Developers Diversified and Coventry Real Estate Partners Announce Sales of California Shopping Centers
CLEVELAND, OH, Jan. 06, 2005 (MARKET WIRE via COMTEX) -- Developers Diversified Realty (NYSE: DDR) and Coventry Real Estate Partners ("Coventry") announced two separate transactions involving the sale of Olympiad Plaza, located in Mission Viejo, California; and a portion of the Plaza at Puente Hills, located in City of Industry, California. The assets were sold to two different private investors for approximately $51.2 million, of which over $10 million represents Developers Diversified's proportionate share. The sale of the assets generated a gain of approximately $13.6 million to the joint venture. Developers Diversified will exclude its portion of the gain from Funds From Operations ("FFO"). While the proceeds from these sales will not result in any additional promoted returns at this time, a significant amount of the proceeds ($27.4 million) will be applied as a return of equity capital. This equity return will result in a lower preferred return and therefore increase future promoted distributions to Coventry from operating cash flows.
Olympiad Plaza, which sold for $18 million, is a 45,600 square foot neighborhood grocery anchored shopping center, excluding the square footage of the unowned Albertson's. The portion of the Plaza at Puente Hills that was sold for approximately $33.2 million comprises approximately 180,000 square feet of owned retail space and is anchored by Sam's Wholesale Club (unowned), Office Depot, Home Depot (unowned), Sam Ash Music and Toys 'R' Us (unowned). RVIP currently has an additional $30.6 million in assets that are expected to be sold during the first quarter of 2005, including five remaining outparcel buildings at the Plaza at Puente Hills.
Olympiad Plaza and the Plaza at Puente Hills were acquired from Burnham Pacific Properties in 2001 and held in a joint venture under the Retail Value Investment Program ("RVIP"), a joint venture among Developers Diversified, Coventry and Prudential Real Estate Investors ("PREI"). Including the sales described above, Developers Diversified has sold five assets from the former Burnham Pacific portfolio for aggregate sales proceeds of over $142 million, of which over $28 million represents Developers Diversified's proportionate share.
Developers Diversified currently owns and manages approximately 460 operating and development retail properties in 44 states totaling over 102 million square feet of retail real estate. Developers Diversified is a self-administered and managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops and manages shopping centers. Additional information about Developers Diversified is available on the Internet at www.ddr.com.
Coventry serves as the general partner of RVIP. On behalf of RVIP, Coventry has managed the investment of approximately $750 million in value-added retail real estate across the country since 1998.
Prudential Real Estate Investors (PREI) is the real estate investment management business of Prudential Financial. PREI is comprised of fund management centers in Parsippany, N.J.; Atlanta, Ga.; Boston, Mass.; Munich, Germany; London, England; and Singapore; supported by a network of local offices throughout the world. PREI's specialized operating units offer a broad range of investment opportunities and investment management services in the United States, Europe, Asia and Latin America. As of September 30, 2004, PREI managed $22.9 billion of gross assets ($15.4 billion net) on behalf of more than 300 clients and is ranked among the largest real estate investment managers. For more information, please visit www.prei.com.
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 of the Securities 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 10-K as of December 31, 2003.