EX-99.1 3 l06710aexv99w1.txt EX-99.1 Exhibit 99.1 For Immediate Release Contact: Michelle Mahue Vice President of Investor Relations Developers Diversified Realty Ph: 216.755.5500 Email: mmahue@ddr.com DEVELOPERS DIVERSIFIED ANNOUNCES $2.3 BILLION ACQUISITION OF SHOPPING CENTER PORTFOLIO FROM BENDERSON DEVELOPMENT COMPANY, INC. COMPANY INCREASES EARNINGS GUIDANCE AND ANNOUNCES COMMON SHARE DIVIDEND INCREASE BEGINNING WITH THE COMPANY'S THIRD QUARTER 2004 DIVIDEND Cleveland, OH - March 31, 2004 -- Developers Diversified Realty (NYSE: DDR) announced today it has entered into a binding agreement to purchase 110 retail real estate assets, totaling 18.8 million square feet from Benderson Development Company, Inc. ("Benderson"), the largest private developer, owner and operator of high-quality market dominant community centers in North America. The transaction has a total value of approximately $2.3 billion, which represents an 8.0% cap rate on a pro-forma basis without the benefit of straight line rents. Benderson will retain a 2% minority interest in certain assets to be sold to Developers Diversified. The transaction has been approved by Developers Diversified's Board of Directors and is expected to close during the second quarter of 2004. The Company expects this transaction to generate approximately $0.35 per share in additional Funds From Operation (FFO) on an annualized, pro forma, leverage neutral basis. Due to the partial year timing of the transaction, the Company is revising its 2004 year-end guidance to approximately $3.00 per share. As a result of the additional income and related retained earnings, Developers Diversified will increase its common share dividend. The Company's Board of Directors has approved a quarterly dividend increase of $0.05 per common share (or 10.9%) to $0.51 per share, commencing with its third quarter dividend, which is scheduled to be paid in October 2004. Developers Diversified intends to fund the acquisition through a combination of assumed debt, new debt financing, asset sales and equity from both public and private sources, potentially including Macquarie DDR Trust ("MDT"), the Company's Australian Listed Property Trust joint venture. The Company is in discussions with the manager of MDT regarding its potential participation in the transaction. The Benderson portfolio includes locations in eleven states with over 80% of the gross leasable area (GLA) in New York and New Jersey. Developers Diversified currently owns less than 100,000 square feet in New York and approximately 2.7 million square feet in New Jersey. The portfolio is approximately 94% leased and its largest tenants, based on revenues, include Tops Market (Ahold USA), Wal*Mart/Sam's Club, Home Depot, Dick's Sporting Goods. Upon completion of the transaction, Developers Diversified will own or manage over 470 operating and development retail properties in 44 states comprising over 100 million square feet of space. Scott Wolstein, Developers Diversified's Chairman and Chief Executive Officer, commented "We are gratified that the Benderson Development Company recognized Developers Diversified as the appropriate acquirer of its high-quality portfolio and, therefore, elected to pursue a negotiated transaction directly with Developers Diversified. The portfolio represents an asset class that is consistent with our current core portfolio and the properties are located in markets with strong and stable demographics. In addition, this acquisition continues to expand the relationships between Developers Diversified and its key retail tenants." Randall Benderson, President of Benderson Development Company, Inc., echoed Mr. Wolstein's comments. "We are gratified to have been able to reach agreement on this significant retail transaction with Developers Diversified, whom we regard as the nation's finest operator of shopping centers. After the sale is complete, Benderson will retain a portfolio of over 23 million square feet of commercial space, which includes office buildings, industrial parks, residential communities, storage complexes, hotels, and retail shopping centers. In addition, the company is presently engaged in the development of approximately 8 million feet of new space." Developers Diversified currently owns and manages over 360 retail operating and development properties in 44 states totaling in excess of 82 million square feet of real estate. The Company is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops and leases shopping centers. You can learn more about Developers Diversified on the internet at www.ddr.com. Developers Diversified will conduct a conference call and an audio webcast on April 1, 2004 at 9 a.m. EST. To access the conference call, dial 1.888.413.7909 at least ten minutes prior to the scheduled start of the call. When prompted, provide the access code: 426393. The conference call will be recorded and available for replay beginning at 12 p.m., April 1, 2004 and will be available until 11:59 p.m., May 1, 2004. To access the conference call recording, please call 1.888.266.2081 and use the access code: 426393. The conference call will be webcast by CCBN, www.ccbn.com, and can be accessed via the DDR web site, www.ddr.com. Management believes that Funds From Operations ("FFO") provides an additional indicator of the financial performance of a REIT. The Company also believes that FFO appropriately measures the core operations of the Company and provides a benchmark to its peer group. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP") and is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity. DDR's reconciliation of net income available to common shareholders to FFO is described and reconciled in the Company's Form 10-K for the year ended December 31, 2003. Developers Diversified Realty Corporation considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21 E 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 the results of the Company 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 or the loss of a major tenant. For more details on the risk factors, please refer to the Company's Form on 10-K as of December 31, 2003. KEY TRANSACTION INFORMATION
Developers Diversified Benderson Development Combined Portfolio ----------- --------------------- ------------------ Total Market Cap(Bn) (1) $6.1 $2.3 $8.4 Number of Retail Operating & Development 364 110 474 Properties GLA (MSF) 82.7 18.8 101.5 Avg. Base Rents - Inline Tenants/Overall $15.55/$10.82 $12.99/$9.83 $14.91/$10.56 Portfolio Number of States 44 11 44 Top Six States Ohio New York New York (Based on Owned GLA) Georgia New Jersey Ohio Florida Florida Georgia Texas Ohio Florida Michigan North Carolina Texas California Kentucky New Jersey Top Six Tenants (Based on Owned & Unowned GLA) Wal*Mart/Sam's Tops (Ahold USA) Wal*Mart/Sam's Lowe's Home Improvement Wal*Mart/Sam's Target Target Home Depot Lowe's Home Improvement Home Depot B.J.'s Wholesale Club Home Depot Kohl's Target Tops (Ahold USA) T.J. Maxx/Marshalls Lowe's Home Improvement Kohl's Top Six Tenants (Based on Base Rents) Wal*Mart / Sam's Tops (Ahold USA) Wal*Mart / Sam's Lowe's Home Improvement Wal*Mart/Sam's Tops (Ahold USA) Kohl's B.J.'s Wholesale Club T.J. Maxx/Marshalls T.J. Maxx/Marshalls Home Depot PETsMART PETsMART Dick's Sporting Goods Lowe's Home Improvement Bed Bath & Beyond Regal Cinema Kohl's
(1) Market capitalization is calculated as common shares and OP Units outstanding multiplied by the closing price of the common shares on the New York Stock Exchange at March 30, 2004 of $40.04, plus preferred shares at liquidation value, consolidated debt and the Company's proportionate share of joint venture debt. BENDERSON DEVELOPMENT ACQUISITION PORTFOLIO (1)
TOTAL OWNED PROJECT CITY ST GLA ANCHOR TENANTS ------- ---- -- ----- -------------- 1 ARLINGTON ROAD PLAZA JACKSONVILLE FL 182,098 Food Lion 2 HIGHLANDS PLAZA LAKELAND FL 102,572 Winn Dixie 3 THE VILLAGE SHOPPING CTR. ORANGE PARK FL 73,081 Bealls Dept. Stores 4 HORIZON PARK TAMPA FL 214,484 Babies `R' Us, Staples, Pearl Artist Craft & Supply 5 HOME DEPOT - ORLAND PARK ORLAND PARK IL 149,498 Home Depot 6 TURFWAY SHOPPING CENTER FLORENCE KY 133,985 Office Depot, Big Lots 7 EASTWOOD SHOPPING CT FRANKFORT KY 155,226 Save-A-Lot Food Store, Sears 8 OUTER LOOP PLAZA LOUISVILLE KY 120,477 Value Discount, Family Recreation 9 ALPINE AVE. - WALKER WALKER MI 93,877 Circuit City 10 MOORESVILLE CONSUMER SQ. MOORESVILLE NC 447,946 Wal*Mart Supercenter, Amstar Theater 11 UNION TOWN CENTER PH1 UNION COUNTY NC 102,400 Food Lion
12 WRANGLEBORO CONSUMER SQ. MAYS LANDING NJ 839,446 Best Buy, Kohl's, Staples, Babies 'R' Us, Dick's Sporting Goods, BJ's Wholesale Club, Seaman's Furniture, Linens `N Things, Michael's, Target, PETsMART, Borders 13 HAMILTON COMMONS MAYS LANDING NJ 398,137 Bed Bath & Beyond, Ross Dress For Less, Sports Authority, Marshalls, Circuit City, Regal Cinema 14 MONMOUTH CONSUMER SQUARE WEST LONG BRANCH NJ 292,999 Sports Authority, Barnes & Noble, PETsMART, Home Depot 15 TOPS - ALDEN, NY ALDEN NY 67,992 Tops Market 16 TOPS - ROBINSON RD. PLAZA AMHERST NY 145,192 Tops Market, Shanor Lighting Center 17 TOPS - TRANSIT COMMONS AMHERST NY 112,427 Tops Market 18 UNIVERSITY PLAZA AMHERST NY 162,686 Tops Market, A.J. Wright 19 BARNES & NOBLE - TRANSIT RD. AMHERST NY 16,030 Barnes & Noble
20 BOULEVARD CONSUMER SQUARE AMHERST NY 708,442 Barnes & Noble, Babies 'R' Us, Target, A.C. Moore, Bed Bath & Beyond, Best Buy, Lowe's Home Improvement, Kmart 21 BURLINGTON/JOANN PLAZA AMHERST NY 199,496 Burlington Coat, Jo-Ann Fabrics 22 DICK'S - MAPLE RD. AMHERST NY 55,745 Dick's Sporting Goods 23 TOPS - ARCADE ARCADE NY 65,915 Tops Market 24 TOPS PLAZA - AVON AVON NY 63,288 Tops Market 25 TOPS PLAZA - BATAVIA BATAVIA NY 37,140 Tops Market 26 BJ'S - BATAVIA BATAVIA NY 95,846 BJ's Wholesale Club 27 BATAVIA COMMONS BATAVIA NY 49,431 CVS, Dollar Tree 28 BIG FLATS CONSUMER SQUARE BIG FLATS NY 641,264 Wal*Mart Supercenter, Sam's Club, Tops Market, Dick's Sporting Goods, Bed Bath & Beyond, Michael's, TJ Maxx, Barnes & Noble, Old Navy, Staples
29 DICK'S - MCKINLEY BLASDELL NY 128,944 Dick's Sporting Goods, Rosa's Home Store, 30 DELAWARE CONSUMER SQUARE BUFFALO NY 241,253 Tops Market, A.J. Wright, OfficeMax, Target 31 ELMWOOD REGAL CENTER BUFFALO NY 126,240 Regal Cinema, Office Depot 32 MARSHALL'S PLAZA BUFFALO NY 82,126 Marshalls 33 THRUWAY PLAZA CHEEKTOWAGA NY 441,776 Wal*Mart, Tops Market, JGM Entertainment, M & T Bank, Value City Furniture 34 TOPS UNION-URBAN CHEEKTOWAGA NY 151,357 Tops Market 35 BORDERS BOOKS - WALDEN CHEEKTOWAGA NY 26,500 Borders Books 36 DICK'S PLAZA-UNION ROAD CHEEKTOWAGA NY 170,264 Dick's Sporting Goods, Applebee's 37 WALDEN CONSUMER SQUARE CHEEKTOWAGA NY 255,964 Office Depot, Linens `N Things, Michael's, Target, PETsMART 38 WALDEN PLACE CHEEKTOWAGA NY 68,002 Media Play 39 KMART PLAZA - CHILI CHILI NY 116,868 Kmart 40 EASTGATE PLAZA CLARENCE NY 527,219 BJ's Wholesale Club, Wal*Mart Supercenter, Dick's Sporting Goods, Linens `N Things, Michael's, PETsMART
41 JO-ANN PLAZA - TRANSIT RD. CLARENCE NY 92,720 Home Depot, Toys `R' Us, OfficeMax, Jo-Ann Fabrics, Big Lots 42 TOPS PLAZA - CORTLAND CORTLAND NY 134,223 Tops Market, Staples 43 TOPS - DANSVILLE DANSVILLE NY 74,600 Tops Market 44 TOPS D&L PLAZA DEPEW NY 148,245 Tops Market, Big Lots 45 DEWITT COMMONS DEWITT NY 320,669 Toys `R' Us, Marshalls, Bed Bath & Beyond, A.C. Moore, Syracuse Orthopedic, PETsMART 46 MICHAEL'S/ CHUCK E CHEESE'S DEWITT NY 49,713 Michael's 47 TOPS PLAZA - ELMIRA ELMIRA NY 98,300 Tops Market 48 WESTGATE PLAZA GATES NY 332,809 Staples, Wal*Mart Supercenter 49 JO-ANN STORES-GREECE GREECE NY 75,916 Jo-Ann Fabrics, PETsMART 50 TOPS - SOUTH PARK PLAZA HAMBURG NY 84,000 Tops Market 51 BJ'S PLAZA - HAMBURG HAMBURG NY 175,965 Toys `R' Us, BJ's Wholesale Club, OfficeMax 52 HAMBURG VILLAGE SQUARE HAMBURG NY 92,934 Tuesday Morning, Dollar Tree, Rite Aid
53 HOME DEPOT - HAMBURG HAMBURG NY 139,413 Home Depot 54 MCKINLEY/MILESTRIP PLAZA HAMBURG NY 106,774 Old Navy, Jo-Ann Fabrics 55 TOPS PLAZA - HAMLIN HAMLIN NY 60,488 Tops Market 56 HEN-JEF PLAZA HENRIETTA NY 159,517 City Mattress, Comp USA, PETsMART 57 CULVER RIDGE PLAZA IRONDEQUOIT NY 226,608 Petco, The Avenue, Dress Barn, Regal Cinema 58 RIDGEVIEW PLACE IRONDEQUOIT NY 65,229 Rochester General Hospital, Rochester Business Institute, Us Marine Center 59 TOPS PLAZA - ITHACA ITHACA NY 229,263 Wal*Mart, Wegman's Market, Lowe's Home Improvement, Tops Market, Michael's, Barnes & Noble, OfficeMax 60 SOUTHSIDE PLAZA JAMESTOWN NY 59,940 Quality Markets 61 TOPS - JAMESTOWN JAMESTOWN NY 98,001 Tops Market 62 REGAL CINEMAS-LANCASTER LANCASTER NY 112,949 Regal Cinema 63 TOPS PLAZA - LEROY LEROY NY 62,747 Tops Market 64 WAL-MART/TOPS LOCKPORT LOCKPORT NY 296,582 Tops Market, Wal*Mart, Sears Hardware
65 TOPS - MEDINA MEDINA NY 80,028 Tops Market 66 TOPS - PORTAGE RD. N. FALLS NY 116,903 Tops Market 67 MID-CITY PLAZA N. TONAWANDA NY 240,743 Tops Market, Sears Hardware 68 TOPS - KELLOGG RD. NEW HARTFORD NY 127,740 Tops Market 69 NEW HARTFORD CONSUMER SQ NEW HARTFORD NY 516,801 Wal*Mart Supercenter, Best Buy, TJ Maxx, Michael's, Staples, Bed Bath & Beyond, Barnes & Noble, Sports Authority 70 HOME DEPOT PLAZA-NF NIAGARA FALLS NY 153,838 Home Depot, Regal Cinema 71 PINE PLAZA NIAGARA FALLS NY 82,980 OfficeMax 72 MOHAWK COMMONS NISKAYUNA NY 404,994 Target, Price Choppers, Marshalls, Bed Bath & Beyond, Lowe's Home Improvement, Barnes & Noble, PETsMART 73 TOPS - NORWICH NORWICH NY 85,453 Tops Market 74 WAL-MART PLAZA-OLEAN OLEAN NY 363,601 Wal*Mart, Home Depot, BJ's Wholesale Club, Eastwynn Theatres 75 TOPS PLAZA - ONTARIO ONTARIO NY 77,040 Tops Market
76 CROSSROADS CENTRE ORCHARD PARK NY 167,805 Lowe's Home Improvement, Tops Market, Stein Mart 77 PLATTSBURGH CONSUMER SQ. PLATTSBURGH NY 491,506 Wal*Mart Supercenter, Sam's Club, TJ Maxx, PETsMART, Michael's, Staples 78 HENRIETTA PLAZA ROCHESTER NY 246,012 Tops Market, Big Lots, Office Depot, Guitar Center 79 PANORAMA PLAZA ROCHESTER NY 278,241 Tops Market, Linens `N Things 80 SPRINGVILLE PLAZA SPRINGVILLE NY 108,500 Tops Market 81 BEAR ROAD PLAZA SYRACUSE NY 59,483 Blockbuster Video, Dollar General, Harbor Freight & Tool 82 TOPS PLAZA - TONAWANDA TONAWANDA NY 97,014 Tops Market 83 SHERIDAN/DELAWARE PLAZA TONAWANDA NY 188,200 Tops Market, Bon Ton Home Store 84 TOPS/GANDER MT. PLAZA TONAWANDA NY 310,921 Tops Market, BJ's Wholesale Club, Gander Mountain, Big Lots 85 DEL-TON PLAZA TONAWANDA NY 55,473 Valu Home Centers 86 OFFICE DEPOT PLAZA TONAWANDA NY 121,846 Computer City, Office Depot 87 TOPS - MOHAWK ST. UTICA NY 190,376 Tops Market, A.J. Wright 88 VICTOR SQUARE VICTOR NY 56,134 Thomasville Home Furnishing, Bassett Furniture, Floorz 89 TOPS - WARSAW WARSAW NY 74,105 Tops Market
90 HOME DEPOT PLAZA-W. SEN. WEST SENECA NY 139,453 Home Depot 91 SENECA RIDGE PLAZA WEST SENECA NY 62,424 Sears Hardware 92 SHERIDAN/HARLEM PLAZA WILLIAMSVILLE NY 58,458 CVS, Chuck E. Cheese 93 WILLIAMSVILLE PLACE WILLIAMSVILLE NY 98,257 Jos A. Bank, Damon's 94 TOPS - ASHTABULA, OH ASHTABULA OH 57,874 Tops Market 95 CONSUMER SQ. WEST COLUMBUS OH 356,515 OfficeMax, Target, Kroger 96 KMART - ENGLEWOOD, OH ENGLEWOOD OH 84,180 Kmart 97 DICK'S SPORTING GOODS OH TOLEDO OH 80,160 Dick's Sporting Goods 98 TOPS - ERIE ERIE PA 99,631 Tops Market 99 BJ'S - HANOVER HANOVER PA 112,230 BJ's Wholesale Club 100 N. CHARLESTON CENTER N. CHARLESTON SC 235,501 Big Lots 101 FAIRVIEW SQUARE LYNCHBURG VA 85,209 Food Lion Total (1) 17,526,867
(1) Does not include a small number of assets to be identified prior to closing.