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PITTSBURGH-Developers Diversified Realty began site work last week for Mt. Nebo Pointe, a 350,000-sf open-air center on 80 acres in the local suburb of Ohio Township.

The $33-million development (including land and entitlement costs) will be anchored by Target and Sportsman’s Warehouse, whose pre-construction commitments for a combined 172,000 sf got the project out of the planning stage and into reality. The project is scheduled to open in 2006.

Located at the intersection of Mt. Nebo Road and Camp Horne Road, DDR says the center will benefit from “excellent” visibility and access from Interstate 279. The 123,610-sf Target and the 48,171-sf Sportsman’s Warehouse are the only two signed tenants. DDR says the rest of the center will be filled with national retailers in the entertainment, specialty apparel, sporting goods, shoes and restaurant categories.

Site grading is scheduled to begin in January 2004. Building construction is expected to commence in spring 2005. Merchants should begin opening for business in summer 2006.

A company official declined to talk about lease terms for the anchor tenants or asking rates for the shop space. According to a recent SEC filing, the company reported that for anchor leases set to expire in 2012, the average annualized base rent is $9.07 per sf. For shop space leases that are scheduled to rollover in 2012, the average base rent is $21.72. By contrast, average annual base rent for anchor spaces and shop spaces set to expire in 2003 are $3.83 and $12.31, respectively.

Mt. Nebo Pointe is one of seven shopping centers in Pennsylvania owned and managed by DDR. The company currently owns and manages approximately 400 shopping centers in 44 states totaling 82 million sf of retail real estate. DDR reported at the end of October that leasing activity during the third quarter continued to be strong throughout its portfolio, with 110 new leases signed for a combined 494,000 sf.

Rental rates on the new leases increased by 15.2% to $11.83 per sf while rental rates on renewals increased by 7.6% to $11.37 per sf. DDR’s overall portfolio was 94.6% leased at the end of September 2003, down from 95.9% at the end of September 2002.

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