DDR Completes $127 million of Strategic Transactions in First Quarter 2013
BEACHWOOD, Ohio, April 2, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced continued execution of its strategic capital recycling program which includes the acquisition of two prime assets for $81 million in Dallas, TX, and Oakland, CA, the fourth and eleventh largest MSA's in the United States, respectively. Also during the quarter, DDR disposed of $46 million of non-prime assets, including $8 million of non-income producing assets. The Company's share of first quarter disposition proceeds was $35 million. The acquisitions were funded primarily with proceeds from asset sales as well as new common equity. The Company accessed its at-the-market common equity program and issued 2.3 million new common shares during the quarter at an average price of $17.57, generating gross proceeds of $40 million. The properties acquired during the quarter, which have an average trade area household income of $96,000 and population of 434,000 people, have been added to the Company's large, high quality, unencumbered asset pool.
First quarter acquisition activity:
DDR acquired Marketplace at Highland Village, a 400,000 square foot prime power center, in Dallas, Texas for $40 million. Located at the intersection of Village Parkway and Justin Road in the heart of the Flower Mound/Highland Village submarket, the shopping center enjoys an average trade area household income of over $100,000 and population of 237,000 people, and features Walmart, T.J. Maxx, HomeGoods, Petco, LA Fitness, and Office Depot. Highland Village is 90% leased, 85% of its revenue is generated by national retailers, and the Company will leverage its operating platform to create additional value through lease up as well as the recapture and downsizing of space that can be marked to market. With this acquisition, DDR owns and manages a portfolio of six prime power centers comprised of 1.8 million square feet in Dallas, an MSA with a 5.7% unemployment rate, and projections for job and population growth over the next four years exceeding the national average.
DDR also acquired Whole Foods at Bay Place, a 57,000 square foot prime asset in downtown Oakland, for $41 million. The asset features a top performing Whole Foods operating in a densely populated high barrier-to-entry urban infill location. Trade area demographics include an average household income of approximately $90,000 and population of 630,000 people. The asset provides low risk current cash flow from a high credit tenant, consistent rent growth, and long-term NOI enhancement potential based on the quality of the location and future asset intensification opportunities.
First quarter disposition activity:
During the quarter, DDR disposed of 21 non-prime operating assets and 2 non-income producing assets for gross proceeds of $46 million, of which the Company's share was $35 million. An additional $81 million of non-prime assets are currently under contract for sale, including $27 million of non-income producing assets.
David J. Oakes, president and chief financial officer of DDR, commented, "Despite a seasonally slow quarter for transaction activity, we are pleased to continue to upgrade our portfolio quality by sourcing attractively priced prime acquisitions. The new assets have increased the credit quality and long-term growth profile of our cash flow, and our prudent funding has advanced the improvement of our balance sheet."
DDR is an owner and manager of 454 value-oriented shopping centers representing 116 million square feet in 39 states, Puerto Rico and Brazil. 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.
DDR 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 oversupply 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, 2012, 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.
SOURCE DDR Corp.