Beachwood, Ohio — DDR Corp. has agreed to pay $1.46 billion for full control of 30 shopping centers the company owns in a joint venture.
The real estate investment trust based in Beachwood, Ohio, will buy a 95 percent stake in the properties from Blackstone Real Estate Partners VII. The portfolio is primarily composed of prime power centers, such as Shoppers World in Boston, Fairfax Towne Centre in Washington, D.C., and Riverdale Village in Minneapolis.
The transaction is set to close later this year and is expected to significantly boost DDR's cash flow generated by the high-quality, large-format centers.
""We are very pleased to add these outstanding assets to our wholly owned portfolio," says Daniel Hurwitz, DDR's chief executive officer. "It was our goal to accomplish this upon the initial formation of the venture with Blackstone, and we thank them for being outstanding partners. We look forward to our continued relationship."
DDR and Blackstone formed a joint venture in 2012 and purchased 46 shopping centers across 20 states for $1.4 billion. Top tenants by base rent at the properties include TJX Cos., Kohl's, PetSmart, Dick's Sporting Goods and Best Buy. Blackstone took a 95 percent stake in the joint venture, while DDR owned the rest and managed the properties.
At the time, DDR said it had the right of first offer to acquire 10 of the shopping centers under certain conditions.
Now DDR will own 68 percent of the 44 centers the joint venture currently owns. The remaining 14 properties will stay in the joint venture.
"This acquisition will significantly advance many of our strategic objectives, and is yet another example of our ability to mitigate risk on attractive investment activity through prudent underwriting and funding," says David Oakes, president and chief financial officer of DDR.
DDR will use a combination of permanent equity and long-term debt to fund its purchase. As part of the deal, DDR has the right to issue common shares to Blackstone in an amount not to exceed $250 million.
— Liz Burlingame