By Ilaina Jonas
NEW YORK Aug 13 Regency Centers Corp
said on Tuesday that it had sold a portfolio of seven
grocery-anchored shopping centers to a joint venture between
Blackstone Group LP and real estate investment trust DDR
Corp for $332 million.
The properties, which will be managed by DDR, will not be
part of Brixmor Property Group Inc, Blackstone's neighborhood
shopping center company which the private equity firm manages.
Last month, Brixmor filed for an initial public offering slated
for the fourth quarter 2013.
Blackstone, one of the world's largest owners of commercial
real estate, recently announced IPO plans for some of its
property companies, including Brixmor and Extended Stay America
Inc hotels. It also is exploring the sale or IPO of La Quinta
Inns & Suites and has hired bankers to explore an IPO for Hilton
Meanwhile, Blackstone is actively acquiring properties.
The private equity firm is buying 26,000 apartment units from
General Electric's financing arm for $2.3 billion, a source
familiar with the deal said.
Under the deal with Regency, the joint venture will assume
$207 million of debt and place $28 million of new mortgage debt
on the properties, DDR said. DDR will issue $30 million of
preferred equity. Blackstone and DDR will split the remaining
$70 million payment, with Blackstone picking up 95 percent of
Blackstone Real Estate Partners VII, the fund in the deal,
will own 95 percent of the joint venture, and DDR will manage
The joint venture is structured very much like a June 2012
transaction in which Blackstone and DDR bought a portfolio of 46
U.S. shopping centers from Israel's EPN Group for $1.43 billion.
That deal also involved a 95 percent stake by Blackstone Real
Estate Partners VII and a 5 percent stake by DDR.
In May 2013, the two announced that DDR would buy back the
95 percent stake in 30 of the centers from Blackstone for $1.46
billion. Blackstone retained its 95 percent stake in 14 of those
Similar to that first deal, the new deal allows DDR the
option to buy four of the most dominant centers in the
The shopping centers are located in Los Angeles, the
Washington D.C. area, Northern Virginia, the San Diego area, the
Portland, Oregon area and in Harrisburg, Pennsylvania. Two are
located in Cincinnati. The shopping centers total 2.3 million
square feet including the stores in some centers that may own
their own property.
Regency sold the properties on behalf of Regency Retail
Partners LP, a fund it manages. Regency has a 20 percent stake
in the fund and will realize $38 million of net sales proceeds
from the deal.