Developers Diversified Keeps Growing

CLEVELAND-Developers Diversified Realty plans to develop $437.6 million of new shopping centers between now and 2006, the company revealed in it third quarter financial report. The new developments, across the country, will add 3.7 million sf to the company’s current total of about 460 centers, which comprise 102 million sf.One of the highest-profile centers it is building, the 600,000-sf Shops at Midtown Miami (FL), has had “unprecedented tenant interest,” said Scott Wolstein, the company’s chairman and CEO, during a conference call with analysts and investors. The company expects to open that center in the fall of 2006. During its last quarter, DDR broke ground on two centers, one in Freehold, NJ, the other in San Antonio.Retailers are expanding and putting their new concepts into DDR centers, Wolstein says. J.C. Penney and Sears, Roebuck & Co. are both opening their off-mall concepts in DDR’s open-air developments. Gap will open its first yet-to-be-named store targeting women over 35 in a DDR center, Wolstein says. Among the other retailers he mentioned that are expanding in the company’s portfolio include Aeropostale, Williams-Sonoma’s West Elm concept and Yankee Candle Co. “Their appetite for our product continues to grow unabated,” Wolstein said of the retailers.By the end of the quarter DDR had closed on its acquisition of 104 out of the 110 centers announced in March as part if acquisition of a Benderson Development Co. portfolio. DDR sold six non-core assets during the quarter for $26.8 million.Retailers signed 129 new leases over the period, totaling 679,000 sf. Rental rates on new leases in its centers averaged $10.42 per sf, an increase of 17.9% from last year. Funds from operations during the quarter were $219.3 million up from $151.5 million over the same year-ago period.