Beachwood, Ohio — DDR Corp. has announced that a joint venture formed with an affiliate of Blackstone Real Estate Partners VII L.P. has closed on the acquisition of a portfolio of seven prime shopping centers totaling 2.4 million sq. ft. The assets are located in supply constrained MSA’s including Los Angeles, San Diego, Washington D.C., Portland, Harrisburg, Pa., 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%. DDR will fund its investment through proceeds from asset sales. Various governance arrangements will allow DDR to potentially acquire four of the most dominant assets in the portfolio, which contribute over 80% of NOI.
DDR will lease and manage the properties in the portfolio, which is 93% leased and presents unique redevelopment and leasing opportunities, which should enable DDR to add value to the properties.
The shopping centers in the portfolio are:
• Silver Spring Square, Harrisburg, Pa., 573,000 sq. ft.
• Falcon Ridge Town Center, Los Angeles, 423,000 sq. ft.
• Sycamore Crossing, Cincinnati, 391,000 sq. ft.
• Indian Springs, Cincinnati, 349,000 sq. ft.
• Fortuna Center, Washington, D.C., 232,000 sq. ft.
• Orchards Market Center, Portland, 223,000 sq. ft.
• Vista Village, San Diego, 213,000 sq. ft.