REAL ESTATE

DDR sell all of its Brazil holdings for $344 miilion

BY Michael Fickes

Beachwood, Ohio — DDR has signed a letter of intent to sell its 50% ownership interest in Sonae Sierra Brazil BV Sarl, a Luxembourg company, to Alexander Otto and his affiliates for $343.6 million. DDR’s interest in SSB BV Sarl represents the company’s entire investment in Brazil. The gross proceeds of $346.6 million include $283 million from the negotiated price of R$26.00 per share of SSB, a 67% premium to the closing price on the IBOVESPA as of March 7, and DDR’s stake in Parque Dom Pedro, valued at $60.7 million. Plans call for the sale to close within the next 30 days.

The SSB portfolio consists of ten regional malls totaling 4.6 million sq. ft. During DDR’s period of investment, four of the ten malls were developed, three of which were recently opened. DDR’s original investment in 2006 was $147.6 million, with an additional $52.6 million funded from 2007 through 2009. At the expected sale price, DDR’s IRR on its investment in Brazil is in excess of 10%. As a result of the sale, DDR’[s pro rata share of NOI from consolidated assets will increase from 89% to 93%.

DDR intents to use the proceeds from the sale for general corporate purposes, including reinvestment in prime shopping center acquisitions and redevelopments in major U.S. markets.

As a result of the timing difference between this transaction and the reinvestment of the proceeds, as well as an acceleration of domestic disposition plans, DDR is lowering 2014 operating FFO guidance from $1.17 to $1.21 per diluted share, to $1.14 to $1.18 per diluted share, representing year-over-year growth of 5% at the midpoint.

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REAL ESTATE

Ross Stores opens 37 locations, plans 95 new stores

BY Dan Berthiaume

Dublin, Calif. — Ross Stores recently opened a total of 30 Ross Dress for Less and seven DD’s Discounts stores in 14 different states. These openings are part of the off-price retailer’s 2014 expansion plans for about 95 new stores, which will include continuing to build presence in existing markets and grow in the newer markets initially entered in 2011.

Ross believes that long-term expansion opportunities include 2,000 Ross Dress for Less stores and 500 DD’s Discounts stores.

"We remain on track to open a total of approximately 95 new locations in 2014, comprised of about 75 Ross Dress for Less and 20 DD’s Discounts," said Jim Fassio, president and chief development officer. "Today, Ross Dress for Less is the largest off-price apparel and home fashion chain in the U.S. Including these newest openings, Ross now operates 1,173 stores in 33 states, the District of Columbia and Guam.”

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REAL ESTATE

Mattress Firm expands company store base

BY Dan Berthiaume

Houston — Mattress Firm Holding Corp. has entered into an agreement to acquire the outstanding equity interests of Sleep Experts Partners L.P., which operates Sleep Experts retail stores in Texas. In addition, Mattress Firm completed the acquisition of substantially all of the assets and operations of Yotes, Inc., which operated stores under the Mattress Firm brand in Colorado and Kansas, as well as the Virginia retail operations of Southern Max LLC.

Both companies were Mattress Firm franchisees and Southern Max LLC will continue its franchised operations in Tennessee. Collectively, these accretive acquisitions will add approximately 93 specialty retail stores to the Mattress Firm company-operated store base, of which approximately 56 stores are located in Texas with the remainder in Colorado, Kansas, and Virginia. The aggregate purchase price for these acquisitions is approximately $80.5 million, subject, in each case, to customary adjustments.

"These acquisitions will further fortify our market-leading position in key growth markets by expanding our presence in prime areas of the country,” said Steve Stagner, president and CEO of Mattress Firm. “We believe that the addition of an impressive number of high performing stores at the same time also provides the company with the opportunity to further enhance the operating performance and cash flow of these stores at an accelerated pace as we integrate them onto our efficient corporate operating platform.”

The closing of the Sleep Experts acquisition is expected to occur in the first fiscal quarter of 2014, subject to the prior satisfaction of customary closing conditions.

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