DDR Highlights 2012 Execution of Strategic Objectives and Provides
2013 Guidance
BEACHWOOD, Ohio, Jan. 7, 2013 /PRNewswire/ -- DDR Corp. (NYSE:
DDR) today highlighted 2012 execution of strategic objectives and
released guidance for 2013. During 2012 the Company significantly
improved the quality of its portfolio through the acquisition of
$2.1 billion of prime shopping
centers ($760 million at DDR's share)
and the disposition of $347 million
of non-prime operating assets ($143
million at DDR's share). Investments in 2012 were funded
primarily with proceeds from asset sales and $511 million of new common equity issued
throughout the year, which significantly improved the Company's
balance sheet as well. DDR's considerable progress in recent years
recycling capital, growing its high quality pool of unencumbered
prime shopping centers, lowering leverage and extending debt
duration combined with strong operating results contributed to
Standard & Poor's upgrade of the Company's corporate bond
rating to BBB- in September and Moody's affirming its investment
grade rating on DDR bonds and raising its credit outlook to
positive from stable. Additionally, DDR retired $969 million of consolidated debt with a weighted
average interest rate of 4.8% during the year with $1.2 billion of new long-term financings with a
weighted average interest rate of 3.8%. As a result, the Company
has no unsecured debt maturities until May
2015, and 2013 consolidated debt maturities are only
$41 million. At year-end, the Company
had over $600 million of availability
under its revolving credit facilities.
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The Company's operating platform continued to perform at a very
high level in 2012, reporting solid improvements in leased rate,
which reflect robust demand and stronger competition for quality
space from retailers. During the year, the Company leased
approximately 11.3 million square feet, representing a 60 basis
point improvement in the leased rate over year end 2011, and
resulting in a 94.2% leased rate at December
31, 2012.
Daniel B. Hurwitz, chief
executive officer, commented, "2012 was another year of successful
execution of our strategic objectives. We have positioned the
Company for future growth with attractive investments, and our
primary tenants continue to increase market share and have a
significant need for new stores. With a dramatically improved
portfolio of high quality prime power centers, a unique and proven
operating platform, and a competitive cost of capital, we expect to
generate strong relative total returns in 2013 and beyond."
In 2012, the Company completed approximately $4.5 billion of capital transactions and
consolidated financing activities including the following:
- Completed $2.1 billion of
acquisitions of prime shopping centers and $347 million of dispositions of non-prime
operating assets. DDR's share of 2012 acquisitions was $760 million and dispositions was $143 million. In addition, the Company sold
$107 million of non-income producing
assets during the year, of which DDR's share was $96 million.
- Issued $511 million of common
equity to fund the net investment in prime shopping centers while
also increasing our pool of unencumbered assets and improving
leverage metrics.
- Issued $200 million, 6.5% Class J
preferred stock to redeem $170
million, 7.5% Class I preferred stock.
- Issued $450 million, 10-year,
4.625% senior unsecured notes ($300
million, June 2012; and
$150 million, 3.46%
yield-to-maturity, November 2012),
with net proceeds used to redeem $224
million, 5.375% notes maturing October 2012 and repay borrowings under the
revolving credit facility.
- Closed on $350 million unsecured
term loan ($300 million, 7-year
tranche, with interest fixed at 3.6% for $200 million and 3.0% for $100 million; and $50
million, 5-year tranche, with interest fixed at 2.3%), with
proceeds used to retire $180 million
of convertible notes, refinance a portion of our 5.0% rate mortgage
debt maturing in 2013, and reduce the outstanding balances under
the revolving credit facilities.
- Closed $103 million 7-year, 3.40%
mortgage loan secured by three prime shopping centers in
Atlanta, GA, Princeton, NJ and San Antonio, TX.
- Closed $265 million, 7-year,
3.95% mortgage loan secured by four prime shopping centers in
San Juan, PR, Atlanta, GA, Miami,
FL, and Columbus, OH. The
proceeds from the loan were used to repay a majority of
$350 million in 5.0% rate mortgage
debt set to mature in April
2013.
- Extended the weighted average maturity of consolidated debt
from 4.3 years to 5.1 years.
- Paid cash dividends of $0.48 per
common share, an increase of 118% from 2011.
The Company also achieved the following operational
accomplishments in 2012:
- Leased approximately 11.3 million square feet of gross leasable
area.
- Increased portfolio leased rate to 94.2%, up 60 basis points
from 93.6% at year-end 2011 and up 100 basis points when adjusting
for the Blackstone acquisition.
- Increased the percentage of net operating income (NOI)
generated from the prime portfolio to approximately 89.3%.
- Generated full year same store NOI growth in excess of 3%.
2013 Guidance
The Company expects to generate operating FFO per diluted
share of $1.07 - $1.11 in 2013, an
increase of 5% to 9% over the midpoint of the latest 2012 guidance.
Significant activity assumed in this guidance is as
follows:
- Generate same store NOI growth of 2.0% - 3.0%, weighted to the
second half of the year.
- Increase year-end portfolio leased rate by 80 basis points,
resulting in a leased rate of 95%.
- Acquire $250 million of prime
shopping centers.
- Dispose of $150 million of
non-prime operating assets.
- Dispose of $50 million of
non-income producing assets.
- Bring at least $75 million of
opportunistic development and redevelopment investment on line,
primarily in the second half of the year.
- Approximately $80 million in
aggregate general and administrative expenses.
- Exchange rate of 2.0 Brazilian
Real per U.S. Dollar.
- Opportunistic capital raising activity to improve liquidity,
further extend debt duration and improve credit metrics.
- Annual dividend of $0.54 per
common share, representing 12.5% growth from the annual common
share dividend of $0.48 per share in
2012.
About DDR
DDR is an owner and manager of 459 value-oriented shopping
centers representing 116 million square feet in 39 states,
Puerto Rico and Brazil. The company's assets are concentrated
in high barrier-to-entry markets with stable populations and high
growth potential and its portfolio is actively managed to create
long-term shareholder value. DDR is a self-administered and
self-managed REIT operating as a fully integrated real estate
company, and is publicly traded on the New York Stock Exchange
under the ticker symbol DDR. Additional information about the
company is available at www.ddr.com.
Safe Harbor
DDR considers portions of the information in this press release
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 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 our results 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;
the loss of, significant downsizing of or bankruptcy of a major
tenant; constructing properties or expansions that produce a
desired yield on investment; our ability to buy or sell assets on
commercially reasonable terms; our ability to complete acquisitions
or dispositions of assets under contract; our ability to secure
equity or debt financing on commercially acceptable terms or at
all; our ability to enter into definitive agreements with regard to
our financing and joint venture arrangements or our failure to
satisfy conditions to the completion of these arrangements; and the
success of our capital recycling strategy. For additional
factors that could cause the results of the Company to differ
materially from those indicated in the forward-looking statements,
please refer to the Company's Form 10-K for the year ended
December 31, 2011, as amended.
The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that
arise after the date hereof.
SOURCE DDR Corp.