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DDR Posts FFO Gains

CLEVELAND-A healthy increase in FFO for the year, but a more modest one for Q4 2004.

By Dees Stribling | Updated on February 21, 2005

CLEVELAND-Developers Diversified Realty Corp., a REIT that owns and operates about 470 retail properties nationwide, garnered a modest increase in funds from operations for the fourth quarter of 2004, compared with the same period in 2003—$0.69 per share, compared to $0.68 per share, a per share increase of 1.5%. For the entire years 2004 and 2003, however, FFO was $2.95 and $2.51 respectively per share, representing an increase of 17.5% last year.

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.”

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