DDR/Coventry Partner on $226M Retail Buy

The assets are Tri-County Mall in Cincinnati, Fairplain Plaza in Benton Harbor, MI and Watters Creek at Montgomery Farm in Allen, TX. The latter is a 350,000-sf, ground-up development within a 700,000-sf lifestyle center.

The JV also obtained a majority stake in the 1.3-million-sf Tri-County Mall from New York City-based Thor Equities, which is retaining a minority interest. A DDR spokeswoman declined to disclose the parties' percentage ownership. The JV's investment total, including redevelopment, is $220 million. The center is more than 90% leased, with anchor spots held by Dillard's, Macy's and Sears. The redevelopment plan involves converting a 160,000-sf former JCPenney anchor store into inline retail and restaurant spaces.

The JV also acquired 100% of 325,000-sf Fairplain Plaza from JPA Real Estate in Oak Brook, IL. It paid $26 million for the asset and plans to invest another $9.8 million into a redevelopment. Tenants include Target, Office Depot, TJ Maxx, Old Navy, Dunham's Sports, Pier One and Rite Aid.

Fairplain Plaza, now 69% leased, was partially redeveloped in 2001. The JV intends to complete the work, re-tenant existing space and develop adjacent parcels. An 89,000-sf Kohl's is under construction. And, the spokeswoman says, discussions are under way with several other prospective tenants.

Fort Worth-based Trademark Property Co. is retaining a 50% share in Watters Creek at Montgomery Farm, selling the other half for $7.6 million to the JV. The 34-acre site is designated for a 700,000-sf, mixed-use lifestyle development. The JV will build a 350,000-sf town center for the 500-acre Montgomery Farm, which ultimately will include a dozen neighborhoods with 1,100 residential units and more than 250 acres of park area. There are two residential subdivisions now rising.

DDR/Coventry expects to invest $80.4 million to develop Watters Creek's retail component. Market Street-United, a specialty grocery chain, has committed to a 65,000-sf store and Borders is planning a 24,000-sf store. According to DDR, talks are under way with an additional 20 specialty retailers for 175,000 sf.