Publications

Transactions - DECEMBER 3, 2018

Chinese investors buy $607m U.S. portfolio

by Andrea Zander

SITE Centers Corp. (previously DDR Corp.) has sold an 80 percent stake in a 10-property, 4 million-square-foot portfolio to two unnamed Chinese institutional investors. The deal’s pricing values the portfolio at approximately $607 million.

SITE Centers will retain a 20 percent stake and also manage the properties. The companies are forming a joint venture called Dividend Trust Portfolio to co-own the properties, which will take on a $364 million mortgage.

Transaction Highlights

  • Selling an 80 percent interest in durable, income-oriented properties: The 10 DTP assets have been chosen to provide stable current income. As a result, the remaining 68-property SITE Centers wholly-owned portfolio will have an improved expected cash flow growth profile and increased exposure to redevelopment.
  • Capital and liquidity to opportunistically reinvest proceeds: The transaction is expected to allow the company to expand its recently initiated opportunistic investment program, to fund its growing redevelopment pipeline and to repurchase its common shares.
  • Materially improved balance sheet: The transaction is expected to result in a sustainable decline in SITE Centers’ pro rata Debt to Adjusted EBITDA to below 6.0x and to increase weighted average debt maturity to 6.5 years from 5.7 years prior to the transaction. Pro forma for the transaction and the contemplated use of proceeds, SITE Centers will have minimal floating rate debt, no unsecured maturities until 2022, and see improvement to all public bond covenants with secured debt ratios expected to be unchanged.

 

DTP joint venture portfolio consists of:

 

Property Location

Owned

(GLA)

Total

(GLA)

ABR PSF
Ahwatukee Foothills Towne Center Phoenix, AZ 688 703 $17.92
Connecticut Commons Plainville, CT 561 561 $13.36
Towne Center Prado Marietta, GA 287 287 $13.38
Brookside Marketplace Tinley Park, IL 317 602 $15.29
Independence Commons Independence, MO 386 403 $14.94
Route 22 Retail Center Union, NJ 112 237 $19.83
University Centre Wilmington, NC 254 434 $11.01
Poyner Place Raleigh, NC 418 525 $16.82
Ashley Crossing Charleston, SC 208 217 $10.27
Commonwealth Center Midlothian, VA 166 166 $16.77

 

 

 

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