Developers Diversified, one of the largest U.S. shopping center real estate investment trusts, has taken a major step in a new joint venture partnership with the acquisition of Inland Retail Real Estate Trust Inc. for $6.2 billion.
Within the next three weeks, the company expects to reveal the identity of the U.S. institutional investor that is partnering in the purchase of 67 of Inland’s more than 300 properties, which are valued at about $3 billion. The REIT will provide 15 percent of the equity for those properties, and the institutional investor will contribute the balance of the cash.
The new partner, which could not be immediately identified because the deal is pending, is “a household name in the industry,” said Scott Wolstein, chairman and chief executive officer of Developers Diversified.
The Inland acquisition, announced Monday, will add about 44 million square feet to Developers Diversified’s 500-plus property portfolio. It is the largest retail real estate investment transaction since Kimco Realty gobbled up market share on the West Coast in July with a $2.9 billion acquisition of Pan Pacific Retail.
The Inland portfolio, which consists primarily of community centers, neighborhood shopping centers and single-tenant, big-box properties, will bulk up Developers Diversified’s presence in the Southeast, especially in key high-growth markets such as Atlanta; Charlotte, N.C.; Miami and Orlando, Fla.
The deal is expected to close in the first quarter of 2007, pending shareholder approval.