SOURCE: Developers Diversified Realty

August 24, 2005 16:15 ET

Developers Diversified and Coventry Real Estate Partners Announce Sale of Long Beach Shopping Center

CLEVELAND, OH -- (MARKET WIRE) -- August 24, 2005 -- Developers Diversified Realty (NYSE: DDR) and Coventry Real Estate Partners ("Coventry") announced the sale of the remaining retail portion of CityPlace in Long Beach, California, for approximately $73.8 million, which equates to a 6.1% stabilized cap rate. The asset that was sold is anchored by Wal-Mart, Nordstrom Rack and Ross Dress for Less. This sale generated a net merchant building and promote gain of approximately $2.0 million of Funds From Operations ("FFO"), after related costs and expenses, including taxes. This amount was reflected in the Company's earnings guidance provided on its second quarter 2005 conference call.

CityPlace was developed in phases between 2002 and 2004 by Developers Diversified, through its Retail Value Investment Program LP III ("RVIP"), a joint venture among Developers Diversified, Coventry and Prudential Real Estate Investors ("PREI"). In an unrelated transaction, Developers Diversified and Coventry sold the grocery-anchored portion of CityPlace in September 2004 for approximately $16.6 million, or a 6.2% cap rate. The sale of both portions of CityPlace generated an aggregate merchant building and promote gain of approximately $22 million to the joint venture. RVIP still owns a 0.2 acre land parcel at CityPlace, which is currently under contract for residential development.

Developers Diversified owns or manages over 470 operating and development retail properties in 44 states, plus Puerto Rico, comprising approximately 110 million square feet. Developers Diversified is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which develops, leases and manages shopping centers. You can learn more about Developers Diversified on the Internet at www.ddr.com.

Coventry Real Estate Partners is an affiliate of Coventry Real Estate Advisors, an investment manager offering a broad array of services to institutional investors in the value-added retail property sector. Coventry acquires under-performing retail properties where identifiable opportunities exist to enhance free cash flow and create substantial value through leasing, redevelopment and intensive management. Coventry serves as the general partner of RVIP. On behalf of RVIP, Coventry has managed the investment of approximately $850 million in value-added retail real estate across the country since 1998. You can learn more about Coventry Real Estate Advisors on the Internet at www.coventryadvisors.com.

Prudential Real Estate Investors (PREI) is the real estate investment management business of Prudential Financial. PREI is comprised of fund management centers in Parsippany, New Jersey; Atlanta, Georgia; Munich, Germany; London, England; and Singapore; supported by a network of local offices throughout the world. PREI's specialized operating units offer a broad range of investment opportunities and investment management services in the United States, Europe, Asia and Latin America. As of March 31, 2005, PREI managed $25.2 billion of gross assets ($16.7 billion net) on behalf of more than 300 clients and is ranked among the largest real estate investment managers.

Developers Diversified Realty Corporation considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E 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, among other factors, local conditions such as oversupply of space or 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. For more details on the risk factors, please refer to the Company's Form on 10-K as of December 31, 2004.

Contact Information

  • Contact:

    Michelle M. Dawson
    Vice President of Investor Relations
    Developers Diversified Realty
    Main: (216) 755-5500
    Fax: (216) 755-1455
    E-mail: Email Contact