DDR Corp. (NYSE: DDR) today announced that it has acquired three prime shopping centers for $110 million and disposed of $59 million of non-prime assets in the third quarter. DDR continues to successfully recycle capital from asset sales into the acquisition of prime shopping centers, and has completed $150 million of acquisitions and $166 million of dispositions year to date. Consistent with previously announced acquisitions, all three third quarter additions have a demographic profile and projected compounded annual growth rate that will enhance the existing DDR prime portfolio metrics and continue to improve overall company asset quality.
Third quarter acquisition activity:
DDR acquired two prime assets in Charlotte, North Carolina, Cotswold Village and The Terraces at SouthPark, for $85 million and one prime asset, Chapel Hills East, in Colorado Springs, Colorado for $25 million. The assets total 500,000 square feet of gross leasable area and range between 96% and 100% leased. In addition, the assets are occupied by many high quality retailers typically found in DDR shopping centers including Whole Foods, Marshalls, PetSmart, Best Buy, Harris Teeter, ULTA, Old Navy, and DSW. With the inclusion of the recently acquired assets, DDR expanded its presence in the Charlotte trade area to nine prime assets representing 2.2 million square feet and the Denver trade area to nine prime assets representing 2.8 million square feet.
In connection with these acquisitions, DDR assumed three existing mortgage loans as follows:
Cotswold Village – $50.8 million at 5.83%, maturing in 2016
The Terraces at SouthPark – $6.6 million at 5.72%, maturing in 2012
Chapel Hills East – $9.6 million at 5.24%, maturing 2021
As previously announced in the third quarter, and further enhancing the Company’s portfolio, DDR is also under contract to acquire Polaris Towne Center in Columbus, Ohio, for $80 million. Polaris is a 700,000 square foot prime asset anchored by Target, Lowe’s, Kroger, Best Buy, and TJ Maxx. It is anticipated that this transaction will close in the fourth quarter of 2011.
Third quarter disposition activity:
The Company disposed of ten non-prime assets and seven land parcels during the quarter for aggregate proceeds of approximately $59 million, all of which was the Company’s share. An additional $209 million of assets are currently under contract for sale, of which the Company’s share is $196 million. Year to date, the Company has generated gross proceeds of $214 million from asset sales, of which the Company’s share is $166 million. Since 2007, DDR has completed $2.3 billion of dispositions of primarily non-prime assets.
Daniel B. Hurwitz, president and chief executive officer of DDR, commented, “We are pleased with the continued execution of our capital recycling strategy and are very confident that these prime acquisitions will enhance our compounded annual growth rate and net asset value. Our successful strategy of funding acquisitions with disposition proceeds will continue and obviates the need to access common equity to support portfolio enhancement initiatives.”
DDR considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements and the success of our capital recycling strategy. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2010. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
DDR is an owner and manager of 546 value-oriented shopping centers representing 126 million square feet in 41 states, Puerto Rico and Brazil. The company’s assets are concentrated in high barrier-to-entry markets with stable populations and high growth potential and its portfolio is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR. Additional information about the company is available at www.ddr.com.
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Filed under: Real Estate