) accomplished transactions worth over $1.64 billion in
fourth-quarter 2013. The move comes as part of the company's
asset management efforts and capital recycling program. In
particular, this retail real estate investment trust (REIT)
closed acquisitions worth $1.46 billion and divestitures of $184
million in the said quarter.
During the fourth quarter, DDR bought Blackstone's 95% stake
in 30 power centers for $1.46 billion. Earlier these properties
were held in joint venture. Spanning 11.8 million square feet and
95% leased, these properties boast of high credit quality tenants
Wal-Mart Stores Inc.
Bed Bath & Beyond Inc.
). DDR financed the deal with funds reaped through the issuance
of new common equity and unsecured debt, assumption of mortgage
debt and preferred equity repayment.
On the other hand, DDR sold 20 non-prime assets for a total of
$184 million. Of this, DDR's share was $98 million. This was
ahead of the company's prior disclosed guidance. Furthermore, the
company is under contract for the sale of another 24 non-prime
assets worth $204 million in total ($181 million at DDR's share),
including non-income producing properties of $53 million.
We believe that the portfolio repositioning efforts would
place DDR well on the growth trajectory. While the company
continues to expand its asset base with the addition of prime
power centers in top MSA's, it is simultaneously offloading lower
quality assets in weak markets. These dispositions provide the
wherewithal to invest in opportunistic acquisitions.
As part of such efforts, DDR purchased 46 prime shopping
centers spanning more than 17 million square feet in 2013 in
premium markets. Leased 95%, these centers are occupied by
renowned national retailers. We believe that the addition of
premium assets to its high-end assets pool, along with
strengthening of the tenant base, promises steady rental revenues
for DDR in the future.
The company also sold 80 non-prime assets for a total of $433
million. Of this, DDR's share was $296 million. These assets span
5.9 million square feet. With the average trade area household
income of $70,000 for these disposed assets being 13% lower than
DDR's prime portfolio, the dispositions were a strategic fit.
DDR currently carries a Zacks Rank #3 (Hold).
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