DRA sells stakes in two malls to JV partner

The New York-based private equity real estate firm has sold its ownership interest in two shopping centres in Oregon and Arizona to DDR for $70 million.

DRA Advisors has divested its 50 percent ownership stake in two retail centres in the Portland and Phoenix markets to its joint venture partner, DDR, for a total of $70 million. In its announcement of the deal, the Beachwood, Ohio-based publicly-traded REIT did not name its joint venture partner, but data provider Real Capital Analytics identified DRA as the seller.

The properties, both of which are more than 95 percent leased, are Tanasbourne Town Center, a 566,000-square-foot power centre in Hillsboro, Oregon, and Arrowhead Crossing, a 412,000-square-foot shopping centre in Peoria, Arizona. The transaction, which was funded with proceeds from DDR’s issuance of 4.8 million common shares, involved the repayment of $104 million in mortgage debt at closing.

In 1998, DRA and DDR formed a joint venture that involved the private equity real estate firm contributing equity and debt financing to six of the REIT’s existing properties in Arizona, Minnesota, Texas and Oregon, including Tanasbourne Town Center and Arrowhead Crossing. The partnership, in which DDR retained a 50 percent interest, freed up approximately $195 million in cash for the REIT. The only property from the 1998 deal that still is jointly owned by the two firms is the Foothill Towne Center, a 557,000-square-foot retail property in Ahwatukee, Arizona.

DRA’s first joint venture with DDR dates back to 1995, when the two firms teamed on an acquisition of community shopping centres from Homart Development. DRA, which currently has more than $9 billion in assets under management, targets value-added real estate investments in the US through direct acquisitions and joint ventures. Retail accounts for nearly half of its portfolio, which also includes office, multifamily and industrial properties, according to the firm’s website.