BEACHWOOD, Ohio, Oct. 20, 2014 /PRNewswire/ -- DDR Corp.
(NYSE: DDR) and an affiliate of Blackstone Real Estate Partners VII
today announced that a joint venture formed by the two entities has
closed on the acquisition of 71 shopping centers previously owned
by American Realty Capital Properties, Inc. (NASDAQ: ARCP) for
$1.93 billion.
(Logo: http://photos.prnewswire.com/prnh/20131217/DDRLOGO)
The portfolio primarily consists of prime power centers located
in Los Angeles, Houston, Denver, Chicago, Atlanta, Washington
D.C. and Phoenix and is
occupied by high quality retailers such as Whole Foods, Trader
Joe's, The Fresh Market, Costco, Target, Walmart, Kohl's, PetSmart,
Dick's Sporting Goods, Bed Bath & Beyond, and the TJX
Companies. Trade area demographics for the portfolio are in-line
with DDR's Prime portfolio featuring average household income of
approximately $75,000 and a
population of approximately 400,000 people. The average base rent
per square foot of the portfolio is 6% below DDR's current prime
average, representing a unique opportunity to drive future
growth.
Blackstone Real Estate Partners VII, a real estate fund managed
by Blackstone on behalf of its
investors, owns 95% of the common equity of the joint venture and
an affiliate of DDR owns the remaining 5%. DDR will provide leasing
and management services and has the right of first offer to acquire
10 of the assets, under certain conditions.
DDR's investment in the joint venture includes approximately
$20 million of common equity and
$300 million of preferred equity with
a fixed dividend rate of 8.5%. DDR also assumed its pro rata share
of joint venture debt of $62
million.
The joint venture has assumed approximately $437 million of senior non-recourse debt, which
has a weighted average term of 7.1 years and an interest rate of
4.45%. The venture has also originated an additional $800 million non-recourse loan facility, which
has a five-year term and an interest rate of LIBOR plus 160 basis
points.
David J. Oakes, president and
chief financial officer of DDR, commented, "We are pleased to once
again announce the closing of a transaction with our partners at
Blackstone, further highlighting
our ability to source high-quality acquisitions in an opportunistic
manner. In consultation with our partner, we are in discussions
with various counterparties to sell a portion of the portfolio over
the near term with the goals of improving the risk-adjusted returns
and maximizing portfolio quality for the joint venture."
About DDR Corp.
DDR is an owner and manager of 456
value-oriented shopping centers representing 125 million square
feet in 42 states and Puerto Rico. The Company's assets are
concentrated in high barrier-to-entry markets with stable
populations and high growth potential and its portfolio is actively
managed to create long-term shareholder value. DDR is a
self-administered and self-managed REIT operating as a fully
integrated real estate company, and is publicly traded on the New
York Stock Exchange under the ticker symbol DDR. Additional
information about the Company is available at www.ddr.com, as well
as on Twitter, LinkedIn and Facebook.
Safe Harbor
DDR Corp. considers portions of the
information in this press release to be forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, both as
amended, with respect to the Company's expectation for future
periods. Although the Company believes that the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its
expectations will be achieved. For this purpose, any statements
contained herein that are not historical fact may be deemed to be
forward-looking statements. There are a number of important factors
that could cause our results to differ materially from those
indicated by such forward-looking statements, including, among
other factors, local conditions such as supply of space or a
reduction in demand for real estate in the area; competition from
other available space; dependence on rental income from real
property; the loss of, significant downsizing of or bankruptcy of a
major tenant; constructing properties or expansions that produce a
desired yield on investment; our ability to buy or sell assets on
commercially reasonable terms; our ability to complete acquisitions
or dispositions of assets under contract; our ability to secure
equity or debt financing on commercially acceptable terms or at
all; our ability to enter into definitive agreements with regard to
our financing and joint venture arrangements or our failure to
satisfy conditions to the completion of these arrangements; and the
success of our capital recycling strategy. For additional factors
that could cause the results of the Company to differ materially
from those indicated in the forward-looking statements, please
refer to the Company's Form 10-K for the year ended December 31, 2013, as amended. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the
date hereof.
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SOURCE DDR Corp.