DDR Announces Closing of a Portfolio of Seven Prime Assets for $332 Million in Partnership with Blackstone

Aug 13, 2013, 16:43 ET from DDR Corp.

BEACHWOOD, Ohio, Aug. 13, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced that a joint venture formed with an affiliate of Blackstone Real Estate Partners VII L.P. ("Blackstone") has closed on the acquisition of a portfolio of seven prime shopping centers totaling 2.4 million square feet.  The assets are located in supply constrained MSA's including Los Angeles, San Diego, Washington DC, Portland, and Cincinnati.  The purchase price is $332 million, including assumed debt of $207 million and $28 million of new mortgage debt. Blackstone owns 95% of the common equity of the joint venture and an affiliate of DDR owns the remaining 5%. DDR also invested $30 million in preferred equity in the venture with a fixed dividend rate of 9%, and will provide leasing and management services. DDR's investment will be funded through proceeds from asset sales.  Similar to the first DDR/Blackstone joint venture, DDR has various governance arrangements allowing it to potentially acquire four of the most dominant assets in the portfolio, which contribute over 80% of total NOI.

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The portfolio features prime shopping centers with an average size of approximately 345,000 square feet and occupied with high-quality retailers including Target, Walmart, Ross Dress for Less, Dick's Sporting Goods, Petco, Best Buy, Wegmans, and The Fresh Market. Trade area demographics for the portfolio feature average household income of approximately $75,000 and population of over 310,000 people. The portfolio is currently 93% leased and presents unique redevelopment and leasing opportunities which should allow DDR's operating platform to add additional value to the properties.

Daniel B. Hurwitz, chief executive officer of DDR, remarked, "We are pleased to advance our relationship with Blackstone and further our strategic objective to creatively source acquisition opportunities.  The partnership structure will enhance our cash flow and provide proprietary access to prime assets for potential acquisition at a future date. The assets fit nicely into our operating platform and we look forward to creating value for our partner and our shareholders."

The shopping centers being acquired include:






Silver Spring Square

Harrisburg, PA


Falcon Ridge Town Center

Los Angeles, CA


Sycamore Crossing

Cincinnati, OH


Indian Springs

Cincinnati, OH


Fortuna Center

Washington, DC


Orchards Market Center

Portland, OR


Vista Village

San Diego, CA



About DDR

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.

Safe Harbor

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; 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; the success of our capital recycling strategy; and the finalization of the financial statements for the three-month period ended June 30, 2013.  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.