The Blackstone Group has agreed to sell its stake in 30 prime power centers to its joint venture partner. The New York-based private equity and real estate giant is selling its 95 percent ownership stake in those properties to Beachwood, Ohio-based DDR Corp. for $1.46 billion. The deal is expected to close in the fourth quarter.
The 30 properties are part of a larger portfolio of 44 shopping centers that the venture bought in June 2012 from private real estate firm EPN Group for roughly $1.43 billion, including the assumption of debt. Blackstone bought into this portfolio on behalf of its Blackstone Real Estate Partners VII fund, which closed on $13.3 billion in equity commitments last year.
The portfolio being sold totals 11.8 million square feet and consists primarily of large-format retail centers with an average size of approximately 400,000 square feet. Those centers, which have an average occupancy rate of 95 percent, are located mainly in top 40 US metropolitan statistical areas.
The sale includes all 10 properties that DDR has a current right of first offer to acquire, such as Shoppers World in Boston, Woodfield Village Green in Chicago, Fairfax Towne Center in suburban Washington DC and Riverdale Village in Minneapolis. DDR intends to leverage its operating platform to create incremental value throughout the portfolio in the coming years through redevelopment and re-merchandising projects, tenant downsizings and center expansions.
The 14 properties not being acquired will remain in the venture owned 95 percent by Blackstone and 5 percent by DDR. DDR will continue to manage and lease those properties pursuant to its existing agreements with Blackstone.
Blackstone has been in something of a disposition mode of late. It was revealed earlier this month that the firm is selling New England Executive Park, a 10-building, 1.1 million-square-foot suburban office park in Burlington, Massachusetts, to a joint venture between Charles River Realty Group and National Development. Data provider Real Capital Analytics lists the sale price as approximately $215 million. Meanwhile, it was announced last month that Blackstone sold a portfolio of 6,900 Berlin residential properties to Deutsche Wohnen for €369 million.