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GlobeSt.com UPDATE: DDR Closes $177M Portfolio Sale

CLEVELAND-Proceeds from the sale of the 25-building office and industrial portfolio were to be directed in part to DDR's joint-venture $396.2-million acquisition of 36 Mervyns department stores, which closed a couple of weeks ago.

By Brian K. Miller | Updated on October 05, 2005

CLEVELAND-Locally headquartered Developers Diversified Realty has completed its disposition of of 25 mostly non-retail properties to Brascan Real Estate Opportunity Fund, which is managed by publicly held Brascan Corp. The sale price is comprised of $170 million in cash and a contingent payment of $7 million in subordinated equity, based on the portfolio’s performance, including proceeds from a potential disposition.

The $136.3 million in net proceeds from the transaction were used to pay down DDR’s primary revolving credit facility, which was used to fund DDR’s acquisition of its interest in the Mervyns stores assets, and for general corporate purposes. The $396.2-million joint venture acquisition of 36 Mervyns department stores closed about two weeks ago.

The office and industrial assets DDR sold were first acquired as part of a 2001 deal through a merger with American Industrial Properties. The portfolio consisted of 31 industrial buildings, six office properties, two retail properties and approximately 24 acres of raw land. Since the merger, Developers Diversified sold seven properties and one land parcel with gross proceeds aggregating over $32 million.

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