BEACHWOOD, OH—DDR Corp., a self-administered and self-managed REIT, earlier this year reported that its portfolio was more than 95% occupied, its highest level since 2008, and as part of a long-term plan to upgrade its tenants, has just unveiled an initiative to recapture space for high-quality anchor store locations across its portfolio as the leases expire. Company officials say they will first collaborate with retailers in the books, electronics, toys, office and traditional department store categories to right-size their real estate footprints before the leases expire, and then bring in market-share-winning tenants, realizing mark-to-market rental upside of 30% to 40%.

DDR has already identified 90 anchor locations with 3.3-million-square-feet of prime retail space that meet its criteria. And of these leases, DDR has finalized terms to recapture 21 locations with 550,000-square-feet primarily located in Boston, Cleveland, Denver, Orlando, Phoenix, Raleigh and San Antonio.

"This initiative demonstrates our ability to create organic growth opportunities for our best-in-class retail partners regardless of current portfolio leased rate,” says Paul Freddo, senior executive vice president of leasing and development for DDR. “Recapturing below-market leases represents an incremental growth opportunity to upgrade asset-level merchandise mix and NOI growth profiles, while simultaneously expanding redevelopment opportunities that will further enhance the quality of our portfolio.”