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DDR Sells 13 Assets for $890M, Keeps Share

CLEVELAND-A joint venture, including DDR, with an institutional investor purchased the properties, totaling 5.9 million sf. In saving moves, the firm has dropped its dividend.

By Debra Hazel | Updated on October 24, 2008

CLEVELAND-Determined to operate more conservatively in the current environment, locally based Developers Diversified is suspending development in Russia and future building in Brazil and is continuing to pursue asset sales, as shown by an $890 million deal announced this morning. The company has reached an agreement to sell 13 stabilized assets, totaling 5.9 million (of which 5.1 million is company-owned) to a joint venture with an institutional investor. The joint venture is expected to close in mid-December, at which point DDR will own 20% and the partner 80%. The company also will receive property management and development/redevelopment fees, a promoted interest, and leasing and ancillary fees upon closing.

The firm also is in various stages of negotiations to sell some $163 million in assets to buyers ranging from private individuals to large REITs, said David J. Oakes, EVP and CIO, speaking at the company’s third quarter conference call.

“We have sold assets in the past and will continue to do so, as it’s one of the least expensive sources of capital,” said Oakes in a press release. The company also is suspending its fourth quarter dividend.

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