Market Overview

DDR and Blackstone Form Joint Venture to Acquire 76 Shopping Centers for $1.975 Billion


BEACHWOOD, Ohio, June 12, 2014 /PRNewswire/ -- DDR Corp. (NYSE: DDR) and an affiliate of Blackstone Real Estate Partners VII today announced the formation of a third joint venture to acquire 76 shopping centers currently owned by American Realty Capital Properties, Inc. (NASDAQ: ARCP).

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The joint venture has executed a purchase and sale agreement to acquire the portfolio in a transaction valued at $1.975 billion, including assumed debt of $461 million and approximately $800 million of new financings.  Blackstone owns 95% of the common equity of the joint venture and an affiliate of DDR owns the remaining 5%. DDR will also invest up to a maximum of $300 million in preferred equity in the joint venture with a fixed dividend rate of 8.5%, and has agreed to provide customary leasing and management services. In addition, DDR will have the right of first offer to acquire ten of the assets under specified conditions consistent with past transactions. This acquisition is anticipated to close in the third quarter of 2014 and non-prime asset sales within the portfolio are expected to commence thereafter as a result of active portfolio management within the joint venture.

The 16.4 million square foot portfolio primarily consists of prime power centers located in Los Angeles, Houston, Denver, Chicago, Atlanta, Washington D.C. and Phoenix and is occupied by high quality retailers such as Whole Foods, Trader Joe's, The Fresh Market, Costco, Target, Walmart, Kohl's, PetSmart, Dick's Sporting Goods, Bed Bath & Beyond, and the TJX Companies. Trade area demographics for the portfolio are in-line with DDR's Prime average featuring household income of approximately $75,000 and population of approximately 400,000 people. The portfolio is 95.1% leased and the average base rent per square foot is 6% below DDR's current prime portfolio representing a unique opportunity to drive future growth. Additionally, the portfolio to be acquired contains eight vacant junior anchor boxes, over 100 available small shop units, more than 20 outparcel expansion opportunities, and over 30 potential candidates for "Project Accelerate," the initiative recently announced by DDR that entails recapturing below market spaces from underperforming retailers.

Daniel B. Hurwitz, chief executive officer of DDR, remarked, "We are pleased to once again announce a transaction with our partners at Blackstone, further reinforcing our unique relationship and again highlighting both partners' ability to source and execute efficiently.  We expect to generate outsized asset-level growth by leveraging our operating platform, and have appropriately structured our investment to produce attractive risk-adjusted returns while securing access to acquisition opportunities in the future."

Goldman, Sachs & Co. and KeyBanc Capital Markets served as advisors to DDR on the transaction.

About DDR Corp.
DDR is an owner and manager of 396 value-oriented shopping centers representing 108 million square feet in 39 states and Puerto Rico.  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, as well as on Twitter, LinkedIn and Facebook.

Safe Harbor
DDR Corp. 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 supply 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, including the ability of the joint venture between DDR and Blackstone to successfully complete the acquisition of the portfolio from American Realty Capital Properties, Inc.; 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, 2013, 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.


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