PhillyDeals: Serving Phila.'s lively neighborhoods

Posted: May 22, 2014

Bruce Schanzer didn't grow up in a rowhouse eating hoagies. His father is a North Jersey neurologist. Schanzer learned real estate as an investment banker at Goldman Sachs.

But it would be hard to find a bigger self-professed fan of Philly's classic outside-Center-City neighborhoods than the 45-year-old chief executive of Cedar Realty Trust Inc.

Cedar owns big, bright, pavement-enclosed shopping centers in Academy Park and Port Richmond and along South Philly's Columbus Avenue and Oregon Avenue, the last of which he calls his favorite street, with its mix of industry, homes, stores, parking, transit.

In March, Cedar bought South Philly's sprawling Quartermaster Plaza from a New York outfit for $92 million, including enough empty land to build another strip of big stores.

Why? "Philly isn't a moonshot town," Schanzer says as his driver speeds us down Grant Avenue past modest brick and asbestos-shingle houses. "It's a solid town, with impressive people who like living here and conduct themselves with honor and integrity. That working-class component. Look at the way people mow their lawns. There's pride of ownership."

Though, on close contact, Schanzer seems to find his stores' customers a bit bemusing. At a Slack's Hoagie Shack in one of his centers, a very large man ordering a pizza steak "appears to lack self-awareness." A bald man heading toward the restroom in a bright orange jersey with a Flyers tattoo on each side of his skull "must really be a fan."

He is impressed by Philadelphians like ShopRite operator Jeff Brown (a Cedar tenant), developer Bart Blatstein, Pennsylvania Real Estate Investment Trust shopping-mall boss Joe Coradino, all of whom have succeeded in aspects of retailing - that mature, low-margin business, where, Schanzer says, every store chain seems to go bankrupt, eventually, and success means spreading your properties so no one competitor can drive you down. And making sure there's a grocery in every center. And charging independent stores more.

Cedar traded at a deep discount to other retail property stocks when Schanzer took over in 2011. It's done well since - nearly triple the stock performance of Bloomberg's retail real estate investment trust index - as Schanzer's team sold suburban centers like the Shore Mall in Egg Harbor to focus on Northeast cities.

What happens to these places as retail moves online? "I don't know. We're trying to figure that out," Schanzer acknowledges.

But he adds that he's betting there will always be some demand for commercial property in places like Northeast and South Philly.

"These live-and-let-live, high-density, middle-income, urban-living neighborhoods," as he describes them. "So many cities struggle with how to maintain these neighborhoods. But here they seem to survive and thrive and endure. So long as they need me to provide them with something to eat, I'm glad to supply it."



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