BEACHWOOD, Ohio, May 18, 2011 /PRNewswire/ -- Developers Diversified Realty Corporation (NYSE: DDR) today announced plans to raze the Terrell Plaza shopping center in San Antonio, Texas and the existing two-story enclosed mall at Tamarac Square in Denver, Colorado to allow for the sale of these non-income producing parcels to Target for the construction of two new stores. DDR intends to redevelop adjacent retail space at both centers to accommodate demand from additional high-quality retailers.
"The redevelopment of two non-income producing assets into prime shopping centers is a perfect example of the continued execution of our redevelopment strategy. We anticipate many similar projects to commence as we focus on redevelopment as a driver of corporate growth," said Paul Freddo, senior executive vice president of leasing & development for DDR.
The combined gross investment for the two projects is $40 million. Net of land sales and project reimbursements, the company's investment is approximately $20 million, and the returns are expected to exceed the company's 10 percent return threshold for redevelopment investments. The projects will be funded with retained cash flow and recycled capital from the continued disposition of non-prime assets.
Terrell Plaza is currently a poorly-configured shopping center in a well-established neighborhood of San Antonio with population density exceeding 540,000 people within a seven-mile trade area. When redeveloped, the shopping center will feature approximately 90,000 square feet of value-oriented junior anchor retail space in addition to the new 138,000 square-foot Target.
Tamarac Square is currently a 90 percent vacant enclosed mall in an in-fill location and the redevelopment will provide Target access to an attractive, high barrier-to-entry market with population density exceeding 720,000 people within a seven-mile trade area. Upon completion of the 135,000 square-foot store and the renovation of the adjacent 33,000 square-foot convenience center, the project will be 98 percent leased.
About Developers Diversified Realty
Developers Diversified owns and manages approximately 520 retail properties in 41 states, Puerto Rico and Brazil totaling approximately 127 million square feet. The Company's prime portfolio features open-air, value-oriented shopping centers in high barrier-to-entry markets with stable populations and high growth potential. Developers Diversified is the largest landlord in Puerto Rico and owns a premier portfolio of regional malls primarily clustered around Sao Paulo, Brazil. Developers Diversified is a self-administered and self-managed REIT operating as a fully integrated real estate company. Additional information about the Company is available on the Company's website at www.ddr.com.
SOURCE Developers Diversified Realty Corporation