RED, CDK Form $200M Partnership

In the latest of numerous partnerships between a deep-pocketed capital source and a real estate company, RED Development L.L.C. has teamed up with CDK Realty Advisors. Under the terms of the deal, a fund managed by CDK will provide $200 million for investment in certain existing RED projects as they open. These include–in RED’s hometown market–Adam’s Dairy Landing in Blue Springs, Mo., and Summit Fair in Lee’s Summit, Mo. The fund will also be a 50/50 JV partner with RED in future development projects. For each of these development projects, CDK will provide the equity necessary to obtain construction financing for the project. The transaction provides RED with definite liquidity and recapitalization opportunities, which is generally more difficult than it used to be since the onset of the credit crunch. According to RED, CDK’s commitment to provide equity will pave the way for future construction financing on RED projects over the next few years, and ease the transition in to permanent financing. RED Development, co-headquartered in Kansas City, Mo., and Scottsdale, Ariz., has more than 30 shopping centers open, in development or under construction, totaling more than 19 million square feet. The company primarily focuses on open-air, lifestyle centers and destination retail and entertainment developments. CDK Realty Advisors currently has more than $1 billion of assets under management in the Midwest and Southwest. CDK and RED have done single-property deals before, but the new arrangement is longer term, and will involve an as-yet unspecified number of properties.