Blackstone's flagship real estate fund completed a busy week concluding its previously announced $1.4 billion purchase of 46 shopping centers and $770 million purchase of an industrial portfolio.
Blackstone's and DDR Corp. closed on the $1.4 billion acquisition of a portfolio of 46 shopping centers previously owned by EPN Group.
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The joint venture has assumed approximately $635 million of senior non-recourse debt and has originated an additional $320 million non-recourse loan facility, which has a five-year term.
Blackstone Real Estate Partners VII, a real estate fund managed by Blackstone on behalf of its investors, owns 95% of the common equity of the joint venture and an affiliate of DDR owns the remaining 5%.
DDR's contribution was $17 million of common equity, $150 million of preferred equity with a fixed dividend rate of 10%, and DDR assumed a pro rata share of joint venture debt of $48 million.
DDR will continue to provide leasing and management services and has the right of first offer to acquire ten of the assets under specified conditions.
The 46 shopping centers acquired by the joint venture are open-air, value-oriented power centers located in 20 states, representing 10.6 million square feet and are currently 90% leased. The top ten tenants by base rent include the TJX companies, Kohl's, PetSmart, Dick's Sporting Goods, Best Buy, Bed Bath & Beyond, JoAnn's, Old Navy, Walmart and Home Depot. More than 94% of the net operating income (NOI) is generated from prime assets, with 50% of such NOI derived from properties in the top 25 MSAs. The portfolio features average household income of approximately $88,000 and average population of over 300,000 people in a seven-mile trade area.
Separately, Blackstone Real Estate Partners VII also picked up a Central U.S. industrial portfolio from Australia-based Dexus Property Group. The $770 million transaction is the largest single industrial real estate portfolio sale in the US in 2012.
The portfolio consisted of 65 industrial properties and included three recently completed large Class A distribution facilities leased to Whirlpool Corp.
The Los Angeles office of Eastdil Secured represented DEXUS in the transaction.
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