DDR Completes $175 Million of Strategic Transactions in Second Quarter 2013
BEACHWOOD, Ohio, July 1, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced that it completed the acquisition of its joint venture partner's 85% interest in five prime power centers located in Atlanta, Tampa and Richmond for $94 million in the second quarter of 2013. Also during the quarter, DDR disposed of $64 million of non-prime assets, of which $60 million was the Company's share.
These transactions allow DDR to further enhance its portfolio quality while also simplifying the Company's structure. The investments were funded with proceeds from asset sales and the issuance of common equity. DDR issued 2.5 million new common shares during the quarter at an average price of $17.83, generating gross proceeds of $45 million. These prime power centers were unencumbered at the time of acquisition, and will be included in the Company's high quality unencumbered asset pool.
Second quarter acquisition activity:
The Company acquired its partner's interest in five prime power centers located in the top 50 MSA's including The Walk at Highwoods Preserve (Tampa, FL), Douglasville Pavilion (Atlanta, GA), Commonwealth Center and Chesterfield Crossing (Richmond, VA), and Jefferson Plaza (Newport News, VA). DDR has managed and leased the centers for over six years. The 1.3 million square foot, 98% leased portfolio is anchored by national high credit quality retailers such as Walmart, Target, Costco, Home Depot, T.J. Maxx, Ross Dress for Less, PetSmart, Fresh Market, and Pier One, while small shop space comprises only 13% of total GLA. The portfolio features an average trade area household income of approximately $74,000 and a population of over 330,000 people.
Second quarter disposition activity:
During the quarter, DDR disposed of 11 non-prime operating assets and 4 non-income producing assets for gross proceeds of $64 million, of which the Company's share was $60 million. The top three tenants by annual base rent at these sold assets were Best Buy, Rite Aid and JC Penney. An additional $118 million of non-prime assets are currently under contract for sale, including $48 million of non-income producing assets.
"Consistent with our strategic goals, these acquisitions and dispositions increase our exposure to high credit quality tenants located at prime power centers in major markets," said David J. Oakes, president and chief financial officer of DDR. "This investment again demonstrates our ability to source off-market transactions through our strong relationships with existing joint venture partners and to fund new investments prudently."
About DDR Corp.
DDR is an owner and manager of 445 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, as well as on Twitter, LinkedIn, Facebook and Pinterest.
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, our ability to successfully complete the proposed acquisition of properties from the Blackstone joint venture, 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, including in connection with the proposed acquisition of properties from the Blackstone joint venture; 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.