BEACHWOOD, Ohio, Oct. 1, 2012 /PRNewswire/ -- DDR Corp.
(NYSE: DDR) today announced continued portfolio repositioning
progress with the acquisition of $328
million of prime assets and the disposition of $12 million of non-prime assets during the
quarter. Year to date, the Company closed $2
billion of acquisitions ($609
million at DDR's share), including the joint venture with
Blackstone's flagship real estate fund, and disposed of
$137 million of non-prime assets. As
of the third quarter, DDR has raised gross common equity capital of
$435 million through the issuance of
31.7 million new common shares to fund investments and lower
leverage. The Company's considerable progress in recent years
recycling capital, growing its pool of prime unencumbered assets,
lowering leverage, and its stronger than expected operating results
contributed to Standard & Poor's upgrade of DDR's corporate
bond rating to BBB- on September 19,
2012. DDR's bonds are now investment grade rated by both
Standard & Poor's and Moody's.
(Logo: http://photos.prnewswire.com/prnh/20110912/CL65938LOGO
)
Third quarter acquisition activity:
Legacy joint ventures continue to provide a proprietary and
attractive source of low risk acquisitions, and during the quarter
the Company purchased its partner's ownership interest in two high
quality prime shopping centers for $118
million. The entire investment was funded with proceeds from
the issuance of 4.7 million new common shares in August at an
average price of $14.77 per share and
3.2 million new common shares in September at an average price of
$15.70 per share. These issuances
were accomplished through the Company's at-the-market common equity
program, and each shopping center is unencumbered. These
acquisitions include the following:
DDR purchased its partner's 50% ownership interest in Ahwatukee
Foothills, located in Phoenix,
Arizona, for $69 million. The
95% leased, 682,000 square foot prime power center features anchor
tenants such as Ross Dress for Less,
Petco, Jo-Ann Fabric and Craft Stores, Babies"R"Us, AMC Theatres
and Old Navy. DDR recently executed a lease with Sprouts Farmers
Market to occupy 27,000 square feet, and is currently finalizing
negotiations with a national junior anchor for the majority of the
remaining space. These tenants are replacing a 60,000 square foot
Roomstore, which was relocated within the center and downsized to
42,000 square feet. The prime power center has an average trade
area household income of $81,000 and
a trade area population of 508,000 people.
DDR acquired its partner's 85% ownership interest in
Independence Commons, in Kansas City,
Missouri, for $49 million.
This 403,000 square foot prime power center is 97% leased, anchored
by Kohl's, Ross Dress for Less,
Marshalls, Best Buy and AMC Theatres, and is located across the
street from Independence Center, an 870,000 square foot high
quality regional mall anchored by Dillard's, Macy's and Sears.
Trade area demographics include an average household income of
$68,000 and population of 379,000
people.
Also during the quarter, DDR acquired Tucson Spectrum, a one
million square foot dominant prime power center located in
Tucson, Arizona, for $125 million. The 95% leased shopping center is
anchored by Target, Home Depot, Ross
Dress for Less, Marshalls, PetSmart, Sports Authority, and
Bed Bath & Beyond. Tucson Spectrum can accommodate the
development of at least five new outparcels, and DDR expects to
leverage its operating platform to drive further increases in asset
quality and value. The project has an average trade area household
income of $50,000 and a trade area
population of 514,000 people. The Company's investment in Tucson
Spectrum was funded with proceeds from asset sales completed during
2012 and assumed debt. DDR assumed a $24.4
million mortgage loan secured by Phase I of the project that
matures in 2014 and bears interest at a fixed rate of 5.6%. Also, a
$58.4 million mortgage loan secured
by Phase II of the project was repaid at closing, and that portion
of the shopping center is unencumbered.
Third quarter disposition activity:
During the quarter, DDR disposed of six non-prime assets for
aggregate proceeds of $12 million, of
which the Company's share was $7
million. An additional $173
million of non-prime and non-income producing assets are
currently under contract for sale, of which DDR's share is
$68 million. Year to date, DDR has
disposed of $137 million non-prime
assets, of which its share was $117
million. Dispositions in 2012 include $46 million of sales of non-income producing
assets, the Company's share of which was $35
million. Assets sold in 2012 have average trade area
household incomes and populations that are 63% and 21% below DDR's
prime portfolio average.
David J. Oakes, chief financial
officer of DDR, commented, "We are very pleased to announce another
quarter of progress improving the quality of the portfolio while
lowering leverage. We are encouraged that the successful execution
of our strategic objectives has been recognized by Standard &
Poor's, whose credit upgrade represents a very important step
toward further reducing our cost of capital. We will continue to
aggressively pursue opportunities to enhance net asset value and
long-term cash flow growth and improve portfolio quality while also
lowering leverage and risk."
About DDR
DDR is an owner and manager of 459 value-oriented shopping
centers representing 117 million square feet in 39 states,
Puerto Rico and Brazil. The Company's assets are concentrated
in high barrier-to-entry markets with stable populations and high
growth potential and its portfolio is actively managed to create
long-term shareholder value. DDR is a self-administered and
self-managed REIT operating as a fully integrated real estate
company, and is publicly traded on the New York Stock Exchange
under the ticker symbol DDR. Additional information about the
Company is available at www.ddr.com.
Safe Harbor
DDR considers portions of the information in this press release
to be forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, both as amended, with respect to the
Company's expectation for future periods. Although the
Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that its expectations will be
achieved. For this purpose, any statements contained herein
that are not historical fact may be deemed to be forward-looking
statements. There are a number of important factors that
could cause our results to differ materially from those indicated
by such forward-looking statements, including, among other factors,
local conditions such as oversupply of space or a reduction in
demand for real estate in the area; competition from other
available space; dependence on rental income from real property;
the loss of, significant downsizing of or bankruptcy of a major
tenant; constructing properties or expansions that produce a
desired yield on investment; our ability to buy or sell assets on
commercially reasonable terms; our ability to complete acquisitions
or dispositions of assets under contract; our ability to secure
equity or debt financing on commercially acceptable terms or at
all; our ability to enter into definitive agreements with regard to
our financing and joint venture arrangements or our failure to
satisfy conditions to the completion of these arrangements; and the
success of our capital recycling strategy. For additional
factors that could cause the results of the Company to differ
materially from those indicated in the forward-looking statements,
please refer to the Company's Form 10-K for the year ended
December 31, 2011, as amended.
The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that
arise after the date hereof.
SOURCE DDR Corp.