Cedar Income Fund, Ltd. (CEDR) - 10-K Summary for Fiscal Year Ended December 31, 2000
Business Context and Reporting Period
Cedar Income Fund, Ltd. (the "Company") is a Maryland corporation operating as a Real Estate Investment Trust (REIT). The reporting period covers the fiscal year ended December 31, 2000. The Company owns and operates three office properties in Jacksonville, Florida; Salt Lake City, Utah; and Bloomington, Illinois, and holds a 50% general partnership interest in The Point Shopping Center in Harrisburg, Pennsylvania. During 2000, the Company underwent significant corporate restructuring, including the termination of a capital raise agreement with Uni-Invest Holdings (U.S.A.) B.V., a subsequent name change back to "Cedar Income Fund, Ltd.," and the repurchase of shares from Uni-Invest and related shareholders.
Key Financial Metrics
| Metric | 2000 | 1999 |
|---|---|---|
| Total Revenue | $3,215,781 | $2,515,287 |
| Net Income (Loss) | $(12,083) | $64,470 |
| Net Income Per Share | $(0.01) | $0.11 |
| Funds From Operations (FFO) | $211,394 | $196,276 |
| Net Cash Provided by Operating Activities | $995,246 | $1,105,342 |
| Total Assets | $35,603,756 | $16,692,560 |
| Total Liabilities | $20,256,236 | $1,888,712 |
| Shareholders' Equity | $3,814,901 | $5,242,935 |
| Dividends Paid Per Share | $0.30 | $0.40 |
Liquidity and Debt: As of December 31, 2000, the Company held $841,111 in cash and cash equivalents. Total mortgage loan payable was $17,900,000 (primarily secured by The Point Shopping Center), and a line of credit of $1,515,644 was outstanding. The Company suspended dividend payments for the period July 1, 2000, through June 30, 2001.
Material Changes vs. Prior Period
- Revenue Increase: Total revenue increased by approximately $700,000 (28%) compared to 1999, primarily driven by the acquisition of a 50% interest in The Point Shopping Center in July 2000 and higher interest income.
- Net Loss: The Company reported a net loss of $(12,083) in 2000, a decline from a net income of $64,470 in 1999. This was primarily due to a $203,979 impairment loss on the Corporate Center East property in Bloomington, Illinois, and increased amortization of financing costs.
- Property Portfolio Changes: The Company sold its 50% interest in Germantown Square (Louisville, KY) for $3,000,000, realizing a gain of $91,012. Proceeds were reinvested into The Point Shopping Center.
- Debt Structure: Mortgage debt increased significantly from $1.35 million in 1999 to $19.42 million in 2000 due to the refinancing of The Point Shopping Center (increased from $9.3M to $17.9M) and the drawdown on a new $10 million line of credit.
- Share Count: Outstanding shares decreased from 942,111 in 1999 to 692,111 in 2000 following the repurchase of 250,000 shares associated with the unwinding of the Uni-Invest transaction.
Outlook, Risks, and Management Commentary
- Dividend Suspension: The Board voted to suspend dividends for the four quarters ending June 30, 2001, to preserve liquidity for capital expenditures and debt service.
- Development Project: The Point Shopping Center is undergoing redevelopment to include a new Giant Food store. Completion is expected in September 2001, with projected occupancy of 88%. Additional capital of approximately $1.55 million is required for this project.
- Asset Sales: The Company has accepted an offer to sell the Broadbent Business Center (Salt Lake City) for $5,300,000, subject to due diligence and financing contingencies. The Corporate Center East (Bloomington) remains classified as "Real Estate Held For Sale" following an impairment write-down.
- Risks: Key risks include the ability to renew expiring leases (notably the GSA lease at Southpoint Parkway Center and Cyclopss at Broadbent), the successful completion of The Point redevelopment, and the impact of interest rate fluctuations on variable-rate debt (hedged via an interest rate cap).
- Related Party Transactions: Significant transactions occurred with affiliates of Cedar Bay Company (CBC), including the purchase of The Point Shopping Center and the sale of Germantown Square. Fees for advisory and management services are paid to affiliates of the Chairman, Leo S. Ullman.
Investor Verification Checklist
- Verify the status of the $5.3 million offer to sell the Broadbent Business Center and the timeline for closing.
- Confirm the progress of the Giant Food lease and redevelopment at The Point Shopping Center, including the funding of the remaining $1.55 million capital requirement.
- Review the occupancy status and lease renewal prospects for the GSA tenant at Southpoint Parkway Center (51% of property, lease expires Dec 2001).
- Assess the impact of the suspended dividend policy on shareholder returns and the Company's cash flow projections for 2001.
- Examine the terms of the $17.9 million mortgage on The Point and the $10 million line of credit, including covenants and interest rate exposure.