Bruce Schanzer, president and CEO of Cedar Realty Trust, Inc. (NYSE: CDR), joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.
Schanzer said Cedar Realty continues to exit lower-density secondary markets by divesting assets and using proceeds from the sales to fund acquisitions in high-density, closer–in markets.
The company is in the process of purchasing two grocery-anchored shopping centers in Washington, D.C., for a total cost of $60 million. That will bring the total for assets acquired or placed under contract in 2015 to more than $100 million, Schanzer said.
Because Cedar Realty’s divestitures have exceeded acquisitions, Schanzer said he expects the company to have excess proceeds that can be used to take advantage of buying opportunities.
Meanwhile, Schanzer said that strong tenant demand and limited new supply have allowed the company to focus more on annual rent bumps in its renewals and new leases. Schanzer said he also sees the possibility of pushing rents higher at four of the company’s large box vacancies.
As for Cedar Realty’s tenant base, Schanzer said he has seen an increase in medical operators, fitness clubs, wellness facilities, beauty retailers and pet stores. There’s also been a general uptick in restaurants and fast casual eating establishments, he added.
In addition, Schanzer said Cedar Realty is seeing an uptick in pad site development at its centers. Pad sites are freestanding parcels of commercial real estate located in the front of a larger shopping center or strip mall. “We have incredibly high returns on investment on those types of capital allocation,” he said.
Schanzer also said some of the company’s larger tenants, or those that occupy roughly 15,000 square feet or more, have been reducing their footprints slightly. He characterized the trend as a positive for the company because it gives Cedar Realty the chance to subdivide the space and lease to new tenants willing to pay higher rent.
To view the original article on REIT.com featuring the interview with Allen Kenney, click here.