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Cedar Realty Trust Investing in Redevelopment

06/25/2013 | By Allen Kenney

Bruce Schanzer, president and CEO of Cedar Realty Trust (NYSE: CDR), joined REIT.com for a CEO Spotlight video interview in Chicago at REITWeek 2013: NAREIT’s Investor Forum.

Cedar Realty focuses on grocery-anchored shopping centers. The company’s assets are primarily located in the northeast. Schanzer was asked about the current market for acquisitions.

“We find that grocery-anchored shopping centers have a higher degree of traffic—they drive roughly twice the traffic of other anchored shopping centers,” he said. “That’s really good for our co-tenants, and we find it enhances a center’s vitality. When we think about the types of centers that we’d like to add to our portfolio, it would be centers very similar to the centers that we currently own. When we think about capital allocation within our portfolio and as part of our business, we don’t just think about acquisitions. One of the things that we have done a fair amount of is investing back into our shopping centers. We’ve done a fair amount of redevelopment and value-add into our centers. From a return perspective, we’ve found that we’re able to achieve more attractive unlevered returns on those sorts of investments relative to brand new acquisitions. When we think about capital allocation more broadly in our portfolio, we think about marrying our acquisitions with redevelopment and value-add investing into our portfolio.”

Schanzer also discussed trends in consumer preferences. He said one is a prioritizing “wellness and healthy living.”

“It really manifests itself in a number of different ways,” he said. “First, we’re seeing increased medical usages in our shopping centers, whether it’s emergency care or outpatient services out of a store front. We’re also seeing continued expansion from companies such as GNC, which sells supplements and vitamins. Additionally, we’re seeing health clubs and exercise facilities being expanded across all demographics. Again, that’s really just consistent with what we’ve seen more broadly in terms of people being aware of the need to exercise as part of healthy living.”

Schanzer also mentioned an interest in organic foods.

“People are interested in the sources of their foods, and so we’re seeing all sorts of retailers who are focused on that,” he said.