SOURCE: Developers Diversified Realty

October 03, 2007 08:55 ET

Developers Diversified Realty Announces Joint Venture to Develop Asset in Toronto, Ontario

CLEVELAND, OH--(Marketwire - October 3, 2007) - Developers Diversified Realty (NYSE: DDR), the leading owner, manager and developer of market-dominant shopping centers in the U.S., announced the formation of a new joint venture to develop a 74-acre mixed-use project, comprised of approximately 700,000 square feet of lifestyle retail, plus office and residential uses, in Toronto with Rice Commercial Group ("Rice"), a Toronto-based real estate developer.

The project has an estimated net cost of approximately CAN $150 million. Developers Diversified will own a 50% stake in the center in partnership with Rice. Construction is expected to begin in Spring 2009, with retail tenants opening as early as Fall 2011.

Scott Wolstein, Developers Diversified's Chairman and Chief Executive Officer, commented, "We are pleased to announce our new partnership with Rice Commercial, an established developer with an exceptional presence in the Toronto market. Rice has proven their ability to source prime sites in the local market, and we look forward to building our relationship further over time."

David Oakes, Developers Diversified's Executive Vice President of Finance and Chief Investment Officer, added, "This site acquisition marks our first investment in Canada and we believe it represents a very attractive development project in a market with strong demographics and considerable supply constraints due to recent Greenbelt regulations in Toronto. We look forward to finding additional attractive investment opportunities to increase our presence in this large, nearby market."

A powerpoint presentation providing information on the Canadian and Toronto markets is available on Developers Diversified's web site, www.ddr.com.

Location

The development site is located at the intersection of Major Mackenzie Drive and Highway 404 in Richmond Hills, a northern suburb of Toronto located approximately 25 kilometers (15 miles) from downtown Toronto. Highway 404 is the major thoroughfare from Toronto's central business district to the outlying suburban areas to the north.

The town of Richmond Hill is bordered by the Ontario Greenbelt, which was created in 2005. The Greenbelt forms a 1.8 million acre band around the extended Toronto MSA, one of Canada's most populated areas. New development is permanently restricted within the Greenbelt and, as a result, demand for developable land and existing retail space in and around the Toronto MSA is expected to intensify as the population grows.

Over 470,000 residents with an average household income of CAN $112,000 live within a 10 kilometer (6.2 mile) radius of the development site. These figures increase to over 1.1 million residents with an average household income of CAN $98,000 that live within a 15 kilometer (9.3 mile) radius.

Canada/Toronto Overview

Canada has the world's eighth largest economy, supporting a steadily growing population base. Canada's population is projected to grow 30% by 2056, reflecting one of the strongest growth rates among developed nations. Toronto is Canada's primary financial and retail center. In 2006, Toronto generated retail sales of $50 billion, 6.7% higher than in 2005.

Rice Commercial Group

Rice Commercial Group is a full service development corporation involved predominantly in the Greater Toronto area (GTA). Rice owns and manages the development of 500 hundred acres of prime property, as well as more than 3.0 million square feet of predominantly retail assets.

Developers Diversified

Developers Diversified currently owns and manages approximately 735 retail operating and development properties in 45 states, plus Puerto Rico and Brazil, totaling 156 million square feet. Developers Diversified Realty is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops, leases and manages shopping centers. Additional information about Developers Diversified is available on the Internet at http://www.ddr.com.

Developers Diversified considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including, the risks of international investment and ownership activities which differ from the risks the Company faces with the Company's domestic operations, such as, adverse effects of changes in exchange rates for foreign currencies; changes in foreign political environments; different lending practices; and obstacles to the repatriation of earnings and cash. In addition, the joint venture faces risks associated with real estate generally such as, local conditions, including a reduction in demand for real estate in the area, competition from other available space, dependence on rental income from real property, the loss of a major tenant, constructing properties or expansions that produce a desired yield on investment or inability to enter into definitive agreements with regard to financing arrangements or failure to satisfy conditions to the completion of these arrangements. For more details on the risk factors, please refer to the Company's Form on 10-K as of December 31, 2006.

Contact Information

  • Contact:
    Michelle M. Dawson
    Vice President of Investor Relations
    Developers Diversified
    Ph: 216.755.5500
    Email: Email Contact