Texas properties account for about 43% of the 39-property disposition list. Under the terms of yesterday's agreement, a wholly owned subsidiary of DDR will merge with AIP, resulting in all stock of AIP common shareholders--other than DDR--being bought by AIP at $13.74 per share. The stock purchase will be funded by the sale of 31 industrial assets to an affiliate of Lend Lease Real Estate Investments and an office building sale to a third party. DDR will end up AIP's sole shareholder in the transaction and in control of AIP's remaining 39-property portfolio. DDR currently owns 46% of AIP's outstanding stock.

DDR intends to maintain AIP as a private REIT while setting the stage for a future disposition plan. Of the properties on today's sale list, 70% are light industrial, 21% are office and 9% are retail locations. All five industrial properties in Ohio originally had been owned by DDR. The transaction also places 23.7 acres of raw land in Texas and Virginia under DDR ownership.

At closing, the properties will be 89% occupied, based upon contracted leases and discounting additional lease-ups, and results in a $28.6-million NOI. Overall, the 39 properties are subject to about $134 million in debt, with annualized interest totaling about $10.5 million. DDR's cost basis in AIP totals about $134 million.

"This portfolio provides for additional potential growth from lease-up of roughly 513,000 sf of vacant space," Scott A. Wolstein, DDR's chairman and CEO, says, describing the merger as a "sound return" on DDR's investment.

Following is a list of Texas properties that are being cut from AIP's portfolio. The Dallas properties are:

Beltline Business Park, 59,888 sf

Valley View Commerce Park, 138,374 sf

Shady Trail Business Park, 68,003 sf

Northgate II, 257,944 sf, and Northgate III, 231,666 sf

2121 Glenville Rd., 20,645

Dallas-Ft. Worth suburban properties consist of the following:

Carrier Place, 83,239 sf, Grand Prairie

DFW North, 74, 580 sf, Grapevine

Gateway 5 and Gateway 6, 79,429, Irving

Meridian Building, 72,072 sf, Arlington

Valwood II, 52,813 sf, Carrollton

Parkway Center, 69,876 sf, Plano

Following is the disposition list for Houston properties:

Westchase Park, 47, 658 sf

TechniPark 10, 71,647 sf

Plaza Southwest, 151,326 sf

Commerce Park, 87,550 sf

Commerce Center, 295,410 sfThe other properties being severed are situated in Washington, California, Maryland, Florida, Ohio, Virginia, Wisconsin, Massachusetts and Missouri. Texas is taking the biggest hit of all of the states involved in the sell-off.

Instant Insights /

Merger Forcing Sale of More Than 1.8-Mil SF of Texas Industrial, Office Space

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