In unorthodox moves, two major retail real estate developers are helping keep Reading, Pa.-baseddepartment store chain Boscov's afloat. Cafaro Co. and Pennsylvania REIT, both of which have holdings in the state, gave $30 million to former chairman and CEO Albert Boscov — 10 percent of the $300 million he has lined up from a consortium of banks and private and public sources that will enable the chain to continue operations.
The privately held, Youngstown, Ohio-based, Cafaro Co., which owns more than 34 million square feet of retail space, invested $20 million in the retailer through Cathco Diversified Fund, LP, owned by members of the Cafaro family. Meanwhile, PREIT, a Philadelphia-based REIT with a 26.1-million-square-foot portfolio, provided a $10 million unsecured loan.
The Cafaro family, whose 51 centers have no Boscov's stores as tenants, owns six retailin Erie, Pa. The Cafaros chose to invest in the struggling retailer out of respect for Al Boscov and their trust in his ability to turn the chain around, according to a Cafaro spokesman. PREIT has as many as eight Boscov's locations within its portfolio of 38 regional malls. Officials from PREIT declined to comment on the motivation for its involvement.