DDR-Glimcher Completes Asset Swap - Analyst Blog
10 December 2011 - 12:15AM
Zacks
DDR Corp. (DDR), a
real estate investment trust (REIT), has recently completed the
asset swap transaction that was announced earlier in September 2011
with one of its peers Glimcher Realty Trust (GRT).
The asset swap was part of the respective corporate strategy to
better align the portfolio with the other’s operating platform. The
transaction is expected to be accretive to earnings of both the
participating companies.
In concurrence with the agreement,
DDR sold Town Center Plaza – an open-air mall spanning 650,000
square feet in Kansas City, Kansas to Glimcher for $139 million. In
exchange, Glimcher sold Polaris Towne Center – a 700,000
square-foot shopping center in Columbus, Ohio, to DDR for $80
million. DDR intends to utilize the additional proceeds from the
asset swap to develop prime retail properties in core
markets.
Town Center Plaza is anchored by
leading retailers such as Macy's, Inc. (M) and
Dick's Sporting Goods Inc. (DKS). With 95%
occupancy and a high sales productivity of over $400 per square
foot, the retail property is expected to enhance the overall
quality of Glimcher's mall portfolio. In addition, the business
module of Town Center Plaza is well aligned with Glimcher's core
competencies and would enable it to capitalize on its deep tenant
relationships within the mall sector.
Polaris Towne Center is a
market-dominant shopping center anchored by prime retailers such as
Target Corp. (TGT), Lowe's Companies
Inc. (LOW), and The Kroger Co. (KR). The
property is the seventh of its kind that is owned by DDR in the
Columbus MSA (metropolitan statistical area), thereby strengthening
its leading position in the market.
The asset swap transaction
involving the simultaneous sale and purchase of retail properties
is expected to be mutually beneficial given the core competencies
of each company, the efficacy of each operating platform, and the
long-term value creation potential of each asset.
Headquartered in Beachwood, Ohio,
DDR acquires, owns, develops, leases and manages shopping centers
and business centers across 41 states in the U.S., along with
Puerto Rico and Brazil. By the end of third quarter 2011, DDR owned
and managed 538 retail operating (primarily open-air,
value-oriented shopping centers) and development properties
spanning approximately 134 million square feet.
We maintain our ‘Neutral’
recommendation on DDR for the long term. The company presently has
a Zacks #3 Rank, which translates into a short-term ‘Hold’
rating.
DDR CORP (DDR): Free Stock Analysis Report
DICKS SPRTG GDS (DKS): Free Stock Analysis Report
GLIMCHER REALTY (GRT): Free Stock Analysis Report
KROGER CO (KR): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
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