Developers Diversified Realty Corporation (DDR - Analyst Report) recently divested 12 non-prime assets and 4 land parcels for $112 million, of which the company's share was $87 million.
Developers Diversified sold non-strategic assets to improve its portfolio demographics and increase liquidity. Additionally, the company is also set to sell some other assets, which would generate proceeds of approximately $93 million for the company.
Developers Diversified intends to acquire two shopping centers for $85 million during the third quarter of 2011. The company plans to use the proceeds from the disposition of assets to fund the acquisition of the two shopping centers.
Developers Diversified is continuing with its portfolio repositioning program as it focuses on higher growth markets characterized by better job and rent growth prospects.The company’s strategy is to decrease its exposure in the non-prime assets.
The company seeks to invest capital derived from this transaction for the acquisition of the shopping centers, which has strong long-term prospects and thereby enhance the overall quality of the company’s portfolio.
Headquartered in Beachwood, Ohio, Developers Diversified is a real estate investment trust (REIT), which acquires, owns, develops, leases and manages shopping centers and business centers across 41 states in the U.S., along with Puerto Rico, Brazil and Canada.
The company has initiated a strategic shift from neighborhoods (non-anchor type strip malls) to community centers, which have begun to blur the line between traditional malls and strip retail centers.
Developers Diversified has a well-diversified portfolio concentrated mostly in the high growth areas of the country, including Florida, California, Texas and North Carolina. With a focus on best-in-class retailers in strategic locations, the company’s portfolio drives value and mitigates operating risks by generating a relatively steady revenue stream.
Developers Diversified currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Kimco Realty Corporation. (KIM - Analyst Report) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.