DDR and Blackstone's Third Joint Venture Closes on the Acquisition of 71 Shopping Centers for $1.93 Billion

Oct 20, 2014

BEACHWOOD, Ohio, Oct. 20, 2014 /PRNewswire/ -- DDR Corp. (NYSE: DDR) and an affiliate of Blackstone Real Estate Partners VII today announced that a joint venture formed by the two entities has closed on the acquisition of 71 shopping centers previously owned by American Realty Capital Properties, Inc. (NASDAQ: ARCP) for $1.93 billion.

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The portfolio primarily consists of prime power centers located in Los Angeles, Houston, Denver, Chicago, Atlanta, Washington D.C. and Phoenix and is occupied by high quality retailers such as Whole Foods, Trader Joe's, The Fresh Market, Costco, Target, Walmart, Kohl's, PetSmart, Dick's Sporting Goods, Bed Bath & Beyond, and the TJX Companies. Trade area demographics for the portfolio are in-line with DDR's Prime portfolio featuring average household income of approximately $75,000 and a population of approximately 400,000 people. The average base rent per square foot of the portfolio is 6% below DDR's current prime average, representing a unique opportunity to drive future growth.

Blackstone Real Estate Partners VII, a real estate fund managed by Blackstone on behalf of its investors, owns 95% of the common equity of the joint venture and an affiliate of DDR owns the remaining 5%. DDR will provide leasing and management services and has the right of first offer to acquire 10 of the assets, under certain conditions.

DDR's investment in the joint venture includes approximately $20 million of common equity and $300 million of preferred equity with a fixed dividend rate of 8.5%. DDR also assumed its pro rata share of joint venture debt of $62 million.

The joint venture has assumed approximately $437 million of senior non-recourse debt, which has a weighted average term of 7.1 years and an interest rate of 4.45%. The venture has also originated an additional $800 million non-recourse loan facility, which has a five-year term and an interest rate of LIBOR plus 160 basis points.

David J. Oakes, president and chief financial officer of DDR, commented, "We are pleased to once again announce the closing of a transaction with our partners at Blackstone, further highlighting our ability to source high-quality acquisitions in an opportunistic manner. In consultation with our partner, we are in discussions with various counterparties to sell a portion of the portfolio over the near term with the goals of improving the risk-adjusted returns and maximizing portfolio quality for the joint venture."

About DDR Corp.
DDR is an owner and manager of 456 value-oriented shopping centers representing 125 million square feet in 42 states and Puerto Rico.  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, as well as on Twitter, LinkedIn and Facebook.

Safe Harbor
DDR Corp. 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 supply 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, 2013, as amended. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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SOURCE DDR Corp.

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