DDR Completes $2.8 Billion of Transactions in 2013
BEACHWOOD, Ohio, Jan. 2, 2014 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced that it continued to strengthen its portfolio as the Company closed $1.46 billion of acquisitions and $184 million of dispositions during the fourth quarter of 2013 and a total of $2.33 billion of acquisitions and $433 million of dispositions in 2013.
Fourth quarter acquisition activity:
As previously announced, DDR acquired Blackstone's 95% interest in 30 open-air, value-oriented power centers previously held in joint venture for $1.46 billion. The 95% leased portfolio is comprised of 11.8 million square feet and features high credit quality tenants typically found in DDR's power centers such as Walmart, Target, T.J. Maxx, Kohl's, PetSmart, Bed Bath & Beyond, and Dick's Sporting Goods. The acquisition was financed with proceeds from the issuance of new common equity and unsecured debt in May, the repayment of preferred equity, and assumed mortgage debt.
Fourth quarter disposition activity:
DDR disposed of 20 non-prime assets for aggregate proceeds of $184 million ($98 million at DDR's share), which exceeded previously published guidance. 24 non-prime assets totaling an additional $204 million ($181 million at DDR's share) are currently under contract for sale, including $53 million of non-income producing assets ($47 million at DDR's share).
Full year acquisition activity:
DDR acquired 46 prime shopping centers totaling over 17 million square feet with an average size of approximately 380,000 square feet. The assets are located primarily in the top 40 MSA's and enjoy an average trade area population with over 480,000 people and average household incomes of $87,000. The centers are 95% leased and are dominated by national retailers such as Walmart, Target, Costco, Whole Foods, T.J. Maxx, Dick's Sporting Goods, PetSmart, and Bed Bath & Beyond.
Investments in 2013 were funded through a combination of proceeds from asset sales, the issuance of new common equity and unsecured debt, preferred equity and mezzanine loan repayments, and the assumption of existing mortgage debt. DDR issued $827 million of common equity at an average price of $18.76 per share in 2013 to fund the net acquisition of market dominant power centers and to further strengthen the balance sheet.
Full year disposition activity:
DDR disposed of 80 non-prime assets for aggregate proceeds of $433 million, of which $296 million was DDR's share. The operating assets totaled 5.9 million square feet with an average size of approximately 95,000 square feet. The average trade area household income was $70,000, 13% below DDR's prime portfolio, and the average trade area population was 211,000 people, 51% below DDR's prime portfolio.
David J. Oakes, president and chief financial officer of DDR, commented, "The transactional activity in 2013 demonstrates our ongoing commitment to further upgrading the quality of the portfolio through active portfolio management. We continued to acquire market dominant, prime power centers in top MSA's with strong growth profiles and high credit tenancy, while disposing of lower quality assets in weak markets with unattractive growth profiles. The high volume of transactions this year reflects the mispricing that we believe exists for high quality power centers, as well as a strong capital markets environment early in the year."
About DDR Corp.
DDR is an owner and manager of 417 value-oriented shopping centers representing 114 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 and Facebook.
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.