SOURCE: Developers Diversified Realty

September 02, 2005 11:40 ET

Developers Diversified's Gulf Coast Portfolio Weathers Hurricane Katrina

CLEVELAND, OH -- (MARKET WIRE) -- September 2, 2005 -- Developers Diversified Realty (NYSE: DDR), a Cleveland-based real estate investment trust (REIT), today announced that only a few of the Company's 13 community shopping centers and six freestanding former Service Merchandise properties in Alabama, Louisiana and Mississippi sustained damage despite Hurricane Katrina's destructive force. The Company's Florida portfolio of shopping centers also evaded major damage from the hurricane during initial landfall on August 25. Because of property and business income interruption insurance, the actual financial loss to the Company will be minimal.

On the day Katrina struck the Gulf Coast, a team of senior property managers was dispatched to assess the status of the Company's Gulf Coast portfolio. Because of the widespread destruction in Gulfport, MS, the Company's main concern was the status of Crossroads Center, a 540,000 sq. ft. open-air regional shopping center located near the intersection of Interstate 10 and US Highway 49 in Gulfport. The property managers reported that the center sustained considerable roof damage and that there was some damage to retail storefronts. However, building structures remain intact.

David Jacobstein, President and Chief Operating Officer, stated that there will not be any material financial impact to the Company as a result of Hurricane Katrina. Mr. Jacobstein also stated, "Our property management team will maintain a continued presence in the Gulf Coast area in order to assess damage, procure and direct contractors and coordinate damage assessment and repair with our tenants' operational personnel. It is too early to predict when the Gulfport, MS, shopping center will reopen due to external factors such as the availability of electricity, water and highway access."

Because of their proximity to the hurricane's path, three of the six former Service Merchandise locations in Louisiana may have sustained damage. Property management executives have reported that the Houma, LA, freestanding former Service Merchandise, owned in fee and occupied by Bed Bath & Beyond and Best Buy, sustained only minor roof damage. Due to flooding in the area, Company representatives have been unable to reach the former Service Merchandise building in Metairie, LA, owned in fee and occupied by Babies "R" Us, Office Depot and PETsMART, and therefore are unable to report on its status. The Baton Rouge former Service Merchandise, occupied by Steve & Barry's, is owned in fee but the leasehold interest was sold. The Company is not responsible for the building but is attempting to contact the owner of the leasehold interest to determine the extent of damage. Because of Developers Diversified's minority portion in the Service Merchandise joint venture and the venture's property and business income interruption insurance, the Company's exposure for this portfolio is minimal.

Developers Diversified owns or manages over 470 operating and development retail properties in 44 states and Puerto Rico, comprising approximately 110 million square feet. Developers Diversified is a self-administered and self-managed real estate investment trust 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.

Contact Information

  • Contact:
    Scott R. Schroeder
    Vice President of Marketing and Corporate Communications
    Developers Diversified Realty
    216.755.5500