Macquarie DDR Marketing 52-Center Portfolio

PITTSBURGH-As part of a continuing effort to get its balance sheet in order, Sydney, Australia-based Macquarie DDR Trust has retained Holliday Fenoglio Fowler and UBS Securities to perform a strategic review of its US real estate assets, and to market for sale a $1.9 billion, 52-center portfolio owned by subsidiary Macquarie DDR US Trust.

This announcement comes less than a month after Macquarie said it would restructure and reorganize ownership of the joint venture operations. Published reports said late last year that the trust might need to sell half of its portfolio to avoid breaching any bank covenants.

The 12.5 million-square-foot portfolio largely is located in the eastern half of the United States, including: Riverchase Promenade in Hoover, AL; Township Marketplace in Center Township, PA; Towne Center in Murfreesboro, TN.; and Walden Place in Cheektowaga, NY; and two centers in Colorado. Anchors include Walmart, BJ’s Wholesale Club, Bed Bath & Beyond, Best Buy, T.J. Maxx, Kohl’s and Dick’s Sporting Goods. Average occupancy is 88.5%.

Interested sellers can purchase the entire portfolio, Macquarie’s interest (now approximately 85.5%), groups of centers or individual projects. The trust’s total assets total $2.7 billion.

Macquarie DDR Trust is managed by Macquarie DDR Management Limited, a 50/50 joint venture of Sydney, Australia-based Macquarie Group, and Beachwood, Ohio-based Developers Diversified Realty. The trust was formed in 2003 to invest in U.S. community centers, and in 2005 acquired 36 Mervyn’s units in a sale-leaseback arrangement. Since Mervyn’s bankruptcy filing, the trust has been selling the locations, most recently five units to Kohl’s for $35.7 million.

The trust’s stock, which had traded as high as AU$0.61 per share last year, closed at AU$0.05 on April 14.