BEACHWOOD, Ohio, June 20, 2012 /PRNewswire/ -- Blackstone's flagship real estate fund and DDR Corp. (NYSE: DDR) today announced that a joint venture formed by the two entities has closed on the acquisition of a portfolio of 46 shopping centers previously owned by EPN Group.
The joint venture has assumed approximately $635 million of senior non-recourse debt and has originated an additional $320 million non-recourse loan facility, which has a five-year term.
DDR's contribution was $17 million of common equity, $150 million of preferred equity with a fixed dividend rate of 10%, and DDR assumed a pro rata share of joint venture debt of $48 million. As previously announced, DDR will fund its entire investment with proceeds from the January issuance of 19 million common shares on a forward basis to be settled shortly.
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 continue to provide leasing and management services and has the right of first offer to acquire ten of the assets under specified conditions.
The 46 shopping centers acquired by the joint venture are open-air, value-oriented power centers located in 20 states, representing 10.6 million square feet and are currently 90% leased. The top ten tenants by base rent include the TJX companies, Kohl's, PetSmart, Dick's Sporting Goods, Best Buy, Bed Bath & Beyond, JoAnn's, Old Navy, Walmart and Home Depot. More than 94% of the net operating income (NOI) is generated from prime assets, with 50% of such NOI derived from properties in the top 25 MSAs. The portfolio features average household income of approximately $88,000 and average population of over 300,000 people in a seven-mile trade area.
DDR is an owner and manager of 469 value-oriented shopping centers representing 119 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 sell assets on commercially reasonable terms; 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 our ability to continue to pay dividends on our common shares at the current or higher rates. 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, 2011. 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.