BEACHWOOD, Ohio, March 31, 2011 /PRNewswire/ -- Developers Diversified Realty Corporation (NYSE : DDR ) today announced that it has acquired its partners' interests in two prime shopping centers valued at $80 million in the aggregate and disposed of $43 million of non-prime assets.
The Company acquired its partners' 50% ownership interests in two prime shopping centers for $40 million. As a result of the transactions, the Company now owns 100% of the two prime shopping centers. The aggregate gross value of the two centers is $80 million.
The centers, which total 811,157 square feet, are located in Cleveland and Minneapolis, and benefit from an outstanding credit tenant lineup, are 98% leased, enjoy strong barriers to entry and have household incomes which average over $80,000 within a 5-mile radius. Both assets are large-format power centers with grocery components, with anchors including Walmart Supercenter, Home Depot, Kohl's, Hobby Lobby, Cinemark, PetSmart, Cub Foods, Bed Bath & Beyond, Gander Mountain, Michaels, Petco and Old Navy.
The two existing short duration loans on the centers aggregating approximately $50 million were repaid in connection with the Company's acquisition. The previous loans matured in 2011 and had a blended average interest rate of 5.6%. The Minneapolis center remains unencumbered and the Cleveland center was refinanced with a new 11-year, $21 million mortgage at a fixed rate of 5.7%.
The Company sold six non-prime assets and three land parcels during the quarter for aggregate proceeds of approximately $43 million, of which the Company's share was $20 million. The non-prime assets sold averaged 79% leased and were predominantly located in tertiary markets with substandard demographics. An additional $73 million of non-prime or non-income producing assets are currently under contract for sale, of which the Company's share is $72 million.
Mark Bratt, Developers Diversified's chief investment officer, commented, "We are pleased to announce these transactions, which are consistent with our stated strategy to grow our investment in prime assets in order to increase our long term growth rate and value. We continue to exercise great discipline on potential investments, but we identified these two attractive opportunities and believe that additional acquisitions are available to redeploy the future proceeds from non-prime dispositions."
About Developers Diversified Realty
Developers Diversified owns and manages approximately 570 retail operating and development properties in 41 states, Brazil, Canada and Puerto Rico. Totaling approximately 132 million square feet, the Company's shopping center portfolio features open-air, value-oriented neighborhood and community centers, mixed-use centers and lifestyle centers located in prime markets with stable populations and high-growth potential. Developers Diversified is the largest landlord in Puerto Rico and owns a premier portfolio of regional malls primarily clustered around Sao Paulo, Brazil. Developers Diversified is a self-administered and self-managed REIT operating as a fully integrated real estate company. Additional information about the Company is available on the Company's website at www.ddr.com.
SOURCE Developers Diversified Realty Corporation