Boston, MA 06/13/2014 (wallstreetpr) – On Thursday, DDR Corp (NYSE:DDR) joined forces with one of the affiliate of The Blackstone Group L.P. (NYSE:BX), to act as a source for the required funding for Blackstone’s purchase plans of 76 malls from American Realty Capital Properties Inc (NASDAQ:ARCP). During the last month, American Realty had put up its 76 multitenant shopping centers for sale to Blackstone, in order to finance its purchase of Red Lobster’s real estate portfolio. Thus, Blackstone formed a venture with DDR, where it will own 95% of the venture and DDR, the remaining.
Evaluating Assets
This is not the first time, when Blackstone and DDR are jointly taking the deal, as they had done so earlier in January to purchase 46 U.S. malls valuing $1.43 billion from Elbit Imaging Ltd. unit. Of late, retail landlords are deriving advantage from the rise in retail sales, which grew by 0.3% and 0.5% in May and April respectively. Thus, with the new acquisitions, the joint venture now plans to sell almost 29 of these properties, as disclosed by DDR’s senior vice president of corporate operations, Joseph Tichar. Further, Tichar said that the company is in the process of assessing the assets within their portfolio that do not match the investment thesis of DDR Corp (NYSE:DDR).
More About The Deal
As with respect to the deal with Americal Realty, it includes debt of nearly $461 million as well as $800 million of new financings. The deal covers a space of 16.4 million square feet and comprises of prime power centers situated in Houston, Denver, Atlants, Los Angeles, Phoenix and Washington D.C. Also, the space is occupied by giant retailers such as The Fresh market, Target, Walmart, PetSmart and others. As per the statement released by DDR Corp (NYSE:DDR), DDR enjoys the privilege to first offer to purchase 10 of the assets. The deal is anticipated to conclude by the third quarter.
