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Section 1: 10-K (10-K)

cdr-10k_20181231.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 001-31817

 

CEDAR REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

 

 

Maryland

42-1241468

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

 

 

44 South Bayles Avenue, Port Washington, NY

11050-3765

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:  (516) 767-6492

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Name of each exchange on which registered

Common Stock, $0.06 par value

New York Stock Exchange

7-1/4% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

New York Stock Exchange

6-1/2% Series C Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

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      No  

 

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      No  

 

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      No  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes      No  

 

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 registrant’s 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.  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

  

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

 

Based on the closing sales price on June 30, 2018 of $4.72 per share, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $414,299,000.

 

The number of shares outstanding of the registrant’s Common Stock $.06 par value was 89,104,577 on February 11, 2019.

 

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant’s definitive proxy statement relating to its 2019 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

 

 

 

 

 


 

CEDAR REALTY TRUST, INC.

TABLE OF CONTENTS

 

PART I

1 and 2.

 

Business and Properties

 

3

1A.

 

Risk Factors

 

10

1B.

 

Unresolved Staff Comments

 

23

3.

 

Legal Proceedings

 

23

4.

 

Mine Safety Disclosures

 

24

 

 

 

 

 

PART II

5.

 

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

24

6.

 

Selected Financial Data

 

26

7.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

28

7A.

 

Quantitative and Qualitative Disclosures about Market Risk

 

39

8.

 

Financial Statements and Supplementary Data

 

41

9.

 

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

72

9A.

 

Controls and Procedures, including Management Report on Internal Control Over Financial Reporting

 

72

9B.

 

Other information

 

75

 

 

 

 

 

PART III

10.

 

Directors, Executive Officers and Corporate Governance

 

75

11.

 

Executive Compensation

 

75

12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

75

13.

 

Certain Relationships and Related Transactions, and Director Independence

 

75

14.

 

Principal Accountant Fees and Services

 

75

 

 

 

 

 

PART IV

15.

 

Exhibits and Financial Statement Schedules

 

76

16.

 

Form 10-K Summary

 

78

 

2


 

Part I.

Items 1 and 2. Business and Properties

General

Cedar Realty Trust, Inc. (the “Company”) is a real estate investment trust (“REIT”) that focuses primarily on ownership, operation and redevelopment of grocery-anchored shopping centers in high-density urban markets from Washington, D.C. to Boston. At December 31, 2018, the Company owned and managed a portfolio of 58 operating properties (excluding properties “held for sale”) totaling 8.7 million square feet of gross leasable area (“GLA”). The portfolio was 91.0% leased and 90.7% occupied at December 31, 2018.

The Company, organized in 1984, 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 Company’s objectives are to provide to its shareholders a professionally-managed real estate portfolio consisting primarily of grocery-anchored shopping centers from Washington, D.C. to Boston, 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 Realty Trust 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, 2018, the Company owned 99.4% of the Operating Partnership and is its sole general partner. The 553,000 limited partnership units in the Operating Partnership (“OP Units”) are economically equivalent to the Company’s common stock and are redeemable at the option of the holder. Such redemptions are payable in cash or in shares of the Company’s common stock, one a one-to-one basis, at the option of the Company.

The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to long-term leases. The Company’s 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 grocery-anchored 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.

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 Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York 11050-3765 (telephone 516-767-6492). The Company also maintains property management, construction management and/or leasing offices at several of its shopping-center properties. The Company’s website can be accessed at www.cedarrealtytrust.com, where a copy of the Company’s 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 Company’s Code of Ethics, corporate governance guidelines and committee charters are also available on the website. Information on the website is not part of this Form 10-K.

The Company’s Properties  

The following tables summarize information relating to the Company’s portfolio as of December 31, 2018:

 

 

 

Number of

 

 

 

 

 

 

Percentage

 

State

 

properties

 

 

GLA

 

 

of GLA

 

Pennsylvania

 

 

24

 

 

 

4,357,000

 

 

 

49.9

%

Massachusetts

 

 

7

 

 

 

1,124,000

 

 

 

12.9

%

Connecticut

 

 

7

 

 

 

1,142,000

 

 

 

13.1

%

Maryland / Washington, D.C.

 

 

8

 

 

 

992,000

 

 

 

11.4

%

Virginia

 

 

7

 

 

 

493,000

 

 

 

5.6

%

New Jersey

 

 

3

 

 

 

307,000

 

 

 

3.5

%

New York

 

 

1

 

 

 

195,000

 

 

 

2.2

%

Delaware

 

 

1

 

 

 

119,000

 

 

 

1.4

%

Total portfolio

 

 

58

 

 

 

8,729,000

 

 

 

100.0

%

3


 

 

Tenant Concentration

 

 

Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

Percentage

 

 

 

of

 

 

 

 

 

 

Percentage

 

 

Annualized

 

 

base rent

 

 

annualized

 

Tenant

 

stores

 

 

GLA

 

 

of GLA

 

 

base rent

 

 

per sq. ft.

 

 

base rents

 

Top twenty tenants (a):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Giant Foods

 

 

8

 

 

 

538,000

 

 

 

6.2

%

 

$

8,857,000

 

 

$

16.46

 

 

 

8.1

%

Shop Rite

 

 

4

 

 

 

250,000

 

 

 

2.9

%

 

 

4,212,000

 

 

 

16.85

 

 

 

3.9

%

Stop & Shop

 

 

4

 

 

 

271,000

 

 

 

3.1

%

 

 

2,966,000

 

 

 

10.94

 

 

 

2.7

%

LA Fitness

 

 

5

 

 

 

199,000

 

 

 

2.3

%

 

 

2,766,000

 

 

 

13.90

 

 

 

2.5

%

Dollar Tree

 

 

22

 

 

 

226,000

 

 

 

2.6

%

 

 

2,542,000

 

 

 

11.25

 

 

 

2.3

%

Big Y

 

 

2

 

 

 

106,000

 

 

 

1.2

%

 

 

2,006,000

 

 

 

18.92

 

 

 

1.8

%

Home Depot

 

 

2

 

 

 

253,000

 

 

 

2.9

%

 

 

1,977,000

 

 

 

7.81

 

 

 

1.8

%

Staples

 

 

5

 

 

 

106,000

 

 

 

1.2

%

 

 

1,773,000

 

 

 

16.73

 

 

 

1.6

%

BJ's Wholesale Club

 

 

1

 

 

 

118,000

 

 

 

1.4

%

 

 

1,683,000

 

 

 

14.26

 

 

 

1.5

%

United Artists

 

 

1

 

 

 

78,000

 

 

 

0.9

%

 

 

1,538,000

 

 

 

19.72

 

 

 

1.4

%

Kroger

 

 

2

 

 

 

125,000

 

 

 

1.4

%

 

 

1,528,000

 

 

 

12.22

 

 

 

1.4

%

Marshalls

 

 

6

 

 

 

170,000

 

 

 

1.9

%

 

 

1,497,000

 

 

 

8.81

 

 

 

1.4

%

Food Lion

 

 

4

 

 

 

163,000

 

 

 

1.9

%

 

 

1,460,000

 

 

 

8.96

 

 

 

1.3

%

Shoppers Food Warehouse

 

 

2

 

 

 

120,000

 

 

 

1.4

%

 

 

1,267,000

 

 

 

10.56

 

 

 

1.2

%

Planet Fitness

 

 

5

 

 

 

99,000

 

 

 

1.1

%

 

 

1,237,000

 

 

 

12.49

 

 

 

1.1

%

Walmart

 

 

3

 

 

 

192,000

 

 

 

2.2

%

 

 

1,193,000

 

 

 

6.21

 

 

 

1.1

%

Redner's

 

 

3

 

 

 

159,000

 

 

 

1.8

%

 

 

1,159,000

 

 

 

7.29

 

 

 

1.1

%

Kohl's

 

 

2

 

 

 

147,000

 

 

 

1.7

%

 

 

1,129,000

 

 

 

7.68

 

 

 

1.0

%

Home Goods

 

 

4

 

 

 

105,000

 

 

 

1.2

%

 

 

1,044,000

 

 

 

9.94

 

 

 

1.0

%

Petsmart

 

 

3

 

 

 

63,000

 

 

 

0.7

%

 

 

971,000

 

 

 

15.41

 

 

 

0.9

%

Sub-total top twenty tenants

 

 

88

 

 

 

3,488,000

 

 

 

40.0

%

 

 

42,805,000

 

 

 

12.27

 

 

 

39.2

%

Remaining tenants

 

 

755

 

 

 

4,426,000

 

 

 

50.7

%

 

 

66,256,000

 

 

 

14.97

 

 

 

60.8

%

Sub-total all tenants (b)

 

 

843

 

 

 

7,914,000

 

 

 

90.7

%

 

$

109,061,000

 

 

$

13.78

 

 

 

100.0

%

Vacant space

 

N/A

 

 

 

815,000

 

 

 

9.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

843

 

 

 

8,729,000

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Several of the tenants listed above share common ownership with other tenants:

(1) Giant Foods, Stop & Shop and Food Lion, 2) Shoppers Food Warehouse and Farm Fresh (GLA of 17,000; annualized base rent of $93,000), and (3) Marshalls, Home Goods, and TJ Maxx (GLA of 54,000; annualized base rent of $529,000).

(b)

Comprised of large tenants (15,000 or more GLA) and small tenants as follows:

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

Annualized

 

 

Percentage

 

 

 

Occupied

 

 

of occupied

 

 

Annualized

 

 

base rent

 

 

annualized

 

 

 

GLA

 

 

GLA

 

 

base rent

 

 

per sq. ft.

 

 

base rents

 

Large tenants

 

 

5,473,000

 

 

 

69.2

%

 

$

59,899,000

 

 

$

10.95

 

 

 

54.9

%

Small tenants

 

 

2,441,000

 

 

 

30.8

%

 

 

49,162,000

 

 

 

20.13

 

 

 

45.1

%

Total

 

 

7,914,000

 

 

 

100.0

%

 

$

109,061,000

 

 

$

13.78

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4


 

Lease Expirations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized

 

 

Percentage

 

 

 

Number

 

 

 

 

 

 

Percentage

 

 

Annualized

 

 

expiring

 

 

of annualized

 

Year of lease

 

of leases

 

 

GLA

 

 

of GLA

 

 

expiring

 

 

base rents

 

 

expiring

 

expiration

 

expiring

 

 

expiring

 

 

expiring

 

 

base rents

 

 

per sq. ft.

 

 

base rents

 

Month-To-Month

 

 

46

 

 

 

193,000

 

 

 

2.4

%

 

$

3,168,000

 

 

$

16.41

 

 

 

2.9

%

2019

 

 

105

 

 

 

703,000

 

 

 

8.9

%

 

 

10,320,000

 

 

 

14.68

 

 

 

9.5

%

2020

 

 

133

 

 

 

1,343,000

 

 

 

17.0

%

 

 

16,812,000

 

 

 

12.52

 

 

 

15.4

%

2021

 

 

131

 

 

 

931,000

 

 

 

11.8

%

 

 

14,616,000

 

 

 

15.70

 

 

 

13.4

%

2022

 

 

106

 

 

 

608,000

 

 

 

7.7

%

 

 

9,420,000

 

 

 

15.49

 

 

 

8.6

%

2023

 

 

76

 

 

 

609,000

 

 

 

7.7

%

 

 

8,496,000

 

 

 

13.95

 

 

 

7.8

%

2024

 

 

62

 

 

 

858,000

 

 

 

10.8

%

 

 

10,656,000

 

 

 

12.42

 

 

 

9.8

%

2025

 

 

40

 

 

 

583,000

 

 

 

7.4

%

 

 

7,800,000

 

 

 

13.38

 

 

 

7.2

%

2026

 

 

30

 

 

 

263,000

 

 

 

3.3

%

 

 

3,804,000

 

 

 

14.46

 

 

 

3.5

%

2027

 

 

34

 

 

 

319,000

 

 

 

4.0

%

 

 

4,248,000

 

 

 

13.32

 

 

 

3.9

%

2028

 

 

34

 

 

 

393,000

 

 

 

5.0

%

 

 

4,872,000

 

 

 

12.40

 

 

 

4.5

%

2029

 

 

21

 

 

 

481,000

 

 

 

6.1

%

 

 

5,772,000

 

 

 

12.00

 

 

 

5.3

%

Thereafter

 

 

25

 

 

 

630,000

 

 

 

8.0

%

 

 

9,077,000

 

 

 

14.41

 

 

 

8.3

%

All tenants

 

 

843

 

 

 

7,914,000

 

 

 

100.0

%

 

$

109,061,000

 

 

$

13.78

 

 

 

100.0

%

Vacant space

 

N/A

 

 

 

815,000

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

Total portfolio

 

 

843

 

 

 

8,729,000

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5


 

Real Estate Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

Year

 

 

 

 

 

 

Percent

 

 

base rent per

 

 

Major Tenants (a)

 

Property Description

 

acquired

 

 

GLA

 

 

occupied

 

 

leased sq. ft.

 

 

Name

 

GLA

 

Connecticut

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bethel Shopping Center

 

 

2013

 

 

 

101,105

 

 

 

95.1

%

 

$

24.26

 

 

Big Y

 

 

63,817

 

Brickyard Plaza

 

 

2004

 

 

 

227,598

 

 

 

97.0

%

 

 

8.45

 

 

Home Depot

 

 

103,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kohl's

 

 

58,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michaels

 

 

21,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petsmart

 

 

20,405

 

Groton Shopping Center

 

 

2007

 

 

 

130,264

 

 

 

100.0

%

 

 

12.29

 

 

TJ Maxx

 

 

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

21,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aldi

 

 

17,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Planet Fitness

 

 

17,500

 

Jordan Lane

 

 

2005

 

 

 

177,504

 

 

 

73.6

%

 

 

13.43

 

 

Stop & Shop

 

 

60,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cardio Fitness

 

 

20,283

 

New London Mall

 

 

2009

 

 

 

259,566

 

 

 

92.1

%

 

 

14.91

 

 

Shop Rite

 

 

64,017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marshalls

 

 

30,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Goods

 

 

25,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petsmart

 

 

23,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A.C. Moore

 

 

20,932

 

Oakland Commons

 

 

2007

 

 

 

90,100

 

 

 

100.0

%

 

 

6.37

 

 

Walmart

 

 

54,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bristol Ten Pin

 

 

35,189

 

Southington Center

 

 

2003

 

 

 

155,842

 

 

 

98.5

%

 

 

7.74

 

 

Walmart

 

 

95,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NAMCO

 

 

20,000

 

Total Connecticut

 

 

 

 

 

 

1,141,979

 

 

 

92.9

%

 

 

12.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delaware

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Christina Crossing

 

 

2017

 

 

 

119,353

 

 

 

89.4

%

 

 

17.53

 

 

Shop Rite

 

 

68,621

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maryland / Washington, D.C.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East River Park

 

 

2015

 

 

 

150,038

 

 

 

98.7

%

 

 

21.67

 

 

Safeway

 

 

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

District of Columbia

 

 

34,400

 

Metro Square

 

 

2008

 

 

 

71,896

 

 

 

100.0

%

 

 

18.14

 

 

Shoppers Food Warehouse

 

 

58,668

 

Oakland Mills

 

 

2005

 

 

 

58,224

 

 

 

91.0

%

 

 

12.11

 

 

LA Mart

 

 

39,279

 

San Souci Plaza (b)

 

 

2009

 

 

 

264,134

 

 

 

82.6

%

 

 

11.20

 

 

Shoppers Food Warehouse

 

 

61,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marshalls

 

 

27,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Goods

 

 

19,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maximum Health and Fitness

 

 

15,612

 

Senator Square

 

 

2018

 

 

 

61,691

 

 

 

100.0

%

 

 

20.80

 

 

Unity Health Care

 

 

18,750

 

Shoppes at Arts District

 

 

2016

 

 

 

35,676

 

 

 

100.0

%

 

 

36.01

 

 

Busboys and Poets

 

 

9,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes! Organic Market

 

 

7,169

 

Valley Plaza

 

 

2003

 

 

 

190,939

 

 

 

95.8

%

 

 

5.75

 

 

K-Mart

 

 

95,810

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ollie's Bargain Outlet

 

 

41,888