Madison International Realty, a provider of venture and equity capital to real estate investors, and DDR Corp have recapitalized a joint venture that comprises 52 shopping centers located mostly in Florida and the Southeastern U.S. The transaction, which included repayment of all outstanding mortgage debt, was made with a $707 million mortgage loan.
BEACHWOOD, Ohio, June 14, 2017 /PRNewswire/ — DDR Corp. (NYSE: DDR) and an affiliate of Madison International Realty today announced the recapitalization of a joint venture with 52 shopping centers previously owned by DDR and various partners through the DDR Domestic Retail Fund I, totaling $1.05 billion.
Madison International Real Estate Liquidity Fund VI, an investment fund managed by Madison International Realty, acquired 80% of the common equity of the joint venture and an affiliate of DDR retained 20%. This ownership structure is consistent with the structure of the joint venture prior to the recapitalization and will be a long-term strategic partnership. DDR will continue to provide leasing and management services.
The portfolio, totaling 7.0 million square feet, consists primarily of grocery anchored shopping centers located predominantly in Florida and the Southeastern United States and was originally formed in 2007. Three properties previously held by the partnership have been excluded from the recapitalization and are being held in a separate joint venture with the previous partners of DDR Domestic Retail Fund I including DDR. The recapitalization includes the repayment of all outstanding mortgage debt previously held by the partnership with a new $707 million mortgage loan ($141 million at DDR share) secured by the 52 assets.
David Lukes, President and Chief Executive Officer of DDR, commented, “We are pleased to announce the closing of this transaction with Madison International. The recapitalized venture will continue to drive our return on invested equity, demonstrates the sustainability of our joint venture business, and provides us the ability to add value to a property type with which this management team has extensive experience.”
“We are very pleased to be partnering with DDR. This venture is an exceptional opportunity and an excellent fit with our investment strategy. Madison’s investment will allow existing partners to exit, Madison to expand its retail footprint, and DDR to continue its value creation strategy. The portfolio consists of destination grocery-anchored centers located in Southeastern markets with growing populations and favorable demographics,” said Ronald M. Dickerman, Founder and President of Madison International Realty.
About DDR Corp.
DDR is an owner and manager of 309 value-oriented shopping centers representing 103 million square feet in 35 states and Puerto Rico. The Company owns a high-quality portfolio of open-air shopping centers in major metropolitan areas that provide a highly-compelling shopping experience and merchandise mix for retail partners and consumers. The Company actively manages its assets with a focus on creating long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR.
About Madison International Realty
Madison International Realty (www.madisonint.com) is a leading liquidity provider to real estate investors worldwide. Madison provides joint venture and preferred equity capital for real estate owners and investors seeking to create an exit strategy; or where existing sponsors seek to sell a portion of their ownership position and take on a partner. The firm provides equity for recapitalizations, partner buyouts and capital infusions; and acquires joint venture, limited partner and co-investment interests as principals. Madison invests only in secondary transactions and focuses solely on existing properties and portfolios in the U.S., U.K., and Western Europe. Madison has offices in New York, London and Frankfurt, Germany, where the firm operates under the name of Madison Real Estate Beteiligungsgesellschaft mbH.