Cedar Shopping Centers Announces Joint Venture

PORT WASHINGTON, N.Y., April 2 /PRNewswire-FirstCall/ -- Cedar Shopping Centers, Inc. (NYSE: CDR) , today announced that it has entered into an agreement to form a joint venture with a wholly-owned subsidiary of Homburg Invest Inc., a public Canadian real estate corporation listed on the Toronto Stock Exchange (TSX: HII.A and HII.B) and Euronext Amsterdam Stock Exchange (AEX: HII) , with respect to four shopping centers presently owned and managed by Cedar and five properties announced in December 2006 to be acquired shortly. Richard Homburg, a director of Cedar Shopping Centers, Inc. since 1998, is Chairman and CEO of Homburg Invest. Cedar will acquire a 20% interest in the joint venture; and Homburg Invest Inc., through a wholly-owned U.S. subsidiary, will acquire the remaining 80% interest. The joint venture is structured in limited partnerships such that, at Homburg's election, it may sell a portion of its ownership interests to individual investors in Europe. The Homburg group will be entitled to certain fees with respect thereto.

The joint venture has been approved by Cedar's Board of Directors, including the unanimous vote of all independent directors, with Mr. Homburg abstaining from the vote.

Cedar will be entitled to a "promote" structure, applicable separately to each property, which, if certain targets are met, commencing at a 9.25% leveraged cash-on-cash internal rate of return, determined upon sale or other disposition of any of the properties, will permit Cedar to receive at least 40% of the returns in excess of such leveraged 9.25% threshold. Additionally, Cedar will receive fees for ongoing property management, leasing, construction management, acquisitions, dispositions, financings and refinancings with respect to the properties.

The properties, valued at approximately $170 million, consist of one shopping center in Massachusetts and eight shopping centers in Pennsylvania, including the Company's recently-completed ground-up shopping center development in Hershey, Pennsylvania. The Pennsylvania properties also include five Giant supermarket-anchored properties announced in December 2006 and scheduled to close on April 4, 2007. Existing and pending first mortgage financing on the nine properties will be approximately $107 million at a weighted average interest rate of 5.54%.

  The properties include the following:

  -- Pennsboro Commons, Enola, Pennsylvania - 110,000 sq. ft.
  -- Fieldstone Marketplace, New Bedford, Massachusetts - 194,000 sq. ft.
  -- Stonehedge Square, Carlisle, Pennsylvania - 90,000 sq. ft.
  -- Meadows Marketplace, Hershey, Pennsylvania - 86,000 sq. ft.
  -- Aston Center, Aston, Pennsylvania - 55,000 sq. ft. (scheduled to close
     4/4/07)
  -- Ayr Town Center, McConnellsburg, Pennsylvania - 56,000 sq. ft.
     (scheduled to close 4/4/07)
  -- Parkway Plaza, Mechanicsburg, Pennsylvania - 107,000 sq. ft. (scheduled
     to close 4/4/07)
  -- Scott Town Center, Bloomsburg, Pennsylvania - 68,000 sq. ft. (scheduled
     to close 4/4/07)
  -- Spring Meadow Shopping Center, Wyomissing, Pennsylvania - 68,000
     (scheduled to close 4/4/07)

The joint venture agreement will enable the Company to realize some of the increases in value of certain of its assets. The Company expects to receive approximately $50 million in net cash proceeds from the sale of the above- listed properties to the joint venture, plus an additional amount of approximately $23 million from new financing of two of the properties. These proceeds along with the Company's availability under its secured revolving credit facility plus available cash should provide in excess of $200 million of capital to fund the Company's development and acquisition pipeline. Closings of the joint venture transactions are expected to be concluded by the end of 2007, subject to Homburg's completion of due diligence and to other normal closing conditions.

Leo S. Ullman, CEO of Cedar, stated, "We are delighted to have negotiated and structured an important joint venture arrangement, which, we believe, will create significant value for shareholders. This transaction allows us to continue to fund and pursue our development and acquisition opportunities without having to access the capital markets in the near term. While the joint venture arrangement announced today is limited to the nine properties, we expect that we will be able to benefit from additional joint venture opportunities to increase shareholder value over time."

The joint venture arrangements incorporate sufficient elements of control, including, without limitation, the right to trigger a "buy-sell" provision after 18 months, so that the properties will in all likelihood continue to be included on a consolidated basis in the Company's financial statements and, accordingly, no gain will be recognized for financial reporting purposes.

About Homburg Invest Inc.

Homburg Invest Inc., with its head office in Halifax, Nova Scotia, owns and develops a diversified portfolio of quality real estate including office, retail, industrial and residential apartment and townhouse properties throughout Canada, the United States and Western Europe.

Homburg Invest Inc. recently announced and expects shortly to complete a successful tender offer for Alexis Nihon Real Estate Investment Trust (TSX: AN.UN), a Canadian REIT also listed on the Toronto Stock Exchange. Homburg Invest Inc. also controls approximately 24 percent of the voting power of Dim Vastgoed N.V., a Netherlands corporation with shopping center holdings in Florida and Georgia.

About Cedar Shopping Centers, Inc.

Cedar Shopping Centers, Inc. is a self-managed real estate investment trust focused on supermarket-anchored shopping centers and drug store-anchored convenience centers, which has realized significant growth in assets and shareholder value since its public offering in October 2003. The Company presently owns and operates 99 of such primarily supermarket- and drug store- anchored centers with an aggregate of approximately 10.2 million square feet of gross leasable area, located in nine states, predominantly in the Northeast and mid-Atlantic regions. Four of such properties are joint ventures with Kimco Realty Corporation (NYSE: KIM) . The Company also owns 15 development parcels aggregating approximately 196 acres.

Forward-Looking Statements

Certain statements contained in this press release constitute forward- looking statements within the meaning of the securities laws. Forward-looking statements include, without limitation, statements containing the words "anticipates", "believes", "expects", "intends", "future", and words of similar import which express the Company's belief, expectations or intentions regarding future performance or future events or trends. While forward-looking statements reflect good faith beliefs, they are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements as a result of factors outside of the Company's control. Certain factors that might cause such a difference include, but are not limited to, the following: real estate investment considerations, such as the effect of economic and other conditions in general and in the Company's market areas in particular; the financial viability of the Company's tenants; the continuing availability of shopping center acquisitions, and development and redevelopment opportunities, on favorable terms; the availability of equity and debt capital in the public and private markets; changes in interest rates; the fact that returns from development, redevelopment and acquisition activities may not be at expected levels; the Company's potential inability to realize the level of proceeds from property sales as initially expected; inherent risks in ongoing development and redevelopment projects including, but not limited to, cost overruns resulting from weather delays, changes in the nature and scope of development and redevelopment efforts, and market factors involved in the pricing of material and labor; the need to renew leases or re-let space upon the expiration of current leases; and the financial flexibility to refinance debt obligations when due. Such forward-looking statements speak only as of the date hereof. The Company does not intend, and disclaims any duty or obligation, to update or revise any forward-looking statements set forth in this release to reflect any change in expectations, change in information, new information, future events or circumstances on which such information was based.