BEACHWOOD, Ohio, Jan. 10, 2012 /PRNewswire/ -- Affiliates of
Blackstone (NYSE: BX) and DDR Corp. (NYSE: DDR) today announced the
formation of a joint venture to acquire a portfolio of 46 shopping
centers currently owned by EPN Group ("EPN").
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The joint venture has executed a purchase and sale agreement to
acquire the majority of the EDT Retail Portfolio in a transaction
valued at $1.43 billion, including
assumed debt of $640 million and at
least $305 million of new financings.
Blackstone Real Estate Partners VII, a real estate fund managed by
Blackstone on behalf of its investors, will own 95% of the common
equity of the joint venture and an affiliate of DDR will own the
remaining 5%. DDR will also invest $150
million in preferred equity in the venture with a fixed
dividend rate of 10%, and will continue to provide leasing and
management services. In addition, DDR will have the right of first
offer to acquire ten of the assets under specified conditions.
The 46 shopping centers being 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.
The assets, currently owned by EPN, were previously owned by EDT
Retail Trust (the "Trust"), which was originally listed on the
Australian Stock Exchange in 2003 as the Macquarie DDR Trust. In
2010, the Trust undertook a recapitalization in which EPN acquired
a majority stake and became the joint manager along with DDR. In
2011, EPN purchased the remainder of the units and privatized the
Trust, at which point it became a wholly owned subsidiary. Since
the inception of the Trust, DDR has leased and managed all the
assets in the portfolio, with involvement in certain assets dating
back to 1995.
"We are very pleased to establish a partnership with Blackstone,
one of the most successful and respected real estate investors in
the world," said Daniel B. Hurwitz,
president and chief executive officer of DDR. "Moreover, this
transaction illustrates our access to off market opportunities
while creative structuring enables risk mitigation and non-dilutive
deleveraging. Lastly, this transaction enables the retention
of significant fee income, and enhances our current ownership and
future access to prime assets."
"In addition to DDR's history and performance with these
shopping centers over many years, the company's impressive
operating platform makes them an outstanding partner for this
portfolio," said Nadeem Meghji,
Principal in Blackstone's real estate group. "We are very pleased
to establish a relationship with DDR and look forward to working
with them in a successful venture."
Goldman, Sachs & Co. served as advisor to DDR on the
acquisition. Citigroup Global Markets Inc. and Eastdil Secured, a
subsidiary of Wells Fargo & Company, served as advisors to
Blackstone and JP Morgan served as advisor to EPN.
About DDR
DDR is an owner and manager of 538 value-oriented shopping
centers representing 134 million square feet in 41 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 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, the
ability of the joint venture between the Company and Blackstone to
successfully complete the acquisition of the EDT Retail Portfolio,
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, 2010. 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.