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NEW YORK CITY-Elbit Imaging Ltd. and Plaza Centers NV have made their first investment in the US with an $8.8-million investment in Macquarie DDR Trust, via joint subsidiary EPN GP LLC. This marks the first step in an agreement that ultimately will lead to EPN acquiring Macquarie Group Ltd.’s 50% share in the trust’s US operating manager, with Developers Diversified Realty Corp. owning the remaining half. It follows the February launch of a strategic joint venture by Plaza, an indirect subsidiary of Israel-based Elbit, to take advantage of US real estate opportunities, primarily in retail.

Following the $8.8-million private placement, MDT plans to conduct a pro rata entitlement offer to raise approximately $186 million for debt reduction. EPN, which was jointly formed by Elbit subsidiary Elbit Plaza USA LP and NCH Capital affiliate Eastgate Property LLC, will sub-underwrite the recapitalization. To facilitate the recap, Macquarie will sell EPN its 2.6% unit holding in the trust.

In a release from DDR, CFO David Oakes says his company is pleased that MDT has managed to “source new capital from a knowledgeable investor, and we look forward to working closely with EPN to manage a better capitalized trust and to continue to lease and manage the many prime assets owned by the trust.”

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

Ran Shtarkman, Plaza’s president and CEO and Elbit’s co-CEO, says in a release that following a string of successful investments across Central and Eastern Europe—many of which have been reported by GlobeSt.com—Plaza and Elbit “identified similar opportunities in North America” at the end of 2008. “We believe that as the US markets recover, this portfolio should be well-positioned to deliver significant value growth, by utilizing the asset management experience of Plaza and Elbit in the retail sector while also delivering a robust revenue stream,” he says.

Shtarkman adds that the joint venture between Plaza, Elbit and Eastgate has “significant equity to deploy and will continue to evaluate other opportunities in the US retail market and we therefore hope to be able to announce further transactions in the near future.”

This past February, Elbit Plaza USA, an investment venture jointly formed by Elbit and Plaza, forged an agreement with Eastgate to create a $200-million co-investment facility. The goal is to fund up to $1 billion in US retail acquisitions.

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