DDR Corp. (DDR) Wednesday said it has agreed to acquire a portfolio of shopping centers from its existing joint venture with private equity firm Blackstone Group L.P (BX) for $1.46 billion.
DDR will acquire Blackstone's 95 percent common equity ownership interest in 30 of the 44 shopping centers owned by the JV for $1.46 billion.
Financial Chief David Oakes said, "The acquisition will be funded responsibly, and will position us well for strong relative growth in cash flow generated by high quality shopping centers over the long term."
DDR said the portfolio features very strong trade area demographics with an average household income of $91,000 and population of 543,000 people, which is above DDR's current prime portfolio. The properties in the acquisition include markets like Washington, Boston, and Chicago.
DDR plans to fund the deal through a combination of the debt and share offerings. DDR separately said it has commenced a public offering of about 32 million common shares on a forward basis, the proceeds of which will be used to fund part of the acquisition.
DDR also has the right, subject to certain conditions, to issue common shares to Blackstone in an amount not to exceed $250 million.
Based on the acquisition and strong operating metrics, DDR lifted the lower-end of its full-year 2013 operating FFO guidance by a penny to a range of $1.08 to $1.11 per share.
The 14 properties not being acquired will remain in the venture with Blackstone owning 95 percent and the rest by DDR. DDR will continue to manage and lease those properties.
DDR closed Wednesday's regular trade at $19.41, up $0.13 or 0.67%, on the NYSE. The stock slipped $0.46 or 2.37% in after-hours trade.
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