DDR Buying 110 Retail Assets for $2B

CLEVELAND-Locally based Developers Diversified Realty said Wednesday that it has agreed to pay $2.3 billion for 110 retail real estate assets totaling 18.8 million sf. The portfolio covers 11 states, but 80% of the space is located in New York and New Jersey. Average occupancy in the portfolio is 94%. The sale is expected to close sometime during the second quarter.

The seller is Benderson Development Company Inc. of University Park, FL, one of the largest private developer, owner and operators of community centers in North America. As part of the transaction, Benderson is retaining a 2% interest in certain assets.

DDR says it will fund the acquisition using a combination of assumed debt, new debt financing, asset sales and equity from both public and private sources. One of those sources may likely be Macquarie DDR Trust, the company’s Australian Listed Property Trust joint venture. DDR says the transaction price represents an 8% cap rate on a pro-forma basis without the benefit of straight line rents.