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June 12, 2014 | ISSUE 344
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DDR, Blackstone Team Up to Acquire
76 Shopping Centers for $1.98B
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 | | Daniel Hurwitz, CEO of DDR |
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BEACHWOOD, OHIO AND NEW YORK -- DDR Corp. (NYSE: DDR) and an affiliate of Blackstone Real Estate Partners VII today announced the formation of a third joint venture to acquire 76 shopping centers currently owned by American Realty Capital Properties Inc. (NASDAQ: ARCP).
The joint venture has executed a purchase and sale agreement to acquire the portfolio for nearly $1.98 billion. The transaction includes assumed debt of $461 million and approximately $800 million of new financings.
"We are pleased to once again announce a transaction with our partners at Blackstone, further reinforcing our unique relationship and again highlighting both partners' ability to source and execute efficiently," says Daniel Hurwitz, CEO of DDR. "We expect to generate outsized asset-level growth by leveraging our operating platform, and have appropriately structured our investment to produce attractive risk-adjusted returns while securing access to acquisition opportunities in the future."
Blackstone owns 95 percent of the common equity of the joint venture and an affiliate of DDR owns the remaining 5 percent. DDR will also invest up to a maximum of $300 million in preferred equity in the joint venture, and has agreed to provide leasing and management services.
The 16.4 million-square-foot portfolio primarily consists of prime power centers located in Los Angeles, Houston, Denver, Chicago, Atlanta, Phoenix and Washington, D.C.
Click here to read more of John Nelson's story.
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DDR's Joe Tichar: Making The Case
for Investing in Power Centers
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Joe Tichar of DDR
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BEACHWOOD, OHIO -- The second half of May was an especially busy time for DDR Corp., the Beachwood, Ohio-based real estate investment trust (REIT) that owns and manages a portfolio of primarily large-format power centers in 39 states and Puerto Rico.
DDR hosted more than 1,000 meetings with retail real estate executives and assorted shopping center industry professionals at the Bellagio Hotel in Las Vegas during RECon 2014.
The three-day convention, which took place May 19-21 at the Las Vegas Convention Center, attracted more than 33,000 attendees from across the globe.
REBusinessonline.com sat down with Joe Tichar, DDR's senior vice president of corporate operations, early on the opening day of RECon 2014 to discuss the company's dominance in the power center category, its near-term strategy and the health of the American consumer. An edited transcript follows.
REBO: Joe, you believe DDR has a unique story to tell in the shopping center industry. Please explain why you feel that way.
Tichar: We are a pure-play power center REIT. We have simplified our story and focused our portfolio during the past few years. There aren't a lot of other retail REITs that can say they are pure-play power center REITs. That makes us unique..
Click here to read more of Matt Valley's story.
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New England Development to Build 325,000 SF Outlet Center in Michigan
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 | | Outlets of Michigan will be located near I-94 and the Detroit Metro Airport. |
ROMULUS, MICH. -- New England Development will develop a 325,000-square-foot outlet center in Romulus, approximately 25 miles southwest of Detroit. Outlets of Michigan will be located near I-94 and the Detroit Metro Airport.
The new open-air outlet center, which is scheduled to open in 2016, will feature 75 retailers. New England Development's portfolio of retail projects now includes a mix of outlet centers in markets nationally.
New outlet centers include the recently opened Palm Beach Outlets in West Palm Beach, Fla.; Asheville Outlets in Asheville, N.C.; Outlets at Little Rock in Little Rock, Ark., opening in 2015; and Des Moines Outlets in Altoona, Iowa, opening in 2016.
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KBS REIT III Arranges 71,043 SF
of Office Leases at Chicago Tower
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 | | 500 West Madison is a 1.46 million-square-foot office tower. The 40-story building consists of office and retail space. |
CHICAGO -- KBS Real Estate Investment Trust III has arranged a total of 71,043 square feet of leases at the 500 West Madison tower in Chicago, which was acquired by the REIT in December 2013. The leases included a lease extension for Lincoln International for a 47,423-square-foot space; a lease expansion for Here North America to occupy 12,214 square feet; a new lease for a 9,925-square-foot space for Inventus; and a 1,481-square-foot lease extension for Alliance Tech Group.
Lisa Davidson and Tiffany Winne of Studley represented Lincoln International in its lease; Todd Lippman and James Whalen of CBRE represented Here North America; Jonathan Gordon and Jordan Mellovitz of Cushman & Wakefield represented Inventus; and Jesse Slack of MB Real Estate represented Alliance Tech Group. Michael Lirtzman and Courtney Baratz of Transwestern represented KBS REIT III in the transactions.
500 West Madison is a 1.46 million-square-foot office tower. The 40-story building consists of office and retail space. The property sits above the Ogilvie Transportation Center, one of two main suburban train stations connecting the Chicago suburbs with downtown, and provides direct access to city trains, buses and expressways. The tower's first two levels contain nearly 64,000 square feet of retail space with 45 stores and restaurants.
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Lee & Associates Arranges Lease
for Brewery in Indianapolis
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 | | Hopcat Broad Ripple will occupy space in the Broad Ripple Garage located at 6280 College Ave. in Indianapolis.The new brewery is set to open in August with 130 taps. |
INDIANAPOLIS -- Lee & Associates has arranged the lease of a 9,260-square-foot retail space for Michigan-based brewery HopCat in Indianapolis. Hopcat Broad Ripple will occupy space in the Broad Ripple Garage located at 6280 College Ave. The Indianapolis brewery will be Hopcat's first location outside of Michigan.
The new brewery is set to open in August with 130 taps. Ben Andrews of Sperry Van Ness represented the tenant in the transaction. Bart Jackson and Scot Courtney of Lee & Associates represented the landlord, 6280 LLC, an entity of Keystone Realty Group.
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Dougherty Originates $10M HUD Loan
for Apartments in Bloomington, Minn.
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 | | Heritage Hills Apartments consists of two apartment buildings with a total of 135 units. |
BLOOMINGTON, MINN. -- Dougherty Mortgage LLC has originated a $10 million HUD loan to refinance an apartment property in Bloomington, a southern suburb of Minneapolis. Heritage Hills Apartments consists of two apartment buildings with a total of 135 units. Dougherty's Minneapolis office arranged the 35-year loan, which includes a 35-year amortization schedule, for Heritage/France Avenue Apartments LLLP.
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NAIOP Minnesota | From Code Blue to Red Hot: The Industrial Market is on Fire
When: June 19
Where: The West End ShowPlace ICON Theatre
St Louis Park, Minn.
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ICSC: Downstate Illinois Alliance Program
When: June 25
Where: The Falls Reception & Convention Center, Columbia, Ill.
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CONTACT US
| Danielle Everson, Associate Editor
Heartland Real Estate Business
France Media, Inc.
404-832-8262
404-832-8260
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