During Q4 2004, DDR inked 94 new leases totaling 718,000 sf and 223 renewals totaling 806,000 sf. Rental rates on new leases increased by 25.8% to $12.60 per sf, and rental rates on renewals increased by 8.4% to $11.99 per sf, compared to previously occupied rental rates, the company reported. At the end of 2004, DDR's portfolio was 95.4% leased, a small increase from the end of 2003, when its portfolio was 95.1% leased.

According to Scott Wolstein, the REIT's chairman and CEO, one of DDR's broader strategies for 2004 included selling assets. "During the year, we sold about $735 million worth of assets, generating funds with which to reinvest into community shopping centers—about $93 million in gains," he said during Friday's earnings conference call. "In addition, our joint ventures sold assets with a value of about $165 million, and recognized nearly $44 million in gains."

It was a busy quarter for DDR in terms of joint venture activity. In October of last year, the company completed a $128 million JV with Prudential Real Estate Investors, contributing 12 neighborhood grocery-anchored retail properties, all of which it had recently acquired. In November, DDR completed a $204 million JV with an investor group led by Kuwait Financial Centre-Markaz, contributing 13 neighborhood grocery-anchored retail properties, 12 of which were recently acquired. In December 2004, the REIT contributed three operating properties to yet another JV, the MDT Joint Venture.

"Our joint venture strategy is a critical component of our growth for several reasons," said Wolstein. "It maintains alternative sources of a capital over the long term, both in good times and bad. It also enables us to capitalize on strong institutional demand for retail assets. Finally, it allows us to align our portfolio with our long-term strategy of owning market-dominant community shopping centers."

"On the acquisition front," continued Wolstein, "we improved our ability to complete large transactions with certainty and efficiency. In March, we announced our $2.3 billion acquisition of over 100 assets from Benderson, which we closed in phases throughout the year."

More recently—in November—DDR acquired a 20% interest in Buena Park Downtown, a 1.1-million sf retail property located in Buena Park, CA (northern Orange County) for about $91 million. In January, the REIT finalized the acquisition of 15 Puerto Rican retail real estate assets totaling nearly 5 million sf from Caribbean Property Group LLC for about $1.15 billion.

"This acquisition positions us as the dominant retail landlord in Puerto Rico, whose developable land is constrained by physical barriers," said Wolstein. "We expect the Puerto Rican portfolio's 7.4 initial cash yield to increase by 20 basis points by year end."

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