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CLEVELAND, OH-Developers Diversified Realty Corporation and Coventry Real Estate Advisors have jointly acquired Ward Parkway, a 750,000-sf shopping center located in suburban Kansas City, Mo. The acquisition price was $48.5 million. It was the first purchase to be completed in connection with Coventry’s newest fund, Coventry Real Estate Fund II.

DDR owns and manages approximately 400 retail operating and development properties totaling nearly 87 million sf in 44 states. Coventry Real Estate Advisors is an investment manager that acquires under-performing retail properties where identifiable opportunities exist to enhance free cash flow and create substantial value through leasing, redevelopment and intensive management.

The fund was formed with several institutional investors and Coventry serves as the investment manager. Coventry says it is seeking to raise up to $250 million of equity to invest exclusively in joint ventures with DDR, which will co-invest 20% in each joint venture and be responsible for day-to-day management of the properties. DDR will earn fees for property management, leasing and construction management plus a promoted interest, along with Coventry, above a 10% preferred return after return of capital to investors.

Coventry says the fund will invest in a variety of well-located retail properties that present opportunities for value creation, such as re-tenanting, market repositioning, redevelopment or expansion. Ward Parkway was built in 1959 as a three-anchor regional enclosed mall. Redevelopment began in 2001, with a portion of the property converted to an open-air center. DDR plans to complete the remainder of the redevelopment by converting approximately 150,000 sf of enclosed mall space to the open-air format. The property offers additional opportunities to add value through the leasing and development of an out parcel and 12 acres of excess land, according to the parties involved. The property is anchored by Target, Dillard’s, AMC Theater, Pier One Imports, SteinMart, Dick’s Sporting Goods, 24-Hour Fitness and T.J. Maxx.

DDR Chairman/CEO Scott Wolstein says there is “extraordinarily strong” institutional interest in its property investments that allows DDR to leverage its equity “at highly favorable cap rates, generate fees and earn a disproportionately greater share of the long-term increase in value at the asset level.”

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