DDR Agrees to Sell 63 Centers for $603M

CLEVELAND-Just two weeks after forming a fund to acquire 63 grocery-store anchored properties in a $1.5-billion fund, Developers Diversified Realty Corp. has agreed to sell a separate portfolio of 63 shopping centers for $603 million, with a weighted average cap rate of 7.25%. The centers were sold to Cincinnati-based Phillips Edison & Co., adding to that firm’s current 150 retail properties.

The properties in the sold portfolio have an average size of about 100,000 sf and are in 15 states, with major concentrations in New York, Florida, North Carolina, Ohio and Virginia. The properties are about 93% leased and make up about 5.7 million sf, with tenants such as Publix, Food Lion, Staples and Dollar Tree, said DDR in a statement. A Phillips Edison spokeswoman did not return a phone call for comment.

Michelle Dawson, VP of investor relations for DDR, tells GlobeSt.com that after the $6.2-billion acquisition of Inland Retail Real Estate Inc. with more than 300 properties in 2006, the company took the opportunity to evaluate the combined portfolio. “Some we decided to keep on the balance sheet, some we put in the fund pool and some we decided to sell outright,” Dawson says.