Continuing a trend started by Macerich Co. and General Growth Properties several months ago, Developers Diversified Realty and Glimcher Trust just announced they will be swapping assets they feel are better alligned with the other's property platform.
DDR will sell Glimcher its Town Center Plaza, a 650,000-square-foot open-air mall in Kansas City, Kan. for $139 million. In turn, Glimcher will sell DDR its Polaris Towne Center, a 700,000-square-foot power center in the Columbus, Ohio market for $80 million. DDR specializes in power centers and already operates several assets in the Columbus area, so Polaris might be a better fit with its portfolio than that of mall operator Glimcher.
After the transaction goes through, in the fourth quarter of this year, DDR plans to use the net proceeds from the swap toward the purchase of prime assets it currently has under contract. While almost every retail REIT in the country previously announced plans to opportunistically acquire prime assets and dispose of non-core ones, many found out that the prices charged for core assets were above what they were willing to pay. Asset swaps like the one executed by DDR and Glimcher might help the REITs achieve their goals while at the same time helping bring down associated costs.