As proposed, Developers Diversified would sell the portfolio tothe partnership for $161.5 million, reducing its stake in theassets to 10% while gaining the fee-based income for assetmanagement, property management and leasing. In addition,Developers Diversified will receive a promoted interest above a9.5% leveraged threshold return.

The assets sold to the partnership are Beaver Creek Commons, a452,383-sf center in Raleigh, NC that is anchored by Super Targetand Lowe's; Mt. Nebo Point, a 362,832-sf center in Pittsburghanchored by Sam's Club and Target; and Centerton Square, a710,159-sf center in Philadelphia anchored by Costco and Target.Developers Diversified estimates its pre-tax merchant-build gain onthe sale to the JV at $50 million.

Dividend Capital is a non-listed REIT that currently hasapproximately $772 million invested in 24 real property assetstotaling approximately 5.2 million sf and various real estatesecurities and debt related investments. Developers Diversified isa publicly traded company that owns and manages 162 million sfspread among 800 retail properties. The partnership is a first forthe two companies.