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DDR acquires 95% stake in Vista Village

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Cleveland-based DDR Corp. reported acquiring the remaining 95 percent interest in a 232,522-square-foot portion of the Vista Village Shopping Center in Vista from an entity of The Blackstone Group.

The terms were not disclosed.

DDR (NYSE: DDR) -- which already manages the 400,000-square-foot Vista center -- acquired the interest as part of a $699 million transaction that included eight power centers around the country, six of which have grocery anchors and some land parcels.

Vista Village center is anchored in part by a 25,000-square-foot Frazier Farms market, a 69,000-square-foot Krikorian Premiere Theatres 15-screen multiplex and a 20,000-square-foot Staples (Nasdaq: SPLS) office supply store.

Other tenants in the 39-store center include Panera Bread, Chipotle Mexican Grill, Cold Stone Creamery, Coldwell Banker, Panda Express, Famous Dave's and California Pizza Kitchen.

A Lowe's (NYSE: LOW) home improvement store is part of the center, but under separate ownership and not part of this transaction.

DDR (formerly known as Developers Diversified Realty) had gotten its 5 percent interest in each of the centers in August 2013.

At that time, DDR was part of what was then billed as a $377 million, 2.4 million-square-foot transaction in which Blackstone acquired the properties from Jacksonville, Fla.-based Regency Centers.

The property was developed by Civic Partners of Huntington Beach, which had owned it until the mid-2000s. The city of Vista invested more than $80 million in infrastructure to support the redevelopment at that time.

Vista Village is marketing four spaces for lease totaling more than 40,000 square feet. A 30,000-square-foot space is the largest available space.

A 25,000-square-foot building has also been proposed for the site, according to The CoStar Group. (Nasdaq: CSGP).

DDR reports that the shopping center has a trade area that includes about 272,500 people with an average annual household income of $76,811.

CoStar -- which noted that DDR is a manager at Vista Village as well as the owner -- reported that the firm is a manager of an 85,758-square-foot building within the Parkway Plaza mall in El Cajon, and DDR and OliverMcMillan are listed as owning the Ocean Place Cinemas property in Oceanside.

DDR and San Diego-based OliverMcMillan were longtime partners in the late 1990s and early 2000s but have since gone their separate ways.

These latest acquisitions increase DDR's exposure to prime markets such as Los Angeles, Washington, D.C., Portland and San Diego County.

Six of the seven power centers have a grocery anchor, and more than 40 percent of the portfolio's gross leasable area comes from Target (NYSE: TGT), Walmart (NYSE: WMT), Wegmans, Kohl's (NYSE: KSS), Ross (Nasdaq: ROST), Dick's Sporting Goods (NYSE: DKS), T.J. Maxx (NYSE: TJX), Bed Bath & Beyond (Nasdaq: BBBY), The Fresh Market (Nasdaq: TFM) and Ulta Beauty Products.

In addition, the DDR remains under contract to acquire a previously announced portfolio from American Realty Capital Properties, Inc. (NASDAQ: ARCP) in a joint venture with Blackstone (NYSE: BX), expected to close in October 2014.

That transaction doesn't appear to involve retail properties here, but ARCP's hospitality division acquired three hotels in San Diego County, including the 145-room Courtyard by Marriott on Owens Avenue in Carlsbad, and the 137-room Springhill Suites by Marriott and the 95-room Residence Inn by Marriott, both on Scripps Highlands Drive in Scripps Ranch.

During the third quarter, DDR also sold seven operating assets and two land parcels, and redeemed its share of the preferred equity in a portfolio for an aggregate of $290 million.

DDR has an additional 39 operating assets under contract for sale totaling $207 million. It has sold $826 million of non-prime assets thus far this year.

DDR is an owner and manager of 385 value-oriented shopping centers representing 106 million square feet in 39 states and Puerto Rico.

It acquired $265 million worth of power centers, and executed 364 new leases and renewals totaling 3.1 million square feet in the second quarter alone.

For the six months ended June 30, DDR posted $58.5 million in net income on $490.65 million in revenue -- compared with a $16.62 million loss on $386.01 million in revenue for the same period a year earlier.

DDR's stock closed at $16.86, up 11 cents, Monday. The stock has ranged from $14.89 to $18.37 during the past 52 weeks.

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