NEW YORK CITY-The Blackstone Group's Blackstone Real Estate Partners VII LP is partnering with DDR on a geographically diverse portfolio of shopping centers totaling 2.4 million square feet, which the joint venture is acquiring from Regency Centers for a total of $332 million. Blackstone owns 95% of the common equity in the JV; Beachwood, OH-based DDR will provide leasing and management services along with owning the remaining 5% of the seven retail properties.

The purchase price includes assumed debt of $207 million and $28 million of new mortgage debt. DDR says it has also invested $30 million in preferred equity in the venture, and as with a previous Blackstone JV, the REIT potentially could acquire four of the most dominant assets in the portfolio. Cushman & Wakefield brokered the sale.

Largest of the properties by square footage is Silver Spring Square in the Harrisburg, PA suburb of Mechanicsburg at 573,000 square feet. The portfolio also includes phases one and two of Falcon Ridge Town Center in Fortuna, CA; Sycamore Crossing in Cincinnati and Indian Springs Market Center in the Cincinnati suburb of Hamilton, OH; Fortuna Center in the Washington, DC suburb of Dumfries, VA; Orchards Market Center in Vancouver, WA, a suburb of Portland, OR; and Vista Village in the San Diego suburb of Vista, CA.

“We are pleased to advance our relationship with Blackstone and further our strategic objective to creatively source acquisition opportunities,” says Daniel B. Hurwitz, CEO of DDR.  He adds that the partnership structure will enhance his company's cash flow “and provide proprietary access to prime assets for potential acquisition at a future date. The assets fit nicely into our operating platform, and we look forward to creating value for our partner and our shareholders.” A Jones Day team of Michael Haas, Will Herzberger and Barbara Gregoratos represented DDR in the deal.

Trade area demographics for the portfolio feature average household income of approximately $75,000 and population of over 310,000 people for each of the properties. The portfolio is currently 93% leased, and DDR says it offers “unique redevelopment and leasing opportunities.”