Developers Diversified Realty has agreed to buy 15 Puerto Rican shopping centers totaling 5 million square feet from Caribbean Property Group LLC. The is valued at $1.15 billion, which represents a 7.4 percent cap rate on a pro-forma basis based on current rent. The transaction is supposed to close during the first quarter of 2005, subject to due diligence.

DDR will use about $300 million proceeds generated by the joint venture sales of neighborhood grocery anchored centers from its existing portfolio and $660 in debt, of which about 85 percent may be paid off within six months of closing. DDR will finance the rest through a combination of sources, including additional assetsales, new debt financing and private equity.

DDR is talking to Macquarie DDR Trust about the possible sale of some DDR assets to the trust.

The CPG portfolio is 97 percent leased and its largest tenants, based on revenue, include Wal-Mart/Sam’sClub, Pueblo (grocery stores), Kmart, Footlocker and Gap/Old Navy/Banana Republic to name a few.