DDR Completes Over $725 Million of Strategic Transactions in Third Quarter 2013
BEACHWOOD, Ohio, Oct. 1, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) announced the closings of its previously announced acquisition activity totaling $591 million. The acquisitions include a portfolio of seven prime power centers in a newly-formed joint venture with an affiliate of Blackstone Real Estate Partners VII L.P. ("Blackstone") for $332 million in August and two market dominant regional power centers in Orlando, Florida and Atlanta, Georgia for an aggregate $259 million in July. Also during the third quarter, DDR disposed of $138 million of non-prime assets, of which $104 million was the Company's share.
These nine prime shopping centers are leased to tenants with strong credit profiles typically found in the DDR portfolio, located in the top 50 MSA's, and feature an average trade area population of over 340,000 people. The investments were funded with new common equity raised in May, asset sales, assumed debt and new mortgage debt.
Third quarter acquisition activity:
DDR acquired two regional power centers located in Orlando and Atlanta. Winter Garden Village, located in Orlando, is a 1.1 million square foot market dominant power center that features tenants such as Target, Lowe's, Marshalls/HomeGoods, Best Buy, Ross Dress For Less, Bed Bath and Beyond, Sports Authority, Staples, PetSmart, World Market, Old Navy, and ULTA. In addition, the asset will benefit from additional traffic in future years as a Florida hospital just broke ground on a medical campus adjacent to the shopping center. Cumming Town Center is a 311,000 square foot regional power center in a northeastern suburb of Atlanta, near DDR's existing Cumming Marketplace shopping center. The shopping center is 100% leased and is anchored by Dick's Sporting Goods, T.J. Maxx/HomeGoods, Best Buy, Staples, Old Navy, and Petco.
Additionally, DDR acquired seven prime shopping centers, comprised of 2.4 million square feet of GLA, in a partnership with Blackstone. Blackstone owns 95% of the common equity of the joint venture and DDR owns the remaining 5%, with DDR providing leasing and management services. The assets are located in supply constraint MSA's including Los Angeles, San Diego, Washington DC, Portland, and Cincinnati and feature high-quality retailers such as Target, Walmart, Ross Dress for Less, Dick's Sporting Goods, Petco, Best Buy, Wegmans, and The Fresh Market. The portfolio is 93% leased and presents unique redevelopment and leasing opportunities that should allow DDR's operating platform to add additional value to the properties. DDR's investment in the venture also includes $30 million in preferred equity with a fixed dividend rate of 9%.
Third quarter disposition activity:
During the quarter, DDR disposed of 16 non-prime operating assets and 6 non-income producing assets for gross proceeds of $138 million, of which the Company's share was $104 million. An additional $79 million of non-prime assets are currently under contract for sale, including $48 million of non-income producing assets.
"I am pleased to report another quarter where we continued our strategic capital recycling efforts in order to further upgrade our high quality portfolio and enhance our long term growth rate," said David J. Oakes, president and chief financial officer of DDR.
About DDR Corp.
DDR is an owner and manager of 435 value-oriented shopping centers representing 115 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, 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.