Coventry Real Estate Advisors

Developers Diversified Realty Corp. to Acquire 15 Properties From Burnham Pacific Properties, Inc.

Transaction Increases West Coast Assets Under Management By 3.7 Million Square Feet;
Creates Second Largest National Shopping Center REIT Based on Total Assets Managed

CLEVELAND, Sept. 5 /PRNewswire/ -- Developers Diversified Realty Corp. (NYSE: DDR - news) announced today it will acquire 15 west coast retail properties for approximately $355 million from Burnham Pacific Properties, Inc. (NYSE: BPP). Fourteen properties will be acquired in a joint venture with Prudential Real Estate Investors (PREI) and Coventry Real Estate Partners (Coventry). One property will be wholly-owned by DDR. DDR will earn fees for managing and leasing the properties, all of which are located in western states.

The transaction will be funded 80% by PREI and 20% by DDR as limited partners. Coventry will be the general partner in the joint venture and will receive asset management fees and a promoted interest above 10% threshold returns to the limited partners. DDR holds a 79% interest in Coventry. Five assets may be acquired through an exchange of operating partnership units, which would also serve to reduce DDR's cash requirement. With the exception of the sale of two assets, the transaction, which has been unanimously approved by BPP's Board of Directors, is subject to the approval of BPP's shareholders.

The properties to be acquired are a mix of community centers, supermarket-anchored neighborhood centers, and specialty centers. The properties are located in the San Francisco area, Southern California, Washington and Oregon. The addition of the portfolio significantly increases DDR's West Coast presence, improving the national diversity of the portfolio, while strengthening its relationships with such national retailers as Wal-Mart, Circuit City, Home Depot, and Michael's.

Commenting on the transaction, Scott Wolstein, Chairman and CEO of Developers Diversified, said, "This is an extraordinary opportunity to utilize our access to private capital to selectively acquire a portfolio of assets in a clean, efficient transaction. Our unique relationship with Prudential allows us to invest our capital efficiently and provides us additional fee revenue as well as a promoted interest that provides exceptional investment returns on our capital."

This transaction represents a significant advancement in the investment activities of the DDR/PREI/Coventry program. The program seeks to identify retail real estate investment opportunities which capitalize on the ability to leverage the capital committed by the participants and DDR's operational capabilities to create value. Peter Henkel, Coventry's Managing Partner, commented, "We have worked diligently over the past several months with BPP to structure a transaction that meets the strategic objectives of all parties. This transaction affords Coventry the opportunity to expand its investment portfolio significantly by acquiring properties that are well-located in strong markets. We believe that under DDR's management, we can enhance the value of the portfolio and generate strong returns for our investor partners."

Portfolio Summary The properties for acquisition were strategically selected from BPP's overall portfolio and represented the highest potential long-term value enhancement. The agreement to terms of the purchase closely followed BPP's announcement to liquidate its assets and the departure of its CEO.

The assets to be purchased are a perfect fit to DDR's portfolio strategy of adding long-term value to assets in dense, infill locations with strong market demand. The acquisition provides DDR immediate access to growth markets with high barriers to entry. The transaction creates significant operating efficiencies, as DDR currently has 1.627 million square feet of assets in California (listed below), with other transactions pending.

                 DDR California Assets and Developments

GLA

Project                       Location         Type     (000s)(1)

Queensway Bay (Spring 2002)   Long Beach, CA   Mixed      475

Long Beach City Center

 (Spring 2002)                Long Beach, CA   Mixed      512

Carmel Mountain Plaza         San Diego, CA    Retail     534

Ocean Place Cinemas           Oceanside, CA    Retail     106

Total                                                   1,627

(1)  Includes property managed but not owned.

DDR will incorporate the owned and managed properties into its operating platform with the creation of a regional leasing and development office located in Los Angeles, which will coordinate the operation of DDR's west coast assets. Upon completion of the overall transaction, DDR will own and operate 221 centers and 51.4 million square feet in 41 states. Of this total, DDR will own and operate 39 properties or 11.4 million square feet in the western U.S., thus increasing the company's portfolio diversification throughout the U.S.

                 DDR Western Portfolio Based on GLA (000s)(1)

                           DDR        BPP            DDR

Region                 Current    Acquisition    Pro Forma

Southern California       440        1,893          2,333

Northern California        --          780            780

Pacific Northwest         308          447            755

Utah                    2,448           --          2,448

Arizona                 1,204           --          1,204

Other                   1,958           --          1,958

Total                   6,358        3,120          9,478

(1)  Owned and operating portfolio; does not include development properties.

           DDR Total Operating Portfolio Based on Percent of GLA(1)

                       DDR            DDR

Region               Current        Pro Forma

Midwest                46%           42%

West                   17%           24%

South East             26%           24%

North East             11%           10%

(1)  Owned and operating portfolio; does not include development properties.

Tenant Summary

The assets selected for acquisition mirror DDR's existing tenancy, which focuses on large national retailers, with an emphasis on clustering discount retailer and category killers. The Company has unparalleled relationships with these national anchors, which attract high-quality regional and local shops. Significant tenant concentrations within the portfolio include national discount department stores, home goods retailers, service retailers, restaurants, supermarkets, electronics and apparel.

           DDR Total Operating Portfolio Based on Percent of GLA(1)

    Tenant        DDR            DDR

    Type          Current        Pro Forma

    National      62%            61%

    Regional      26%            26%

    Local          7%             8%

    Vacant         5%             5%

(1)  Owned and operating portfolio; does not include development properties.

The transaction not only increases DDR's diversification by introducing new regional and local tenants, but it strengthens DDR's relationships with tenants already participating in the Company's National Tenant Account Program. These tenants include Barnes & Noble; Bed Bath & Beyond; Circuit City; Home Depot; Ikea; Kmart; Marshalls/T.J. Maxx; Michael's, Officemax; Toys R Us; and Wal-Mart.

                   Largest Tenants in BPP Acquisition Pool

                        Owned    GLA(1)        Base Rent

          Tenant        Units    (000)         ($000)

    1.    Ikea              1    150           $1,181

    2.    Circuit City      4    139           $1,337

    3.    Wal-Mart          1    118             $812

    4.    Home Base         1    114             $726

    5.    Home Depot        1    107           $1,269

    6.    Kmart             1     98             $622

    7.    Albertson's       1     63             $977

    8.    Michael's         3     56             $767

    9.    Safeway           1     55             $665

   10.    Border's          2     50             $530

          Total            16    950           $8,886

(1)  Owned property only.

Developers Diversified Realty currently owns and manages 206 shopping centers in 40 states totaling 47.7 million square feet of real estate under management. DDR is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which develops leases and manages shopping centers. You can learn more about DDR on the internet at www.ddrc.com.

Bank of America Securities provided financial advisory services to DDR/PREI/Coventry in this transaction.

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 21E if 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.

                          BPP Acquisition Pool

Community Centers:     Location     Yr Blt/Ren    Location      GLA      GLA

                                                               Owned    Managed

Hilltop Plaza       Richmond, CA    1996/2000      No. CA     249,685   249,685

Valley Central      Lancaster, CA    1990          So. CA     450,192   608,711

Mountaingate Plaza  Simi Valley, CA 1976/1994      So. CA     282,163   282,163

Meridian Village    Bellingham, WA  1979/1997      WA         208,422   208,422

Plaza at Puente

     Hills          City of         1987           So. CA     518,938   781,222

                     Industry, CA

Village East        Salem, OR       1986           OR         135,926   135,926

Neighborhood

Centers:

La Mancha           Fullerton, CA    1973          So. CA     109,358   114,358

Cameron Park

     Place          Cameron Park, CA 1960/1999     No. CA     103,719   108,719

Olympiad Plaza     Mission Viejo, CA 1989          So. CA      45,600    93,337

Keizer Creekside    Salem, OR        1989          OR          61,939   104,208

Puget Park          Everett, WA      1981          WA          40,988    88,884

Richmond City

Center              Richmond, CA     1993          No. CA      76,692    76,692

Other:

San Diego Factory

     Outlet        San Ysidro, CA    1988/1993     So. CA     258,356   258,356

Lake Arrowhead

     Village       Lake, CA          1980          So. CA     229,114   229,114

Downtown Pleasant

     Hill          Pleasant Hill, CA 1999/2000     No. CA     348,597   348,597

Total                                                       3,119,689  3,688,394

(table continued)

    Community     % Vacant Base Rent                                 Anchors

     Centers:         (1)   ($000s)

    Hilltop Plaza    6.6%    3,378      Petsmart, Ross Dress, Barnes & Noble,

                                                                Circuit City

    Valley Central   1.0%    4,636          WalMart, Marshalls, Circuit City,

                                                  Home Base, Staples, Costco,

                                                          Mode Five Clothing

    Mountaingate

     Plaza          24.3%    2,326            T.J. Maxx, Bally Total Fitness,

                                                    Thrifty Drugs, Michael's

    Meridian Village 2.3%    2,003                  Circuit City, Home Depot

    Plaza at

     Puente Hills    9.0%    6,277                 Ikea, WalMart, Home Depot,

                                                      Toy R Us, Circuit City,

                                              Office Depot, Miller's Outpost

    Village East     5.8%    1,476                     Border's, Ross Stores

    Neighborhood

     Centers:

    La Mancha       21.2%      719              Ralph's, Ballard Wimer Brock

    Cameron Park

     Place           0.0%    1,518                                   Safeway

    Olympiad Plaza   0.0%    1,228                              Lucky Stores

    Keizer Creekside 0.0%      637                 Payless Drug, Albertson's

    Puget Park      19.9%      432                               Albertson's

    Richmond City

     Center          0.0%    1,082                               Food 4 Less

    Other:

    San Diego

     Factory Outlet  2.2%    3,291                     Kmart, Nike, Stroud's

    Lake Arrowhead

     Village         8.3%    3,379                           Stater Brothers

    Downtown Pleasant

     Hill            0.0%    6,712                     Albertsons, Michael's,

                                              Borders, Ross Stores, Bed Bath

    Total            6.6%   39,094

    (1)  Based on owned GLA.

SOURCE Developers Diversified Realty Corporation Web site: www.ddrc.com 9/5/2000

Developers Diversified Realty Corp. to Acquire 15 Properties From Burnham Pacific Properties, Inc.

Transaction Increases West Coast Assets Under Management By 3.7 Million Square Feet; Creates Second Largest National Shopping Center REIT Based on Total Assets Managed

Tenant Summary

Transaction Increases West Coast Assets Under Management By 3.7 Million Square Feet;
Creates Second Largest National Shopping Center REIT Based on Total Assets Managed