SKOKIE, IL-The locally based EPN Group, part of Alex Berman-headed EPN Investment Management, has agreed to sell a portfolio of 46 shopping centers to a joint venture of New York City-based Blackstone and Beachwood, OH-based DDR for $1.43 billion. Berman had just finalized the takeover of the properties from EDT Retail Trust, previously known as Macquarie DDR Trust, this past summer.
The Blackstone fund Blackstone Real Estate Partners VII will own 95% of the common equity of the joint venture, with DDR, which has managed the properties, owning the rest. The venture will be known as BRE DDR Retail Holdings LLC. The deal includes $640 million in assumed debt and at least $305 million of new financing. DDR is also investing $150 million into the venture, and will have the right of first offer to purchase 10 of the assets should the venture decide to sell.
Daniel Hurwitz, president and CEO of DDR, said in a statement that the transaction “enables the retention of significant fee income, and enhances current ownership and future access to prime assets.” His firm is an owner and manager of 538 retail centers in 41 states.
EPN, a joint venture of Israel-based Elbit Imaging Ltd., Netherlands-based Plaza Centers NV and New York City-based NCH Capital Inc., took over half of EDT Retail in June 2010. The venture took over the other half of EDT in August 2011, and removed the company from the Australian Stock Exchange. In an Elbit company presentation in November, the firm said the portfolio was worth $1.45 billion.
There were 48 properties in the EDT portfolio when it was taken over in August 2011, and EPN will continue to hold two properties valued at $43 million. An Elbit statement this morning claims there are 49 sites, but a DDR spokesman tells GlobeSt.com that one of properties included in the deal, the 872,507-square-foot Riverdale Village in Coon Rapids, MN, is counted as two properties by Elbit “because of its size and configuration.”
Dudi Machluf, co-CEO of Elbit, said in his firm’s statement that EPN will still maintain an investment platform for continuing operations in the United States. “We believe that there are further opportunities in the United States that meet the profile of our US investment vehicle,” he said. “We intend to continue our operations in the United States together with our existing partners, using our experience to attract new investors, so that the United States continues to be an important part of our operations in the coming years."
Both seller and buyer agree that the portfolio totals about 10.6 million square feet, and is about 90% leased with tenants such as Kohl’s, PetSmart, Dick’s Sporting Goods, Best Buy, Walmart and Home Depot. In August, the portfolio had included centers such as the 253,000-square-foot Fairfax Towne Center in Fairfax, VA.
Goldman, Sachs & Co. advised DDR and JP Morgan advised EPN on the recent deal. Citigroup Global Markets Inc. and Eastdil Secured, a subsidiary of Wells Fargo & Co., advised Blackstone.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
