DDR Closes Last of $287M Sale to Macquarie JV

CLEVELAND, OH-Developers Diversified Realty has closed on the sale of an 85.5% interest in three community shopping centers to its joint venture with Macquarie DDR Trust, an Australian-listed property trust sponsored by Macquarie Bank Ltd. The $63.8-million transaction completes an eight-property, $287-million transaction with the trust that began at the end of February. The pricing equates to an overall cap rate in the low-to-mid 7% range, according to DDR documents. In each of the properties, DDR retains a 14.5% ownership interest, remains responsible for all day-to-day operations and receives its share of ongoing fees for property management, leasing and construction management, plus nominal one-time fees for financing and due diligence. DDR also receives base asset management fees and incentive fees based on the overall performance of the trust relative to the S&P/ASX 200. The three properties involved in this latest transaction are Parker Pavilion in Parker, CO; McDonough Marketplace in McDonough, GA; and Grandville Marketplace in Grandville, MI. Parker Pavilion is a 97,000 sf center anchored by Home Depot (unowned), Wal-Mart Supercenter (unowned) and Office Depot. McDonough Marketplace is a 31,000 sf center anchored by Lowe’s Home Improvement (unowned) and Wal-Mart Supercenter (unowned). Grandville Marketplace is a 217,000-sf center anchored by Lowe’s Home Improvement (unowned), Circuit City, Linens ‘N Things, Gander Mountain and OfficeMax.The other six properties in the deal are as follows: the 201,414-sf Cool Springs Pointe in the City of Brentwood, TN; Shoppers World, a 190,142-sf store in Brookfield, WI; Connecticut Commons, a 566,537-sf center in Plainville, CT; Brandon Village & McDonough Marketplace, a 447,500-sf property in Brandon, FL; and Market Place, a 410,000-sf property in Brown Deer, WI.The transactions give the DDR-MDT joint venture 35 community center assets across the US totaling over 14 million sf. On a pro forma basis, the MDT joint venture portfolio will represent nearly $2 billion in aggregate value. DDR itself owns or manages approximately 470 operating and development retail properties in 44 states, plus Puerto Rico, comprising approximately 108 million sf.