DDR and Blackstone’s Third Joint Venture Closes on 71 Shopping Centers for $1.93 Billion

by Nate Hunter

Beachwood, Ohio – Blackstone Real Estate Partners VII owns 95 percent of the common equity of the joint venture and an affiliate of DDR owns the remaining 5 percent.

Beachwood, Ohio – A joint venture formed by DDR Corp. and an affiliate of Blackstone Real Estate Partners VII has closed on the acquisition of 71 shopping centers previously owned by American Realty Capital Properties Inc. for $1.93 billion. The portfolio primarily consists of power centers located in Los Angeles, Houston, Denver, Chicago, Atlanta, Washington D.C. and Phoenix, and is occupied by high quality retailers such as Whole Foods, Trader Joe’s, The Fresh Market, Costco, Target, Walmart, Kohl’s, PetSmart, Dick’s Sporting Goods, Bed Bath & Beyond and the TJX Companies. Blackstone Real Estate Partners VII, a real estate fund managed by Blackstone on behalf of its investors, owns 95 percent of the common equity of the joint venture and an affiliate of DDR owns the remaining 5 percent. DDR will provide leasing and management services and has the right of first offer to acquire 10 of the assets, under certain conditions. DDR’s investment in the joint venture includes approximately $20 million of common equity and $300 million of preferred equity with a fixed dividend rate of 8.5 percent. DDR also assumed its pro rata share of joint venture debt of $62 million. The joint venture has assumed approximately $437 million of senior non-recourse debt, which has a weighted average term of 7.1 years and an interest rate of 4.45 percent. 

   — Scott Reid

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