BEACHWOOD, Ohio, Jan. 10, 2011 /PRNewswire/ -- Developers
Diversified Realty Corporation (NYSE: DDR) today announced an
update on 2010 activities as well as its outlook for 2011.
In 2010, the Company completed approximately $2.7 billion of capital transactions and
financing activities including the following:
- Sold $454 million of common
equity, of which $350 million was
issued through an underwritten public offering and $104 million was issued through the Company's "at
the market" equity program.
- Completed $791 million in asset
sales, of which the Company's pro rata share was $250 million.
- Purchased $259 million aggregate
principal amount of its near-term senior unsecured notes through a
tender offer and open market purchases at an aggregate discount to
par of approximately $8 million.
- Issued $600 million aggregate
principal amount of 7 and 10-year senior unsecured notes at a
weighted average interest rate of 7.69%.
- Issued $350 million aggregate
principal amount of 1.75% convertible senior notes.
- Raised $69 million of new
unconsolidated mortgage capital of which the Company's pro rata
share was $12 million.
- Refinanced two senior unsecured revolving credit facilities
providing $1.015 billion of borrowing
capacity through February 2014.
- Reduced consolidated debt from $5.2
billion to $4.3 billion.
- Increased the consolidated weighted average maturity of debt
from 3 years to 4 years.
- Eliminated approximately $682
million of unconsolidated mortgage debt with a weighted
average term of 3.5 years, of which the Company's pro-rata share
was $110 million.
The Company also achieved the following operational
accomplishments in 2010:
- Leased approximately 11.3 million square feet of retail
space.
- Increased core portfolio leased rate to 92.3%, up from 91.2% at
year-end 2009.
- Increased total portfolio average annualized base rent per
occupied square foot by approximately 2.6%.
- Continued to improve portfolio demographic and credit quality
through the disposition of more than 50 non-Prime assets.
- Increased the percentage of total portfolio NOI from the Prime
portfolio from 80% to more than 83%.
- Increased total portfolio ancillary income by approximately 22%
from 2009 for a total of approximately $44
million.
- Reduced development expenditures by 56% from 2009.
In addition, the Company expects to recognize approximately
$73 million of non-cash charges in
the fourth quarter of 2010 associated with an abandoned development
project and a tax-related reserve. The Company incurred an
approximate $23 million non-cash
charge associated with a development project that it no longer
plans to pursue. A subsidiary of the Company's taxable REIT
subsidiary ("TRS") acquired a leasehold interest in the development
as part of a portfolio acquisition in 2003, and no longer expects
to fund the ground rent expense. The Company also incurred a fourth
quarter non-cash income tax expense of approximately $50 million recognized due to the establishment
of a reserve against certain deferred tax assets within its TRS.
Based upon the continued loss activity recognized by the TRS,
including the estimated $23 million
charge associated with the development project described above, it
was determined that it was more likely than not that the deferred
tax assets would not be utilizable, thus requiring a current
reserve.
2011 Guidance
The Company expects to achieve the following goals during
2011:
- 2011 operating FFO per diluted share of approximately
$0.90 - $1.05.
- Pro rata EBITDA in the range of $600
million to $625 million.
- Annualized consolidated debt to EBITDA in the high-6x range by
year-end.
- Annualized pro rata debt to EBITDA in the mid-7x range by
year-end.
- Total consolidated debt reduced to $4.1
billion by year-end.
The assumptions that support this guidance include the
following:
- Same store net operating income growth projected to be
approximately 3.0%.
- Year-end core portfolio leased rate increasing 100 basis
points, resulting in a leased rate above 93%.
- Portfolio ancillary income increasing by approximately
10%.
- $100 million of operating
non-Prime asset sales with net proceeds reinvested into
acquisitions of Prime assets.
- Total general corporate expense reductions of $12 million annually, a portion of which had been
capitalized.
- Approximately $81 million in
aggregate general and administrative expenses.
- Capitalized interest of $8
million, down approximately $4
million from 2010.
- Capitalized general and administrative expenses of $9 million, down approximately $1 million from 2010.
- Straight line rent of $0.4
million, down approximately $2
million from 2010.
- An annualized common share dividend of $0.16 per share.
- Opportunistic capital raising activity to improve liquidity,
extend debt maturities and improve credit metrics.
Daniel B. Hurwitz, President and
Chief Executive Officer, commented, "We are pleased with the
progress made in 2010, and remain acutely focused on continuing to
execute with similar success in 2011. Our primary goals include
growing EBITDA, making further improvements to our balance sheet
and continuing to achieve positive operating results even in a
volatile economic environment."
Developers Diversified owns and manages approximately 570 retail
operating and development properties in 40 states, Brazil, Canada and Puerto
Rico. Totaling approximately 132 million square feet, the
Company's shopping center portfolio features open-air,
value-oriented neighborhood and community centers, mixed-use
centers and lifestyle centers located in prime markets with stable
populations and high-growth potential. Developers Diversified is
the largest landlord in Puerto
Rico and owns a premier portfolio of regional malls in and
around Sao Paulo, Brazil.
Developers Diversified is a self-administered and self-managed REIT
operating as a fully integrated real estate company. Additional
information about the Company is available on the Internet
at www.ddr.com.
Developers Diversified Realty Corporation considers portions of
this information to be forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, both as amended, with
respect to the Company's expectation for future periods. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that its expectations will be achieved.
For this purpose, any statements contained herein that are not
historical fact may be deemed to be forward-looking statements.
There are a number of important factors that could cause our
results to differ materially from those indicated by such
forward-looking statements, including, among other factors, local
conditions such as oversupply of space or a reduction in demand for
real estate in the area; competition from other available space;
dependence on rental income from real property; the loss of,
significant downsizing of or bankruptcy of a major tenant;
constructing properties or expansions that produce a desired yield
on investment; our ability to sell assets on commercially
reasonable terms; our ability to secure equity or debt financing on
commercially acceptable terms or at all; our ability to enter into
definitive agreements with regard to our financing and joint
venture arrangements or our failure to satisfy conditions to the
completion of these arrangements; the outcome of pending or future
litigation, including litigation with tenants or joint venture
partners; the completion of our financial statements for the year
ended December 31, 2010; and the
assumptions underlying our guidance for 2011 may be incorrect or
may not occur. For additional factors that could cause the results
of the Company to differ materially from these indicated in the
forward-looking statements, please refer to the Company's Form 10-K
as of December 31, 2009. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the
date hereof.
SOURCE Developers Diversified Realty Corporation