza |
|
|
740,000 |
|
|
|
2,443,000 |
|
|
|
9,813,000 |
|
|
|
12,256,000 |
|
|
|
1,295,000 |
|
|
|
(2 |
) |
Suffolk Plaza |
|
|
|
|
|
|
1,402,000 |
|
|
|
7,236,000 |
|
|
|
8,638,000 |
|
|
|
1,341,000 |
|
|
|
4,617,000 |
|
Swede Square |
|
|
4,457,000 |
|
|
|
2,272,000 |
|
|
|
10,685,000 |
|
|
|
12,957,000 |
|
|
|
2,321,000 |
|
|
|
(2 |
) |
The Brickyard |
|
|
488,000 |
|
|
|
6,465,000 |
|
|
|
29,796,000 |
|
|
|
36,261,000 |
|
|
|
5,908,000 |
|
|
|
(2 |
) |
The Commons |
|
|
1,131,000 |
|
|
|
3,098,000 |
|
|
|
15,178,000 |
|
|
|
18,276,000 |
|
|
|
2,980,000 |
|
|
|
(2 |
) |
The Point |
|
|
12,355,000 |
|
|
|
2,996,000 |
|
|
|
22,859,000 |
|
|
|
25,855,000 |
|
|
|
5,355,000 |
|
|
|
17,298,000 |
|
The Point at Carlisle Plaza |
|
|
211,000 |
|
|
|
2,233,000 |
|
|
|
11,401,000 |
|
|
|
13,634,000 |
|
|
|
2,220,000 |
|
|
|
(2 |
) |
Timpany Plaza |
|
|
328,000 |
|
|
|
3,379,000 |
|
|
|
19,601,000 |
|
|
|
22,980,000 |
|
|
|
1,796,000 |
|
|
|
8,377,000 |
|
Trexler Mall |
|
|
715,000 |
|
|
|
6,932,000 |
|
|
|
33,530,000 |
|
|
|
40,462,000 |
|
|
|
4,346,000 |
|
|
|
21,526,000 |
|
Ukrops at Fredericksburg |
|
|
|
|
|
|
3,213,000 |
|
|
|
12,758,000 |
|
|
|
15,971,000 |
|
|
|
1,522,000 |
|
|
|
(2 |
) |
Ukrops at Glen Allen |
|
|
|
|
|
|
6,769,000 |
|
|
|
683,000 |
|
|
|
7,452,000 |
|
|
|
258,000 |
|
|
|
(2 |
) |
Valley Plaza |
|
|
637,000 |
|
|
|
1,950,000 |
|
|
|
8,403,000 |
|
|
|
10,353,000 |
|
|
|
1,352,000 |
|
|
|
(2 |
) |
Virginia Center Commons |
|
|
3,000 |
|
|
|
992,000 |
|
|
|
3,863,000 |
|
|
|
4,855,000 |
|
|
|
559,000 |
|
|
|
(2 |
) |
Virginia Little Creek |
|
|
(11,000 |
) |
|
|
1,639,000 |
|
|
|
8,350,000 |
|
|
|
9,989,000 |
|
|
|
1,424,000 |
|
|
|
5,348,000 |
|
Wal-Mart Center |
|
|
23,000 |
|
|
|
|
|
|
|
11,857,000 |
|
|
|
11,857,000 |
|
|
|
1,884,000 |
|
|
|
5,795,000 |
|
Washington Center Shoppes |
|
|
3,692,000 |
|
|
|
1,999,000 |
|
|
|
11,068,000 |
|
|
|
13,067,000 |
|
|
|
2,286,000 |
|
|
|
8,575,000 |
|
West Bridgewater Plaza |
|
|
(606,000 |
) |
|
|
2,712,000 |
|
|
|
14,406,000 |
|
|
|
17,118,000 |
|
|
|
1,100,000 |
|
|
|
10,885,000 |
|
Westlake Discount Drug Mart Plaza |
|
|
70,000 |
|
|
|
1,004,000 |
|
|
|
3,975,000 |
|
|
|
4,979,000 |
|
|
|
451,000 |
|
|
|
3,215,000 |
|
Yorktowne Plaza |
|
|
(141,000 |
) |
|
|
5,898,000 |
|
|
|
25,406,000 |
|
|
|
31,304,000 |
|
|
|
2,432,000 |
|
|
|
20,418,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Wholly-Owned Stabilized Properties |
|
|
124,253,000 |
|
|
|
181,518,000 |
|
|
|
859,177,000 |
|
|
|
1,040,695,000 |
|
|
|
125,275,000 |
|
|
|
434,401,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties Owned in Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homburg Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aston Center |
|
|
|
|
|
|
4,319,000 |
|
|
|
17,070,000 |
|
|
|
21,389,000 |
|
|
|
1,303,000 |
|
|
|
12,802,000 |
|
Ayr Town Center |
|
|
2,000 |
|
|
|
2,442,000 |
|
|
|
9,750,000 |
|
|
|
12,192,000 |
|
|
|
840,000 |
|
|
|
7,225,000 |
|
Fieldstone Marketplace |
|
|
441,000 |
|
|
|
5,167,000 |
|
|
|
21,943,000 |
|
|
|
27,110,000 |
|
|
|
3,093,000 |
|
|
|
18,647,000 |
|
Meadows Marketplace |
|
|
11,390,000 |
|
|
|
1,914,000 |
|
|
|
11,390,000 |
|
|
|
13,304,000 |
|
|
|
1,094,000 |
|
|
|
10,333,000 |
|
Parkway Plaza |
|
|
15,000 |
|
|
|
4,647,000 |
|
|
|
19,435,000 |
|
|
|
24,082,000 |
|
|
|
1,800,000 |
|
|
|
14,300,000 |
|
Pennsboro Commons |
|
|
43,000 |
|
|
|
3,608,000 |
|
|
|
14,297,000 |
|
|
|
17,905,000 |
|
|
|
2,147,000 |
|
|
|
10,949,000 |
|
Scott Town Center |
|
|
1,000 |
|
|
|
2,959,000 |
|
|
|
11,801,000 |
|
|
|
14,760,000 |
|
|
|
1,073,000 |
|
|
|
8,669,000 |
|
Spring Meadow Shopping Center |
|
|
20,000 |
|
|
|
4,112,000 |
|
|
|
16,429,000 |
|
|
|
20,541,000 |
|
|
|
1,318,000 |
|
|
|
12,698,000 |
|
Stonehedge Square |
|
|
57,000 |
|
|
|
2,698,000 |
|
|
|
11,705,000 |
|
|
|
14,403,000 |
|
|
|
1,464,000 |
|
|
|
8,700,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,969,000 |
|
|
|
31,866,000 |
|
|
|
133,820,000 |
|
|
|
165,686,000 |
|
|
|
14,132,000 |
|
|
|
104,323,000 |
|
PCP Joint Venture: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New London Mall |
|
|
24,000 |
|
|
|
14,891,000 |
|
|
|
24,991,000 |
|
|
|
39,882,000 |
|
|
|
918,000 |
|
|
|
26,009,000 |
|
San Souci Plaza |
|
|
25,000 |
|
|
|
14,849,000 |
|
|
|
18,470,000 |
|
|
|
33,319,000 |
|
|
|
918,000 |
|
|
|
27,200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,000 |
|
|
|
29,740,000 |
|
|
|
43,461,000 |
|
|
|
73,201,000 |
|
|
|
1,836,000 |
|
|
|
53,209,000 |
|
Joint Ventures (other): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CVS at Naugatuck |
|
|
2,825,000 |
|
|
|
|
|
|
|
2,825,000 |
|
|
|
2,825,000 |
|
|
|
82,000 |
|
|
|
2,450,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Joint Ventures |
|
|
14,843,000 |
|
|
|
61,606,000 |
|
|
|
180,106,000 |
|
|
|
241,712,000 |
|
|
|
16,050,000 |
|
|
|
159,982,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stabilized Portfiolio |
|
|
139,096,000 |
|
|
|
243,124,000 |
|
|
|
1,039,283,000 |
|
|
|
1,282,407,000 |
|
|
|
141,325,000 |
|
|
|
594,383,000 |
|
83
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year built/ |
|
|
Gross |
|
|
Initial cost to the Company |
|
|
|
|
|
|
|
Year |
|
|
Percent |
|
|
Year last |
|
|
leasable |
|
|
|
|
|
|
Building and |
|
Property |
|
State |
|
|
acquired |
|
|
owned |
|
|
renovated |
|
|
area |
|
|
Land |
|
|
Improvements |
|
Redevelopment Properties: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dunmore Shopping Center |
|
PA |
|
|
2005 |
|
|
|
100 |
% |
|
|
1962/1997 |
|
|
|
101,000 |
|
|
|
565,000 |
|
|
|
2,203,000 |
|
Lake Raystown Plaza |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
1995 |
|
|
|
145,727 |
|
|
|
2,231,000 |
|
|
|
6,735,000 |
|
Shore Mall |
|
NJ |
|
|
2006 |
|
|
|
100 |
% |
|
|
1960/1980 |
|
|
|
459,098 |
|
|
|
7,179,000 |
|
|
|
37,868,000 |
|
The Shops at Suffolk Downs |
|
MA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2005 |
|
|
|
121,829 |
|
|
|
7,580,000 |
|
|
|
11,089,000 |
|
Townfair Center |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
138,041 |
|
|
|
3,022,000 |
|
|
|
13,786,000 |
|
Trexlertown Plaza |
|
PA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1990/2005 |
|
|
|
241,381 |
|
|
|
5,262,000 |
|
|
|
23,867,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Redevelopment Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,207,076 |
|
|
|
25,839,000 |
|
|
|
95,548,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retenanting Properties: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Mall |
|
PA |
|
|
2005 |
|
|
|
75 |
% |
|
|
1988 |
|
|
|
348,574 |
|
|
|
2,855,000 |
|
|
|
15,600,000 |
|
Centerville Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2000 |
|
|
|
49,494 |
|
|
|
780,000 |
|
|
|
3,607,000 |
|
Fairview Commons |
|
PA |
|
|
2007 |
|
|
|
100 |
% |
|
|
1976/2003 |
|
|
|
59,578 |
|
|
|
858,000 |
|
|
|
3,568,000 |
|
Huntingdon Plaza |
|
PA |
|
|
2004 |
|
|
|
100 |
% |
|
|
1972 - 2003 |
|
|
|
147,355 |
|
|
|
933,000 |
|
|
|
4,129,000 |
|
Oakhurst Plaza |
|
VA |
|
|
2006 |
|
|
|
100 |
% |
|
|
1980/2001 |
|
|
|
107,869 |
|
|
|
4,539,000 |
|
|
|
18,177,000 |
|
Ontario Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
38,623 |
|
|
|
809,000 |
|
|
|
3,643,000 |
|
Shelby Discount Drug Mart Plaza |
|
OH |
|
|
2005 |
|
|
|
100 |
% |
|
|
2002 |
|
|
|
36,596 |
|
|
|
671,000 |
|
|
|
3,264,000 |
|
Shoppes at Salem Run |
|
VA |
|
|
2005 |
|
|
|
100 |
% |
|
|
2005 |
|
|
|
15,100 |
|
|
|
1,076,000 |
|
|
|
4,253,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Retenanting Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
803,189 |
|
|
|
12,521,000 |
|
|
|
56,241,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Stabilized Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,010,265 |
|
|
|
38,360,000 |
|
|
|
151,789,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,043,652 |
|
|
|
277,488,000 |
|
|
|
1,055,972,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ground-Up Developments: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crossroads II |
|
PA |
|
|
2008 |
|
|
|
60 |
% |
|
|
2009 |
|
|
|
133,618 |
|
|
|
15,383,000 |
|
|
|
|
|
Heritage Crossing |
|
PA |
|
|
2008 |
|
|
|
60 |
% |
|
|
2009 |
|
|
|
59,396 |
|
|
|
5,080,000 |
|
|
|
|
|
Northside Commons |
|
PA |
|
|
2008 |
|
|
|
100 |
% |
|
|
2009 |
|
|
|
85,300 |
|
|
|
3,332,000 |
|
|
|
|
|
Upland Square |
|
PA |
|
|
2007 |
|
|
|
60 |
% |
|
|
2009 |
|
|
|
352,456 |
|
|
|
28,187,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Ground-Up Developments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
630,770 |
|
|
|
51,982,000 |
|
|
|
|
|
Total Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,674,422 |
|
|
|
329,470,000 |
|
|
|
1,055,972,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Under Development and Land Held For Future Expansion and Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Mall |
|
PA |
|
|
|
|
|
|
75 |
% |
|
|
|
|
|
|
46.21 |
|
|
|
1,466,000 |
|
|
|
|
|
Halifax Commons |
|
PA |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
4.37 |
|
|
|
858,000 |
|
|
|
|
|
Halifax Plaza |
|
PA |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
12.83 |
|
|
|
1,107,000 |
|
|
|
|
|
Liberty Marketplace |
|
PA |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
15.51 |
|
|
|
1,564,000 |
|
|
|
|
|
Oregon Pike |
|
PA |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
11.20 |
|
|
|
2,283,000 |
|
|
|
|
|
Pine Grove Plaza |
|
NJ |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
2.66 |
|
|
|
388,000 |
|
|
|
|
|
Shore Mall |
|
NJ |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
50.00 |
|
|
|
2,018,000 |
|
|
|
|
|
The Brickyard |
|
CT |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
1.95 |
|
|
|
1,167,000 |
|
|
|
|
|
Trexlertown Plaza |
|
PA |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
37.28 |
|
|
|
8,087,000 |
|
|
|
|
|
Trindle Spring |
|
NY |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
2.10 |
|
|
|
1,028,000 |
|
|
|
|
|
Wyoming |
|
MI |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
12.32 |
|
|
|
360,000 |
|
|
|
|
|
Various projects in progress |
|
N/A |
|
|
|
|
|
|
100 |
% |
|
|
|
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Projects Under Development and Land Held For Future Expansion and Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196.41 |
|
|
|
20,326,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Carrying Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
349,796,000 |
|
|
|
1,055,972,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount at which carried at |
|
|
|
|
|
|
|
(continued) |
|
Subsequent |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
cost |
|
|
|
|
|
|
Building and |
|
|
|
|
|
|
Accumulated |
|
|
Amount of |
|
Property |
|
capitalized |
|
|
Land |
|
|
improvements |
|
|
Total |
|
|
depreciation (4) |
|
|
Encumbrance |
|
Redevelopment Properties: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dunmore Shopping Center |
|
$ |
42,000 |
|
|
$ |
565,000 |
|
|
$ |
2,245,000 |
|
|
$ |
2,810,000 |
|
|
$ |
424,000 |
|
|
|
(3 |
) |
Lake Raystown Plaza |
|
|
6,115,000 |
|
|
|
2,231,000 |
|
|
|
12,850,000 |
|
|
|
15,081,000 |
|
|
|
2,016,000 |
|
|
|
(3 |
) |
Shore Mall |
|
|
4,028,000 |
|
|
|
7,179,000 |
|
|
|
41,896,000 |
|
|
|
49,075,000 |
|
|
|
4,991,000 |
|
|
|
21,243,000 |
|
The Shops at Suffolk Downs |
|
|
8,180,000 |
|
|
|
7,580,000 |
|
|
|
19,269,000 |
|
|
|
26,849,000 |
|
|
|
1,503,000 |
|
|
|
(2 |
) (3) |
Townfair Center |
|
|
(1,574,000 |
) |
|
|
3,022,000 |
|
|
|
12,212,000 |
|
|
|
15,234,000 |
|
|
|
2,325,000 |
|
|
|
(3 |
) |
Trexlertown Plaza |
|
|
2,808,000 |
|
|
|
5,262,000 |
|
|
|
26,675,000 |
|
|
|
31,937,000 |
|
|
|
2,589,000 |
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Redevelopment Properties |
|
|
19,599,000 |
|
|
|
25,839,000 |
|
|
|
115,147,000 |
|
|
|
140,986,000 |
|
|
|
13,848,000 |
|
|
|
21,243,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retenanting Properties: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Mall |
|
|
1,346,000 |
|
|
|
2,855,000 |
|
|
|
16,946,000 |
|
|
|
19,801,000 |
|
|
|
2,335,000 |
|
|
|
|
|
Centerville Discount Drug Mart Plaza |
|
|
2,277,000 |
|
|
|
1,219,000 |
|
|
|
5,445,000 |
|
|
|
6,664,000 |
|
|
|
825,000 |
|
|
|
2,795,000 |
|
Fairview Commons |
|
|
5,000 |
|
|
|
858,000 |
|
|
|
3,573,000 |
|
|
|
4,431,000 |
|
|
|
490,000 |
|
|
|
(2 |
) |
Huntingdon Plaza |
|
|
1,813,000 |
|
|
|
933,000 |
|
|
|
5,942,000 |
|
|
|
6,875,000 |
|
|
|
727,000 |
|
|
|
(3 |
) |
Oakhurst Plaza |
|
|
12,000 |
|
|
|
4,539,000 |
|
|
|
18,189,000 |
|
|
|
22,728,000 |
|
|
|
2,095,000 |
|
|
|
(2 |
) |
Ontario Discount Drug Mart Plaza |
|
|
27,000 |
|
|
|
809,000 |
|
|
|
3,670,000 |
|
|
|
4,479,000 |
|
|
|
588,000 |
|
|
|
2,181,000 |
|
Shelby Discount Drug Mart Plaza |
|
|
12,000 |
|
|
|
671,000 |
|
|
|
3,276,000 |
|
|
|
3,947,000 |
|
|
|
611,000 |
|
|
|
2,181,000 |
|
Shoppes at Salem Run |
|
|
12,000 |
|
|
|
1,076,000 |
|
|
|
4,265,000 |
|
|
|
5,341,000 |
|
|
|
498,000 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Retenanting Properties |
|
|
5,504,000 |
|
|
|
12,960,000 |
|
|
|
61,306,000 |
|
|
|
74,266,000 |
|
|
|
8,169,000 |
|
|
|
7,157,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Stabilized Properties |
|
|
25,103,000 |
|
|
|
38,799,000 |
|
|
|
176,453,000 |
|
|
|
215,252,000 |
|
|
|
22,017,000 |
|
|
|
28,400,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Portfolio |
|
|
164,199,000 |
|
|
|
281,923,000 |
|
|
|
1,215,736,000 |
|
|
|
1,497,659,000 |
|
|
|
163,342,000 |
|
|
|
622,783,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ground-Up Developments: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crossroads II |
|
|
25,123,000 |
|
|
|
17,671,000 |
|
|
|
22,835,000 |
|
|
|
40,506,000 |
|
|
|
118,000 |
|
|
|
1,325,000 |
|
Heritage Crossing |
|
|
5,623,000 |
|
|
|
5,066,000 |
|
|
|
5,637,000 |
|
|
|
10,703,000 |
|
|
|
91,000 |
|
|
|
(3 |
) |
Northside Commons |
|
|
10,009,000 |
|
|
|
3,379,000 |
|
|
|
9,962,000 |
|
|
|
13,341,000 |
|
|
|
43,000 |
|
|
|
(3 |
) |
Upland Square |
|
|
55,956,000 |
|
|
|
27,454,000 |
|
|
|
56,689,000 |
|
|
|
84,143,000 |
|
|
|
285,000 |
|
|
|
61,181,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Ground-Up Developments |
|
|
96,711,000 |
|
|
|
53,570,000 |
|
|
|
95,123,000 |
|
|
|
148,693,000 |
|
|
|
537,000 |
|
|
|
62,506,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Portfolio |
|
|
260,910,000 |
|
|
|
335,493,000 |
|
|
|
1,310,859,000 |
|
|
|
1,646,352,000 |
|
|
|
163,879,000 |
|
|
|
685,289,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Under Development and Land Held For Future Expansion and Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Mall |
|
|
402,000 |
|
|
|
1,465,000 |
|
|
|
403,000 |
|
|
|
1,868,000 |
|
|
|
|
|
|
|
|
|
Halifax Commons |
|
|
303,000 |
|
|
|
872,000 |
|
|
|
289,000 |
|
|
|
1,161,000 |
|
|
|
|
|
|
|
|
|
Halifax Plaza |
|
|
1,603,000 |
|
|
|
1,503,000 |
|
|
|
1,207,000 |
|
|
|
2,710,000 |
|
|
|
|
|
|
|
|
|
Liberty Marketplace |
|
|
25,000 |
|
|
|
1,564,000 |
|
|
|
25,000 |
|
|
|
1,589,000 |
|
|
|
|
|
|
|
750,000 |
|
Oregon Pike |
|
|
63,000 |
|
|
|
2,283,000 |
|
|
|
63,000 |
|
|
|
2,346,000 |
|
|
|
|
|
|
|
750,000 |
|
Pine Grove Plaza |
|
|
71,000 |
|
|
|
388,000 |
|
|
|
71,000 |
|
|
|
459,000 |
|
|
|
|
|
|
|
|
|
Shore Mall |
|
|
149,000 |
|
|
|
2,018,000 |
|
|
|
149,000 |
|
|
|
2,167,000 |
|
|
|
|
|
|
|
(6 |
) |
The Brickyard |
|
|
178,000 |
|
|
|
1,183,000 |
|
|
|
162,000 |
|
|
|
1,345,000 |
|
|
|
|
|
|
|
|
|
Trexlertown Plaza |
|
|
2,478,000 |
|
|
|
8,089,000 |
|
|
|
2,476,000 |
|
|
|
10,565,000 |
|
|
|
|
|
|
|
(3 |
) |
Trindle Spring |
|
|
380,000 |
|
|
|
1,148,000 |
|
|
|
260,000 |
|
|
|
1,408,000 |
|
|
|
|
|
|
|
750,000 |
|
Wyoming |
|
|
|
|
|
|
360,000 |
|
|
|
|
|
|
|
360,000 |
|
|
|
|
|
|
|
750,000 |
|
Various projects in progress |
|
|
351,000 |
|
|
|
|
|
|
|
351,000 |
|
|
|
351,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Projects Under Development and Land
Held For Future Expansion and Development |
|
|
6,003,000 |
|
|
|
20,873,000 |
|
|
|
5,456,000 |
|
|
|
26,329,000 |
|
|
|
|
|
|
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Carrying Value |
|
$ |
266,913,000 |
|
|
$ |
356,366,000 |
|
|
$ |
1,316,315,000 |
|
|
$ |
1,672,681,000 |
|
|
$ |
163,879,000 |
|
|
|
688,289,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate to be transferred to a joint venture (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
139,743,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for sale discontinued operations (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
21,380,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated joint venture (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
14,113,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
(continued)
The changes in real estate and accumulated depreciation for the three years ended December
31, 2009 are as follows (7)(8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
2008 |
|
|
2007 |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of the year |
|
$ |
1,536,590,000 |
|
|
$ |
1,384,187,000 |
|
|
$ |
1,028,845,000 |
|
Properties acquired |
|
|
73,152,000 |
|
|
|
98,337,000 |
|
|
|
326,486,000 |
|
Improvements and betterments |
|
|
69,086,000 |
|
|
|
56,373,000 |
|
|
|
28,856,000 |
|
Write-off fully-depreciated assets |
|
|
(6,147,000 |
) |
|
|
(2,307,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of the year |
|
$ |
1,672,681,000 |
|
|
$ |
1,536,590,000 |
|
|
$ |
1,384,187,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, beginning of the year |
|
$ |
123,807,000 |
|
|
$ |
86,326,000 |
|
|
$ |
53,178,000 |
|
Depreciation expense |
|
|
46,219,000 |
|
|
|
39,788,000 |
|
|
|
33,148,000 |
|
Write-off fully-depreciated assets |
|
|
(6,147,000 |
) |
|
|
(2,307,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of the year |
|
$ |
163,879,000 |
|
|
$ |
123,807,000 |
|
|
$ |
86,326,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
$ |
1,508,802,000 |
|
|
$ |
1,412,783,000 |
|
|
$ |
1,297,861,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Stabilized properties are those properties which are at least 80% leased and not
designated as development/redevelopment properties as of December 31, 2009. Eight of the
Companys properties are being re-tenanted, are not-stabilized, and are not designated as
development/ redevelopment properties as of December 31, 2009. |
|
(2) |
|
Properties pledged as collateral under the Companys stabilized property credit facility. The
total net book value of such properties was $323,285,000 at December 31, 2009 (including $368,000
relating to a property treated as real estate held for sale); the total amount outstanding under
the secured revolving credit facility at that date was $187,985,000. |
|
(3) |
|
Properties pledged as collateral under the Companys development property credit facility. The
total net book value of all such properties was $142,567,000 at December 31, 2009; the total amount
outstanding the secured development revolving credit facility at that date was $69,700,000. |
|
(4) |
|
Depreciation is provided over the estimated useful lives of the buildings and improvements,
which range from 3 to 40 years. |
|
(5) |
|
The Company has a 76.3% interest in an unconsolidated joint venture, which owns a single-tenant
office property located in Philadelphia, PA. and an 20% interest in an unconsolidated joint venture
that owns two supermarket shopping center located in Dickson City and Harrisburg, Pa. |
|
(6) |
|
The Shore Mall land parcel also collateralizes the mortgage loan payable relating to the Shore
Mall shopping center. |
|
(7) |
|
Restated to reflect the reclassifications of properties to real estate held for sale and
real estate to be transferred to a joint venture during 2009 and subsquent to December 31, 2009. |
|
(8) |
|
Restated to reflect the retroactive valuation adjustments relating to lease renewal options. |
86
Part IV
Item 15. Exhibits and Financial Statement Schedules
|
(a) |
|
1. |
|
Financial Statements |
|
|
|
The response to this portion of Item 15 is included in Item 8 of this report. |
|
|
2. |
|
Financial Statement Schedules |
|
|
|
|
The response to this portion of Item 15 is included in Item 8 of this report. |
|
|
3. |
|
Exhibits |
|
|
|
Item |
|
Title or Description |
|
|
|
23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm |
|
|
|
31.1
|
|
Section 302 Chief Executive Officer Certification |
|
|
|
31.2
|
|
Section 302 Chief Financial Officer Certification |
|
|
|
32.1
|
|
Section 906 Chief Executive Officer Certification |
|
|
|
32.2
|
|
Section 906 Chief Financial Officer Certification |
|
(b) |
|
Exhibits |
|
|
|
|
The response to this portion of Item 15 is included in Item 15(a) (3) above. |
|
|
(c) |
|
The following documents are filed as part of the report: |
None.
87
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this Amendment to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
CEDAR SHOPPING CENTERS, INC.
|
|
/s/ LAWRENCE E. KREIDER, JR.
|
|
Lawrence E. Kreider, Jr. |
|
Chief Financial Officer
(principal financial officer) |
|
|
August 12, 2010
88