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Vornado unit Urban Edge acquires NY, NJ retail portfolio for $325M

Urban Edge Properties, the strip mall unit of Vornado Realty Trust, has agreed to buy seven retail properties in New York, New Jersey and Missouri for $325 million.

The portfolio, which is 83 percent leased, includes the Yonkers Gateway Center (Yonkers, NY), The Plaza at Woodbridge (Woodbridge, NJ), The Plaza at Cherry Hill (Cherry Hill, NJ), the Millburn Gateway Center (Millburn, NJ), One Lincoln Plaza (Westfield, NJ) and Manchester Plaza (Manchester, MO).

The biggest property in the portfolio is Yonkers Gateway Center. The mall, which has 436,770 s/f, houses tenants such as Alamo Drafthouse Cinema, Best Buy and DSW. Occupancy in the property is at 88 percent.

The Plaza at Woodbrige and The Plaza at Cherry Hill also have more than 400,000 s/f of space. Tenants in the properties include Raymour & Flanigan, Aldi, Best Buy and LA Fitness.

The properties were acquired in exchange for $127 million of operating property units in Urban Edge. The units, which can be converted into common shares, are valued at $27.02 per unit. As part of the deal, Urban Edge will assume $33 million of debt. The company also has to provide a $117 million non-recourse loan and fund the remaining $48 million in cash.

In spite of investor pessimism over malls, Urban Edge has been expanding its portfolio. Last November, the company announced that it was in contract to buy the Hudson Mall in Jersey City for $43.7 million. Earlier this year, it also bought a leasehold interest in the Shops at Bruckner in the Bronx for $32 million.  “Since the beginning of the year and including this transaction, we have announced or closed on ten acquisitions for $455 million. These properties align with our strategy of owning and improving large, well-located properties in the New York City metropolitan area and investing at a meaningful spread to our cost of capital,” said Jeff Olson, the chairman and CEO of Urban Edge.

The properties were privately owned for four decades. The owners were represented by James Kuhn, David Colen and Geoff Millerd of Newmark Grubb Knight Frank. The acquisition is expected to close in the second quarter of this year.

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