SOURCE: Developers Diversified

October 13, 2008 09:42 ET

Developers Diversified Realty and Its Joint Ventures Receive $600 Million From Financing and Asset Disposition Activities During the Third Quarter

CLEVELAND, OH--(Marketwire - October 13, 2008) - Developers Diversified Realty (NYSE: DDR), the nation's leading owner, developer and manager of market-dominant shopping centers, today announced it has raised approximately $600 million in aggregate funds from financing and asset disposition activities completed during the third quarter.

Asset Sale Activities

During the third quarter, Developers Diversified generated $73 million in proceeds from asset sales, and the Company and its joint ventures currently have an additional $140 million in asset sales under contract or in active contract negotiations. In addition, the Company continues to work with a large institutional investor regarding the formation of a significant joint venture that has been previously referenced during the Company's most recent conference call.

Developers Diversified's core operating activities continue to generate steady operating results. As of September 30, 2008, the portfolio was 94.5% leased and recently completed portfolio reviews indicate continued positive net operating income growth expected during 2009 despite the negative impact of certain tenant bankruptcies, such as Linens N' Things, Mervyns, and Goody's. The Company is scheduled to report its third quarter financial results on October 24, 2008.

Financing Activities

Developers Diversified completed $525 million of financing activities during the third quarter on behalf of wholly owned and joint venture entities. These financing transactions included the following:

--  The Company closed a new $44.5 million, three-year construction loan
    on its Horseheads, New York development.
    
--  The Macquarie DDR Trust ("MDT") joint venture refinanced $340 million
    of mortgage debt with new mortgage debt aggregating $370 million.
    
--  Other joint ventures refinanced and/or extended approximately $100
    million of debt
    

As a result, substantially all the Company's consolidated and joint venture 2008 debt maturities have been repaid, refinanced or extended as of September 30, 2008. The remaining maturities are comprised of two mortgages aggregating $25 million on wholly owned assets which will be repaid using the Company's revolving credit facility during the fourth quarter and one loan on a consolidated 50% joint venture development aggregating $18.6 million, which will be extended based on advanced discussions with the existing lender.

Developers Diversified is proactively addressing its upcoming debt maturities. In addition to the activities discussed above, the Company is pursuing additional financings with a variety of life insurance companies, as well as domestic and foreign commercial banks. Excluding loans with extension options, the Company's 2009 consolidated debt maturities aggregate approximately $400 million and the Company's joint venture maturities aggregate approximately $350 million, of which the Company's proportionate share is less than $60 million.

Notably, Developers Diversified's joint venture debt is nonrecourse to the Company, except with regard to certain construction loans in which the recourse is limited to the Company's proportionate ownership interest and aggregates approximately $70 million. Similarly, the Company has no requirement to fund its partners' share of joint venture debt.

At September 30, 2008, the Developers Diversified had over $360 million available on its revolving credit facilities and maintained an unencumbered asset pool with an estimated value of more than $5.5 billion.

Scott A. Wolstein, Chairman and Chief Executive Officer of Developers Diversified, commented, "We are pleased to announce these transactions, which illustrate the depth and breadth of our relationships and our ability to tap a wide variety of lenders and other capital sources. We continue to execute our capital plan despite the disruption in the financial markets."

William H. Schafer, Executive Vice President and Chief Financial Officer of Developers Diversified, commented, "We are pleased with the liquidity these new transactions provide and are gratified with the continued interest we have received from the lending and institutional investment communities."

Developers Diversified Realty owns and manages approximately 730 retail operating and development properties in 45 states, plus Puerto Rico, Brazil, Russia, and Canada, totaling approximately 157 million square feet. The Company is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops and leases shopping centers. Additional information about Developers Diversified Realty is available on the Internet at http://www.ddr.com.

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, constructing properties or expansions that produce a desired yield on investment or inability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements. For additional factors that could cause the results of the Company to differ materially from these indicated in the forward-looking statements, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2007. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Contact Information

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