Developers Diversified and Coventry Real Estate Advisors Announce the Acquisition of Orange County, CA Shopping Center
CLEVELAND, OH, Nov. 23, 2004 (MARKET WIRE via COMTEX) -- Developers Diversified Realty (NYSE: DDR) and Coventry Real Estate Advisors ("Coventry") announced the formation of a joint venture to purchase Buena Park Downtown ("Property"), a 1.1 million square foot retail property located in Buena Park, California (northern Orange County) for approximately $91 million. The Property is comprised of the following three separate components:
(1) Buena Park Mall, a 782,000 square foot enclosed mall anchored by Wal*Mart, Sears, Burlington Coat Factory, Ross Dress for Less, Bed Bath & Beyond and DSW Shoe Warehouse;
(2) Buena Park Place, a 208,000 square foot open-air community center anchored by Kohl's, Circuit City, Office Depot, Michael's and PetsMart; and
(3) Park Central Entertainment Center ("Park Central"), a 137,000 square foot open-air entertainment center anchored by an 18-screen Krikorian Theater and featuring a variety of restaurants and inline retail shops.
Buena Park Downtown has significant frontage along La Palma Avenue, with Buena Park Place located along the north side of the street and Buena Park Mall and Park Central located along the south side. The Property is located proximate to Knott's Berry Farm and within one mile of the intersection of Interstate 5 and State Route 91, which are the region's busiest freeways. It is also located within three miles of downtown Anaheim. Buena Park Downtown offers a unique Orange County location, a true infill market with outstanding demographics and significant barriers to entry. The population count within a five-mile radius of the Property is approximately 640,000, which increases to over 1.23 million within a seven-mile radius. The average household income within these five and seven mile trade areas is approximately $66,000. The Property is 81% occupied and provides a rare lease-up opportunity in the Orange County market.
Buena Park Mall underwent extensive redevelopment beginning in 1998. In addition to retenanting a former anchor box with a newly opened Wal*Mart, Burlington Coat Factory, Ross Dress for Less, Bed Bath & Beyond and DSW Shoe Warehouse were added as new anchor tenants. The mall, which is anchored by traditional open-air community center tenants, is 74% occupied, providing re-leasing opportunities for both a junior anchor and additional inline small shops. Buena Park Place, which was recently redeveloped to include Kohl's, Office Depot, Michael's and PetsMart as new anchor tenants, is approximately 94% occupied, with a junior anchor box yet to be leased. Park Central, which is also newly developed and is 81% occupied, replaced a former freestanding J.C. Penney department store with an 88,000 square foot, state-of-the-art theater, plus complementary restaurant and retail uses.
Including Buena Park Downtown, Developers Diversified owns and manages 3.4 million square feet in the greater Los Angeles metropolitan area, including City Place (Long Beach), Valley Central Shopping Center (Lancaster) and Plaza at Puente Hills (City of Industry), each of which is owned in joint ventures with Coventry. Developers Diversified also owns Paseo Colorado (Pasadena) and The Pike at Rainbow Harbor (Long Beach).
Buena Park Downtown is the fifth investment of the Coventry Real Estate Fund II (the "Fund"). The Fund was formed with several institutional investors and Coventry serves as the investment manager. The Fund and Developers Diversified have agreed to jointly acquire value-added retail properties in the U.S. The Fund invests in a variety of well-located retail properties that present opportunities for value creation, such as retenanting, market repositioning, redevelopment or expansion.
Developers Diversified co-invests 20% in each joint venture and is responsible for the day-to-day management of the properties. Pursuant to the terms of the joint venture, Developers Diversified earns fees for property management, leasing and construction management plus a promoted interest, along with Coventry, after return of capital to investors.
Developers Diversified owns and manages approximately 460 retail operating and development properties totaling over 102 million square feet of real estate in 44 states. Developers Diversified 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 Developers Diversified on the internet at www.ddr.com. Coventry Real Estate Advisors is an investment manager offering a broad array of services to institutional investors in the value-added retail property sector. Coventry acquires under-performing retail properties where identifiable opportunities exist to enhance free cash flow and create substantial value through leasing, redevelopment and intensive management.
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 Developers Diversified 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 Developers Diversified 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 Annual Report on Form 10-K for the year-end December 31, 2003.