Following the $8.8-million private placement, MDT plans toconduct a pro rata entitlement offer to raise approximately $186million for debt reduction. EPN, which was jointly formed by Elbitsubsidiary Elbit Plaza USA LP and NCH Capital affiliate EastgateProperty LLC, will sub-underwrite the recapitalization. Tofacilitate the recap, Macquarie will sell EPN its 2.6% unit holdingin the trust.

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In a release from DDR, CFO David Oakes says his company ispleased that MDT has managed to "source new capital from aknowledgeable investor, and we look forward to working closely withEPN to manage a better capitalized trust and to continue to leaseand manage the many prime assets owned by the trust."

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MDT holds and manages two US REIT portfolios, Macquarie DDR USTrust Inc. and Macquarie DDR US Trust II Inc., which owns a totalof 78 operating retail properties across 23 states. Combinedleasable area for the portfolio, which consists mainly of communityshopping centers, is approximately 13.3 million square feet.

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Ran Shtarkman, Plaza's president and CEO and Elbit's co-CEO,says in a release that following a string of successful investmentsacross Central and Eastern Europe—many of which have been reportedby GlobeSt.com—Plaza and Elbit "identified similar opportunities inNorth America" at the end of 2008. "We believe that as the USmarkets recover, this portfolio should be well-positioned todeliver significant value growth, by utilizing the asset managementexperience of Plaza and Elbit in the retail sector while alsodelivering a robust revenue stream," he says.

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Shtarkman adds that the joint venture between Plaza, Elbit andEastgate has "significant equity to deploy and will continue toevaluate other opportunities in the US retail market and wetherefore hope to be able to announce further transactions in thenear future."

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This past February, Elbit Plaza USA, an investment venturejointly formed by Elbit and Plaza, forged an agreement withEastgate to create a $200-million co-investment facility. The goalis to fund up to $1 billion in US retail acquisitions.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.