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Merger Forcing Sale of More Than 1.8-Mil SF of Texas Industrial, Office Space

IRVING, TX-More than 1.8-million sf of Texas industrial and office space in 17 properties are being sold to fund a merger between Developers Diversified Realty and American Industrial Properties.

By Connie Gore | Updated on November 03, 2000

IRVING, TX-Developers Diversified Realty Corp., a Cleveland-based REIT, is planning to dispose of 17 Texas industrial and office properties totaling 1,862,120 sf as a result of a merger with American Industrial Properties of Irving.

Texas properties account for about 43% of the 39-property disposition list. Under the terms of yesterday’s agreement, a wholly owned subsidiary of DDR will merge with AIP, resulting in all stock of AIP common shareholders–other than DDR–being bought by AIP at $13.74 per share. The stock purchase will be funded by the sale of 31 industrial assets to an affiliate of Lend Lease Real Estate Investments and an office building sale to a third party. DDR will end up AIP’s sole shareholder in the transaction and in control of AIP’s remaining 39-property portfolio. DDR currently owns 46% of AIP’s outstanding stock.

DDR intends to maintain AIP as a private REIT while setting the stage for a future disposition plan. Of the properties on today’s sale list, 70% are light industrial, 21% are office and 9% are retail locations. All five industrial properties in Ohio originally had been owned by DDR. The transaction also places 23.7 acres of raw land in Texas and Virginia under DDR ownership.

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