SOURCE: Developers Diversified Realty

September 19, 2005 08:30 ET

Developers Diversified Realty and Macquarie DDR Trust Close on Portfolio of Mervyns Locations

CLEVELAND, OH -- (MARKET WIRE) -- September 19, 2005 -- Developers Diversified Realty (NYSE: DDR) and Macquarie DDR Trust ("MDT") announced the acquisition of the real estate underlying 32 open and operating Mervyns stores for $319.1 million in a new 50:50 joint venture. The joint venture will acquire the remaining assets in phases over the next two months. Developers Diversified and MDT previously announced their intent to acquire the portfolio on August 8, 2005.

The joint venture expects to place cross-collaterized mortgage financing on the portfolio at a loan-to-value ratio of approximately 65%. The remaining equity contribution will be allocated on a 50:50 basis to Developers Diversified and MDT. Developers Diversified intends to fund its portion of the equity with proceeds generated from the sale of a substantial portion of its office and industrial portfolio, which was also previously announced.

Developers Diversified will also purchase two additional Mervyns sites, one in California and the other in a shopping center owned by the Company in Salt Lake City. These assets will be held in the Company's wholly owned portfolio.

Including the Mervyns portfolio, Developers Diversified owns or manages approximately 500 operating and development retail properties in 44 states, plus Puerto Rico, comprising approximately 114 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 acquires, develops and manages shopping centers. Additional information about Developers Diversified is available on the Internet at http://www.ddr.com.

MDT is an Australian Listed Property Trust jointly managed by Developers Diversified and Macquarie Bank Limited (ASX: MBL), an international investment bank and leading advisor and manager of specialized real estate funds. Macquarie DDR Trust is a listed property trust with approximately $2.5 billion of assets as of June 30, 2005. More than $A24 billion in property assets is managed under the Macquarie brand across a portfolio of listed and unlisted property trusts, unlisted development funds and property investment syndicates, globally.

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, 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 arrangements or our 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, 2004.

Contact Information

  • Contact:
    Michelle M. Dawson
    Vice President - Investor Relations
    Developers Diversified
    216.755.5455