X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CLEVELAND-Developer’s Diversified Realty Corp. posted higher funds from operation per diluted share in Q1, than compared to Q4 2008. This quarter’s FFO was $140 million, roughly $1.08 per diluted share; while Q4 saw FFO of $96.3, or $0.80 per share. Revenue fell from $236.1 million to $219.8 million.

“Despite the challenging macro environment, we are pleased with our first quarter 2009 operating results which came in as expected,” says Scott Wolstein, Developers Diversified’s chairman and CEO. “We executed nearly 2 million square feet of leases and are making headway in leasing space that we have recently recaptured from retailer bankruptcies.”

Despite severe apprehension in the market about the health of the retail sector, Developers Diversified signed 124 new leases, which is 34 more leases than Q4. The company also renewed 227 leases portfolio wide. “Contrary to what some of the headlines might say, there are some retailers looking to make deals,” says Daniel Hurwitz, president and COO, during the earnings call. Additionally, the company sold seven properties totaling 0.7 million square feet.

Current occupancy is 90.7% and executives expect occupancy to hover around 90% for the rest of the year. Hurwitz says that 40% of the vacant space is due to bankruptcy closings. The retailers expressing the most interest include Bed Bath & Beyond, Best Buy, Staples, TJ Max and Forever 21. Hurwitz says Developers Diversified is in talks with each of these companies to fill space left vacant after the Circuit City, Steve & Barry’s and Mervyn store closings.

To date, Developers Diversified has received 672 rent relief requests, of those 525 have come from local tenants. Hurwitz says that each request is evaluated on a case-by-case basis after a number of financial documents have been obtained from the companies. Of those requests a large number never submit the necessary financial information. Of those that do, Developers Deiversified has approved 20 requests.

The first closing on the Otto Family deal, which received shareholder approval earlier this month, will likely close in the next couple weeks. This 30 million stock sale will provide the company with $112.5 million. The deal will be completed in two closings, trading 15 million shares each time. The second closing is expected to take place in six months. Additionally, the company will allow Otto family members and their investors to purchase an additional 10 million shares at $6.00 per share, according to company executives.

The REIT owns 710 retail assets in 45 states, plus Puerto Rico, Brazil and Canada. Its portfolio totals 157 million square feet.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.