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EPN Investment Management

5250 Old Orchard Road, Suite 300

Skokie, IL 60077

Fax: +1-312-915-0691

www.epngroup.com


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May 15, 2012
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May 15, 2012
EPN Poised to Make a Play

Shopping Center Business


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May 01, 2012
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May 01, 2012
The Deal Maker: Alex Berman Sold One Portfolio and is Planning the Next

Shopping Centers Today: an ICSC publication


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February 10, 2012
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February 10, 2012
EPN’s Berman back on the hunt after flipping shopping centers

ChicagoRealEstateDaily.com Powered by Crain’s Chicago Business

By: Bob Craig February 10, 2012 

(Crain's) — After agreeing to sell his shopping center portfolio for $1.43 billion, Alex Berman is back out in the market scouting for more deals.

Mr. Berman's Skokie-based firm, EPN GP LLC, which acquired the 47 shopping centers last year, last month decided to flip them to a joint venture of New York-based private-equity firm Blackstone Group L.P. and Beachwood, Ohio-based retail real estate investment trust DDR Corp..

The sale will generate a roughly 66 percent gain in less than a year, but leaves EPN with just two shopping centers. Mr. Berman says he's already meeting with property owners trying to find new acquisitions.

“It is always hard with an investment to know when to sell, and it is very hard to sell at the very peak of the market,” Mr. Berman says. “You may have a little bit of regret. At this point we think we've made the right move.”

The former head of General Growth Properties Inc.'s overseas investment arm, Mr. Berman, 52, formed EPN in 2009 with the backing of Elbit Imaging Ltd., a Tel Aviv-based conglomerate.

In a recent conversation, Mr. Berman discussed his future plans and his outlook on the real estate market. Here's an edited excerpt from that interview:

Crain's: What is next for EPN and for Alex Berman?

Mr. Berman: Well, in some ways, it's a reset. Now we're back looking at opportunities. We are expecting to talk to more investors. We haven't started the formal process, but we expect to do so.

We are in a much stronger position today than we were two years ago, when we had capital but no team. I was the only person. Now we have a team. It's small, but it's a group of people who have worked together, who know each other and we have this proof of being able to buy and sell. I don't expect it to be easy, but I hope it is a little easier and maybe a little faster.

What was it that made you decide to sell that quickly?

There were a couple of reasons: One, and perhaps a more humorous answer, is that some people have told me that you can never go broke by taking a profit.  We created value, and locking in value is not a bad idea. There are certainly many examples of people who stay longer and value evaporates. So that was one consideration.

We think our strength is in finding special situations, and perhaps applying our money elsewhere we will find — we certainly hope we will find — some investments where we can create value at a greater pace than we would have had we stayed in this investment longer.

The second reason was that we actually entered this business in 2009 and our idea was to get into management and invite some other investors to invest with EPN. We are a fairly new company and a number of these potential investors told us that we have to show that not only can we buy, but that we can also sell — and sell at a profit.

How do you view the retail property market over the next 12 months?

On the fundamentals, I think we're still in a little bit of a challenging situation. The leasing and strength of tenants is certainly better than it was in 2008 and 2009, but it's still not the market where the landlord has an upper hand. Whenever you get involved in leasing space, tenants have significant requirements and there's competition and rents have not increased as significantly as landlords hope.

I think that challenge will continue. I actually met with several owners last week and they share the same view. You have a little bit of an overhang from Internet shopping and everybody watches that.

How did the Blackstone deal come together?

Basically DDR, who was our asset management partner on the deal, and they own a small share of the company. When we decided to sell we told them we were thinking about it and they actually approached Blackstone. We could have approached them on our own, but they approached Blackstone because they had interest in staying in the deal and they came to us as a partnership to buy. The news is more about Blackstone, because they got the greater share of the deal, but it's really a partnership of DDR and Blackstone that is buying it.









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January 12, 2012
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January 12, 2012
EPN TO SELL 47 SHOPPING CENTERS TO JOINT VENTURE FOR $1.43 BILLION

Heartland Real Estate Business


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January 11, 2012
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January 11, 2012
EPN Group Announces Sale of 47 Real Estate Properties for US $1.4B

PR Newswire

Skokie, Illinois, January 11, 2012

EPN GP, LLC and EPN EDT Holdings II, LLC (collectively, “EPN” and together with their affiliates “EPN Group”) entered into an agreement to sell 47 shopping centers located throughout the USA (the “Properties”), to BRE DDR Retail Holdings LLC, a joint venture between Blackstone Real Estate Partners VII L.P. and/or its affiliates and DDR Corp. and/or its affiliates, for a purchase price of US$1.428 billion. Total property level debt to be repaid by EPN or assumed by BRE DDR Retail Holdings LLC is approximately US$934 million as of the date hereof.

In addition, the sellers shall retain all restricted and unrestricted cash upon the closing of the transaction which amounts to approximately US$30 million at the date hereof. Following the sale of the Properties, EPN Group will continue to hold two properties located in the United States valued at approximately US$43 million with total non-recourse secured debt of approximately US$14 million. In September 2011, EDT Retail Trust ("EDT"), the entity through which the Properties were held at the time, distributed an
interim dividend payment of US$26 million to EPN.

The transaction is expected to close in June 2012, and is subject to the completion of a limited due diligence investigation by the purchaser to be completed by the end of January 2012, approval of the applicable lenders to the assignment and assumption of the above mentioned assumed debt, and satisfaction of certain other closing conditions.

EPN first acquired its interest in the Properties in June 2010 by investing approximately US$116 million in EDT, then an Australian publicly traded trust (through which the Properties were held at the time), and its managing entity. Following completion of that transaction, EPN became EDT's largest unitholder, holding an approximately 47.8% ownership interest in EDT. In March 2011, EPNcommenced an off-market takeover bid for all of the units in EDT not already held by EPN, which was successfully completed in August 2011. Upon completion of that transaction, EPN became the holder of 100% of the outstanding units of EDT, at an additional cost of approximately US$242 million.

Alex Berman, EPN Group’s Co-Founder and Chief Executive Officer, commented: "Sale of the EDT portfolio is a bittersweet event for EPN Group. On one hand, we have enjoyed immensely our association with EDT and DDR, and wish well to Blackstone and DDR, two of the most prominent and sophisticated real estate investors. On the other hand, we are proud of EPN's ability to successfully acquire, create value and realize significant profit for our investors on a large and complex investment in a span of two years. The transaction positions EPN and its team well for the next business stage. EPN Group sees further exciting investment opportunities and intends to continue raising funds. We look forward to building up on our knowledge and experience, expanding the EPN Group platform, and pursuing new real estate investments on behalf of its existing and future investors."

JP Morgan served as advisor to EPN Group.


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