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EPN Buys Stake in Macquarie DDR Trust

EPN GP LLC, a real estate investment venture jointly formed by Elbit Plaza USA LP and Eastgate Property LLC announced a $116 million investment in Australian limited property trust Macquarie DDR Trust. The trust will be renamed EDT Retail Trust. Following completion of the transaction, which is expected on June 18, 2010, EPN will hold an approximately 48 percent ownership interest in the trust, becoming its largest unitholder, and will appoint EPN representatives to the firm’s board.

The trust holds interests in 78 operating retail properties in 23 states covering 13.2 million square feet and valued $1.5 billion as of December 31, 2009.

The transaction had several components. MDT completed a private placement to EPN worth A$9.5 million. It also completed a pro entitlement offering that raised A$200 million. In addition, EPN acquired from Macquarie Group Limited its principal unit holding in the trust and EPN acquired from Macquarie Group a 50 percent interest. The other 50 percent is owned by Developers Diversified Realty Corp., which continues to provide property management and leasing services for the trust’s assets.

The proceeds of the MDT recapitalization will be largely used for repayment of the amounts outstanding under the trust's unsecured debt and derivative liabilities and other senior debt. As a result, the trust’s leverage will fall from 73.2 percent to 64.4 percent.

“We are excited to be making a significant investment in EDT with its high quality portfolio of retail assets,” EPN CEO Alex Berman said in a statement. “This large-scale complicated transaction has been made possible by hard work of the EPN team and commitment from its sponsors, and is an important step forward to fulfilling EPN’s strategy of becoming a significant U.S. retail real estate investor.”

Kimco Forms Partnership with BIG Shopping Centers

Kimco Realty Corp. announced that it will partner with BIG Shopping Centers, an Israeli publicly traded company, in a new joint venture to acquire a portfolio of 15 neighborhood and community shopping centers for approximately $422 million including $385 million in mortgage debt. The properties are currently owned by a joint venture of an institutional investor and Kimco.

BIG and Kimco will hold a 49.9 percent and 33.3 percent interest, respectively in this venture and a consortium of other investors will hold the remaining 16.8 percent interest. Kimco, currently a minority owner in the portfolio, will serve as the operating partner and provide leasing and property management services in exchange for customary fees.

The portfolio, which comprises approximately 2.6 million square feet, is primarily located on the West Coast of the U.S. including nine properties in California, two in both Washington and Nevada, and one each in Oregon and Maryland. The portfolio is 89.5 percent occupied and includes Wal-Mart, Target, TJ Maxx, CVS Pharmacy, Ross Dress for Less and Albertsons as anchor tenants.

BIG is also a current joint venture partner with Kimco in two neighborhood and community shopping centers located in California comprising 343,000 square feet.

W. P. Carey Completes Second Transaction With Eroski

W.P. Carey & Co. LLC has completed a second transaction with Eroski Sociedad Cooperativa of Spain. The two firms announced an earlier transaction in December.

W. P. Carey & Co. LLC and CPA:17 – Global, one of its publicly held non-traded REIT affiliates, have acquired two warehouse logistics facilities in Elorrio and Mallorca, for a total consideration of EUR 43 million. The transaction brings the combined total of financing provided by The W. P. Carey Group to Eroski, to more than EUR 115 million. The properties are leased to Eroski under long term leases.

Reed Smith & Linklaters were legal advisors to W. P. Carey, while Eroski was represented by DJV Abogados. Real estate consultant Cushman & Wakefield were transaction advisors to the parties.

Cushman & Wakefield Brokers Sale of California Center

Cushman & Wakefield announced the $19.8 million sale of the 103,548-square-foot Shops at San Miguel Ranch in Chula Vista, Calif.

Pete Bethea, Rob Ippolito, Jesse Lowe and David Bradley of Cushman & Wakefield’s Retail Advisors negotiated the lender sale for Jefferson Pilot Investments Inc. The buyer, MGP IX REIT, LLC represented itself.

The property, which was developed in 2007 by McMillin Commercial is 76.8 percent leased to tenants including Albertson’s, Starbuck’s and First Bank. The buyer plans to hold the property as an investment.

Lormax Stern Development and Konover South Acquire Fairlane Green

A partnership of Lormax Stern Development Co. and Konover South LLC announced the acquisition of the 275,891-square-foot Fairlane Green regional shopping center in Allen Park, Mich., from Archon Group, a subsidiary of Goldman Sachs. Financial details of the transaction were not disclosed.

The center’s tenants include Barnes & Noble, Bed Bath & Beyond, Michaels, Old Navy, and TJ Maxx, among others. In addition, the acquired center is contiguous with two other centers that contain Target and The Home Depot as well as Best Buy, LA Fitness, Lowe’s, Meijer, and Staples.

Cohen Secures $5M Loan for Dallas Center

Cohen Financial arranged a $5 million refinancing of the 96,111-square-foot Overland Stage Shopping Center. The class-B retail property was built in 1986 and is more than 93 percent leased.

Joseph N. Hevey, Jr., managing director of Cohen Financial in the Dallas office, secured the $5 million dollar, fixed-rate, non-recourse five-year term loan at a 65 percent loan-to-value ratio with a 25-year amortization at a rate of approximately 7 percent. The lender is a Texas based regional bank. The borrower is a regional shopping center investor.

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