The Blackstone Group has formed a joint venture with DD Corp that will see them buying as many as 76 shopping centers that are currently owned by American Realty Capital Properties Inc. The total value of this deal is being pegged at USD 2 billion, including the element of assumed debt. The companies said in a joint statement issued on 12 June 2014 that 95% of the venture will be owned by Blackstone Real Estate Partners VII fund and the remaining 5% will have DDR as the owner. Last month, American Realty had said that it had plans of selling its multitenant shopping centers. The sale was being made to Blackstone so as to fund American Realty’s purchase of the real estate portfolio of Red Lobster.
Earlier, in January 2014, Blackstone had joined hands with DDR to purchase 46 shopping centers in the United States, shelling out USD 1.43 billion for the deal via an Elbit Imaging Ltd unit.
According to DDR CEO Daniel Hurwitz, this latest deal is expected to produce ‘attractive’ risk adjusted returns and would also secure access to opportunities for acquisition in the near future. This latest deal comprises a USD 461 million debt element and nearly USD 800 million new financings, the statement further added. The combined space of all properties that are a part of this deal is 16.4 million square feet. The right of first offer lies with DDR, for the purchase of any 10 of the assets, the statement said. Officials from the company expect this deal to be closed by the third quarter of 2014.