DDR closes initial Blackstone transaction for USD1.46bn
DDR has closed its previously announced acquisition of a portfolio of 30 prime power centres from its existing joint venture with Blackstone Real Estate Partners VII.
The investment was funded through a combination of proceeds from the issuance of new common equity and unsecured debt, preferred equity and mezzanine loan repayments, and the assumption of existing mortgage debt.
DDR acquired Blackstone's 95 per cent interest in 30 open-air, value oriented power centres previously held in joint venture. The 95 per cent leased portfolio is comprised of 11.8 million square feet of GLA and features high credit quality tenants typically found in DDR's power centres such as Walmart, Target, TJ Maxx, Kohl's, PetSmart, Bed Bath and Beyond, and Dick's Sporting Goods. The portfolio features very strong trade area demographics with an average household income of USD91,000 and population of 543,000 people.
The acquisition further simplifies DDR’s structure by reducing joint venture assets by 20 per cent and enhances EBITDA quality through the conversion of shorter-term fee and interest income into higher multiple, long-term property level cash flow with strong growth potential.
"This investment further demonstrates our commitment to improve the quality of the prime portfolio while simplifying our story and enhancing our earnings composition. Our deep knowledge of the assets reduces risk and gives us confidence in the long term growth profile of the assets. We thank Blackstone for being outstanding partners and greatly value our continued relationship," says Daniel B Hurwitz (pictured), chief executive officer of DDR.