DDR Comments on the Announced Merger between Office Depot and OfficeMax
BEACHWOOD, Ohio, Feb. 20, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today commented that the merger announcement involving Office Depot and OfficeMax will have a positive overall effect on the Company's portfolio.
"Over the past three years we have leased over 34 million square feet across our portfolio while simultaneously increasing rental rates and improving the credit quality of cash flow," said Paul Freddo, senior executive vice president of leasing and development for DDR. "With our continued increase in portfolio leased rate, we are excited about the opportunity presented by the Office Depot and OfficeMax merger, and we will maintain a close dialogue with both retailers to assist them in their transition and pursue opportunities to recapture valuable space."
DDR owns 50 OfficeMax stores totaling 1.2 million square feet with average remaining lease term through February 2016, and 15 Office Depot stores totaling approximately 365,000 square feet with average remaining lease term through January 2017.
Between the two retailers, DDR owns 65 stores, of which 59 are located in prime assets that are 95.5% leased, with an average trade area population of 448,000 and household incomes over $80,000. The average rent per square foot for both retailers is currently $11.00 and approximately 30% below DDR's prime portfolio average. With an average remaining lease term of nearly four years, the Company has limited risk to cash flow interruption, and enjoys the opportunity to recognize termination fee income and unique mark-to-market opportunities in this supply constrained environment.
"Consolidation in the office supply sector has been highly anticipated and based upon our market knowledge, store spacing, and store performance, we expect the opportunity to recapture certain locations. If executed as proposed, the merger will enable us to realize positive rental increases by backfilling the newly available space with a variety of today's fastest growing, high credit quality retailers, including T.J.Maxx, Marshalls, HomeGoods, Ross Dress for Less, Bed Bath & Beyond, buybuy BABY, Cost Plus World Market, Nordstrom Rack, and many others." concluded Mr. Freddo.
DDR is an owner and manager of 454 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.
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; the success of our capital recycling strategy; and the finalization of the financial statements for the three-month period ended and year ended December 31 , 2012. 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.