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DRA buys Inland Real Estate for $2.3bn

DRA Advisors has purchased the shopping center REIT in the industry’s latest take-private transaction.

DRA Advisors, the New York-based investment firm, has purchased real estate investment trust Inland Real Estate Corporation (IRC) for about $2.3 billion, the firm announced Tuesday.

Inland Real Estate owns and operates shopping centers primarily in the central and southeastern US. The Oak Brook, Illinois-based enterprise held stakes in 135 properties with aggregate leasable space of approximately 15 million square feet, as of September 30, 2015.

DRA, headquartered in New York, manages about $6.8 billion in assets. Since its inception, the firm has acquired 158 shopping centers totaling 33 million square feet, according to its website, in addition to investing in multifamily, office and industrial assets.

“We are excited to enter into an agreement to acquire Inland Real Estate Corporation,” said David Luski, DRA’s president, in a statement Tuesday. “IRC is a company with quality assets, a strong management team and great long-term potential. We look forward to closing the transaction and adding the IRC platform to our portfolio.”

The transaction comes as REITs have undergone a wave of privatizations since the summer. Private equity real estate firms with large amounts of capital are turning to corporate acquisitions and rolling up assets in sector-specific plays as REITs trade at a significant discount to net asset value. The structures are extremely visible and transparent given their public nature, which helps for valuation and ultimately pricing a bid.

Wells Fargo is leading the financing for this deal. The acquisition is expected to close in the first half of 2016, according to a statement from IRC. Law firm Proskauer represented IRC in the transaction.